8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 10, 2017 (January 10, 2017)

MBIA INC.

(Exact name of registrant as specified in its charter)

Connecticut	1-9583	06-1185706
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1 Manhattanville Road, Suite 301 Purchase, New York	10577
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 914-273-4545

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENTS.

Item 2.01 COMPLETION OF DISPOSITION OR ACQUISITION OF ASSETS.

Item 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF BALANCE SHEET ARRANGEMENT OF THE REGISTRANT

Sale of MBIA UK and Entry into Financing Facility by MBIA Insurance Corp.

MBIA Inc. (the “Company”) today announced that its wholly-owned subsidiary, MBIA Insurance Corporation (“MBIA Corp.”), has consummated two previously announced transactions (the “Transactions”), which are described below and were previously disclosed in filings on Form 8-K filed on September 29, 2016, and November 28, 2016, respectively (the “Prior 8-Ks’”). The Prior 8-Ks described the material terms of the Transactions. Such descriptions are qualified in their entirety by reference to the descriptions below and by reference to the Exhibits to the Prior 8-Ks and by the exhibits hereto. The Transactions were subject to various regulatory approvals, which were obtained.

In one of the transactions, MBIA Corp.’s wholly owned subsidiary, MBIA UK (Holdings) Limited (“MBIA UK Holdings”), sold its operating subsidiary, MBIA UK Insurance Limited (“MBIA UK”), to Assured Guaranty Corp. (“Assured”), a subsidiary of Assured Guaranty Ltd. In exchange for MBIA UK and a cash payment of $23 million to Assured, MBIA UK Holdings received certain notes owned by Assured that were issued by Zohar II 2005-1 CLO (“Assured Zohar II Notes”), which had an aggregate outstanding principal amount of approximately $347 million as of September 30, 2016.

In the second transaction, MBIA Corp. consummated a financing facility, as described in more detail below, with affiliates of certain holders of 14% Fixed-to-Floating Rate Surplus Notes of MBIA Corp. (collectively, the “Senior Lenders”), and with the Company, pursuant to which the Senior Lenders have provided $328.25 million of senior financing and the Company has provided $38 million of subordinated financing (the Senior Lenders and the Company being referred to herein as, the “Lenders”) to MZ Funding (as defined below), which in turn lent the proceeds of such financing to MBIA Corp. MBIA Corp. will use the net proceeds of the financing, together with approximately $60 million from its own resources, to pay an anticipated claim (the “Zohar II Claim”) on its insurance policy (the “Zohar II Policy”) insuring certain notes (the “Zohar II Notes”) issued by Zohar II 2005-1 Limited and Zohar II 2005-1 Corp. (together, “Zohar II”) on January 20, 2017 (the “Zohar Maturity Date”), which had approximately $770 million of par outstanding at September 30, 2016. Under the Facility (as defined below), MBIA Inc. has agreed to provide an additional $50 million of subordinated financing to MZ Funding, which MZ Funding will lend to MBIA Corp. if needed by MBIA Corp. for liquidity purposes. The Transactions will enable MBIA Corp. to satisfy the Zohar II Claim.

In connection with the financing, a bankruptcy remote special purpose entity called MZ Funding LLC (“MZ Funding”) was organized as a wholly owned subsidiary of the Company to act as the direct borrower from the Senior Lenders and from the Company. Pursuant to the Senior Note Indenture, dated as of January 10, 2017 (the “Senior Note Indenture”), MZ Funding issued its 14% Insured Senior Notes due January 20, 2020, having an initial aggregate principal amount of up to $328.25 million (the “Insured Senior Notes”). The Insured Senior Notes are guaranteed pursuant to a financial guaranty insurance policy issued by MBIA Corp. Pursuant to the Subordinated Note Indenture, dated as of January 10, 2017 (the “Subordinated Note Indenture”), MZ Funding (i) issued its 14% Insured Subordinated Notes due January 20, 2020, having an initial aggregate principal amount of $38 million (the “Initial Insured Subordinated Notes”) and (ii) may from

time to time on or after the closing date on January 10, 2017 issue additional 14% Insured Subordinated Notes due January 20, 2020, with an aggregate principal amount of up to $50 million (the “Additional Insured Subordinated Notes” and, together with the Initial Insured Subordinated Notes, the “Insured Subordinated Notes” and, together with the Insured Senior Notes, the “Notes”). The Insured Subordinated Notes are guaranteed pursuant to a financial guaranty insurance policy issued by MBIA Corp. Wilmington Savings Fund Society, FSB (“WSFS”) will act as trustee and collateral agent under the Senior Note Indenture and the Subordinated Note Indenture.

The Senior Lenders and MZ Funding entered into a Senior Note Purchase Agreement, dated as of January 10, 2017 (the “Senior NPA”), pursuant to which the Senior Lenders purchased the Insured Senior Notes with an aggregate principal amount of $328.25 million, and the Company entered into a Subordinated Note Purchase Agreement with MZ Funding, dated as of January 10, 2017 (the “Subordinated NPA”), pursuant to which the Company purchased the Initial Insured Subordinated Notes with an aggregate principal amount of $38 million. In addition, under the Subordinated NPA, the Company committed to purchase up to $50 million of Additional Insured Subordinated Notes, if needed by MBIA Corp. to provide additional liquidity to MBIA Corp. to pay claims or for other purposes as described below and in the Credit Agreement (as defined below). Such commitment is conditioned on no insolvency proceeding having been commenced in respect of MBIA Corp. or MZ Funding.

In connection with the Facility, MZ Funding entered into a Credit Agreement with MBIA Corp. (the “Credit Agreement”; and the loans thereunder, the “MBIA Loans”) pursuant to which it immediately lent the proceeds of the Notes to MBIA Corp. The Notes and the MBIA Loans are referred to herein as the “Facility.” MBIA Corp. will use the net proceeds of the loans made under the Credit Agreement on the closing date of the Facility, together with approximately $60 million from its own resources (the “MBIA Corp. Payment”), to pay the Zohar II Claim on the Zohar Maturity Date as described above.

MBIA Corp. is required to promptly submit a written request to MZ Funding to make an additional loan (“Additional Loans”), and MZ Funding is required to issue to the Company (and the Company is obligated to purchase) Additional Insured Subordinated Notes, in the aggregate amount of up to $50 million minus the outstanding principal amount of any outstanding Additional Loans (the “Undrawn Amount”) (i) immediately upon the earlier of: (x) such time as MBIA Corp. consents to the filing of a petition for an Insolvency Proceeding, or (y) such time as the Superintendent informs MBIA Corp. that a filing of a petition for an Insolvency Proceeding in respect of MBIA Corp. is imminent, (ii) if the Senior Insured Notes have not been paid in full as of July 10, 2019, (iii) if as of the last day of any fiscal quarter of MBIA Corp. the Statutory Surplus of MBIA Corp. is less than $65,000,000 (iv) the Available Liquidity less the Undrawn Delayed Draw Amount of MBIA Corp. is less than $20,000,000 or (v) MBIA Corp. determines that it requires the Undrawn Amount for liquidity purposes; provided, however, in the event MBIA Corp. submits a request for a Delayed Draw Loan on account of subsection (iv) above, MBIA Corp. shall only be required to draw Delayed Draw Loans in increments of $12,500,000 until such time that subsection (iv) above is no longer applicable.

The Notes and the MBIA Loans will mature on January 20, 2020 and will bear interest at 14% per annum, payable quarterly in arrears. Interest on the Notes will be payable in cash, but may be payable in kind at the option of MBIA Corp. to the extent that recoveries on the Collateral and the Cash Sweep (referred to below) is less than the accrued but unpaid interest on the Notes.

If at the end of any fiscal quarter, MBIA’s “Available Liquidity” (as defined in the Credit Agreement) exceeds $150 million and MBIA Corp.’s “Statutory Surplus” (as defined in the Credit Agreement) exceeds $250 million, MBIA Corp. will make a payment on the MBIA Loans in the amount by which the Available Liquidity exceeds $150 million, except that during the first 18 months after the closing of MBIA Loans, the payment may be limited to the amount of the accrued but unpaid interest with the

amount of any recovery in excess of accrued interest placed in an interest bearing account subject to the liens in favor of the Senior Lenders in lieu of the payment of principal on the MBIA Loans. This payment, which is referred to as the “Cash Sweep,” will be subject to approval, or non-disapproval, of the New York State Department of Financial Services (“NYSDFS”). In the event the NYSDFS objects to or otherwise prevents any portion of the payments described above, MBIA Corp. shall, subject to NYSDFS approval to make such payment, pay all approved portions of the Cash Sweep Amount, as provided for herein, and, if such deposit is approved by the NYSDFS, deposit any unapproved portion of the Cash Sweep Amount into the Mandatory Prepayment Account (as defined in the Credit Agreement).

Also, MBIA Corp. will be required to apply any recoveries in respect of the Collateral to the repayment of the MBIA Loans, except that during the first 18 months after closing of the MBIA Loans, MBIA Corp. may elect to place the amount of any recovery in excess of accrued interest in an interest bearing account subject to the liens in favor of the Senior Lenders in lieu of the payment of principal on the MBIA Loans. Any repayment of principal on the MBIA Loans during the first 18 months will be subject to a declining make-whole payment as set forth in the Credit Agreement, calculated as a percentage of the principal amount being repaid.

The Facility is secured by a first priority security interest in all of MBIA Corp.’s right, title and interest in the Zohar I Collateral and the Zohar II Collateral, as such terms are defined in the Security Agreement attached as Exhibit 99.6 hereto, (collectively, including any proceeds thereof, the “Collateral”). In addition, the Insured Senior Notes are secured by a pledge of the Company’s interest in MZ Funding pursuant to the Pledge Agreement attached as Exhibit 99.9 hereto. Any payments on or recoveries made on the Zohar II Collateral will be allocated on a pro-rata basis to repayment of the Facility and the MBIA Corp. Payment.

The Insured Senior Notes are secured by a first lien on the Collateral, and the Insured Subordinated Notes are secured by a second lien on the Collateral. The Company, MZ Funding and the trustees under the Senior Note Indenture and the Subordinated Note Indenture have entered into an Intercreditor Agreement, attached as Exhibit 99.10 hereto (the “Intercreditor Agreement”), pursuant to which any amounts due the Company in respect of the Insured Subordinated Notes or from the MBIA Corp. Policies insuring the Insured Subordinated Notes are subordinated to payment in full of the Insured Senior Notes until the amounts owed to the Senior Lenders in respect of the Insured Senior Notes have been paid in full. Therefore, at any time that the MBIA Loans are repaid, MZ Funding is required to apply the repayment first to the payment of interest and principal on the Insured Senior Notes and, after the Insured Senior Notes are paid in full, to the payment of the Insured Subordinated Notes, subject to certain reimbursements payable to MBIA Corp. The Company’s ability to collect the principal and interest on the Insured Subordinated Notes will be based primarily on the amount recovered by MBIA Corp. with respect to the Collateral, after payment in full of the Insured Senior Notes and other related payment obligations that are senior to the Insured Subordinated Notes pursuant to the Intercreditor Agreement. Based on the estimated value of the Collateral in relation to the amount of the Senior Insured Notes and the Subordinated Insured Notes, the Company expects that the recoveries from the Collateral will be sufficient to enable the payment in full of the Subordinated Insured Notes. There is uncertainty, however, with respect to the realizable value of the Collateral and there can be no assurance that recoveries on the Collateral will be sufficient to pay the Subordinated Insured Notes in full or that, in the event that recoveries on the collateral are not sufficient to pay the subordinated Insured Notes in full, that MBIA Corp. will be able to pay any shortfall necessary to pay the Subordinated Insured Notes in full under the policy insuring the Subordinated Insured Notes.

Pursuant to the Credit Agreement MBIA Corp. will be making publicly available the following information:

(i) all cash received by MBIA Corp. or its affiliates as proceeds (i) of the Zohar I Collateral (as defined in the Credit Agreement) or the Zohar II Collateral (as defined in the Credit Agreement) during the preceding calendar quarter;

(ii) all assets obtained by MBIA Corp. or its affiliates from Zohar II, Zohar CDO 2003-1, Limited, Zohar CDO 2003-1, Corp. and Zohar CDO 2003-1, LLC during the preceding calendar quarter;

(iii) the outstanding principal amount of the Senior Insured Notes as of the end of the preceding calendar quarter;

(iv) the outstanding principal amount of the Subordinated Insured Notes as of the end of the preceding calendar quarter;

(v) the interest paid in cash on the Senior Insured Notes during the preceding calendar quarter;

(vi) the interest paid in cash on the Subordinated Insured Notes during the preceding calendar quarter;

(vii) the amount by which the outstanding principal of the Notes have increased in connection with MZ Funding’s election to pay in kind interest due and owing on an interest payment date as of the end of the preceding calendar quarter; and

(viii) contained in the quarterly Interest and Principal Payment Certification for each Interest Payment Date.

The information described in clause (i) above will be disclosed on a monthly and quarterly basis, for the previous calendar month or quarter, as the case may be, and the information described in clauses (ii) through (viii) above will be disclosed on a quarterly basis for the previous calendar quarter. Such information will be made publicly available by posting such information on the MBIA Inc. web site or in MBIA Inc.’s periodic SEC reports.

The Facility contains customary and other representations and warranties and affirmative, negative and financial covenants and events of default as set forth in the Credit Agreement.

Notwithstanding the transactions entered into today, MBIA Corp. believes that if the NYSDFS concludes at any time that MBIA Corp. will not be able to pay its policyholder claims, the NYSDFS would likely put MBIA Corp. into a rehabilitation or liquidation proceeding under Article 74 of the New York Insurance Law and/or take such other actions as the NYSDFS may deem necessary to protect the interests of MBIA Corp.’s policyholders. The determination to commence such a proceeding or take other such actions is within the exclusive control of the NYSDFS. The NYSDFS enjoys broad discretion in this regard, and no assurance is given as to what action, if any, the NYSDFS may take.

Given the separation of the Company and MBIA Corp. as distinct legal entities, the absence of any material intercompany lending agreements or cross defaults between the entities, and the lack of reliance by the Company on MBIA Corp. for the receipt of dividends, neither of the transactions announced today are expected to have a material impact on the Company’s financial position and results of operations, except to the extent that a material portion of the Subordinated Insured Notes is not paid at maturity.

The description of the Facility described herein is qualified by reference to the Exhibits attached hereto.

A copy of the following documents, in each case dated as of January 10, 2017, is attached hereto as Exhibits 99.1 through 99.10 and is incorporated herein by reference:

(i) Senior Note Indenture, between MZ Funding, as issuer, and WSFS, as indenture trustee and collateral agent;

(ii) Form of $328,250,000 14% Senior Secured Notes, due January 20, 2020, issued pursuant to the Senior Note Indenture;

(iii) Subordinated Note Indenture, between MZ Funding, as issuer, and WSFS, as indenture trustee and collateral agent;

(iv) Form of up to $88,000,000 14% Subordinated Secured Notes, due January 20, 2020, issued pursuant to the Subordinated Note Indenture;

(v) Credit Agreement, between MBIA Corp., as borrower, and MZ Funding, as lender;

(vi) Security Agreement, between MBIA Corp, as grantor, and MZ Funding, as secured party;

(vii) Security Agreement, between MZ Funding, as grantor, and WSFS, as collateral agent under the Senior Note Indenture;

(viii) Security Agreement, between MZ Funding, as grantor, and WSFS, as collateral agent under the Subordinated Note Indenture;

(ix) Pledge Agreement, between the Company, as pledgor, and WSFS, as collateral agent under the Senior Note Indenture; and

(x) Intercreditor Agreement, among WSFS, in its capacities as trustee under the Senior Note Indenture and the Subordinated Note Indenture, MBIA Corp., as insurer, and MZ Funding.

Item 9.01 Financial Statements and Exhibits.

99.1	Senior Note Indenture, between MZ Funding, as issuer, and WSFS, as indenture trustee and collateral agent;
99.2	Form of $328,250,000 14% Senior Secured Notes, due January 20, 2020, issued pursuant to the Senior Note Indenture;
99.3	Subordinated Note Indenture, between MZ Funding, as issuer, and WSFS, as indenture trustee and collateral agent;
99.4	Form of up to $88,000,000 14% Subordinated Secured Notes, due January 20, 2020, issued pursuant to the Subordinated Note Indenture;
99.5	Credit Agreement, between MBIA Corp., as borrower, and MZ Funding, as lender;
99.6	Security Agreement, between MBIA Corp, as grantor, and MZ Funding, as secured party;
99.7	Security Agreement, between MZ Funding, as grantor, and WSFS, as collateral agent under the Senior Note Indenture;
99.8	Security Agreement, between MZ Funding, as grantor, and WSFS, as collateral agent under the Subordinated Note Indenture;
99.9	Pledge Agreement, between the Company, as pledgor, and WSFS, as collateral agent under the Senior Note Indenture; and
99.10	Intercreditor Agreement, among WSFS, in its capacities as trustee under the Senior Note Indenture and the Subordinated Note Indenture, MBIA Corp., as insurer, and MZ Funding.

Forward-Looking Statements

The information contained in this Current Report should be read in conjunction with our filings made with the Securities and Exchange Commission. This report includes statements that are not historical or current facts and are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “project,” “plan,” “expect,” “intend,” “will likely result,” “looking forward” or “will continue,” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other risks and uncertainties, the possibility that the Company will experience increased credit losses or impairments on public finance obligations we insure issued by state, local and territorial governments and finance authorities that are experiencing unprecedented fiscal stress, the possibility that MBIA Insurance Corporation will have inadequate liquidity to pay expected claims as a result of increased losses on certain structured finance transactions, in particular residential mortgage-backed securities transactions that include a substantial number of ineligible mortgage loans, or a delay or failure in collecting expected recoveries, the possibility that loss reserve estimates are not adequate to cover potential claims, a disruption in the cash flow from our subsidiaries or an inability to access capital and our exposure to significant fluctuations in liquidity and asset values within the global credit markets as a result of collateral posting requirements, our ability to fully implement our strategic plan, including our ability to maintain high stable ratings for National Public Finance Guarantee Corporation and generate investor demand for our financial guarantees, deterioration in the economic environment and financial markets in the United States or abroad, and adverse developments in European sovereign credit performance, real estate market performance, credit spreads, interest rates and foreign currency levels, the effects of governmental regulation, including insurance laws, securities laws, tax laws, legal precedents and accounting rules; and uncertainties that have not been identified at this time. These and other factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company’s forward-looking statements are discussed under the “Risk Factors” section in MBIA Inc.’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, which may be updated or amended in the Company’s subsequent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. The Company undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MBIA INC.
By:	/s/ Ram D. Wertheim
	Ram D. Wertheim
	Chief Legal Officer

Date: January 10, 2017

EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K

Dated January 10, 2017

99.1	Senior Note Indenture, between MZ Funding, as issuer, and WSFS, as indenture trustee and collateral agent;
99.2	Form of $328,250,000 14% Senior Secured Notes, due January 20, 2020, issued pursuant to the Senior Note Indenture;
99.3	Subordinated Note Indenture, between MZ Funding, as issuer, and WSFS, as indenture trustee and collateral agent;
99.4	Form of up to $88,000,000 14% Subordinated Secured Notes, due January 20, 2020, issued pursuant to the Subordinated Note Indenture;
99.5	Credit Agreement, between MBIA Corp., as borrower, and MZ Funding, as lender;
99.6	Security Agreement, between MBIA Corp, as grantor, and MZ Funding, as secured party;
99.7	Security Agreement, between MZ Funding, as grantor, and WSFS, as collateral agent under the Senior Note Indenture;
99.8	Security Agreement, between MZ Funding, as grantor, and WSFS, as collateral agent under the Subordinated Note Indenture;
99.9	Pledge Agreement, between the Company, as pledgor, and WSFS, as collateral agent under the Senior Note Indenture; and
99.10	Intercreditor Agreement, among WSFS, in its capacities as trustee under the Senior Note Indenture and the Subordinated Note Indenture, MBIA Corp., as insurer, and MZ Funding.

EX-99.1

Exhibit 99.1

EXECUTION VERSION

MZ FUNDING LLC,

as Issuer,

and

WILMINGTON SAVINGS FUND SOCIETY, FSB,

as Trustee and as Collateral Agent

INDENTURE

Dated as of January 10, 2017

14% Senior Secured Notes due 2020

CONFIDENTIAL / SUBJECT TO FRE 408

SUBJECT TO MATERIAL CHANGE

Table of Contents

		Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.	Definitions		1
SECTION 1.02.	Other Definitions		12
SECTION 1.03.	Rules of Construction		12
SECTION 1.04.	Agent for Service; Submission to Jurisdiction; Waiver of Immunities		12
SECTION 1.05.	Currency		13
SECTION 1.06.	No Incorporation by Reference of Trust Indenture Act		13
ARTICLE II
THE SECURITIES
SECTION 2.01.	Form and Dating		13
SECTION 2.02.	Execution and Authentication		13
SECTION 2.03.	Registrar and Paying Agent		14
SECTION 2.04.	Paying Agent To Hold Money in Trust		15
SECTION 2.05.	Lists of Holders of Securities		15
SECTION 2.06.	Transfer and Exchange		15
SECTION 2.07.	Replacement Securities		15
SECTION 2.08.	Outstanding Securities		16
SECTION 2.09.	Temporary Securities		16
SECTION 2.10.	Cancellation		16
SECTION 2.11.	Payment of Interest		16
SECTION 2.12.	Defaulted Interest		17
SECTION 2.13.	CUSIP Numbers, ISINs, etc		17
SECTION 2.14.	Claims Under Insurance Policy		17
SECTION 2.15.	Persons Deemed Owner		18
SECTION 2.16.	Rule 144A Information		19
SECTION 2.17.	Investment Company Act Procedures		19
SECTION 2.18.	Transferability
ARTICLE III
REDEMPTION
SECTION 3.01.	Notices to Trustee		21
SECTION 3.02.	Selection of Securities to Be Redeemed		21

i

CONFIDENTIAL / SUBJECT TO FRE 408

SUBJECT TO MATERIAL CHANGE

Table of Contents

		Page
SECTION 3.03.	Notice of Redemption		22
SECTION 3.04.	Effect of Notice of Redemption		23
SECTION 3.05.	Deposit of Redemption Price		23
SECTION 3.06.	Securities Redeemed in Part		23
SECTION 3.07.	Optional Redemption		23
SECTION 3.08.	Mandatory Redemption		23
SECTION 3.09.	Redemption at Maturity		24
ARTICLE IV
COVENANTS
SECTION 4.01.	Payment of Securities		24
SECTION 4.02.	Corporate Existence; Compliance with Operating Agreement		24
SECTION 4.03.	Limitation on Liens		24
SECTION 4.04.	Limitation on Indebtedness		25
SECTION 4.05.	Limitation on Investments		25
SECTION 4.06.	Maintenance of Property; Insurance		25
SECTION 4.07.	Financial Reports and Other Information		25
SECTION 4.08.	Inspection Rights		26
SECTION 4.09.	Conduct of Business		26
SECTION 4.10.	Use of Proceeds; Margin Regulations; Company Activities		27
SECTION 4.11.	Limitation on Dividends		27
SECTION 4.12.	Maintenance of Accounts		27
SECTION 4.13.	Performance under MBIA Facility		29
SECTION 4.14.	Taxes		29
SECTION 4.15.	Compliance with Laws; Policies and Procedures		29
SECTION 4.16.	Limitation on Modifications		29
SECTION 4.17.	Further Assurances		30
SECTION 4.18.	Post-Bankruptcy Restrictions		30
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.01.	Consolidation, Merger and Sale of Assets		30

ii

CONFIDENTIAL / SUBJECT TO FRE 408

SUBJECT TO MATERIAL CHANGE

Table of Contents

		Page
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01.	Events of Default		30
SECTION 6.02.	Acceleration of Maturity; Rescission and Annulment		32
SECTION 6.03.	Collection of Indebtedness and Suits for Enforcement by Trustee		33
SECTION 6.04.	Trustee May File Proofs of Claim		34
SECTION 6.05.	Trustee May Enforce Claims Without Possession of Securities		35
SECTION 6.06.	Application of Money Collected		35
SECTION 6.07.	Limitation on Suits		35
SECTION 6.08.	Unconditional Contractual Right of Holders to Receive Principal, Premium and Interest		36
SECTION 6.09.	Restoration of Rights and Remedies		36
SECTION 6.10.	Rights and Remedies Cumulative		36
SECTION 6.11.	Delay or Omission Not Waiver		36
SECTION 6.12.	Control by Holders		36
SECTION 6.13.	Waiver of Past Defaults		37
SECTION 6.14.	Undertaking for Costs		37
SECTION 6.15.	Waiver of Stay or Extension Laws		38
SECTION 6.16.	Subrogation Rights of MBIA Corp.		38
ARTICLE VII
TRUSTEE
SECTION 7.01.	Duties of Trustee		38
SECTION 7.02.	Rights of Trustee		39
SECTION 7.03.	Individual Rights of Trustee		41
SECTION 7.04.	Trustee’s Disclaimer		41
SECTION 7.05.	Notice of Defaults		41
SECTION 7.06.	Compensation and Indemnity		41
SECTION 7.07.	Replacement of Trustee		42
SECTION 7.08.	Successor Trustee by Merger		43
SECTION 7.09.	Corporate Trustee Required; Eligibility		43
ARTICLE VIII
[RESERVED]
ARTICLE IX
SATISFACTION AND DISCHARGE
SECTION 9.01.	Satisfaction and Discharge of Indenture		43

iii

CONFIDENTIAL / SUBJECT TO FRE 408

SUBJECT TO MATERIAL CHANGE

Table of Contents

		Page
ARTICLE X
AMENDMENT AND WAIVER
SECTION 10.01.	Without Consent of Holders		44
SECTION 10.02.	With Consent of Holders		45
SECTION 10.03.	Execution of Amendments		46
SECTION 10.04.	Effect of Amendments		46
SECTION 10.05.	Reference in Securities to Amendment		46
SECTION 10.06.	Notice of Amendments		47
ARTICLE XI
SECURITY
SECTION 11.01.	Security Documents; Additional Collateral		47
SECTION 11.02.	Releases of Collateral		47
SECTION 11.03.	Release Documentation		47
SECTION 11.04.	Possession and Use of Collateral; No Impairment of the Security Interests		48
SECTION 11.05.	Collateral Agent		48
SECTION 11.06.	Replacement of Collateral Agent		50
SECTION 11.07.	Purchaser Protected		50
SECTION 11.08.	Authorization of Receipt of Funds by the Trustee Under the Security Documents		50
SECTION 11.09.	Powers Exercisable by Receiver or Trustee		50
SECTION 11.10.	Compensation and Indemnification		51
SECTION 11.11.	Form of Security Documents and Opinions		51
ARTICLE XII
ADDITIONAL AMOUNTS
SECTION 12.01.	Payment of Additional Amounts		51
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01.	Notices		53
SECTION 13.02.	Certificate as to Conditions Precedent		54
SECTION 13.03.	Statements Required in Certificate or Opinion		54
SECTION 13.04.	Rules by Trustee, Paying Agent and Registrar		55
SECTION 13.05.	Legal Holidays		55
SECTION 13.06.	Governing Law; Waiver of Jury Trial		55

iv

CONFIDENTIAL / SUBJECT TO FRE 408

SUBJECT TO MATERIAL CHANGE

Table of Contents

		Page
SECTION 13.07.	No Recourse Against Others		56
SECTION 13.08.	Successors		56
SECTION 13.09.	Counterparts		56
SECTION 13.10.	Table of Contents; Headings		56
SECTION 13.11.	U.S.A. Patriot Act		56
SECTION 13.12.	Tax Characterization		56
SECTION 13.13.	Multiple Roles		57
SECTION 13.14.	Confidentiality		57

v

APPENDICES

Appendix A

Exhibit 1.1 to Appendix A     –     Form of 144A Global Security

Exhibit 1.2 to Appendix A     –     Form of Regulation S Global Security

Exhibit 1.3 to Appendix A     –     Form of Institutional Accredited Investor Security

Appendix B – Form of Certificate of Transfer

Appendix C – Form of Certificate of Exchange

Appendix D – Form of Newco Equity Pledge Agreement

Appendix E – Form of Security Agreement

i

CONFIDENTIAL / SUBJECT TO FRE 408

SUBJECT TO MATERIAL CHANGE

INDENTURE dated as of January 10, 2017, among MZ Funding LLC, a Delaware limited liability company (the “Company”), as issuer, and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”) and as Collateral Agent.

RECITALS

The Company has duly authorized the issuance of $328,250,000.00 aggregate principal amount of 14% Senior Secured Notes due 2020, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture.

All things necessary to make the Securities (as defined below), when executed by the Company, authenticated and delivered hereunder and duly issued by the Company, the valid and binding obligations of the Company, and to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the benefit of each other and the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

“14% Senior Secured Notes due 2020” means the Securities.

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or other beneficial interest, by contract or otherwise; and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.

“Anti-Corruption Laws” means all laws, rules and regulations of any jurisdiction applicable to the Company and MBIA Corp. from time to time concerning or relating to bribery, money laundering, or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended from time to time, and the United Kingdom’s Bribery Act 2010, as amended from time to time.

“Applicable Procedures” means, with respect to any transfer, redemption or exchange of or for beneficial interests in any Global Security, the rules and procedures of the Depositary that apply to such transfer, redemption or exchange.

“Bankruptcy Law” means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors.

“Business Day” means each day which is not a Legal Holiday.

“Capital Lease” means any lease obligation of a Person incurred with respect to real property or equipment acquired or leased by such Person and used in its business that is required to be recorded as a capital lease in accordance with GAAP.

“Change of Control” means, at any time, the failure of MBIA Inc. to directly, legally and beneficially own 100% of the Equity Interests of (a) the Company or (b) MBIA Corp.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document until the Lien on such property has been released or terminated in accordance with this Indenture or the applicable Security Document.

“Collateral Agent” means Wilmington Savings Fund Society, FSB, acting in its capacity as Collateral Agent for the Secured Creditors, and any successor Collateral Agent appointed hereunder pursuant to Section 11.06.

“Collateral Grantor” means MBIA Inc. and each other affiliate of the Company that becomes a party to a Security Document from time to time.

“Collection Account” means that (i) certain interest-bearing account held in the name of the Company at the Deposit Bank which shall at all times be subject to the Liens of the Collateral Agent and governed by the Collection Account Control Agreement or (ii) in the event the account specified in clause (i) of this definition has not yet been established, the Collateral Proceeds Account.

“Collection Account Control Agreement” means the Blocked Account Control Agreement among the Company, the Collateral Agent, the collateral agent under the Subordinated Indenture and the Deposit Bank with respect to the Collection Account, in form and substance reasonably satisfactory to the Collateral Agent and the Majority Holders.

“Company Operating Agreement” means that certain Limited Liability Company Agreement of MZ Funding LLC, dated as of January 9, 2017.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 500 Delaware Avenue, Wilmington, Delaware 19801, Attn.: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Deposit Bank” means JPMorgan Chase Bank, N.A. or such other bank with the consent of the Majority Holders.

“Depositary” means, with respect to the Securities issuable or issued in whole or in part in global form, the Person specified in Section 2.03 as the Depositary with respect to the Securities, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provisions of this Indenture.

2

“Environmental Law” means any federal, state or local statute, law, rule, regulation, ordinance, code, policy or rule of common law now or hereafter in effect, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of the environment, health, safety or natural resources, in each case, relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of any Hazardous Materials.

“Equity Interests” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest, but excluding any debt security that is convertible into, or exchangeable for, such interests in equity.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Company or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company, any corporation described in clause (a) above or any trade or business described in clause (b) above.

“ERISA Event” means (a) a Reportable Event with respect to a Plan; (b) the withdrawal of the Company or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA) or insolvent (within the meaning of Section 4245 of ERISA); (d) the filing of a notice of intent to terminate or the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, respectively, (e) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan; (g) the determination that any Plan is considered an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; (h) the determination that any Multiemployer Plan is considered a plan in endangered or critical status within the meaning of Sections 431 and 432 of the Code or Sections 304 and 305 of ERISA; (i) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate; (j) the conditions for the imposition of a lien under Section 430(k) of the Code or Section 303(k) of ERISA shall have been met with respect to any Plan; or (k) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of the Company, other than in the usual course.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“GAAP” means generally accepted accounting principles in the United States set forth in the statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect as of the date of determination.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or

3

(b) entered into for the primary purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Holder” means the Person in whose name a Security is registered on the Registrar’s books; provided that for purposes of Article X hereto, “Holder” shall not include the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor other than as provided in Section 2.14(c).

“Indebtedness” of a Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations (excluding any prepaid interest thereon) of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations (including, without limitation, earnout obligations) of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than (i) trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof and (ii) expenses accrued in the ordinary course of business) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guaranty obligations of such Person with respect to Indebtedness of another Person, (h) the principal portion of all capital lease obligations plus any accrued interest thereon, (i) all net obligations of such Person under hedging agreements, (j) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred equity interests issued by such Person, (l) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, (m) all obligations of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer solely to the extent such obligations are recourse to such Person and (n) obligations of such Person under non-compete agreements to the extent such obligations are quantifiable contingent obligations of such Person under GAAP principles.

“Indenture” means this Indenture as amended or otherwise modified from time to time.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Security through a Participant.

“Insolvency Proceeding” means any case, proceeding or other action by or against any Person (a) under any existing or future law (including any agency or department with jurisdiction over insurance companies) of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization,

4

rehabilitation, liquidation, conservatorship, receivership or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition, rehabilitation or other relief with respect to it or its debts, or (b) seeking appointment of a receiver, trustee, custodian, conservator, rehabilitator, liquidator or other similar official for it or for all or any substantial part of its assets.

“Institutional Accredited Investor” means an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D.

“Insurance Agreement” means the Insurance Agreement dated January 10, 2017 by and between the Company, the Insurer and Wilmington Savings Fund Society, FSB, as trustee under this Indenture and the Subordinated Facility.

“Insurance Policy” means insurance policy no. 541511, dated January 10, 2017, issued by MBIA Corp. to the Trustee on behalf of the Holders and insuring the timely payment of all amounts due under the Securities.

“Insurance Policy Claim Amount” means, for any Insured Payment Date, (x) the Insured Amounts for such Insured Payment Date minus (y) any amount held or received by the Trustee or the Paying Agent in accordance with this Indenture for payment on the Securities on such related payment date, whether or not those funds are properly applied by the Trustee or Paying Agent.

“Insured Payment Date” means at or before 11:00 a.m., New York City time, on the later of (x) the Payment Date, on which the related Insured Amount is due and (y) the next Business Day following receipt of a Notice of Claim in New York, New York on a Business Day by the Insurer; provided that if such Notice of Claim is received after 11:00 a.m., New York City time, on a Business Day, it will be deemed to be received on the following Business Day.

“Insurer” means MBIA Corp., as issuer of the Insurance Policy.

“Insurer Default” means the occurrence and continuance of any of the following events:

(a) the Insurer shall have failed to make a payment required under the Insurance Policy in accordance with its terms;

(b) the Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation based on actual or threatened insolvency, liquidation or reorganization, (ii) made a general assignment for the benefit of its creditors, or (iii) had an order for relief entered against it under the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation based on actual or threatened insolvency, liquidation or reorganization which is final and nonappealable; or

(c) a court of competent jurisdiction, the New York Department of Financial Services or other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a rehabilitator, custodian, trustee, agent or receiver for the Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a rehabilitator, custodian, trustee, agent or receiver of the Insurer (or the taking of possession of all or any material portion of the property of the Insurer).

5

“Insured Amounts” has the meaning set forth in the Insurance Policy.

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the Collateral Agent, Wilmington Savings Fund Society, FSB, as subordinated collateral agent, and the Company.

“Interest Payment Date” means each February 1, May 1, August 1, and November 1, commencing on February 1, 2017.

“Investment” shall mean (a) the acquisition (whether for cash, property, services, assumption of Indebtedness, securities or otherwise) of Equity Interests, other ownership interests or other securities of any Person or bonds, notes, debentures or all or substantially all of the assets of any Person, (b) any deposit with, or advance, loan or other extension of credit to, any Person (other than deposits made in the ordinary course of business) or (c) any other capital contribution to or investment in any Person, including, without limitation, any guaranty obligation (including any support for a letter of credit issued on behalf of such Person) incurred for the benefit of such Person.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s); a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P); and a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch).

“IRS” means the Internal Revenue Service.

“Issue Date” means January 10, 2017.

“Legal Holiday” means a Saturday, Sunday or other day on which banking institutions are not required by law or regulation to be open in the State of New York.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan Administration Agreement” means that certain Loan Administration Agreement, dated as of the date hereof, by and among the Trustee, the Loan Administrator and MBIA Corp.

“Loan Administrator” has the meaning given to such term in the Loan Administration Agreement.

“Loan Commitment Fee” means a $3,250,000 financed commitment fee.

“Majority Holders” means, as of any date, the Holders of a majority in aggregate principal amount of the Outstanding Securities on such date.

6

“Make-Whole Premium” shall mean, with respect to any Securities on any applicable date of repayment of such Securities whether by acceleration, redemption, or otherwise, on or prior the Make-Whole Termination Date, the amount as calculated by the Company as equal to the following percentage of the amount of principal so repaid or redeemed:

Period after the Issue Date	Make-Whole Premium
During first 90 days		21.00	%
During 91st to 180th day		17.50	%
During 181st to 270th day		14.00	%
During 271st to 360th day		10.50	%
During 361st to 450th day		7.00	%
During 451st to 540th day		3.50	%
On and after 541st day		0	%

“Make-Whole Termination Date” means the 541st day after the Issue Date.

“Mandatory Prepayment Account” means (i) that certain interest-bearing account held in the name of the Company at the Deposit Bank which shall at all times be subject to the Liens of the Senior Collateral Agent for the benefit of the Senior Note Holders and governed by the Mandatory Prepayment Account Control Agreement or (ii) in the event the account specified in clause (i) of this definition has not yet been established, the Collateral Proceeds Account.

“Mandatory Prepayment Account Control Agreement” means the Blocked Account Control Agreement among the Company, the Collateral Agent, the collateral agent under the Subordinated Indenture and the Deposit Bank with respect to the Mandatory Prepayment Account, in form and substance reasonably satisfactory to the Collateral Agent and the Majority Holders.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Company, MBIA Corp. or MBIA Inc., (b) the Company’s or MBIA Corp.’s ability to perform any of its payment obligations under this Indenture, the other Note Documents or the MBIA Facility, or (c) the rights and remedies of the Trustee, the Collateral Agent and/or the Holders under this Indenture and the other Note Documents.

“Material Non-Public Information” means any material non-public information within the meaning of the rules and regulations of the Exchange Act.

“Maturity”, when used with respect to any Security, means the date on which the principal of such Security becomes due and payable in full as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, automatic acceleration in accordance with Section 6.02 hereof, notice of redemption, exercise of a Holder’s option to require the Company to purchase or repay the Security, or otherwise.

“MBIA Corp.” means MBIA Insurance Corporation, a New York statutory insurance corporation.

“MBIA Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, by and between the Company, as lender, and MBIA Corp., as borrower.

7

“MBIA Facility” means the MBIA Credit Agreement and the other Credit Documents (as defined in the MBIA Credit Agreement).

“MBIA Inc.” means MBIA Inc., a Connecticut corporation.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions.

“Newco Equity Pledge Agreement” means that certain Pledge Agreement, dated as of the date hereof, by MBIA Corp. in favor of the Collateral Agent for the benefit of the Secured Creditors and attached hereto as Appendix D.

“Note Documents” means this Indenture, the Securities, the Note Purchase Agreement, the Insurance Policy, the Insurance Agreement, the Intercreditor Agreement, the Loan Administration Agreement, any acknowledgments to collateral assignment executed in connection with the Securities and each Security Document, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time.

“Notes Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Company arising under this Indenture, the Securities, the Insurance Policy, the Insurance Agreement and the Security Documents (including all principal, premium (including the Make-Whole Premium), interest, penalties, fees, charges, expenses (including reasonable fees and expenses of attorneys, agents, and advisors), indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts payable or arising thereunder), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Company of any proceeding in bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Note Purchase Agreement” means that certain Note Purchase Agreement, dated as of January 10, 2017, by and among the Company, as issuer, and the purchasers named therein.

“Officer” means with respect to any Person any one of the Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Chief Legal Officer, any Executive Vice President, Managing Director, Director, Vice President, Treasurer, any Assistant Treasurer or the Secretary of such Person.

“Officer’s Certificate” means a certificate signed by any Officer of such Person, and delivered to the Trustee or the Collateral Agent, as applicable.

“Opinion of Counsel” means a written opinion of counsel who shall be reasonably acceptable to the Trustee or the Collateral Agent, as applicable.

“Organizational Documents” with respect to any Person shall mean, as applicable, such Person’s certificate of incorporation, memorandum and articles of association, certificate of formation (including, without limitation, by the filing or modification of any certificate of designation), by-laws or limited liability company agreement or, in each case, equivalent organizational documents.

8

“Outstanding”, when used with respect to Securities, means, as of any date of determination, all Securities theretofore authenticated and delivered under this Indenture (including any increases in the principal amount thereof resulting from the payment of interest thereon in the form of PIK Interest), except:

(d) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(e) Securities, or portions thereof for which payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

(f) Securities which have been issued pursuant to Section 2.07 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a “protected purchaser” (as defined in Article 8 of the UCC) in whose hands such Securities are valid obligations of the Company;

provided, however, that Securities which have been paid with proceeds of the Insurance Policy shall continue to remain Outstanding for purposes of this Indenture until the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the Insurance Agreement as evidenced by a written notice from the Insurer delivered to the Trustee, and the Insurer shall be deemed to be the Holder thereof to the extent of any payments thereon made by the Insurer; provided, further, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or are present at a meeting of Holders for quorum purposes, Securities owned by the Company or any other obligor upon the Securities or any Affiliate (other than the Insurer) of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Trust Officer actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

“Payment Date” has the meaning set forth in the Insurance Policy.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including any governmental authority.

“PIK Interest” means, with respect to any interest payment date, the interest paid-in-kind on the Securities in the form of (i) an increase in the outstanding principal amount of the Securities or (ii) the issuance of PIK Securities as of such interest payment date.

9

“Plan” means any “employee benefit plan” (other than a Multiemployer Plan) within the meaning of Section 3(3) of ERISA that is maintained or is contributed to by the Company or any ERISA Affiliate and is subject to Title IV of ERISA or the minimum funding standards under Section 412 of the Code or Section 302 of ERISA.

“principal” of a Security means the principal of the Security plus the premium including the Make-Whole Premium, if any, payable on the Security which is due or overdue or is to become due at the relevant time.

“Private Placement Legend” means the legend set forth in Section 2.3(e)(1) of Appendix A hereof to be placed on all Securities issued under this Indenture except as otherwise permitted by the provisions of this Indenture.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Qualified Purchaser” means a “qualified purchaser” as defined in Section 2(a)(51)(A) of the Investment Company Act of 1940, as amended, and related rules.

“Record Date” means each January 27, April 26, July 27 and October 27, commencing on January 27, 2017.

“Regulation D” means Regulation D promulgated under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Related Parties” means, as to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, attorneys-in-fact, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 501” means Rule 501 of Regulation D promulgated under the Securities Act.

“Rule 902” means Rule 902 of Regulation S promulgated under the Securities Act.

“Rule 903” means Rule 903 of Regulation S promulgated under the Securities Act.

“Rule 904” means Rule 904 of Regulation S promulgated under the Securities Act.

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including the Patriot Act and those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council or the European Union.

“SEC” means the U.S. Securities and Exchange Commission.

10

“Secured Creditors” means the Holders of the Securities, the Trustee and the Collateral Agent, each in their respective capacities.

“Securities” means the 14% senior secured notes due 2020 issued on the Issue Date pursuant to this Indenture and any PIK Securities.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Security Agreement” means that certain Security Agreement, dated as of the date hereof, by the Company in favor of the Collateral Agent for the benefit of the Secured Creditors and attached hereto as Appendix E, and any other agreement entered into in respect of the Collateral.

“Security Documents” means the Security Agreement, the Newco Equity Pledge Agreement and any account control agreement related thereto.

“Stated Maturity” means with respect to any Indebtedness, the date specified in the instrument governing such Indebtedness as the fixed date on which the principal of such Indebtedness or any installment thereof, or any installment of interest thereon, is scheduled to be due and payable, and shall not include any contingent obligations to repay, redeem or repurchase any such principal or interest prior to such date.

“Subordinated Facility” means the Subordinated Indenture, the other Note Documents (as defined therein) and the transactions contemplated thereunder.

“Subordinated Indenture” means the Subordinated Indenture, dated as of the date hereof, by and between the Company, as Issuer and Wilmington Savings Fund Society, FSB, as trustee and collateral agent.

“Subsidiary” means, for any Person, any other Person of which more than fifty percent (50%) of the outstanding stock or comparable equity interests having ordinary voting power for the election of the board of directors, managers, or comparable governing board or body of such other Person (irrespective of whether or not at the time stock or other equity interests of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency), is at the time directly or indirectly owned by any such Person or by one or more of its Subsidiaries.

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, senior associate, associate, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

11

SECTION 1.02. Other Definitions

Term	Defined in Section
“144A Global Security”	Appendix A 2.1(a)
“Additional Amounts”	12.01(a)
“Agent Members”	Appendix A 2.1(b)
“Appendix A”	2.01
“Collateral Proceeds Account”	4.12(e)
“Datasite”	4.07(c)
“Deficiency Notice”	4.01
“Definitive Security”	Appendix A 1.1
“Distribution Account”	4.12(d)
“DTC”	2.03
“Event of Default”	6.01
“Global Security”	Appendix A 2.1(a)
“Global Security Legend”	Appendix A 1.1
“Institutional Accredited Investor Security”	Appendix A 1.1
“Paying Agent”	2.03
“PIK Securities”	2.02
“Registrar”	2.03
“Regulation S Security”	Appendix A 1.1
“Rule 144A Security”	Appendix A 2.1(a)
“Securities Proceeds Account”	4.12(f)
“Taxing Jurisdiction”	12.01(a)
“Trust Indenture Act”	1.06
“withholding tax”	12.01(a)

SECTION 1.03. Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended or otherwise modified (subject to any restrictions on such amendments or modifications set forth herein), (b) any reference herein to any person shall be construed to include such person’s successors and assigns, (c) the words “herein,” “hereof,” and “hereunder,” and words of similar import, shall be construed to refer to this Indenture in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, and Appendices shall be construed to refer to Articles and Sections of, and Appendices to, this Indenture, (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and general intangibles and (f) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.

SECTION 1.04. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By the execution and delivery of this Indenture, the Company (i) irrevocably designates and appoints, and acknowledges that it has irrevocably designated and appointed, Corporation Trust Center as its authorized agent upon which process may be served in any suit, action or proceeding arising out of or relating to the Securities, this Indenture or any other Note Document that may be instituted in any United States federal or New York state court in The City of New York or brought under federal or state securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder) or,

12

subject to Section 6.07, any Holder of Securities in any United States federal or New York state court in The City of New York, (ii) submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) agrees that service of process upon the Company and written notice of said service to the Company (mailed or delivered to its Secretary at its principal office specified in Section 13.01), shall be deemed in every respect effective service of process upon the Company in any such suit, action or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of the Company in full force and effect so long as any of the Securities shall be Outstanding or any amounts shall be payable in respect of any Securities.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such action, suit or proceeding in any such court or any appellate court with respect thereto and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such action, suit or proceeding in any such court.

To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each of them hereby irrevocably waives such immunity in respect of its obligations under this Indenture, the Securities and any other Note Document, to the extent permitted by law.

SECTION 1.05. Currency. References herein to “$” are to lawful money of United States of America.

SECTION 1.06. No Incorporation by Reference of Trust Indenture Act. This Indenture is not qualified under the U.S. Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the Trust Indenture Act shall not apply to or in any way govern the terms of this Indenture. As a result, no provisions of the Trust Indenture Act are incorporated into this Indenture.

ARTICLE II

THE SECURITIES

SECTION 2.01. Form and Dating. Provisions relating to the Securities are set forth in Appendix A attached hereto (“Appendix A”), which is hereby incorporated in, and expressly made part of, this Indenture. The Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1.1 to Appendix A, in the case of the 144A Global Securities, substantially in the form of Exhibit 1.2 and Exhibit 1.3 to Appendix A, in the case of Securities acquired by Non-US Persons pursuant to Regulation S under the Securities Act or by certain institutional accredited investors within the meaning of Rule 501(A)(1), (2), (3) or (7) of Regulation D under the Securities Act, respectively, each of which form is hereby incorporated in, and expressly made a part of, this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of its authentication. The terms of the Securities set forth in Appendix A are part of the terms of this Indenture.

SECTION 2.02. Execution and Authentication. An Officer shall sign the Securities for the Company by manual or facsimile signature.

If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

13

A Security shall not be valid until an authorized signatory of the Trustee signs manually or by facsimile the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

The Trustee, upon a written order of the Company signed by an Officer of the Company, together with the other documents required by Sections 13.02 and 13.03, shall authenticate Securities for original issue on the Issue Date in the aggregate principal amount not to exceed $328,250,000.00. Such written order of the Company shall specify the amount of Securities to be authenticated and the date on which the original issue of Securities is to be authenticated and in connection with the issuance of any PIK Securities, Interest as provided in the following paragraph. For the avoidance of doubt, no Opinion of Counsel shall be required in order for the Trustee to authenticate Securities for original issuance on the Issue Date or PIK Securities for issuance in connection with any Interest Payment Date.

In connection with the payment of PIK Interest in respect of the Securities (including the PIK Securities), the Company shall be entitled, without the consent of the Holders, to increase the outstanding principal amount of the Securities or issue additional Securities (the “PIK Securities”) under this Indenture on the same terms and conditions as the Securities issued on the Issue Date (other than the issuance dates and the date from which interest will accrue). The Securities and any PIK Securities subsequently issued under this Indenture shall be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase.

Each Global Security will represent such of the outstanding Securities as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Securities from time to time endorsed thereon and that the aggregate principal amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions, transfers of Securities, conversions and payments of PIK Interest. Any endorsement of a Global Security to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Securities represented thereby will be made by the Trustee.

The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

SECTION 2.03. Registrar and Paying Agent. The Company shall maintain, or cause to be maintained, an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent.

If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate reasonable compensation therefor pursuant to Section 7.06. The Company may change the Paying Agent or Registrar without prior notice to the Holders. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent.

The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities.

14

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Securities.

SECTION 2.04. Paying Agent To Hold Money in Trust. Subject to Section 2.11, prior to each due date of the principal of and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders of Securities or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or any of its Affiliates acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.

SECTION 2.05. Lists of Holders of Securities. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of Securities. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date with respect to Securities and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of Securities.

SECTION 2.06. Transfer and Exchange. The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar, if any, with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture (including Appendices A, B and C hereto) are met. When Securities are presented to the Registrar or a co-registrar, if any, with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.

Anything to the contrary herein notwithstanding, a Security may be transferred only to the Depositary or to any other Person if both (i) such Person is a Qualified Purchaser and (ii) either such transfer is (x) to a QIB in compliance with Rule 144A, (y) an Institutional Accredited Investor or (z) in an Offshore Transaction (as defined in Rule 902) in compliance with Rule 903 or Rule 904.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants or beneficial owners of interests in any Definitive Security or Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Neither the Trustee nor any agent of the Trustee shall have any responsibility for any actions taken or not taken by the Depositary.

SECTION 2.07. Replacement Securities. If any mutilated Security is surrendered to the Trustee or either the Company or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Security, the Company shall issue and the Trustee, upon receipt of evidence of authentication in accordance with Section 2.02, shall authenticate a replacement Security if the Trustee’s requirements for replacement of Securities are met. An indemnity bond must be supplied by the Holder

15

that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Trustee and the Company each may charge such Holder for their expenses in replacing such Security.

Every replacement Security is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities duly issued hereunder.

SECTION 2.08. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.

If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code) in whose hands such Securities are valid obligations of the Company.

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

SECTION 2.09. Temporary Securities. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities.

SECTION 2.10. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation in accordance with its retention policy then in effect, unless the Company directs the Trustee in writing to deliver canceled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.

SECTION 2.11. Payment of Interest. Interest shall accrue on the Securities and any past due interest amounts thereon and shall be payable in cash quarterly in arrears at the rate of 14% per annum on each Interest Payment Date, or if such day is not a Business Day, on the next succeeding Business Day, to Holders of record of the Securities on the Record Date immediately preceding such Interest Payment Date. Subject to Sections 2.14 and 4.12, the Trustee shall pay the amount specified in the Interest and Principal Payment Certification (as defined in the MBIA Credit Agreement) from the Distribution Account to the Holders on such Interest Payment Date. To the extent (i) the funds received by the Company pursuant to Section 2.03(c) of the MBIA Credit Agreement are insufficient to pay interest on the Securities in cash on any date on which interest is due and payable pursuant to this Section 2.11 and (ii) no Default or Event of Default hereunder or under the MBIA Facility has occurred and is continuing, the Company may elect to pay interest in the amount of any such insufficiency in kind by treating such

16

amount as PIK Interest; provided that if the Company shall elect to treat such amount as PIK Interest, or a combination of cash payment and PIK Interest, the payment of cash, if any, and PIK Interest shall be applied pro rata to all Holders of Securities. If the Company elects to pay interest by treating such amounts as PIK Interest as aforesaid, the Company shall so specify in the Interest and Principal Payment Certification which shall be delivered to the Trustee by no later than 11:00 a.m. New York City time on the third Business Day prior to the Interest Payment Date on which the respective interest payment is due and payable, which certification shall specify the amount of interest that will be payable in cash, if any, and in the form of PIK Interest. Upon such election, the outstanding principal amount of the Securities will be so increased or PIK Securities in the amount of interest specified shall be issued, as applicable. Interest shall accrue and be payable on the PIK Interest. If the Company shall issue PIK Securities as aforesaid by increasing the outstanding principal amount of such Securities, at any time or from time to time, the Company shall not be required to issue, and the Trustee shall not be required to authenticate, additional physical Securities, and the outstanding physical Securities may be deemed to represent all such PIK Securities pro rata.

SECTION 2.12. Defaulted Interest. If the Company defaults in a payment of principal, interest or any other amount on the Securities, including any Make-Whole Premium, or any other payment due and owing under the Note Documents, or upon the occurrence of an Event of Default and so long as such Event of Default is continuing, the Company shall pay defaulted interest at the rate of 5.00% in excess of the rate which would have been payable if such overdue interest had, during the period of non-payment, constituted an outstanding amount of the Securities (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest on a payment date to the persons who are Holders of Securities on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date may be less than ten days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon written request of the Company, the Trustee in the name and at the expense of the Company) will send to each Holder of Securities a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.13. CUSIP Numbers, ISINs, etc. The Company in issuing the Securities may use “CUSIP” numbers, ISINs and “Common Code” numbers (in each case if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall advise the Trustee in writing of any change in any “CUSIP” numbers, ISINs or “Common Code” numbers applicable to the Securities.

SECTION 2.14. Claims Under Insurance Policy.

(a) If, by 11:00 a.m. New York City time on the second Business Day preceding any Interest Payment Date or at Maturity relating to the Securities, there are not sufficient funds in the Distribution Account to pay all principal and interest payable in cash by the Company on such Interest Payment Date as set forth in the Interest and Principal Payment Certification and the Trustee has not received a notice from the Company electing to pay PIK Interest pursuant to Section 2.11, the Trustee shall deliver to the Collateral Agent, the Insurer and the Holders by facsimile or other electronic transmission a written notice identifying such deficiency and setting forth the amount of such deficiency (a “Deficiency Notice”) by no later than 11:00 a.m. New York City time on the first Business Day preceding the date such principal and interest becomes due. In the event that there is such a deficiency and the Trustee delivers a Deficiency Notice, the Trustee shall furnish to the Insurer a completed Notice

17

of Claim (as defined in clause (b) of this Section 2.13) in the amount of the Insurance Policy Claim Amount. Any amounts paid by the Insurer to the Trustee shall be deposited into the Distribution Account and shall be paid by the Trustee or the Paying Agent to Holders in respect of the applicable principal and/or interest payment in accordance with the Interest and Principal Payment Certification, in each case, on the later of (i) the related Interest Payment Date and (ii) the Business Day received.

(b) Any notice delivered by the Trustee to the Insurer pursuant to Section 2.14(a) shall (i) be in the form attached as Exhibit A to the Insurance Policy, (ii) specify the Insurance Policy Claim Amount claimed under the Insurance Policy and (iii) constitute a “Notice” under the Insurance Policy (such notice, a “Notice of Claim”). In accordance with the provisions of the Insurance Policy, the Insurer is required to pay to the Trustee the Insurance Policy Claim Amount properly claimed thereunder on the applicable Insured Payment Date. Any payments made by the Insurer to the Trustee under the Insurance Policy shall be applied solely to the scheduled payment of the Securities in accordance with the Interest and Principal Payment Certification, and for no other purpose.

(c) The Trustee shall (i) receive in trust for the benefit of each Holder any Insurance Policy Claim Amount from the Insurer and (ii) distribute the same in accordance with Section 2.14(a) above. Any and all Insurance Policy Claim Amounts disbursed by the Trustee from claims made under the Insurance Policy shall not be considered payment by the Company with respect to such Securities, and shall not discharge the obligations of the Company with respect thereto. The Insurer shall, to the extent it makes any payment with respect to the Securities, become subrogated to the rights of the recipients of such payments to the extent of such payments. Subject to and conditioned upon any payment with respect to the Securities by or on behalf of the Insurer, the Insurer shall be entitled to all rights to the payment of interest or principal with respect to the Securities which are then due for payment to the extent of all payments made by the Insurer, and, without limiting any rights of the Insurer, the Insurer may exercise any option, vote, right, power or the like with respect to the Securities to the extent that it has made payment pursuant to the Insurance Policy. To evidence such subrogation, the Trustee shall note the Insurer’s rights as subrogee upon the register of Holders upon receipt from the Insurer of proof of payment by the Insurer. The foregoing subrogation shall in all cases be subject to the rights of the Holders to receive all Insured Amounts in respect of the Securities.

(d) The Trustee shall keep a complete and accurate record of all funds deposited by the Insurer into the Distribution Account and distributed to the Holders with respect to the Insurance Policy and the allocation of such funds to payment of interest on and principal paid in respect of any Security. Upon the reasonable request of the Insurer, the Insurer or its authorized agents shall be permitted (i) to inspect the books and records of the Trustee as they may relate to the Securities, the Note Documents, or the transactions relating to the foregoing (including, without limitation, access to information reasonably required) and (ii) to discuss the affairs, finances and accounts of the Company with the independent accountants of the Company.

(e) The Trustee shall be entitled to enforce on behalf of the Holders the obligations of the Insurer under the Insurance Policy.

SECTION 2.15. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Security, the Company, the Trustee and any agent of the Company or the Trustee, or the Insurer may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of and interest, if any on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Insurer, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

18

SECTION 2.16. Rule 144A Information.

The Company shall furnish to each Holder of the Securities, and any prospective purchasers designated by any Holder, upon request, the information required to be delivered pursuant to Rule 144A(d)(4). For purposes of this Section 2.16 only, Holder shall include any beneficial holder of a Security, identified as such to the Company by a statement from a bank, broker or other nominees that holds the Securities for the beneficial holder in “street name,” or in any other manner acceptable to the Company.

SECTION 2.17. Investment Company Act Procedures. For so long as any Securities are Outstanding, the Company shall do the following:

(a) Notification. Each periodic report sent or caused to be sent by the Company to the Holders, which should in no event be less frequently than annually, will include a notice to the following effect:

“The Investment Company Act of 1940, as amended (the “1940 Act”), requires that all holders of the outstanding securities of the Company be “Qualified Purchasers” (“Qualified Purchasers”) as defined in Section 2(a)(51)(A) of the 1940 Act and related rules. Under the rules, the Company must have a “reasonable belief” that all holders of its outstanding securities, including transferees, are Qualified Purchasers or entities owned exclusively by Qualified Purchasers. Consequently, all sales and resales of the Securities must be made solely to purchasers that are Qualified Purchasers or entities owned exclusively by Qualified Purchasers. Each purchaser of a Security (or a beneficial interest therein) will be deemed (or required, as the case may be) to represent at the time of purchase that: (i) the purchaser is a Qualified Purchaser or an entity owned exclusively by Qualified Purchasers, (ii) the purchaser is (x) a qualified institutional buyer as defined in Rule 144A under the Securities Act (“QIB”), (y) solely in the case of Notes issued in the form of certificated Notes, a Person that is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act or any entity in which all of the equity owners come within such paragraphs (an “IAI”)) or (z) solely in the case of Notes issued in the form of certificated Notes, a Person who has acquired such Note in a transaction under Regulation S; (iii) the purchaser is acting for its own account or the account of another Qualified Purchaser meeting the requirements of clause (ii) above; (iv) the purchaser is not formed for the purpose of investing in the Company; (v) the purchaser, and each account for which it is purchasing, will hold and transfer at least the minimum denominations specified herein; and (vi) the purchaser understands that the Company may receive a list of participants holding positions in securities from one or more book-entry depositories. The Securities (or beneficial interests therein) may only be transferred to a transferee who is a both (I) a (x) Qualified Purchaser or (y) entity owned exclusively by Qualified Purchasers and (II) a Person meeting the requirements of clause (ii) above and all subsequent transferees are deemed to have made representations (i) through (vi) above.

If, notwithstanding the restrictions on transfer contained therein, the Company determines that any Holder or beneficial owner of an interest in a Security is determined not to have been a Qualified Purchaser at the time of acquisition of such Security or beneficial interest therein, the Company may require, by notice to such Holder or beneficial owner, that such Holder or beneficial owner sell all of its right, title and interest to such Security (or any interest therein) to a Person that is both (x) a (I) Qualified Purchaser or (II) entity owned exclusively by Qualified Purchasers and (y) a Person meeting the requirements of clause (ii) above, with such sale to be effected within 30 days after notice of such sale requirement is given. If such Holder or beneficial owner fails to effect the transfer required within such 30-day period, (i)

19

the Company (or the Trustee acting on behalf of the Company), without further notice to such Holder or beneficial owner, shall and is hereby irrevocably authorized by such Holder or beneficial owner, to cause its Security or beneficial interest therein to be transferred in a commercially reasonable sale (conducted by the Trustee in accordance with Article 9 of the UCC as in effect in the State of New York as applied to securities that are sold on a recognized market or that may decline speedily in value) to a Person that certifies to the Trustee and the Company, in connection with such transfer, that such Person meets the qualifications set forth above and pending such transfer, no further payments will be made in respect of such Security or beneficial interest therein held by such Holder or beneficial owner.”

(b) DTC Actions. The Company will direct DTC to take the following steps in connection with the Global Securities:

(i) The Company will direct DTC to include the marker “3c7” in the DTC 20-character security descriptor and the 48-character additional descriptor for the Global Securities in order to indicate that sales are limited to Qualified Purchasers.

(ii) The Company will direct DTC to cause each physical deliver order ticket that is delivered by DTC to purchasers to contain the 20-character security descriptor. The Company will direct DTC to cause each deliver order ticket that is delivered by DTC to purchasers in electronic form to contain a “3c7” indicator and a related user manual for participants. Such user manual will contain a description of the relevant restrictions imposed by Section 3(c)(7).

(iii) On or prior to the Issue Date, the Company will instruct DTC to send a Section 3(c)(7) Notice to all DTC participants in connection with the offering of the Global Securities.

(iv) In addition to the obligations of the Registrar set forth in Section 2.03, the Company will from time to time (upon the request of the Trustee) make a request to DTC to deliver to the Company a list of all DTC participants holding an interest in the Global Securities.

(v) The Company will cause each CUSIP number obtained for a Global Security to have a fixed field containing “3c7” and “144A” indicators, as applicable, attached to such CUSIP number.

(c) Bloomberg Screens, etc. The Company will from time to time request all third-party vendors to include on screens maintained by such vendors appropriate legends regarding Rule 144A and Section 3(c)(7) under the Investment Company Act restrictions on the Global Securities. Without limiting the foregoing, the Company will request that each third-party vendor include the following legends on each screen containing information about the Securities:

(i) Bloomberg.

(A) “Iss’d Under 144A/3c7”, to be stated in the “Note Box” on the bottom of the “Security Display” page describing the Global Securities;

(B) a flashing red indicator stating “See Other Available Information” located on the “Security Display” page;

20

(C) a link to an “Additional Security Information” page on such indicator stating that the Global Securities are being offered in reliance on the exception from registration under Rule 144A under the Securities Act of 1933 to persons that are both (i) “Qualified Institutional Buyers” as defined in Rule 144A under the Securities Act and (ii) “Qualified Purchasers” as defined under Section 2(a)(51) of the Investment Company Act of 1940, as amended; and

(D) a statement on the “Disclaimer” page for the Global Securities that the Global Securities will not be and have not been registered under the Securities Act of 1933, as amended, that the Company has not been registered under the Investment Company Act of 1940, as amended, and that the Global Securities may only be offered or sold in accordance with Section 3(c)(7) of the Investment Company Act of 1940, as amended.

(ii) Reuters.

(A) a “144A – 3c7” notation included in the security name field at the top of the Reuters Instrument Code screen;

(B) a <144A3c7Disclaimer> indicator appearing on the right side of the Reuters Instrument Code screen; and

(C) a link from such <144A3c7Disclaimer> indicator to a disclaimer screen containing the following language: “These Notes may be sold or transferred only to Persons who are both (i) Qualified Institutional Buyers, as defined in Rule 144A under the Securities Act, and (ii) “Qualified Purchasers”, as defined under Section 3(c)(7) under the U.S. Investment Company Act of 1940.”

ARTICLE III

REDEMPTION

SECTION 3.01. Notices to Trustee. If the Company elects to redeem Securities pursuant to Section 3.07, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed, the redemption price, if then ascertainable and the paragraph or subparagraph of this Indenture pursuant to which the redemption shall occur.

The Company shall give each notice to the Trustee provided for in this Section 3.01 at least five Business Days prior to the giving of notice of a redemption pursuant to Section 3.03 unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officer’s Certificate from the Company to the effect that such redemption will comply with the conditions herein.

SECTION 3.02. Selection of Securities to Be Redeemed. If fewer than all the Securities are to be redeemed pursuant to Section 3.07, the Trustee shall select the Securities to be redeemed (1) if such Securities are in global form, by lot or by such other method, then in accordance with the procedures of the Depositary or (2) if such Securities are not in global form, then on a pro rata basis, although no Security of $2,000 (or, in the case of Global Securities, $250,000 or less) in original principal amount or less will be redeemed in part. The Securities and the portions of them that the Trustee selects to be redeemed shall be in minimum principal amounts of $2,000 (or, in the case of Global Securities, $250,000 or less) or a whole multiple of $1,000 in excess thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed.

21

SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days before a date for redemption of Securities pursuant to Section 3.07, the Company shall send, or cause to be sent (in the case of Securities held in book-entry form, by electronic transmission) a notice of redemption to each Holder of Securities to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of the Depositary. Notwithstanding the above, when notice has to be given to a holder of a global security (including any notice of redemption) such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with Applicable Procedures. Notices to the Trustee may be given by email in PDF format. Notices of redemption may be subject to one or more conditions precedent.

The notice shall identify the Securities to be redeemed (including the Issue Date and, if applicable, the certificate number) and shall state:

(1) the redemption date;

(2) the redemption price;

(3) the name and address of the Paying Agent;

(4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(5) if fewer than all the Outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed;

(6) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

(7) the “CUSIP” number, ISIN or “Common Code” number, if any, printed on the Securities being redeemed;

(8) the paragraph or subparagraph of the Securities and/or Section of this Indenture pursuant to which the Securities called for redemption are being redeemed;

(9) any conditions precedent to the redemption of the Securities; and

(10) that no representation is made as to the correctness or accuracy of the “CUSIP” number, ISIN, or “Common Code” number, if any, listed in such notice or printed on the Securities.

At the Company’s request, the Trustee shall give the notice of redemption set forth in this Section 3.03 in the Company’s name and at the Company’s expense. In such event, the Company shall provide the Trustee with an Officer’s Certificate delivered five Business Days prior to the date that notification will be sent to the Holders pursuant to this Section 3.03 (unless the Trustee consents to a shorter period) requesting that the Trustee give such notice of redemption and attaching the form of notice containing the information required by this Section.

22

SECTION 3.04. Effect of Notice of Redemption. Once a notice of redemption referred to in Section 3.03 is sent, Securities called for redemption become irrevocably due and payable on the redemption date and at the redemption price stated in the notice, unless the conditions described in the notice of redemption, if any, have not been satisfied. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date), and such Securities shall be canceled by the Trustee. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

SECTION 3.05. Deposit of Redemption Price. On or prior to the date of any redemption pursuant to Section 3.07, the Company shall deposit with the Paying Agent (or, if the Company or any of its Subsidiaries is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities or portions thereof to be redeemed on that date other than Securities or portions of Securities called for redemption which have been delivered by the Company to the Trustee for cancellation.

SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed pursuant to Section 3.07 in part, the Company shall execute and the Trustee shall authenticate, upon the receipt of a written order of the Company, for the Holder (at the Company’s expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered.

SECTION 3.07. Optional Redemption.

(a) The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities plus the Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), and any other payment due and owing under the Note Documents.

(b) Any redemption pursuant to this Section 3.07 shall be made in accordance with the provisions of Sections 3.01 through 3.06.

SECTION 3.08. Payment of Principal.

(a) If at any time, or from time to time, the Company shall receive by deposit to the Distribution Account any cash payment under Section 2.04 of the MBIA Credit Agreement, the Company shall apply all of such payment, to the extent not applied to pay interest pursuant to Section 2.11 or defaulted interest pursuant to Section 2.12, to the prepayment of outstanding Securities, at a price equal to 100% of the principal amount of the Securities to be repaid, together with the Make-Whole Premium, if any; provided, however, that the Company shall not be required to pay the Make-Whole Premium on prepayment of the principal amount of the Securities except to the extent such prepayment is attributable to the initial principal amount of the Notes, and not to PIK Interest, calculated by the Company, on any date on which such prepayment of principal amount is to be made pursuant to this Section 3.08(a), as the positive difference, if any, between (x) the total principal amount of the Securities prepaid or to be prepaid through, and including, such date of prepayment, less (y) the sum of (I) the total principal amount of PIK Interest paid on the Securities in lieu of cash interest through such date of prepayment, plus (II) the total principal amount of the Securities previously prepaid through, but not including, such date of prepayment as to which the Make-Whole Premium has been paid. The Interest and Principal Payment Certification shall set forth the principal amount of the Securities to be prepaid and the Make-Whole Premium, if any.

23

(b) The prepayment of principal amount of the Notes pursuant to Section 3.08(a) shall be made on the Interest Payment Date occurring on, or immediately following, the date on which the cash payment under Section 2.04 of the MBIA Credit Agreement is deposited to the Distribution Account. Subject to any operational limitations of DTC, the Trustee shall repay the principal amount of the Securities and the Make-Whole Premium, if any, as specified in the Interest and Principal Payment Certification, from the Distribution Account to the Holders on such Interest Payment Date; provided that such funds have been deposited to the Distribution Account by 11:00 a.m. New York City time, on such Interest Payment Date.

(c) For the avoidance of doubt, any funds deposited to the Mandatory Prepayment Account shall not be deemed to be received by the Company for purposes of making prepayments under Section 3.08(a).

(d) Payments made pursuant to this Sections 3.08 shall be deemed a prepayment of principal, and not a redemption made pursuant to Sections 3.01 through 3.06. Any prepayments made pursuant to this Section 3.08 in respect of Securities issued in global form, and the Trustee’s obligation to effect such payments, shall be subject in all respects to the applicable procedures of the Depositary.

SECTION 3.09. Payment at Maturity. At Maturity, the Company shall pay the Securities in whole, at a price equal to 100% of the principal amount of the Securities plus the Make-Whole Premium, if any, and accrued and unpaid interest, if any, to Maturity and any other payment then due and owing under the Note Documents.

ARTICLE IV

COVENANTS

SECTION 4.01. Payment of Securities. The Company shall promptly pay the principal of (and premium including the Make-Whole Premium, if any) and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if the Trustee or the Paying Agent holds in accordance with this Indenture as of 11:00 a.m. New York City time on the due date money sufficient to pay all principal and interest then due.

The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

SECTION 4.02. Corporate Existence; Compliance with Operating Agreement. The Company shall preserve and maintain its organizational existence. The Company shall duly observe and comply with the terms of the Company Operating Agreement.

SECTION 4.03. Limitation on Liens. The Company shall not create, incur, assume or suffer to exist any Lien of any kind on any of its property or assets other than (a) Liens arising by operation of law, (b) Liens under the Note Documents and (c) Liens under the Subordinated Facility provided that such Liens are subordinated to the Liens under the Note Documents.

24

SECTION 4.04. Limitation on Indebtedness. The Company shall not incur, assume or suffer to exist any Indebtedness other than (a) Indebtedness under the Note Documents and (b) Indebtedness under the Subordinated Facility.

SECTION 4.05. Limitation on Investments. The Company shall not make or hold any Investments other than the MBIA Facility to the extent the MBIA Facility is an Investment.

SECTION 4.06. Maintenance of Property; Insurance. The Company shall keep all material property necessary to the proper conduct of the business of the Company in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted) with such exceptions as would not reasonably be expected to have a Material Adverse Effect.

SECTION 4.07. Financial Reports and Other Information

(a) Reports, Notices. The Company shall (i) furnish to the Trustee all reports and/or notices it sends or receives in connection with the MBIA Facility and the Subordinated Facility and (ii) designate and mark, or cause to be designated and marked, any reports and/or notices which contain any Material Non-Public Information. The Trustee shall promptly forward (i) copies of all reports and notices it receives which have not been marked as containing any Material Non-Public Information to the Holders and (ii) at the request of any Holder, copies of all reports and notices it receives which have been marked as containing Material Non-Public Information to such Holder.

(b) Interest and Principal Payment Certification. The Company shall cause MBIA Corp. to deliver a completed Interest and Principal Payment Certification to the Trustee by no later than 11:00 a.m. New York City time on the third Business Day prior to each Interest Payment Date and make the information contained in the Interest and Principal Payment Certification (or the information therein) public, in accordance with Section 7.12(b)(viii) of the MBIA Credit Agreement.

(c) Maintenance of Datasite. The Company shall maintain, or cause to be maintained, an internet accessible datasite (the “Datasite”) in accordance with Section 5.01(d) of the MBIA Credit Agreement. The Company shall cause all information required to be delivered to the Trustee and/or the Holders to be available on the Datasite. The Company shall cause MBIA Corp. to publicly disclose on a quarterly basis the information described in Section 7.12 of the MBIA Credit Agreement in accordance with the MBIA Credit Agreement.

(d) Notice of Default. So long as any of the Securities are outstanding, the Company will deliver to the Trustee, within five days after any Officer of the Company becoming aware of the occurrence of any Default or Event of Default that has not been cured, a written statement specifying such Default or Event of Default and what action the Company is taking or proposing to take with respect thereto.

(e) Limitation of Trustee Duty. Delivery of reports, information and documents to the Trustee under this Section 4.07 is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from the information contained therein, including the Company’s compliance or non-compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates). The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s compliance with the covenants or with respect to any reports or other documents filed with the SEC or EDGAR or any website or Datasite under this Indenture, or participate in any conference calls.

25

SECTION 4.08. Inspection Rights. Upon reasonable notice from the Trustee, the Insurer or any Holder, the Company will and will cause MBIA Corp. to permit the Trustee (and such Persons acting for the Trustee as the Trustee may reasonably designate), the Insurer (and such Persons acting for the Insurer as the Insurer may reasonably designate) or such Holder during normal business hours at the Company’s sole expense for two inspections in any consecutive period of twelve months unless an Event of Default is continuing, to visit and inspect any of the properties of the Company and MBIA Corp. to examine all of their books and records to make copies and extracts therefrom, including any information about the Collateral or the “Collateral” (as such term is defined in the MBIA Facility), (subject to reasonable confidentiality restrictions), and to discuss their respective affairs, finances and accounts with their respective officers, advisors and independent public accountants (and by this provision each of the Company and MBIA Corp. authorizes such accountants to discuss with the Trustee (and such Persons acting for the Trustee as the Trustee may reasonably designate), the Insurer (and such Persons acting for the Insurer as the Insurer may reasonably designate) or such Holder the affairs, finances and accounts of the Company and MBIA Corp.), all as often, and to such extent, as may be reasonably requested. The chief financial officer of MBIA Corp. and/or his or her designee shall be afforded the opportunity to be present at any meeting of the Trustee, the Insurer or such Holder and such accountants.

SECTION 4.09. Conduct of Business. The Company shall not conduct, transact or otherwise engage in any business, operations or activities other than as set forth below, so long as such business, operations or activities are not prohibited by the Note Documents:

(a) to purchase, accept an assignment of, acquire, own, hold and collect all or any portion of the Collateral;

(b) to take any and all steps necessary or desirable to administer, secure, enforce and collect the loan extended by the Company under the MBIA Facility and any other Collateral;

(c) to take any and all steps necessary to perform any of its funding obligations with respect to the MBIA Facility;

(d) to enter into and perform its obligations under the Note Documents, the Subordinated Facility and the MBIA Facility and all other documents, instruments or agreements which may be necessary in connection with the transactions contemplated thereunder;

(e) to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the laws of the State of Delaware that are reasonably related or incidental to and necessary, convenient or advisable for the accomplishment of the above-mentioned purposes or contemplated by the Note Documents, the Subordinated Facility or the MBIA Facility (including the establishment of bank accounts and referral, management, servicing and administration agreements);

(f) to issue limited liability company interests as provided for in the Company Operating Agreement; and

(g) to the extent not otherwise prohibited in this Indenture or the Note Documents, to take any and all other actions necessary to maintain the existence of the Company as a limited liability company in good standing under the laws of the State of Delaware and/or to qualify the Company to do business as a foreign limited liability company in any other state in which such qualification is required.

26

SECTION 4.10. Use of Proceeds; Margin Regulations; Company Activities

(a) Use of Proceeds. The net proceeds of the Securities shall be used by the Company to make a loan to MBIA Corp. solely pursuant to the MBIA Facility. The Loan Commitment Fee will be netted from the proceeds of the Securities.

(b) Margin Stock. Neither the Company nor MBIA Corp. shall (i) engage in the business of extending credit for the purpose of purchasing or carrying margin stock in violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System or (ii) use any proceeds of the Securities for a purpose which violates Regulations T, U or X of the Board of Governors of the Federal Reserve System.

SECTION 4.11. Limitation on Dividends. The Company shall not declare or pay any dividend or make any other similar payment or distribution on account of its Equity Interests or to the direct or indirect holders of its Equity Interests in their capacity as such.

SECTION 4.12. Maintenance of Accounts.

(a) Collection Account. The Company shall at all times maintain the Collection Account. The Company shall not use any amounts deposited into the Collection Account in any manner or for any purpose other than for transfer to the Mandatory Prepayment Account, Distribution Account and/or MBIA Corp. in accordance with the relevant Interest and Principal Payment Certification and the MBIA Credit Agreement. The Company, or MBIA Corp. on behalf of the Company, may, by written notice to the Trustee, request amounts on deposit in the Collection Account to be transferred into the Mandatory Prepayment Account, the Distribution Account and/or to MBIA Corp. and within one Business Day after the receipt of the Interest and Principal Payment Certification and such request, the Trustee shall initiate the transfer of the amounts to be so transferred in accordance with such request.

(b) Mandatory Prepayment Account. The Company shall at all times on or prior to the Make-Whole Termination Date, maintain the Mandatory Prepayment Account. The Company shall not use any amounts deposited into the Mandatory Prepayment Account in any manner or for any purpose other than for transfer to the Collection Account and/or the Distribution Account in accordance with the relevant Interest and Principal Payment Certification and the MBIA Credit Agreement. The Company, or MBIA Corp. on behalf of the Company, may, by written notice to the Trustee, request amounts on deposit in the Mandatory Prepayment Account to be transferred into the Collection Account and/or the Distribution Account and within one Business Day after the receipt of the Interest and Principal Payment Certification and such request, the Trustee shall initiate the transfer of the amounts to be so transferred in accordance with such request.

(c) The Company shall not maintain any account other than the Collection Account and the Mandatory Prepayment Account.

(d) Distribution Account. At the time of execution and delivery of this Indenture, and for purposes of this Indenture, the Company hereby instructs the Trustee to establish an account for the benefit of Holders (the “Distribution Account”), which shall be a trust account, the assets of which shall not be commingled with the general assets of the Trustee, and over which the Trustee shall have exclusive control and sole right of withdrawal pursuant to this Indenture.

(i) The Trustee shall deposit any amount received by it from MBIA Corp. under the Insurance Policy in the Distribution Account and distribute such amount only for purposes of making scheduled payments hereunder for which a claim was made. Any funds received by the Trustee as a result of any claim under the Insurance Policy shall be applied by the Trustee directly to the payment in full (to the extent of the proceeds received pursuant to the Insurance Policy) of the scheduled payments due on the Securities in accordance with the Interest and Principal Payment Certification.

27

(ii) The Trustee shall make such deposits from any amount received by it from the Company (or MBIA Corp. on behalf of the Company) under this Indenture, other than any amounts under Section 7.06, pursuant to directions received from the Company in the Distribution Account and distribute such amount only for purposes of making scheduled principal and interest payments hereunder in accordance with the Interest and Principal Payment Certification.

(iii) Funds held in the Distribution Account shall not be invested by the Trustee.

(iv) On each Interest Payment Date, or any other payment date pursuant to this Indenture, in respect of the Securities, the Trustee or the Paying Agent shall pay to the Holders, solely to the extent of the funds available therefor in the Distribution Account, the principal and/or interest payments on the Securities to be paid on such payment date in accordance with the Interest and Principal Payment Certification.

(e) Collateral Proceeds Account. At the time of execution and delivery of this Indenture, and for purposes of this Indenture, the Company hereby instructs the Trustee to establish an account for the benefit of Holders (the “Collateral Proceeds Account”), which shall be a trust account, the assets of which shall not be commingled with the general assets of the Trustee, and over which the Trustee shall have exclusive control and sole right of withdrawal pursuant to this Indenture. The Trustee shall make such deposits to the Collateral Proceeds Account as directed by the Company in accordance with such directions.

(i) Funds held in the Collateral Proceeds Account shall not be invested by the Trustee.

(ii) On the same Business Day that the account specified in clause (i) of the definition of “Mandatory Prepayment Account is established, the Company shall provide written notice of such establishment to the Trustee and direct the Trustee to transfer all amounts on deposit in the Collateral Proceeds Account to the account specified in clause (i) of the definition of “Collection Account”. The Trustee shall make such transfer within two Business Days of receipt of such notice and direction.

(f) Securities Proceeds Account. At the time of execution and delivery of this Indenture, and for purposes of this Indenture, the Company hereby instructs the Trustee to establish an account for the benefit of Holders (the “Securities Proceeds Account”), which shall be a trust account, the assets of which shall not be commingled with the general assets of the Trustee, and over which the Trustee shall have exclusive control and sole right of withdrawal pursuant to this Indenture. On the Issue Date, upon the Trustee’s receipt of the proceeds of the Securities issued on the Issue Date, the Company hereby directs the Trustee to deposit such proceeds in the Securities Proceeds Account.

(i) Funds held in the Securities Proceeds Account shall not be invested by the Trustee.

(ii) Upon request from the Company and certification that all amounts on deposit in the Securities Proceeds Account under the Subordinated Facility have been or shall be concurrently used to pay the Zohar II Policy Payment, the Trustee or the Paying Agent shall pay

28

the Zohar II Policy Payment (as defined in the MBIA Credit Agreement), solely to the extent of the funds available therefor in the Securities Proceeds Account. The Company shall deliver a written request (the “Zohar II Policy Payment Request”) to the Trustee and each of the Holders at least one Business Day prior to the date of the requested payment (a) specifying the amount to be paid and the account to which such payment shall be directed and (b) certifying that (1) such payment shall be used to pay the Zohar II Policy Payment and (2) all amounts on deposit in the Securities Proceeds Account under the Subordinated Indenture have been or shall be concurrently used to pay the Zohar II Policy Payment, and upon receipt of such written request and certifications, the Trustee shall pay such amount from the Securities Proceeds Account to the account specified in the Zohar II Policy Payment Request on the payment date requested therein.

(iii) The Trustee shall transfer all amounts remaining on deposit in the Securities Proceeds Account on January 26, 2017 to the Collection Account.

SECTION 4.13. Performance under MBIA Facility. The Company shall cause MBIA Corp. to duly and punctually perform and observe in all material respects its obligations and conditions under the MBIA Facility.

SECTION 4.14. Taxes . The Company shall pay, prior to delinquency, all taxes, assessments, and governmental levies due and payable by the Company except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders. The Company is not a party to, and shall not become a party to, any tax sharing or similar agreement that would obligate it to make payments to MBIA Inc. or any affiliate of MBIA Inc. in respect of taxes, assessments or other governmental levies.

SECTION 4.15. Compliance with Laws; Policies and Procedures.

(a) Without limiting any of the other covenants in this Article 4, the Company, shall (i) conduct its business, and otherwise be, in compliance with all applicable laws, regulations, ordinances and orders of any governmental or judicial authorities if the failure to comply thereunder would reasonably be expected to have a Material Adverse Effect; provided, however, that this Section 4.15 shall not require the Company to comply with any such law, regulation, ordinance or order if it shall be contesting such law, regulation, ordinance or order in good faith by appropriate proceedings and reserves in conformity with GAAP have been provided therefor, (ii) comply with all obligations it might have under Anti-Corruption Laws and (iii) comply with all applicable Sanctions imposed on it.

(b) The Company shall maintain in effect and enforce policies and procedures intended to ensure compliance by the Company and MBIA Corp. and their respective officers, directors, employees and agents with Anti-Corruption Laws and Sanctions.

SECTION 4.16. Limitation on Modifications

(a) The Company shall not amend, modify, waive or otherwise change any provision of the Company Operating Agreement without the prior written consent of the Majority Holders.

(b) The Company shall not amend, modify, waive or otherwise change any provision of the MBIA Facility without the prior written consent of the Majority Holders.

(c) The Company shall not amend, modify, waive or otherwise change any provision of the Subordinated Facility without the prior written consent of the Majority Holders.

29

SECTION 4.17. Further Assurances

(a) The Company agrees that it will, and agrees to cause each Collateral Grantor, at any time and from time to time, at the expense of such Collateral Grantor, promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, to perfect and protect any Lien granted or purported to be granted by the Security Documents, or to enable the Collateral Agent to exercise and enforce its rights and remedies under the Security Documents. Without limiting the generality of the foregoing, the Company shall, and shall cause each Collateral Grantor to, execute, if required, and file, or cause to be filed, such financing or continuation statements under the Uniform Commercial Code (or any non-U.S. equivalent thereto), or amendments thereto, and such other instruments or notices, to protect and preserve the Liens granted or purported to be granted by the Security Documents.

(b) Subject to Section 11.05, the Company hereby authorizes the Collateral Agent (without obligation) to file one or more financing or continuation statements under the Uniform Commercial Code (or any non-U.S. equivalent thereto), and amendments thereto, relative to all or any part of the Collateral without the signature of any Collateral Grantor where permitted by law. The Collateral Agent will promptly send the Company a copy of any financing or continuation statements which it may file without the signature of the relevant Collateral Grantor and the filing or recordation information with respect thereto.

SECTION 4.18. Post-Bankruptcy Restrictions. The Company shall, and shall cause MBIA Corp. and MBIA Inc. to, not take or support any challenge of any transfer made in connection with the Note Documents as a preference or fraudulent conveyance.

ARTICLE V

SUCCESSOR COMPANY

SECTION 5.01. Consolidation, Merger and Sale of Assets. The Company will not, in any transaction or series of transactions, consolidate with or merge into or engage in a scheme of arrangement qualifying as an amalgamation with any Person, or sell, lease, convey, transfer or otherwise dispose of any of its assets to any Person.

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default Each of the following is an “Event of Default”:

(a) failure to pay interest on any Security when such interest becomes due and payable and such default is continued for two Business Days;

(b) failure to pay principal of (or premium including the Make-Whole Premium, if any, on) any Security or any other amounts due hereunder when such amounts become due and payable and such default continues for two Business Days;

(c) (i) failure by the Company to comply with Sections 4.1 through 4.5, 4.9 through 4.13, 4.15, 4.16 and 4.18 or (ii) failure to comply with any other covenant or agreement in this Indenture and such default continues for 15 Business Days;

30

(d) the (i) Insurance Policy ceases to be in full force and effect, (ii) at the option of the Insurer, the Insurance Agreement ceases to be in full force and effect (other than in accordance with the terms thereof or pursuant to the terms of this Indenture or other applicable Note Document), (iii) MBIA Corp. denies or disaffirms its obligations under the Insurance Policy or the Insurance Agreement, or (iv) at the option of the Insurer, failure of any premium payment to be made on the Insurance Policy when due;

(e) (i) the Company, MBIA Corp. or MBIA Inc. shall commence an Insolvency Proceeding, or the Company, MBIA Corp. or MBIA Inc. shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Company, MBIA Corp. or MBIA Inc. any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Company, MBIA Corp. or MBIA Inc. any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Company, MBIA Corp. or MBIA Inc. shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Company, MBIA Corp. or MBIA Inc. shall generally not, or shall be unable to, or shall admit in writing their inability to, pay its debts as they become due;

(f) one or more final judgments or decrees shall be entered against the Company involving in the aggregate a liability (to the extent not covered by insurance) of $5,000,000 or more and all such judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof;

(g) (i) the Security Documents or the Intercreditor Agreement shall for any reason cease to create a valid and perfected first-priority Lien on any portion of the Collateral (other than in accordance with the terms of this Indenture or the terms of the Security Documents) or (ii) any Collateral Grantor asserts in writing that any Lien created under the Security Documents is invalid or unenforceable;

(h) any “Event of Default” shall occur and continue beyond the applicable cure period, if any, under the (i) Subordinated Facility, (ii) MBIA Facility, or (iii) any other Indebtedness of the Company; provided that no effect shall be given to any waiver of any such “Event of Default” granted thereunder;

(i) any material provision of any Note Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder ceases to be in full force and effect; or the Company, MBIA Corp. or MBIA Inc. denies in writing the validity or enforceability of any provision of any Note Document or the validity or priority of a Lien as required by the Security Documents, or the Company, MBIA Corp. or MBIA Inc. denies in writing that it has any or further liability or obligation under any Note Document;

(j) an ERISA Event occurs which results or could reasonably be expected to result in liability of the Company in an aggregate amount (determined as of the date of occurrence of such ERISA Event) which could reasonably be expected to result in a Material Adverse Effect or (ii) the Company or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under any Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Company in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect;

31

(k) a Change of Control shall have occurred; or

(l) any representation or warranty by the Company, MBIA Corp. or MBIA Inc. made or deemed made herein or in any other Note Document or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection herewith shall prove to have been incorrect, false or misleading on or as of the date made or deemed made which failure has a Material Adverse Effect.

SECTION 6.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default described in Section 6.01 (other than Event of Default specified in Section 6.01(e)) occurs and is continuing, then in every such case the Trustee or the Majority Holders, if any, of the Outstanding Securities, may declare the principal amount of all of the Securities and all interest thereon to be due and payable immediately, including the Make-Whole Premium, if any, and any other payments due and owing under the Note Documents, by a notice in writing to the Company (and to the Trustee if given by the Holders) and upon any such declaration such amount (or specified portion thereof) shall become immediately due and payable. Upon the occurrence of an Event of Default specified in Section 6.01(e), the principal amount of all of the Securities, all interest thereon, and the Make-Whole Premium, if any, shall automatically and immediately become due and payable.

For the avoidance of doubt, upon an acceleration pursuant to this Section 6.02, the Make-Whole Premium shall be calculated as of the date of such acceleration and shall be due and owing following such an acceleration. The Company will pay the Make-Whole Premium, as compensation to the Holders for the loss of their investment opportunity and not as a penalty, whether or not an Event of Default specified in Section 6.01(e) has occurred and (if an Event of Default specified in Section 6.01(e) has occurred) without regard to whether the event causing such Event of Default is voluntary or involuntary, or whether payment occurs pursuant to a motion, plan of reorganization, or otherwise, and without regard to whether the Securities and other Notes Obligations are satisfied or released by foreclosure (whether or not by power of judicial proceeding), deed in lieu of foreclosure or by any other means. The Company agrees that payment of the Make-Whole Premium is reasonable under the circumstances currently existing. THE COMPANY EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE MAKE-WHOLE PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Company expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Make-Whole Premium is reasonable and the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Make-Whole Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Holders and the Company giving specific consideration in this transaction for such agreement to pay the Make-Whole Premium; and (D) the Company shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Company expressly acknowledges that its agreement to pay the Make-Whole Premium to the Trustee for the ratable benefit of the Holders as herein described is a material inducement to Holders to purchase the Securities.

At any time after such a declaration of acceleration with respect to Securities has been made, but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article 6, the Majority Holders, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:

(a) the Company has paid or deposited with the Trustee a sum sufficient to pay in U.S. dollars,

(i) all overdue interest, if any, on all Outstanding Securities,

32

(ii) all unpaid principal of (and premium including the Make-Whole Premium, if any, on) any Outstanding Securities which has become due otherwise than by such declaration of acceleration, interest, if any, on such unpaid principal (and premium including the Make-Whole Premium, if any) and all other amounts due and owing under the Note Documents at the rate or rates prescribed therefor in such Securities, and any other amounts due and owing under the Note Documents,

(iii) to the extent that payment of such interest is lawful, interest on overdue interest, if any, at the rate or rates prescribed therefor in such Securities, and

(iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(b) all Events of Default with respect to Securities other than the non-payment of amounts of principal of (or premium including the Make-Whole Premium, if any, on) or interest on Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Upon the Trustee providing any declaration of acceleration, or rescission and annulment thereof pursuant to this Section 6.02 with respect to Securities all or part of which is represented by a Global Security, a record date shall automatically and without any other action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join such declaration of acceleration, or rescission and annulment, as the case may be, which record date shall be the close of business on the date the Trustee shall have provided such declaration of acceleration, or rescission and annulment, as the case may be. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such declaration of acceleration, or rescission and annulment, as the case may be, whether or not such Holders remain Holders after such record date; provided that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having been obtained prior to the day which is 90 days after such record date (or their duly appointed agents), such declaration of acceleration, or rescission and annulment, as the case may by, shall automatically and without any action by any Person be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder (or duly appointed agent thereof) from giving, before or after the expiration of such 90-day period, a declaration of acceleration, or a rescission and annulment of any such declaration, contrary to or different from a declaration previously given by a Holder, or from giving, after the expiration of such period, a declaration identical to a declaration of acceleration, or rescission and annulment thereof, as the case may be, that has been cancelled pursuant to the proviso to the preceding sentence, in any of which events a new record date shall be established pursuant to the provisions of this Section 6.02.

SECTION 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if:

(a) default is made in the payment of any installment of interest on any Security when such interest becomes due and payable and such default continues for a period of two Business Days, or

(b) default is made in the payment of the principal of (or premium including the Make-Whole Premium, if any, on) any Security at the Maturity thereof and on any date required under Section 3.08, or any other payment due and owing under the Note Documents, the Company shall, upon

33

demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium including the Make-Whole Premium, if any) and interest, if any, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium including the Make-Whole Premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name, as Trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.

If an Event of Default with respect to the Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 6.04. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal, premium including the Make-Whole Premium, if any, or interest, if any, or and any other payment due and owing under the Note Documents) shall be entitled and empowered, by intervention in such proceeding or otherwise,

(a) to file and prove a claim for the whole amount of principal (and premium including the Make-Whole Premium, if any) and interest, if any, and any other payment due and owing under the Note Documents, owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

(b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payment to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

34

SECTION 6.05. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

SECTION 6.06. Application of Money Collected. Any money collected by the Trustee or the Collateral Agent pursuant to this Article 6 (including upon any realization of any Lien upon Collateral) shall, subject to the terms of the Security Documents, be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium including the Make-Whole Premium, if any) or interest, if any, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee or the Collateral Agent under Section 7.06;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium including the Make-Whole Premium, if any) and interest, if any, on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium including the Make-Whole Premium, if any) and interest, if any, respectively; and

THIRD: The balance, if any, to the Company or to such party as a court of competent jurisdiction shall direct.

SECTION 6.07. Limitation on Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, the Securities, or the other Note Documents, or for the appointment of a receiver or trustee, or for any other remedy hereunder or thereunder, unless:

(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities;

(b) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(c) such Holder or Holders have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

(d) the Trustee for 30 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Majority Holders;

35

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing themselves of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any such use by a Holder affects, disturbs or prejudices the rights of other Holders or obtains or seeks to obtain priority or preference over such other Holders or enforces any right under this Indenture). Nothing in this section 6.07 shall be construed as limiting the rights of otherwise qualified Holders to petition a court for the removal of a Trustee pursuant to Section 7.07 hereof.

SECTION 6.08. Unconditional Contractual Right of Holders to Receive Principal, Premium and Interest. Subject to the following sentence, notwithstanding any other provision in this Indenture, the Holder of any Security shall have the contractual right, which is absolute and unconditional, to receive payment, as provided herein and in such Security of the principal of (and premium including the Make-Whole Premium, if any) and interest, if any, on such Security on the Stated Maturity or any Maturities (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such contractual rights shall not be impaired without the consent of such Holder. Notwithstanding the foregoing, no amendment to, or deletion or waiver of any of the covenants described in Article 4 of this Indenture or in any other Note Document or any action taken by the Company not prohibited hereunder shall be deemed to impair or affect any rights of any Holder to receive payment of principal of, and premium, interest and Additional Amounts, if any, on, the Securities.

SECTION 6.09. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

SECTION 6.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 2.07, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 6.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 6.12. Control by Holders. The Majority Holders shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Outstanding Securities, provided that in each case (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

36

Upon receipt by the Trustee of any such direction with respect to Securities all or part of which is represented by a Global Security, a record date shall automatically and without any further action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join in such direction, which record date shall be the close of business on the day the Trustee shall have received such direction. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such direction, whether or not such Holders remain Holders after such record date; provided that, unless such direction shall have become effective by virtue of Holders of the requisite principal amount of Outstanding Securities on such record date (or their duly appointed agents) having joined therein on or prior to the 90th day after such record date, such direction shall automatically and without any action by any Person be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder (or a duly appointed agent of a Holder) from giving, before or after the expiration of such 90-day period, a direction contrary to or different from a direction previously given by a Holder, or from giving, after the expiration of such period, a direction identical to a direction that has been cancelled pursuant to the proviso to the preceding sentence, in any of which events a new record date in respect thereof shall be set pursuant to the provisions of this Section 6.12.

SECTION 6.13. Waiver of Past Defaults. Subject to Section 6.02, the Majority Holders may on behalf of the Holders of all the Outstanding Securities waive any past Default or Event of Default hereunder, except a default

(1) in the payment of the principal of (or premium including the Make-Whole Premium, if any) or interest on any Security or the payment of Additional Amounts, if any, or

(2) in respect of a covenant or provision hereof which under Article 10 cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any past Default or Event of Default hereunder. If a record date is fixed, the Holders on such record date (or their duly designated agents), and only such Persons, shall be entitled to waive any such default hereunder, whether or not such Holders remain Holders after such record date; provided, that unless such majority in principal amount shall have been obtained prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture and the other Note Documents; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

SECTION 6.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by the Majority Holders, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium including the Make-Whole Premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the redemption date).

37

SECTION 6.15. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted; provided that this Section shall not prohibit the Company from exercising any rights it may have under this Indenture to contest any actions taken by the Trustee pursuant to this Section.

SECTION 6.16. Subrogation Rights of the Insurer. The Insurer shall be subrogated to the rights of the Holders as provided in the Insurance Agreement.

ARTICLE VII

TRUSTEE

SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and any Note Documents to which it is or will become a party and no implied covenants or obligations shall be read into this Indenture or any of the Note Documents against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.12.

38

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

(f) Except as expressly required by this Indenture, money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

(i) The Trustee shall, upon two Business Days’ prior notice to the Trustee, permit any representative of the Insurer at the Insurer’s own expense, during the Trustee’s normal business hours, to examine all books of account, records, reports and other papers of the Trustee relating to the Securities, to make copies and extracts therefrom and to discuss the Trustee’s affairs and actions, as such affairs and actions relate to the Trustee’s duties with respect to the Securities, with the Trustee’s officers and employees responsible for carrying out the Trustee’s duties with respect to the Securities.

(j) Each of the Holders by acceptance of the Securities hereby irrevocably authorize the Trustee to enter into the Note Documents and to take such action on their behalf under the provisions of the Note Documents and to exercise such powers and perform such duties as are expressly delegated to the Trustee by the terms of this Indenture and the Note Documents, together with such powers as are reasonably incidental thereto.

SECTION 7.02. Rights of Trustee. Subject to Section 7.01:

(a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both, in each case, to the effect that it is so permitted to act or to refrain from acting. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.

(c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture.

(e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

39

(f) Unless otherwise specified in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.

(g) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

(i) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(j) The Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.

(k) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, the Collateral Agent and each agent, custodian and other Person employed to act hereunder.

(l) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

(m) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(n) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

(o) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

40

SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Section 7.09.

SECTION 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Securities or any of the Note Documents, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company or recital in this Indenture, or any statement in any Note Document or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

SECTION 7.05. Notice of Defaults. If a Default occurs with respect to the Securities and is continuing and written notice of such Default has been received by the Trustee as specified in Section 7.02(j), the Trustee shall send to each Holder a notice of the Default within 5 Business Days after such written notice of it is received by a Trust Officer of the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders.

SECTION 7.06. Compensation and Indemnity The Company agrees to: (a) pay to the Trustee, the Collateral Agent and the Loan Administrator, from time to time as agreed to between the Company, the Trustee, the Collateral Agent and the Loan Administrator, reasonable compensation for its services as has been agreed to by the Company, the Trustee, the Collateral Agent and the Loan Administrator, which compensation shall not be limited by any law on compensation of a trustee of an express trust; (b) reimburse the Trustee, Collateral Agent and Loan Administrator upon request for all reasonable out-of-pocket expenses incurred or made by it, including, but not limited to, costs of monitoring the Collateral, costs of monitoring the Company’s compliance with the Note Documents and the MBIA Facility (provided that the Trustee, the Collateral Agent and the Loan Administrator shall have no duty to monitor), costs of collection, in addition to the compensation for its services (such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s, Collateral Agent’s and Loan Administrator’s agents, counsel, accountants, financial advisors, and experts); (c) indemnify, defend, protect and hold harmless the Trustee (in its individual capacity and Trustee capacities), the Collateral Agent (in its capacity as Collateral Agent), the Loan Administrator (in its capacity as Loan Administrator) and their respective directors, officers and agents against any and all loss, damage, claims, liability, cost or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the acceptance or administration of this Indenture and the trusts thereunder and the performance of its duties hereunder or any of the Note Documents (including the costs and expenses of enforcing this Indenture against the Company or defending itself against any claim whether asserted by any Holder or the Company, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder) and (d) after the occurrence of an Event of Default, reimburse the Majority Holders for reasonable compensation and expenses, disbursement and advances of the Majority Holders’ counsel and financial advisors. The Trustee, Collateral Agent and Loan Administrator shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee, Collateral Agent or Loan Administrator to so notify the Company shall not relieve the Company of its obligations hereunder or any of the Note Documents, except to the extent the Company has been prejudiced by such failure. The Company shall defend the claim and the Trustee, Collateral Agent and Loan Administrator may have a single separate counsel for all of them (except to the extent that representation of all of the Trustee, Collateral Agent and Loan Administrator by a single counsel would be improper due to conflict of interest, in which case each of them may retain separate counsel) and the Company shall pay the fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense found by a court of competent jurisdiction in a final, non-appealable judgment to have been incurred by the Trustee, Collateral Agent or Loan Administrator through the Trustee’s, Collateral Agent’s or Loan Administrator’s, as applicable, own willful misconduct or gross negligence.

41

To secure the Company’s payment obligations in this Section 7.06, the Trustee, Collateral Agent and Loan Administrator shall have a lien prior to the Securities on all money or property held or collected by the Trustee, Collateral Agent or Loan Administrator other than money or property held in trust to pay principal of and interest on particular Securities.

The Company’s payment obligations pursuant to this Section shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee, Collateral Agent or Loan Administrator. When the Trustee, Collateral Agent or Loan Administrator incurs expenses after the occurrence of a Default specified in Section 6.01(e) with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law or any similar federal, provincial, territorial or state law for the relief of debtors.

SECTION 7.07. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company. The Majority Holders may remove the Trustee with respect to the Securities by so notifying with 31 days prior notice to the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if:

(a) the Trustee fails to comply with Section 7.09;

(b) the Trustee is adjudged bankrupt or insolvent;

(c) a receiver or other public officer takes charge of the Trustee or its property; or

(d) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed by the Company, or is removed by the Majority Holders and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Outstanding Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.06.

If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 20% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.09, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.

42

SECTION 7.08. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture.

SECTION 7.09. Corporate Trustee Required; Eligibility. (a) There shall at all times be a Trustee hereunder which shall be:

(i) a corporation organized and doing business under the laws of the United States, or of any state or territory thereof, or of the District of Columbia, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by federal or state authority, or

(ii) a corporation or other person organized and doing business under the laws of a foreign government permitted to act as a Trustee pursuant to a rule, regulation or other order of the Commission, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees.

(b) The Trustee shall have at all times a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

ARTICLE VIII

[RESERVED]

ARTICLE IX

SATISFACTION AND DISCHARGE

SECTION 9.01. Satisfaction and Discharge of Indenture. (a) This Indenture and the other Note Documents shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities expressly provided for herein or pursuant hereto and any right to receive Additional Amounts as contemplated by Article 12), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture and the other Note Documents, when:

(i) all Outstanding Securities that have been authenticated, except lost, stolen or destroyed Securities that have been replaced or paid and Securities for which payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation;

43

(ii) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Outstanding Securities (other than contingent obligations or liabilities for which no claim or demand for payment has been made); and

(iii) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

(b) After the conditions to discharge contained in this Article 9 have been satisfied, and the Company has paid or caused to be paid all other sums payable hereunder, and delivered to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that all conditions precedent to satisfaction and discharge have been satisfied, the Trustee upon written request shall acknowledge in writing the discharge of the obligations of the Company and the Insurer. under this Indenture and the other Note Documents.

ARTICLE X

AMENDMENT AND WAIVER 

SECTION 10.01. Without Consent of Holders. The Company, the Trustee, and the Collateral Agent (if applicable) at any time and from time to time, may amend this Indenture and other Note Documents without notice to or consent of any Holder to, but with the written consent of the Insurer (unless an Insurer Default shall have occurred and be continuing) solely if such amendment is adverse to the interests of the Insurer:

(a) cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture or other Note Documents, provided such action shall not adversely affect the interests of the Holders of Securities in any material respect;

(b) provide for uncertificated Securities in addition to or in place of certificated Securities;

(c) add to the covenants of the Company for the benefit of the Holders of the Securities or to surrender any right or power herein or in the other Note Documents conferred upon the Company or MBIA Inc.;

(d) enter into additional or supplemental Security Documents and to add additional assets as Collateral to secure the Securities;

(e) release, terminate or discharge, or to confirm and evidence the release, termination or discharge of, any Collateral when permitted or required by this Indenture or the Security Documents or to amend or supplement any Security Document in accordance with this Indenture or the Security Documents;

(f) accept and consent to, and to take, any and all steps to perfect a security interest in the Collateral granted pursuant to the Security Documents;

(g) evidence and provide for the acceptance of appointment hereunder by a successor Trustee or a successor Collateral Agent and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;

44

(h) provide for the issuance of PIK Securities in accordance with this Indenture; provide for uncertificated Securities in addition to or in replacement of certificated Securities; in the event PIK Securities are issued in certificated form, to make appropriate amendments to this Indenture to reflect changes to minimum denomination of certificated PIK Securities, establish minimum redemption amounts for certificated PIK Securities and other changes necessary to administer the certificated PIK Securities; or

(i) supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the discharge of Securities pursuant to Section 9.01; provided that any such action shall not adversely affect the interests of the Holders of Securities or any other series of Securities in any material respect.

After an amendment under this Section 10.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.01.

SECTION 10.02. With Consent of Holders. Except as provided above in Section 10.01 and below in this Section 10.02, the Company, the Trustee and the Collateral Agent (if applicable) may amend this Indenture and the other Note Documents, with the written consent of the Insurer (unless an Insurer Default shall have occurred and be continuing) solely if such amendment is materially adverse to the interests of the Insurer, and the written consent of the Holders of at least a majority in principal amount of the Outstanding Securities affected (including consents obtained in connection with a tender offer or exchange for the Securities) and any past default or compliance with any provisions may also be waived with the written consent of the Insurer (unless an Insurer Default shall have occurred and be continuing) solely if such waiver is adverse to the interests of the Insurer and the consent of the Holders of at least a majority in principal amount of the Outstanding Securities affected. However, without the consent of each Holder of an Outstanding Security affected thereby, an amendment or waiver may not:

(a) change the Stated Maturity of the principal of or any installment of interest on any Security, or change the due date of the Make-Whole Premium or any other premium;

(b) reduce the principal amount thereof (or premium including the Make-Whole Premium, if any) or the rate of interest, if any, on any Security;

(c) change any obligation of the Company to pay Additional Amounts contemplated by Section 12.01;

(d) reduce the amount of the principal of any Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02 or the amount thereof provable in bankruptcy pursuant to Section 6.04, or adversely affect any right of repayment at the option of any Holder;

(e) change the currency of payment of principal on (or premium including the Make-Whole Premium, if any) or interest, if any on any Security;

(f) reduce the percentage in aggregate principal amount of the Outstanding Securities required for the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults and their consequences provided for in this Indenture;

45

(g) change any provision of the Note Documents providing for payments or redemptions, in each case, to be applied pro rata among the Holders entitled to such payments or redemptions of Securities;

(h) make any change in, or release other than in accordance with this Indenture that would adversely affect the Holders of any such Securities; or

(i) release the Liens for the benefit of the Holders on all or substantially all of the Collateral other than in accordance with this Indenture and the Security Documents;

(j) release the Company or MBIA Inc. from its obligations under this Indenture or any other Note Document, other than in accordance with this Indenture and the other Note Documents; or

(k) modify any of the provisions of this Section or Section 6.13 except to increase any percentage or to provide that certain provisions of this Indenture cannot be waived without the consent of the Holder of each Outstanding Security.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any amendment hereto. If a record date is fixed, the Holders on such record date or their duly designated agents, and only such Persons, shall be entitled to consent to such amendment, whether or not such Holders remain Holders after such record date; provided that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

It shall not be necessary to approve the particular form of any proposed amendment, but it shall be sufficient if the substance thereof shall be approved.

SECTION 10.03. Execution of Amendments. The Trustee and the Collateral Agent (if applicable) shall sign any amendment authorized pursuant to this Article 10 if such amendment does not adversely affect the rights, duties or immunities of the Trustee or Collateral Agent, as applicable. In executing, or accepting the additional trusts created by this Article 10 or the modifications thereby of the trusts created by this Indenture, the Trustee and Collateral Agent (if applicable) shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of Company, enforceable against them in accordance with its terms, subject to customary exceptions. The Trustee and the Collateral Agent (if applicable) may, but shall not be obligated to, enter into any such amendment which affects the Trustee’s or Collateral Agent’s, as applicable, own rights, duties or immunities under this Indenture or otherwise.

SECTION 10.04. Effect of Amendments. Upon the execution of any amendment under this Article 10, this Indenture or the applicable Note Document shall be modified in accordance therewith, and such amendment shall form a part of this Indenture or the applicable Note Document for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 10.05. Reference in Securities to Amendments. Securities authenticated and delivered after the execution of any amendment pursuant to this Article 10 may bear a notation as to any matter provided for in such amendment. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Company, to any such amendment may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

46

SECTION 10.06. Notice of Amendments. Promptly after the execution by the Company and the Trustee of any amendment pursuant to the provisions of Section 10.03, the Company shall give notice thereof to the Holders of each Outstanding Security affected, in the manner set forth in Section 13.01, setting forth in general terms the substance of such amendment.

ARTICLE XI

SECURITY

SECTION 11.01. Security Documents; Additional Collateral.

(a) In order to secure the due and punctual payment of the Notes Obligations, (i) on the Issue Date, simultaneously with the execution and delivery of this Indenture, the Collateral Grantors have executed Security Documents granting to the Collateral Agent for the benefit (or, where applicable, as direct representative) of the Secured Creditors a first-priority perfected Lien in the Collateral, and (ii) after the Issue Date, each other affiliate of the Company that is required to become a Collateral Grantor pursuant to Section 4.17 shall execute and deliver the necessary Security Documents in order to grant to the Collateral Agent a first-priority perfected Lien in all assets of such Person which are required to, but do not already, constitute Collateral.

(b) The Company shall cause every Collateral Grantor to from time to time take the actions required by Section 4.17.

SECTION 11.02. Releases of Collateral. The Notes Obligations will no longer be required to be secured by Liens on Collateral and the Liens securing the Notes Obligations will be released:

(a) in whole, upon the payment in full of all Notes Obligations (other than contingent obligations or liabilities for which no claim or demand for payment has been made);

(b) if the Company’s obligations under this Indenture are satisfied and discharged pursuant to Article 9; and

(c) in whole or in part, with the consent of the requisite Holders as provided in Section 10.02.

SECTION 11.03. Release Documentation. Upon compliance with the conditions to release of all or any portion of the Collateral set forth in Section 11.02, the Collateral Agent and the Trustee shall forthwith take all necessary action (at the request of and the expense of the Company, accompanied by an Officer’s Certificate and Opinion of Counsel that the conditions precedent to such release have been satisfied) to release and re-convey to the applicable Collateral Grantor or the Company the applicable portion of the Collateral that is authorized to be released pursuant to Section 11.02, and shall deliver such Collateral in its possession to the applicable Collateral Grantor or the Company, including, without limitation, executing and delivering releases and satisfactions wherever required. Neither the Trustee nor the Collateral Agent shall be liable for any such release undertaken in reliance upon any such Officer’s Certificate or Opinion of Counsel, and the Trustee and the Collateral Agent shall not be under any obligation to release any such Lien and security interest, or execute and deliver any such instrument of release, satisfaction or termination, unless and until it receives such Officer’s Certificate and Opinion of Counsel.

47

SECTION 11.04. Possession and Use of Collateral; No Impairment of the Security Interests.

(a) So long as no Event of Default has occurred and is continuing, and subject to the terms of this Indenture, the Security Documents, the MBIA Facility and the Company Operating Agreement, each Collateral Grantor will be entitled to freely operate the property and assets constituting the Collateral pledged by it and to receive, invest and dispose of all cash dividends, principal, interest and other payments made upon or with respect to the Collateral pledged by it and to exercise any voting and other consensual rights pertaining to the Collateral pledged by it.

(b) No Collateral Grantor shall take any action, or omit to take any action, which action or omission would have the result of impairing the validity, perfection or priority of the security interests in the Collateral created by the Security Documents, (except as expressly set forth in this Indenture or the Security Documents, including any action that would result in a Permitted Collateral Lien (as defined in the Security Documents)).

(c) The Collateral Agent will distribute all funds received by it in accordance with the provisions of the Security Documents, and the Trustee will distribute all funds received by it from the Collateral Agent for the benefit of the Trustee and the Holders in accordance with the provisions of this Indenture.

SECTION 11.05. Collateral Agent. The Trustee and each of the Holders by acceptance of the Securities hereby authorize the appointment of the Collateral Agent as the Trustee’s and the Holders’ Collateral Agent under the Security Documents, and the Trustee and each of the Holders by acceptance of the Securities hereby irrevocably authorize the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement and to take such action on their behalf under the provisions of the Security Documents and to exercise such powers and perform such duties as are expressly delegated to the Collateral Agent by the terms of this Indenture, the Security Documents and the Intercreditor Agreement, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Security Documents and the Intercreditor Agreement, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, in the Security Documents to which the Collateral Agent is a party and the Intercreditor Agreement or as requested by the Majority Holders (subject to this Section 11.05), nor shall the Collateral Agent have or be deemed to have any trust or fiduciary relationship with the Trustee, any Holder, the Company or any Collateral Grantor, either before or after the occurrence of an Event of Default, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Security Documents and the Intercreditor Agreement or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. For the avoidance of doubt, the Collateral Agent shall have no discretion under this Indenture, the Intercreditor Agreement or the Security Documents and shall not be required to make or give any determination, consent, approval, request or direction without the written direction of the Holders of a majority in aggregate principal amount of the then outstanding Notes or the Trustee, as applicable.

The Trustee is authorized and directed by the Holders and the Holders by acquiring the Securities are deemed to have authorized the Trustee, as applicable, to cause the Collateral Agent to enter into and perform its obligations under the Security Documents and the Intercreditor Agreement. The Collateral Agent is authorized and directed by the Trustee and the Holders and the Holders by acquiring the

48

Securities are deemed to have authorized the Collateral Agent, to (i) enter into the Security Documents to which it is a party and the Intercreditor Agreement, (ii) bind the Trustee and the Holders on the terms as set forth in such Security Documents and the Intercreditor Agreement and (iii) perform and observe its obligations and exercise its rights and powers under such Security Documents, including entering into amendments and other modifications permitted by the terms of this Indenture, the Intercreditor Agreement or the Security Documents. Each Holder, by its acceptance of a Security, is deemed to have consented and agreed to the terms of each Security Document and the Intercreditor Agreement, as originally in effect and as amended, restated, replaced or modified from time to time in accordance with its terms or the terms of this Indenture.

The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless the Collateral Agent shall have received written notice from the Trustee or unless a written notice of any event which is in fact such a Default is received by the Collateral Agent at the address specified in Section 13.01, and such notice references the Securities and this Indenture. The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Trustee in accordance with Article 6 or the Majority Holders (subject to this Section 11.05).

The Collateral Agent shall have no obligation and makes no representation whatsoever to the Trustee or any of the Holders as to the existence, genuineness, value or protection of the Collateral or the sufficiency of any Security Documents, or that the Collateral is owned by any of the Collateral Grantors or is cared for, protected or insured or has been encumbered, or that the Collateral Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, maintained or enforced or are entitled to any particular priority, or to determine whether all of the Collateral Grantor’s property constituting Collateral intended to be subject to the Lien and security interest of the Security Documents has been properly and completely listed or delivered, as the case may be, or the genuineness, validity, marketability or sufficiency thereof or title thereto, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or available to the Collateral Agent pursuant to this Indenture or any other Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Collateral Agent shall have no other duty or liability whatsoever to the Trustee or any Holder as to any of the foregoing. The grant of permissive rights or powers to the Collateral Agent shall not be construed to impose duties to act. For the avoidance of doubt, nothing herein shall require the Collateral Agent to file financing statements or continuation statements, to record any documents or instruments in any public office at any time or be responsible for perfection or maintaining the perfection of the security interests purported to be created by the Security Documents and such responsibility shall be solely that of the Company.

Each of the Collateral Agent and the Trustee, each in its capacity as such, shall not be liable or responsible for the failure of the Company or any Collateral Grantor to maintain insurance on the Collateral, nor shall it be responsible for any loss due to the insufficiency of such insurance or by reason of the failure of any insurer to pay the full amount of any loss against which it may have insured to the Company or any Collateral Grantor, the Trustee, the Collateral Agent or any other Person.

The provisions of Article 7, mutatis mutandis, shall apply to the Collateral Agent. Without limiting the generality of such preceding sentence, and notwithstanding anything to the contrary contained in this Indenture, the Intercreditor Agreement or the Security Documents, in the event the Collateral Agent is entitled or required to commence an action to foreclose or otherwise exercise its remedies to acquire control or possession of the Collateral, the Collateral Agent shall not be required to commence any such action or exercise any remedy or to inspect or conduct any studies of any property under mortgages or take any such other action if the Collateral Agent has determined that the Collateral Agent

49

may incur personal liability as a result of the presence at, or release on or from, the Collateral or such property, unless the Collateral Agent has received security or indemnity from the Holders in an amount and in a form all satisfactory to the Collateral Agent in its sole discretion, protecting the Collateral Agent from all such liability. The Collateral Agent shall at any time be entitled to cease taking any action described above if it no longer reasonably deems any indemnity, security or undertaking from the Company or the Holders to be sufficient.

SECTION 11.06. Replacement of Collateral Agent. The Collateral Agent may resign at any time by so notifying the Company. The Majority Holders may remove Collateral Agent with respect to the Securities by so notifying with 31 days prior notice to the Collateral Agent and may appoint a successor Collateral Agent. The Company shall remove Collateral Agent if:

(a) the Collateral Agent is adjudged bankrupt or insolvent;

(b) a receiver or other public officer takes charge of the Collateral Agent or its property; or

(c) the Collateral Agent otherwise becomes incapable of acting.

If the Collateral Agent resigns or is removed by the Company, or is removed by the Majority Holders and such Holders do not reasonably promptly appoint a successor Collateral Agent, or if a vacancy exists in the office of Collateral Agent for any reason (the Collateral Agent in such event being referred to herein as the retiring Collateral Agent), the Company shall promptly appoint a successor Collateral Agent.

A successor Collateral Agent shall deliver a written acceptance of its appointment to the retiring Collateral Agent and to the Company. Thereupon the resignation or removal of the retiring Collateral Agent shall become effective, and the successor Collateral Agent shall have all the rights, powers and duties of the Collateral Agent under this Indenture. The successor Collateral Agent shall mail a notice of its succession to Holders of the Securities. The retiring Collateral Agent shall promptly transfer all property held by it as Collateral Agent to the successor Collateral Agent.

If a successor Collateral Agent does not take office within 30 days after the retiring Collateral Agent resigns or is removed, the retiring Collateral Agent or the Holders of 20% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent.

SECTION 11.07. Purchaser Protected. No purchaser or grantee of any property or rights purporting to be released from the Liens in favor of the Collateral Agent shall be bound to ascertain the authority of the Collateral Agent or Trustee to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority so long as the conditions set forth in Section 11.02 have been satisfied.

SECTION 11.08. Authorization of Receipt of Funds by the Trustee Under the Security Documents. The Trustee is authorized to receive any funds for the benefit of Holders distributed under the Security Documents and to apply such funds as provided in Section 6.06.

SECTION 11.09. Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon any Collateral Grantor, as applicable, with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of any Collateral Grantor, as applicable, or of any officer or officers thereof required by the provisions of this Article 11.

50

SECTION 11.10. Compensation and Indemnification. The Collateral Agent shall be entitled to the compensation and indemnification set forth in Section 7.06 (with the references to the Trustee therein being deemed to refer to and include the Collateral Agent).

SECTION 11.11. Form of Security Documents and Opinions. To the extent that any provision of this Indenture or any Security Document requires the execution or delivery by the Trustee or the Collateral Agent after the Issue Date of any Security Documents, agreements, certificates, opinions or other documents, in each case, in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, or other similar discretionary approval, or in substantially in the same form as such Security Documents, agreements, certificates, opinions or other documents were delivered on the Issue Date or as attached hereto, the Holders, by acquiring the Securities, are deemed to have approved the form and substance of any such Security Documents, agreements, certificates, opinions or other documents in substantially the same form as those executed and delivered on the Issue Date, in each case, with such changes as may be appropriate to reflect the entity subject to or the subject of or the governing law of such Security Documents, agreements, certificates, opinions or other documents and the jurisdiction of organization of such entity and hereby authorize the Trustee and the Collateral Agent, as applicable, to execute such documents and accept such documents and opinions. For the avoidance of doubt, this Section 11.11 shall not supersede any requirement contained herein regarding the delivery of an Officer’s Certificate or an Opinion of Counsel, stating that all conditions precedent to the execution and delivery of such Security Documents have been satisfied and the Trustee and Collateral Agent, as applicable, is permitted to execute and deliver such Security Documents.

ARTICLE XII

ADDITIONAL AMOUNTS 

SECTION 12.01. Payment of Additional Amounts.

(a) The Company shall pay any amounts due with respect to the Securities without deduction or withholding for any and all present and future withholding taxes, levies, imposts and charges (a “withholding tax”) imposed by or for the account of the United States of America, the State of Delaware or any other jurisdiction in which the Company is a resident for tax purposes or any political subdivision or taxing authority of such jurisdiction (the “Taxing Jurisdiction”), unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, the Company will, to the fullest extent allowed by law (subject to compliance by the holder of a Security with any relevant administrative requirements), pay additional amounts (the “Additional Amounts”) in respect of principal amount, redemption price and interest (if any), in accordance with the terms of the Securities and this Indenture, as may be necessary so that the net amounts paid to the holder or the Trustee after such deduction or withholding will equal the principal amount, redemption price and interest (if any), on the Securities. However, the Company will not pay any Additional Amounts in the following instances:

(i) if any withholding would not be payable or due but for the fact that (i) the holder of a Security (or a fiduciary, settlor, beneficiary of, member or shareholder of, the holder, if the holder is an estate, trust, partnership or corporation) is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or being physically present in, the Taxing Jurisdiction or otherwise having some present or former connection with the Taxing Jurisdiction other than solely the holding or ownership of the Security or the collection of principal amount, redemption price, repurchase price and interest (if any), in accordance with the terms of the Securities and this Indenture, or the enforcement of the Security or (ii) where presentation is required, the Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later;

51

(ii) if and to the extent the withholding tax is pursuant to the law in effect at the time the holder acquires Securities and the assignor to the holder was not entitled to such Additional Amounts at the time of the holder’s acquisition;

(iii) if any withholding tax would not have been imposed but for the failure to comply with Section 12.01(c), if such compliance is required by statute or by regulation as a precondition to relief or exemption from such withholding tax and such holder or beneficial owner is legally able to so comply;

(iv) if any withholding tax or deduction is required to be made in respect of any tax, duty, assessment or other governmental charge imposed or withheld pursuant to Sections 1471 through 1474 of the Code, as of the date hereof (or any amended or successor version), current or future U.S. Treasury Regulations issued thereunder or any official interpretation thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (hereinafter “FATCA”); or

(v) any combination of the instances described in the preceding clauses.

(b) If a holder receives a refund of any taxes as to which the Company has paid Additional Amounts pursuant to this Section 12.01 (including in respect of the payment of Additional Amounts pursuant to this Section 12.01), such holder shall pay to the Company an amount equal to such refund, net of all out of pocket expenses (including taxes) of the holder and without interest (other than any interest paid by the relevant governmental authority with respect to such refund). The Company shall repay to the holder the amount paid over pursuant to this clause (b) (plus any penalties, interest, or other charges imposed by the relevant governmental authority) in the event that the holder is required to repay such refund to such governmental authority.

(c) Tax Forms.

(i) Each non-U.S. holder shall (w) on or prior to the date such non-U.S. holder becomes a holder hereunder, (x) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (c) and (y) from time to time if reasonably requested by the Company or the Trustee, provide the Company, the Trustee and the Paying Agent with two properly completed and duly executed originals of one of the following, as applicable: (A) Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is effectively connected with a U.S. trade or business), W-8BEN-E or other applicable W-8 Form (claiming exemption from, or a reduction of, U.S. withholding tax under an income tax treaty) and/or W-8IMY (together with appropriate forms, certifications and supporting statements) or any successor forms, (B) in the case of a non-U.S. holder claiming exemption under Sections 871(h) or 881(c) of the Code, Form W-8BEN-E or other applicable W-8 Form (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to the Company that such non-U.S. holder is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS that enables the Company to determine its withholding and reporting obligations.

52

(ii) Each U.S. holder shall (w) on or prior to the date such holder becomes a holder hereunder, (x) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (ii) and (y) from time to time if requested by the Company, provide the Company with two completed originals of Form W-9 (certifying that the holder is entitled to an exemption from U.S. backup withholding tax) or any successor form.

(iii) If a payment made to a holder under this Indenture would be subject to U.S. withholding tax imposed by FATCA if such holder were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such holder shall deliver to the Company, the Trustee and the Paying Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Company, the Trustee or the Paying Agent, such documentation and information prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation and information reasonably requested by the Company, the Trustee or the Paying Agent as may be necessary for the Company, the Trustee or the Paying Agent, as applicable, to comply with their respective obligations under FATCA, to determine that such holder has or has not complied with its obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. For purposes of this Section 12.01(c), FATCA shall include any amendments made to FATCA after the Issue Date.

ARTICLE XIII

MISCELLANEOUS 

SECTION 13.01. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows:

if to the Company:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

if to the Trustee or the Collateral Agent:

Wilmington Savings Fund Society, FSB

500 Delaware Avenue

Wilmington, Delaware 19801

Attention: Corporate Trust Administration

if to the Insurer:

MBIA Insurance Corporation

One Manhattanville Road

Suite 301

Purchase, New York 10577

53

The Company or the Trustee or the Collateral Agent by notice to the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication mailed (or, in the case of Global Securities, sent to the Depositary pursuant to Applicable Procedures) to a Holder shall be sent to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so sent within the time prescribed.

Failure to mail or otherwise send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is sent in the manner provided above, it is duly given, whether or not the addressee receives it.

The Trustee and Collateral Agent agree to accept and act upon instructions or directions pursuant to this Indenture and any other Note Document sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee and Collateral Agent, as applicable, in a timely manner, and such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions. If the party elects to give the Trustee and Collateral Agent, as applicable, e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee and Collateral Agent, as applicable, in its discretion elects to act upon such instructions, the Trustee’s and Collateral Agent’s, as applicable, understanding of such instructions shall be deemed controlling. The Trustee and Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s and Collateral Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee and Collateral Agent, including without limitation the risk of the Trustee and Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.

SECTION 13.02. Certificate as to Conditions Precedent. Upon any request or application by the Company to the Trustee or the Collateral Agent to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee or the Collateral Agent an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee or the Collateral Agent stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with.

SECTION 13.03. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

(a) a statement that the individual making such certificate or opinion has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

54

(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representation by, counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 13.04. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.

SECTION 13.05. Legal Holidays. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

SECTION 13.06. Governing Law; Waiver of Jury Trial.

(a) This Indenture and any claim, controversy or dispute related to or in connection with this Indenture, any Note Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS INDENTURE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY

55

APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY NOTE DOCUMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.

(c) Each party to this Indenture irrevocably consents to service of process in the manner provided for notices in Section 13.01. Nothing in this Indenture will affect the right of any party to this Indenture to serve process in any other manner permitted by law.

SECTION 13.07. No Recourse Against Others. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under or in respect of the Securities or this Indenture, this Indenture or other Note Document, as applicable. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities.

SECTION 13.08. Successors. All agreements of the Company in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 13.09. Counterparts. This Indenture may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Indenture by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Indenture.

SECTION 13.10. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 13.11. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee and Loan Administrator, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee and Loan Administrator. The parties to this Indenture agree that they will provide the Trustee and Loan Administrator with such information as it may request in order for the Trustee and Loan Administrator to satisfy the requirements of the U.S.A. Patriot Act.

SECTION 13.12. Tax Characterization. Each party to this Indenture and the Loan Administrator (a) acknowledges and agrees that it is the intent of the parties to this Indenture that for all purposes, including federal, state and local income, single business and franchise tax purposes, the

56

Securities will be treated as evidence of indebtedness of the Company and the Company will not be characterized as an association or publicly traded partnership that is taxable as a corporation, (b) agrees to treat the Securities for federal, state and local income and franchise tax purposes as indebtedness and (c) agrees that the provisions of all Note Documents shall be construed to further these intentions of the parties.

SECTION 13.13. Multiple Roles. The parties hereto expressly acknowledge and consent to Wilmington Savings Fund Society, FSB, acting in the multiple roles of Trustee, Collateral Agent and Loan Administrator. Wilmington Savings Fund Society, FSB may, in such capacities, discharge its separate functions fully, without hindrance or regard to conflict of interest principles, duty of loyalty principles or other breach of fiduciary duties to the extent that any such conflict or breach arises from the performance by Wilmington Savings Fund Society, FSB of express duties set forth in this Indenture or the other Note Documents in any of such capacities, all of which defenses, claims or assertions are hereby expressly waived by the other parties hereto except in the case of negligence (other than errors in judgment), bad faith or willful misconduct by Wilmington Savings Fund Society, FSB.

SECTION 13.14. Confidentiality. Each of the Trustee, the Collateral Agent and, to the extent it accesses Confidential Information through the Datasite, each Holder and each beneficial owner of an interest in a Global Security agrees to maintain the confidentiality of the Confidential Information (as defined in the MBIA Credit Agreement), except that Confidential Information may be disclosed (a) to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and instructed to keep such Information confidential in accordance with customary practices); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Note Document or any action or proceeding relating to this Indenture or any other Note Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same (or at least as restrictive) as those of this Section 13.14 (or as may otherwise be reasonably acceptable to the Company), to (x) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights and obligations under this Indenture, or (y) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Company and its obligations, this Indenture or payments hereunder; (g) with the consent of the Company; or (h) to the extent that such Confidential Information (x) becomes publicly available other than as a result of a breach of this Section 13.14, or (y) becomes available to the Trustee, the Collateral Agent or any of their Affiliates on a nonconfidential basis from a source other than the Company, which source is not known by the Trustee, the Collateral Agent or such Affiliate to be bound by a confidentiality obligation to the Company or its Affiliate.

SECTION 13.15. Benefits of Indenture. The Insurer and its successors and assigns shall be a third-party beneficiary to the provisions of this Indenture which expressly provide rights to the Insurer, and shall be entitled to rely upon and directly to enforce such provisions of this Indenture so long as no Insurer Default shall have occurred and be continuing.

[SIGNATURE PAGES FOLLOW]

57

MZ FUNDING LLC, as Company
By:
	Name:
	Title:

[Signature page to the Indenture]

WILMINGTON SAVINGS FUND SOCIETY, FSB, as Trustee and as Collateral Agent
By:
	Name:
	Title:

[Signature page to the Indenture]

Appendix A

PROVISIONS RELATING TO SECURITIES

1. Definitions.

1.1 Definitions

For the purposes of this Appendix the following terms shall have the meanings indicated below:

“Definitive Security” means a certified Security registered in the name of the Holder thereof and issued in accordance with Section 2.3 to Appendix A of this Indenture, in substantially the form of a Global Security hereto, except that such Security shall not bear the Global Security Legend and shall not have the “Schedule of Exchanges of Interests in the Global Security” attached hereto.

“Global Security Legend” means the legend set forth in Section 2.3(e)(3) of this Appendix A, which is required to be placed on all Global Securities issued under this Indenture.

“Institutional Accredited Investor Security” means a Security issued to an Institutional Accredited Investor in a private transaction.

“Regulation S Security” means a Security issued in an Offshore Transaction (as defined in Rule 902) in compliance with Rule 903 or Rule 904.

“Securities Custodian” means the custodian with respect to a Global Security (as appointed by the Depositary), or any successor Person thereto and shall initially be the Trustee.

Capitalized terms used and not otherwise defined in this Appendix A shall have the meanings given to them in the Indenture.

1.2 Other Definitions.

Term	Defined in Section:
“144A Global Security”		2.1	(a)
“Agent Members”		2.1	(b)
“Global Security”		2.1	(a)
“Rule 144A Security”		2.1	(a)

2. The Securities.

2.1 (a) Form and Dating. The Securities may be issued either in the form of Definitive Securities or, in the case only of Securities whose resale is restricted to transactions in compliance with Rule 144A (each, a “Rule 144A Security”), in the form of one or more permanent global restricted Securities in definitive fully registered form (each, a “Global Security”). A Global Security shall have the global securities legend set forth in Exhibit 1.1. and shall be deposited on behalf of the purchasers of the Securities represented thereby with the Securities Custodian and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided.

A-1

(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depositary.

The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Securities that (1) shall be registered in the name of the Depositary for such Global Security or Global Securities or the nominee of such Depositary and (2) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Securities Custodian. Each Global Security shall have a minimum denomination of $250,000 at issuance thereof.

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as the Securities Custodian of the Depositary or under such Global Security, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depositary as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security.

(c) Certificated Securities. Except for Rule 144A Securities, which may be issued in the form of Global Securities as provided in Section 2.1(b), all Securities shall be issued as Definitive Securities.

2.2 Authentication. The Trustee shall authenticate and deliver: on the Issue Date, an aggregate principal amount of $328,250,000.00 14% Senior Secured Notes due 2020.

2.3 Transfer and Exchange.

(a) Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary in accordance with the provisions hereof and the Applicable Procedures. Beneficial interests in Global Securities shall be subject to restrictions on transfer comparable to those set forth herein and as otherwise required by the Securities Act. Transfers of beneficial interests in a Global Security shall be in a minimum denomination of $250,000. Transfers of beneficial interests in Global Securities also shall require compliance with either clause (1) or (2) below, as applicable, as well as one or more of the other following clauses, as applicable:

(1) Transfer of Beneficial Interests in the Same Global Security. Beneficial interests in any Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Security in accordance with the transfer restrictions set forth in the Private Placement Legend and any Applicable Procedures. Except as may be required by any Applicable Procedures, no written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.3(a)(1).

A-2

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Securities. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.3(a)(1) above, the transferor of any such beneficial interest must deliver to the Registrar either (A)(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) if permitted under Section 2.3(b) or 2.3(g) hereof, (i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Security in an amount equal to the beneficial interest to be transferred or exchanged and (ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Security shall be registered to effect the transfer or exchange referred to in (B)(i) above. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in the Indenture and the Securities or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Security(s) pursuant to Section 2.3(g) hereof.

(3) Transfer of Beneficial Interests in a Global Security to Another Global Security. A beneficial interest in any Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Global Security if the transfer complies with the requirements of Section 2.3(a)(2) above and the Registrar receives a certificate in the form of Appendix B hereto, including the certifications in item (1) thereof.

(b) Transfer or Exchange of Beneficial Interests in Global Securities for Definitive Securities. Subject to Section 2.4 hereof, if any holder of a beneficial interest in a Global Security proposes to exchange such beneficial interest for a Definitive Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Security, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Global Security proposes to exchange such beneficial interest for a Definitive Security, a certificate from such holder in the form of Appendix C hereto, including the certifications in item (1)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in compliance with Rule 144A, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (1) thereof;

(C) if such beneficial interest is being transferred in an Offshore Transaction (as defined in Rule 902 of Regulation S) in compliance with Rule 903 or Rule 904, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred to an Institutional Accredited Investor in a private transaction, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (3) thereof; and

(E) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (4) thereof,

A-3

the Trustee shall reduce or cause to be reduced in a corresponding amount pursuant to Section 2.3(g) hereof the aggregate principal amount of the applicable Global Security, and the Company shall execute and the Trustee shall authenticate and deliver a Definitive Security in the appropriate principal amount to the Person designated by the holder of such beneficial interest in instructions delivered to the Registrar by the Depositary and the applicable Participant or Indirect Participant on behalf of such holder. Any Definitive Security issued in exchange for a beneficial interest in a Global Security pursuant to this Section 2.3(b) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall designate in such instructions. The Trustee shall deliver such Definitive Securities to the Persons in whose names such Securities are so registered. Any Definitive Security issued in exchange for a beneficial interest in a Global Security pursuant to this Section 2.3(b)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(c) Transfer and Exchange of Definitive Securities for Beneficial Interests in Global Securities. If any holder of a Definitive Security that is a QIB proposes to exchange such Security for a beneficial interest in a Global Security or if a holder proposes to transfer such Definitive Security to a QIB who takes delivery thereof in the form of a beneficial interest in a Global Security, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such Definitive Security proposes to exchange such Security for a beneficial interest in a Global Security, a certificate from such holder in the form of Appendix C hereto, including the certifications in item (1)(b) thereof; or

(B) if such Definitive Security is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (1) thereof.

the Trustee shall cancel the Definitive Security, increase or cause to be increased in a corresponding amount pursuant to Section 2.3(g) hereof the aggregate principal amount of the appropriate Global Security.

(d) Transfer and Exchange of Definitive Securities for Definitive Securities. Upon request by a holder of Definitive Securities and such holder’s compliance with the provisions of this Section 2.3(d), the Registrar shall register the transfer or exchange of Definitive Securities. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.3(d), including:

(A) if the holder of such Definitive Security proposes to exchange such Security for another Definitive Security, a certificate from such holder in the form of Appendix C hereto, including the certifications in item (1)(c) thereof; or

(B) if such Definitive Security is being transferred to a QIB in compliance with Rule 144A, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (1) thereof;

(C) if such Definitive Security is being transferred in an Offshore Transaction (as defined in Rule 902 of Regulation S) in compliance with Rule 903 or Rule 904, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (2) thereof;

A-4

(D) if such Definitive Security is being transferred to an Institutional Accredited Investor in a private transaction, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (3) thereof; or

(E) if such Definitive Security is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (4) thereof.

Upon satisfaction of the conditions of this Section 2.3(d), the Trustee shall cancel the prior Definitive Security and the Company shall execute, and the Trustee shall authenticate and deliver a Definitive Security in the appropriate principal amount to the Person designated by the holder of such prior Definitive Security in instructions delivered to the Registrar by such holder.

(e) Legends. The following legends shall appear on the face of all Global Securities and Definitive Securities issued under the Indenture unless specifically stated otherwise in the applicable provisions of the Indenture.

(1) Private Placement Legend.

Each Global Security and each Definitive Security (and all Securities issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS (A) A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT OR (B) A PERSON WHO HAS ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION (AS DEFINED IN RULE 902 OF REGULATION S UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S OR (C) AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3), OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN,“INSTITUTIONAL ACCREDITED INVESTOR”); AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A PRIVATE TRANSACTION. PRIOR TO REGISTRATION OF TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE.

A-5

THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.”

“BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.”

“THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.”

“EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS

A-6

THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.”

(2) Regulation S Legend. Each Definitive Security issued pursuant to Regulation S shall also bear a legend in substantially the following form:

“THE ACQUIRER AGREES FOR THE BENEFIT OF THE COMPANY THAT PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, ANY OFFER OR SALE OF THE NOTES SHALL NOT BE MADE BY IT TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON WITHIN THE MEANING OF RULE 902 OF REGULATION S.”

(3) Global Security Legend. Each Global Security shall also bear a legend in substantially the following form:

“THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

A-7

(f) Cancellation and/or Adjustment of Global Securities. At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or cancelled in whole and not in part, each such Global Security shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.10 of the Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(g) General Provisions Relating to Transfers and Exchanges.

(1) No service charge shall be made to a Holder of a beneficial interest in a Global Security or to a Holder of a Definitive Security for any registration of transfer or exchange, but the Company or the Trustee may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.06 and 2.09 of the Indenture).

(2) All Global Securities and Definitive Securities issued upon any registration of transfer or exchange of Global Securities or Definitive Securities shall be the valid obligations of the Company, evidencing the same Indebtedness, as the Global Securities or Definitive Securities surrendered upon such registration of transfer or exchange and shall be entitled to all of the benefits of the Indenture equally and proportionately with all other Securities duly issued hereunder.

(3) Neither the Registrar nor the Company shall be required (A) to issue, to register the transfer of or to exchange any Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 3.02 of the Indenture and ending at the close of business on the date of selection, (B) to register the transfer of or to exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part or (C) to register the transfer of or to exchange a Security between a record date (including a regular record date) and the next succeeding interest payment date.

(4) Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes, in each case regardless of any notice to the contrary.

(5) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section to effect a registration of transfer or exchange may be submitted by facsimile.

A-8

(6) The Trustee is hereby authorized and directed to enter into a letter of representation with the Depositary in the form provided by the Company and to act in accordance with such letter. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture under applicable law with respect to any transfer of any interest in any Security (including any transfer between or among Participants or other beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(h) Transfer of Global Securities as a Whole. Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4 hereof), a Global Security may not be transferred as a whole except 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.

(i) Proxies Granted With Respect to Global Certificates. Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Security shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

(j) No Obligation of the Trustee.

(1) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(2) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

2.4 Definitive Securities.

(a) A Global Security deposited with the Depositary or with the Trustee as Securities Custodian for the Depositary pursuant to Section 2.1 hereof shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, if the Depositary notifies the Company

A-9

that it is unwilling or unable to continue as Depositary for such Global Security and the Depositary fails to appoint a successor Depositary or if at any time such Depositary ceases to be a “clearing agency” registered under the Exchange Act, in either case, and a successor Depositary is not appointed by the Company within 90 days of such notice; provided that such exchange shall comply with the provisions of Section 2.3.

(b) Any Global Security that is transferable to the beneficial owners thereof pursuant to Section 2.4(a) shall be surrendered by the Depositary to the Trustee located at its principal Corporate Trust Office in the Borough of Manhattan, The City of New York, to be so transferred, in whole, without charge, and the Trustee shall authenticate and deliver, upon such transfer of an equal aggregate principal amount of certificated Securities of authorized denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(c) A Definitive Security shall be in authorized denominations of $2,000 and integral multiples of $1,000, unless (i) such Definitive Security is issued upon exchange or transfer of another Definitive Security and the Definitive Security so issued is equal in principal amount to the Definitive Security so exchange or transferred, (ii) the Definitive Security is issued to a beneficial holder pursuant to this Section 2.4 and the entire principal amount beneficially owned by the holder is exchanged for such Definitive Security, or (iii) the principal amount of a Definitive Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 2.11 of the Indenture.

(d) In the event of the occurrence of the event specified in Section 2.4(a) hereof, the Company shall promptly make available to the Trustee a reasonable supply of certificates in definitive, fully registered form without interest coupons.

A-10

EXHIBIT 1.1

to

APPENDIX A

[FORM OF FACE OF RULE 144A SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3)

Appendix A-11

OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

[THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.4 OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE

Appendix A-12

HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

¹  [To be affixed to Global Securities]

Appendix A-13

No.________	$______
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Senior Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                      UNITED STATES DOLLARS ($                    ), subject to adjustments listed on the Schedule of Increases or Decreases in Global Security attached hereto, on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-14

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:                                         

MZ FUNDING LLC, as Company
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Senior Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB as Trustee
By:
	Authorized Signatory
Dated:

Appendix A-15

[FORM OF REVERSE SIDE OF RULE 144A SECURITY]

MZ FUNDING LLC

14% Senior Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Company shall make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

Appendix A-16

4. INDENTURE. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Senior Secured Notes due 2020, initially issued in the aggregate principal amount of $328,250,000.00. The terms of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 3.08 of the Indenture, and provided that if this is a Global Security, any transfer of a beneficial interest in the Security evidenced by this certificate shall be in a minimum denomination of $250,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A, (y) in an Offshore Transaction (as defined in Rule 9012) in compliance with Rule 903 or Rule 904, or (z) to an Institutional Accredited Investor in a private placement. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [Reserved].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

Appendix A-17

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

Appendix A-18

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-19

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:
	(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                       as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated: _________________________	Your Signature:	______________________________
		(Sign exactly as your name appears on the other side of this Security.)

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-20

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

Date of Exchange Amount of decrease in principal amount of this Global Security Amount of increase in principal amount of this Global Security Principal amount of this Global Security following such decrease or increase) Signature of authorized officer of Trustee or Securities Custodian

Appendix A-21

EXHIBIT 1.2

to

APPENDIX A

[FORM OF FACE OF REGULATION S SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION (AS DEFINED IN RULE 902 OF REGULATION S UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER REGULATION S; AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANIING OF RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

Appendix A-22

AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

THE ACQUIRER AGREES FOR THE BENEFIT OF THE COMPANY THAT PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, ANY OFFER OR SALE OF THE SECURITIES SHALL NOT BE MADE BY IT TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON WITHIN THE MEANING OF RULE 902 OF REGULATION S.

Appendix A-23

No.________	$______
	CUSIP NO. ___
	ISIN NO. _____

MZ FUNDING LLC

14% Senior Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                              UNITED STATES DOLLARS ($            ) on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-24

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:                                         

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Senior Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB

as Trustee

By:
	Authorized Signatory

Dated:                                         

Appendix A-25

[FORM OF REVERSE SIDE OF REGULATION S SECURITY]

MZ FUNDING LLC

14% Senior Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments in respect of this Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on this Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Senior Secured Notes due 2020, initially issued in the aggregate principal amount of $328,250,000.00. The terms

Appendix A-26

of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 3.08 of the Indenture. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A, (y) in an Offshore Transaction (as defined in Rule 9012) in compliance with Rule 903 or Rule 904, or (z) to an Institutional Accredited Investor in a private placement. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [Reserved].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

Appendix A-27

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-28

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:  

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                               as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated: __________________________	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-29

EXHIBIT 1.3

to

APPENDIX A

[FORM OF FACE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”); AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

Appendix A-30

AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

Appendix A-31

No.________	$______
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Senior Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to [            ], the principal sum of                              UNITED STATES DOLLARS ($            ) on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-32

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:                                         

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Senior Secured Notes due 2020 described in the within-mentioned Indenture.

WILMINGTON SAVINGS FUND SOCIETY, FSB

as Trustee

By:
	Authorized Signatory

Dated:                                         

Appendix A-33

[FORM OF REVERSE SIDE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

MZ FUNDING LLC

14% Senior Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments in respect of this Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on this Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Senior Secured Notes due 2020, initially issued in the aggregate principal amount of $328,250,000.00. The terms

Appendix A-34

of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased at the election of the Company to pay interest as provided in Section 3.08 of the Indenture. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A, (y) to an Institutional Accredited Investor in compliance with Regulation D or (z) in an Offshore Transaction (as defined in Rule 901) in compliance with Rule 904. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [Reserved].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

Appendix A-35

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-36

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                   as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated: __________________________	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)

Signature Guarantee:
	(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-37

APPENDIX B

FORM OF CERTIFICATE OF TRANSFER

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Re: 14% Senior Secured Notes due 2020

Reference is hereby made to the Indenture, dated as January 10, 2017 (the “Indenture”), among MZ Funding LLC, as issuer (the “Company”), and Wilmington Savings Fund Society, FSB, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                             , (the “Transferor”) owns and proposes to transfer the Security[ies] or interest in such Security[ies] specified in Annex A hereto, in the principal amount of $                     in such Security[ies] or interests (the “Transfer”), to                              (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ☐ Check if Transferee will take delivery of a beneficial interest in a Global Security or of a Definitive Security Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Security for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. In addition, the Transferor hereby certifies that the beneficial interest or the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or the Definitive Security for its own account or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “Qualified Purchaser” within the meaning of the Investment Company Act of 1940, as amended. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and/or the Definitive Security and in the Indenture and the Securities Act.

2. ☐ Check if Transferee will take delivery of a Definitive Security pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in

B-1

the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903 or Rule 904 of Regulation S under the Securities Act, and (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act. In addition, the Transferor hereby certifies that the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the Definitive Security for its own account or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “Qualified Purchaser” within the meaning of the Investment Company Act of 1940, as amended. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Definitive Security and in the Indenture and the Securities Act.

3. ☐ Check and complete if Transferee is an Institutional Accredited Investor that will take delivery of a Definitive Security in a Private Placement. The Transfer is being effected pursuant to a private placement exemption under the Securities Act, and, accordingly, the Transferor hereby further certifies that the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing Definitive Security for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is an institutional investor that is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D in a private transaction and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. In addition, the Transferor hereby certifies that the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the Definitive Security for its own account or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “Qualified Purchaser” within the meaning of the Investment Company Act of 1940, as amended. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred Definitive Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Definitive Security and in the Indenture and the Securities Act.

4. ☐ The Transfer is being effected to the Company or any of its Subsidiaries.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Transferor]
By:
	Name:
	Title:

Dated:

B-2

ANNEX A TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

(a) ☐ a beneficial interest in a: Global Security (CUSIP                     ), or

(b) ☐ a Definitive Security.

2. After the Transfer the Transferee will hold:

[CHECK ONE OF (a) OR (b)]

(a) ☐ a beneficial interest in a: Global Security (CUSIP                     ), or

(b) ☐ a Definitive Security.

in accordance with the terms of the Indenture.

B-3

APPENDIX C

FORM OF CERTIFICATE OF EXCHANGE

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Re: 14% Senior Secured Notes due 2020

Reference is hereby made to the Indenture, dated as January 10, 2017 (the “Indenture”), among MZ Funding LLC, as issuer (the “Company”), and Wilmington Savings Fund Society, FSB, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                             , (the “Owner”) owns and proposes to exchange the Security[ies] or interest in such Security[ies] specified herein, in the principal amount of $             in such Security[ies] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

[CHECK ALL THAT APPLY]

1. (a) ☐ Check if Exchange is from beneficial interest in a Global Security to Definitive Security. In connection with the Exchange of the Owner’s beneficial interest in a Global Security for a Definitive Security with an equal principal amount, the Owner hereby certifies that the Definitive Security is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Definitive Security issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Definitive Security and in the Indenture and the Securities Act.

(b) ☐ Check if Exchange is from Definitive Security to beneficial interest in a Global Security. In connection with the Exchange of the Owner’s Definitive Security for a beneficial interest in a Global Security with an equal principal amount, the Owner hereby certifies (i) the Owner is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, (ii) the beneficial interest is being acquired for the Owner’s own account without transfer and (iii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Definitive Security and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and in the Indenture and the Securities Act.

(c) ☐ Check if Exchange is from Definitive Security to Definitive Security. In connection with the Owner’s Exchange of a Definitive Security for a Definitive Security, the Owner hereby certifies (i) the Definitive Security is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Definitive Security and pursuant to and in accordance with the Securities Act, and (iii) the Definitive Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. The Owner is a “Qualified Purchaser,” as that term is defined under the Investment Company Act of 1940, as amended.

C-1

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Owner]
By:
	Name:
	Title:

Dated:

C-2

APPENDIX D

FORM OF NEWCO EQUITY PLEDGE AGREEMENT

D-1

APPENDIX E

FORM OF SECURITY AGREEMENT

E-1

APPENDIX F

FORM OF BLOCKED ACCOUNT CONTROL AGREEMENT

EX-99.2

EXHIBIT 99.2

EXHIBIT 1.1

to

APPENDIX A

[FORM OF FACE OF RULE 144A SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

Appendix A-1

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

[THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.4 OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

¹  [To be affixed to Global Securities]

Appendix A-2

No.	$
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Senior Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                      UNITED STATES DOLLARS ($            ), subject to adjustments listed on the Schedule of Increases or Decreases in Global Security attached hereto, on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-3

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:                                     

MZ FUNDING LLC, as Company
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Senior Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB

as Trustee

By:
	Authorized Signatory

Dated:                                     

Appendix A-4

[FORM OF REVERSE SIDE OF RULE 144A SECURITY]

MZ FUNDING LLC

14% Senior Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Company shall make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

Appendix A-5

4. INDENTURE. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Senior Secured Notes due 2020, initially issued in the aggregate principal amount of $328,250,000.00. The terms of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 3.08 of the Indenture, and provided that if this is a Global Security, any transfer of a beneficial interest in the Security evidenced by this certificate shall be in a minimum denomination of $250,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A, (y) in an Offshore Transaction (as defined in Rule 9012) in compliance with Rule 903 or Rule 904, or (z) to an Institutional Accredited Investor in a private placement. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [Reserved].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

Appendix A-6

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

Appendix A-7

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-8

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:                                                                                                                                                                                                     

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                           as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)
Signature Guarantee:                                                                                                                                                                                                      (Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-9

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

Date of Exchange Amount of decrease in principal amount of this Global Security Amount of increase in principal amount of this Global Security Principal amount of this Global Security following such decrease or increase) Signature of authorized officer of Trustee or Securities Custodian

Appendix A-10

EXHIBIT 1.2

to

APPENDIX A

[FORM OF FACE OF REGULATION S SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING ACQUIRED THIS SECURITY IN AN OFFSHORE TRANSACTION (AS DEFINED IN RULE 902 OF REGULATION S UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 903 OR RULE 904 UNDER REGULATION S; AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANIING OF RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT

Appendix A-11

OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

THE ACQUIRER AGREES FOR THE BENEFIT OF THE COMPANY THAT PRIOR TO THE END OF THE 40 DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, ANY OFFER OR SALE OF THE SECURITIES SHALL NOT BE MADE BY IT TO A U.S. PERSON OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON WITHIN THE MEANING OF RULE 902 OF REGULATION S.

Appendix A-12

No.	$
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Senior Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                      UNITED STATES DOLLARS ($            ) on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-13

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:                     

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Senior Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB

as Trustee

By:                                                              

Authorized Signatory

Dated:                                                         

Appendix A-14

[FORM OF REVERSE SIDE OF REGULATION S SECURITY]

MZ FUNDING LLC

14% Senior Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments in respect of this Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on this Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Senior Secured Notes due 2020, initially issued in the aggregate principal amount of $328,250,000.00. The terms

Appendix A-15

of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 3.08 of the Indenture. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A, (y) in an Offshore Transaction (as defined in Rule 9012) in compliance with Rule 903 or Rule 904, or (z) to an Institutional Accredited Investor in a private placement. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [Reserved].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

Appendix A-16

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-17

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:                                                                                                                                                                                               

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                      as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)
Signature Guarantee:                                                                                                                                                                                                        (Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-18

EXHIBIT 1.3

to

APPENDIX A

[FORM OF FACE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”); AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE, (2)(C) ABOVE OR (2)(D) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT

Appendix A-19

OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

Appendix A-20

No.	$
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Senior Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to [            ], the principal sum of                      UNITED STATES DOLLARS ($            ) on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-21

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:                     

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Senior Secured Notes due 2020 described in the within-mentioned Indenture.

WILMINGTON SAVINGS FUND SOCIETY, FSB

as Trustee

By:
	Authorized Signatory

Dated:                     

Appendix A-22

[FORM OF REVERSE SIDE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

MZ FUNDING LLC

14% Senior Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments in respect of this Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on this Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Senior Secured Notes due 2020, initially issued in the aggregate principal amount of $328,250,000.00. The terms

Appendix A-23

of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased at the election of the Company to pay interest as provided in Section 3.08 of the Indenture. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A, (y) to an Institutional Accredited Investor in compliance with Regulation D or (z) in an Offshore Transaction (as defined in Rule 901) in compliance with Rule 904. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [Reserved].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

Appendix A-24

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-25

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:                                                                                                                                                                                                      

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                      as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)
Signature Guarantee:                                                                                                                                                                                      (Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-26

EX-99.3

Exhibit 99.3

EXECUTION VERSION

MZ FUNDING LLC,

as Issuer,

and

WILMINGTON SAVINGS FUND SOCIETY, FSB,

as Trustee and as Collateral Agent

SUBORDINATED INDENTURE

Dated as of January 10, 2017

14% Subordinated Secured Notes due 2020

Table of Contents

		Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE			1
SECTION 1.01.	Definitions		1
SECTION 1.02.	Other Definitions		12
SECTION 1.03.	Rules of Construction		13
SECTION 1.04.	Agent for Service; Submission to Jurisdiction; Waiver of Immunities		13
SECTION 1.05.	Currency		13
SECTION 1.06.	No Incorporation by Reference of Trust Indenture Act		14
ARTICLE II
THE SECURITIES			14
SECTION 2.01.	Form and Dating		14
SECTION 2.02.	Execution and Authentication; Additional Securities		14
SECTION 2.03.	Registrar and Paying Agent		15
SECTION 2.04.	Paying Agent To Hold Money in Trust		15
SECTION 2.05.	Lists of Holders of Securities		15
SECTION 2.06.	Transfer and Exchange		16
SECTION 2.07.	Replacement Securities		16
SECTION 2.08.	Outstanding Securities		16
SECTION 2.09.	Temporary Securities		17
SECTION 2.10.	Cancellation		17
SECTION 2.11.	Payment of Interest		17
SECTION 2.12.	Defaulted Interest		17
SECTION 2.13.	CUSIP Numbers, ISINs, etc		18
SECTION 2.14.	Claims Under Insurance Policy		18
SECTION 2.15.	Persons Deemed Owner		19
SECTION 2.16.	Rule 144A Information		19
SECTION 2.17.	Investment Company Act Procedures		19
ARTICLE III
REDEMPTION			22
SECTION 3.01.	Notices to Trustee		22
SECTION 3.02.	Selection of Securities to Be Redeemed		22
SECTION 3.03.	Notice of Redemption		22
SECTION 3.04.	Effect of Notice of Redemption		23

i

SECTION 3.05.	Deposit of Redemption Price	23
SECTION 3.06.	Securities Redeemed in Part	23
SECTION 3.07.	Optional Redemption	24
SECTION 3.08.	Mandatory Principal Payment	24
SECTION 3.09.	Payment at Maturity	25
ARTICLE IV
COVENANTS		25
SECTION 4.01.	Payment of Securities	25
SECTION 4.02.	Corporate Existence	25
SECTION 4.03.	Limitation on Liens	25
SECTION 4.04.	Limitation on Indebtedness	25
SECTION 4.05.	Limitation on Investments	25
SECTION 4.06.	Maintenance of Property; Insurance	25
SECTION 4.07.	Financial Reports and Other Information	25
SECTION 4.08.	Inspection Rights	26
SECTION 4.09.	Conduct of Business	27
SECTION 4.10.	Use of Proceeds; Margin Regulations; Company Activities	27
SECTION 4.11.	Limitation on Dividends	27
SECTION 4.12.	Maintenance of Accounts	28
SECTION 4.13.	Performance under MBIA Facility	29
SECTION 4.14.	Taxes	29
SECTION 4.15.	Compliance with Laws; Policies and Procedures	29
SECTION 4.16.	Limitation on Modifications	30
SECTION 4.17.	Further Assurances	30
SECTION 4.18.	Post-Bankruptcy Restrictions	30
ARTICLE V
SUCCESSOR COMPANY		30
SECTION 5.01.	Consolidation, Merger and Sale of Assets	30
ARTICLE VI
DEFAULTS AND REMEDIES		31
SECTION 6.01.	Events of Default. Each of the following is an “Event of Default”:	31
SECTION 6.02.	Acceleration of Maturity; Rescission and Annulment	32
SECTION 6.03.	Collection of Indebtedness and Suits for Enforcement by Trustee	34
SECTION 6.04.	Trustee May File Proofs of Claim	34
SECTION 6.05.	Trustee May Enforce Claims Without Possession of Securities	35

ii

SECTION 6.06.	Application of Money Collected	35
SECTION 6.07.	Limitation on Suits	35
SECTION 6.08.	Unconditional Contractual Right of Holders to Receive Principal, Premium and Interest	36
SECTION 6.09.	Restoration of Rights and Remedies	36
SECTION 6.10.	Rights and Remedies Cumulative	37
SECTION 6.11.	Delay or Omission Not Waiver	37
SECTION 6.12.	Control by Holders	37
SECTION 6.13.	Waiver of Past Defaults	37
SECTION 6.14.	Undertaking for Costs	38
SECTION 6.15.	Waiver of Stay or Extension Laws	38
SECTION 6.16.	Subrogation Rights of the Insurer	38
SECTION 6.17.	Intercreditor Agreement	38
ARTICLE VII
TRUSTEE		38
SECTION 7.01.	Duties of Trustee	38
SECTION 7.02.	Rights of Trustee	40
SECTION 7.03.	Individual Rights of Trustee	41
SECTION 7.04.	Trustee’s Disclaimer	41
SECTION 7.05.	Notice of Defaults	41
SECTION 7.06.	Compensation and Indemnity	41
SECTION 7.07.	Replacement of Trustee	42
SECTION 7.08.	Successor Trustee by Merger	43
SECTION 7.09.	Corporate Trustee Required; Eligibility	43
ARTICLE VIII
[RESERVED]		44
ARTICLE IX
SATISFACTION AND DISCHARGE		44
SECTION 9.01.	Satisfaction and Discharge of Indenture	44
ARTICLE X
AMENDMENT AND WAIVER		44
SECTION 10.01.	Without Consent of Holders	44
SECTION 10.02.	With Consent of Holders	45
SECTION 10.03.	Execution of Amendments	47
SECTION 10.04.	Effect of Amendments	47

iii

SECTION 10.05.	Reference in Securities to Amendments	47
SECTION 10.06.	Notice of Amendments	47
ARTICLE XI
SECURITY		47
SECTION 11.01.	Security Documents; Additional Collateral	47
SECTION 11.02.	Releases of Collateral	48
SECTION 11.03.	Release Documentation	48
SECTION 11.04.	Possession and Use of Collateral; No Impairment of the Security Interests	48
SECTION 11.05.	Collateral Agent	49
SECTION 11.06.	Replacement of Collateral Agent	50
SECTION 11.07.	Purchaser Protected	51
SECTION 11.08.	Authorization of Receipt of Funds by the Trustee Under the Security Documents	51
SECTION 11.09.	Powers Exercisable by Receiver or Trustee	51
SECTION 11.10.	Compensation and Indemnification	51
SECTION 11.11.	Form of Security Documents and Opinions	51
ARTICLE XII
ADDITIONAL AMOUNTS		52
SECTION 12.01.	Payment of Additional Amounts	52
ARTICLE XIII
MISCELLANEOUS		54
SECTION 13.01.	Notices	54
SECTION 13.02.	Certificate as to Conditions Precedent	55
SECTION 13.03.	Statements Required in Certificate or Opinion	55
SECTION 13.04.	Rules by Trustee, Paying Agent and Registrar	56
SECTION 13.05.	Legal Holidays	56
SECTION 13.06.	Governing Law; Waiver of Jury Trial	56
SECTION 13.07.	No Recourse Against Others	57
SECTION 13.08.	Successors	57
SECTION 13.09.	Counterparts	57
SECTION 13.10.	Table of Contents; Headings	57
SECTION 13.11.	U.S.A. Patriot Act	57
SECTION 13.12.	Tax Characterization	57
SECTION 13.13.	Multiple Roles	57
SECTION 13.14.	Confidentiality	57

iv

ARTICLE XIV
SUBORDINATION		58
SECTION 14.01.	Subordination of Subordinated Obligations and Liens	58
SECTION 14.02.	Benefits of Indenture	59

v

APPENDICES

Appendix A

Exhibit 1.1 to Appendix A	–	Form of 144A Global Security
Exhibit 1.2 to Appendix A	–	Form of Face of Institutional Accredited Investor Security

Appendix B – Form of Certificate of Transfer

Appendix C – Form of Certificate of Exchange

Appendix D – Form of Security Agreement

i

SUBORDINATED INDENTURE dated as of January 10, 2017, among MZ Funding LLC, a Delaware limited liability company (the “Company”), as issuer, and Wilmington Savings Fund Society, FSB, as trustee (the “Trustee”) and as Collateral Agent.

RECITALS

The Company has duly authorized the issuance of up to $88,000,000.00 aggregate principal amount of 14% Subordinated Secured Notes due 2020, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture.

All things necessary to make the Securities (as defined below) (in the case of the Additional Securities, when duly authorized), when executed by the Company, authenticated and delivered hereunder and duly issued by the Company, the valid and binding obligations of the Company, and to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done.

The Securities will be subordinated as described in this Indenture.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the benefit of each other and the equal and proportionate benefit of all Holders of the Securities, as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01. Definitions.

“14% Subordinated Secured Notes due 2020” means the Securities.

“Affiliate” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities or other beneficial interest, by contract or otherwise; and the terms “controlling” and “controlled” have the meanings correlative to the foregoing.

“Additional Securities” means any notes issued under this Indenture in addition to the Initial Securities, having the same terms in all respects as the Initial Securities, or in all respects except with respect to interest paid or payable on or prior to the first interest payment date after the issuance of such Additional Securities.

“Anti-Corruption Laws” means all laws, rules and regulations of any jurisdiction applicable to the Company and MBIA Corp. from time to time concerning or relating to bribery, money laundering, or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended from time to time, and the United Kingdom’s Bribery Act 2010, as amended from time to time.

“Applicable Procedures” means, with respect to any transfer, redemption or exchange of or for beneficial interests in any Global Security, the rules and procedures of the Depositary that apply to such transfer, redemption or exchange.

“Bankruptcy Law” means Title 11 of the United States Code or any similar federal, state or foreign law for the relief of debtors.

“Business Day” means each day which is not a Legal Holiday.

“Capital Lease” means any lease obligation of a Person incurred with respect to real property or equipment acquired or leased by such Person and used in its business that is required to be recorded as a capital lease in accordance with GAAP.

“Change of Control” means, at any time, the failure of MBIA Inc. to directly, legally and beneficially own 100% of the Equity Interests of (a) the Company or (b) MBIA Corp.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document until the Lien on such property has been released or terminated in accordance with this Indenture or the applicable Security Document.

“Collateral Agent” means Wilmington Savings Fund Society, FSB, acting in its capacity as Collateral Agent for the Secured Creditors, and any successor Collateral Agent appointed hereunder pursuant to Section 11.06.

“Collateral Grantor” means MBIA Inc. and each other affiliate of the Company that becomes a party to a Security Document from time to time.

“Collateral Proceeds Account” means the Collateral Proceeds Account under the Senior Facility.

“Collection Account” means that (i) certain interest-bearing account held in the name of the Company at the Deposit Bank which shall at all times prior to the Senior Collection Date be subject to the Liens of the Senior Collateral Agent and governed by the Collection Account Control Agreement or (ii) in the event the account specified in clause (i) of this definition has not yet been established, the Collateral Proceeds Account.

“Collection Account Control Agreement” means the Blocked Account Control Agreement among the Company, the Collateral Agent, the collateral agent under the Senior Indenture and the Deposit Bank with respect to the Collection Account in form and substance reasonably satisfactory to the Collateral Agent and, prior to the Senior Collection Date, the Majority Holders (as defined in the Senior Facility) and, after the Senior Collection Date, the Majority Holders.

“Company Operating Agreement” means that certain Limited Liability Company Agreement of MZ Funding LLC, dated as of January 9, 2017.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 500 Delaware Avenue, Wilmington, Delaware 19801, Attn.: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

2

“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.

“Deposit Bank” means JPMorgan Chase Bank, N.A. or such other bank with the consent of the Majority Holders.

“Depositary” means, with respect to the Securities issuable or issued in whole or in part in global form, the Person specified in Section 2.03 as the Depositary with respect to the Securities, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provisions of this Indenture.

“Environmental Law” means any federal, state or local statute, law, rule, regulation, ordinance, code, policy or rule of common law now or hereafter in effect, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of the environment, health, safety or natural resources, in each case, relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of any Hazardous Materials.

“Equity Interests” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any limited liability company membership interest, but excluding any debt security that is convertible into, or exchangeable for, such interests in equity.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means (a) any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Company, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Company or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Company, any corporation described in clause (a) above or any trade or business described in clause (b) above.

“ERISA Event” means (a) a Reportable Event with respect to a Plan; (b) the withdrawal of the Company or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA) or insolvent (within the meaning of Section 4245 of ERISA); (d) the filing of a notice of intent to terminate or the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, respectively, (e) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan; (g) the determination that any Plan is considered an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; (h) the determination that any Multiemployer Plan is considered a plan in endangered or critical status within the meaning of Sections 431 and 432 of the Code or Sections 304 and 305 of ERISA; (i) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate; (j) the conditions

3

for the imposition of a lien under Section 430(k) of the Code or Section 303(k) of ERISA shall have been met with respect to any Plan; or (k) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of the Company, other than in the usual course.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

“GAAP” means generally accepted accounting principles in the United States set forth in the statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect as of the date of determination.

“Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or other obligation of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

(a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or

(b) entered into for the primary purpose of assuring in any other manner the obligee of such Indebtedness or other obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

“Holder” means the Person in whose name a Security is registered on the Registrar’s books; provided that for purposes of Article X hereto, “Holder” shall not include the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor other than as provided in Section 2.14(c).

“Indebtedness” of a Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations (excluding any prepaid interest thereon) of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations (including, without limitation, earnout obligations) of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than (i) trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof and (ii) expenses accrued in the ordinary course of business) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guaranty obligations of such Person with respect to Indebtedness of another Person, (h) the principal portion of all capital lease obligations plus any accrued interest thereon, (i) all net obligations of such Person under hedging agreements, (j) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred equity interests issued by such Person, (l) the

4

principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, (m) all obligations of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venturer solely to the extent such obligations are recourse to such Person and (n) obligations of such Person under non-compete agreements to the extent such obligations are quantifiable contingent obligations of such Person under GAAP principles.

“Indenture” means this Indenture as amended or otherwise modified from time to time.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Security through a Participant.

“Initial Securities” means the Securities issued on the Issue Date and any Securities issued in replacement thereof.

“Insolvency Proceeding” means any case, proceeding or other action by or against any Person (a) under any existing or future law (including any agency or department with jurisdiction over insurance companies) of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, rehabilitation, liquidation, conservatorship, receivership or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition, rehabilitation or other relief with respect to it or its debts, or (b) seeking appointment of a receiver, trustee, custodian, conservator, rehabilitator, liquidator or other similar official for it or for all or any substantial part of its assets.

“Institutional Accredited Investor” means an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D.

“Insurance Agreement” means the Insurance Agreement dated January 10, 2017 by and between the Company, the Insurer and Wilmington Savings Fund Society, FSB, as trustee under this Indenture and the Senior Facility.

“Insurance Policy” means insurance policy no. 541512, dated January 10, 2017, issued by MBIA Corp. to the Trustee on behalf of the Holders and insuring the timely payment of all amounts due under the Securities.

“Insurance Policy Claim Amount” means, for any Insured Payment Date, (x) the Insured Amounts for such Insured Payment Date minus (y) any amount held or received by the Trustee or the Paying Agent in accordance with this Indenture for payment on the Securities on such related payment date, whether or not those funds are properly applied by the Trustee or Paying Agent.

“Insured Payment Date” means at or before 11:00 a.m., New York City time, on the later of (x) the Payment Date, on which the related Insured Amount is due and (y) the next Business Day following receipt of a Notice of Claim in New York, New York on a Business Day by the Insurer; provided that if such Notice of Claim is received after 11:00 a.m., New York City time, on a Business Day, it will be deemed to be received on the following Business Day.

“Insurer” means MBIA Corp., as issuer of the Insurance Policy.

5

“Insurer Default” means the occurrence and continuance of any of the following events:

(a) the Insurer shall have failed to make a payment required under the Insurance Policy in accordance with its terms;

(b) the Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation based on actual or threatened insolvency, liquidation or reorganization, (ii) made a general assignment for the benefit of its creditors, or (iii) had an order for relief entered against it under the United States Bankruptcy Code or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation based on actual or threatened insolvency, liquidation or reorganization which is final and nonappealable; or

(c) a court of competent jurisdiction, the New York Department of Financial Services or other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a rehabilitator, custodian, trustee, agent or receiver for the Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a rehabilitator, custodian, trustee, agent or receiver of the Insurer (or the taking of possession of all or any material portion of the property of the Insurer).

“Insured Amounts” has the meaning set forth in the Insurance Policy.

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the Collateral Agent, Wilmington Savings Fund Society, FSB, as senior collateral agent, and the Company.

“Interest Payment Date” means each February 1, May 1, August 1, and November 1, commencing on February 1, 2017.

“Investment” shall mean (a) the acquisition (whether for cash, property, services, assumption of Indebtedness, securities or otherwise) of Equity Interests, other ownership interests or other securities of any Person or bonds, notes, debentures or all or substantially all of the assets of any Person, (b) any deposit with, or advance, loan or other extension of credit to, any Person (other than deposits made in the ordinary course of business) or (c) any other capital contribution to or investment in any Person, including, without limitation, any guaranty obligation (including any support for a letter of credit issued on behalf of such Person) incurred for the benefit of such Person.

“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s); a rating of BBB- or better by S&P (or its equivalent under any successor rating categories of S&P); and a rating of BBB- or better by Fitch (or its equivalent under any successor rating categories of Fitch).

“IRS” means the Internal Revenue Service.

“Issue Date” means January 10, 2017.

“Legal Holiday” means a Saturday, Sunday or other day on which banking institutions are not required by law or regulation to be open in the State of New York.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

6

“Loan Administration Agreement” means that certain Loan Administration Agreement, dated as of the date hereof, by and among the Senior Trustee, the Loan Administrator, and MBIA Corp.

“Loan Administrator” has the meaning given to such term in the Loan Administration Agreement.

“Majority Holders” means, as of any date, the Holders of a majority in aggregate principal amount of the Outstanding Securities on such date.

“Make-Whole Premium” shall mean, with respect to any Securities on any applicable date of repayment of such Securities whether by acceleration, redemption, or otherwise, on or prior to the Make-Whole Termination Date, the amount as calculated by the Company as equal to the following percentage of the amount of principal so repaid or redeemed:

Period after the Issue Date	Make-Whole Premium
During first 90 days		21.00	%
During 91st to 180th day		17.50	%
During 181st to 270th day		14.00	%
During 271st to 360th day		10.50	%
During 361st to 450th day		7.00	%
During 451st to 540th day		3.50	%
On and after 541st day		0	%

“Make-Whole Termination Date” means the 541^st day after the Issue Date.

“Mandatory Prepayment Account” means (i) that certain interest-bearing account held in the name of the Company at the Deposit Bank which shall at all times prior to the Senior Collection Date be subject to the Liens of the Senior Collateral Agent and governed by the Mandatory Prepayment Account Control Agreement or (ii) in the event the account specified in clause (i) of this definition has not yet been established, the Collateral Proceeds Account.

“Mandatory Prepayment Account Control Agreement” means the Blocked Account Control Agreement among the Company, the Collateral Agent, the collateral agent under the Senior Indenture and the Deposit Bank with respect to the Mandatory Prepayment Account in form and substance reasonably satisfactory to the Collateral Agent and, prior to the Senior Collection Date, the Majority Holders (as defined in the Senior Facility) and, after the Senior Collection Date, the Majority Holders.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Company, MBIA Corp., or MBIA Inc. (b) the Company’s or MBIA Corp.’s ability to perform any of its payment obligations under this Indenture, the other Note Documents or the MBIA Facility, or (c) the rights and remedies of the Trustee, the Collateral Agent and/or the Holders under this Indenture and the other Note Documents.

7

“Material Non-Public Information” means any material non-public information within the meaning of the rules and regulations of the Exchange Act.

“Maturity”, when used with respect to any Security, means the date on which the principal of such Security becomes due and payable in full as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, automatic acceleration in accordance with Section 6.02 hereof, notice of redemption, exercise of a Holder’s option to require the Company to purchase or repay the Security, or otherwise.

“MBIA Corp.” means MBIA Insurance Corporation, a New York statutory insurance corporation.

“MBIA Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, by and between the Company, as lender, and MBIA Corp., as borrower.

“MBIA Facility” means the MBIA Credit Agreement and the other Credit Documents (as defined in the MBIA Credit Agreement)

“MBIA Inc.” means MBIA Inc., a Connecticut corporation.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions.

“Note Documents” means this Indenture, the Securities, the Note Purchase Agreement, the Insurance Policy, the Insurance Agreement, the Intercreditor Agreement, the Loan Administration Agreement, any acknowledgments to collateral assignment executed in connection with the Securities, and each Security Document, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time.

“Notes Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, the Company arising under this Indenture, the Securities, the Insurance Policy, the Insurance Agreement and the Security Documents (including all principal, premium (including the Make-Whole Premium), interest, penalties, fees, charges, expenses (including reasonable fees and expenses of attorneys, agents and advisors), indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts payable or arising thereunder), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Company of any proceeding in bankruptcy or insolvency law naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Note Purchase Agreement” means that certain Subordinated Note Purchase Agreement, dated as of January 10, 2017, by and among the Company, as issuer, and MBIA Inc.

“Officer” means with respect to any Person any one of the Chief Executive Officer, President, Chief Operating Officer, Chief Financial Officer, Chief Legal Officer, any Executive Vice President, Managing Director, Director, Vice President, Treasurer, any Assistant Treasurer, or the Secretary of such Person.

8

“Officer’s Certificate” means a certificate signed by any Officer of such Person, and delivered to the Trustee or the Collateral Agent, as applicable.

“Opinion of Counsel” means a written opinion of counsel who shall be reasonably acceptable to the Trustee or the Collateral Agent, as applicable.

“Organizational Documents” with respect to any Person shall mean, as applicable, such Person’s certificate of incorporation, memorandum and articles of association, certificate of formation (including, without limitation, by the filing or modification of any certificate of designation), by-laws or limited liability company agreement or, in each case, equivalent organizational documents.

“Outstanding”, when used with respect to Securities, means, as of any date of determination, all Securities theretofore authenticated and delivered under this Indenture (including an increases in the principal amount thereof resulting from the payment of interest thereon in the form of PIK Interest), except:

(a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;

(b) Securities, or portions thereof for which payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and

(c) Securities which have been issued pursuant to Section 2.07 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a “protected purchaser” (as defined in Article 8 of the UCC) in whose hands such Securities are valid obligations of the Company;

provided, however, that Securities which have been paid with proceeds of the Insurance Policy shall continue to remain Outstanding for purposes of this Indenture until the Insurer has been paid as subrogee hereunder or reimbursed pursuant to the Insurance Agreement as evidenced by a written notice from the Insurer delivered to the Trustee, and the Insurer shall be deemed to be the Holder thereof to the extent of any payments thereon made by the Insurer; provided, further, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, or are present at a meeting of Holders for quorum purposes, Securities owned by the Company or any other obligor upon the Securities or any Affiliate (other than the Insurer) of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Trust Officer actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

9

“Payment Date” has the meaning set forth in the Insurance Policy.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including any governmental authority.

“PIK Interest” means, with respect to any interest payment date, the interest paid-in-kind on the Securities in the form of (i) an increase in the outstanding principal amount of the Securities or (ii) the issuance of PIK Securities as of such interest payment date.

“Plan” means any “employee benefit plan” (other than a Multiemployer Plan) within the meaning of Section 3(3) of ERISA that is maintained or is contributed to by the Company or any ERISA Affiliate and is subject to Title IV of ERISA or the minimum funding standards under Section 412 of the Code or Section 302 of ERISA.

“principal” of a Security means the principal of the Security plus the premium including the Make-Whole Premium, if any, payable on the Security which is due or overdue or is to become due at the relevant time.

“Private Placement Legend” means the legend set forth in Section 2.3(e)(1) of Appendix A hereof to be placed on all Securities issued under this Indenture except as otherwise permitted by the provisions of this Indenture.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Qualified Purchaser” means a “qualified purchaser” as defined in Section 2(a)(51)(A) of the Investment Company Act of 1940, as amended, and related rules.

“Record Date” means each January 27, April 26, July 27 and October 27, commencing on January 27, 2017.

“Regulation D” means Regulation D promulgated under the Securities Act.

“Regulation S” means Regulation S promulgated under the Securities Act.

“Related Parties” means, as to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, attorneys-in-fact, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 501” means Rule 501 of Regulation D promulgated under the Securities Act.

10

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including the Patriot Act and those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council or the European Union.

“SEC” means the U.S. Securities and Exchange Commission.

“Secured Creditors” means the Holders of the Securities, the Trustee and the Collateral Agent, each in their respective capacities.

“Securities” means the 14% Subordinated Secured Notes due 2020 issued on the Issue Date pursuant to this Indenture and any PIK Securities and Additional Securities, if and when issued.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Security Agreement” means that certain Security Agreement, dated as of the date hereof, by the Company in favor of the Collateral Agent for the benefit of the Secured Creditors and attached hereto as Appendix D or any other agreement entered into in respect of the Collateral.

“Security Documents” means the Security Agreement and any account control agreement related thereto.

“Senior Collateral Agent” means Wilmington Savings Fund Society, FSB, in its capacity as the collateral agent under the Senior Facility.

“Senior Collection Date” means the first date on which the aggregate outstanding principal balance of the Senior Notes and all other Senior Obligations have been fully and indefeasibly paid.

“Senior Event of Default” means an “Event of Default” under and as defined in the Senior Facility.

“Senior Facility” means that certain Indenture, dated as of the date hereof, by and between the Company and the Senior Trustee, the Senior Collateral Agent, the other Note Documents (as defined in therein) and the transaction contemplated thereunder.

“Senior Obligations” means the “Senior Obligations” as defined in the Intercreditor Agreement.

“Senior Notes” means the “Notes” issued by the Company under the Senior Facility.

“Senior Trustee” means Wilmington Savings Fund Society, FSB, in its capacity as the trustee under the Senior Facility.

“Stated Maturity” means with respect to any Indebtedness, the date specified in the instrument governing such Indebtedness as the fixed date on which the principal of such Indebtedness or any installment thereof, or any installment of interest thereon, is scheduled to be due and payable, and shall not include any contingent obligations to repay, redeem or repurchase any such principal or interest prior to such date.

“Subordinated Obligations” means the principal of, and interest on the Securities and any other amounts owing to the Holders or the Trustee, under this Indenture, the Note Documents or the MBIA Facility, including any amounts owing in respect of a breach of the representations, warranties or covenants hereunder by the Company.

11

“Subsidiary” means, for any Person, any other Person of which more than fifty percent (50%) of the outstanding stock or comparable equity interests having ordinary voting power for the election of the board of directors, managers, or comparable governing board or body of such other Person (irrespective of whether or not at the time stock or other equity interests of any other class or classes of such corporation or other entity shall have or might have voting power by reason of the happening of any contingency), is at the time directly or indirectly owned by any such Person or by one or more of its Subsidiaries.

“Trustee” means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor.

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, senior associate, associate, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Voting Stock” of any specified “person” (as that term is used in Section 13(d)(3) of the Exchange Act) as of any date means the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person.

SECTION 1.02. Other Definitions

Term	Defined in Section
“144A Global Security”	Appendix A 2.1(a)
“Additional Amounts” “Agent Members”	12.01(a) Appendix A 2.1(b)
“Appendix A”	2.01
“Confidential Information”	13.14
“Datasite”	4.07(c)
“Deficiency Notice”	2.14(a)
“Definitive Security”	Appendix A 1.1
“Distribution Account”	4.12(d)
“DTC”	2.03
“Event of Default”	6.01
“Global Security”	Appendix A 2.1(a)
“Global Security Legend”	Appendix A 1.1
“Institutional Accredited Investor Security”	Appendix A 1.1
“Paying Agent”	2.03
“PIK Securities”	2.02
“Registrar”	2.03
“Rule 144A Security”	Appendix A 2.1(a)
“Securities Proceeds Account”	4.12(f)
“Taxing Jurisdiction”	12.01(a)
“Trust Indenture Act”	1.06
“withholding tax”	12.01(a)

12

SECTION 1.03. Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended or otherwise modified (subject to any restrictions on such amendments or modifications set forth herein), (b) any reference herein to any person shall be construed to include such person’s successors and assigns, (c) the words “herein,” “hereof,” and “hereunder,” and words of similar import, shall be construed to refer to this Indenture in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, and Appendices shall be construed to refer to Articles and Sections of, and Appendices to, this Indenture, (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and general intangibles and (f) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.

SECTION 1.04. Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By the execution and delivery of this Indenture, the Company (i) irrevocably designates and appoints, and acknowledges that it has irrevocably designated and appointed, Corporation Trust Center as its authorized agent upon which process may be served in any suit, action or proceeding arising out of or relating to the Securities, this Indenture or any other Note Document that may be instituted in any United States federal or New York state court in The City of New York or brought under federal or state securities laws or brought by the Trustee (whether in its individual capacity or in its capacity as Trustee hereunder) or, subject to Section 6.07, any Holder of Securities in any United States federal or New York state court in The City of New York, (ii) submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding, and (iii) agrees that service of process upon the Company and written notice of said service to the Company (mailed or delivered to its Secretary at its principal office specified in Section 13.01), shall be deemed in every respect effective service of process upon the Company in any such suit, action or proceeding. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of the Company in full force and effect so long as any of the Securities shall be Outstanding or any amounts shall be payable in respect of any Securities.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such action, suit or proceeding in any such court or any appellate court with respect thereto and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such action, suit or proceeding in any such court.

To the extent that the Company has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, each of them hereby irrevocably waives such immunity in respect of its obligations under this Indenture, the Securities and any other Note Document, to the extent permitted by law.

SECTION 1.05. Currency. References herein to “$” are to lawful money of United States of America.

13

SECTION 1.06. No Incorporation by Reference of Trust Indenture Act. This Indenture is not qualified under the U.S. Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the Trust Indenture Act shall not apply to or in any way govern the terms of this Indenture. As a result, no provisions of the Trust Indenture Act are incorporated into this Indenture.

ARTICLE II

THE SECURITIES

SECTION 2.01. Form and Dating. Provisions relating to the Securities are set forth in Appendix A attached hereto (“Appendix A”), which is hereby incorporated in, and expressly made part of, this Indenture. The Securities and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1.1 to Appendix A, in the case of the 144A Global Securities, substantially in the form of Exhibit 1.2 to Appendix A, in the case of Securities acquired by certain institutional accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, respectively, each of which form is hereby incorporated in, and expressly made a part of, this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of its authentication. The terms of the Securities set forth in Appendix A are part of the terms of this Indenture.

SECTION 2.02. Execution and Authentication; Additional Securities. An Officer shall sign the Securities for the Company by manual or facsimile signature.

If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless.

A Security shall not be valid until an authorized signatory of the Trustee signs manually or by facsimile the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture.

The Trustee, upon a written order of the Company signed by an Officer of the Company, together with the other documents required by Sections 13.02 and 13.03, shall authenticate Securities for original issue on the Issue Date in the aggregate principal amount not to exceed $38,000,000.00 and such Additional Securities from time to time for original issue in aggregate principal amounts specified by the Company but not to exceed $50,000,000 in the aggregate; provided, that the Company shall issue such Additional Securities only to fund a Delayed Draw Loan pursuant to the terms of the MBIA Facility. The Additional Securities shall be issued in identical amounts to the principal amounts of any Delayed Draw Loans to be made pursuant to the terms of the MBIA Facility. Such written order of the Company shall specify the amount of Securities to be authenticated, whether the Securities are to be Initial Securities or Additional Securities, and the date on which the issue of Securities is to be authenticated. For the avoidance of doubt, no Opinion of Counsel shall be required in order for the Trustee to authenticate Securities for original issuance on the Issue Date or PIK Securities for issuance in connection with any Interest Payment Date.

In connection with the payment of PIK Interest in respect of the Securities (including the PIK Securities), the Company shall be entitled, without the consent of the Holders, to increase the outstanding principal amount of the Securities or issue additional Securities (the “PIK Securities”) under this Indenture on the same terms and conditions as the Securities issued on the Issue Date (other than the issuance dates and the date from which interest will accrue). The Securities and any Additional Securities and PIK Securities subsequently issued under this Indenture shall be treated as a single class for all purposes under this Indenture, including waivers, amendments, redemptions and offers to purchase.

14

Each Global Security will represent such of the outstanding Securities as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Securities from time to time endorsed thereon and that the aggregate principal amount of outstanding Securities represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions, transfers of Securities, conversions and payments of PIK Interest. Any endorsement of a Global Security to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Securities represented thereby will be made by the Trustee.

The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

SECTION 2.03. Registrar and Paying Agent. The Company shall maintain, or cause to be maintained, an office or agency where Securities may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent.

If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate reasonable compensation therefor pursuant to Section 7.06. The Company may change the Paying Agent or Registrar without prior notice to the Holders. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent.

The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Securities.

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Securities.

SECTION 2.04. Paying Agent To Hold Money in Trust. Subject to Section 2.11, prior to each due date of the principal of and interest on any Security, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders of Securities or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in making any such payment. If the Company or any of its Affiliates acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.

SECTION 2.05. Lists of Holders of Securities. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of Securities. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five Business Days before each interest payment date with respect to Securities and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of Securities.

15

SECTION 2.06. Transfer and Exchange. The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer. When a Security is presented to the Registrar or a co-registrar, if any, with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture (including Appendices A, B and C hereto) are met. When Securities are presented to the Registrar or a co-registrar, if any, with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.

Anything to the contrary herein notwithstanding, a Security may be transferred only to the Depositary or to any other Person if both (i) such Person is a Qualified Purchaser and (ii) either such transfer is (x) to a QIB in compliance with Rule 144A or (y) an Institutional Accredited Investor.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants or beneficial owners of interests in any Definitive Security or Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Neither the Trustee nor any agent of the Trustee shall have any responsibility for any actions taken or not taken by the Depositary.

SECTION 2.07. Replacement Securities. If any mutilated Security is surrendered to the Trustee or either the Company or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Security, the Company shall issue and the Trustee, upon receipt of evidence of authentication in accordance with Section 2.02, shall authenticate a replacement Security if the Trustee’s requirements for replacement of Securities are met. An indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Security is replaced. The Trustee and the Company each may charge such Holder for their expenses in replacing such Security.

Every replacement Security is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Securities duly issued hereunder.

SECTION 2.08. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.

If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code) in whose hands such Securities are valid obligations of the Company.

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

16

SECTION 2.09. Temporary Securities. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities and deliver them in exchange for temporary Securities.

SECTION 2.10. Cancellation. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of (subject to the record retention requirements of the Exchange Act) all Securities surrendered for registration of transfer, exchange, payment or cancellation in accordance with its retention policy then in effect, unless the Company directs the Trustee in writing to deliver canceled Securities to the Company. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancellation.

SECTION 2.11. Payment of Interest. Interest shall accrue on the Securities and any past due interest amounts thereon and shall be payable in cash quarterly in arrears at the rate of 14% per annum on each Interest Payment Date, or if such day is not a Business Day, on the next succeeding Business Day, to Holders of record of the Securities on the Record Date immediately preceding such Interest Payment Date. Subject to Sections 2.14 and 4.12, the Trustee shall pay the amount specified in the Interest and Principal Payment Certification (as defined in the MBIA Credit Agreement) from the Distribution Account to the Holders on such Interest Payment Date. To the extent (i) the funds received by the Company pursuant to Section 2.03(c) of the MBIA Credit Agreement are insufficient to pay interest on the Securities in cash on any date on which interest is due and payable pursuant to this Section 2.11 and (ii) no Default or Event of Default hereunder or under the MBIA Facility has occurred and is continuing, the Company may elect to pay interest in the amount of any such insufficiency in kind by treating such amount as PIK Interest; provided that if the Company shall elect to treat such amount as PIK Interest, or a combination of cash payment and PIK Interest, the payment of cash, if any, and PIK Interest shall be applied pro rata to all Holders of Securities. If the Company elects to pay interest by treating such amounts as PIK Interest as aforesaid, the Company shall so specify in the Interest and Principal Payment Certification which shall be delivered to the Trustee by no later than 11:00 a.m. New York City time on the third Business Day prior to the Interest Payment Date on which the respective interest payment is due and payable, which certification shall specify the amount of interest that will be payable in cash, if any, and in the form of PIK Interest. Upon such election, the outstanding principal amount of the Securities will be so increased or PIK Securities in the amount of interest specified shall be issued, as applicable. Interest shall accrue and be payable on the PIK Interest. If the Company shall issue PIK Securities as aforesaid by increasing the outstanding principal amount of such Securities, at any time or from time to time, the Company shall not be required to issue, and the Trustee shall not be required to authenticate, additional physical Securities, and the outstanding physical Securities may be deemed to represent all such PIK Securities pro rata.

SECTION 2.12. Defaulted Interest. If the Company defaults in a payment of principal, interest or any other amount on the Securities, including any Make-Whole Premium, or any other payment due and owing under the Note Documents, or upon the occurrence of an Event of Default and so long as such Event of Default is continuing, the Company shall pay defaulted interest, subject to Section 2.11, at the rate of 5.00% in excess of the rate which would have been payable if such overdue interest had, during the period of non-payment, constituted an outstanding amount of the Securities (plus interest

17

on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest on a payment date to the persons who are Holders of Securities on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date; provided that no such special record date may be less than ten days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon written request of the Company, the Trustee in the name and at the expense of the Company) will send to each Holder of Securities a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.

SECTION 2.13. CUSIP Numbers, ISINs, etc. The Company in issuing the Securities may use “CUSIP” numbers, ISINs and “Common Code” numbers (in each case if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers, ISINs and “Common Code” numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall advise the Trustee in writing of any change in any “CUSIP” numbers, ISINs or “Common Code” numbers applicable to the Securities.

SECTION 2.14. Claims Under Insurance Policy.

(a) If, by 11:00 a.m. New York City time on the second Business Day preceding any Interest Payment Date or at Maturity relating to the Securities, there are not sufficient funds in the Distribution Account to pay all principal and interest payable in cash by the Company on such Interest Payment Date as set forth in the Interest and Principal Payment Certification and the Trustee has not received a notice from the Company electing to pay PIK Interest pursuant to Section 2.11, the Trustee shall deliver to the Collateral Agent, the Insurer and the Holders by facsimile or other electronic transmission a written notice identifying such deficiency and setting forth the amount of such deficiency (a “Deficiency Notice”) by no later than 11:00 a.m. New York City time on the first Business Day preceding the date such principal and interest becomes due. In the event that there is such a deficiency and the Trustee delivers a Deficiency Notice, the Trustee shall furnish to the Insurer a completed Notice of Claim (as defined in clause (b) of this Section 2.14) in the amount of the Insurance Policy Claim Amount. Any amounts paid by the Insurer to the Trustee shall be deposited into the Distribution Account and shall be paid by the Trustee or the Paying Agent to Holders in respect of the applicable principal and/or interest payment in accordance with the Interest and Principal Payment Certification, in each case, on the later of (i) the related Interest Payment Date and (ii) the Business Day received.

(b) Any notice delivered by the Trustee to the Insurer pursuant to Section 2.14(a) shall (i) be in the form attached as Exhibit A to the Insurance Policy, (ii) specify the Insurance Policy Claim Amount claimed under the Insurance Policy and (iii) constitute a “Notice” under the Insurance Policy (such notice, a “Notice of Claim”). In accordance with the provisions of the Insurance Policy, the Insurer is required to pay to the Trustee the Insurance Policy Claim Amount properly claimed thereunder on the applicable Insured Payment Date. Any payments made by the Insurer to the Trustee under the Insurance Policy shall be applied solely to the scheduled payment of the Securities in accordance with the Interest and Principal Payment Certification, and for no other purpose.

(c) The Trustee shall (i) receive in trust for the benefit of each Holder any Insurance Policy Claim Amount from the Insurer and (ii) distribute the same in accordance with Section 2.14(a) above. Any and all Insurance Policy Claim Amounts disbursed by the Trustee from claims made under the Insurance Policy shall not be considered payment by the Company with respect to such Securities, and shall not discharge the obligations of the Company with respect thereto. The Insurer shall, to the

18

extent it makes any payment with respect to the Securities, become subrogated to the rights of the recipients of such payments to the extent of such payments. Subject to and conditioned upon any payment with respect to the Securities by or on behalf of the Insurer, the Insurer shall be entitled to all rights to the payment of interest or principal with respect to the Securities which are then due for payment to the extent of all payments made by the Insurer, and, without limiting any rights of the Insurer, the Insurer may exercise any option, vote, right, power or the like with respect to the Securities to the extent that it has made payment pursuant to the Insurance Policy. To evidence such subrogation, the Trustee shall note the Insurer’s rights as subrogee upon the register of Holders upon receipt from the Insurer of proof of payment by the Insurer. The foregoing subrogation shall in all cases be subject to the rights of the Holders to receive all Insured Amounts in respect of the Securities.

(d) The Trustee shall keep a complete and accurate record of all funds deposited by the Insurer into the Distribution Account and distributed to the Holders with respect to the Insurance Policy and the allocation of such funds to payment of interest on and principal paid in respect of any Security. Upon the reasonable request of the Insurer, the Insurer or its authorized agents shall be permitted (i) to inspect the books and records of the Trustee as they may relate to the Securities, the Note Documents, or the transactions relating to the foregoing (including, without limitation, access to information reasonably required) and (ii) to discuss the affairs, finances and accounts of the Company with the independent accountants of the Company.

(e) The Trustee shall be entitled to enforce on behalf of the Holders the obligations of the Insurer under the Insurance Policy.

SECTION 2.15. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Security, the Company, the Trustee and any agent of the Company or the Trustee, or the Insurer may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payments of principal of and interest, if any on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and none of the Company, the Insurer, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

SECTION 2.16. Rule 144A Information. The Company shall furnish to each Holder of the Securities, and any prospective purchasers designated by any Holder, upon request, the information required to be delivered pursuant to Rule 144A(d)(4). For purposes of this Section 2.16 only, Holder shall include any beneficial holder of a Security, identified as such to the Company by a statement from a bank, broker or other nominees that holds the Securities for the beneficial holder in “street name,” or in any other manner acceptable to the Company.

SECTION 2.17. Investment Company Act Procedures. For so long as any Securities are Outstanding, the Company shall do the following:

(a) Notification. Each periodic report sent or caused to be sent by the Company to the Holders, which should in no event be less frequently than annually, will include a notice to the following effect:

“The Investment Company Act of 1940, as amended (the “1940 Act”), requires that all holders of the outstanding securities of the Company be “Qualified Purchasers” (“Qualified Purchasers”) as defined in Section 2(a)(51)(A) of the 1940 Act and related rules. Under the rules, the Company must have a “reasonable belief” that all holders of its outstanding securities, including transferees, are Qualified Purchasers or entities owned exclusively by Qualified Purchasers. Consequently, all sales and resales of the Securities must be made solely to purchasers that are Qualified Purchasers or entities owned

19

exclusively by Qualified Purchasers. Each purchaser of a Security (or a beneficial interest therein) will be deemed (or required, as the case may be) to represent at the time of purchase that: (i) the purchaser is a Qualified Purchaser or an entity owned exclusively by Qualified Purchasers; (ii) the purchaser is (x) a qualified institutional buyer as defined in Rule 144A under the Securities Act (“QIB”) or (y) solely in the case of Notes issued in the form of certificated Notes, a Person that is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act or any entity in which all of the equity owners come within such paragraphs (an “IAI”)); (iii) the purchaser is acting for its own account or the account of another Qualified Purchaser meeting the requirements of clause (ii) above; (iv) the purchaser is not formed for the purpose of investing in the Company; (v) the purchaser, and each account for which it is purchasing, will hold and transfer at least the minimum denominations specified herein; and (vi) the purchaser understands that the Company may receive a list of participants holding positions in securities from one or more book-entry depositories. The Securities (or beneficial interests therein) may only be transferred to a transferee who is a both (I) a (x) Qualified Purchaser or (y) entity owned exclusively by Qualified Purchasers and (II) a Person meeting the requirements of clause (ii) above and all subsequent transferees are deemed to have made representations (i) through (vi) above.

If, notwithstanding the restrictions on transfer contained therein, the Company determines that any Holder or beneficial owner of an interest in a Security is determined not to have been a Qualified Purchaser at the time of acquisition of such Security or beneficial interest therein, the Company may require, by notice to such Holder or beneficial owner, that such Holder or beneficial owner sell all of its right, title and interest to such Security (or any interest therein) to a Person that is both (x) a (I) Qualified Purchaser or (II) entity owned exclusively by Qualified Purchasers and (y) a Person meeting the requirements of clause (ii) above, with such sale to be effected within 30 days after notice of such sale requirement is given. If such Holder or beneficial owner fails to effect the transfer required within such 30-day period, (i) the Company (or the Trustee acting on behalf of the Company), without further notice to such Holder or beneficial owner, shall and is hereby irrevocably authorized by such Holder or beneficial owner, to cause its Security or beneficial interest therein to be transferred in a commercially reasonable sale (conducted by the Trustee in accordance with Article 9 of the UCC as in effect in the State of New York as applied to securities that are sold on a recognized market or that may decline speedily in value) to a Person that certifies to the Trustee and the Company, in connection with such transfer, that such Person meets the qualifications set forth above and pending such transfer, no further payments will be made in respect of such Security or beneficial interest therein held by such Holder or beneficial owner.”

(b) DTC Actions. The Company will direct DTC to take the following steps in connection with the Global Securities:

(i) The Company will direct DTC to include the marker “3c7” in the DTC 20-character security descriptor and the 48-character additional descriptor for the Global Securities in order to indicate that sales are limited to Qualified Purchasers.

(ii) The Company will direct DTC to cause each physical deliver order ticket that is delivered by DTC to purchasers to contain the 20-character security descriptor. The Company will direct DTC to cause each deliver order ticket that is delivered by DTC to purchasers in electronic form to contain a “3c7” indicator and a related user manual for participants. Such user manual will contain a description of the relevant restrictions imposed by Section 3(c)(7).

20

(iii) On or prior to the Issue Date, the Company will instruct DTC to send a Section 3(c)(7) Notice to all DTC participants in connection with the offering of the Global Securities.

(iv) In addition to the obligations of the Registrar set forth in Section 2.03, the Company will from time to time (upon the request of the Trustee) make a request to DTC to deliver to the Company a list of all DTC participants holding an interest in the Global Securities.

(v) The Company will cause each CUSIP number obtained for a Global Security to have a fixed field containing “3c7” and “144A” indicators, as applicable, attached to such CUSIP number.

(c) Bloomberg Screens, etc. The Company will from time to time request all third-party vendors to include on screens maintained by such vendors appropriate legends regarding Rule 144A and Section 3(c)(7) under the Investment Company Act restrictions on the Global Securities. Without limiting the foregoing, the Company will request that each third-party vendor include the following legends on each screen containing information about the Securities:

(i) Bloomberg.

(1) “Iss’d Under 144A/3c7”, to be stated in the “Note Box” on the bottom of the “Security Display” page describing the Global Securities;

(2) a flashing red indicator stating “See Other Available Information” located on the “Security Display” page;

(3) a link to an “Additional Security Information” page on such indicator stating that the Global Securities are being offered in reliance on the exception from registration under Rule 144A under the Securities Act of 1933 to persons that are both (i) “Qualified Institutional Buyers” as defined in Rule 144A under the Securities Act and (ii) “Qualified Purchasers” as defined under Section 2(a)(51) of the Investment Company Act of 1940, as amended; and

(4) a statement on the “Disclaimer” page for the Global Securities that the Global Securities will not be and have not been registered under the Securities Act of 1933, as amended, that the Company has not been registered under the Investment Company Act of 1940, as amended, and that the Global Securities may only be offered or sold in accordance with Section 3(c)(7) of the Investment Company Act of 1940, as amended.

(ii) Reuters.

(1) a “144A – 3c7” notation included in the security name field at the top of the Reuters Instrument Code screen;

(2) a <144A3c7Disclaimer> indicator appearing on the right side of the Reuters Instrument Code screen; and

21

(3) a link from such <144A3c7Disclaimer> indicator to a disclaimer screen containing the following language: “These Notes may be sold or transferred only to Persons who are both (i) Qualified Institutional Buyers, as defined in Rule 144A under the Securities Act, and (ii) “Qualified Purchasers”, as defined under Section 3(c)(7) under the U.S. Investment Company Act of 1940.”

ARTICLE III

REDEMPTION

SECTION 3.01. Notices to Trustee. Following the occurrence of the Senior Collection Date, if the Company elects to redeem Securities pursuant to Section 3.07, it shall notify the Trustee in writing of the redemption date, the principal amount of Securities to be redeemed, the redemption price, if then ascertainable and the paragraph or subparagraph of this Indenture pursuant to which the redemption shall occur.

The Company shall give each notice to the Trustee provided for in this Section 3.01 at least five Business Days prior to the giving of notice of a redemption pursuant to Section 3.03, unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officer’s Certificate from the Company to the effect that such redemption will comply with the conditions herein.

SECTION 3.02. Selection of Securities to Be Redeemed. If fewer than all the Securities are to be redeemed pursuant to Section 3.07, the Trustee shall select the Securities to be redeemed (1) if such Securities are in global form, by lot or by such other method, then in accordance with the procedures of the Depositary or (2) if such Securities are not in global form, then on a pro rata basis, although no Security of $2,000 (or, in the case of Global Securities, $250,000 or less) in original principal amount or less will be redeemed in part. The Securities and the portions of them that the Trustee selects to be redeemed shall be in minimum principal amounts of $2,000 (or, in the case of Global Securities, $250,000 or less) or a whole multiple of $1,000 in excess thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed.

SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days before a date for redemption of Securities pursuant to Section 3.07, the Company shall send, or cause to be sent (in the case of Securities held in book-entry form, by electronic transmission) a notice of redemption to each Holder of Securities to be redeemed at such Holder’s registered address or otherwise in accordance with the procedures of the Depositary. Notwithstanding the above, when notice has to be given to a holder of a global security (including any notice of redemption) such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with Applicable Procedures. Notices to the Trustee may be given by email in PDF format. Notices of redemption may be subject to one or more conditions precedent.

The notice shall identify the Securities to be redeemed (including the Issue Date and, if applicable, the certificate number) and shall state:

(1) the redemption date;

22

(2) the redemption price;

(3) the name and address of the Paying Agent;

(4) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(5) if fewer than all the Outstanding Securities are to be redeemed, the identification and principal amounts of the particular Securities to be redeemed;

(6) that, unless the Company defaults in making such redemption payment, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date;

(7) the “CUSIP” number, ISIN or “Common Code” number, if any, printed on the Securities being redeemed;

(8) the paragraph or subparagraph of the Securities and/or Section of this Indenture pursuant to which the Securities called for redemption are being redeemed;

(9) any conditions precedent to the redemption of the Securities; and

(10) that no representation is made as to the correctness or accuracy of the “CUSIP” number, ISIN, or “Common Code” number, if any, listed in such notice or printed on the Securities.

At the Company’s request, the Trustee shall give the notice of redemption set forth in this Section 3.03 in the Company’s name and at the Company’s expense. In such event, the Company shall provide the Trustee with an Officer’s Certificate delivered five Business Days prior to the date that notification will be sent to the Holders pursuant to this Section 3.03 (unless the Trustee consents to a shorter period) requesting that the Trustee give such notice of redemption and attaching the form of notice containing the information required by this Section.

SECTION 3.04. Effect of Notice of Redemption. Once a notice of redemption referred to in Section 3.03 is sent, Securities called for redemption become irrevocably due and payable on the redemption date and at the redemption price stated in the notice, unless the conditions described in the notice of redemption, if any, have not been satisfied. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the related interest payment date), and such Securities shall be canceled by the Trustee. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder.

SECTION 3.05. Deposit of Redemption Price. On or prior to the date of any redemption pursuant to Section 3.07, the Company shall deposit with the Paying Agent (or, if the Company or any of its Subsidiaries is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Securities or portions thereof to be redeemed on that date other than Securities or portions of Securities called for redemption which have been delivered by the Company to the Trustee for cancellation.

SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed pursuant to Section 3.07 in part, the Company shall execute and the Trustee shall authenticate, upon receipt of a written order of the Company, for the Holder (at the Company’s expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered.

23

SECTION 3.07. Optional Redemption.

(a) Following the occurence of the Senior Collection Date, the Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities plus the Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date), and any other payment due and owing under the Note Documents. For the avoidance of doubt, the Company shall not be entitled to redeem the Securities prior to the occurrence of the Senior Collection Date.

(b) Any redemption pursuant to this Section 3.07 shall be made in accordance with the provisions of Sections 3.01 through 3.06.

SECTION 3.08. Mandatory Principal Payment.

(a) Following the occurrence of the Senior Collection Date, if the Company receives any cash payments under Section 2.04 of the MBIA Facility, the Company shall receive by deposit to the Distribution Account any cash payment under Section 2.04 of the MBIA Credit Agreement, the Company shall apply all of such payment, to the extent not applied to pay interest pursuant to Section 2.11 or defaulted interest pursuant to Section 2.12, to the prepayment of outstanding Securities, at a price equal to 100% of the principal amount of the Securities to be repaid, together with the Make-Whole Premium, if any; provided, however, that the Company shall not be required to pay the Make-Whole Premium on prepayment of the principal amount of the Securities except to the extent such prepayment is attributable to the initial principal amount of the Notes, and not to PIK Interest, calculated by the Company, on any date on which such prepayment of principal amount is to be made pursuant to this Section 3.08(a), as the positive difference, if any, between (x) the total principal amount of the Securities prepaid or to be prepaid through, and including, such date of prepayment, less (y) the sum of (I) the total principal amount of PIK Interest paid on the Securities in lieu of cash interest through such date of prepayment, plus (II) the total principal amount of the Securities previously prepaid through, but not including, such date of prepayment as to which the Make-Whole Premium has been paid; provided, however, that on or prior to the Make-Whole Termination Date, such cash payment, if so elected by MBIA Corp. pursuant to Section 2.04(c) of the MBIA Credit Agreement, may be deposited in the Mandatory Prepayment Account. The Interest and Principal Payment Certification shall set forth the principal amount of the Securities to be prepaid and the Make-Whole Premium.

(b) The prepayment of principal amount of the Notes pursuant to Section 3.08(a) shall be made on the first Interest Payment Date occurring no earlier than the third Business Day following the date on which the cash payment under Section 2.04 of the MBIA Credit Agreement is deposited in the Distribution Account. Subject to any operational limitations of DTC, the Trustee shall repay the principal amount of the Securities and the Make-Whole Premium, if any, as specified in the Interest and Principal Payment Certification, from the Distribution Account to the Holders on such Interest Payment Date; provided that such funds have been deposited to the Distribution Account by 11:00 a.m. New York City time, on such Interest Payment Date.

(c) For the avoidance of doubt, any funds deposited to the Mandatory Prepayment Account shall not be deemed to be received by the Company for purposes of making prepayments under Section 3.08(a).

24

(d) Payments made pursuant to this Sections 3.08 shall be deemed a prepayment of principal, and not a redemption made pursuant to Sections 3.01 through 3.06. Any prepayments made pursuant to this Section 3.08 in respect of Securities issued in global form, and the Trustee’s obligation to effect such payments, shall be subject in all respects to the applicable procedures of the Depositary

SECTION 3.09. Payment at Maturity. The Company shall repay the Securities in whole (including PIK Interest, if any) plus the Make-Whole Premium, if any, and accrued and unpaid interest, if any, to Maturity and any other payment due and owing under the Note Documents; provided, however, that the Company shall not repay the Securities until all Senior Obligations have been paid in full in cash and the Senior Collection Date has occurred.

ARTICLE IV

COVENANTS

SECTION 4.01. Payment of Securities. The Company shall promptly pay the principal of (and premium including the Make-Whole Premium, if any) and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture; provided, however, that the Company shall make no cash payments, whether of principal, interest or otherwise, on the Securities unless and until all Senior Obligations are paid in full in cash and the Senior Collection Date has occurred. For the avoidance of doubt, the proceeds of the Collateral shall not be used to make any payments on the Securities unless and until all Senior Obligations are paid in full in cash. Principal and interest shall be considered paid on the date due if the Trustee or the Paying Agent holds in accordance with this Indenture as of 11:00 a.m. New York time on the due date money sufficient to pay all principal and interest then due.

The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

SECTION 4.02. Corporate Existence; Compliance with Operating Agreement. The Company shall preserve and maintain its organizational existence. The Company shall duly observe and comply with the terms of the Company Operating Agreement.

SECTION 4.03. Limitation on Liens. The Company shall not create, incur, assume or suffer to exist any Lien of any kind on any of its property or assets other than (a) Liens arising by operation of law, (b) Liens under the Note Documents and (c) Liens under the Senior Facility.

SECTION 4.04. Limitation on Indebtedness. The Company shall not incur, assume or suffer to exist any Indebtedness other than (a) Indebtedness under the Note Documents and (b) Indebtedness under the Senior Facility.

SECTION 4.05. Limitation on Investments. The Company shall not make or hold any Investments other than the MBIA Facility to the extent the MBIA Facility is an Investment.

SECTION 4.06. Maintenance of Property; Insurance. The Company shall keep all material property necessary to the proper conduct of the business of the Company in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted) with such exceptions as would not reasonably be expected to have a Material Adverse Effect.

SECTION 4.07. Financial Reports and Other Information

(a) Reports, Notices. The Company shall (i) furnish to the Trustee all reports and/or notices it sends or receives in connection with the MBIA Facility and the Senior Facility, (ii) designate and mark, or cause to be designated and marked, any reports and/or notices which contain any Material Non-Public Information. The Trustee shall promptly forward (i) copies of all reports and notices it receives which have not been marked as containing any Material Non-Public Information to the Holders and (ii) at the request of any Holder, copies of all reports and notices it receives which have been marked as containing Material Non-Public Information to such Holder.

25

(b) Interest and Principal Payment Certification. The Company shall cause MBIA Corp. to deliver a completed Interest and Principal Payment Certification to the Trustee by no later than 11:00 a.m. New York City time on the third Business Day prior to each Interest Payment Date and make the information contained in the Interest and Principal Payment Certification (or the information therein) public, in accordance with Section 7.12(b)(viii) of the MBIA Credit Agreement.

(c) Maintenance of Datasite. The Company shall maintain, or cause to be maintained, an internet accessible datasite (the “Datasite”) in accordance with Section 5.01(d) of the MBIA Credit Agreement. The Company shall cause all information required to be delivered to the Trustee and/or the Holders to be available on the Datasite. The Company shall cause MBIA Corp. to publicly disclose on a quarterly basis the information described in Section 7.12 of the MBIA Credit Agreement in accordance with the MBIA Credit Agreement.

(d) Notice of Default. So long as any of the Securities are outstanding, the Company will deliver to the Trustee, within five days after any Officer of the Company becoming aware of the occurrence of any Default or Event of Default that has not been cured, a written statement specifying such Default or Event of Default and what action the Company is taking or proposing to take with respect thereto.

(e) Limitation of Trustee Duty. Delivery of reports, information and documents to the Trustee under this Section 4.07 is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from the information contained therein, including the Company’s compliance or non-compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates). The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s compliance with the covenants or with respect to any reports or other documents filed with the SEC or EDGAR or any website or datasite under this Indenture, or participate in any conference calls.

SECTION 4.08. Inspection Rights. Upon reasonable notice from the Trustee, the Insurer or any Holder, the Company will and will cause MBIA Corp. to permit the Trustee (and such Persons acting for the Trustee as the Trustee may reasonably designate), the Insurer (and such Persons acting for the Insurer as the Insurer may reasonably designate) or such Holder during normal business hours at the Company’s sole expense for two inspections in any consecutive period of twelve months unless an Event of Default is continuing, to visit and inspect any of the properties of the Company and MBIA Corp. to examine all of their books and records to make copies and extracts therefrom, including any information about the Collateral or the “Collateral” (as such term is defined in the MBIA Facility), (subject to reasonable confidentiality restrictions), and to discuss their respective affairs, finances and accounts with their respective officers, advisors and independent public accountants (and by this provision each of the Company and MBIA Corp. authorizes such accountants to discuss with the Trustee (and such Persons acting for the Trustee as the Trustee may reasonably designate), the Insurer (and such Persons acting for the Insurer as the Insurer may reasonably designate) or such Holder the affairs, finances and accounts of the Company and MBIA Corp.), all as often, and to such extent, as may be reasonably requested. The chief financial officer of MBIA Corp. and/or his or her designee shall be afforded the opportunity to be present at any meeting of the Trustee, the Insurer or such Holder and such accountants.

26

SECTION 4.09. Conduct of Business. The Company shall not conduct, transact or otherwise engage in any business, operations or activities other than as set forth below, so long as such business, operations or activities are not prohibited by the Note Documents:

(a) to purchase, accept an assignment of, acquire, own, hold and collect all or any portion of the Collateral;

(b) to take any and all steps necessary or desirable to administer, secure, enforce and collect the loan extended by the Company under the MBIA Facility and any other Collateral;

(c) to take any and all steps necessary to perform any of its funding obligations with respect to the MBIA Facility;

(d) to enter into and perform its obligations under the Note Documents, the Senior Facility and the MBIA Facility and all other documents, instruments or agreements which may be necessary in connection with the transactions contemplated thereunder;

(e) to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the laws of the State of Delaware that are reasonably related or incidental to and necessary, convenient or advisable for the accomplishment of the above-mentioned purposes or contemplated by the Note Documents, the Senior Facility or the MBIA Facility (including the establishment of bank accounts and referral, management, servicing and administration agreements);

(f) to issue limited liability company interests as provided for in the Company Operating Agreement; and

(g) to the extent not otherwise prohibited in this Indenture or the Note Documents, to take any and all other actions necessary to maintain the existence of the Company as a limited liability company in good standing under the laws of the State of Delaware and/or to qualify the Company to do business as a foreign limited liability company in any other state in which such qualification is required.

SECTION 4.10. Use of Proceeds; Margin Regulations; Company Activities.

(a) Use of Proceeds. The net proceeds of the Securities shall be used by the Company to make a loan to MBIA Corp. solely pursuant to the MBIA Facility.

(b) Margin Stock. The Company shall not (i) engage in the business of extending credit for the purpose of purchasing or carrying margin stock in violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System or (ii) use any proceeds of the Securities for a purpose which violates Regulations T, U or X of the Board of Governors of the Federal Reserve System.

SECTION 4.11. Limitation on Dividends. The Company shall not declare or pay any dividend or make any other similar payment or distribution on account of its Equity Interests or to the direct or indirect holders of its Equity Interests in their capacity as such.

27

SECTION 4.12. Maintenance of Accounts.

(a) Collection Account. The Company shall at all times maintain the Collection Account. The Company shall not use any amounts deposited into the Collection Account in any manner or for any purpose other than (i) prior to the Senior Collection Date, in accordance with the Senior Facility and (ii) on or after the Senior Collection Date, for transfer to the Mandatory Prepayment Account, Distribution Account and/or MBIA Corp. in accordance with the relevant Interest and Principal Payment Certification and the MBIA Credit Agreement. The Company, or MBIA Corp. on behalf of the Company, may, by written notice to the Trustee, request amounts on deposit in the Collection Account to be transferred into the Mandatory Prepayment Account, the Distribution Account and/or to MBIA Corp. and within one Business Day after the receipt of the Interest and Principal Payment Certification and such request, the Trustee shall initiate the transfer of the amounts to be so transferred in accordance with such request.

(b) Mandatory Prepayment Account. The Company shall open and prior to the Make-Whole Termination Date maintain the Mandatory Prepayment Account. The Company shall not use any amounts deposited into the Mandatory Prepayment Account in any manner or for any purpose other than (i) prior to the Senior Collection Date, in accordance with the Senior Facility and (ii) on or after the Senior Collection Date, to be transferred into the Collection Account and/or the Distribution Account in accordance with the relevant Interest and Principal Payment Certification and the MBIA Credit Agreement. The Company, or MBIA Corp. on behalf of the Company, may, by written notice to the Trustee, request amounts on deposit in the Mandatory Prepayment Account be transferred into the Collection Account and/or the Distribution Account and upon receipt of such request, the Trustee shall cause such amounts to be so transferred.

(c) The Company shall not maintain any account other than the Collection Account and the Mandatory Prepayment Account.

(d) Distribution Account. At the time of execution and delivery of this Indenture, and for purposes of this Indenture, the Company hereby instructs the Trustee to establish an account for the benefit of Holders (the “Distribution Account”), which shall be a trust account, the assets of which shall not be commingled with the general assets of the Trustee or the assets held in trust for the benefit of holders of Senior Notes, and over which the Trustee shall have exclusive control and sole right of withdrawal.

(i) The Trustee shall deposit any amount received by it from MBIA Corp. under the Insurance Policy, subject to the terms of the Intercreditor Agreement, and excluding any amounts which must be turned over to the holders of Senior Notes under the Intercreditor Agreement, into the Distribution Account and distribute such amount only for purposes of making scheduled payments hereunder for which a claim was made. Any funds received by the Trustee as a result of any claim under the Insurance Policy shall be applied by the Trustee directly to the payment in full (to the extent of the proceeds received pursuant to the Insurance Policy) of the scheduled payments due on the Securities.

(ii) The Trustee shall deposit any amount received by it from the Company (or MBIA Corp. on behalf of the Company) pursuant to this Indenture, subject to the terms of the Intercreditor Agreement, and excluding any amounts which must be turned over to the holders of Senior Notes under the Intercreditor Agreement, into the Distribution Account and distribute such amount only for purposes of making scheduled principal and interest payments hereunder and under the Subordinated Facility. Such amounts shall be disbursed by the Trustee to the Holders as set forth under Section 4.01.

(iii) Funds held in the Distribution Account shall not be invested by the Trustee.

28

(iv) On each Interest Payment Date and at Maturity in respect of the Securities, the Trustee or Paying Agent shall pay to the Holders, solely to the extent of the funds available therefor in the Distribution Account, the principal and/or interest payments on the Securities to be paid on such Interest Payment Date in accordance with the Interest and Principal Payment Certification.

(e) [Reserved]

(f) Securities Proceeds Account. At the time of execution and delivery of this Indenture, and for purposes of this Indenture, the Company hereby instructs the Trustee to establish an account for the benefit of Holders (the “Securities Proceeds Account”), which shall be a trust account, the assets of which shall not be commingled with the general assets of the Trustee, and over which the Trustee shall have exclusive control and sole right of withdrawal pursuant to this Indenture. On the Issue Date, upon the Trustee’s receipt of the proceeds of the Securities issued on the Issue Date, the Company hereby directs the Trustee to deposit such proceeds in the Securities Proceeds Account.

(i) Funds held in the Securities Proceeds Account shall not be invested by the Trustee.

(ii) Upon request from the Company and certification that all amounts on deposit in the Securities Proceeds Account have been or shall be concurrently used to pay the Zohar II Policy Payment, the Trustee or the Paying Agent shall pay the Zohar II Policy Payment (as defined in the MBIA Credit Agreement), solely to the extent of the funds available therefor in the Securities Proceeds Account and the Securities Proceeds Account under the Senior Facility. The Company shall deliver a written request (the “Zohar II Policy Payment Request”) to the Trustee and each of the Holders at least one Business Day prior to the date of the requested payment (a) specifying the amount to be paid and the account to which such payment shall be directed and (b) certifying that such payment shall be used to pay the Zohar II Policy Payment and the Trustee shall pay such amount from the Securities Proceeds Account to the account specified in the Zohar II Policy Payment Request on the payment date requested therein.

(iii) The Trustee shall transfer all amounts remaining on deposit in the Securities Proceeds Account on January 26, 2017 to the Collection Account.

SECTION 4.13. Performance under MBIA Facility. The Company shall cause MBIA Corp. to duly and punctually perform and observe in all material respects its obligations and conditions under the MBIA Facility.

SECTION 4.14. Taxes. The Company shall pay, prior to delinquency, all taxes, assessments, and governmental levies due and payable by the Company except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders. The Company is not a party to, and shall not become a party to, any tax sharing or similar agreement that would obligate it to make payments to MBIA Inc. or any affiliate of MBIA Inc. in respect of taxes, assessments or other governmental levies.

SECTION 4.15. Compliance with Laws; Policies and Procedures.

(a) Without limiting any of the other covenants in this Article 4, the Company, shall (i) conduct its business, and otherwise be, in compliance with all applicable laws, regulations, ordinances and orders of any governmental or judicial authorities if the failure to comply thereunder would reasonably be expected to have a Material Adverse Effect; provided, however, that this Section 4.15 shall

29

not require the Company to comply with any such law, regulation, ordinance or order if it shall be contesting such law, regulation, ordinance or order in good faith by appropriate proceedings and reserves in conformity with GAAP have been provided therefor, (ii) comply with all obligations it might have under Anti-Corruption Laws and (iii) comply with all applicable Sanctions imposed on it.

(b) The Company shall maintain in effect and enforce policies and procedures intended to ensure compliance by the Company and MBIA Corp. and their respective officers, directors, employees and agents with Anti-Corruption Laws and Sanctions.

SECTION 4.16. Limitation on Modifications.

(a) The Company shall not amend, modify, waive or otherwise change any provision of the Company Operating Agreement without the prior written consent of the holders of a majority in aggregate principal amount of the then outstanding Senior Notes.

(b) The Company shall not amend, modify, waive or otherwise change any provision of the MBIA Facility without the prior written consent of the holders of a majority in aggregate principal amount of the then outstanding Senior Notes.

SECTION 4.17. Further Assurances.

(a) The Company agrees that it will, and agrees to cause each Collateral Grantor, at any time and from time to time, at the expense of such Collateral Grantor, promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, to perfect and protect any Lien granted or purported to be granted by the Security Documents, or to enable the Collateral Agent to exercise and enforce its rights and remedies under the Security Documents. Without limiting the generality of the foregoing, the Company shall, and shall cause each Collateral Grantor to execute, if required, and file, or cause to be filed, such financing or continuation statements under the Uniform Commercial Code (or any non-U.S. equivalent thereto), or amendments thereto, and such other instruments or notices, to protect and preserve the Liens granted or purported to be granted by the Security Documents.

(b) Subject to Section 11.05, the Company hereby authorizes the Collateral Agent (without obligation) to file one or more financing or continuation statements under the Uniform Commercial Code (or any non-U.S. equivalent thereto), and amendments thereto, relative to all or any part of the Collateral without the signature of any Collateral Grantor where permitted by law. The Collateral Agent will promptly send the Company a copy of any financing or continuation statements which it may file without the signature of the relevant Collateral Grantor and the filing or recordation information with respect thereto.

SECTION 4.18. Post-Bankruptcy Restrictions. The Company shall, and shall cause MBIA Corp. and MBIA Inc. to, not take or support any challenge of any transfer made in connection with the Note Documents as a preference or fraudulent conveyance.

ARTICLE V

SUCCESSOR COMPANY

SECTION 5.01. Consolidation, Merger and Sale of Assets. The Company will not, in any transaction or series of transactions, consolidate with or merge into or engage in a scheme of arrangement qualifying as an amalgamation with any Person, or sell, lease, convey, transfer or otherwise dispose of any of its assets to any Person.

30

ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.01. Events of Default. Each of the following is an “Event of Default”:

(a) failure to pay interest on any Security when such interest becomes due and payable and such default is continued for two Business Days;

(b) failure to pay principal of (or premium including the Make-Whole Premium, if any, on) any Security or any other amounts due hereunder when such amounts become due and payable and such default continues for two Business Days;

(c) failure by the Company to comply with Sections 4.1 through 4.5, 4.9, through 4.13, 4.15, 4.16 and 4.18 or (ii) failure to comply with any other covenant or agreement in this Indenture and such default continues for 15 Business Days;

(d) the (i) Insurance Policy ceases to be in full force and effect (ii) at the option of the Insurer, the Insurance Agreement ceases to be in full force and effect (other than in accordance with the terms thereof or pursuant to the terms of this Indenture or other applicable Note Document), (iii) MBIA Corp. denies or disaffirms its obligations under the Insurance Policy or the Insurance Agreement, or (iv) at the option of the Insurer, failure of any premium payment to be made on the Insurance Policy when due;

(e) (i) the Company or MBIA Corp. shall commence an Insolvency Proceeding, or the Company or MBIA Corp. shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Company or MBIA Corp. any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Company or MBIA Corp. any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Company or MBIA Corp. shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Company or MBIA Corp. shall generally not, or shall be unable to, or shall admit in writing their inability to, pay its debts as they become due;

(f) one or more final judgments or decrees shall be entered against the Company involving in the aggregate a liability (to the extent not covered by insurance) of $5,000,000 or more and all such judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof;

(g) (i) the Security Documents or the Intercreditor Agreement shall for any reason cease to create a valid and perfected first-priority Lien on any portion of the Collateral (other than in accordance with the terms of this Indenture or the terms of the Security Documents) or (ii) any Collateral Grantor asserts in writing that any Lien created under the Security Documents is invalid or unenforceable;

(h) any “Event of Default” shall occur and continue beyond the applicable cure period, if any, under the (i) Senior Facility, (ii) MBIA Facility, or (iii) any other Indebtedness of the Company; provided that no effect shall be given to any waiver of any such “Event of Default” granted thereunder;

31

(i) any material provision of any Note Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder ceases to be in full force and effect; or the Company or MBIA Corp. denies in writing the validity or enforceability of any provision of any Note Document or the validity or priority of a Lien as required by the Security Documents, or the Company or MBIA Corp. denies in writing that it has any or further liability or obligation under any Note Document;

(j) an ERISA Event occurs which results or could reasonably be expected to result in liability of the Company in an aggregate amount (determined as of the date of occurrence of such ERISA Event) which could reasonably be expected to result in a Material Adverse Effect or (ii) the Company or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under any Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Company in an aggregate amount which could reasonably be expected to result in a Material Adverse Effect;

(k) a Change of Control shall have occurred; or

(l) any representation or warranty by the Company or MBIA Corp. made or deemed made herein or in any other Note Document or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection herewith shall prove to have been incorrect, false or misleading on or as of the date made or deemed made which failure has a Material Adverse Effect.

SECTION 6.02. Acceleration of Maturity; Rescission and Annulment. Subject to the terms of the Intercreditor Agreement, if an Event of Default described in Section 6.01 (other than an Event of Default specified in Section 6.01(e) occurs and is continuing then in every such case the Trustee or the Majority Holders, if any, of the Outstanding Securities may declare the principal amount of all of the Securities and all interest thereon to be due and payable immediately, including the Make-Whole Premium, if any, and any other payments due and owing under the Note Documents, by a notice in writing to the Company (and to the Trustee if given by the Holders) and upon any such declaration such amount (or specified portion thereof) shall become immediately due and payable. Upon the occurrence of an Event of Default specified in Section 6.01(e), the principal amount of all of the Securities, all interest thereon, and the Make-Whole Premium, if any, shall automatically and immediately become due and payable.

For the avoidance of doubt, upon an acceleration pursuant to this Section 6.02, the Make-Whole Premium shall be calculated as of the date of such acceleration and shall be due and owing following such an acceleration. The Company will pay the Make-Whole Premium, as compensation to the Holders for the loss of their investment opportunity and not as a penalty, whether or not an Event of Default specified in Section 6.01(e) has occurred and (if an Event of Default specified in Section 6.01(e) has occurred) without regard to whether the event causing such Event of Default is voluntary or involuntary, or whether payment occurs pursuant to a motion, plan of reorganization, or otherwise, and without regard to whether the Securities and other Notes Obligations are satisfied or released by foreclosure (whether or not by power of judicial proceeding), deed in lieu of foreclosure or by any other means. The Company agrees that payment of the Make-Whole Premium is reasonable under the circumstances currently existing. THE COMPANY EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE MAKE-WHOLE PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Company expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Make-Whole Premium is reasonable and the product of an arm’s length

32

transaction between sophisticated business people, ably represented by counsel; (B) the Make-Whole Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Holders and the Company giving specific consideration in this transaction for such agreement to pay the Make-Whole Premium; and (D) the Company shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Company expressly acknowledges that its agreement to pay the Make-Whole Premium to the Trustee for the ratable benefit of the Holders as herein described is a material inducement to Holders to purchase the Securities.

At any time after such a declaration of acceleration with respect to Securities has been made, but before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter provided in this Article 6, the Majority Holders, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:

(a) the Company has paid or deposited with the Trustee a sum sufficient to pay in U.S. dollars,

(i) all overdue interest, if any, on all Outstanding Securities,

(ii) all unpaid principal of (and premium including the Make-Whole Premium, if any, on) any Outstanding Securities which has become due otherwise than by such declaration of acceleration, interest, if any, on such unpaid principal (and premium including the Make-Whole Premium, if any) and all other amounts due and owing under the Note Documents at the rate or rates prescribed therefor in such Securities, and any other amounts due and owing under the Note Documents,

(iii) to the extent that payment of such interest is lawful, interest on overdue interest, if any, at the rate or rates prescribed therefor in such Securities, and

(iv) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and

(b) all Events of Default with respect to Securities other than the non-payment of amounts of principal of (or premium including the Make-Whole Premium, if any, on) or interest on Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.13.

No such rescission shall affect any subsequent default or impair any right consequent thereon.

Upon the Trustee providing any declaration of acceleration, or rescission and annulment thereof pursuant to this Section 6.02 with respect to Securities all or part of which is represented by a Global Security, a record date shall automatically and without any other action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join such declaration of acceleration, or rescission and annulment, as the case may be, which record date shall be the close of business on the date the Trustee shall have provided such declaration of acceleration, or rescission and annulment, as the case may be. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such declaration of acceleration, or rescission and annulment, as the case may be, whether or not such Holders remain Holders after such record date; provided that, unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having been obtained prior to the day which is 90 days after such record date (or their duly appointed agents), such declaration of

33

acceleration, or rescission and annulment, as the case may by, shall automatically and without any action by any Person be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder (or duly appointed agent thereof) from giving, before or after the expiration of such 90-day period, a declaration of acceleration, or a rescission and annulment of any such declaration, contrary to or different from a declaration previously given by a Holder, or from giving, after the expiration of such period, a declaration identical to a declaration of acceleration, or rescission and annulment thereof, as the case may be, that has been cancelled pursuant to the proviso to the preceding sentence, in any of which events a new record date shall be established pursuant to the provisions of this Section 6.02.

SECTION 6.03. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if:

(a) default is made in the payment of any installment of interest on any Security when such interest becomes due and payable and such default continues for a period of two Business Days, or

(b) default is made in the payment of the principal of (or premium including the Make-Whole Premium, if any, on) any Security at the Maturity thereof and on any date required under Section 3.08, or any other payment due and owing under the Note Documents, the Company, subject to the Intercreditor Agreement, shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium including the Make-Whole Premium, if any) and interest, if any, and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium including the Make-Whole Premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name, as Trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon such Securities, wherever situated.

If an Event of Default with respect to the Securities occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.

SECTION 6.04. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor upon the Securities or the property of the Company or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company for the payment of overdue principal, premium including the Make-Whole Premium, if any, or interest, if any, or and any other payment due and owing under the Note Documents) shall be entitled and empowered, by intervention in such proceeding or otherwise,

34

(a) to file and prove a claim for the whole amount of principal (and premium including the Make-Whole Premium, if any) and interest, if any, and any other payment due and owing under the Note Documents, owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and

(b) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payment to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06.

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.05. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.

SECTION 6.06. Application of Money Collected. Subject to the terms of the Intercreditor Agreement, any money collected by the Trustee or the Collateral Agent pursuant to this Article 6 (including upon any realization of any Lien upon Collateral) shall, subject to the terms of the Security Documents, be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium including the Make-Whole Premium, if any) or interest, if any, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:

FIRST: To the payment of all amounts due the Trustee or the Collateral Agent under Section 7.06;

SECOND: To the payment of the amounts then due and unpaid for principal of (and premium including the Make-Whole Premium, if any) and interest, if any, on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium including the Make-Whole Premium, if any) and interest, if any, respectively; and

THIRD: The balance, if any, to the Company or to such party as a court of competent jurisdiction shall direct.

SECTION 6.07. Limitation on Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, the Securities, or the other Note Documents, or for the appointment of a receiver or trustee, or for any other remedy hereunder or thereunder, unless:

35

(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities;

(b) the Holders of not less than 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;

(c) such Holder or Holders have offered to the Trustee indemnity satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;

(d) the Trustee for 30 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and

(e) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Majority Holders;

it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing themselves of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any such use by a Holder affects, disturbs or prejudices the rights of other Holders or obtains or seeks to obtain priority or preference over such other Holders or enforces any right under this Indenture). Nothing in this section 6.07 shall be construed as limiting the rights of otherwise qualified Holders to petition a court for the removal of a Trustee pursuant to Section 7.07 hereof.

SECTION 6.08. Unconditional Contractual Right of Holders to Receive Principal, Premium and Interest. Subject to the following sentence, notwithstanding any other provision in this Indenture, the Holder of any Security shall have the contractual right, which is absolute and unconditional, to receive payment, as provided herein and in such Security of the principal of (and premium including the Make-Whole Premium, if any) and interest, if any, on such Security on the Stated Maturity or any Maturities (or, in the case of redemption, on the redemption date) and to institute suit for the enforcement of any such payment, and such contractual rights shall not be impaired without the consent of such Holder. Notwithstanding the foregoing, no amendment to, or deletion or waiver of any of the covenants described in Article 4 of this Indenture or in any other Note Document or any action taken by the Company not prohibited hereunder shall be deemed to impair or affect any rights of any Holder to receive payment of principal of, and premium, interest and Additional Amounts, if any, on, the Securities.

SECTION 6.09. Restoration of Rights and Remedies. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

36

SECTION 6.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 2.07, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

SECTION 6.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

SECTION 6.12. Control by Holders. The Majority Holders shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Outstanding Securities, provided that in each case (a) such direction shall not be in conflict with any rule of law, this Indenture or the Intercreditor Agreement and (b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.

Upon receipt by the Trustee of any such direction with respect to Securities all or part of which is represented by a Global Security, a record date shall automatically and without any further action by any Person be set for the purpose of determining the Holders of Outstanding Securities entitled to join in such direction, which record date shall be the close of business on the day the Trustee shall have received such direction. The Holders of Outstanding Securities on such record date (or their duly appointed agents), and only such Persons, shall be entitled to join in such direction, whether or not such Holders remain Holders after such record date; provided that, unless such direction shall have become effective by virtue of Holders of the requisite principal amount of Outstanding Securities on such record date (or their duly appointed agents) having joined therein on or prior to the 90th day after such record date, such direction shall automatically and without any action by any Person be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder (or a duly appointed agent of a Holder) from giving, before or after the expiration of such 90-day period, a direction contrary to or different from a direction previously given by a Holder, or from giving, after the expiration of such period, a direction identical to a direction that has been cancelled pursuant to the proviso to the preceding sentence, in any of which events a new record date in respect thereof shall be set pursuant to the provisions of this Section 6.12.

SECTION 6.13. Waiver of Past Defaults. Subject to Section 6.02, the Majority Holders may on behalf of the Holders of all the Outstanding Securities waive any past Default or Event of Default hereunder, except a default

(1) in the payment of the principal of (or premium including the Make-Whole Premium, if any) or interest on any Security or the payment of Additional Amounts, if any, or

(2) in respect of a covenant or provision hereof which under Article 10 cannot be modified or amended without the consent of the Holder of each Outstanding Security affected.

37

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any past Default or Event of Default hereunder. If a record date is fixed, the Holders on such record date (or their duly designated agents), and only such Persons, shall be entitled to waive any such default hereunder, whether or not such Holders remain Holders after such record date; provided, that unless such majority in principal amount shall have been obtained prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture and the other Note Documents; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

SECTION 6.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by the Majority Holders, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium including the Make-Whole Premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the redemption date).

SECTION 6.15. Waiver of Stay or Extension Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted; provided that this Section shall not prohibit the Company from exercising any rights it may have under this Indenture to contest any actions taken by the Trustee pursuant to this Section.

SECTION 6.16. Subrogation Rights of the Insurer. The Insurer shall be subrogated to the rights of the Holders as provided in the Insurance Agreement.

SECTION 6.17. Intercreditor Agreement. All rights of the Trustee and the Holders of Securities to declare an Event of Default, exercise remedies, and receive payments or proceeds of the Collateral under this Indenture are subject to, and limited by, the Intercreditor Agreement.

ARTICLE VII

TRUSTEE

SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs.

(b) Except during the continuance of an Event of Default:

38

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and any Note Documents to which it is or will become a party and no implied covenants or obligations shall be read into this Indenture or any of the Note Documents against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved in a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.12.

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.

(e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

(f) Except as expressly required by this Indenture, money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

(i) The Trustee shall, upon two Business Days’ prior notice to the Trustee, permit any representative of the Insurer at the Insurer’s own expense, during the Trustee’s normal business hours, to examine all books of account, records, reports and other papers of the Trustee relating to the Securities, to make copies and extracts therefrom and to discuss the Trustee’s affairs and actions, as such affairs and actions relate to the Trustee’s duties with respect to the Securities, with the Trustee’s officers and employees responsible for carrying out the Trustee’s duties with respect to the Securities.

39

(j) Each of the Holders by acceptance of the Securities hereby irrevocably authorize the Trustee to enter into the Note Documents and to take such action on their behalf under the provisions of the Note Documents and to exercise such powers and perform such duties as are expressly delegated to the Trustee by the terms of this Indenture and the Note Documents, together with such powers as are reasonably incidental thereto.

SECTION 7.02. Rights of Trustee. Subject to Section 7.01:

(a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both, in each case, to the effect that it is so permitted to act or to refrain from acting. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.

(c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by this Indenture.

(e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) Unless otherwise specified in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.

(g) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

(h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.

(i) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(j) The Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.

(k) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, the Collateral Agent and each agent, custodian and other Person employed to act hereunder.

40

(l) In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

(m) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(n) The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

(o) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Section 7.09.

SECTION 7.04. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Securities or any of the Note Documents, it shall not be accountable for the Company’s use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company or recital in this Indenture, or any statement in any Note Document or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee’s certificate of authentication.

SECTION 7.05. Notice of Defaults. If a Default occurs with respect to the Securities and is continuing and written notice of such Default has been received by the Trustee as specified in Section 7.02(j), the Trustee shall send to each Holder a notice of the Default within 5 Business Days after such written notice of it is received by a Trust Officer of the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders.

SECTION 7.06. Compensation and Indemnity. The Company agrees to: (a) pay to the Trustee, the Collateral Agent and the Loan Administrator, from time to time as agreed to between the Company, the Trustee, the Collateral Agent and the Loan Administrator, reasonable compensation for its

41

services as has been agreed to by the Company, the Trustee, the Collateral Agent and the Loan Administrator, which compensation shall not be limited by any law on compensation of a trustee of an express trust; (b) reimburse the Trustee, Collateral Agent and Loan Administrator upon request for all reasonable out-of-pocket expenses incurred or made by it, including, but not limited to, costs of monitoring the Collateral, costs of monitoring the Company’s compliance with the Note Documents and the MBIA Facility (provided that the Trustee, the Collateral Agent and the Loan Administrator shall have no duty to monitor) costs of collection, in addition to the compensation for its services (such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s, Collateral Agent’s and Loan Administrator’s agents, counsel, accountants, financial advisors, and experts); (c) indemnify, defend, protect and hold harmless the Trustee (in its individual capacity and Trustee capacities), the Collateral Agent (in its capacity as Collateral Agent), the Loan Administrator (in its capacity as Loan Administrator) and their respective directors, officers and agents against any and all loss, damage, claims, liability, cost or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the acceptance or administration of this Indenture and the trusts thereunder and the performance of its duties hereunder or any of the Note Documents (including the costs and expenses of enforcing this Indenture against the Company or defending itself against any claim whether asserted by any Holder or the Company, or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder) and (d) after the occurrence of an Event of Default, reimburse the Majority Holders for reasonable compensation and expenses, disbursement and advances of the Majority Holders’ counsel and financial advisors. The Trustee, Collateral Agent and Loan Administrator shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee, Collateral Agent or Loan Administrator to so notify the Company shall not relieve the Company of its obligations hereunder or any of the Note Documents, except to the extent the Company has been prejudiced by such failure. The Company shall defend the claim and the Trustee, Collateral Agent and Loan Administrator may have a single separate counsel for all of them (except to the extent that representation of all of the Trustee, Collateral Agent and Loan Administrator by a single counsel would be improper due to conflict of interest, in which case each of them may retain separate counsel) and the Company shall pay the fees and expenses of such counsel. The Company need not reimburse any expense or indemnify against any loss, liability or expense found by a court of competent jurisdiction in a final, non-appealable judgment to have been incurred by the Trustee, Collateral Agent or Loan Administrator through the Trustee’s, Collateral Agent’s or Loan Administrator’s, as applicable, own willful misconduct or gross negligence.

To secure the Company’s payment obligations in this Section 7.06, the Trustee, Collateral Agent and Loan Administrator shall have a lien prior to the Securities on all money or property held or collected by the Trustee, Collateral Agent or Loan Administrator other than money or property held in trust to pay principal of and interest on particular Securities.

The Company’s payment obligations pursuant to this Section shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee, Collateral Agent or Loan Administrator. When the Trustee. Collateral Agent or Loan Administrator incurs expenses after the occurrence of a Default specified in Section 6.01(e) with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law or any similar federal, provincial, territorial or state law for the relief of debtors.

SECTION 7.07. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company. The Majority Holders may remove the Trustee with respect to the Securities by so notifying with 31 days prior notice to the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if:

(a) the Trustee fails to comply with Section 7.09;

42

(b) the Trustee is adjudged bankrupt or insolvent;

(c) a receiver or other public officer takes charge of the Trustee or its property; or

(d) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed by the Company, or is removed by the Majority Holders and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Outstanding Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.06.

If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 20% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee fails to comply with Section 7.09, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s obligations under Section 7.06 shall continue for the benefit of the retiring Trustee.

SECTION 7.08. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture.

SECTION 7.09. Corporate Trustee Required; Eligibility. (a) There shall at all times be a Trustee hereunder which shall be:

(i) a corporation organized and doing business under the laws of the United States, or of any state or territory thereof, or of the District of Columbia, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by federal or state authority, or

43

(ii) a corporation or other person organized and doing business under the laws of a foreign government permitted to act as a Trustee pursuant to a rule, regulation or other order of the Commission, authorized under such laws to exercise corporate trust powers, and subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees.

(b) The Trustee shall have at all times a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.

ARTICLE VIII

[RESERVED]

ARTICLE IX

SATISFACTION AND DISCHARGE

SECTION 9.01. Satisfaction and Discharge of Indenture. (a) This Indenture and the other Note Documents shall cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities expressly provided for herein or pursuant hereto and any right to receive Additional Amounts as contemplated by Article 12), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture and the other Note Documents, when:

(i) all Outstanding Securities that have been authenticated, except lost, stolen or destroyed Securities that have been replaced or paid and Securities for which payment money has been deposited in trust and thereafter repaid to the Company, have been delivered to the Trustee for cancellation, or

(ii) the Company has paid or caused to be paid all other sums payable hereunder by the Company with respect to the Outstanding Securities (other than contingent obligations or liabilities for which no claim or demand for payment has been made); and

(iii) the Company has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

(b) After the conditions to discharge contained in this Article 9 have been satisfied, and the Company has paid or caused to be paid all other sums payable hereunder, and delivered to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that all conditions precedent to satisfaction and discharge have been satisfied, the Trustee upon written request shall acknowledge in writing the discharge of the obligations of the Company and the Insurer under this Indenture and the other Note Documents.

ARTICLE X

AMENDMENT AND WAIVER

SECTION 10.01. Without Consent of Holders. The Company, the Trustee, and the Collateral Agent (if applicable) at any time and from time to time, may amend this Indenture and other Note Documents without notice to or consent of any Holder to, but with the written consent of the Insurer (unless an Insurer Default shall have occurred and be continuing) solely if such amendment is adverse to the interest of the Insurer:

44

(a) cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture or other Note Documents, provided such action shall not adversely affect the interests of the Holders of Securities in any material respect;

(b) provide for uncertificated Securities in addition to or in place of certificated Securities;

(c) add to the covenants of the Company for the benefit of the Holders of the Securities or to surrender any right or power herein or in the other Note Documents conferred upon the Company or MBIA Inc.;

(d) enter into additional or supplemental Security Documents and to add additional assets as Collateral to secure the Securities;

(e) release, terminate or discharge, or to confirm and evidence the release, termination or discharge of, any Collateral when permitted or required by this Indenture or the Security Documents or to amend or supplement any Security Document in accordance with this Indenture or the Security Documents;

(f) accept and consent to, and to take, any and all steps to perfect a security interest in the Collateral granted pursuant to the Security Documents;

(g) evidence and provide for the acceptance of appointment hereunder by a successor Trustee or a successor Collateral Agent and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee;

(h) provide for the issuance of PIK Securities in accordance with this Indenture; provide for uncertificated Securities in addition to or in replacement of certificated Securities; in the event PIK Securities are issued in certificated form, to make appropriate amendments to this Indenture to reflect changes to minimum denomination of certificated PIK Securities, establish minimum redemption amounts for certificated PIK Securities and other changes necessary to administer the certificated PIK Securities; or

(i) supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the discharge of Securities pursuant to Section 9.01; provided that any such action shall not adversely affect the interests of the Holders of Securities or any other series of Securities in any material respect.

After an amendment under this Section 10.01 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.01.

SECTION 10.02. With Consent of Holders. Except as provided above in Section 10.01 and below in this Section 10.02, the Company, the Trustee and the Collateral Agent (if applicable) may amend this Indenture and the other Note Documents, with the written consent of the Insurer (unless an Insurer Default shall have occurred and be continuing) solely if such amendment is adverse to the

45

interests of the Insurer, and the written consent of the Holders of at least a majority in principal amount of the Outstanding Securities affected (including consents obtained in connection with a tender offer or exchange for the Securities) and any past default or compliance with any provisions may also be waived with the written consent of the Insurer (unless an Insurer Default shall have occurred and be continuing) solely if such waiver is adverse to the interest of the Insurer and the consent of the Holders of at least a majority in principal amount of the Outstanding Securities affected. However, without the consent of each Holder of an Outstanding Security affected thereby, an amendment or waiver may not:

(a) change the Stated Maturity of the principal of or any installment of interest on any Security, or change the due date of the Make-Whole Premium or any other premium;

(b) reduce the principal amount thereof (or premium including the Make-Whole Premium, if any) or the rate of interest, if any, on any Security;

(c) change any obligation of the Company to pay Additional Amounts contemplated by Section 12.01;

(d) reduce the amount of the principal of any Security that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 6.02 or the amount thereof provable in bankruptcy pursuant to Section 6.04, or adversely affect any right of repayment at the option of any Holder;

(e) change the currency of payment of principal on (or premium including the Make-Whole Premium, if any) or interest, if any, on any Security;

(f) reduce the percentage in aggregate principal amount of the Outstanding Securities the consent of whose Holders is required for any waiver of compliance with certain provisions of this Indenture or certain defaults and their consequences provided for in this Indenture;

(g) change any provision of the Note Documents providing for payments or redemptions, in each case, to be applied pro rata among the Holders entitled to such payments or redemptions of Securities;

(h) make any change in, or release other than in accordance with this Indenture that would adversely affect the Holders of any such Securities; or

(i) release the Liens for the benefit of the Holders on all or substantially all of the Collateral other than in accordance with this Indenture and the Security Documents;

(j) release the Company or MBIA Inc. from its obligations under this Indenture or any other Note Document, other than in accordance with this Indenture and the other Note Documents; or

(k) modify any of the provisions of this Section or Section 6.13 except to increase any percentage or to provide that certain provisions of this Indenture cannot be waived without the consent of the Holder of each Outstanding Security.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any amendment hereto. If a record date is fixed, the Holders on such record date or their duly designated agents, and only such Persons, shall be entitled to consent to such amendment, whether or not such Holders remain Holders after such record date; provided that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

46

It shall not be necessary to approve the particular form of any proposed amendment, but it shall be sufficient if the substance thereof shall be approved.

Notwithstanding anything to the contrary herein, so long as the Senior Collection Date has not occurred, no amendment, supplement or waiver under Section 10.01 or 10.02 shall be effective without the prior written consent of the holders of a majority in aggregate principal amount of the then outstanding Senior Notes.

SECTION 10.03. Execution of Amendments. The Trustee and the Collateral Agent (if applicable) shall sign any amendment authorized pursuant to this Article 10 if such amendment does not adversely affect the rights, duties or immunities of the Trustee or Collateral Agent, as applicable. In executing, or accepting the additional trusts created by this Article 10 or the modifications thereby of the trusts created by this Indenture, the Trustee and Collateral Agent (if applicable) shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of Company, enforceable against them in accordance with its terms, subject to customary exceptions. The Trustee and the Collateral Agent (if applicable) may, but shall not be obligated to, enter into any such amendment which affects the Trustee’s or Collateral Agent’s, as applicable, own rights, duties or immunities under this Indenture or otherwise.

SECTION 10.04. Effect of Amendments. Upon the execution of any amendment under this Article 10, this Indenture or the applicable Note Document shall be modified in accordance therewith, and such amendment shall form a part of this Indenture or the applicable Note Document for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.

SECTION 10.05. Reference in Securities to Amendments. Securities authenticated and delivered after the execution of any amendment pursuant to this Article 10 may bear a notation as to any matter provided for in such amendment. If the Company shall so determine, new Securities so modified as to conform, in the opinion of the Company, to any such amendment may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities.

SECTION 10.06. Notice of Amendments. Promptly after the execution by the Company and the Trustee of any amendment pursuant to the provisions of Section 10.03, the Company shall give notice thereof to the Holders of each Outstanding Security affected, in the manner set forth in Section 13.01, setting forth in general terms the substance of such amendment.

ARTICLE XI

SECURITY

SECTION 11.01. Security Documents; Additional Collateral.

(a) In order to secure the due and punctual payment of the Notes Obligations, (i) on the Issue Date, simultaneously with the execution and delivery of this Indenture, the Collateral Grantors have executed Security Documents granting to the Collateral Agent for the benefit (or, where applicable, as direct representative) of the Secured Creditors a perfected Lien in the Collateral, and (ii) after the Issue Date, each other affiliate of the Company that is required to become a Collateral Grantor pursuant to Section 4.17 shall execute and deliver the necessary Security Documents in order to grant to the Collateral Agent a perfected Lien in all assets of such Person which are required to, but do not already, constitute Collateral.

47

(b) The Company shall cause every Collateral Grantor to from time to time take the actions required by Section 4.17.

SECTION 11.02. Releases of Collateral. The Notes Obligations will no longer be required to be secured by Liens on Collateral and the Liens securing the Notes Obligations will be released:

(a) in whole, upon the payment in full of all Notes Obligations (other than contingent obligations or liabilities for which no claim or demand for payment has been made);

(b) if the Company’s obligations under this Indenture are satisfied and discharged pursuant to Article 9; and

(c) in whole or in part, with the consent of the requisite Holders as provided in Section 10.02.

SECTION 11.03. Release Documentation. Upon compliance with the conditions to release of all or any portion of the Collateral set forth in Section 11.02, the Collateral Agent and the Trustee shall forthwith take all necessary action (at the request of and the expense of the Company, accompanied by an Officer’s Certificate and Opinion of Counsel that the conditions precedent to such release have been satisfied) to release and re-convey to the applicable Collateral Grantor or the Company the applicable portion of the Collateral that is authorized to be released pursuant to Section 11.02, and shall deliver such Collateral in its possession, if any, to the applicable Collateral Grantor or the Company, including, without limitation, executing and delivering releases and satisfactions wherever required. Neither the Trustee nor the Collateral Agent shall be liable for any such release undertaken in reliance upon any such Officer’s Certificate or Opinion of Counsel, and the Trustee and the Collateral Agent shall not be under any obligation to release any such Lien and security interest, or execute and deliver any such instrument of release, satisfaction or termination, unless and until it receives such Officer’s Certificate and Opinion of Counsel.

SECTION 11.04. Possession and Use of Collateral; No Impairment of the Security Interests.

(a) So long as no Event of Default has occurred and is continuing, and subject to the terms of this Indenture, the Security Documents, the MBIA Facility and the Company Operating Agreement, each Collateral Grantor will be entitled to freely operate the property and assets constituting the Collateral pledged by it and to receive, invest and dispose of all cash dividends, principal, interest and other payments made upon or with respect to the Collateral pledged by it and to exercise any voting and other consensual rights pertaining to the Collateral pledged by it.

(b) No Collateral Grantor shall take any action, or omit to take any action, which action or omission would have the result of impairing the validity, perfection or priority of the security interests in the Collateral created by the Security Documents, (except as expressly set forth in this Indenture, the Security Documents or the Intercreditor Agreement, including any action that would result in a Permitted Collateral Lien (as defined in the Security Documents)).

(c) The Collateral Agent will distribute all funds received by it in accordance with the provisions of the Security Documents, and the Trustee will distribute all funds received by it from the Collateral Agent for the benefit of the Trustee and the Holders in accordance with the provisions of this Indenture.

48

SECTION 11.05. Collateral Agent. The Trustee and each of the Holders by acceptance of the Securities hereby authorize the appointment of the Collateral Agent as the Trustee’s and the Holders’ Collateral Agent under the Security Documents, and the Trustee and each of the Holders by acceptance of the Securities hereby irrevocably authorize the Collateral Agent to enter into the Security Documents and the Intercreditor Agreement and to take such action on their behalf under the provisions of the Security Documents and to exercise such powers and perform such duties as are expressly delegated to the Collateral Agent by the terms of this Indenture, the Security Documents and the Intercreditor Agreement, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Security Documents and the Intercreditor Agreement, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, in the Security Documents to which the Collateral Agent is a party and the Intercreditor Agreement or as requested by the Majority Holders (subject to this Section 11.05), nor shall the Collateral Agent have or be deemed to have any trust or fiduciary relationship with the Trustee, any Holder, the Company or any Collateral Grantor, either before or after the occurrence of an Event of Default, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Security Documents and the Intercreditor Agreement or otherwise exist against the Collateral Agent. Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties. For the avoidance of doubt, the Collateral Agent shall have no discretion under this Indenture, the Intercreditor Agreement or the Security Documents and shall not be required to make or give any determination, consent, approval, request or direction without the written direction of the Holders of a majority in aggregate principal amount of the then outstanding Notes or the Trustee, as applicable.

The Trustee is authorized and directed by the Holders and the Holders by acquiring the Securities are deemed to have authorized the Trustee, as applicable, to cause the Collateral Agent to enter into and perform its obligations under the Security Documents and the Intercreditor Agreement. The Collateral Agent is authorized and directed by the Trustee and the Holders and the Holders by acquiring the Securities are deemed to have authorized the Collateral Agent, to (i) enter into the Security Documents to which it is a party and the Intercreditor Agreement, (ii) bind the Trustee and the Holders on the terms as set forth in such Security Documents and the Intercreditor Agreement and (iii) perform and observe its obligations and exercise its rights and powers under such Security Documents, including entering into amendments and other modifications permitted by the terms of this Indenture, the Intercreditor Agreement or the Security Documents. Each Holder, by its acceptance of a Security, is deemed to have consented and agreed to the terms of each Security Document and the Intercreditor Agreement, as originally in effect and as amended, restated, replaced or modified from time to time in accordance with its terms or the terms of this Indenture.

The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless the Collateral Agent shall have received written notice from the Trustee or unless a written notice of any event which is in fact such a Default is received by the Collateral Agent at the address specified in Section 13.01, and such notice references the Securities and this Indenture. The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Trustee in accordance with Article 6 or the Majority Holders (subject to this Section 11.05).

49

The Collateral Agent shall have no obligation and makes no representation whatsoever to the Trustee or any of the Holders as to the existence, genuineness, value or protection of the Collateral or the sufficiency of any Security Documents, or that the Collateral is owned by any of the Collateral Grantors or is cared for, protected or insured or has been encumbered, or that the Collateral Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, maintained or enforced or are entitled to any particular priority, or to determine whether all of the Collateral Grantor’s property constituting Collateral intended to be subject to the Lien and security interest of the Security Documents has been properly and completely listed or delivered, as the case may be, or the genuineness, validity, marketability or sufficiency thereof or title thereto, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or available to the Collateral Agent pursuant to this Indenture or any other Security Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Collateral Agent shall have no other duty or liability whatsoever to the Trustee or any Holder as to any of the foregoing. The grant of permissive rights or powers to the Collateral Agent shall not be construed to impose duties to act. For the avoidance of doubt, nothing herein shall require the Collateral Agent to file financing statements or continuation statements, to record any documents or instruments in any public office at any time or be responsible for perfection or maintaining the perfection of the security interests purported to be created by the Security Documents and such responsibility shall be solely that of the Company.

Each of the Collateral Agent and the Trustee, each in its capacity as such, shall not be liable or responsible for the failure of the Company or any Collateral Grantor to maintain insurance on the Collateral, nor shall it be responsible for any loss due to the insufficiency of such insurance or by reason of the failure of any insurer to pay the full amount of any loss against which it may have insured to the Company or any Collateral Grantor, the Trustee, the Collateral Agent or any other Person.

The provisions of Article 7, mutatis mutandis, shall apply to the Collateral Agent. Without limiting the generality of such preceding sentence, and notwithstanding anything to the contrary contained in this Indenture, the Intercreditor Agreement or the Security Documents, in the event the Collateral Agent is entitled or required to commence an action to foreclose or otherwise exercise its remedies to acquire control or possession of the Collateral, the Collateral Agent shall not be required to commence any such action or exercise any remedy or to inspect or conduct any studies of any property under mortgages or take any such other action if the Collateral Agent has determined that the Collateral Agent may incur personal liability as a result of the presence at, or release on or from, the Collateral or such property, unless the Collateral Agent has received security or indemnity from the Holders in an amount and in a form all satisfactory to the Collateral Agent in its sole discretion, protecting the Collateral Agent from all such liability. The Collateral Agent shall at any time be entitled to cease taking any action described above if it no longer reasonably deems any indemnity, security or undertaking from the Company or the Holders to be sufficient.

SECTION 11.06. Replacement of Collateral Agent. The Collateral Agent may resign at any time by so notifying the Company. The Majority Holders may remove Collateral Agent with respect to the Securities by so notifying with 31 days prior notice to the Collateral Agent and may appoint a successor Collateral Agent. The Company shall remove Collateral Agent if:

(a) the Collateral Agent is adjudged bankrupt or insolvent;

(b) a receiver or other public officer takes charge of the Collateral Agent or its property; or

(c) the Collateral Agent otherwise becomes incapable of acting.

50

If the Collateral Agent resigns or is removed by the Company, or is removed by the Majority Holders and such Holders do not reasonably promptly appoint a successor Collateral Agent, or if a vacancy exists in the office of Collateral Agent for any reason (the Collateral Agent in such event being referred to herein as the retiring Collateral Agent), the Company shall promptly appoint a successor Collateral Agent.

A successor Collateral Agent shall deliver a written acceptance of its appointment to the retiring Collateral Agent and to the Company. Thereupon the resignation or removal of the retiring Collateral Agent shall become effective, and the successor Collateral Agent shall have all the rights, powers and duties of the Collateral Agent under this Indenture. The successor Collateral Agent shall mail a notice of its succession to Holders of the Securities. The retiring Collateral Agent shall promptly transfer all property held by it as Collateral Agent to the successor Collateral Agent.

If a successor Collateral Agent does not take office within 30 days after the retiring Collateral Agent resigns or is removed, the retiring Collateral Agent or the Holders of 20% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Collateral Agent.

SECTION 11.07. Purchaser Protected. No purchaser or grantee of any property or rights purporting to be released from the Liens in favor of the Collateral Agent shall be bound to ascertain the authority of the Collateral Agent or Trustee to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority so long as the conditions set forth in Section 11.02 have been satisfied.

SECTION 11.08. Authorization of Receipt of Funds by the Trustee Under the Security Documents. The Trustee is authorized to receive any funds for the benefit of Holders distributed under the Security Documents and to apply such funds as provided in Section 6.06.

SECTION 11.09. Powers Exercisable by Receiver or Trustee. In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article 11 upon any Collateral Grantor, as applicable, with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of any Collateral Grantor, as applicable, or of any officer or officers thereof required by the provisions of this Article 11.

SECTION 11.10. Compensation and Indemnification. The Collateral Agent shall be entitled to the compensation and indemnification set forth in Section 7.06 (with the references to the Trustee therein being deemed to refer to and include the Collateral Agent).

SECTION 11.11. Form of Security Documents and Opinions. To the extent that any provision of this Indenture or any Security Document requires the execution or delivery by the Trustee or the Collateral Agent after the Issue Date of any Security Documents, agreements, certificates, opinions or other documents, in each case, in form and substance reasonably satisfactory to the Trustee or the Collateral Agent, or other similar discretionary approval, or in substantially in the same form as such Security Documents, agreements, certificates, opinions or other documents were delivered on the Issue Date or as attached hereto, the Holders, by acquiring the Securities, are deemed to have approved the form and substance of any such Security Documents, agreements, certificates, opinions or other documents in substantially the same form as those executed and delivered on the Issue Date, in each case, with such changes as may be appropriate to reflect the entity subject to or the subject of or the governing law of such Security Documents, agreements, certificates, opinions or other documents and the jurisdiction of organization of such entity and hereby authorize the Trustee and the Collateral Agent, as

51

applicable, to execute such documents and accept such documents and opinions. For the avoidance of doubt, this Section 11.11 shall not supersede any requirement contained herein regarding the delivery of an Officer’s Certificate or an Opinion of Counsel, stating that all conditions precedent to the execution and delivery of such Security Documents have been satisfied and the Trustee and Collateral Agent, as applicable, is permitted to execute and deliver such Security Documents.

ARTICLE XII

ADDITIONAL AMOUNTS

SECTION 12.01. Payment of Additional Amounts.

(a) The Company shall pay any amounts due with respect to the Securities without deduction or withholding for any and all present and future withholding taxes, levies, imposts and charges (a “withholding tax”) imposed by or for the account of the United States of America, the State of Delaware or any other jurisdiction in which the Company is a resident for tax purposes or any political subdivision or taxing authority of such jurisdiction (the “Taxing Jurisdiction”), unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, the Company will, to the fullest extent allowed by law (subject to compliance by the holder of a Security with any relevant administrative requirements), pay additional amounts (the “Additional Amounts”) in respect of principal amount, redemption price and interest (if any), in accordance with the terms of the Securities and this Indenture, as may be necessary so that the net amounts paid to the holder or the Trustee after such deduction or withholding will equal the principal amount, redemption price and interest (if any), on the Securities. However, the Company will not pay any Additional Amounts in the following instances:

(i) if any withholding would not be payable or due but for the fact that (i) the holder of a Security (or a fiduciary, settlor, beneficiary of, member or shareholder of, the holder, if the holder is an estate, trust, partnership or corporation) is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or being physically present in, the Taxing Jurisdiction or otherwise having some present or former connection with the Taxing Jurisdiction other than solely the holding or ownership of the Security or the collection of principal amount, redemption price, repurchase price and interest (if any), in accordance with the terms of the Securities and this Indenture, or the enforcement of the Security or (ii) where presentation is required, the Security was presented more than 30 days after the date such payment became due or was provided for, whichever is later;

(ii) if and to the extent the withholding tax is pursuant to the law in effect at the time the holder acquires Securities and the assignor to the holder was not entitled to such Additional Amounts at the time of the holder’s acquisition;

(iii) if any withholding tax would not have been imposed but for the failure to comply with Section 12.01(c), if such compliance is required by statute or by regulation as a precondition to relief or exemption from such withholding tax and such holder or beneficial owner is legally able to so comply;

(iv) if any withholding tax or deduction is required to be made in respect of any tax, duty, assessment or other governmental charge imposed or withheld pursuant to Sections 1471 through 1474 of the Code, as of the date hereof (or any amended or successor version), current or future U.S. Treasury Regulations issued thereunder or any official interpretation thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (hereinafter “FATCA”); or

52

(v) any combination of the instances described in the preceding clauses.

(b) If a holder receives a refund of any taxes as to which the Company has paid Additional Amounts pursuant to this Section 12.01 (including in respect of the payment of Additional Amounts pursuant to this Section 12.01), such holder shall pay to the Company an amount equal to such refund, net of all out of pocket expenses (including taxes) of the holder and without interest (other than any interest paid by the relevant governmental authority with respect to such refund). The Company shall repay to the holder the amount paid over pursuant to this clause (b) (plus any penalties, interest, or other charges imposed by the relevant governmental authority) in the event that the holder is required to repay such refund to such governmental authority.

(c) Tax Forms.

(i) Each non-U.S. holder shall (w) on or prior to the date such non-U.S. holder becomes a holder hereunder, (x) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (c) and (y) from time to time if reasonably requested by the Company or the Trustee, provide the Company, the Trustee and the Paying Agent with two properly completed and duly executed originals of one of the following, as applicable: (A) Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is effectively connected with a U.S. trade or business), W-8BEN-E or other applicable W-8 Form (claiming exemption from, or a reduction of, U.S. withholding tax under an income tax treaty) and/or W-8IMY (together with appropriate forms, certifications and supporting statements) or any successor forms, (B) in the case of a non-U.S. holder claiming exemption under Sections 871(h) or 881(c) of the Code, Form W-8BEN-E or other applicable W-8 Form (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any successor form and a certificate in form and substance acceptable to the Company that such non-U.S. holder is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (2) a “10 percent shareholder” of the Company within the meaning of Section 881(c)(3)(B) of the Code or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (C) any other applicable document prescribed by the IRS that enables the Company to determine its withholding and reporting obligations.

(ii) Each U.S. holder shall (w) on or prior to the date such holder becomes a holder hereunder, (x) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (ii) and (y) from time to time if requested by the Company, provide the Company with two completed originals of Form W-9 (certifying that the holder is entitled to an exemption from U.S. backup withholding tax) or any successor form.

(iii) If a payment made to a holder under this Indenture would be subject to U.S. withholding tax imposed by FATCA if such holder were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such holder shall deliver to the Company, the Trustee and the Paying Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Company, the Trustee or the Paying Agent, such documentation and information prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation and information reasonably requested by the Company, the Trustee or the Paying Agent as may be necessary for the Company, the Trustee or the Paying

53

Agent, as applicable, to comply with their respective obligations under FATCA, to determine that such holder has or has not complied with its obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. For purposes of this Section 12.01(c), FATCA shall include any amendments made to FATCA after the Issue Date.

ARTICLE XIII

MISCELLANEOUS

SECTION 13.01. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows:

if to the Company:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

if to the Trustee or the Collateral Agent:

Wilmington Savings Fund Society, FSB

500 Delaware Avenue

Wilmington, Delaware 19801

Attention: Corporate Trust Administration

if to the Insurer:

MBIA Insurance Corporation

One Manhattanville Road

Suite 301

Purchase, New York 10577

The Company or the Trustee or the Collateral Agent by notice to the other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication mailed (or, in the case of Global Securities, sent to the Depositary pursuant to Applicable Procedures) to a Holder shall be sent to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so sent within the time prescribed.

Failure to mail or otherwise send a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is sent in the manner provided above, it is duly given, whether or not the addressee receives it.

54

The Trustee and Collateral Agent agree to accept and act upon instructions or directions pursuant to this Indenture and any other Note Document sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods; provided, however, that (a) the party providing such written instructions, subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee and Collateral Agent, as applicable, in a timely manner, and such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions. If the party elects to give the Trustee and Collateral Agent, as applicable, e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee and Collateral Agent, as applicable, in its discretion elects to act upon such instructions, the Trustee’s and Collateral Agent’s, as applicable, understanding of such instructions shall be deemed controlling. The Trustee and Collateral Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s and Collateral Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee and Collateral Agent, including without limitation the risk of the Trustee and Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.

SECTION 13.02. Certificate as to Conditions Precedent. Upon any request or application by the Company to the Trustee or the Collateral Agent to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee or the Collateral Agent an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee or the Collateral Agent stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with.

SECTION 13.03. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

(a) a statement that the individual making such certificate or opinion has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of, or representation by, counsel may be based, insofar as it relates to factual matters, upon a certificate or

55

opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

SECTION 13.04. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.

SECTION 13.05. Legal Holidays. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

SECTION 13.06. Governing Law; Waiver of Jury Trial.

(a) This Indenture and any claim, controversy or dispute related to or in connection with this Indenture, any Note Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS INDENTURE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY NOTE DOCUMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS INDENTURE.

(c) Each party to this Indenture irrevocably consents to service of process in the manner provided for notices in Section 13.01. Nothing in this Indenture will affect the right of any party to this Indenture to serve process in any other manner permitted by law.

56

SECTION 13.07. No Recourse Against Others. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under or in respect of the Securities or this Indenture, this Indenture or other Note Document, as applicable. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities.

SECTION 13.08. Successors. All agreements of the Company in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 13.09. Counterparts. This Indenture may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Indenture by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Indenture.

SECTION 13.10. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 13.11. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee and Loan Administrator, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee and Loan Administrator. The parties to this Indenture agree that they will provide the Trustee and Loan Administrator with such information as it may request in order for the Trustee and Loan Administrator to satisfy the requirements of the U.S.A. Patriot Act.

SECTION 13.12. Tax Characterization. Each party to this Indenture and the Loan Administrator (a) acknowledges and agrees that it is the intent of the parties to this Indenture that for all purposes, including federal, state and local income, single business and franchise tax purposes, the Securities will be treated as evidence of indebtedness of the Company and the Company will not be characterized as an association or publicly traded partnership that is taxable as a corporation, (b) agrees to treat the Securities for federal, state and local income and franchise tax purposes as indebtedness and (c) agrees that the provisions of all Note Documents shall be construed to further these intentions of the parties.

SECTION 13.13. Multiple Roles. The parties hereto expressly acknowledge and consent to Wilmington Savings Fund Society, FSB, acting in the multiple roles of Trustee, Collateral Agent and Loan Administrator. Wilmington Savings Fund Society, FSB may, in such capacities, discharge its separate functions fully, without hindrance or regard to conflict of interest principles, duty of loyalty principles or other breach of fiduciary duties to the extent that any such conflict or breach arises from the performance by Wilmington Savings Fund Society, FSB of express duties set forth in this Indenture or the other Note Documents in any of such capacities, all of which defenses, claims or assertions are hereby expressly waived by the other parties hereto except in the case of negligence (other than errors in judgment), bad faith or willful misconduct by Wilmington Savings Fund Society, FSB.

SECTION 13.14. Confidentiality. Each of the Trustee, the Collateral Agent, and to the extent it accesses Confidential Information through the Datasite, each Holder and each beneficial owner of an interest in a Global Security agrees to maintain the confidentiality of the Confidential Information

57

(defined below), except that Confidential Information may be disclosed (a) to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and instructed to keep such Information confidential in accordance with customary practices); (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party hereto; (e) in connection with the exercise of any remedies hereunder or under any other Note Document or any action or proceeding relating to this Indenture or any other Note Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing provisions substantially the same (or at least as restrictive) as those of this Section 13.14 (or as may otherwise be reasonably acceptable to the Company), to (x) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights and obligations under this Indenture, or (y) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Company and its obligations, this Indenture or payments hereunder; (g) with the consent of the Company; or (h) to the extent that such Confidential Information (x) becomes publicly available other than as a result of a breach of this Section 13.14, or (y) becomes available to the Trustee, the Collateral Agent or any of their Affiliates on a nonconfidential basis from a source other than the Company, which source is not known by the Trustee, the Collateral Agent or such Affiliate to be bound by a confidentiality obligation to the Company or its Affiliate. For purposes of this Section 13.14, “Confidential Information” means all information received from the Company or any of its Affiliates (including, for avoidance of doubt and without limitation, information prepared by others and forwarded by or on behalf of the Company) relating to the Collateral or the Company or any of its Affiliates or any of their respective businesses, other than any such information that is available to the Trustee or the Collateral Agent on a nonconfidential basis prior to disclosure by the Company or any of its Affiliates or that is made public by the Company or any of its Affiliates.

ARTICLE XIV

SUBORDINATION

SECTION 14.01. Subordination of Subordinated Obligations and Liens.

(a) The Company, for itself and its successors and assigns, covenants and agrees, and the Trustee, for itself and its successors and assigns, likewise covenants and agrees, that the Subordinated Obligations, and the payment from whatever source (including, but not limited to, the Insurance Policy) of the principal of, and interest (including PIK Interest, if any) on, the Securities, are hereby expressly made subordinate and subject in right of payment to the prior payment in full in cash of all Senior Obligations in accordance with the Intercreditor Agreement. The Company and Trustee, and each of their successors and assigns, further covenants and agrees that any Liens granted under the Security Documents are hereby made expressly subordinate to the Liens granted under the Senior Facility and shall be subject to the terms of the Intercreditor Agreement.

(b) The Trustee shall be entitled to conclusively rely on the delivery to it of a written notice by a person representing himself to be a holder of Senior Obligations (or a trustee or agent on behalf of such holder) to establish that notice has been given by a holder of Senior Obligations (or a trustee or agent on behalf of any such holder). In the event that the Trustee determines, in good faith, that further evidence is required with respect to the right of any person as a holder of Senior Obligations to participate in any payment or distribution pursuant to this Section 14.01, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior

58

Obligations held by such person, as to the extent to which such person is entitled to participate in such payment or distribution, and as to other facts pertinent to the rights of such person under this Section 14.01, and if such evidence is not furnished, the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive such payment.

(c) Upon any payment or distribution of assets of the Company referred to in this Section 14.01, the Trustee and the Holders of the Securities shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee or agent or other person making any payment or distribution, delivered to the Trustee or to the Holders of the Securities, for the purpose of ascertaining the persons entitled to participate in a payment or distribution under this Section 14.01, the holders of the Senior Obligations and other indebtedness of the Company, the amount thereof or payable thereon, the amount paid or distributed thereon and all other facts pertinent thereto.

(d) Each Holder of Securities, by his or her acceptance thereof, authorizes and directs the Trustee in his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Section 14.01 and appoints the Trustee his or her attorney-in-fact for any and all such purposes.

(e) Notwithstanding the provisions of this Section 14.01 or any other provisions of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or by the Trustee, or the taking of any other action by the Trustee, unless and until Trustee shall have received at the Corporate Trust Office written notice thereof from the Company, any Holder of the Securities, any paying agent of the Company or the holder or representative of any class of Senior Obligations.

(f) The Trustee shall be entitled to all the rights set forth in this Section 14.01 with respect to any Senior Obligations at the time held by it, to the same extent as any other holder of Senior Obligations, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Notwithstanding anything in this Indenture or in the Securities of any series, nothing in this Section 14.01 shall apply to or limit claims of or payment to the Trustee under or pursuant to Article VII.

(g) With respect to holders of Senior Obligations, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Section 14.01, and no implied covenants or obligations with respect to the holders of Senior Obligations shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Obligations. No recourse may be taken with respect to the obligations of the Company or the Trustee against the Trustee in its individual capacity.

SECTION 14.02. Benefits of Indenture. The Insurer and its successors and assigns shall be a third-party beneficiary to the provisions of this Indenture which expressly provide rights to the Insurer, and shall be entitled to rely upon and directly to enforce such provisions of this Indenture so long as no Insurer Default shall have occurred and be continuing.

[SIGNATURE PAGES FOLLOW]

59

MZ FUNDING LLC, as Company
By:	/s/ Jonathan Harris
	Name: Jonathan Harris
	Title: Secretary

[Signature page to the Indenture]

Wilmington Savings Fund Society, FSB, as Trustee and as Collateral Agent
By:	/s/ Geoffrey J. Lewis
	Name: Geoffrey J. Lewis
	Title: Vice President

[Signature page to the Indenture]

Appendix A

PROVISIONS RELATING TO SECURITIES

1. Definitions

1.1 Definitions

For the purposes of this Appendix the following terms shall have the meanings indicated below:

“Definitive Security” means a certified Security registered in the name of the Holder thereof and issued in accordance with Section 2.3 to Appendix A of this Indenture, in substantially the form of a Global Security hereto, except that such Security shall not bear the Global Security Legend and shall not have the “Schedule of Exchanges of Interests in the Global Security” attached hereto.

“Global Security Legend” means the legend set forth in Section 2.3(e)(3) of this Appendix A, which is required to be placed on all Global Securities issued under this Indenture.

“Institutional Accredited Investor Security” means a Security issued to an Institutional Accredited Investor in a private transaction.

“Securities Custodian” means the custodian with respect to a Global Security (as appointed by the Depositary), or any successor Person thereto and shall initially be the Trustee.

Capitalized terms used and not otherwise defined in this Appendix A shall have the meanings given to them in the Indenture.

1.2 Other Definitions.

Term	Defined in Section:
“144A Global Security”	2.1(a)
“Agent Members”	2.1(b)
“Global Security”	2.1(a)
“Rule 144A Security”	2.1(a)

2. The Securities.

2.1 (a) Form and Dating. The Securities may be issued either in the form of Definitive Securities or, in the case only of Securities whose resale is restricted to transactions in compliance with Rule 144A (each, a “Rule 144A Security”), in the form of one or more permanent global restricted Securities in definitive fully registered form (each, a “Global Security”). A Global Security shall have the global securities legend set forth in Exhibit 1.1. and shall be deposited on behalf of the purchasers of the Securities represented thereby with the Securities Custodian and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided.

(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Security deposited with or on behalf of the Depositary.

A-1

The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Securities that (1) shall be registered in the name of the Depositary for such Global Security or Global Securities or the nominee of such Depositary and (2) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Securities Custodian. Each Global Security shall have a minimum denomination of $250,000 at issuance thereof.

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as the Securities Custodian of the Depositary or under such Global Security, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depositary as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security.

(c) Certificated Securities. Except for Rule 144A Securities, which may be issued in the form of Global Securities as provided in Section 2.1(b), all Securities shall be issued as Definitive Securities.

2.2 Authentication. The Trustee shall authenticate and deliver, on the Issue Date, an aggregate principal amount not to exceed $38,000,000.00 14% Subordinated Secured Notes due 2020 and such Additional Securities from time to time for original issue in aggregate principal amounts specified by the Company but not to exceed $50,000,000 in the aggregate.

2.3 Transfer and Exchange.

(a) Transfer and Exchange of Beneficial Interests in the Global Securities. The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary in accordance with the provisions hereof and the Applicable Procedures. Beneficial interests in Global Securities shall be subject to restrictions on transfer comparable to those set forth herein and as otherwise required by the Securities Act. Transfers of beneficial interests in Global Securities shall be in a minimum denomination of $250,000. Transfers of beneficial interests in Global Securities also shall require compliance with either clause (1) or (2) below, as applicable, as well as one or more of the other following clauses, as applicable:

(1) Transfer of Beneficial Interests in the Same Global Security. Beneficial interests in any Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Global Security in accordance with the transfer restrictions set forth in the Private Placement Legend and any Applicable Procedures. Except as may be required by any Applicable Procedures, no written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.3(a)(1).

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Securities. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.3(a)(1) above, the transferor of any such beneficial interest must deliver to the Registrar either (A)(i) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Security in an amount equal to the beneficial interest to be transferred or exchanged and (ii) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) if permitted under Section 2.3(b) or 2.3(g) hereof, (i) a written order

A-2

from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Security in an amount equal to the beneficial interest to be transferred or exchanged and (ii) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Security shall be registered to effect the transfer or exchange referred to in (B)(i) above. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Securities contained in the Indenture and the Securities or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Security(s) pursuant to Section 2.3(g) hereof.

(3) Transfer of Beneficial Interests in a Global Security to Another Global Security. A beneficial interest in any Global Security may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Global Security if the transfer complies with the requirements of Section 2.3(a)(2) above and the Registrar receives a certificate in the form of Appendix B hereto, including the certifications in item (1) thereof.

(b) Transfer or Exchange of Beneficial Interests in Global Securities for Definitive Securities.

(1) Subject to Section 2.4 hereof, if any holder of a beneficial interest in a Global Security proposes to exchange such beneficial interest for a

Definitive Security or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Security, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Global Security proposes to exchange such beneficial interest for a Definitive Security, a certificate from such holder in the form of Appendix C hereto, including the certifications in item (1)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in compliance with Rule 144A, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (1) thereof;

(C) [Reserved];

(D) if such beneficial interest is being transferred to an Institutional Accredited Investor in a private transaction, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (3) thereof; and

(E) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (4) thereof,

the Trustee shall reduce or cause to be reduced in a corresponding amount pursuant to Section 2.3(g) hereof the aggregate principal amount of the applicable Global Security, and the Company shall execute and the Trustee shall authenticate and deliver a Definitive Security in the appropriate principal amount to the Person designated by the holder of such beneficial interest in instructions delivered to the Registrar by the Depositary and the applicable Participant or Indirect Participant on behalf of such holder. Any Definitive Security issued in exchange for a beneficial interest in a Global Security pursuant to this Section 2.3(b) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall designate in such instructions. The Trustee shall deliver such Definitive Securities to the Persons in whose names such Securities are so registered. Any Definitive Security issued in exchange for a beneficial interest in a Global Security pursuant to this Section 2.3(b)(1) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

A-3

(c) Transfer and Exchange of Definitive Securities for Beneficial Interests in Global Securities. If any holder of a Definitive Security that is a QIB proposes to exchange such Security for a beneficial interest in a Global Security or if a holder proposes to transfer such Definitive Security to a QIB who takes delivery thereof in the form of a beneficial interest in a Global Security, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such Definitive Security proposes to exchange such Security for a beneficial interest in a Global Security, a certificate from such holder in the form of Appendix C hereto, including the certifications in item (1)(b) thereof; or

(B) if such Definitive Security is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (1) thereof.

the Trustee shall cancel the Definitive Security, increase or cause to be increased in a corresponding amount pursuant to Section 2.3(g) hereof the aggregate principal amount of the appropriate Global Security.

(d) Transfer and Exchange of Definitive Securities for Definitive Securities. Upon request by a holder of Definitive Securities and such holder’s compliance with the provisions of this Section 2.3(d), the Registrar shall register the transfer or exchange of Definitive Securities. Prior to such registration of transfer or exchange, the requesting holder shall present or surrender to the Registrar the Definitive Securities duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such holder. In addition, the requesting holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.3(d), including:

(A) if the holder of such Definitive Security proposes to exchange such Security for another Definitive Security, a certificate from such holder in the form of Appendix C hereto, including the certifications in item (1)(c) thereof; or

(B) if such Definitive Security is being transferred to a QIB in compliance with Rule 144A, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (1) thereof;

(C) [Reserved];

(D) if such Definitive Security is being transferred to an Institutional Accredited Investor in a private transaction, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (3) thereof; or

(E) if such Definitive Security is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Appendix B hereto, including the certifications in item (4) thereof,

Upon satisfaction of the conditions of this Section 2.3(d), the Trustee shall cancel the prior Definitive Security and the Company shall execute, and the Trustee shall authenticate and deliver a Definitive Security in the appropriate principal amount to the Person designated by the holder of such prior Definitive Security in instructions delivered to the Registrar by such holder.

A-4

(e) Legends. The following legends shall appear on the face of all Global Securities and Definitive Securities issued under the Indenture unless specifically stated otherwise in the applicable provisions of the Indenture.

(1) Private Placement Legend.

Each Global Security and each Definitive Security (and all Securities issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS (A) A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT OR (B) AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3), OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”); AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A PRIVATE TRANSACTION. PRIOR TO REGISTRATION OF TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE OR (2)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.”

“BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.”

“THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS

A-5

LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.”

“EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.”

(2) [Reserved.]

(3) Global Security Legend. Each Global Security shall also bear a legend in substantially the following form:

“THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE

A-6

TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

(f) Cancellation and/or Adjustment of Global Securities. At such time as all beneficial interests in a particular Global Security have been exchanged for Definitive Securities or a particular Global Security has been redeemed, repurchased or cancelled in whole and not in part, each such Global Security shall be returned to or retained and cancelled by the Trustee in accordance with Section 2.10 of the Indenture. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security or for Definitive Securities, the principal amount of Securities represented by such Global Security shall be reduced accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Security, such other Global Security shall be increased accordingly and an endorsement shall be made on such Global Security by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(g) General Provisions Relating to Transfers and Exchanges.

(1) No service charge shall be made to a Holder of a beneficial interest in a Global Security or to a Holder of a Definitive Security for any registration of transfer or exchange, but the Company or the Trustee may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.06 and 2.09 of the Indenture).

(2) All Global Securities and Definitive Securities issued upon any registration of transfer or exchange of Global Securities or Definitive Securities shall be the valid obligations of the Company, evidencing the same Indebtedness, as the Global Securities or Definitive Securities surrendered upon such registration of transfer or exchange and shall be entitled to all of the benefits of the Indenture equally and proportionately with all other Securities duly issued hereunder.

A-7

(3) Neither the Registrar nor the Company shall be required (A) to issue, to register the transfer of or to exchange any Securities during a period beginning at the opening of business 15 days before the day of any selection of Securities for redemption under Section 3.02 of the Indenture and ending at the close of business on the date of selection, (B) to register the transfer of or to exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part or (C) to register the transfer of or to exchange a Security between a record date (including a regular record date) and the next succeeding interest payment date.

(4) Prior to due presentment for the registration of a transfer of any Security, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes, in each case regardless of any notice to the contrary.

(5) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section to effect a registration of transfer or exchange may be submitted by facsimile.

(6) The Trustee is hereby authorized and directed to enter into a letter of representation with the Depositary in the form provided by the Company and to act in accordance with such letter. The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture under applicable law with respect to any transfer of any interest in any Security (including any transfer between or among Participants or other beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(h) Transfer of Global Securities as a Whole. Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4 hereof), a Global Security may not be transferred as a whole except 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.

(i) Proxies Granted With Respect to Global Securities. Subject to the provisions of Section 2.4(b) hereof, the registered Holder of a Global Security shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities.

(j) No Obligation of the Trustee.

(1) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depositary or other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments

A-8

to be made to Holders under the Securities shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

(2) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

2.4 Definitive Securities.

(a) A Global Security deposited with the Depositary or with the Trustee as Securities Custodian for the Depositary pursuant to Section 2.1 hereof shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, if the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Security and the Depositary fails to appoint a successor Depositary or if at any time such Depositary ceases to be a “clearing agency” registered under the Exchange Act, in either case, and a successor Depositary is not appointed by the Company within 90 days of such notice; provided that such exchange shall comply with the provisions of Section 2.3.

(b) Any Global Security that is transferable to the beneficial owners thereof pursuant to Section 2.4(a) shall be surrendered by the Depositary to the Trustee located at its principal Corporate Trust Office in the Borough of Manhattan, The City of New York, to be so transferred, in whole, without charge, and the Trustee shall authenticate and deliver, upon such transfer of an equal aggregate principal amount of certificated Securities of authorized denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(c) A Definitive Security shall be in authorized denominations of $2,000 and integral multiples of $1,000, unless (i) such Definitive Security is issued upon exchange or transfer of another Definitive Security and the Definitive Security so issued is equal in principal amount to the Definitive Security so exchange or transferred, (ii) the Definitive Security is issued to a beneficial holder pursuant to this Section 2.4 and the entire principal amount beneficially owned by the holder is exchanged for such Definitive Security, or (iii) the principal amount of a Definitive Security is increased, or additional Securities are issued at the election of the Company to pay interest as provided in Section 2.11 of the Indenture.

(d) In the event of the occurrence of the event specified in Section 2.4(a) hereof, the Company shall promptly make available to the Trustee a reasonable supply of certificates in definitive, fully registered form without interest coupons.

A-9

EXHIBIT 1.1

to

APPENDIX A

[FORM OF FACE OF RULE 144A SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (C) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE OR (2)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

Appendix A-10

AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

[THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.4 OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

¹  [To be affixed to Global Securities]

Appendix A-11

No.________	$
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                  UNITED STATES DOLLARS ($        ), subject to adjustments listed on the Schedule of Increases or Decreases in Global Security attached hereto, on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-12

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated: _____________

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Subordinated Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB

as Trustee

By:    ______________________________

                    Authorized Signatory

Dated:    _______________

Appendix A-13

[FORM OF REVERSE SIDE OF RULE 144A SECURITY]

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27, October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Company shall make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture are insufficient to pay interest on the Securities in cash, the Company may elect to pay any such shortfall by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee on or before the third Business Day prior to the Interest Payment Date, a copy of which shall promptly be forwarded by the Trustee to the Holders. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

Appendix A-14

4. INDENTURE AND SUBORDINATION. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Subordinated Secured Notes due 2020, initially issued in the aggregate principal amount of $38,000,000.00, but Additional Securities may be issued pursuant to the Indenture in the aggregate principal amount of $50,000,000, and the Initial Securities and the Additional Securities vote together for all purposes as a single class. The Securities are subordinated as set forth in the Indenture and the Intercreditor Agreement to all obligations in respect of the Senior Obligations (including all interest accrued or accruing on the Senior Obligations after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for the interest is allowed as a claim in the case or proceeding with respect to the Senior Obligations). The terms of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased at the election of the Company to pay interest as provided in Section 3.08 of the Indenture; and provided that any transfer of a beneficial interest in the Security evidenced by this certificate shall be in a minimum denomination of $250,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A or (y) to an Institutional Accredited Investor in a private transaction. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

Appendix A-15

10. [RESERVED].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

Appendix A-16

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-17

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:                                                                                                                                                                                                                                                 

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                          as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated: _________________	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)

Signature

Guarantee:                                                                                                                                                                                                                                                  

(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-18

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

Date of Exchange Amount of decrease in Principal amount of this Global Security Amount of increase in Principal amount of this Global Security Principal amount of this Global Security following such decrease or increase) Signature of authorized officer of Trustee or Securities Custodian

Appendix A-19

EXHIBIT 1.2

to

APPENDIX A

[FORM OF FACE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”); AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE OR (2)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL

Appendix A-20

REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

Appendix A-21

No.________	$______
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                      UNITED STATES DOLLARS ($        ) on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

Appendix A-22

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated: _____________

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Subordinated Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB,

as Trustee

By:    ______________________________

                        Authorized Signatory

Dated:    _______________

Appendix A-23

[FORM OF REVERSE SIDE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments in respect of this Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on this Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE AND SUBORDINATION. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Subordinated Secured Notes due 2020, initially issued in the aggregate

Appendix A-24

principal amount of $38,000,000.00, but Additional Securities may be issued pursuant to the Indenture in the aggregate principal amount of $50,000,000, and the Initial Securities and the Additional Securities vote together for all purposes as a single class. The Securities are subordinated as set forth in the Indenture and the Intercreditor Agreement to all obligations in respect of the Senior Obligations (including all interest accrued or accruing on the Senior Obligations after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for the interest is allowed as a claim in the case or proceeding with respect to the Senior Obligations). The terms of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 3.08 of the Indenture, and provided that if this is a Global Security, any transfer of a beneficial interest in the Security evidenced by this certificate shall be in a minimum denomination of $250,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A or (y) to an Institutional Accredited Investor in a private transaction. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [RESERVED.]

Appendix A-25

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

Appendix A-26

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Appendix A-27

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:                                                                                                                                                                                                                                                 

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                          as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated: _______________	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)
Signature Guarantee:                                                                                                                                                                                                      (Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

Appendix A-28

APPENDIX B

FORM OF CERTIFICATE OF TRANSFER

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Re: 14% Subordinated Secured Notes due 2020

Reference is hereby made to the Indenture, dated as January 10, 2017 (the “Indenture”), among MZ Funding LLC, as issuer (the “Company”), and Wilmington Savings Fund Society, FSB, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                    , (the “Transferor”) owns and proposes to transfer the Security[ies] or interest in such Security[ies] specified in Annex A hereto, in the principal amount of $                     in such Security[ies] or interests (the “Transfer”), to                     (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ☐ Check if Transferee will take delivery of a beneficial interest in a Global Security or of a Definitive Security Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Security for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. In addition, the Transferor hereby certifies that the beneficial interest or the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or the Definitive Security for its own account or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “Qualified Purchaser” within the meaning of the Investment Company Act of 1940, as amended. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and/or the Definitive Security and in the Indenture and the Securities Act.

2. [Reserved]

3. ☐ Check and complete if Transferee is an Institutional Accredited Investor that will take delivery of a Definitive Security in a Private Placement. The Transfer is being effected pursuant to a private placement exemption under the Securities Act, and, accordingly, the Transferor hereby further certifies that the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing Definitive Security for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is an institutional investor that is an “accredited investor” within the meaning of Rule 501(a)(1),

B-1

(2), (3) or (7) of Regulation D in a private transaction and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. In addition, the Transferor hereby certifies that the Definitive Security is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the Definitive Security for its own account or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “Qualified Purchaser” within the meaning of the Investment Company Act of 1940, as amended. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred Definitive Security will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Definitive Security and in the Indenture and the Securities Act.

4. ☐ The Transfer is being effected to the Company or any of its Subsidiaries.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Transferor]
By:
	Name:
	Title:
Dated:

B-2

ANNEX A TO CERTIFICATE OF TRANSFER

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

(a)     ☐ a beneficial interest in a: Global Security (CUSIP                     ), or

(b)     ☐ a Definitive Security.

2. After the Transfer the Transferee will hold:

[CHECK ONE OF (a) OR (b)]

(a)     ☐ a beneficial interest in a: Global Security (CUSIP                     ), or

(b)     ☐ a Definitive Security.

in accordance with the terms of the Indenture.

B-3

APPENDIX C

FORM OF CERTIFICATE OF EXCHANGE

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

Re: 14% Subordinated Secured Notes due 2020

Reference is hereby made to the Indenture, dated as January 10, 2017 (the “Indenture”), among MZ Funding LLC, as issuer (the “Company”), and Wilmington Savings Fund Society, FSB, as Trustee and as Collateral Agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                         , (the “Owner”) owns and proposes to exchange the Security[ies] or interest in such Security[ies] specified herein, in the principal amount of $                     in such Security[ies] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

1. (a) ☐ Check if Exchange is from beneficial interest in a Global Security to Definitive Security. In connection with the Exchange of the Owner’s beneficial interest in a Global Security for a Definitive Security with an equal principal amount, the Owner hereby certifies that the Definitive Security is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Definitive Security issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Definitive Security and in the Indenture and the Securities Act.

(b) ☐ Check if Exchange is from Definitive Security to beneficial interest in a Global Security. In connection with the Exchange of the Owner’s Definitive Security for a beneficial interest in a Global Security with an equal principal amount, the Owner hereby certifies (i) the Owner is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, (ii) the beneficial interest is being acquired for the Owner’s own account without transfer and (iii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Definitive Security and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Security and in the Indenture and the Securities Act.

(c) ☐ Check if Exchange is from Definitive Security to Definitive Security. In connection with the Owner’s Exchange of a Definitive Security for a Definitive Security, the Owner hereby certifies (i) the Definitive Security is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Definitive Security and pursuant to and in accordance with the Securities Act, and (iii) the Definitive Security is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. The Owner is a “Qualified Purchaser,” as that term is defined under the Investment Company Act of 1940, as amended.

C-1

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

[Insert Name of Owner]
By:
	Name:
	Title:
Dated:

C-2

APPENDIX D

FORM OF SECURITY AGREEMENT

F-1

EX-99.4

EXHIBIT 99.4

EXHIBIT 1.1

to

APPENDIX A

[FORM OF FACE OF RULE 144A SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT; AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, OR (C) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A) (1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE OR (2)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS

AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

[THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.3 OF APPENDIX A TO THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.4 OF APPENDIX A TO THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]¹

¹  [To be affixed to Global Securities]

APPENDIX A 2

No.	$
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                                  UNITED STATES DOLLARS ($            ), subject to adjustments listed on the Schedule of Increases or Decreases in Global Security attached hereto, on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

APPENDIX A 3

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Subordinated Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB

as Trustee

By:
	Authorized Signatory
Dated:

APPENDIX A 4

[FORM OF REVERSE SIDE OF RULE 144A SECURITY]

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27, October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by the Depositary. The Company shall make all payments in respect of a certificated Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on a certificated Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture are insufficient to pay interest on the Securities in cash, the Company may elect to pay any such shortfall by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee on or before the third Business Day prior to the Interest Payment Date, a copy of which shall promptly be forwarded by the Trustee to the Holders. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

APPENDIX A 5

4. INDENTURE AND SUBORDINATION. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Subordinated Secured Notes due 2020, initially issued in the aggregate principal amount of $38,000,000.00, but Additional Securities may be issued pursuant to the Indenture in the aggregate principal amount of $50,000,000, and the Initial Securities and the Additional Securities vote together for all purposes as a single class. The Securities are subordinated as set forth in the Indenture and the Intercreditor Agreement to all obligations in respect of the Senior Obligations (including all interest accrued or accruing on the Senior Obligations after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for the interest is allowed as a claim in the case or proceeding with respect to the Senior Obligations). The terms of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased at the election of the Company to pay interest as provided in Section 3.08 of the Indenture; and provided that any transfer of a beneficial interest in the Security evidenced by this certificate shall be in a minimum denomination of $250,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A or (y) to an Institutional Accredited Investor in a private transaction. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

APPENDIX A 6

10. [RESERVED].

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

APPENDIX A 7

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

APPENDIX A 8

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                                as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)

Signature

Guarantee:

(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

APPENDIX A 9

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made:

Date of Exchange Amount of decrease in Principal amount of this Global Security Amount of increase in Principal amount of this Global Security Principal amount of this Global Security following such decrease or increase) Signature of authorized officer of Trustee or Securities Custodian

APPENDIX A 10

EXHIBIT 1.2

to

APPENDIX A

[FORM OF FACE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER (1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR AS DEFINED IN RULE 501(A)(1), (2),(3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN “INSTITUTIONAL ACCREDITED INVESTOR”); AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT IN ACCORDANCE WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OR (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A PRIVATE TRANSACTION. PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(B) ABOVE OR (2)(C) ABOVE, A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH MAY BE OBTAINED FROM THE TRUSTEE) MUST BE DELIVERED TO THE TRUSTEE. THE COMPANY ALSO RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

BY ITS ACQUISITION HEREOF, THE (1) ACQUIRER REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED PURCHASER,” AS THAT TERM IS DEFINED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (A “QUALIFIED PURCHASER”), AND (2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN, EXCEPT TO A QUALIFIED PURCHASER.

THE FOLLOWING INFORMATION IS SUPPLIED SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES. THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), AND THIS LEGEND IS REQUIRED BY SECTION 1275(c) OF THE CODE. HOLDERS MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF OID, THE ISSUE PRICE, THE ISSUE DATE AND THE YIELD TO MATURITY RELATING TO THE SECURITIES BY CONTACTING THE COMPANY AT (914) 765-3190.

EACH PERSON ACQUIRING OR HOLDING THIS SECURITY OR ANY INTEREST HEREIN SHALL BE DEEMED TO HAVE REPRESENTED, WARRANTED AND AGREED THAT, FOR SO LONG AS IT HOLDS A SECURITY OR INTEREST THEREIN (I) EITHER (A) IT IS NOT, AND IS NOT ACTING ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN, AS DEFINED IN SECTION 3(3) OF THE UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), THAT IS SUBJECT TO THE PROVISIONS OF PART 4 OF SUBTITLE B OF TITLE I OF ERISA, A PLAN TO WHICH SECTION 4975 OF THE UNITED STATES INTERNAL

APPENDIX A 11

REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), APPLIES, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF SUCH AN EMPLOYEE BENEFIT PLAN’S OR PLAN’S INVESTMENT IN SUCH ENTITY WITHIN THE MEANING OF 29 C.F.R. SECTION 2510.3-101 (AS MODIFIED BY SECTION 3(42) OF ERISA) (“BENEFIT PLAN INVESTOR”), OR A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE, LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS OF SECTION 406 OF ERISA AND/OR SECTION 4975 OF THE CODE (“SIMILAR LAW”), AND NO PART OF THE ASSETS TO BE USED BY IT TO ACQUIRE OR HOLD SUCH SECURITIES OR ANY INTEREST THEREIN CONSTITUTES THE ASSETS OF ANY BENEFIT PLAN INVESTOR OR SUCH GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN, OR (B) IF IT IS, OR IS ACTING ON BEHALF OF, A GOVERNMENTAL, CHURCH, NON-U.S. OR OTHER PLAN SUBJECT TO SIMILAR LAW, ITS ACQUISITION, HOLDING AND DISPOSITION OF SUCH SECURITIES (OR INTERESTS THEREIN) WILL NOT CONSTITUTE OR RESULT IN A VIOLATION OF ANY SUCH SIMILAR LAW, AND (II) IT WILL NOT SELL OR TRANSFER SUCH SECURITIES (OR INTERESTS THEREIN) TO AN ACQUIROR ACQUIRING SUCH SECURITIES (OR INTERESTS THEREIN) UNLESS THE ACQUIROR MAKES OR IS DEEMED TO MAKE THE FOREGOING REPRESENTATIONS, WARRANTIES AND AGREEMENTS DESCRIBED IN CLAUSE (I) HEREOF. ANY PURPORTED TRANSFER OF THE SECURITIES IN VIOLATION OF THE REQUIREMENTS SET FORTH IN THIS PARAGRAPH SHALL BE NULL AND VOID AB INITIO.

APPENDIX A 12

No.	$
	CUSIP NO.
	ISIN NO.

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

MZ Funding LLC, a Delaware limited liability company (herein called the “Company”, which term includes any Successor Company under the Indenture hereinafter referred to), for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of                                          UNITED STATES DOLLARS ($                ) on January 20, 2020.

Interest Rate: 14% per annum

Interest Payment Dates: February 1, May 1, August 1, and November 1.

Record Dates: January 27, April 26, July 27 and October 27.

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

[SIGNATURE PAGE FOLLOWS]

APPENDIX A 13

IN WITNESS WHEREOF, the Company has caused this Security to be signed manually or by facsimile by its duly authorized officer.

Dated:

MZ FUNDING LLC
By:
	Name:
	Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the 14% Subordinated Secured Notes due 2020 described in the within-mentioned Indenture.

Wilmington Savings Fund Society, FSB,

as Trustee

By:
	Authorized Signatory
Dated:

APPENDIX A 14

[FORM OF REVERSE SIDE OF INSTITUTIONAL ACCREDITED INVESTOR SECURITY]

MZ FUNDING LLC

14% Subordinated Secured Notes due 2020

Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. MZ Funding LLC (the “Company”) promises to pay interest on the principal amount of this Security at 14% per annum. The Company shall pay interest quarterly in arrears on February 1, May 1, August 1, and November 1 of each year, commencing February 1, 2017. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from January 10, 2017. Interest shall be calculated on the basis of a year of 360 days. The Company shall pay interest on overdue principal, interest and other overdue amounts at a rate per annum equal to the rate which is 5.00% in excess of the rate which would have been payable if such overdue amount had, during the period of non-payment, constituted an outstanding amount of the Securities. Such interest shall be payable in accordance with Section 2.11 of the Indenture.

2. METHOD OF PAYMENT. The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the January 27, April 26, July 27 and October 27 next preceding the interest payment date even if such Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company shall make all payments in respect of this Security (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on this Security shall be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). Notwithstanding the foregoing and subject to and as provided in Section 2.11 of the Indenture, the Company may elect to pay all or a portion of interest by increasing the principal amount of this Security or issuing new Securities in accordance with Section 2.02 of the Indenture. The Company must elect the form of interest payment by delivering a notice to the Trustee at least 3 Business Days prior to the Interest Payment Date, a copy of which shall be posted to MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. On any Interest Payment Date with respect to which the Company has elected to pay interest by increasing the principal amount of this Security, the principal amount of this Security shall be so increased.

3. PAYING AGENT AND REGISTRAR. Initially, Wilmington Savings Fund Society, FSB, a national banking association duly organized and existing under the laws of the United States of America (the “Trustee”), shall act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its Affiliates incorporated or organized within The United States of America may act as Paying Agent, Registrar or co-registrar.

4. INDENTURE AND SUBORDINATION. The Company issued the Securities under an Indenture dated as of January 10, 2017 (the “Indenture”), among the Company, the Trustee and the Collateral Agent. This Security is one of a duly authorized issue of notes of the Company designated as its 14% Subordinated Secured Notes due 2020, initially issued in the aggregate

APPENDIX A 15

principal amount of $38,000,000.00, but Additional Securities may be issued pursuant to the Indenture in the aggregate principal amount of $50,000,000, and the Initial Securities and the Additional Securities vote together for all purposes as a single class. The Securities are subordinated as set forth in the Indenture and the Intercreditor Agreement to all obligations in respect of the Senior Obligations (including all interest accrued or accruing on the Senior Obligations after the commencement of any bankruptcy, insolvency or reorganization or similar case or proceeding at the contract rate (including, without limitation, any contract rate applicable upon default) specified in the relevant documentation, whether or not the claim for the interest is allowed as a claim in the case or proceeding with respect to the Senior Obligations). The terms of the Securities include those stated in the Indenture, and Holders are referred to the Indenture for a statement of those terms (which for greater certainty includes the right of exchange of the Securities provided in Appendix A to the Indenture, which is an express term of this Security). To the extent any provision of this Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

5. OPTIONAL REDEMPTION. The Company shall be entitled at its option to redeem the Securities, in whole or in part, at a redemption price equal to 100% of the principal amount of the Securities being redeemed plus any applicable Make-Whole Premium as of, and accrued and unpaid interest, if any, to (but not including), the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date).

6. PREPAYMENT. The Securities are subject to prepayment as described in Section 3.08 of the Indenture.

7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in registered form without coupons in denominations of a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof, except that the Securities may be in other denominations to the extent that the principal amount of a Security is increased, or additional Securities are issued, at the election of the Company to pay interest as provided in Section 3.08 of the Indenture, and provided that if this is a Global Security, any transfer of a beneficial interest in the Security evidenced by this certificate shall be in a minimum denomination of $250,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and the Company will require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed or 15 days before an interest payment date. A Security may be transferred only to the Depositary or to another Person if both (i) such Person is a Qualified Purchaser and (ii) such transfer is (x) to a Qualified Institutional Buyer in compliance with Rule 144A or (y) to an Institutional Accredited Investor in a private transaction. Transfer may otherwise be restricted as provided in the Indenture.

8. PERSONS DEEMED OWNERS. The registered Holder of this Security may be treated as the owner of it for all purposes.

9. UNCLAIMED MONEY. If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10. [RESERVED.]

APPENDIX A 16

11. AMENDMENT AND WAIVER. The Indenture, the Securities and the other Note Documents may be amended or waived in the manner provided in the Indenture.

12. DEFAULTS AND REMEDIES. The Events of Default relating to the Securities are defined in Section 6.01 of the Indenture. Upon the occurrence of an Event of Default, the rights and obligations of the Company, the Insurer, the Trustee and the Holders shall be as set forth in the applicable provisions of the Indenture or other applicable Note Document.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may become a creditor of, or otherwise deal with the Company or any of its Affiliates, with the same rights it would have if it were not Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, member or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture, this Indenture or any other Note Document, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.

15. SECURITY DOCUMENTS. The obligations of the Company under the Indenture, the Securities and the Security Documents will be secured by a Lien granted to the Collateral Agent on the Collateral.

16. AUTHENTICATION. This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) signs manually or by facsimile the certificate of authentication on the other side of this Security.

17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).

18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Holders of Securities. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

19. GOVERNING LAW. THIS SECURITY AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS SECURITY AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 ET SEQ OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).

APPENDIX A 17

The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

MZ Funding LLC

c/o MBIA Inc.

One Manhattanville Road

Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

APPENDIX A 18

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this

Security to:

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                       as agent to transfer this Security on the books of the Company. The agent may substitute another to act for him.

Dated:	Your Signature:
		(Sign exactly as your name appears on the other side of this Security.)

Signature

Guarantee:

(Signature must be guaranteed)

Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

APPENDIX A 19

EX-99.5

EXHIBIT 99.5

EXECUTION VERSION

CREDIT AGREEMENT

CREDIT AGREEMENT dated as of January 10, 2017, between MBIA INSURANCE CORPORATION and MZ FUNDING LLC. The parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Anti-Corruption Laws” means all laws, rules and regulations of any jurisdiction applicable to the Borrower from time to time concerning or relating to bribery, money laundering, or corruption, including, without limitation, the United States Foreign Corrupt Practices Act of 1977, as amended from time to time, and the United Kingdom’s Bribery Act 2010, as amended from time to time.

“Applicable Tranche” means (a) if the Tranche A Loan has not been paid in full, the Tranche A Loan, or (b) if the Tranche A Loan has been paid in full, the Tranche B Loan.

“Available Liquidity” means, as of the last day of any fiscal quarter, the amount equal to (a) the Undrawn Delayed Draw Amount plus (b) the amount of “Cash Equivalents and Short-Term Investments” (as such item is reported in the Borrower’s statutory financial statement filed for such fiscal quarter) minus (c) “foreign cash depositories,” (as such item is reported in the Borrower’s statutory financial statement filed for such fiscal quarter).

“Blocked Account Opening Date” means the date agreed by the Borrower and the Lender as the date on and after which cash collateral pledged from the Borrower to the Lender will be deposited in the Collection Account and Mandatory Prepayment Account.

“Borrower” means MBIA Insurance Corporation, a New York corporation.

“Business Day” means each day which is not a Saturday, Sunday or other day on which banking institutions are not required by law or regulation to be open in the State of New York.

“Cash Equivalents” means any of the following types of Investments, to the extent owned by the Borrower:

(a) (i) Dollars and (ii) readily marketable obligations issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof, in each case having maturities of not more than twelve (12) months from the date of acquisition thereof; provided that the full faith and credit of the United States is pledged in support thereof;

(b) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is organized under the laws of the United States, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated at least P-2 (or the then equivalent grade) by Moody’s Investors Services, Inc. (“Moody’s”) or at least A-2 (or the then equivalent grade) by Standard & Poor’s Financial Services LLC (“S&P”) and (iii) has combined capital and surplus of at least $500,000,000 (any such bank being an “Approved Domestic Bank”), in each case with maturities of not more than three hundred sixty-five (365) days from the date of acquisition thereof;

(c) commercial paper and variable or fixed rate notes issued by an Approved Domestic Bank (or by the parent company thereof) or any variable or fixed rate note issued by, or guaranteed by, a domestic corporation rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case with maturities of not more than two hundred seventy (270) days from the date of acquisition thereof;

(d) marketable short-term money market and similar funds (including such funds investing a portion of their assets in municipal securities) having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Borrower);

(e) repurchase agreements entered into by any Person with a bank or trust company or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed or insured by the United States government or any agency or instrumentality of the United States in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a Fair Market Value of at least 100% of the amount of the repurchase obligations;

(f) Investments, classified in accordance with GAAP as Current Assets of the Borrower, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions having capital of at least $500,000,000, and the portfolios of which are limited such that at least 95% of such investments are of the character, quality and maturity described in clauses (a) through (e) of this definition; and

(g) investment funds investing at least 95% of their assets in securities of the types (including as to credit quality and maturity) described in clauses (a) through (f) above.

“Cash Sweep Amount” means, with respect to the last day of any fiscal quarter of the Borrower, an amount equal to the amount by which Available Liquidity exceeds $150,000,000.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980.

“CERCLIS” means the Comprehensive Environmental Response, Compensation, and Liability Information System maintained by the U.S. Environmental Protection Agency.

“Change of Control” means, at any time, the failure of MBIA Inc. to directly, legally and beneficially own 100% of the Equity Interests of (a) the Borrower or (b) the Lender.

“Closing Date” means the date on which the conditions specified in Section 4.01 are satisfied.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means, collectively, the Zohar I Collateral and the Zohar II Collateral and any other assets described in Exhibit A to the Security Agreement.

“Collection Account” means (a) prior to the Blocked Account Opening Date, an account of the Senior Trustee established under the Senior Indenture and designated as the Collateral Proceeds Account and (b) on and after the Blocked Account Opening Date, that certain interest-bearing account

2

held in the name of the Lender at the Deposit Bank which shall at all times be subject to the Liens of the Senior Collateral Agent for the benefit of the Senior Note Holders and the other Secured Creditors (as defined in the Senior Indenture) and governed by the Collection Account Control Agreement.

“Collection Account Control Agreement” means the Blocked Account Control Agreement among the Lender, the Senior Collateral Agent and the Deposit Bank with respect to the Collection Account, or another account control agreement entered into in replacement thereof.

“Commitment” means the Lender’s commitment to lend the Tranche A Loan and the Tranche B Loan as such commitment may be reduced from time to time pursuant to the terms of this Agreement. Once reduced, the amount of the Commitment cannot be increased.

“Company Operating Agreement” means that certain Limited Liability Company Agreement of MZ Funding LLC, dated as of January 9, 2017.

“Confidential Information” means all information relating to the Collateral or to the Borrower or any of its Affiliates or any of their respective businesses (including without limitation information prepared by others and forwarded by or on behalf of the Borrower or any of its Affiliates and information described in Section 5.01(d) and 5.09(d)), other than any such information that (i) is or becomes generally available to the public on a non-confidential basis, (ii) is known to the Lender (or other party required to keep information confidential pursuant to this Agreement) on a non-confidential basis prior to the time of disclosure of such information by the Borrower, (iii) is independently developed by the Lender (or other party required to keep information confidential pursuant to this Agreement), (iv) is permitted in writing by the Borrower to be disclosed to third parties on a non-confidential basis, (v) is or was publicly disclosed by the Borrower, or (vi) is Publicized Information.

“Control Agreements” means the Collection Account Control Agreement and the Mandatory Prepayment Account Control Agreement.

“Credit Documents” means this Agreement, the Security Agreement, the Control Agreements, the Loan Administration Agreement, the Notes, the Intercreditor Agreement and any other documents hereafter delivered to the Lender by the Borrower evidencing or securing the Loan or the Collateral.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Delayed Draw Amount” means the net proceeds of additional notes issued by the Lender and purchased by MBIA Inc. after the Closing Date pursuant to the Subordinated Facility, up to $50,000,000 in the aggregate.

“Delayed Draw Loan” has the meaning given to such term in Section 2.01.

“Deposit Bank” means JPMorgan Chase Bank, N.A. or such other bank agreed between the Borrower and the Lender with the consent of the Collateral Agent as directed by the Majority Senior Note Holders.

“Disposition” or “Dispose” means the sale, transfer, license, sublicense, lease, any other disposition of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated

3

therewith and any reinsurance or novation arrangement or transaction; provided, however, that “Disposition” and “Dispose” shall not be deemed to include any issuance by the Borrower of any of its Equity Interests to another Person.

“Distribution Account” has the meaning specified in the Senior Indenture and the Subordinated Indenture.

“Dollars” or “$” means the lawful money of the United States of America.

“Eligible Person” means a person who is (i) a “qualified purchaser” within the meaning of the Investment Company Act, and the rules and regulations promulgated pursuant thereto and who (ii) either (x) is a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended, or (y) purchases or intends to purchase Senior Notes or Subordinated Notes in an offshore transaction outside the United States in reliance on Regulation S under the Securities Act, or (z) is an institutional “accredited investor” as described in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act.

“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, including applicable common law, regulations, ordinances, rules, judgments, orders, decrees or governmental restrictions relating to pollution, the protection of the environment, the release of Hazardous Materials into the environment and human exposure to Hazardous Materials, including those related to the treatment, transport, storage and disposal of Hazardous Materials, air emissions and discharges to public pollution control systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, monitoring or oversight by a Governmental Authority, fines, penalties or indemnities), directly or indirectly resulting from or based upon (a) any actual or alleged violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) human exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other binding consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“ERISA Event” means (a) a Reportable Event with respect to a Plan; (b) the withdrawal of the Borrower or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA) or insolvent (within the meaning of Section 4245 of ERISA); (d) the filing of a notice of intent to terminate or the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, respectively, (e) the institution by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or Multiemployer Plan; (g) the determination that any Plan is considered an at-risk plan within the meaning of Section 430 of the Code or Section 303 of ERISA; (h) the determination that any Multiemployer Plan is considered a plan in endangered or critical status within the meaning of Sections 431 and 432 of the Code or Sections 304 and 305 of ERISA; (i) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not

4

delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate; (j) the conditions for the imposition of a lien under Section 430(k) of the Code or Section 303(k) of ERISA shall have been met with respect to any Plan; or (k) any other event or condition with respect to a Plan or Multiemployer Plan that could result in liability of the Borrower, other than in the usual course.

“ERISA Affiliate” means (a) Any corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Issuer, (b) a trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Code) with the Issuer or (c) a member of the same affiliated service group (within the meaning of Section 414(m) of the Code) as the Issuer, any corporation described in clause (a) above or any trade or business described in clause (b) above.

“Event of Default” has the meaning set forth in Article VI.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to the Borrower or required to be withheld or deducted from a payment to the Lender, (a) Taxes imposed on or measured by income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of the Lender being organized under the laws of, having its principal office or its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of the Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) the Lender acquires such interest in the Loan or Commitment or (ii) the Lender changes its lending office, and (c) any U.S. federal withholding Taxes imposed under FATCA; provided, however, for the avoidance of doubt, that Excluded Taxes shall not include any Taxes described in clause (b) of the definition of Other Taxes.

“Fair Market Value” means, with respect to any asset or group of assets on any date of determination, the value of the consideration obtainable in a sale of such asset at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, as reasonably determined by the Borrower in good faith (which shall be conclusive if reasonably determined in good faith).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

“Final Maturity Date” means (a) January 20, 2020, or (b) such earlier date on which the Loan shall become due and payable in accordance with the terms of this Agreement, whether by acceleration or otherwise.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, any state or locality, any political subdivision of the foregoing, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

5

“Hazardous Materials” means all radioactive and all hazardous or toxic substances, materials or wastes, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated as “hazardous” or “toxic,” or as a “pollutant” or a “contaminant,” pursuant to any Environmental Law.

“Indebtedness” of a Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (c) all obligations (excluding any prepaid interest thereon) of such Person under conditional sale or other title retention agreements relating to property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (d) all obligations (including, without limitation, earnout obligations) of such Person incurred, issued or assumed as the deferred purchase price of property or services purchased by such Person (other than (i) trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof and (ii) expenses accrued in the ordinary course of business) which would appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all guaranty obligations of such Person with respect to Indebtedness of another Person (excluding financial guarantee policies issued by the Borrower in the ordinary course of business), (h) the principal portion of all capital lease obligations plus any accrued interest thereon, (i) all net obligations of such Person under hedging agreements, (j) the maximum amount of all letters of credit issued or bankers’ acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred equity interests issued by such Person, (l) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product plus any accrued interest thereon, (m) all obligations of any partnership or unincorporated joint venture in which such Person is a general partner or a joint venture solely to the extent such obligations are recourse to such Person and (n) obligations of such Person under non-compete agreements to the extent such obligations are quantifiable contingent obligations of such Person under GAAP principles; provided, however, that all financial guarantee policies issued by the Borrower in the ordinary course of business with respect to Indebtedness of another Person shall not be considered “Indebtedness.”

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under this Agreement and (b) to the extent not otherwise described in (a), Other Taxes.

“Initial Loan” has the meaning given to such term in Section 2.01.

“Insolvency Proceeding” means any case, proceeding or other action by or against any Person (a) under any existing or future law (including any agency or department with jurisdiction over insurance companies) of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, rehabilitation, liquidation, conservatorship, receivership or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition, rehabilitation or other relief with respect to it or its debts, or (b) seeking appointment of a receiver, trustee, custodian, conservator, rehabilitator, liquidator or other similar official for it or for all or any substantial part of its assets.

6

“Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, by and among the Senior Collateral Agent, the Subordinated Collateral Agent and the Lender.

“Interest and Principal Payment Certification” means an Interest and Principal Payment Certification for such Interest Payment Date in substantially the form of Exhibit A, with such changes as agreed to by the Lender and the Borrower; provided that the written objection of the Majority Senior Note Holders has not been received by the Borrower or the Lender on or before the 5^th Business Day after a copy thereof has been sent to the Senior Note Holders by the Senior Trustee.

“Interest Period” means (a) initially, the period from the Closing Date to but excluding February 1, 2017 and (b) thereafter, the period following the end of the immediately preceding Interest Period to but excluding the next Interest Payment Date.

“Interest Payment Date” means each February 1, May 1, August 1, and November 1, commencing on February 1, 2017.

“Investment” means, as to any Person, any direct or indirect investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor incurs debt of the type referred to in clause (h) of the definition of Indebtedness in respect of such Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such other Person.

“Investment Plan” means the investment guidelines of the Borrower as of the Closing Date, attached as Schedule IV, as amended from time to time in the ordinary course of business consistent with the Borrower’s policy for amending such guidelines.

“Lender” means MZ Funding LLC.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Loan” means, collectively, the Tranche A Loan and the Tranche B Loan.

“Loan Administration Agreement” means that certain Loan Administration Agreement, dated as of the date hereof, by and among the Lender, the Loan Administrator and the Senior Trustee, and acknowledged by the Borrower.

“Loan Administrator” means Wilmington Savings Fund Society, FSB.

“Loan Commitment Fee” means a $3,250,000 financed commitment fee.

“Majority Senior Note Holders” means the Senior Note Holders holding a majority of the Outstanding principal amount of the securities issued under the Senior Facility; provided that the calculation of “Majority Senior Note Holders” shall not include any securities held by the Lender, the Borrower or any of their Affiliates other than as provided in Section 2.13 of the Senior Indenture.

7

“Make-Whole Premium” shall mean, with respect to the Loan on any applicable date of prepayment of the Loan whether by acceleration, voluntary or mandatory prepayment, or otherwise, on or prior to the Make-Whole Termination Date, the amount as calculated by the Lender as equal to the following percentage of the principal (excluding any PIK Principal) so prepaid:

Period after the Closing Date	Make-Whole Premium
During first 90 days		21.00	%
During 91st to 180th day		17.50	%
During 181st to 270th day		14.00	%
During 271st to 360th day		10.50	%
During 361st to 450th day		7.00	%
During 451st to 540th day		3.50	%
On and after 541st day		0	%

“Make-Whole Termination Date” means the 541^st day after the Closing Date.

“Mandatory Prepayment Account” means (a) prior to the Blocked Account Opening Date, an account of the Senior Trustee established in the Senior Indenture and designated as the Collateral Proceeds Account and (b) on and after the Blocked Account Opening Date, that certain interest-bearing account held in the name of the Lender at the Deposit Bank which shall at all times be subject to the Liens of the Senior Collateral Agent for the benefit of the Senior Note Holders and the other Secured Creditors (as defined in the Senior Indenture) and governed by the Mandatory Prepayment Account Control Agreement.

“Mandatory Prepayment Account Control Agreement” means the Blocked Account Control Agreement among the Lender, the Senior Collateral Agent and the Deposit Bank with respect to the Mandatory Prepayment Account, or another account control agreement entered into in replacement thereof.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, financial condition or results of operations of the Borrower, (b) the Borrower’s or the Lender’s ability to perform any of its payment obligations under this Agreement, the other Credit Documents or the Senior Facility, or (c) the rights and remedies of the Lender under this Agreement and the other Credit Documents; provided, that solely for purposes of determining whether a Material Adverse Effect has occurred at a time prior to the Closing Date, and assuming the accuracy of the representation given in the last sentence of Section 3.22, a Specified Reserve Increase shall not, by itself, be deemed to constitute a Material Adverse Effect; provided further that it may be taken into account with other factors, conditions and changes in determining whether a Material Adverse Effect has occurred. A “Specified Reserve Increase” means an increase in statutory loss reserves, loss adjustment expense reserves or contingency reserves, which, together with all other such increases occurring within 30 days of each other, equals or exceeds $125,000,000.

8

“Material Non-Public Information” means any Confidential Information constituting material non-public information within the meaning of the rules and regulations of the Exchange Act.

“MBIA Corp. Payment” means the amount specified in the notice from the Borrower referred to in Section 5.02(e) as the aggregate amount of all insurance payments made by the Borrower under the insurance policy in respect of the Zohar II Notes (the “Zohar II Policy Payment”), excluding (a) any payments made using the proceeds of the Loan, (b) any payments made on account of any Zohar II Notes with an aggregate outstanding principal amount of approximately $347,000,000 acquired from Assured Guaranty, and (c) any payments made on account of Zohar II Notes held by Note Holders under the Senior Facility or Subordinated Facility and transferred to the Lender. The MBIA Corp. Payment is in the amount of approximately $60,000,000.

“MBIA Corp. Percentage” means the percentage equal to 100%, minus the Zohar II Prepayment Percentage.

“MBIA Inc.” means MBIA Inc.

“MBIA UK Sale” means the transaction whereby the Borrower’s wholly owned subsidiary, MBIA UK (Holdings) Limited sold, or will sell, its operating subsidiary, MBIA UK Insurance Limited, to Assured Guaranty Corp., a subsidiary of Assured Guaranty Ltd. for certain consideration.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions.

“Notes” means, collectively, the Tranche A Note and the Tranche B Note of the Borrower, each executed and delivered as provided in Section 2.05.

“Note Holder” means the holders of the notes issued pursuant to the Senior Facility or the Subordinated Facility.

“NPL” means the National Priorities List under CERCLA.

“NYDFS” means the New York Department of Financial Services.

“Obligations” all now existing or hereafter arising obligations of the Borrower to the Lender, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses or otherwise (including, without limitation, interest, fees, costs or other payments on the Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding.

“Other Connection Taxes” means, with respect to the Lender, Taxes imposed as a result of a present or former connection between the Lender and the jurisdiction imposing such Tax (other than connections arising solely from the Lender having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under or enforced this Agreement or that are described in clause (b) of the definition of Other Taxes).

9

“Other Taxes” means (a) all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement and (b) all increased taxes imposed on Lender and/or the Senior Note Holders as a result of the classification of Lender as a corporation for federal and/or state and local income tax purposes.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Person” means any individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including any governmental authority.

“PIK Interest” means, with respect to any Interest Payment Date, the interest paid-in-kind on the Loan in the form of an increase in the outstanding principal of the Loan.

“PIK Principal” has the meaning set forth in Section 2.03(a).

“Plan” means any “employee benefit plan” (other than a Multiemployer Plan) within the meaning of Section 3(3) of ERISA that is maintained or is contributed to by the Borrower or any ERISA Affiliate and is subject to Title IV of ERISA or the minimum funding standards under Section 412 of the Code or Section 302 of ERISA.

“Portfolio Company” means a Person whose Indebtedness and/or Equity constitutes collateral securing the Zohar I Notes or the Zohar II Notes, as applicable.

“Publicized Information” means any information made public by the Borrower or any of its Affiliates (including, without limitation, as described in Section 7.12(b) and (c)).

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30-day notice period has been waived.

“Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including the Patriot Act and those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council or the European Union.

“Securities Proceeds Account” means the Securities Proceeds Account established under the Senior Indenture.

“Security Agreement” means the Security Agreement, dated as of the date hereof, by the Borrower in favor of the Lender.

“SEMS” means the Superfund Enterprise Management System maintained by the U.S. Environmental Protection Agency.

“Senior Collateral Agent” means the collateral agent under the Senior Facility.

10

“Senior Facility” means the Senior Indenture, the other Note Documents (as defined therein) and the transactions contemplated thereunder.

“Senior Indenture” means the Indenture, dated as of the date hereof, by and between the Lender, as Issuer and Wilmington Savings Fund Society, FSB, as trustee and collateral agent.

“Senior Insurance Policy” means insurance policy no. 541511 dated January 10, 2017, issued by the Borrower and insuring the timely payment of all amounts due under the Senior Facility.

“Senior Notes” means the notes issued pursuant to the Senior Facility.

“Senior Note Collection Date” means the first date on which the aggregate outstanding principal balance of the Senior Facility and all other Senior Note Obligations have been fully and indefeasibly paid.

“Senior Note Holders” means the holders of the notes issued pursuant to the Senior Facility.

“Senior Note Obligations” means the “Senior Obligations” as defined in the Intercreditor Agreement.

“Senior Trustee” means the trustee under the Senior Facility.

“Statutory Surplus” means, as of the last day of any fiscal quarter, “Surplus as regards policyholders” (line 37) as set forth in “Liabilities, Surplus and Other Funds” in the Borrower’s statutory financial statement filed for such fiscal quarter.

“Subordinated Collateral Agent” means the collateral agent under the Subordinated Facility.

“Subordinated Facility” means the Subordinated Indenture, the other Note Documents (as defined therein) and the transactions contemplated thereunder

“Subordinated Indenture” means the Subordinated Indenture, dated as of the date hereof, by and between the Lender, as Issuer and Wilmington Savings Fund Society, FSB, as trustee and collateral agent.

“Subordinated Notes” means the notes issued pursuant to the Subordinated Facility.

“Subordinated Securities Proceeds Account” means the Securities Proceeds Account established under the Subordinated Indenture.

“Subordinated Trustee” means the trustee under the Subordinated Facility.

“Superintendent” means, Maria T. Vullo, as the Superintendent of the New York State Department of Financial Services, and any predecessor or successor in such position at the given time, and any staff member of NYDFS or other Governmental Authority acting as such person’s agent or representative in such capacity.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

11

“Tranche A Loan” means a loan made by the Lender to the Borrower on the Closing Date in the aggregate principal amount of $328,250,000.

“Tranche B Loan” means, collectively, a loan made by the Lender to the Borrower on the Closing Date in the aggregate principal amount of $38,000,000 plus the aggregate principal amount of all Delayed Draw Loans.

“Tranche A Note” means the Note made by the Borrower to the order of the Lender dated the Closing Date evidencing the Tranche A Loan in the aggregate principal amount of $328,250,000.

“Tranche B Note” means the Note made by the Borrower to the order of the Lender dated the Closing Date evidencing the Tranche B Loan including the Delayed Draw Loans in the aggregate principal amount of $88,000,000.

“Transactions” means the execution, delivery, and performance by the Borrower of the Credit Documents, the borrowing and repayment of the Loan, the pledge, assignments or grant of the security interests in the Collateral pursuant to the Credit Documents, the payment of interest and fees thereunder and the use of the proceeds of the Loan.

“Undrawn Delayed Draw Amount” means $50,000,000 minus the aggregate amount Delayed Draw Loans funded by the Lender after the Closing Date.

“Zohar I CLO” means, collectively, Zohar CDO 2003-1, Limited, Zohar CDO 2003-1, Corp. and Zohar CDO 2003-1, LLC.

“Zohar I Collateral” means the assets described in Exhibit A to the Security Agreement relating to the Zohar I Notes and the Zohar I Documents including (a) the Borrower’s rights to payment, reimbursement, indemnity, recovery, salvage or subrogation with respect to the claim paid by the Borrower under its policy insuring the Zohar I Notes, (b) the Borrower’s Zohar I Notes, related subrogation rights and all supporting obligations, (c) the Borrower’s rights as a party to, or third-party beneficiary under any of the Zohar I Documents, including, but not limited to, its rights as “Controlling Party” (as defined in the Zohar I Documents) under the Zohar I Documents, (d) any rights to any collateral under the Zohar I Documents, (e) any rights as a transferee of any collateral under the Zohar I Documents including any assets resulting from any foreclosure auction, (f) any commercial tort claims accruing to the Borrower in any capacity, including as insurer, credit enhancer, controlling party or holder of any Zohar I Notes, under or relating to the Zohar I Documents or the transactions contemplated thereby, whether for fraud, breach of duty or otherwise, against any person, including any (i) current or former collateral manager or servicer thereunder; (ii) agent, administrative agent, collateral agent or lender under any loans owned by any issuer of the Zohar I Notes; or (iii) manager, managing member, director, officer or other controlling party of any portfolio company in which Zohar I CLO has an equity, loan or loan participation interest, (g) any other rights or remedies inuring to the benefit of the Borrower in connection with the Zohar I Notes, whether arising under contract or tort and (f) any proceeds with respect to the foregoing, including any recoveries the Borrower acquires from any source in connection with such rights.

“Zohar I Documents” means the Zohar I Notes and any indenture, supplemental indenture, insurance policy or agreement, indemnity agreement or other legal documentation related to the Zohar I Notes.

“Zohar I Notes” means the class A-1 and A-2 notes issued by the Zohar I CLO.

12

“Zohar II CLO” means, collectively, Zohar II 2005-1, Limited, Zohar II 2005-1, Corp. and Zohar II 3005-1, LLC.

“Zohar II Collateral” means the assets described in Exhibit A to the Security Agreement relating to the Zohar II Notes and the Zohar II Documents including (a) the Borrower’s rights to payment, reimbursement, indemnity, recovery, salvage or subrogation with respect to the claim paid by the Borrower under its policy insuring the Zohar II Notes, (b) the Borrower’s Zohar II Notes, related subrogation rights and all supporting obligations, (c) the Borrower’s rights as a party to, or third-party beneficiary under any of the Zohar II Documents, including, but not limited to, its rights as “Controlling Party” (as defined in the Zohar II Documents) under the Zohar II Documents, (d) any rights to any collateral under the Zohar II Documents, (e) [Reserved], (f) any commercial tort claims accruing to the Borrower in any capacity, including as insurer, credit enhancer, controlling party or holder of any Zohar II Notes, under or relating to the Zohar II Documents or the transactions contemplated thereby, whether for fraud, breach of duty or otherwise, against any person, including any (i) current or former collateral manager or servicer thereunder; (ii) the agent, administrative agent, collateral agent or lender under any loans owned by any issuer of the Zohar II Notes; or (iii) manager, managing member, director, officer or other controlling party of any portfolio company in which Zohar II CLO has an equity, loan or loan participation interest, (g) any other rights or remedies inuring to the benefit of the Borrower in connection with the Zohar II Notes, whether arising under contract or tort and (f) any proceeds with respect to the foregoing, including any recoveries the Borrower acquires from any source in connection with such rights.

“Zohar II Documents” means the Zohar II Notes and any indenture, supplemental indenture, insurance policy or agreement, indemnity agreement or other legal documentation related to the Zohar II Notes.

“Zohar II Notes” means the notes issued by the Zohar II CLO.

“Zohar II Policy Payment” means the amount drawn under the Borrower’s policy insuring the Zohar II Notes.

“Zohar II Prepayment Percentage” means the percentage equal to 100% minus the percentage representing the fraction obtained when (a) the amount of the MBIA Corp. Payment is divided by (b) the sum of (i) the aggregate amount funded in cash by the Lender under this Agreement plus (ii) the amount of the MBIA Corp. Payment; provided, that notwithstanding the foregoing, after the aggregate amount of proceeds of the Zohar II Collateral retained by or paid to the Borrower pursuant to Section 2.04(c)(ii)(B)(3) equals 100% of the MBIA Corp. Payment, the Zohar II Prepayment Percentage shall equal 100%.

SECTION 1.02. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof,” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, and Schedules shall be construed to refer to Articles

13

and Sections of, and Schedules to, this Agreement (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and general intangibles and (f) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.

SECTION 1.03. Specified Times and Dates; Determinations. All times specified in this Agreement shall be determined, unless stated specifically herein to the contrary, on the basis of the prevailing time in New York City. Unless stated specifically herein to the contrary, if any day or date specified in this Agreement for any notice, action or event is not a Business Day, then the due date for such notice, action or event shall be extended to the immediately succeeding Business Day; provided that interest shall accrue on any payments due by the Borrower which are extended by the operation of this Section 1.03. Any determination by the Lender hereunder shall, in the absence of manifest error, be conclusive and binding.

ARTICLE II

THE LOAN

SECTION 2.01. Loan. Subject to the terms and conditions and relying upon the representations and warranties set forth herein, the Lender hereby agrees to make the Tranche A Loan and the Tranche B Loan (excluding the Delayed Draw Loan) to the Borrower on the Closing Date in the aggregate principal amount of $366,250,000 (the “Initial Loan”). The initial principal amount of the Tranche A Loan shall be $328,250,000. The initial principal amount of the Tranche B Loan shall be $38,000,000. Upon the Closing Date, the amount of the Commitment shall be reduced by the amount of the Initial Loan. In addition, at the written request and in the sole discretion of the Borrower (subject to Section 5.31) from time to time after the Closing Date, the Lender shall make one or more additional loans (which will constitute Tranche B Loans) to the Borrower in an aggregate principal amount not to exceed the Delayed Draw Amount (each, a “Delayed Draw Loan”). Upon the reduction of the Delayed Draw Amount to $0, the Commitment shall terminate. Once repaid, the Loan or any portion thereof may not be reborrowed.

SECTION 2.02. Repayment of Loan. Any principal of any Loan not previously paid shall be payable on the Final Maturity Date.

SECTION 2.03. Interest.

(a) Loan. The Loan shall bear interest on the unpaid principal amount thereof from the borrowing date thereof, and any past due interest amounts thereon, until payment in full thereof. Interest shall be payable in cash in arrears (a) quarterly on each Interest Payment Date in respect of the Interest Period ending on such Interest Payment Date, (b) on the date of each prepayment (on the principal amount prepaid) and (c) on the Final Maturity Date. Notwithstanding the foregoing, on any Interest Payment Date, in the event the amounts paid pursuant to Section 2.04(c), together with any amounts on deposit in the Mandatory Prepayment Account, are insufficient to pay accrued interest in cash, the Borrower may pay such shortfall as PIK Interest; provided, however, that on any Interest Payment Date before the Senior Note Collection Date, the Borrower shall pay all accrued interest on the Tranche B Loan as PIK Interest. During the continuation of any Default, the Borrower shall not be entitled to pay interest on the Loan as PIK Interest. If the Borrower elects to pay interest through the payment of PIK Interest, the Borrower shall deliver a notice of such election to the Lender by no later than the third Business Day prior to the Interest Payment Date.

14

On any Interest Payment Date with respect to which the Borrower has elected to or is required to pay PIK Interest the principal amount of such Loan shall be so increased (the aggregate amount of such increases to principal, the “PIK Principal”) and following such increase, interest shall accrue and be paid on the increased principal amount of such Loan. For the avoidance of doubt, PIK Interest paid in respect of (a) the Tranche A Loan shall have the effect of increasing the principal amount of the Tranche A Loan (which increase shall not, for the avoidance of doubt, constitute a Delayed Draw Loan), and (b) the Tranche B Loan shall have the effect of increasing the principal amount of the Tranche B Loan (which increase shall not, for the avoidance of doubt, constitute a Delayed Draw Loan).

(b) Interest Rate. The interest rate for the Loan shall be 14% per annum.

(c) Default Interest. After the occurrence and during the continuance of an Event of Default, to the extent permitted by applicable law, the Borrower shall pay on demand, on the principal amount of the outstanding Loan and any overdue interest, interest at a rate per annum equal to 5% per annum plus the interest rate applicable to the Loan.

(d) Maximum Interest Rate. Notwithstanding anything in any Credit Document to the contrary, in no event shall the interest charged under any Credit Document exceed the maximum rate of interest permitted under applicable law. Any interest payment which would cause the interest charged to exceed the maximum rate permitted shall instead be held by the Lender to the extent of such excess as additional Collateral hereunder and applied to future interest payments as and when such amount becomes due and payable hereunder.

(e) Calculations. Interest shall be calculated on the basis of a year of 360 days. In computing interest on the Loan (or interest on past due interest), the date of the making of the Loan shall be included and the date of payment of the Loan shall be excluded. For purposes of calculating interest, no payments shall be deemed to have been made on the Tranche A Loan until the Lender shall have made payments in the same amount on the Senior Notes under the Senior Indenture.

SECTION 2.04. Prepayment of Loan.

(a) Optional Prepayment. The Borrower shall have the right to prepay the Tranche A Loan at any time in whole or from time to time in part. The Borrower shall not be permitted to prepay the Tranche B Loan in whole or from time to time in part on any day that there are outstanding obligations under the Senior Facility; thereafter, the Borrower shall have the right to prepay the Tranche B Loan at any time in whole or from time to time in part.

(b) Notices. Any prepayment pursuant to Section 2.04(a) may only be made on at least 30 days’ (or such shorter period as shall be agreed to by the Lender) prior written notice to the Lender.

(c) Mandatory Prepayment.

(i) If the Borrower receives any cash proceeds of the Zohar I Collateral, then on or before the second (2nd) Business Day after receipt of such proceeds the Borrower shall deliver such cash proceeds to the Lender for deposit into the Collection Account and on the first Interest Payment Date thereafter, the Lender shall (A) use all such cash proceeds to pay accrued but unpaid interest on the Applicable Tranche, including any PIK Principal, and (B) prepay the outstanding principal of the Applicable Tranche (including any Make-Whole Premium) with any remaining proceeds; provided, however, that prior to the Make-Whole Termination Date, the Borrower may elect to deposit such remaining proceeds into the Mandatory Prepayment Account

15

instead of prepaying principal; provided, further, that any such cash proceeds received by the Lender after 11:00 a.m. on the third Business Day preceding any Interest Payment Date shall be applied in accordance with clauses (A) and (B) hereof on the Interest Payment Date after such Interest Payment Date.

(ii) (A) If, prior to the payment by MBIA Corp. of the MBIA Corp. Payment, the Borrower receives any cash proceeds of the Zohar II Collateral, then on or before the second (2nd) Business Day after receipt of such proceeds the Borrower shall deliver such cash proceeds to the Lender for deposit into the Collection Account and on the first Interest Payment Date thereafter, the Lender shall (1) use all such cash proceeds to pay accrued but unpaid interest on the Applicable Tranche, including any PIK Principal, and (2) prepay the outstanding principal of the Applicable Tranche (including any Make-Whole Premium) with any remaining proceeds; provided, however, that prior to the Make-Whole Termination Date, the Borrower may elect to deposit such remaining proceeds into the Mandatory Prepayment Account instead of prepaying principal; provided, further, that any such cash proceeds received by the Lender after 11:00 a.m. on the third Business Day preceding any Interest Payment Date shall be applied in accordance with clauses (1) and (2) hereof on the Interest Payment Date after such Interest Payment Date.

(B) If, after the payment by MBIA Corp. of the MBIA Corp. Payment, the Borrower receives any cash proceeds of the Zohar II Collateral, then on or before the second (2nd) Business Day after receipt of such proceeds the Borrower shall deliver such cash proceeds to the Lender for deposit into the Collection Account and on the first Interest Payment Date thereafter, the Lender shall (1) first, use the Zohar II Prepayment Percentage of such proceeds (the “Zohar II Prepayment Proceeds”) to pay accrued but unpaid interest on the Applicable Tranche, including any PIK Principal, (2) second, prepay the outstanding principal of the Applicable Tranche (including any Make-Whole Premium) with any remaining Zohar II Prepayment Proceeds; provided, however, that prior to the Make-Whole Termination Date, the Borrower may elect to deposit any such remaining Zohar II Prepayment Proceeds into the Mandatory Prepayment Account instead of prepaying principal and (3) third, pay the MBIA Corp. Percentage of such cash proceeds to the Borrower until the aggregate of all amounts paid to the Borrower on such date and any prior date equals the MBIA Corp. Payment. Any cash proceeds described in this clause (c)(ii)(B) that are received by the Lender after 11:00 a.m. on the third Business Day preceding any Interest Payment Date shall be applied in accordance with clauses (1), (2) and (3) hereof on the Interest Payment Date after such Interest Payment Date.

(iii) If, on the last day of any fiscal quarter of the Borrower, beginning with the fiscal quarter ending March 31, 2017, (x) the Borrower’s Available Liquidity exceeds $150,000,000 and (y) the Borrower’s Statutory Surplus exceeds $250,000,000 (collectively, the “Cash Sweep Threshold”), the Borrower shall, following the submission of its statutory financial statement for such quarter to NYDFS, promptly seek approval or non-disapproval from NYDFS (“NYDFS Approval”) to make a prepayment under this Section 2.04(c)(iii) and, on the Interest Payment Date immediately following (A) receipt of NYDFS Approval or (B) if no notice of disapproval is received from NYDFS, 30 days (or such longer time period as may be (i) reasonably necessary to respond to requests from NYDFS for additional information or documents in connection with such request for approval or (ii) requested by NYDFS in reviewing such request for approval) after the Borrower requested approval from NYDFS, the Borrower shall pay an amount equal to the Cash Sweep Amount to, (1) prior to the Make-Whole Termination Date, (A) pay accrued but unpaid interest on the Applicable Tranche, including any PIK Principal, and (B) (x) prepay the outstanding principal of the Applicable Tranche (including any Make-Whole Premium) with the

16

remaining Cash Sweep Amount or (y) deposit the remaining Cash Sweep Amount into the Mandatory Prepayment Account, and (2) on and after the Make-Whole Termination Date, pay accrued but unpaid interest on the Applicable Tranche, including any PIK Principal, and prepay the outstanding principal of the Applicable Tranche. In the event the NYDFS objects to or otherwise prevents any portion of the payments described in this Section 2.04(c)(iii), the Borrower shall, subject to NYDFS Approval to make such payment, pay all approved portions of the Cash Sweep Amount, as provided for herein, and, if such deposit is approved by the NYDFS, deposit any portion of the Cash Sweep Amount not approved for payment into the Mandatory Prepayment Account.

(iv) Amounts on deposit in the Mandatory Prepayment Account may be applied by the Borrower on any Interest Payment Date or on any day on which the Borrower makes a prepayment of the Loan as described in this Section 2.04. On the first Business Day after the Make-Whole Termination Date, the Lender shall apply all amounts on deposit in the Mandatory Prepayment Account to prepay the outstanding principal of the Applicable Tranche, plus any accrued but unpaid interest including any PIK Principal.

(v) If on January 26, 2017 (or such earlier date as the Zohar II Policy Payment is paid as provided in Section 5.10 (after giving effect to such Zohar II Policy Payment)), the amount remaining on deposit in the Subordinated Securities Proceeds Account and the Securities Proceeds Account is greater than $0, then the Borrower shall direct the Lender to deposit such remaining funds into the Collection Account and on the first Interest Payment Date thereafter, the Lender shall (A) use all such funds to pay accrued but unpaid interest on the Applicable Tranche, including any PIK Principal, and (B) pay the outstanding principal of the Applicable Tranche (including any Make-Whole Premium) with any remaining proceeds; provided, however, that prior to the Make-Whole Termination Date, the Borrower may deposit such remaining proceeds into the Mandatory Prepayment Account instead of prepaying principal.

(d) The Borrower shall pay to the Lender the Make-Whole Premium, if any, in connection with any prepayment of any outstanding principal of the Loan.

(e) All payments under this Section 2.04 (other than, for the avoidance of doubt, payments described in clause (c)(ii)(B)(3) above and payments into the Mandatory Prepayment Account) shall be applied by the Lender as follows: first, to the payment of all accrued but unpaid interest on the Tranche A Loan, including any PIK Principal; second, to the repayment of the then outstanding principal of the Tranche A Loan , third, if the Tranche A Loan has been paid in full, to the payment of all accrued but unpaid interest on the Tranche B Loan and fourth, if the Tranche A Loan has been paid in full, to the repayment of the then outstanding principal amount of the Tranche B Loan.

(f) Any PIK Principal paid pursuant to this Section 2.04 shall reduce the principal amount of the Loan with respect to such PIK Principal.

(g) The Borrower hereby grants a security interest to the Lender in any amounts deposited by the Borrower in the Collection Account or the Mandatory Prepayment Account as security for the Borrower’s obligations to the Lender under the Credit Documents

SECTION 2.05. Note. The Tranche A Loan and the Tranche B Loan made by the Lender to the Borrower shall be evidenced by the Tranche A Note and the Tranche B Note, duly executed by or on behalf of the Borrower, delivered and payable to the Lender in an aggregate principal amount equal to the Loan plus interest added to the principal as provided under this Agreement. Additional terms and conditions relating to the Loan are set forth in the Notes. The Notes are hereby referenced and

17

incorporated herein as if set forth in their entirety. The Lender shall maintain its records to reflect the amount and date of the Loan and of each payment of principal and interest thereon. All such records shall, absent manifest error, be conclusive as to the outstanding principal amount hereof; provided, however, that the failure to make any notation to the Lender’s records shall not limit or otherwise affect the obligations of the Borrower to repay the Loan.

SECTION 2.06. Taxes. (a) Any and all payments made by the Borrower hereunder shall be made free and clear of and without deduction for any Taxes to the extent attributable to the Loan or the Collateral, unless required by law. If any applicable law (as determined in the good faith discretion of the Lender) requires deduction or withholding of any Tax from any such payment made by the Borrower, then the Borrower shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.06) the Lender receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) The Borrower shall pay to the relevant Governmental Authority in accordance with applicable law any Other Taxes.

(c) The Borrower hereby indemnifies (i) the Lender for the full amount of any Indemnified Taxes paid by the Lender and (ii) each Senior Note Holder for the full amount of Taxes paid by such Senior Note Holder that are described in clause (b) of the definition of Other Taxes (other than such taxes and expenses payable by reason of the gross negligence or willful misconduct of the Lender or such Senior Note Holder) and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such taxes were correctly or legally asserted. Payment pursuant to this indemnification shall be made as soon as reasonably practicable upon written demand thereof. The obligations of the Borrower under this paragraph shall survive the termination of this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower acknowledges that the Lender has used proceeds from the issuance of Securities (under the Senior Facility and the Subordinated Facility) to the Note Holders to make the Loan, that the Note Holders and the Senior Trustee are relying on the representations and warranties made by the Borrower hereunder and are express beneficiaries hereof, and represents and warrants to the Lender on the date hereof and on the date of the making of each Loan that:

SECTION 3.01. Organization; Powers; Authorization; Enforceability, Etc. (a) The Borrower is a corporation organized under the laws of the State of New York and is duly organized, validly existing, licensed as an insurance company and is in good standing under the laws of the jurisdiction of its organization, is licensed or authorized and duly qualified to do business in and is in good standing in every jurisdiction where the failure to so qualify would reasonably be expected to have or cause a Material Adverse Effect, and has all powers and all governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted except where the failure to obtain such licenses, authorizations, consents and approvals would not reasonably be expected to result in a Material Adverse Effect. (b) The execution, delivery and performance by the Borrower of this Agreement and each other Credit Document to which the Borrower is a party have been duly authorized by the Borrower, and do not conflict with, and will not result in a violation of, or constitute or give rise to an event of default under (i) any of the Borrower’s organizational documents, (ii) any agreement or other instrument which may be binding upon the Borrower, (iii) any law or governmental regulation or court decree or order

18

applicable to it or its properties, except, in the case of (ii) and (iii), where such conflict, violation or event of default would not reasonably be expected to result in a Material Adverse Effect. The Transactions do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, other than as already been obtained. The Borrower has the power and authority to enter into this Agreement and each other Credit Document to which it is a party and has the power and authority to grant collateral security for the Loan. The Borrower has the further power and authority to own and to hold all of its assets and properties, and to carry on its business as now conducted.

SECTION 3.02. Indebtedness. The Borrower does not have any Indebtedness other than as set forth on Schedule I and Indebtedness under the Credit Documents.

SECTION 3.03. Liens. Except as set forth on Schedule II, the Borrower owns and has good title to all of its properties and assets, including, but not limited to, its rights in respect of the Collateral, free and clear of all security interests, and has not executed any security documents or authorized the filing of any financing statements relating to such properties and assets. All of the material properties and assets of the Borrower are titled in its name, except as otherwise required or permitted under any Credit Document or if the lack thereof would have no more than a de minimis adverse effect on the Borrower.

SECTION 3.04. Litigation. Except as set forth on Schedule V, there are no suits, investigations or proceedings pending, or to the knowledge of the Borrower, threatened against or adversely affecting it or its assets, before any court or by any governmental agency, which would reasonably be expected to have or cause a Material Adverse Effect.

SECTION 3.05. Tax Returns. All of the Borrower’s federal and material state and local tax returns and reports that are or were required to be filed have been filed (or an extension has been timely and duly requested), and all material amounts of Taxes, assessments and other governmental charges shown as due thereon have been paid in full, except (a) those that are not yet delinquent and those presently being or to be contested in good faith and for which adequate reserves have been provided, and (b) to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.06. Lien Priority. The security interests in the Collateral granted to the Lender by the Borrower pursuant to the Credit Documents are valid and perfected. The Borrower has not entered into or granted any security agreements, or permitted the filing or attachment of any security interests on or affecting any of the Collateral, that would be prior or that may in any way be superior to the security interests granted under the Credit Documents and rights in and to such Collateral.

SECTION 3.07. Binding Effect. This Agreement and all other Credit Documents executed by the Borrower are (or, in the case of the Control Agreements, upon execution and delivery will be) binding upon the Borrower and are legally enforceable against the Borrower in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or equitable principles relating to enforceability.

SECTION 3.08. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate maintains, contributes to or has any obligation to contribute to any Plan. Further, the Borrower is not, and is not acting on behalf of or with any assets of, any Plan, nor will it be during the term of any Credit Document.

SECTION 3.09. Investment Company. The Borrower is not required to be registered as an “investment company” under the 1940 Act.

19

SECTION 3.10. Location of Records. Other than any documents held by the Custodian, the Borrower keeps its records concerning the Collateral in its own office.

SECTION 3.11. Information. All written information heretofore or contemporaneously herewith furnished by the Borrower to the Lender for the purposes of or in connection with this Agreement or any transaction contemplated hereby (other than with respect to projected financial and other forward-looking information) is, and all information hereafter furnished by or on behalf of the Borrower will be, true and accurate in all material respects on the date as of which such information is dated or certified; and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in any material respect; provided that with respect to information concerning the Collateral which was not prepared by the Borrower, the Borrower makes such representation only to the extent of its knowledge. With respect to projected financial and other forward-looking information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed by the Borrower to be reasonable at the time prepared.

SECTION 3.12. Solvency and Capitalization. After giving effect to the Loan, the Borrower and the Borrower and its subsidiaries on a consolidated basis is not, nor will it be, “insolvent” within the meaning of (a) Section 101(32) of the United States Bankruptcy Code, as amended, (b) Section 271 of the Debtor and Creditor Law of the State of New York, as amended, or (c) Section 1309 of the New York Insurance Law, as amended. The Borrower and its subsidiaries are adequately capitalized after giving effect to the Loan, the Senior Facility, and the Subordinated Facility.

SECTION 3.13. Fiscal Year. The fiscal year of the Borrower ends on December 31.

SECTION 3.14. Compliance with Applicable Laws. The Borrower has complied with (and will comply with), in all material respects, all federal, state or local laws applicable to it, including, but not limited to, the requirements of the insurance laws and regulations of its respective jurisdiction of incorporation and the insurance laws and regulations of other jurisdictions which are applicable to it, except where the failure to so comply would not reasonably be expect to have a Material Adverse Effect. The Borrower has filed all notices, reports, documents or other information required to be filed thereunder, except where the failure to file such notices, reports, documents or other information would not reasonably be expected to have a Material Adverse Effect. The Borrower has not received any notification from any insurance regulatory authority to the effect that any additional authorization, approval, order, consent, license, certificate, permit, registration or qualification from such insurance regulatory authority is needed to be obtained by the Borrower except where the failure to obtain such additional authorization, approval, order, consent, license, certificate, permit, registration or qualification would not reasonably be expected to have a Material Adverse Effect.

SECTION 3.15. Material Adverse Effect. Except as disclosed in its public filings prior to the Closing Date, no Material Adverse Effect has occurred since December 31, 2015. Except as publicly disclosed prior to the Closing Date, the Borrower does not have actual knowledge that since December 31, 2015, (a) there has been a material deterioration in the value, quality or condition of the Collateral and (b) any material Portfolio Company or group of Portfolio Companies, has suffered a material adverse effect on its business, assets, financial condition or results of operations or its ability to perform any of its payment obligations owed to the Zohar I CLO or the Zohar II CLO, as applicable.

SECTION 3.16. Commissions to Third Parties; Fraudulent Conveyance. The Borrower has not dealt with any broker or agent or other Person who might be entitled to a fee, commission or compensation in connection with the transactions contemplated by the Credit Documents.

20

SECTION 3.17. Securities Act Registration. There are no contracts, agreements or understandings between the Borrower and any Person granting such Person the right to require the filing at any time of a registration statement under the Securities Act with respect to the Loan.

SECTION 3.18. Anti-Corruption Laws. Neither the Borrower nor, to its knowledge, any director, officer, agent or employee of the Borrower is aware of or has taken any action, directly or indirectly, that would result in a violation in any material respect by such persons of any Anti-Corruption Laws. The operations of the Borrower are conducted and, to its knowledge, have been conducted in all material respects in compliance with the applicable Anti-Corruption Laws, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Borrower with respect to any Anti-Corruption Laws is pending or, to the knowledge of the Borrower, threatened.

SECTION 3.19. Office of Foreign Assets Control. Neither the Borrower, nor, to its knowledge, any of its directors, officers, agents, or employees, is a Person that is, or is owned or controlled by Persons that are (a) the subject of any Sanctions or (b) located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions; including, without limitation, Cuba, Iran, North Korea, Sudan and Syria; and the Borrower hereby covenants that it will not directly or indirectly use the proceeds of the Loan, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other Person, to fund activities of or business with any Person, or in any country or territory, that at the time of such funding or facilitation, is the subject of Sanctions, or in a manner that would otherwise cause any Person to violate any Sanctions.

SECTION 3.20. [Reserved].

SECTION 3.21. Environmental Compliance.

(a) The Borrower is not subject to any Environmental Liability that would reasonably be expected to have a Material Adverse Effect.

(b) Except as would not reasonably be expected to have a Material Adverse Effect, (i) none of the properties currently, or to the knowledge of the Borrower, formerly owned or operated by, the Borrower is listed or, to the knowledge of the Borrower, proposed for listing on the NPL or on the SEMS, CERCLIS or any analogous foreign, state or local list, (ii) there are no and, to the knowledge of the Borrower, there never have been any underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by the Borrower or, to the knowledge of the Borrower, on any property formerly owned or operated by the Borrower, (iii) there is no asbestos or asbestos-containing material on any property currently owned or operated by the Borrower requiring investigation, remediation, mitigation, removal, or assessment, or other response, remedial or corrective action, pursuant to any Environmental Law and (iv) Hazardous Materials have not been released, discharged or disposed of on any property currently or, to the knowledge of the Borrower, formerly owned or operated by the Borrower, except for such releases, discharges and disposals that were in compliance with Environmental Laws.

(c) None of the real property owned by the Borrower contain any Hazardous Materials in amounts or in concentrations which constitute a violation of, or require remedial action under, Environmental Laws or otherwise could reasonably be expected to give rise to an Environmental Liability, except for any such violations, remedial actions and liabilities that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

21

(d) The Borrower is not undertaking, and has not completed, either individually or together with other potentially responsible parties, any investigation, remediation, mitigation, removal, assessment or remedial, response or corrective action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law, except for any such investigations or assessments or remedial or responsive actions that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

(e) All Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or, to the knowledge of the Borrower, formerly owned or operated by the Borrower have been disposed of in a manner not reasonably expected to result in liability to the Borrower that would, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.22. Financial Statements. The most recent statutory financial statements filed by the Borrower with its insurance regulators fairly present in all material respects the financial condition of the Borrower as of the date thereof and their results of operations for the period covered thereby in accordance with statutory accounting principles permitted or required for insurers domiciled in New York, consistently applied throughout the period covered thereby, except as otherwise expressly noted therein. The reserves of the Borrower as presented in such financial statements are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles, are based on actuarial assumptions that produce reserves at least as great as those called for in any contract provision as to reserve basis and method, are in accordance with all other contract provisions, meet the requirements of applicable law, are at least as great as the minimum aggregate amounts required by the requirements of the NYDFS, are computed on the basis of assumptions consistent with those used in computing the corresponding items in the annual statement of the preceding year-end and include provision for all actuarial reserves and related statement items which ought to be established.

SECTION 3.23. Margin Regulations.

(a) The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock and no proceeds of the Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock.

(b) Neither the making of the Loan nor the use of the proceeds thereof will violate the provisions of Regulation T, Regulation U or Regulation X of the FRB.

ARTICLE IV

CONDITIONS

SECTION 4.01. Closing Date. The obligations of the Lender to make the Initial Loan to the Borrower hereunder is subject to the satisfaction of the following conditions (any or all of which may be waived by the Lender and the Majority Senior Note Holders):

(a) The Borrower shall have provided the Lender with all Credit Documents (other than the Control Agreements), fully executed and in form reasonably satisfactory to the Lender, and any other documents required under this Agreement. Each such Credit Document shall be in full force and effect and shall be binding upon the parties thereto (other than the Lender) and legally enforceable against

22

them in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or equitable principles relating to enforceability. No party to any Credit Document (other than the Lender) shall be in breach or default of its obligations thereunder. The NYDFS shall have approved or indicated its non-objection to the transactions contemplated by this Agreement, which approval or non-objection shall not include any statement that contradicts the views stated by the Borrower, in its letter dated December 12, 2016 to the Superintendent seeking such approval or non-objection, regarding the possible effects of an Article 74 proceeding, and neither the Superintendent nor the NYDFS shall have materially altered guidance previously given to the Borrower and the Note Holders on such matters.

(b) The Lender shall have received in form and substance reasonably satisfactory to the Lender an Officer’s Certificate from the Borrower, dated the Closing Date, certifying (i) as to its Certificate of Incorporation, Bylaws, good standing certificate, resolutions authorizing the Transactions and incumbency of officers signing the Credit Documents and (ii) that each of the representations and warranties of the Borrower set forth in the Credit Documents are true and correct.

(c) The Lender and the Note Holders shall have received in form and substance reasonably satisfactory to the Lender opinions of counsel to the Borrower regarding (i) certain corporate and perfection matters relating to the Credit Documents, (ii) the Investment Company Act status of the Borrower, and (iii) such other matters as the Lender may reasonably request.

(d) The Senior Facility and the Subordinated Facility shall have been consummated.

(e) (i) The representations and warranties set forth in Article III hereof and in any documents delivered herewith, shall be true and correct with the same effect as though made on and as of such date; (ii) the Lender shall be satisfied that no event has occurred which would reasonably be expected to have a Material Adverse Effect and that no fraud or intentional misconduct has taken place by or at the Borrower between the date hereof and the Closing Date; (iii) the Borrower shall be in compliance with all the terms and provisions contained herein and in the Credit Documents to be observed or performed; and (iv) no Default shall have occurred and be continuing.

SECTION 4.02. Conditions to the Delayed Draw Loan. The obligation of the Lender to make the Delayed Draw Loan hereunder is subject to the satisfaction of the following conditions: (a) the Initial Loan shall have been made, (b) an Insolvency Proceeding has not occurred with respect to the Borrower and (c) the conditions to issuance and purchase of the related notes under the Subordinated Facility shall have been satisfied.

ARTICLE V

COVENANTS

Until the termination of the Commitment and the principal of and interest on the Loan and all fees and other Obligations payable under the Credit Documents shall have been paid in full, the Borrower acknowledges that the Lender has used proceeds from the issuance of Securities (as defined in the Senior Facility and the Subordinated Facility) to the Note Holders to make the Loan, that the Note Holders are relying on the representations and warranties made by the Borrower hereunder and are express beneficiaries hereof, and covenants and agrees with the Lender that:

SECTION 5.01. Financial Reports and Other Information.

(a) Financial Statements. The Borrower shall deliver to the Lender, the Note Holders and the Senior Trustee:

23

(i) as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a copy of the statutory financial statements of the Borrower for such fiscal year filed with the Borrower’s regulators

(ii) as soon as available, but in any event within 45 days after the end of each of the fiscal quarters of each fiscal year of the Borrower ending after the date hereof, a copy of the statutory financial statements of the Borrower for such fiscal quarter filed with the Borrower’s regulators

(iii) as soon as available, but in any event within 10 days after the end of each calendar month of each fiscal year of the Borrower ending after the date hereof, a report based solely on information received by the Borrower setting forth all cash generated by the Collateral, which report shall include the amount of cash generated and the source of such cash and/or how such cash was generated and any cash proceeds of any Collateral that is sold, liquidated or otherwise disposed of during such period.

(iv) as soon as available, but in any event within 10 days after the end of each of the fiscal quarters of each fiscal year of the Borrower ending after the date hereof, a report setting forth (i) the Cash Sweep Amount for the preceding fiscal quarter and the payments (whether of interest, principal or deposits into the Mandatory Prepayment Account) towards which it was applied; and (ii) an updated schedule setting forth the amount of PIK Principal, if any, in the event the Borrower elects to pay interest through PIK Principal in accordance with Section 2.03(a).

(v) no later than the third Business Day prior to each Interest Payment Date, a completed Interest and Principal Payment Certification for such Interest Payment Date.

(b) Certificates; Other Information. The Borrower shall deliver to the Lender and the Senior Trustee:

(i) as soon as reasonably practicable after receipt by the Borrower, but in no event later than five Business Days after receipt, all reports, documents or other written information received by the Borrower in connection with the Collateral (other than any such items subject to privilege or to confidentiality restrictions that prohibit disclosure to the Lender, the Senior Collateral Agent or the Senior Trustee), including, but not limited to, reports issued by any trustee or custodian of the Zohar I Notes or the Zohar II Notes or the collateral manager under the Zohar I Documents or Zohar II Documents, and any documents related to the Collateral turned over by the former collateral manager of the Zohar I CLO and Zohar II CLO or by the Portfolio Companies or their representatives;

(ii) in the event the Borrower owns any property, assets or financial interests, which previously constituted collateral securing the Zohar I Notes or Zohar II Notes, reports received by the Borrower from any custodian or collateral manager which is managing such collateral on behalf of the Borrower and any reports generated by the Borrower for internal monitoring purposes;

(iii) as soon as reasonably practicable, any non-privileged updates regarding material developments in any current or future litigations involving the Borrower, the Collateral, the Zohar I CLO, the Zohar II CLO or the current or former collateral manager under the Zohar I Documents or the Zohar II Documents;

24

(iv) promptly after the same are available, copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, or with any Governmental Authority that may be substituted therefor, or with any national securities exchange, and in any case not otherwise required to be delivered to the Lender pursuant hereto;

(v) promptly after the assertion or occurrence thereof, notice of any action arising under any Environmental Law against, or of any noncompliance by, the Borrower with any Environmental Law or Environmental Permit that would reasonably be expected to have a Material Adverse Effect;

(vi) promptly, all information related to the receipt of any proceeds by the Borrower from any Collateral;

(vii) promptly, such additional information regarding the business, legal, financial or corporate affairs of the Borrower or compliance with the terms of the Credit Documents as such information may relate to the Credit Documents, Senior Facility or Subordinated Facility, as the Lender may from time to time reasonably request; and

(viii) promptly, a copy of any material item of correspondence, notice, report, response, filing, submission or other written communication from the Borrower to the NYDFS or from the NYDFS to the Borrower related to the Senior Facility.

(c) Public/Non-Public Information or Confidential Information. The Borrower shall designate and mark, or cause to be designated and marked, any reports or notices delivered under this Section 5.01 which in its good faith judgement contain Material Non-Public Information or Confidential Information; provided that the determination as to whether any person has received Material Non-Public Information shall be the responsibility of such Person and, except to the extent provided in Section 7.12(b) or otherwise in the Credit Documents, the Borrower shall not be obligated under the Credit Documents to make public any information required to be delivered by it under this Agreement.

(d) Maintenance of Datasite. The Borrower shall maintain, or cause to be maintained, an internet accessible datasite that can be accessed by the Lender, the Senior Trustee and the Note Holders (subject to reasonable confidentiality restrictions), which shall contain all of the information required to be delivered by the Borrower pursuant to this Agreement. Such datasite may be password protected so long as such password is made available to the Lender, the Trustee and the Note Holders. Access to such datasite may be limited to persons who are Eligible Persons who agree to confidentiality provisions reasonably acceptable to the Borrower. The Borrower agrees that (x) any reports or notices described in subsection (c) above that are posted on such datasite shall be marked as provided in such subsection (c) and (y) if any other information included on such datasite in its good faith judgment would constitute Material Non-Public Information with respect to any securities of the Borrower or otherwise constitute Confidential Information, the Borrower shall segregate and clearly mark, or shall to cause to be segregated and clearly marked, such information as material non-public information and/or confidential information, as appropriate ; provided that the determination as to whether any person has received Material Non-Public Information shall be the responsibility of such person and, except to the extent provided in Section 7.12(b) or otherwise in the Credit Documents, the Borrower shall not be obligated under the Credit Documents to make public any information required to be delivered by it under this Agreement.

SECTION 5.02. Notices. Within three Business Days following the Borrower’s knowledge thereof, the Borrower shall notify the Lender and the Senior Trustee:

25

(a) of the occurrence of any Default;

(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(c) of the institution of any material litigation not previously disclosed by the Borrower to the Lender, or any material development in any material litigation in each case that is reasonably likely to be adversely determined and would, if adversely determined, be reasonably expected to have a material adverse effect on the Collateral or the security interests granted to the Lender thereon, or a Material Adverse Effect, or that seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated herein; provided that the Borrower shall not be required to provide any information subject to attorney-client privilege.

(d) of the occurrence of any ERISA Event, where there is any potential material liability to the Borrower as a result thereof;

(e) the amount and calculation of the MBIA Corp. Payment; and

(f) the Blocked Account Opening Date.

Each notice pursuant to this Section shall be accompanied by a statement of an officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto.

SECTION 5.03. Taxes. The Borrower shall pay, prior to delinquency, all material amounts of Taxes imposed upon it or any of its properties or assets for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, except where (a) it is being contested in good faith and for which adequate reserves have been provided, and (b) failure to pay or discharge the same would not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.04. Corporate Existence, Etc. The Borrower shall (a) preserve, renew and maintain its organizational existence, (b) take all reasonable action to maintain all rights, privileges (including its good standing, if such concept is applicable in its jurisdiction of organization), permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect or as otherwise permitted hereunder, and (c) preserve or renew all of its preservable or renewable, as applicable, United States registered patents, trademarks, trade names and service marks to the extent permitted by applicable laws of the United States, except for the non-preservation of which would reasonably be expected to have a Material Adverse Effect or as otherwise permitted hereunder. The Borrower shall conduct its business materially in accordance with that certain letter from the NY Superintendent of Insurance, dated as of February 9, 2009, relating to the Borrower’s transformation transaction, in which the Borrower ceded certain businesses to a new affiliate and became a run-off insurer, except as may be otherwise approved by the NYDFS; provided that the Borrower shall provide prior written notice to the Lender of any such transaction. The Borrower shall assert all defenses to payment, exercise all applicable remedies and seek all available subrogation or other recoveries in respect of its insured obligations to the same extent as if it had not entered into this Agreement.

SECTION 5.05. Maintenance of Properties. The Borrower shall keep all material property necessary to the proper conduct of the business of the Borrower in good working order and condition (ordinary wear and tear and loss or damage by casualty or condemnation excepted) with such exceptions as would not reasonably be expected to have a Material Adverse Effect.

26

SECTION 5.06. Maintenance of Insurance. The Borrower shall maintain with financially sound and reputable insurance companies (in the good faith judgment of the management of the Borrower), insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons, and will furnish to the Lender, upon reasonable written request, information presented in reasonable detail as to the insurance so carried.

SECTION 5.07. Compliance with Laws. The Borrower shall comply with the requirements of all applicable Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except if the failure to comply therewith would not reasonably be expected to have a Material Adverse Effect.

SECTION 5.08. Books and Records. The Borrower shall maintain proper books of record and account, in a manner to allow financial statements to be prepared in conformity with statutory accounting principles permitted or required for insurers domiciled in New York, consistently applied in respect of all financial transactions and matters involving the assets and business of the Borrower.

SECTION 5.09. Inspection Rights. Upon reasonable notice from the Lender or any Note Holder, the Borrower will permit the Lender (and such Persons acting for the Lender as the Lender may reasonably designate) or such Note Holder during normal business hours at the Borrower’s sole expense for two inspections in any consecutive period of twelve months unless an Event of Default is continuing, to visit and inspect any of the properties of the Borrower to examine all of their books and records to make copies and extracts therefrom, including any information about the Collateral or the “Collateral” (as such term is defined in the Senior Facility), (subject to reasonable confidentiality restrictions), and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Borrower authorizes such accountants to discuss with the Lender (and such Persons acting for the Lender as the Lender may reasonably designate) or such Note Holder the affairs, finances and accounts of the Borrower), all as often, and to such extent, as may be reasonably requested. The chief financial officer of the Borrower and/or his or her designee shall be afforded the opportunity to be present at any meeting of the Lender and/or Note Holder and such accountants.

SECTION 5.10. Use of Proceeds.

(a) The Borrower shall use the proceeds of (i) the Initial Loan to pay the Zohar II Policy Payment in the manner set forth below in this paragraph and the Loan Commitment Fee and (ii) the Delayed Draw Loans (to the extent provided in Section 2.01) for any purpose not prohibited hereunder. The Lender shall deposit and maintain the amount of the Zohar II Policy Payment in the Securities Proceeds Account and the Subordinated Securities Proceeds Account until such time as the Borrower informs the Lender that a draw for payment of the Zohar II Policy Payment is made under the Zohar II Documents. Upon notice from the Borrower, the Lender will withdraw the Zohar II Policy Payment first, from the Subordinated Securities Proceeds Account until all funds therein are withdrawn and second, from the Securities Proceeds Account, and deliver the same on the Borrower’s behalf to the trustee for the Zohar II Notes for payment of the policy claim in respect of the Zohar II Notes or, to the extent the amount on deposit in the Securities Proceeds Account and the Subordinated Securities Proceeds Account, exceeds the Zohar II Policy Payment, will apply such excess in the manner specified in Section 2.04(c)(v).

(b) The Lender shall transfer any proceeds it receives in accordance with Section 6.06 THIRD of the Senior Indenture to the Borrower.

27

SECTION 5.11. Margin Stock. The Borrower shall not (a) engage in the business of extending credit for the purpose of purchasing or carrying margin stock in violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System or (b) use any proceeds of the Loan for a purpose which violates Regulations T, U or X of the Board of Governors of the Federal Reserve System.

SECTION 5.12. Covenant to Guarantee Obligations and Give Security. Upon the acquisition of any asset which secures the Zohar I Notes or the Zohar II Notes, which asset is not already subject to a perfected Lien in favor of the Lender, the Borrower shall, in each case at the Borrower’s expense, at any time and from time to time, promptly execute and deliver any and all instruments, documents and opinions, and take all such other action as the Lender in its reasonable judgment may deem necessary or desirable in evidencing a grant of security interest in such asset, obtaining the full benefits thereof, or in perfecting and preserving the Liens thereof.

SECTION 5.13. Compliance with Environmental Laws. Except, in each case, to the extent that the failure to do so would not reasonably be expected to have a Material Adverse Effect, the Borrower shall (a) comply, and make all reasonable efforts to cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties and (b) to the extent required under Environmental Laws, conduct any investigation, mitigation, study, sampling and testing, and undertake any cleanup, removal or remedial, corrective or other action necessary to respond to and remove all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws, unless liability for such actions is being contested in good faith.

SECTION 5.14. Maintenance of Accounts.

(a) Collection Account. The Lender shall open and maintain the Collection Account. Unless the Collection Account is held at the Senior Trustee, the Collection Account shall be subject to the Collection Account Control Agreement.

(b) Mandatory Prepayment Account. The Lender shall open and prior to the Make-Whole Termination Date maintain the Mandatory Prepayment Account. Unless the Mandatory Prepayment Account is held at the Senior Trustee, the Mandatory Prepayment Account shall be subject to the Mandatory Prepayment Account Control Agreement.

SECTION 5.15. Further Assurances. Promptly upon request by the Lender, the Senior Collateral Agent or the Majority Senior Note Holders, the Borrower shall (a) correct any material defect or error that may be discovered in the execution, acknowledgment, filing or recordation of any Credit Document or other document or instrument relating to any Collateral and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Lender may reasonably require from time to time in order to grant, preserve, protect and perfect the validity and priority of the security interests created or intended to be created by the Security Agreement, including acknowledgement of the Liens of the Senior Collateral Agent by the custodian (or participation grantor) of Zohar I Collateral and the collateral manager of the Zohar I CLO and the Zohar II CLO.

SECTION 5.16. Compliance with Laws; Policies and Procedures.

(a) Without limiting any of the other covenants in this Article 5, the Borrower shall (i) conduct its business, and otherwise be, in compliance with all applicable laws, regulations, ordinances and orders of any governmental or judicial authorities if the failure to comply thereunder would

28

reasonably be expected to have a Material Adverse Effect; provided, however, that this Section 5.16 shall not require the Borrower to comply with any such law, regulation, ordinance or order if it shall be contesting such law, regulation, ordinance or order in good faith by appropriate proceedings and reserves in conformity with GAAP and statutory accounting principles permitted or required for insurers domiciled in New York have been provided therefor, (ii) comply with all obligations it might have under Anti-Corruption Laws and (iii) comply with all applicable Sanctions imposed on it.

(b) The Borrower shall maintain in effect and enforce policies and procedures intended to ensure compliance by the Borrower and their respective officers, directors, employees and agents with Anti-Corruption Laws and Sanctions.

SECTION 5.17. Collateral Information. The Borrower shall use reasonable best efforts to obtain any documents, written information, notices or reports relating to the Collateral, as such documents, information, notices or reports become available, and shall provide them to the Lenders, the Senior Note Holders and the Senior Trustee in accordance with Section 5.01(a)(i) and/or (b)(i).

SECTION 5.18. Liens. The Borrower shall not create, incur, assume or suffer to exist any Lien of any kind upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than (a) Liens arising by operation of law, (b) Liens under any Credit Document and (c) Liens existing on the Closing Date and listed on Schedule II. The Borrower shall not enter into any material reinsurance agreement, amend or renew any existing material reinsurance agreement, or recapture or commute any risk under any material reinsurance agreement, without the prior written consent of the Lender and the Majority Senior Note Holders.

SECTION 5.19. Investments. The Borrower shall not make or hold any Investments, other than (a) Investments existing on the Closing Date and listed on Schedule III, (b) Investments in Cash Equivalents and (c) ordinary course Investments (but not, in any event, Investments in MBIA Inc.) in accordance with the Investment Plan.

SECTION 5.20. Indebtedness. The Borrower shall not create, incur, assume or suffer to exist any Indebtedness, other than (a) Indebtedness under the Credit Documents and (b) Indebtedness existing on the Closing Date and listed on Schedule I.

SECTION 5.21. Fundamental Changes. Except in connection with the MBIA UK Sale, the Borrower shall not merge, dissolve, liquidate, amalgamate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person.

SECTION 5.22. Dispositions. The Borrower shall not make any Disposition other than (i) Dispositions of an equity interest of the Borrower or any of its Affiliates in MBIA Mexico S.A. de C.V. for fair value in the Borrower’s reasonable business judgment, (ii) Dispositions of Collateral for fair value in the Borrower’s reasonable business judgment; provided, however, that the Borrower shall provide the Lender, the Loan Administrator, and Senior Trustee with written notice of any such Dispositions at least 10 Business Days prior to such Disposition (or if such Disposition is to occur sooner than 10 Business Days after the Borrower knows of such Disposition no later than the next Business Day after the Borrower knows of such Disposition), (iii) Dispositions of rights to assets or recoveries that the Borrower receives or is entitled to receive as salvage in respect of claims paid by the Borrower, in each case for fair value in the Borrower’s reasonable business judgment, (iv) Dispositions of assets constituting Investments in the ordinary course of business, (v) Dispositions of obsolete assets and (vi) Dispositions for fair value in the Borrower’s reasonable business judgment which, in the aggregate, do not exceed $1,000,000 in any fiscal year.

29

SECTION 5.23. Dividends. The Borrower shall not declare or pay any dividend or make any other similar payment or distribution on account of its Equity Interests or to the direct or indirect holders of its Equity Interests in their capacity as such.

SECTION 5.24. Change in Nature of Business; Investment Plan. (a) The Borrower shall not engage in any material line of business substantially different from those lines of business conducted by the Borrower and the Restricted Subsidiaries on the date hereof or any business reasonably related, complementary, synergistic or ancillary thereto or reasonable extensions thereof. (b) The Borrower shall promptly provide written notice of any amendments of the Investment Plan to the Lender along with a copy of such amendments.

SECTION 5.25. Transactions with Affiliates. The Borrower shall not enter any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than the Transactions, and any transaction approved or not objected to by the NYDFS; provided that the Borrower shall provide prior written notice to the Lender of any such transaction.

SECTION 5.26. Burdensome Agreements. The Borrower shall not enter into or permit to exist any contractual obligation (other than this Agreement or any other Credit Document) that limits the ability of any Subsidiary to make distributions or dividends to the Borrower.

SECTION 5.27. Accounting Changes. The Borrower shall not make any change in the fiscal year of the Borrower.

SECTION 5.28. Prepayments, Etc. of Indebtedness; Amendments. The Borrower shall not (a) prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner any Indebtedness that is expressly subordinated in right of payment to the Loan or any Indebtedness that is secured on a junior priority basis relative to the Loan by some or all of the Collateral or any unsecured financing or (b) amend, modify or change any term or condition of any documentation with respect to any Indebtedness in any manner that is, taken as a whole, materially adverse to the interests of the Lender.

SECTION 5.29. Post-Bankruptcy Restrictions. The Borrower shall, and shall cause MBIA Inc., not to take or support any challenge of any transfer made in connection with the Credit Documents as a preference or fraudulent conveyance.

SECTION 5.30. Collateral. The Borrower shall use reasonable best efforts to diligently (i) take all action necessary or advisable to protect and seek to maximize the value of the Collateral and all recoveries thereon, including the timely enforcement of the Borrower’s rights to, and in respect of, the Collateral and (ii) consider all actions reasonably requested by the Lender, the Senior Collateral Agent (at the direction of the Majority Senior Note Holders) and/or the Majority Senior Note Holders to enforce the Borrower’s contractual rights to, and in respect of, the Collateral (provided that the determination as to actions to take or not to take shall be the Borrower’s).

SECTION 5.31. Delayed Draw Loan. In the event (i) immediately upon the earlier of: (x) such time as the Borrower consents to the filing of a petition for an Insolvency Proceeding, or (y) such time as the Superintendent informs the Borrower that a filing of a petition for an Insolvency Proceeding in respect of the Borrower is imminent, (ii) there are outstanding obligations under the Senior Facility as of July 10, 2019, (iii) the Statutory Surplus of the Borrower is less than $65,000,000, (iv) the Available Liquidity less the Undrawn Delayed Draw Amount of the Borrower is less than $20,000,000, or (v) the Borrower determines that it requires the Delayed Draw Loan for liquidity purposes, the Borrower shall promptly submit a written request to the Lender to make a Delayed Draw Loan, and the Lender shall

30

make such Delayed Draw Loan in the amount of the Undrawn Delayed Draw Amount; provided, however, in the event the Borrower submits a request for a Delayed Draw Loan on account of subsection (iv) above, the Borrower shall only be required to draw Delayed Draw Loans in increments of $12,500,000 until such time that subsection (iv) above is no longer applicable.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. If any of the following events (each an “Event of Default”) shall occur:

(a) failure to pay interest on the Loan when such interest becomes due and payable, unless the Borrower has elected to pay interest by increasing the principal amount of the Loan in accordance with Section 2.03, and such default is continued for two Business Days;

(b) failure to pay principal of (or premium including the Make-Whole Premium, if any, on) the Loan or any other amounts due hereunder when such amounts become due and payable and such default continues for two Business Days;

(c) failure to pay the Zohar II Policy Payment when due and payable under the insurance policy in respect of the Zohar II Notes;

(d) failure to comply with any covenant or agreement provided for in Sections 5.01(a), 5.01(b)(i), 5.02, 5.03, 5.04, 5.07, 5.10, 5.11, 5.12, 5.14, 5.16, 5.18, 5.19, 5.20, 5.21, 5.22, 5.23, 5.24, 5.25, 5.26, 5.28, 5.29, 5.30 and 5.31, or any other provision of this Agreement;

(e) failure to comply with any covenant or agreement provided for in Sections 5.01 (other than 5.01(a) and 5.01(b)(i)), 5.05, 5.06, 5.08, 5.09, 5.13, 5.15, 5.17, 5.27, and such default or breach is continued for 15 days;

(f) the (i) Senior Insurance Policy ceases to be in full force and effect (other than in accordance with the terms thereof or pursuant to the terms of the Senior Facility); (ii) the Borrower denies or disaffirms its obligations under the Senior Insurance Policy; or (iii) the Borrower, any rehabilitator, liquidator, conservator or other receiver of the Borrower, or the NYDFS asserts in writing that the Senior Insurance Policy is invalid or unenforceable;

(g) (i) the Borrower, the Lender or MBIA Inc. shall commence an Insolvency Proceeding, or the Borrower, the Lender or MBIA Inc. shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against the Borrower, the Lender or MBIA Inc. any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (iii) there shall be commenced against the Borrower, the Lender or MBIA Inc. any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of their assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (iv) the Borrower, the Lender or MBIA Inc. shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower, the Lender or MBIA Inc. shall generally not, or shall be unable to, or shall admit in writing their inability to, pay its debts as they become due;

31

(h) one or more judgments or decrees shall be entered against the Borrower involving in the aggregate a liability (to the extent not covered by insurance) of $15,000,000 or more and all such judgments or decrees shall not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within 60 days from the entry thereof;

(i) (i) the Security Agreement shall for any reason cease to create a valid and perfected first-priority Lien on any portion of the Collateral (other than in accordance with the terms of this Agreement or the terms of the Security Agreement) or (ii) the Borrower, any rehabilitator, liquidator, conservator or other receiver of the Borrower, or the NYDFS asserts in writing that any Lien created under the Security Agreement is invalid or unenforceable;

(j) any “Event of Default” shall occur and continue beyond the applicable cure period, if any, under the (i) Senior Facility, (ii) Subordinated Facility, or (iii) any other Indebtedness of the Borrower;

(k) any material provision of any Credit Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder ceases to be in full force and effect; or the Borrower, the Lender, MBIA Inc. or the NYDFS denies in writing the validity or enforceability of any provision of any Credit Document or the validity or priority of a Lien as required by the Security Agreement, or the Borrower, the Lender or MBIA Inc. denies in writing that it has any or further liability or obligation under any Credit Document;

(l) an ERISA Event occurs which results or would reasonably be expected to result in liability of the Borrower in an aggregate amount (determined as of the date of occurrence of such ERISA Event) which would reasonably be expected to result in a Material Adverse Effect or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under any Multiemployer Plan which has resulted or would reasonably be expected to result in liability of the Borrower in an aggregate amount which would reasonably be expected to result in a Material Adverse Effect;

(m) a Change of Control shall have occurred; or

(n) any representation or warranty made or deemed made herein or in any other Credit Document, under the Senior Facility or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection herewith shall prove to have been incorrect, false or misleading on or as of the date made or deemed made which failure has a Material Adverse Effect.

then, and in every such event (other than an event with respect to the Borrower described in Section 6.01(g)), and at any time thereafter during the continuance of such event, the Lender may by notice to the Borrower, take any or all of the following actions, at the same or different times: (i) terminate the Commitment, and thereupon the Commitment shall terminate immediately, and (ii) declare the Loan then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loan so declared to be due and payable, together with accrued interest thereon, any Make-Whole Premium and all fees and other Obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in Section 6.01(g), the Commitment shall automatically terminate and the principal of the Loan then outstanding, together with accrued interest, any Make-Whole Premium thereon and all fees and other

32

Obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Notwithstanding any of the foregoing, no Event of Default, except for that described in Section 6.01(g) with respect to the Borrower, or the remedies provided in this paragraph, shall prevent a borrowing of the Delayed Draw Loan.

For the avoidance of doubt, upon an acceleration pursuant to this Section 6.01, the Make-Whole Premium shall be calculated as of the date of such acceleration and shall be due and owing following such an acceleration. The Borrower will pay the Make-Whole Premium, as compensation to the Lender for the loss of its investment opportunity and not as a penalty, whether or not an Event of Default specified in Section 6.01(g) has occurred and (if an Event of Default specified in Section 6.01(g) has occurred) without regard to whether the event causing such Event of Default is voluntary or involuntary, or whether payment occurs pursuant to a motion, plan of reorganization, or otherwise, and without regard to whether the Loan and other Obligations are satisfied or released by foreclosure (whether or not by power of judicial proceeding), deed in lieu of foreclosure or by any other means. The Borrower agrees that payment of the Make-Whole Premium is reasonable under the circumstances currently existing. THE BORROWER EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE MAKE-WHOLE PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Borrower expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Make-Whole Premium is reasonable and the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Make-Whole Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Lender and the Borrower giving specific consideration in this transaction for such agreement to pay the Make-Whole Premium; and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Borrower expressly acknowledges that its agreement to pay the Make-Whole Premium to the Lender as herein described is a material inducement to Lender to make the Loan.

SECTION 6.02. Application of Money Collected. Any money collected by the Lender pursuant to this Article VI (including upon any realization of any Lien upon Collateral) shall be applied in the following order:

FIRST: to the payment of all amounts due to third parties pursuant to Section 7.03;

SECOND: to the payment of all amounts due the Lender pursuant to Section 7.03;

THIRD: to the payment of all accrued but unpaid interest, including any PIK Principal, on the Tranche A Loan for application by the Lender in accordance with the terms of the Senior Facility and, if applicable, the Subordinated Facility;

FOURTH: to the repayment of the outstanding principal amount of the Tranche A Loan and any Make-Whole Premium due in connection therewith for application by the Lender in accordance with the terms of the Senior Facility and, if applicable, the Subordinated Facility;

FIFTH: to the payment of all accrued but unpaid interest on the Tranche B Loan for application by the Lender in accordance with the terms of the Senior Facility and, if applicable, the Subordinated Facility;

SIXTH: to the repayment of the outstanding principal amount of the Tranche B Loan and any Make-Whole Premium due in connection therewith for application by the Lender in accordance with the terms of the Senior Facility and, if applicable, the Subordinated Facility; and

SEVENTH: The balance, if any, to the Borrower.

33

ARTICLE VII

MISCELLANEOUS

SECTION 7.01. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight delivery) to the addresses (or telecopy numbers) set forth on the signature pages hereof. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or, if mailed, the fifth Business Day following the date so mailed, if earlier.

SECTION 7.02. Amendment and Waiver. No alteration, modification, amendment or waiver of any terms and conditions of any of the Credit Documents, including, for the avoidance of doubt, a waiver of any Event of Default, shall be effective or enforceable unless set forth in a writing signed by the Lender and the Senior Trustee at the direction of the Majority Senior Note Holders and to the extent any such alteration, modification, amendment or waiver affects in any way the rights or obligations of the Senior Trustee or the Subordinated Trustee, signed by the Senior Trustee or the Subordinated Trustee, as applicable. Without limiting the generality of the foregoing, the making of each Loan shall not be construed as a waiver of any Default, regardless of whether the Lender or any of the Senior Note Holders may have had notice or knowledge of such Default at the time.

SECTION 7.03. Expenses; Indemnity; Damage Waiver.

(a) The Borrower shall pay (x) all reasonable out-of-pocket expenses incurred by the Lender, including but not limited to fees and disbursements of counsel for the Lender, in connection with the negotiation and preparation of any Credit Documents, the Senior Facility documents, the Subordinated Facility Documents, and all ancillary documents related thereto, including any amendments, modifications or waivers thereto requested or agreed to by the Borrower (whether or not the transactions contemplated hereby or thereby shall be consummated), the addition or release of any collateral or the enforcement or protection of the Lender’s rights in connection with any Credit Documents, the Senior Facility documents, and the Subordinated Facility Documents, including its rights under this Section in connection with the Loan made hereunder or any workout, restructuring or negotiations in respect thereof and (y) all fees and expenses of third parties, including without limitation, the Senior Trustee, the Senior Collateral Agent, the Subordinated Trustee, the Subordinated Collateral Agent and the Loan Administrator, arising under any of the Credit Documents, the Senior Facility, the Subordinated Facility, the Company Operating Agreement, and all ancillary documents related the foregoing (including any and all indemnification and reimbursement obligations arising thereunder or therefrom) for which the Lender is otherwise liable; which in the case of clause (y) shall be payable by the Borrower on an unconditional basis as a primary obligor and not merely as a surety and paid from proceeds of a Delayed Draw Loan to the extent that funds are not otherwise available therefor.

(b) The Borrower shall indemnify the Lender, the Senior Trustee, each Senior Note Holder, the Senior Collateral Agent, the Subordinated Trustee, the Subordinated Collateral Agent, and each Affiliate, director, officer, employee, agent and advisor of the Lender, the Senior Trustee, each Senior Note Holder, the Senior Collateral Agent, the Subordinated Trustee, the Subordinated Collateral Agent (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees and

34

disbursements of counsel for any Indemnitee (the “Losses”), incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of, any actual or prospective claim, litigation, investigation or proceeding relating to (i) the execution or delivery of any Credit Document, the performance of the parties hereto of their respective Obligations thereunder or the consummation of the Transactions or (ii) the Loan or the use of the proceeds therefrom, in each case, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Losses are (i) determined by a final judgment of a court of competent jurisdiction to have been incurred by reason of gross negligence, bad faith or willful misconduct of such Indemnitee or (ii) in relation to Taxes (including, without limitation, Indemnified Taxes, Excluded Taxes or Other Taxes), indemnification for all of which shall be governed solely by Section 2.06.

(c) To the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, any Credit Document or any agreement or instrument contemplated thereby, the Transactions, each Loan or the use of the proceeds thereof.

(d) All amounts due under this Section shall be payable promptly after written demand therefor. The Obligations of the Borrower under this Section shall survive payment in full of the Loan.

SECTION 7.04. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Borrower may not assign or otherwise transfer any of its rights or Obligations hereunder and any attempted assignment or transfer by the Borrower shall be null and void. The Lender may not assign or otherwise transfer all or any portion of the Obligations hereunder to any Person without the consent of, or notice to, the Borrower and the Majority Senior Note Holders.

SECTION 7.05. Survival. All covenants, agreements, representations and warranties made by the Borrower in any Credit Document and in the certificates or other instruments delivered in connection with or pursuant to any Credit Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of each Credit Document and the making of the Loan, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on the Loan or any fee or any other amount payable under any Credit Document is outstanding and unpaid. The provisions of Section 7.03 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loan or the termination of this Agreement or any provision hereof.

SECTION 7.06. Right of Setoff. If any amount payable hereunder or under any other Credit Document is not paid as and when due, the Borrower hereby authorizes the Lender and each affiliate of the Lender to proceed, to the extent permitted by applicable law, without prior notice, by right of setoff, bankers’ lien, counterclaim or otherwise, against any assets of the Borrower in any currency that may at any time be in the possession of the Lender or such affiliate, at any branch or office, to the full extent of all amounts payable to the Lender hereunder or thereunder. The Lender shall give prompt notice to the Borrower after any exercise of the Lender’s rights under the preceding sentence, but the failure to give such notice shall not affect the validity of any of the Lender’s actions.

35

SECTION 7.07. Severability. Any provision of any Credit Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without effecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 7.08. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and any claim, controversy or dispute related to or in connection with this Agreement, any Credit Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq. of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY CREDIT DOCUMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY CREDIT DOCUMENT.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 7.09. Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 7.10. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement or of any other Credit Document by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement or of such other Credit Document.

36

SECTION 7.11. Administration Fee. On an annual basis, the Borrower shall pay to the Lender an administration fee in the amount of $20,000 or such other amount as may be agreed from time to time by the Borrower and the Lender. Such administration fee or any portion thereof shall be payable on each February 1 Interest Payment Date, commencing February 1, 2017.

SECTION 7.12. Confidentiality. (a) The Lender agrees to maintain the confidentiality of the Confidential Information, except that Confidential Information may be disclosed (i) to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and instructed to keep such Information confidential in accordance with customary practices); (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners); (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process; (iv) to any other party hereto; (v) in connection with the exercise of any remedies hereunder or under any other Credit Document or any action or proceeding relating to this Agreement or any other Credit Document or the enforcement of rights hereunder or thereunder; (vi) subject to an agreement containing provisions substantially the same (or at least as restrictive) as those of this Section 7.12 (or as may otherwise be reasonably acceptable to the Borrower), to (x) any assignee of or participant in, or any prospective assignee of or participant in, any of its rights and obligations under this Agreement, or (y) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder; (vii) with the consent of the Borrower; (viii) to the extent that such Confidential Information (x) becomes publicly available other than as a result of a breach of this Section 7.12, or (y) becomes available to the Lender or any of its Affiliates on a nonconfidential basis from a source other than the Borrower or (ix) in accordance with the Senior Facility.

(b) The Borrower agrees to publicly disclose on a quarterly basis the information described in clauses (i) through (viii) below with respect to the immediately preceding calendar quarter. Such public disclosure will be made by including such information on a dedicated page on MBIA Inc.’s website or in MBIA Inc.’s periodic SEC Reports. The information to be so disclosed will consist of the following:

(i) all cash received by the Borrower or its Affiliates as proceeds of the Zohar I Collateral or the Zohar II Collateral during the preceding calendar quarter;

(ii) all assets obtained by the Borrower or its Affiliates from Zohar I CLO or Zohar II CLO during the preceding calendar quarter;

(iii) the outstanding principal amount of the Senior Notes as of the end of the preceding calendar quarter;

(iv) the outstanding principal amount of the Subordinated Notes as of the end of the preceding calendar quarter;

(v) the interest paid in cash on the Senior Notes during the preceding calendar quarter;

(vi) the interest paid in cash on the Subordinated Notes during the preceding calendar quarter;

(vii) the PIK Principal as of the end of the preceding calendar quarter; and

37

(viii) the quarterly Interest and Principal Payment Certification for each Interest Payment Date.

(c) The Borrower agrees to publicly disclose on a monthly basis all cash received by the Borrower or its Affiliates as proceeds of the Zohar I Collateral or the Zohar II Collateral during the preceding calendar month. Such public disclosure will be made by including such information on MBIA Inc.’s website or in MBIA Inc.’s periodic SEC reports.

SECTION 7.13. Benefits of Agreement. The Senior Trustee, the Subordinated Trustee and Senior Note Holders and their successors and assigns shall be a third-party beneficiary to the provisions of this Agreement, and shall be entitled to rely upon and directly to enforce such provisions of this Agreement. In exercising any of their voting rights, rights to direct or consent or any other rights as Senior Note Holders under this Agreement, subject to the terms and conditions of this Agreement, the Senior Note Holders shall not have any obligation or duty to any Person to consider or take into account the interests of any Person and shall not be liable to any Person for any action taken by it or at its discretion or any failure by it to act or to direct that any action be taken, without regard to whether such inaction or action benefits or adversely affects the Borrower or the Lender.

[Remainder of Page Intentionally Left Blank]

38

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

BORROWER:
MBIA INSURANCE CORPORATION
By	/s/ Anthony McKiernan
	Name: Anthony McKiernan
	Title: Director/President and CFO

Notice Address for Borrower:

MBIA INSURANCE CORPORATION

One Manhattanville Road, Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

39

LENDER:

MZ FUNDING LLC

By /s/ Jonathan Harris

Name: Jonathan Harris

Title: Secretary

Notice Address for Lender:

MZ FUNDING LLC

c/o MBIA Inc.

One Manhattanville Road, Suite 301

Purchase, New York 10577

Attention: Anthony Reynolds

40

EXHIBIT A TO CREDIT AGREEMENT

Form of Interest and Principal Payment Certification

41

SCHEDULE I TO CREDIT AGREEMENT

(Indebtedness)

1. Any unpaid advances made to the Borrower pursuant to the Advances Agreement, dated on or about January 5, 2016, by and among National Public Finance Guarantee Corporation, MBIA Inc., the Borrower and any other affiliates of National Public Finance Guarantee Corporation which may become parties to the agreement from time to time.

2. 14% Fixed-to-Floating Rate Surplus Notes

42

SCHEDULE II TO CREDIT AGREEMENT

(Liens)

1. The lien on the trust account to secure payment on new policies to be issued by the Borrower replacing existing Financial Guaranty Insurance Policies numbers 503270 and 504220 issued by MBIA México, S.A. de C.V., the Borrower’s affiliate insurance company in Mexico, in the amount of the current capital account held in such Mexico affiliate. Replacement of the policies is part of the liquidation and dissolution of the Mexico office, including the transfer of net assets and reserves to the Borrower.

43

SCHEDULE III TO CREDIT AGREEMENT

(Investments)

1. Any Investments made by the Borrower in connection with the remediation of any policy issued by the Borrower or the recovery of any claim payment made under any policy issued by the Borrower.

2. The Borrower wholly owns MBIA UK Insurance Limited, a private limited company incorporated under the laws of the United Kingdom and Wales.

3. The Borrower wholly owns MBIA Mexico S.A. de C.V., a Mexican corporation.

44

SCHEDULE IV TO CREDIT AGREEMENT

(Investment Plan)

[See Attached]

45

SCHEDULE V TO CREDIT AGREEMENT

(Litigation)

1. “ZOHAR I INVOLUNTARY BANKRUPTCY CASES”: In Re: Zohar CDO 2003-1 Ltd., No. 15-23680 (S.D.N.Y.); In Re: Zohar CDO 2003-1 Corp., No. 15-23681 (S.D.N.Y.); In Re: Zohar CDO 2003-1 LLC, No. 15-23682 (S.D.N.Y.)

2. “WESTCHESTER ACTION”: Tilton and Patriarch Partners XV, LLC v. MBIA Inc. and MBIA Ins. Corp., No. 68880/2015 (Sup. Ct. Westchester – Commercial Division)

3. “TRUSTEE INTERPLEADER ACTION”: U.S. Bank N.A. v. Alvarez & Marsal Zohar Mgmt., LLC, Patriarch Partners VIII, XIV and XV, LLC, No. 652173/2016 (Sup. Ct. N.Y. Cnty.)

4. “DELAWARE ACTION”: Zohar CDO 2003-1, et al., v. Patriarch Partners, LLC, VIII, XIV and XV, LLC, and PPAS, et al., C. A. No. 12247-VCS (Del. Ch.)

5. “AGENCY REMOVAL ACTION”: Patriarch Partners Agency Servs., LLC v. Zohar CDO 2003-1, Ltd., et al., Case No. 16-cv-04488-VM-KHP.

6. “ZOHAR I AUCTION ACTION”: Patriarch Partners XV, LLC and Octaluna LLC v. U.S. Bank Nat’l Ass’n and MBIA Ins. Corp., No. 1:16-cv-07128 (S.D.N.Y.)

7. “DIRECTOR/CONSENTS LITIGATION”: ZOHAR II 2005-1, LIMITED, and ZOHAR III, LIMITED, v. FSAR HOLDINGS, INC., GLENOIT UNIVERSAL LTD., and UI ACQUISITION HOLDING CO., LYNN TILTON and MICHAEL RICCIARELLI, Civil Action No. 12946-VCS (Delaware Chancery Court)

8. “SEC ACTION”: In the Matter of Lynn Tilton, Patriarch Partners, LLC, Patriarch Partners VIII, XIV, and XV, LLC; File No. 3-16462 –Administrative Proceeding

46

EX-99.6

EXHIBIT 99.6

EXECUTION COPY

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, this “Agreement”), made by MBIA INSURANCE CORPORATION, a New York statutory insurance corporation (the “Grantor”) in favor of MZ FUNDING LLC, a Delaware limited liability company (the “Secured Party”).

RECITALS

Pursuant to the Credit Agreement, dated as of the date hereof (as amended, restated, amended and restated, supplemented or modified from time to time, the “Credit Agreement”; capitalized terms used but not defined herein shall have the meanings given such terms in the Credit Agreement), by and among MBIA Insurance Corporation (the “Borrower”) and the Secured Party, the Secured Party has agreed to make the Loan to the Borrower. In order to induce the Secured Party to make the Loan, the Grantor has agreed to grant a continuing Lien on the Collateral to secure the Obligations (as hereinafter defined). Accordingly, the Grantor hereby agrees as follows:

1. Security Interest.

(a) Grant of Security. As security for the Obligations (as hereinafter defined), the Grantor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of its right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all items of its personal property described on Exhibit A hereto which is executed by an authorized person of the Grantor, together with all substitutions and replacements thereof and any products and proceeds thereof including any which are described on a supplement hereto in substantially the form of Exhibit B hereto (the “Collateral”).

(b) Security for Obligations. This Agreement secures the payment of all now existing or hereafter arising obligations of the Grantor to the Secured Party, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses or otherwise (including, without limitation, interest, fees, costs or other payments on the Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding (all such obligations being the “Obligations”).

(c) Grantor Remains Liable. This Agreement shall not affect the Grantor’s liability to perform all of its duties and obligations under the transactions giving rise to the Obligations. The exercise by the Secured Party of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under the transactions giving rise to the Obligations, which shall remain unchanged as if this Agreement had not been executed. The Secured Party shall not have any obligation or liability under the transactions giving rise to the Obligations by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

(d) Supplement. From time to time the Grantor may deliver, assign, pledge, set over and grant to the Secured Party a first priority security interest in any additional items of personal property by delivering a supplement hereto in substantially the form of Exhibit B hereto describing such items; thereafter, all such items of personal property shall be “Collateral” hereinafter and subject to the terms of this Agreement.

(e) Continuing Agreement. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until payment in full of the Obligations.

2. Title; Liens and Encumbrances. The Grantor represents and warrants that it is (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will be) the record and beneficial owner of, having (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will have) good and marketable title to, the Collateral pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other person, except the Liens created by this Agreement, and the Grantor will promptly notify the Secured Party of any such other Lien or claim made or asserted against the Collateral and will defend the Collateral against any such Lien or other claim.

3. State of Organization or Residence; Legal Name. The Grantor represents and warrants to the Secured Party as follows:

(a) The Grantor’s state of incorporation is the State of New York. The Grantor’s chief executive office or principal office, if it is not a registered organization, as such term is defined under the Uniform Commercial Code as in effect in the State of New York as it may be amended, supplemented or modified from time to time (the “UCC”), is set forth on Schedule I hereto. The Grantor shall promptly notify the Secured Party of any change in the foregoing representations.

(b) The Grantor’s registered or legal name is as set forth on Schedule I hereto. The Grantor currently uses, and during the last five (5) years has used, no other names including business or trade names, except as set forth on Schedule I hereto. The Grantor shall not change such name without providing the Secured Party thirty (30) days’ prior written notice.

(c) The grant of the security interest in the Collateral, combined with the filing of financing statements, the execution of control agreements, the execution of assignments, and/or possession of the Collateral, each as appropriate, is effective to vest in the Secured Party a valid and perfected first priority security interest, superior to the rights of any person in and to the Collateral as set forth herein.

4. Perfection of Security Interest. The Grantor authorizes the Secured Party to file all such financing statements and amendments thereto pursuant to the UCC or other notices appropriate under applicable law, as the Secured Party may reasonably require, each in form satisfactory to the Secured Party. Such financing statements and amendments may contain a description of the Collateral as set forth herein or more broadly in a generic or categorical manner. The Secured Party may transfer, withdraw or redeem any funds or other property in each deposit account or securities account constituting Collateral without further consent by the Grantor; provided that the Secured Party will not exercise any of such rights other than during an Event of Default. The Grantor also shall pay all filing or recording costs with respect thereto, and all costs of filing or recording this Agreement or any other agreement or document executed and delivered pursuant hereto or to the Obligations (including the cost of all federal, state or local mortgage, documentary, stamp or other taxes), in each case, in all public offices where filing or recording is deemed by the Secured Party to be necessary or desirable. The Grantor authorizes the Secured Party to take all other actions which the Secured Party may deem necessary or desirable to perfect or otherwise protect the Liens created hereunder and to obtain the benefits of this Agreement.

2

5. Covenants Relating to Collateral. Until the Obligations shall have been paid in full, and the Credit Agreement shall have terminated, the Grantor covenants and agrees that if the Grantor shall become entitled to receive or shall receive any note (including a Zohar I Note or Zohar II Note as defined in Exhibit A hereto), any certificate or other equity securities (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Collateral, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Collateral, or otherwise in respect thereof, the Grantor shall accept the same as the agent of the Secured Party, hold the same in trust for the Secured Party and deliver the same forthwith to the Secured Party in the exact form received, duly indorsed by the Grantor to the Secured Party, together with an undated assignment or stock power covering such certificate duly executed in blank by the Grantor and with, if the Secured Party so requests, signature guaranteed, to be held by the Secured Party, subject to the terms thereof, as collateral security for the Obligations. If any of the foregoing property so distributed in respect of the Collateral shall be received by the Grantor, the Grantor shall, until such property is paid or delivered to the Secured Party, hold such property in trust for the Secured Party, segregated from other funds or property of the Grantor, as collateral security for the Obligations. Grantor shall (i) promptly forward to the Secured Party written notification of, and grant of, a security interest to the Secured Party in any and all Commercial Tort Claims (as defined in the UCC) acquired by the Grantor or coming into existence, in each case, after the date hereof, including, but not limited to, any and all actions, suits, and proceedings before any court or governmental authority by or affecting such Grantor by executing and delivering a supplement in the form of Exhibit B describing such Commercial Tort Claim (as defined in the UCC) with reasonable specificity and (ii) execute and deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Secured Party, or required by law, including all things which may from time to time be necessary under the UCC to fully create, preserve, perfect and protect the priority of the Secured Party’s security interest in any Commercial Tort Claim (as defined in the UCC).

6. Collections; Other Rights.

(a) Except as provided herein, the Grantor shall be entitled to receive all cash interest, dividends and distributions paid in respect of the Collateral, and to exercise all voting rights with respect to the Collateral; provided, however, that no vote shall be cast or right exercised or other action taken which would result in any violation of any provision of this Agreement or any other Credit Document.

(b) All of the foregoing amounts set forth in paragraph (a) of this Section 6 so collected after the occurrence of and during the continuation of an Event of Default shall be held in trust by the Grantor for and as the property of the Secured Party, and shall not be commingled with other funds, money or property of the Grantor.

(c) After the occurrence and during the continuation of an Event of Default, the Grantor will immediately upon receipt of all such checks, cash or other remittances constituting part of the Collateral or in payment for any Collateral sold, transferred, leased or otherwise disposed of, deliver any such items to the Secured Party accompanied by a remittance report in form supplied or approved by the Secured Party. The Grantor shall deliver such items in the same form received, endorsed or otherwise assigned by the Grantor where necessary to permit collection of such items.

7. Events of Default. The occurrence of any one or more Events of Default under the Credit Agreement shall constitute an event of default (“Event of Default”) under this Agreement.

3

8. Rights and Remedies.

(a) In the event of the occurrence and continuation of any Event of Default, to the extent applicable: (i) the Secured Party may exercise exclusive control over the Collateral; (ii) the Secured Party shall have the right, with or without (to the extent permitted by applicable law) notice to the Grantor, as to any or all of the Collateral, by any available judicial procedure or without judicial process, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, and generally to exercise any and all rights afforded to a secured party under the UCC or other applicable law; (iii) the Secured Party shall have the right to sell, lease, or otherwise dispose of all or any part of the Collateral, whether in its then condition or after further preparation or processing, either at public or private sale or at any broker’s board, in lots or in bulk, for cash or for credit, with or without warranties or representations, and upon such terms and conditions, all as the Secured Party in its sole discretion may deem advisable; (iv) at the Secured Party’s request, the Grantor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall select, whether at the Grantor’s premises or elsewhere, and make available to the Secured Party, without rent, all of the Grantor’s premises and facilities for the purpose of the Secured Party’s taking possession of, removing or putting the Collateral in saleable or disposable form; (v) the Secured Party shall have the right to receive any and all cash interest, dividends, distributions, payments or other proceeds paid in respect of the Collateral and made application thereof to the Obligations in such order as the Secured Party may determine and (vi) any or all of the Collateral may be registered in the name of the Secured Party or its nominee and they may thereafter exercise (x) all voting, corporate and other rights pertaining to such Collateral and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Collateral as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all securities or securities entitlements upon any merger, consolidation, reorganization, recapitalization or other fundamental change, or upon the exercise of the Grantor or the Secured Party of any right, privilege or option pertaining to such securities or securities entitlements, and in connection therewith, the right to deposit and deliver any and all of the securities or securities entitlements with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Secured Party may determine), in each of the foregoing cases, all without liability except to account for property actually received by it, but the Secured Party shall have no duty to the Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

(b) Any such sale, lease or other disposition of Collateral may be made without demand for performance or any notice of advertisement whatsoever except that where an applicable statute requires reasonable notice of sale or other disposition, the Grantor agrees that the sending of ten days’ notice by ordinary mail, postage prepaid, to the Grantor of the place and time of any public sale or of the time at which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof. Notwithstanding the foregoing, if any of the Collateral may be materially diminished in value during such ten (10) day period, the Secured Party shall provide the Grantor with such shorter notice as it deems reasonable under the circumstances.

(c) The proceeds of any such sale, lease or other disposition of the Collateral shall be applied first to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like, and to the reasonable attorneys’ fees and legal expenses incurred by the Secured Party, and then to satisfaction of the Obligations (in any order as the Secured Party may decide in its sole discretion), and to the payment of any other amounts required by applicable law. If, upon the sale, lease or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Grantor will be liable for the deficiency, together with interest thereon, at the rate prescribed in the agreements giving rise to the Obligations, and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, the Grantor waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral.

4

9. Power of Attorney. The Grantor authorizes the Secured Party and does hereby make, constitute and appoint the Secured Party, and any officer or agent of the Secured Party, with full power of substitution, as the Grantor’s true and lawful attorney-in-fact, with power, in its own name or in the name of the Grantor: (i) to endorse any notes, checks, drafts, money orders, or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party; (ii) to pay or discharge any taxes, liens, security interest or other encumbrances at any time levied or placed on or threatened against the Collateral; (iii) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (iv) to receive, open and dispose of all mail addressed to the Grantor and to notify the post office authorities to change the address for delivery of mail addressed to the Grantor to such address as the Secured Party may designate; (v) to exercise all membership rights, powers and privileges in connection with the Collateral to the same extent as the Grantor is entitled to exercise such rights, powers and privileges and (vi) generally to do all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral and the Secured Party’s security interest therein. The Grantor hereby approves and ratifies all acts of said attorney or designee, who shall not be liable for any acts of commission or omission, nor for any error or judgment or mistake of fact or law except for its own gross negligence or willful misconduct. This power of attorney shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The Secured Party may exercise this power of attorney only after the occurrence and during the continuance of an Event of Default.

10. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight delivery) to the addresses (or telecopy numbers) set forth in Section 7.01 of the Credit Agreement. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or, if mailed, the third business day following the date so mailed, if earlier.

11. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then the Secured Party shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.

12. No Waiver; Rights Cumulative.

(a) No course of dealing between the Grantor and the Secured Party, or the Secured Party’s failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Any single or partial exercise of any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(b) All of the Secured Party’s rights and remedies with respect to the Collateral, whether established hereby or by any other agreements, instruments or documents or by law, shall be cumulative and may be exercised singly or concurrently.

5

13. Limitation on Secured Party’s Duty in Respect of Collateral. The Secured Party shall not have any duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of it or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except that the Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.

14. Amendments, Etc. No alteration, modification, amendment or waiver of any terms and conditions of this Agreement shall be effective or enforceable against the Secured Party unless set forth in a writing signed by the Secured Party.

15. Successors and Assigns. This Agreement and all obligations of the Grantor and the Secured Party hereunder shall be binding upon the successors and assigns of the Grantor and the Secured Party, as applicable, and shall, together with the rights and remedies of the Secured Party hereunder, inure to the benefit of the Secured Party and their respective successors and assigns.

16. No Partnership. The relationship between the Secured Party and the Grantor shall be only of creditor-debtor and no relationship of agency, partner or joint- or co-venturer shall be created by or inferred from this Agreement or the other Credit Documents. The Grantor shall indemnify, defend, and save the Secured Party harmless from any and all claims asserted against the Secured Party as being the agent, partner, or joint-venturer of the Grantor.

17. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Grantor and the Secured Party with respect to its subject matter and supersedes all prior conflicting or inconsistent agreements, consents and understandings relating to such subject matter. The Grantor acknowledges and agrees that there is no oral agreement between the Grantor and the Secured Party which has not been incorporated in this Agreement.

18. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

19. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without effecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

20. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and any claim, controversy or dispute related to or in connection with this Agreement, any Credit Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN

6

CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, GRANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10 hereto. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

21. Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

22. Further Pledge; Bailee and Custodial Arrangements. Grantor acknowledges that Secured Party is granting a security interest in its rights under this Agreement to secure obligations of the Secured Party. Grantor agrees that it will cause any bailee or custodian now or hereafter in possession of the Collateral to acknowledge that it holds possession of the Collateral for the Secured Party’s benefit and for the benefit of the Secured Party’s secured party. Grantor agrees that at any time when Grantor is obligated to deliver physical possession of any Collateral to Secured Party, Secured Party may appoint a bailee or custodian to hold physical possession of the Collateral for the Secured Party’s benefit and Grantor agrees to deliver all such physical Collateral as directed by the Secured Party.

23. Registration of Zohar Notes. Grantor agrees that any Zohar I Notes or Zohar II Notes which are held in book-entry form shall be registered to indicate the interest of the Secured Party and the Secured Party’s secured party.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

7

IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be effective for all purposes as of the date above first written.

GRANTOR:
MBIA INSURANCE CORPORATION
By	/s/ Anthony McKiernan

Name:	Anthony McKiernan
Title:	Director/President and CFO
SECURED PARTY:
MZ FUNDING LLC

By /s/ Jonathan Harris

Name:	Jonathan Harris
Title:	Secretary

[Signature Page to MBIA Security Agreement]

SCHEDULE I

Grantor’s chief executive office or principal office	One Manhattanville Road Purchase, New York 10577
Registered or Legal Name	MBIA Insurance Corporation
Other names (including business or trade names) used during the last five (5) years	None

Schedule I

EXHIBIT A

This Exhibit A to the Security Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Security Agreement”), made MBIA INSURANCE CORPORATION, a New York statutory insurance corporation (the “Grantor”) in favor of MZ FUNDING LLC, a Delaware limited liability company (the “Secured Party”) describes the Collateral granted by the Grantor to the Secured Party pursuant to the Security Agreement. “UCC” means the Uniform Commercial Code as in effect in the State of New York as the UCC may be amended, supplemented or modified from time to time. Any reference to any agreement, instrument or document shall be construed as referring to such agreement, instrument or document, as amended, supplemented or modified from time to time. The Collateral shall be all of the Grantor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all of the following items of personal property of the Grantor:

1. The class A-1 and A-2 notes (the “Zohar I Notes”) issued by Zohar CDO 2003-1, Limited, Zohar CDO 2003-1, Corp. and Zohar CDO 2003-1, LLC (collectively, the “Zohar I Issuer”), related subrogation rights and all Supporting Obligations (as defined in the UCC) relating thereto.

2. The Grantor’s rights to payment, reimbursement, indemnity, recovery, salvage or subrogation with respect to any claims paid by the Grantor under its policy insuring the Zohar I Notes.

3. The Grantor’s rights as a party to, or third-party beneficiary under, any indenture, supplemental indenture, insurance policy or agreement, indemnity agreement or other legal documentation related to the Zohar I Notes, including any rights as a controlling party thereunder (the “Zohar I Documents”).

4. The Grantor’s rights to any collateral under the Zohar I Documents (the “Zohar I Underlying Collateral”).

5. The Grantor’s rights as a transferee of any of the Zohar I Underlying Collateral including the assets described on Exhibit A-1 hereto.

6. Any Commercial Tort Claims (as defined in the UCC) accruing to the Grantor in any capacity, including as insurer, credit enhancer, controlling party or holder of any Zohar I Notes, under or relating to the Zohar I Documents or the transactions contemplated thereby, whether for fraud, breach of duty or otherwise, against any person, including any (i) current or former collateral manager or servicer thereunder; (ii) the agent, administrative agent, collateral agent or lender under any loans owned by any issuer of the Zohar I Notes; or (iii) manager, managing member, director, officer or other controlling party of any portfolio company in which Zohar I has an equity, loan or loan participation interest.

7. Any other rights or remedies inuring to the benefit of the Grantor in connection with the Zohar I Notes, whether arising under contract or tort.

8. The notes issued by Zohar II 2005-1, Limited, Zohar II 2005-1, Corp. and Zohar II 2005-1, LLC (the “Zohar II Notes”), related subrogation rights and all Supporting Obligations (as defined in the UCC) relating thereto.

9. The Grantor’s rights to payment, reimbursement, indemnity, recovery, salvage or subrogation with respect to any claims paid by the Grantor under its policy insuring the Zohar II Notes.

10. The Grantor’s rights as a party to, or third-party beneficiary under, any indenture, supplemental indenture, insurance policy or agreement, indemnity agreement or other legal documentation related to the Zohar II Notes (the “Zohar II Documents”).

11. The Grantor’s rights to any collateral under the Zohar II Documents.

12. Any Commercial Tort Claims (as defined in the UCC) accruing to the Grantor in any capacity, including as insurer, credit enhancer, controlling party or holder of any Zohar II Notes, under or relating to the Zohar II Documents or the transactions contemplated thereby, whether for fraud, breach of duty or otherwise, against any person, including any (i) current or former collateral manager or servicer thereunder; (ii) the agent, administrative agent, collateral agent or lender under any loans owned by any issuer of the Zohar II Notes; or (iii) manager, managing member, director, officer or other controlling party of any portfolio company in which Zohar II has an equity, loan or loan participation interest.

13. Any other rights or remedies inuring to the benefit of the Grantor in connection with the Zohar II Notes, whether arising under contract or tort.

14. The Grantor’s rights and interests in any deposit accounts or securities accounts established by the Secured Party to hold funds paid or payable by the Grantor.

15. Any proceeds with respect to the foregoing, including any recoveries the Grantor acquires from any source in connection with such rights.

[Remainder of page intentionally left blank]

The undersigned has executed this Exhibit A as of the date first written above.

MBIA INSURANCE CORPORATION
By	/s/ Anthony McKiernan

Name:	Anthony McKiernan
Title:	Director/President and CFO

EXHIBIT A-1

List of Assets Acquired by MBIA Insurance Corporation as Transferee in an Auction dated December 21, 2016

Exhibit A-1:¹

Loan Interests
#	Issuer	Issue	Asset Type	Current Par Amount (Issue Currency)		Total Commitment		Current Coupon		Maturity Date
1.	180s, LLC & 180s Canada Corporation	Fully Funded Term B	Delayed Draw Loan		2,240,328.00		2,242,328.00		2.53267		4/15/2019
2.	180s, LLC & 180s Canada Corporation	Tranche A Revolver	Revolving Credit		16,600,000.00		16,600,000.00		2.53267		4/15/2019
3.	American Doors, LLC	Term Loan	Term Loan		115,751.42		115,751.42		1.03267		4/15/2019
4.	American Doors, LLC	Term Loan C	Term Loan		8,315,638.01		8,315,638.01		1.03267		4/15/2019
5.	American LaFrance	Delayed Draw Term Loans	Delayed Draw Loan		509,019.73		509,019.73		0.197		10/31/2015
6.	American LaFrance	Fully Funded DD Term Loan A	Term Loan		1,784,456.80		1,784,456.80		0.434		10/31/2015
7.	American LaFrance	Revolver	Revolving Credit		451,290.39		451,290.40		1		10/31/2015
8.	American LaFrance	Term Loan 1	Term Loan		414,121.55		414,121.55		1		10/31/2015
9.	American LaFrance	Term Loan 2	Term Loan		42,240,641.22		42,240,641.22		1		10/31/2015
10.	Amweld International LLC	Delayed Draw	Delayed Draw Loan		80,160.09		80,160.09		0		6/28/2016
11.	Amweld International LLC	Term Loan B	Term Loan		5,758,739.62		5,758,739.62		0		10/31/2015
12.	Best Textiles Acquisition, LLC	Revolver	Revolving Credit		5,000,000.00		5,000,000.00		2.53267		4/15/2019
13.	Bomar Industries International, Inc.	Revolver 2	Revolving Credit		3,200,000.00		3,200,000.00		0		6/30/2013
14.	Bomar Industries International, Inc.	Tranche A Term Loan	Term Loan		10,000,000.00		10,000,000.00		0		6/30/2013
15.	Bomar Industries International, Inc.	Tranche B Term Loan	Term Loan		3,806,930.16		3,806,930.16		0		6/30/2013
16.	Croscil Home	Revolver	Revolving Credit		10,000,000.00		10,000,000.00		6.53267		4/15/2019
17.	Duro Textiles, LLC	Fully Funded Term Loan G	Delayed Draw Loan		1,049,259.65		1,049,259.65		2.03267		4/15/2019
18.	Duro Textiles, LLC	Term B Loan	Term Loan		7,500,000.00		7,500,000.00		2.03267		4/15/2019
19.	Duro Textiles, LLC	Term Loan	Term Loan		8,000,000.00		8,000,000.00		2.03267		4/15/2019
20.	Duro Textiles, LLC	Term Loan K1	Term Loan		1,888,000.99		1,888,000.99		2.03267		4/15/2019

¹  Information is current as of November 30, 2016.

21.	East Alliance Limited	Term Loan A	Term Loan	11,928,348.24	11,928,348.24	2.53267	12/31/2016
22.	Emag Solutions, LLC	Revolver	Revolving Credit	4,062,500.04	4,062,500.04	7.53267	4/15/2019
23.	Fetco Home Decor, Inc.	Exchanged Security	Term Loan	2,757,727.26	2,757,727.26	0.1702	4/15/2019
24.	Fetco Home Decor, Inc.	Term Loan	Term Loan	1,082,661.77	1,082,661.77	8.53267	4/15/2019
25.	Galey & Lord, LLC	Fully Funded Term Loan	Term Loan	3,000,000.00	3,000,000.00	1.53267	4/15/2019
26.	Galey & Lord, LLC	Revolver	Revolving Loan	1,180,176.25	1,180,176.25	1.53267	4/15/2019
27.	Galey & Lord, LLC	Term Loan	Term Loan	25,263,396.84	25,263,396.84	1.53267	4/15/2019
28.	Galey & Lord, LLC	Term Loan E	Term Loan	1,600,000.00	1,600,000.00	1.52722	4/15/2019
29.	Galey & Lord, LLC	Term Loan K	Term Loan	689,999.01	689,999.01	1.53267	4/15/2019
30.	Galey & Lord, LLC	Term Loan M	Term Loan	800,000.00	800,000.00	1.53267	4/15/2019
31.	Global Automotive Systems, LLC	Term Loan	Term Loan	9,100,000.00	9,100,000.00	6.03267	4/15/2019
32.	Global Automotive Systems, LLC	Term Loan A	Term Loan	21,727,855.40	21,727,855.40	6.03267	4/15/2019
33.	Hartwell Industries, Inc.	DELAYED DRAW TERM LOAN C	Delayed Draw Loan	1,500,000.00	1,500,000.00	3.03267	4/15/2019
34.	Hartwell Industries, Inc.	New Revolver	Revolving Credit	1,927,636.19	1,927,639.96	3.03267	4/15/2019
35.	Hartwell Industries, Inc.	New Term Loan 2	Term Loan	15,060,304.48	15,060,304.48	3.02722	4/15/2019
36.	Hartwell Industries, Inc.	Term Loan A-1	Term Loan	500,000.00	500,000.00	3.03267	4/15/2019
37.	Heritage Aviation, Ltd.	Delayed Draw Term Loan A	Delayed Draw Loan	9,860,000.00	9,970,000.00	4	4/15/2019
38.	Heritage Aviation, Ltd.	Term Loan	Term Loan	1,000,000.00	1,000,000.00	4.52722	4/15/2019
39.	Iconic American Trucks	Iconic American Trucks T/L B	Term Loan	7,217,681.53	7,217,681.53		3/31/2019
40.	IMG Holdings, Inc.	Fully Funded Term Loan	Term Loan	555,360.00	555,360.00	4.53267	4/15/2019
41.	IMG Holdings, Inc.	Revolver A	Revolving Credit	3,999,999.97	4,000,000.00	4.53267	4/15/2019
42.	IMG Holdings, Inc.	Revolving Credit C	Revolving Credit	2,000,000.35	2,000,000.35	4.53267	4/15/2019
43.	IMG Holdings, Inc.	Term E	Term Loan	144,640.00	144,640.00	4.53267	4/15/2019
44.	IMG Holdings, Inc.	Term Loan 1A	Term Loan	2,004,585.76	2,004,585.76	4.53267	4/15/2019
45.	IMG Holdings, Inc.	Term Loan 1B	Term Loan	2,174,795.68	2,174,795.68	4.53267	4/15/2019
46.	IMG Holdings, Inc.	Term Loan D	Term Loan	300,000.00	300,000.00	4.53267	4/15/2019
47.	Intera Group, Inc.	Exchanged Security	Note	6,374,815.23	6,374,815.23	0	12/31/2016
48.	Intera Group, Inc.	Fully Funded Term C	Delayed Draw Loan	2,586,494.53	2,586,494.53	0	10/31/2016

49.	Intera Group, Inc.	Restructured Term Loan	Term Loan	869,031.69	869,031.69	0	10/31/2016
50.	Intera Group, Inc.	Term Loan C	Term Loan	158,501.65	158,501.65	0	10/31/2016
51.	Intrepid USA	Intrepid USA R/C	Revolving Credit	9,280,002.89	9,280,002.89	8	4/15/2019
52.	Intrepid USA	Term Loan B	Term Loan	3,860,066.01	3,860,066.01	6.53267	4/15/2019
53.	LVD Acquisition, LLC	Term Loan	Term Loan	9,303,993.33	9,303,993.33	4.53267	4/15/2019
54.	MD Helicopters, Inc.	Sub Note Term Loan	Term Loan	11,255,271.08	11,255,271.08	2.4255	5/15/2019
55.	MD Helicopters, Inc.	Term A	Term Loan	12,873,602.92	12,873,602.92	3.53267	4/15/2019
56.	MD Helicopters, Inc.	Term Loan	Term Loan	25,551,724.14	25,551,724.14	3.53267	4/15/2019
57.	MD Helicopters, Inc.	Term Loan B	Term Loan	16,116,674.23	16,116,674.23	3.53267	4/15/2019
58.	MD Helicopters, Inc.	Tranche A-3	Term Loan	700,000.00	700,000.00	3.53267	4/15/2019
59.	MD Helicopters, Inc.	Tranche A-7	Term Loan	1,200,000.00	1,200,000.00	3.53267	4/15/2019
60.	Natura Water, Inc.	Fully Funded Term B	Term Loan	1,500,000.00	1,500,000.00	5.53267	4/15/2019
61.	Natura Water, Inc.	Fully Funded Term C	Term Loan	2,200,000.00	2,200,000.00	5.53267	4/15/2019
62.	Natura Water, Inc.	Fully Funded Term Loan E	Term Loan	300,000.00	300,000.00	5.53267	4/15/2019
63.	NetVersant Acquisition, LLC	Restructured Revolver A	Revolving Credit	277,490.69	277,490.69	1.53267	4/15/2019
64.	NetVersant Acquisition, LLC	Restructured Term Loan	Term Loan	41,585,556.76	41,585,556.76	1.53267	4/15/2019
65.	NetVersant Solutions, Inc.	Restructured Revolver B	Revolving Credit	2,102,385.30	2,102,385.31	1.49565	4/15/2019
66.	Petry Media Corporation	Priming Revolver	Revolving Credit	9,212,536.60	9,219,801.44	10	10/31/2017
67.	Petry Media Corporation	Priming Term Loan	Term Loan	210,397.61	210,397.61	10	10/31/2016
68.	Petry Media Corporation	Term Loan C	Term Loan	1,380,775.74	1,380,775.74	10	10/31/2016
69.	Petry Media Corporation	Term Loan E	Term Loan	770,092.44	770,092.44	10	10/31/2016
70.	Rapid Rack Industries, Inc.	Term Loan	Term Loan	4,121,507.10	4,121,507.10	0	10/31/2015
71.	Red Shield Acquisition LLC	Revolver 2	Revolving Credit	5,000,000.00	5,000,000.00		10/31/2016
72.	Red Shield Acquisition LLC	Term Loan	Delayed Draw Loan	5,722,548.98	5,722,548.98		10/31/2016
73.	Remco Maintenance, LLC	Revolver	Revolving Credit	2,500,000.00	2,500,000.00	8.53267	4/15/2019
74.	Remco Maintenance, LLC	Term Loan	Term Loan	3,362,670.50	3,362,670.50	8.53267	4/15/2019
75.	RM Acquisition, LLC	Preferred Security	Term Loan	8,545,250.00	8,545,250.00	0.53433	5/15/2019
76.	RM Acquisition, LLC	Revolver	Revolving Credit	2,205,882.33	2,205,882.35	10	4/15/2019

77.	RM Acquisition, LLC	Term Loan	Term Loan	5,823,529.41	5,823,529.41	4.86267	4/15/2019
78.	S.O. Acquisition, LLC	Fully Funded Term A	Term Loan	4,500,000.00	4,500,000.00	6.53267	4/15/2019
79.	S.O. Acquisition, LLC	Fully Funded Term Loan C	Term Loan	350,000.00	350,000.00	6.53267	4/15/2019
80.	Silverack, LLC	Silverack R/C A	Revolving Credit	6,000,000.00	6,000,000.00	2.53267	4/15/2019
81.	Silverack, LLC	Silverack T/L A	Term Loan	3,395,487.02	3,395,487.02	2.53267	4/15/2019
82.	Snelling Medical Staffing	Term Loan	Term Loan	223,000.00	223,000.00	7.53267	4/15/2019
83.	Transcare Corporation	Tranche B Term Loan	Term Loan	3,500,000.00	3,500,000.00	2.53267	4/15/2019
84.	Trim Trends, LLC	Term Loan A	Term Loan	6,555,380.26	6,555,380.26	6.02722	4/15/2019
85.	Vulcan Engineering Corporation	Revolver	Revolving Credit	1, 428,571.43	2,000,000.00	7.52722	4/15/2019
86.	Xinhua Sports & Entertainment	Additional Term Loan	Term Loan	2,394,288.89	2,394,288.89	0.2145	10/21/2012
87.	Xinhua Sports & Entertainment	Convertible Term Loan	Term Loan	13,060,228.45	13,060,228.45	0.2145	10/21/2012
88.	Xpient Solutions, LLC	Exchanged Security	Term Loan	318,427.84	318,427.84	4.19775	11/30/2019
89.	Zohar SS Acquisition, LLC	Exchanged Security	Term Loan	2,564,102.60	2,564,102.60	2	5/15/2019
90.	Zohar SS Acquisition, LLC	Preferred Stock	Term Loan	256,410.26	256,410.26	7.53267	5/15/2019
91.	Zohar SS Acquisition, LLC	Term Loan	Term Loan	7,652,549.20	7,652,549.20	7.53267	4/15/2019

Equity Interests
#	Issuer Name	Type		Amount
92.	Automated Ductwork Manufacturing Company		Common		100.00
93.	Felagastyring EHF		Common Stock		63,100.00
94.	Fetco Home Decor, Inc.		Common1		51,263.00
95.	Fetco Home Decor, Inc.		Common2		25,000.00
96.	Reserved
97.	Fetco Home Decor, Inc.		Pref 315619ZB5		13,488.00
98.	Reserved
99.	Fetco Home Decor, Inc.		Preferred		14,090.00
100.	Fetco International Hong Kong Limited		Common		9,997.00
101.	Galey & Lord, Inc.		Common Stock		687,547.00
102.	Galey & Lord, Inc.		Series A Preferred Interest 8/18/2012		39,010,000.00
103.	Glenoit Universal, Ltd.		Common Stock Class A		12,967.00
104.	Glenoit Universal, Ltd.		Class B Common Stock		3,527.00
105.	Reserved
106.	Reserved

107.	Hartwell Industries, Inc.	Common CL A	194,512.00
108.	HyperActive Technologies, Inc.	Common Stock	85,334.00
109.	IMG Holdings, Inc.	Common Stock	757.00
110.	Intera Group, Inc.	Preferred Stock	5,069.42
111.	Intera Group, Inc.	Common Stock	839.09
112.	Reserved
113.	MD Helicopters, Inc.	Common Stock	235.00
114.	Metalforming Technologies, Inc.	Common Stock	175,889.00
115.	Opening Specialties and Supply Inc.	Common	2,267.00
116.	PHC Holding Corp	Class A Common Stock	83,460.13
117.	PHC Holding Corp	Class C Common Stock	85,880.75
118.	PHC Holding Corp	Common	100.00
119.	PHC Holding Corp	Class B Common Stock	112,047.09
120.	PHC Holding Corp	Preferred Stock	114,178.19
121.	Pleasants Hardware Company	Common CL A	1,000.00
122.	Spectrum International Holdings, Inc.	Common	286,103,870.07
123.	Textile Holdings, Inc.	Common	400,000.00
124.	U.F. Holdings, Inc.	Preferred Stock	53,810.00
125.	UF Holdings Inc.	Common	196,020.00
126.	UI Acquisition Holding Company	Class A Common Stock
127.	UI Acquisition Holding Company	Class B Common Stock
128.	Vorumerkjastyring EHF	Common Stock	63,100.00
129.	W.W. Holdings, LLC	Common Stock	4,787.00
130.	Western Forest Products, Inc.	Common	45,327.00
131.	W.W. Versat Acquisition Corporation	Common Stock	100.00
132.	Xinhua Sports & Entertainment Limited	Common	41,992.00
133.	To the extent not identified in Items 1 to 132 above, Item 133 shall consist of all of the Zohar I Issuer’s right, title and interest in and to instruments, accounts, payment intangibles, general intangibles, letter-of-credit rights, chattel paper, electronic chattel paper, deposit accounts and investment property and other property and rights constituting Zohar I Collateral, including, without limitation, any and all property of any type or nature owned by the Zohar I Issuer (other than Excluded Property, as defined in the Zohar I Documents) and any Equity Securities (as defined in the Zohar I Documents) and other securities or obligations owned or acquired by the Zohar I Issuer and such other right, title or interest which may be transferred under the Zohar I Documents, including, without limitation (and for avoidance of any doubt), any commercial tort claims; provided, however, that all of the Accounts and all Cash therein (as each such term is defined in the Zohar I Documents) shall in no event be included in the Assets Subject To Sale..

EXHIBIT B

SUPPLEMENT NO.             dated as of             , 20    (this “Supplement”) to the Security Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Security Agreement”), made by MBIA INSURANCE CORPORATION, a New York statutory insurance corporation (the “Grantor”) in favor of MZ FUNDING, LLC, a Delaware limited liability company (the “Secured Party”).

As security for the Obligations (as defined in the Security Agreement), the Grantor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of the Grantor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all items of personal property of the Grantor described below together with all substitutions and replacements thereof and any products and proceeds thereof:

[describe collateral]

Exhibit A to the Security Agreement executed by the Grantor shall be deemed amended to include all of the foregoing items of personal property and such items shall be “Collateral” as defined in the Security Agreement and subject to the terms of the Security Agreement.

This Supplement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned parties have executed this Supplement to be effective for all purposes as of the date above first written.

GRANTOR:

MBIA INSURANCE CORPORATION

By

Name:

Title:

EX-99.7

EXHIBIT 99.7

EXECUTION COPY

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, this “Agreement”), made by MZ FUNDING LLC, a Delaware limited liability company (the “Grantor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as collateral agent (in such capacity, together with its successors and assigns, the “Secured Party”) for the Secured Creditors.

RECITALS

Pursuant to the Indenture, dated as of the date hereof (as amended, restated, amended and restated, supplemented or modified from time to time, the “Indenture”; capitalized terms used but not defined herein shall have the meanings given such terms in the Indenture), by and among the Grantor, the Trustee, and the Secured Party, the Holders have agreed to purchase Securities from the Grantor. In order to induce the Holders to purchase such Securities, the Grantor has agreed to grant a continuing Lien on the Collateral to secure the Obligations (as hereinafter defined). Accordingly, the Grantor hereby agrees as follows:

1. Security Interest.

(a) Grant of Security. As security for the Obligations (as hereinafter defined), the Grantor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of its right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all items of its personal property described on Exhibit A hereto which is executed by an authorized person of the Grantor, together with all substitutions and replacements thereof and any products and proceeds thereof including any which are described on a supplement hereto in substantially the form of Exhibit B hereto (the “Collateral”).

(b) Security for Obligations. This Agreement secures the payment of all now existing or hereafter arising obligations of the Grantor to the Secured Creditors, including the Notes Obligations, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses or otherwise (including, without limitation, interest, fees, costs or other payments on the Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding (all such obligations being the “Obligations”).

(c) Grantor Remains Liable. This Agreement shall not affect the Grantor’s liability to perform all of its duties and obligations under the transactions giving rise to the Obligations. The exercise by the Secured Party of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under the transactions giving rise to the Obligations, which shall remain unchanged as if this Agreement had not been executed. The Secured Party shall not have any obligation or liability under the transactions giving rise to the Obligations by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

1

(d) Supplement. From time to time the Grantor may deliver, assign, pledge, set over and grant to the Secured Party for the benefit of the Secured Creditors a first priority security interest in any additional items of personal property by delivering a supplement hereto in substantially the form of Exhibit B hereto describing such items; thereafter, all such items of personal property shall be “Collateral” hereinafter and subject to the terms of this Agreement.

(e) Continuing Agreement. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until payment in full of the Obligations.

2. Title; Liens and Encumbrances. The Grantor represents and warrants that it is (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will be) the record and beneficial owner of, having (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will have) good and marketable title to, the Collateral pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other person, except the Liens created by this Agreement, and the Grantor will promptly notify the Secured Party of any such other Lien or claim made or asserted against the Collateral and the Grantor will defend the Collateral against any such Lien or other claim.

3. State of Organization or Residence; Legal Name. The Grantor represents and warrants to the Secured Party as follows:

(a) The Grantor’s state of organization is the State of Delaware. The Grantor’s chief executive office or principal office, if it is not a registered organization, as such term is defined under the Uniform Commercial Code as in effect in the State of New York as it may be amended, supplemented or modified from time to time (the “UCC”), is set forth on Schedule I hereto. The Grantor shall promptly notify the Secured Party of any change in the foregoing representations.

(b) The Grantor’s registered or legal name is as set forth on Schedule I hereto. The Grantor currently uses, and during the last five (5) years has used, no other names including business or trade names, except as set forth on Schedule I hereto. The Grantor shall not change such name without providing the Secured Party thirty (30) days’ prior written notice.

(c) The grant of the security interest in the Collateral, combined with the filing of financing statements, the execution of control agreements, the execution of assignments, and/or possession of the Collateral, each as appropriate, is effective to vest in the Secured Party a valid and perfected first priority security interest, superior to the rights of any person in and to the Collateral as set forth herein.

4. Perfection of Security Interest. The Grantor shall take any and all actions and make all filings (including the filing of UCC financing statements, continuation statements and amendments thereto) reasonably required to create and maintain, as security for the Obligations, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Intercreditor Agreement) in favor of the Secured Party for the benefit of the Secured Creditors. The Grantor authorizes the Secured Party to file all such UCC financing statements and amendments thereto pursuant to the UCC or other notices appropriate under applicable law, as the Secured Party may reasonably require, each in form satisfactory to the Secured Party. Such financing statements and amendments may contain a description of the Collateral as set forth herein or in any generic manner and may describe the Collateral as “all assets” or words of similar effect. The Secured Party may transfer, withdraw or redeem any funds or other property in each deposit account or securities account constituting Collateral without further consent by the Grantor; provided that the Secured Party will not exercise any of such rights other than during an Event of Default. The Grantor also shall pay all filing or recording costs

2

with respect thereto, and all costs of filing or recording this Agreement or any other agreement or document executed and delivered pursuant hereto or to the Obligations (including the cost of all federal, state or local mortgage, documentary, stamp or other taxes), in each case, in all public offices where filing or recording is necessary or desirable. The Grantor authorizes the Secured Party to take all other actions which the Secured Party may reasonably deem necessary or desirable to perfect or otherwise protect the Liens created hereunder and to obtain the benefits of this Agreement. Notwithstanding anything to the contrary herein or in the Intercreditor Agreement, in no event shall the Secured Party be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, creation, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including without limitation the filing or continuation of any UCC financing statement or continuation statements or similar documents or instruments), nor shall the Secured Party be responsible for, and the Secured Party makes no representation regarding, the validity, effectiveness or priority of the security interests or Liens intended to be created hereby. The Grantor shall deliver the original of the MBIA Note (as defined in Exhibit A hereto) to the Secured Party on the date hereof and any replacement or substitutions therefore promptly upon receipt by the Grantor, in each case, endorsed in blank.

5. Covenants Relating to Collateral. Until the Obligations shall have been paid in full, and the Indenture shall have terminated, the Grantor covenants and agrees that if the Grantor shall become entitled to receive or shall receive any note, any certificate or other equity securities (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Collateral, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Collateral, or otherwise in respect thereof, the Grantor shall accept the same as the agent of the Secured Party, hold the same in trust for the Secured Party and deliver the same forthwith to the Secured Party in the exact form received, duly indorsed by the Grantor to the Secured Party, together with an undated assignment or stock power covering such certificate duly executed in blank by the Grantor and with, if the Secured Party so requests, signature guaranteed, to be held by the Secured Party, subject to the terms thereof, as collateral security for the Obligations. If any of the foregoing property so distributed in respect of the Collateral shall be received by the Grantor, the Grantor shall, until such property is paid or delivered to the Secured Party, hold such property in trust for the Secured Party, segregated from other funds or property of the Grantor, as collateral security for the Obligations. Grantor shall (i) promptly forward to the Secured Party written notification of, and grant of, a security interest to the Secured Party in any and all Commercial Tort Claims (as defined in the UCC) acquired by the Grantor or coming into existence, in each case, after the date hereof, including, but not limited to, any and all actions, suits, and proceedings before any court or governmental authority by or affecting such Grantor by executing and delivering a supplement in the form of Exhibit B describing such Commercial Tort Claim (as defined in the UCC) with reasonable specificity and (ii) execute and deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Secured Party, or required by law, including all things which may from time to time be necessary under the UCC to fully create, preserve, perfect and protect the priority of the Secured Party’s security interest in any Commercial Tort Claim (as defined in the UCC).

6. Collections; Other Rights.

(a) Except as provided herein, the Grantor shall be entitled to receive all cash interest, dividends and distributions paid in respect of the Collateral, and to exercise all voting rights with respect to the Collateral; provided, however, that no vote shall be cast or right exercised or other action taken which would result in any violation of any provision of this Agreement or any other Note Document.

3

(b) All of the foregoing amounts set forth in paragraph (a) of this Section 6 so collected after the occurrence of and during the continuation of an Event of Default shall be held in trust by the Grantor for and as the property of the Secured Party, and shall not be commingled with other funds, money or property of the Grantor.

(c) After the occurrence and during the continuation of an Event of Default, the Grantor will immediately upon receipt of all such checks, cash or other remittances constituting part of the Collateral or in payment for any Collateral sold, transferred, leased or otherwise disposed of, deliver any such items to the Secured Party accompanied by a remittance report in form supplied or approved by the Secured Party. The Grantor shall deliver such items in the same form received, endorsed or otherwise assigned by the Grantor where necessary to permit collection of such items.

7. Events of Default. The occurrence of any one or more Events of Default under the Indenture shall constitute an event of default (“Event of Default”) under this Agreement.

8. Rights and Remedies.

(a) In the event of the occurrence and continuation of any Event of Default, to the extent applicable: (i) the Secured Party may exercise exclusive control over the Collateral; (ii) the Secured Party shall have the right, with or without (to the extent permitted by applicable law) notice to the Grantor, as to any or all of the Collateral, by any available judicial procedure or without judicial process, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, and generally to exercise any and all rights afforded to a secured party under the UCC or other applicable law; (iii) the Secured Party shall have the right to sell, lease, or otherwise dispose of all or any part of the Collateral, whether in its then condition or after further preparation or processing, either at public or private sale or at any broker’s board, in lots or in bulk, for cash or for credit, with or without warranties or representations, and upon such terms and conditions, all as the Secured Party in its sole discretion may deem advisable; (iv) at the Secured Party’s request, the Grantor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall select, whether on the Grantor’s premises or elsewhere, and make available to the Secured Party, without rent, all of the Grantor’s premises and facilities for the purpose of the Secured Party’s taking possession of, removing or putting the Collateral in saleable or disposable form; (v) the Secured Party shall have the right to receive any and all cash interest, dividends, distributions, payments or other proceeds paid in respect of the Collateral and made application thereof to the Obligations in accordance with Section 6.06 of the Indenture and (vi) any or all of the Collateral may be registered in the name of the Secured Party or its nominee and they may thereafter exercise (x) all voting, corporate and other rights pertaining to such Collateral and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Collateral as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all securities or securities entitlements upon any merger, consolidation, reorganization, recapitalization or other fundamental change, or upon the exercise of the Grantor or the Secured Party of any right, privilege or option pertaining to such securities or securities entitlements, and in connection therewith, the right to deposit and deliver any and all of the securities or securities entitlements with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Secured Party may determine), in each of the foregoing cases, all without liability except to account for property actually received by it, but the Secured Party shall have no duty to the Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

4

(b) Any such sale, lease or other disposition of Collateral may be made without demand for performance or any notice of advertisement whatsoever except that where an applicable statute requires reasonable notice of sale or other disposition, the Grantor agrees that the sending of ten days’ notice by ordinary mail, postage prepaid, to the Grantor of the place and time of any public sale or of the time at which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof. Notwithstanding the foregoing, if any of the Collateral may be materially diminished in value during such ten (10) day period, the Secured Party shall provide the Grantor with such shorter notice as it deems reasonable under the circumstances.

(c) The proceeds of any such sale, lease or other disposition of the Collateral shall be applied first to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like, and to the reasonable attorneys’ fees and legal expenses incurred by the Secured Party, and then to satisfaction of the Obligations (in accordance with Section 6.06 of the Indenture), and to the payment of any other amounts required by applicable law. If, upon the sale, lease or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Grantor will be liable for the deficiency, together with interest thereon, at the rate prescribed in the agreements giving rise to the Obligations, and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, the Grantor waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral.

9. Power of Attorney. The Grantor authorizes the Secured Party and does hereby make, constitute and appoint the Secured Party, and any officer or agent of the Secured Party, with full power of substitution, as the Grantor’s true and lawful attorney-in-fact, with power, in its own name or in the name of the Grantor: (i) to endorse any notes, checks, drafts, money orders, or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party; (ii) to pay or discharge any taxes, liens, security interest or other encumbrances at any time levied or placed on or threatened against the Collateral; (iii) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (iv) to receive, open and dispose of all mail addressed to the Grantor and to notify the post office authorities to change the address for delivery of mail addressed to the Grantor to such address as the Secured Party may designate; (v) to exercise all membership rights, powers and privileges in connection with the Collateral to the same extent as the Grantor is entitled to exercise such rights, powers and privileges and (vi) generally to do all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral and the Secured Party’s security interest therein. The Grantor hereby approves and ratifies all acts of said attorney or designee, who shall not be liable for any acts of commission or omission, nor for any error or judgment or mistake of fact or law except for its own gross negligence or willful misconduct. This power of attorney shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The Secured Party may exercise this power of attorney only after the occurrence and during the continuance of an Event of Default.

10. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight delivery) to the addresses (or telecopy numbers) set forth in Section 13.01 of the Indenture. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or, if mailed, the third business day following the date so mailed, if earlier.

5

11. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then the Secured Party shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.

12. No Waiver; Rights Cumulative.

(a) No course of dealing between the Grantor and the Secured Party, or the Secured Party’s failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Any single or partial exercise of any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(b) All of the Secured Party’s rights and remedies with respect to the Collateral, whether established hereby or by any other agreements, instruments or documents or by law, shall be cumulative and may be exercised singly or concurrently.

13. Limitation on Secured Party’s Duty in Respect of Collateral. The Secured Party shall not have any duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of it or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except that the Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.

14. Amendments, Etc. No alteration, modification, amendment or waiver of any terms and conditions of this Agreement shall be effective or enforceable against the Secured Party unless set forth in a writing signed by the Secured Party.

15. Successors and Assigns. This Agreement and all obligations of the Grantor and the Secured Party hereunder shall be binding upon the successors and assigns of the Grantor and the Secured Party, as applicable, and shall, together with the rights and remedies of the Secured Party hereunder, inure to the benefit of the Secured Party and their respective successors and assigns.

16. No Partnership. The relationship between the Secured Party and the Grantor shall be only of creditor-debtor and no relationship of agency, partner or joint- or co-venturer shall be created by or inferred from this Agreement or the other Note Documents. The Grantor shall indemnify, defend, and save the Secured Party harmless from any and all claims asserted against the Secured Party as being the agent, partner, or joint-venturer of the Grantor.

17. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Grantor and the Secured Party with respect to its subject matter and supersedes all prior conflicting or inconsistent agreements, consents and understandings relating to such subject matter. The Grantor acknowledges and agrees that there is no oral agreement between the Grantor and the Secured Party which has not been incorporated in this Agreement.

18. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

19. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without effecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

6

20. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and any claim, controversy or dispute related to or in connection with this Agreement, any Note Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, GRANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10 hereto. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

21. Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

22. Bailee and Custodial Arrangements. Grantor agrees that it will cause any bailee or custodian now or hereafter in possession of the Collateral to acknowledge that it holds possession of the Collateral for the Secured Party’s benefit. Grantor agrees that at any time when Grantor is obligated to deliver physical possession of any Collateral to Secured Party, Secured Party may appoint a bailee or custodian to hold physical possession of the Collateral for the Secured Party’s benefit and Grantor agrees to deliver all such physical Collateral as directed by the Secured Party.

7

23. The Collateral Agent.

(a) The Secured Party has been appointed to act as collateral agent hereunder by the Holders pursuant to the Indenture. Without limiting the generality of any other term or provision herein, the Grantor acknowledges that the rights and responsibilities of the Secured Party under this Agreement with respect to any action taken by the Secured Party or the exercise or non-exercise by the Secured Party of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Secured Party and the other Secured Creditors, be governed by the Indenture.

(b) In entering into this Agreement, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Secured Party shall be protected by and shall enjoy all of the rights, immunities, protections and indemnities granted to it under the Indenture.

(c) Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Secured Party or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Secured Party, it is understood that in all cases the Secured Party shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same), in each case in accordance with the Indenture. This provision is intended solely for the benefit of the Secured Party and its successors and permitted assigns and is not intended to and will not entitle the other parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

8

IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be effective for all purposes as of the date above first written.

GRANTOR:

MZ FUNDING LLC

By /s/ Jonathan Harris

Name: Jonathan Harris

Title: Secretary

SECURED PARTY:

WILMINGTON SAVINGS FUND

SOCIETY, FSB, as Collateral Agent

By /s/ Geoffrey J. Lewis

Name: Geoffrey J. Lewis

Title: Vice President

[Signature Page to Newco Security Agreement]

SCHEDULE I

Grantor’s chief executive office or principal office	One Manhattanville Road Suite 301 Purchase, New York 10577
Registered or Legal Name	MZ Funding LLC
Other names (including business or trade names) used during the last five (5) years	None

Schedule I

EXHIBIT A

This Exhibit A to the Security Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Security Agreement”), made by MZ FUNDING LLC, a Delaware limited liability company (the “Grantor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as Collateral Agent (the “Secured Party”) describes the Collateral granted by the Grantor to the Secured Party pursuant to the Security Agreement. “UCC” means the Uniform Commercial Code as in effect in the State of New York as the UCC may be amended, supplemented or modified from time to time. Any reference to any agreement, instrument or document shall be construed as referring to such agreement, instrument or document, as amended, supplemented or modified from time to time. The Collateral shall be all of the Grantor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all of the following items of personal property of the Grantor:

1. Accounts (as defined in the UCC).

2. Certificated Securities (as defined in the UCC).

3. Chattel Paper (as defined in the UCC).

4. All of the Grantor’s rights (including rights as licensee and lessee) with respect to (A) computer and other electronic data processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (B) all Software (as defined in the UCC), and all software programs designed for use on the computers and electronic data processing hardware described in clause (A) above, including all operating system software, utilities and application programs in any form (source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (C) any firmware associated with any of the foregoing; and (D) any documentation for hardware, Software and firmware described in clauses (A), (B), and (C) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes (the “Computer Hardware and Software”) and all rights with respect to the Computer Hardware and Software, including any and all licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing.

5. Any right of the Grantor to payment under a contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance.

6. Commercial Tort Claims (as defined in the UCC).

7. Deposit Accounts (as defined in the UCC).

8. Documents (as defined in the UCC).

9. Equipment (as defined in the UCC).

10. Financial Assets (as defined in the UCC).

11. General Intangibles (as defined in the UCC), including Payment Intangibles (as defined in the UCC) and Software.

12. Goods (as defined in the UCC) (including all of its Equipment, Fixtures and Inventory, all as defined in the UCC), and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor.

13. Instruments (as defined in the UCC), including (a) the Tranche A Note, dated as of January 10, 2017, in the initial principal amount of up to $328,250,000, by MBIA Corp. to the order of the Grantor and (b) the Tranche B Note, dated as of January 10, 2017, in the initial principal amount of up to $88,000,000, by MBIA Corp. to the order of the Grantor (collectively, the “MBIA Note”) and all Supporting Obligations (as defined in the UCC).

14. All past, present and future: trade secrets, know-how and other proprietary information; trademarks, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights, unpatented inventions (whether or not patentable); patent applications and patents; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all past, present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing (the “Intellectual Property”).

15. Inventory (as defined in the UCC).

16. Investment Property (as defined in the UCC).

17. Money (of every jurisdiction whatsoever) (as defined in the UCC).

18. Letter-of-Credit Rights (as defined in the UCC).

19. Payment Intangibles (as defined in the UCC).

20. Security Entitlements (as defined in the UCC).

21. Software (as defined in the UCC).

22. Uncertificated Securities (as defined in the UCC).

23. To the extent not included in the foregoing, all other personal property of any kind or description; together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all Proceeds (as defined in the UCC), products, offspring, rents, issues, profits and returns of and from any of the foregoing; provided that to the extent that the provision of any lease or license of Computer Hardware or Software or Intellectual Property expressly prohibit (which prohibition is enforceable under applicable law) any assignment thereof, and the grant of a security interest therein, Secured Party will not enforce its security interest in the Grantor’s rights under such lease or license (other than in respect of the Proceeds thereof) for so long as such prohibition continues, it being understood that upon the request of Secured Party, the Grantor will in good faith use reasonable efforts to obtain consent for the creation of a security interest in favor of Secured Party (and to Secured Party’s enforcement of such security interest) in such Secured Party’s rights under such lease or license.

[Remainder of page intentionally left blank]

The undersigned has executed this Exhibit A as of the date first written above.

MZ FUNDING LLC

By /s/ Jonathan Harris

Name:  Jonathan Harris

Title:    Secretary

EXHIBIT B

SUPPLEMENT NO.             dated as of             , 20    (this “Supplement”) to the Security Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Security Agreement”), made by MZ FUNDING LLC, a Delaware limited liability company (the “Grantor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as Collateral Agent (the “Secured Party”).

As security for the Obligations (as defined in the Security Agreement), the Grantor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of the Grantor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all items of personal property of the Grantor described below together with all substitutions and replacements thereof and any products and proceeds thereof:

[describe collateral]

Exhibit A to the Security Agreement executed by the Grantor shall be deemed amended to include all of the foregoing items of personal property and such items shall be “Collateral” as defined in the Security Agreement and subject to the terms of the Security Agreement.

This Supplement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned parties have executed this Supplement to be effective for all purposes as of the date above first written.

GRANTOR:

MZ FUNDING LLC

By

Name:

Title:

EX-99.8

EXHIBIT 99.8

EXECUTION VERSION

SECURITY AGREEMENT

SECURITY AGREEMENT, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, this “Agreement”), made by MZ FUNDING LLC, a Delaware limited liability company (the “Grantor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as collateral agent (in such capacity, together with its successors and assigns, the “Secured Party”) for the Secured Creditors.

RECITALS

Pursuant to the Subordinated Indenture, dated as of the date hereof (as amended, restated, amended and restated, supplemented or modified from time to time, the “Indenture”; capitalized terms used but not defined herein shall have the meanings given such terms in the Indenture), by and among the Grantor, the Trustee and the Secured Party, the Holders have agreed to purchase Securities from the Grantor. In order to induce the Holders to purchase such Securities, the Grantor has agreed to grant a continuing Lien on the Collateral to secure the Obligations (as hereinafter defined). Accordingly, the Grantor hereby agrees as follows:

1. Security Interest.

(a) Grant of Security. As security for the Obligations (as hereinafter defined), the Grantor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of its right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all items of its personal property described on Exhibit A hereto which is executed by an authorized person of the Grantor, together with all substitutions and replacements thereof and any products and proceeds thereof including any which are described on a supplement hereto in substantially the form of Exhibit B hereto (the “Collateral”).

(b) Security for Obligations. This Agreement secures the payment of all now existing or hereafter arising obligations of the Grantor to the Secured Creditors, including the Notes Obligations, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses or otherwise (including, without limitation, interest, fees, costs or other payments on the Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding (all such obligations being the “Obligations”).

(c) Grantor Remains Liable. This Agreement shall not affect the Grantor’s liability to perform all of its duties and obligations under the transactions giving rise to the Obligations. The exercise by the Secured Party of any of the rights hereunder shall not release the Grantor from any of its duties or obligations under the transactions giving rise to the Obligations, which shall remain unchanged as if this Agreement had not been executed. The Secured Party shall not have any obligation or liability under the transactions giving rise to the Obligations by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of the Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

1

(d) Supplement. From time to time the Grantor may deliver, assign, pledge, set over and grant to the Secured Party for the benefit of the Secured Creditors a first priority security interest in any additional items of personal property by delivering a supplement hereto in substantially the form of Exhibit B hereto describing such items; thereafter, all such items of personal property shall be “Collateral” hereinafter and subject to the terms of this Agreement.

(e) Continuing Agreement. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until payment in full of the Obligations.

2. Title; Liens and Encumbrances. The Grantor represents and warrants that it is (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will be) the record and beneficial owner of, having (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will have) good and marketable title to, the Collateral pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other person, except the Liens created by this Agreement, and the Grantor will promptly notify the Secured Party of any such other Lien or claim made or asserted against the Collateral and the Grantor will defend the Collateral against any such Lien or other claim.

3. State of Organization or Residence; Legal Name. The Grantor represents and warrants to the Secured Party as follows:

(a) The Grantor’s state of organization is the State of Delaware. The Grantor’s chief executive office or principal office, if it is not a registered organization, as such term is defined under the Uniform Commercial Code as in effect in the State of New York as it may be amended, supplemented or modified from time to time (the “UCC”), is set forth on Schedule I hereto. The Grantor shall promptly notify the Secured Party of any change in the foregoing representations.

(b) The Grantor’s registered or legal name is as set forth on Schedule I hereto. The Grantor currently uses, and during the last five (5) years has used, no other names including business or trade names, except as set forth on Schedule I hereto. The Grantor shall not change such name without providing the Secured Party thirty (30) days’ prior written notice.

(c) The grant of the security interest in the Collateral, combined with the filing of financing statements, the execution of control agreements, the execution of assignments, and/or possession of the Collateral, each as appropriate, is effective to vest in the Secured Party a valid and perfected first priority security interest, superior to the rights of any person in and to the Collateral as set forth herein.

4. Perfection of Security Interest. The Grantor shall take any and all actions and make all filings (including the filing of UCC financing statements, continuation statements and amendments thereto) reasonably required to create and maintain, as security for the Obligations, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Intercreditor Agreement) in favor of the Secured Party for the benefit of the Secured Creditors. The Grantor authorizes the Secured Party to file all such UCC financing statements and amendments thereto pursuant to the UCC or other notices appropriate under applicable law, as the Secured Party may reasonably require, each in form satisfactory to the Secured Party. Such financing statements and amendments may contain a description of the Collateral as set forth herein or in any generic manner and may describe the Collateral as “all assets” or words of similar effect. The Secured Party may transfer, withdraw or redeem any funds or other property in each deposit account or securities account constituting Collateral without further consent by the Grantor; provided that the Secured Party will not exercise any of such rights other than during an Event of Default. The Grantor also shall pay all filing or recording costs

2

with respect thereto, and all costs of filing or recording this Agreement or any other agreement or document executed and delivered pursuant hereto or to the Obligations (including the cost of all federal, state or local mortgage, documentary, stamp or other taxes), in each case, in all public offices where filing or recording is necessary or desirable. The Grantor authorizes the Secured Party to take all other actions which the Secured Party may reasonably deem necessary or desirable to perfect or otherwise protect the Liens created hereunder and to obtain the benefits of this Agreement. Notwithstanding anything to the contrary herein or in the Intercreditor Agreement, in no event shall the Secured Party be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, creation, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including without limitation the filing or continuation of any UCC financing statement or continuation statements or similar documents or instruments), nor shall the Secured Party be responsible for, and the Secured Party makes no representation regarding, the validity, effectiveness or priority of the security interests or Liens intended to be created hereby. The Grantor shall deliver the original of the MBIA Note (as defined in Exhibit A hereto) to the Secured Party on the date hereof and any replacement or substitutions therefore promptly upon receipt by the Grantor, in each case, endorsed in blank.

5. Covenants Relating to Collateral. Until the Obligations shall have been paid in full, and the Indenture shall have terminated, the Grantor covenants and agrees that if the Grantor shall become entitled to receive or shall receive any note, any certificate or other equity securities (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Collateral, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Collateral, or otherwise in respect thereof, the Grantor shall accept the same as the agent of the Secured Party, hold the same in trust for the Secured Party and deliver the same forthwith to the Secured Party in the exact form received, duly indorsed by the Grantor to the Secured Party, together with an undated assignment or stock power covering such certificate duly executed in blank by the Grantor and with, if the Secured Party so requests, signature guaranteed, to be held by the Secured Party, subject to the terms thereof, as collateral security for the Obligations. If any of the foregoing property so distributed in respect of the Collateral shall be received by the Grantor, the Grantor shall, until such property is paid or delivered to the Secured Party, hold such property in trust for the Secured Party, segregated from other funds or property of the Grantor, as collateral security for the Obligations. Grantor shall (i) promptly forward to the Secured Party written notification of, and grant of, a security interest to the Secured Party in any and all Commercial Tort Claims (as defined in the UCC) acquired by the Grantor or coming into existence, in each case, after the date hereof, including, but not limited to, any and all actions, suits, and proceedings before any court or governmental authority by or affecting such Grantor by executing and delivering a supplement in the form of Exhibit B describing such Commercial Tort Claim (as defined in the UCC) with reasonable specificity and (ii) execute and deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Secured Party, or required by law, including all things which may from time to time be necessary under the UCC to fully create, preserve, perfect and protect the priority of the Secured Party’s security interest in any Commercial Tort Claim (as defined in the UCC).

6. Collections; Other Rights.

(a) Except as provided herein, the Grantor shall be entitled to receive all cash interest, dividends and distributions paid in respect of the Collateral, and to exercise all voting rights with respect to the Collateral; provided, however, that no vote shall be cast or right exercised or other action taken which would result in any violation of any provision of this Agreement or any other Note Document.

3

(b) All of the foregoing amounts set forth in paragraph (a) of this Section 6 so collected after the occurrence of and during the continuation of an Event of Default shall be held in trust by the Grantor for and as the property of the Secured Party, and shall not be commingled with other funds, money or property of the Grantor.

(c) After the occurrence and during the continuation of an Event of Default, the Grantor will immediately upon receipt of all such checks, cash or other remittances constituting part of the Collateral or in payment for any Collateral sold, transferred, leased or otherwise disposed of, deliver any such items to the Secured Party accompanied by a remittance report in form supplied or approved by the Secured Party. The Grantor shall deliver such items in the same form received, endorsed or otherwise assigned by the Grantor where necessary to permit collection of such items.

7. Events of Default. The occurrence of any one or more Events of Default under the Indenture shall constitute an event of default (“Event of Default”) under this Agreement.

8. Rights and Remedies.

(a) In the event of the occurrence and continuation of any Event of Default, to the extent applicable: (i) the Secured Party may exercise exclusive control over the Collateral; (ii) the Secured Party shall have the right, with or without (to the extent permitted by applicable law) notice to the Grantor, as to any or all of the Collateral, by any available judicial procedure or without judicial process, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, and generally to exercise any and all rights afforded to a secured party under the UCC or other applicable law; (iii) the Secured Party shall have the right to sell, lease, or otherwise dispose of all or any part of the Collateral, whether in its then condition or after further preparation or processing, either at public or private sale or at any broker’s board, in lots or in bulk, for cash or for credit, with or without warranties or representations, and upon such terms and conditions, all as the Secured Party in its sole discretion may deem advisable; (iv) at the Secured Party’s request, the Grantor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall select, whether on the Grantor’s premises or elsewhere, and make available to the Secured Party, without rent, all of the Grantor’s premises and facilities for the purpose of the Secured Party’s taking possession of, removing or putting the Collateral in saleable or disposable form; (v) the Secured Party shall have the right to receive any and all cash interest, dividends, distributions, payments or other proceeds paid in respect of the Collateral and made application thereof to the Obligations in accordance with Section 6.06 of the Indenture and (vi) any or all of the Collateral may be registered in the name of the Secured Party or its nominee and they may thereafter exercise (x) all voting, corporate and other rights pertaining to such Collateral and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Collateral as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all securities or securities entitlements upon any merger, consolidation, reorganization, recapitalization or other fundamental change, or upon the exercise of the Grantor or the Secured Party of any right, privilege or option pertaining to such securities or securities entitlements, and in connection therewith, the right to deposit and deliver any and all of the securities or securities entitlements with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Secured Party may determine), in each of the foregoing cases, all without liability except to account for property actually received by it, but the Secured Party shall have no duty to the Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

4

(b) Any such sale, lease or other disposition of Collateral may be made without demand for performance or any notice of advertisement whatsoever except that where an applicable statute requires reasonable notice of sale or other disposition, the Grantor agrees that the sending of ten days’ notice by ordinary mail, postage prepaid, to the Grantor of the place and time of any public sale or of the time at which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof. Notwithstanding the foregoing, if any of the Collateral may be materially diminished in value during such ten (10) day period, the Secured Party shall provide the Grantor with such shorter notice as it deems reasonable under the circumstances.

(c) The proceeds of any such sale, lease or other disposition of the Collateral shall be applied first to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like, and to the reasonable attorneys’ fees and legal expenses incurred by the Secured Party, and then to satisfaction of the Obligations (in accordance with Section 6.06 of the Indenture), and to the payment of any other amounts required by applicable law. If, upon the sale, lease or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Grantor will be liable for the deficiency, together with interest thereon, at the rate prescribed in the agreements giving rise to the Obligations, and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, the Grantor waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral.

9. Power of Attorney. The Grantor authorizes the Secured Party and does hereby make, constitute and appoint the Secured Party, and any officer or agent of the Secured Party, with full power of substitution, as the Grantor’s true and lawful attorney-in-fact, with power, in its own name or in the name of the Grantor: (i) to endorse any notes, checks, drafts, money orders, or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party; (ii) to pay or discharge any taxes, liens, security interest or other encumbrances at any time levied or placed on or threatened against the Collateral; (iii) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (iv) to receive, open and dispose of all mail addressed to the Grantor and to notify the post office authorities to change the address for delivery of mail addressed to the Grantor to such address as the Secured Party may designate; (v) to exercise all membership rights, powers and privileges in connection with the Collateral to the same extent as the Grantor is entitled to exercise such rights, powers and privileges and (vi) generally to do all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral and the Secured Party’s security interest therein. The Grantor hereby approves and ratifies all acts of said attorney or designee, who shall not be liable for any acts of commission or omission, nor for any error or judgment or mistake of fact or law except for its own gross negligence or willful misconduct. This power of attorney shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The Secured Party may exercise this power of attorney only after the occurrence and during the continuance of an Event of Default.

10. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight delivery) to the addresses (or telecopy numbers) set forth in Section 13.01 of the Indenture. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or, if mailed, the third business day following the date so mailed, if earlier.

5

11. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then the Secured Party shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.

12. No Waiver; Rights Cumulative.

(a) No course of dealing between the Grantor and the Secured Party, or the Secured Party’s failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Any single or partial exercise of any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(b) All of the Secured Party’s rights and remedies with respect to the Collateral, whether established hereby or by any other agreements, instruments or documents or by law, shall be cumulative and may be exercised singly or concurrently.

13. Limitation on Secured Party’s Duty in Respect of Collateral. The Secured Party shall not have any duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of it or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except that the Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.

14. Amendments, Etc. No alteration, modification, amendment or waiver of any terms and conditions of this Agreement shall be effective or enforceable against the Secured Party unless set forth in a writing signed by the Secured Party.

15. Successors and Assigns. This Agreement and all obligations of the Grantor and the Secured Party hereunder shall be binding upon the successors and assigns of the Grantor and the Secured Party, as applicable, and shall, together with the rights and remedies of the Secured Party hereunder, inure to the benefit of the Secured Party and their respective successors and assigns.

16. No Partnership. The relationship between the Secured Party and the Grantor shall be only of creditor-debtor and no relationship of agency, partner or joint- or co-venturer shall be created by or inferred from this Agreement or the other Note Documents. The Grantor shall indemnify, defend, and save the Secured Party harmless from any and all claims asserted against the Secured Party as being the agent, partner, or joint-venturer of the Grantor.

17. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Grantor and the Secured Party with respect to its subject matter and supersedes all prior conflicting or inconsistent agreements, consents and understandings relating to such subject matter. The Grantor acknowledges and agrees that there is no oral agreement between the Grantor and the Secured Party which has not been incorporated in this Agreement.

18. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

19. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without effecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

6

20. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and any claim, controversy or dispute related to or in connection with this Agreement, any Note Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GRANTOR AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, GRANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10 hereto. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

21. Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

22. Bailee and Custodial Arrangements. Grantor agrees that it will cause any bailee or custodian now or hereafter in possession of the Collateral to acknowledge that it holds possession of the Collateral for the Secured Party’s benefit. Grantor agrees that at any time when Grantor is obligated to deliver physical possession of any Collateral to Secured Party, Secured Party may appoint a bailee or custodian to hold physical possession of the Collateral for the Secured Party’s benefit and Grantor agrees to deliver all such physical Collateral as directed by the Secured Party.

7

23. The Collateral Agent.

(a) The Secured Party has been appointed to act as collateral agent hereunder by the Holders pursuant to the Indenture. Without limiting the generality of any other term or provision herein, the Grantor acknowledges that the rights and responsibilities of the Secured Party under this Agreement with respect to any action taken by the Secured Party or the exercise or non-exercise by the Secured Party of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Secured Party and the other Secured Creditors, be governed by the Indenture.

(b) In entering into this Agreement, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Secured Party shall be protected by and shall enjoy all of the rights, immunities, protections and indemnities granted to it under the Indenture.

(c) Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Secured Party or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Secured Party, it is understood that in all cases the Secured Party shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same), in each case in accordance with the Indenture. This provision is intended solely for the benefit of the Secured Party and its successors and permitted assigns and is not intended to and will not entitle the other parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

8

IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be effective for all purposes as of the date above first written.

GRANTOR:
MZ FUNDING LLC
By	/s/ Jonathan Harris
Name: Jonathan Harris
Title: Secretary
SECURED PARTY:
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Collateral Agent
By	/s/ Geoffrey J. Lewis
Name: Geoffrey J. Lewis
Title: Vice President

[Signature Page to Newco Security Agreement]

SCHEDULE I

Grantor’s chief executive office or principal office	One Manhattanville Road Suite 301 Purchase, New York 10577
Registered or Legal Name	MZ Funding LLC
Other names (including business or trade names) used during the last five (5) years	None

Schedule I

EXHIBIT A

This Exhibit A to the Security Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Security Agreement”), made by MZ FUNDING LLC, a Delaware limited liability company (the “Grantor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as Collateral Agent (the “Secured Party”) describes the Collateral granted by the Grantor to the Secured Party pursuant to the Security Agreement. “UCC” means the Uniform Commercial Code as in effect in the State of New York as the UCC may be amended, supplemented or modified from time to time. Any reference to any agreement, instrument or document shall be construed as referring to such agreement, instrument or document, as amended, supplemented or modified from time to time. The Collateral shall be all of the Grantor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all of the following items of personal property of the Grantor:

1. Accounts (as defined in the UCC).

2. Certificated Securities (as defined in the UCC).

3. Chattel Paper (as defined in the UCC).

4. All of the Grantor’s rights (including rights as licensee and lessee) with respect to (A) computer and other electronic data processing units, memory units, display terminals, printers, computer elements, card readers, tape drives, hard and soft disk drives, cables, electrical supply hardware, generators, power equalizers, accessories, peripheral devices and other related computer hardware; (B) all Software (as defined in the UCC), and all software programs designed for use on the computers and electronic data processing hardware described in clause (A) above, including all operating system software, utilities and application programs in any form (source code and object code in magnetic tape, disk or hard copy format or any other listings whatsoever); (C) any firmware associated with any of the foregoing; and (D) any documentation for hardware, Software and firmware described in clauses (A), (B), and (C) above, including flow charts, logic diagrams, manuals, specifications, training materials, charts and pseudo codes (the “Computer Hardware and Software”) and all rights with respect to the Computer Hardware and Software, including any and all licenses, options, warranties, service contracts, program services, test rights, maintenance rights, support rights, improvement rights, renewal rights and indemnifications, and any substitutions, replacements, additions or model conversions of any of the foregoing.

5. Any right of the Grantor to payment under a contract for the sale or lease of goods or the rendering of services, which right is at the time not yet earned by performance.

6. Commercial Tort Claims (as defined in the UCC).

7. Deposit Accounts (as defined in the UCC).

8. Documents (as defined in the UCC).

9. Equipment (as defined in the UCC).

10. Financial Assets (as defined in the UCC).

11. General Intangibles (as defined in the UCC), including Payment Intangibles (as defined in the UCC) and Software.

12. Goods (as defined in the UCC) (including all of its Equipment, Fixtures and Inventory, all as defined in the UCC), and all accessions, additions, attachments, improvements, substitutions and replacements thereto and therefor.

13. Instruments (as defined in the UCC), including (a) the Tranche A Note, dated as of January 10, 2017, in the initial principal amount of up to $328,250,000, by MBIA Corp. to the order of the Grantor and (b) the Tranche B Note, dated as of January 10, 2017, in the initial principal amount of up to $88,000,000, by MBIA Corp. to the order of the Grantor (collectively, the “MBIA Note”) and all Supporting Obligations (as defined in the UCC).

14. All past, present and future: trade secrets, know-how and other proprietary information; trademarks, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and the goodwill of the business relating thereto and all registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights (including copyrights for computer programs) and copyright registrations or applications for registrations which have heretofore been or may hereafter be issued throughout the world and all tangible property embodying the copyrights, unpatented inventions (whether or not patentable); patent applications and patents; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; the right to sue for all past, present and future infringements of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing (the “Intellectual Property”).

15. Inventory (as defined in the UCC).

16. Investment Property (as defined in the UCC).

17. Money (of every jurisdiction whatsoever) (as defined in the UCC).

18. Letter-of-Credit Rights (as defined in the UCC).

19. Payment Intangibles (as defined in the UCC).

20. Security Entitlements (as defined in the UCC).

21. Software (as defined in the UCC).

22. Uncertificated Securities (as defined in the UCC).

23. To the extent not included in the foregoing, all other personal property of any kind or description; together with all books, records, writings, data bases, information and other property relating to, used or useful in connection with, or evidencing, embodying, incorporating or referring to any of the foregoing, and all Proceeds (as defined in the UCC), products, offspring, rents, issues, profits and returns of and from any of the foregoing; provided that to the extent that the provision of any lease or license of Computer Hardware or Software or Intellectual Property expressly prohibit (which prohibition is enforceable under applicable law) any assignment thereof, and the grant of a security interest therein, Secured Party will not enforce its security interest in the Grantor’s rights under such lease or license (other than in respect of the Proceeds thereof) for so long as such prohibition continues, it being understood that upon the request of Secured Party, the Grantor will in good faith use reasonable efforts to obtain consent for the creation of a security interest in favor of Secured Party (and to Secured Party’s enforcement of such security interest) in such Secured Party’s rights under such lease or license.

[Remainder of page intentionally left blank]

The undersigned has executed this Exhibit A as of the date first written above.

MZ FUNDING LLC
By	/s/ Jonathan Harris
Name: Jonathan Harris
Title: Secretary

EXHIBIT B

SUPPLEMENT NO.             dated as of             , 20            (this “Supplement”) to the Security Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Security Agreement”), made by MZ FUNDING LLC, a Delaware limited liability company (the “Grantor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as Collateral Agent (the “Secured Party”).

As security for the Obligations (as defined in the Security Agreement), the Grantor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of the Grantor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all items of personal property of the Grantor described below together with all substitutions and replacements thereof and any products and proceeds thereof:

[describe collateral]

Exhibit A to the Security Agreement executed by the Grantor shall be deemed amended to include all of the foregoing items of personal property and such items shall be “Collateral” as defined in the Security Agreement and subject to the terms of the Security Agreement.

This Supplement shall be governed by and construed in accordance with the laws of the State of New York.

IN WITNESS WHEREOF, the undersigned parties have executed this Supplement to be effective for all purposes as of the date above first written.

GRANTOR:

MZ FUNDING LLC

By

Name:

Title:

EX-99.9

EXHIBIT 99.9

EXECUTION COPY

PLEDGE AGREEMENT

PLEDGE AGREEMENT, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, this “Agreement”), made by MBIA INC., a Connecticut corporation (the “Pledgor”), in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB, as collateral agent for the Holders of the Securities (in such capacity, together with its successors and assigns, the “Secured Party”) for the Secured Creditors.

RECITALS

A. Pursuant to the Indenture, dated as of the date hereof (as amended, restated, amended and restated, supplemented or modified from time to time, the “Indenture”; capitalized terms used but not defined herein shall have the meanings given such terms in the Indenture), by and among MZ Funding, LLC, a Delaware limited liability company (the “Company”), the Collateral Agent, and Wilmington Savings Fund Society, FSB, as trustee (in such capacity, together with its successors and assigns, the “Trustee”), the Company will from time to time incur the Obligations (as hereinafter defined) and the Holders have agreed to purchase such Securities from the Company. It is a requirement under the Indenture that the Pledgor shall execute and deliver this Agreement to the Secured Party for the benefit of the Secured Creditors.

B. In order to induce the Holders to accept the Securities issued under the Indenture, the Pledgor has agreed to pledge and grant a continuing Lien on the Collateral to secure the Obligations (as hereinafter defined).

C. The Company and the Pledgor are entering into certain other transactions related to the transactions contemplated hereby, including an additional financing of the Company by the Pledgor (the “Inc. Subordinated Financing”) and the possible extension of additional credit to the Company by the Pledgor (the “Additional Subordinated Facility”), such Inc. Subordinated Financing and Additional Subordinated Facility and the transactions contemplated hereby being part of a coordinated financing plan involving the Company and the Pledgor.

Accordingly, the Pledgor hereby agrees as follows:

1. Security Interest.

(a) Grant of Security and Pledge. As security for the Obligations (as hereinafter defined), Pledgor hereby delivers, assigns, pledges, sets over and grants to the Secured Party a first priority security interest in, all of its right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all limited liability company membership interests of the Company, as more fully described on Exhibit A hereto, which is executed by an authorized person of the Pledgor (the “Collateral”).

(b) Security for Obligations. This Agreement secures the payment of all now existing or hereafter arising obligations of the Company and all obligations of the Pledgor and the Company to the Secured Creditors hereunder and under the Note Documents, including the Notes Obligations, to the Secured Party with respect to the Indenture, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses or otherwise (including, without limitation, interest, fees, costs, or other payments on the Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding (all such obligations being the “Obligations”).

1

(c) Pledgor Remains Liable. This Agreement shall not affect the Pledgor’s liability to perform all of its duties and obligations under the transactions giving rise to the Obligations. The exercise by the Secured Party of any of the rights hereunder shall not release the Pledgor from any of its duties or obligations under the transactions giving rise to the Obligations, which shall remain unchanged as if this Agreement had not been executed. The Secured Party shall not have any obligation or liability under the transactions giving rise to the Obligations by reason of this Agreement, nor shall the Secured Party be obligated to perform any of the obligations or duties of the Pledgor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

(d) Continuing Agreement. This Agreement shall create a continuing security interest in the Collateral and shall remain in full force and effect until payment in full of the Obligations.

2. Title; Liens and Encumbrances. The Pledgor represents and warrants that it is (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will be) the record and beneficial owner of, having (or to the extent that this Agreement states that the Collateral is to be acquired after the date hereof, will have) good and marketable title to, the Collateral pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other person, except the Liens created by this Agreement, and the Pledgor will promptly notify the Secured Party of any such other Lien or claim made or asserted against the Collateral and will defend the Collateral against any such Lien or other claim.

3. State of Organization or Residence; Legal Name. The Pledgor represents and warrants to the Secured Party as follows:

(a) The Pledgor’s state of incorporation is the State of Connecticut. The Pledgor’s chief executive office or principal office, if it is not a registered organization, as such term is defined under the Uniform Commercial Code as in effect in the State of New York, as it may be amended, supplemented or modified from time to time (the “UCC”), is set forth on Schedule I hereto. The Pledgor shall promptly notify the Secured Party of any change in the foregoing representations.

(b) The Pledgor’s registered or legal name is as set forth on Schedule I hereto. The Pledgor currently uses, and during the last five (5) years has used, no other names, including business or trade names, except as set forth on Schedule I hereto. The Pledgor shall not change such name without providing the Secured Party thirty (30) days’ prior written notice.

(c) The grant of the security interest in the Collateral, combined with the filing of financing statements, the execution of control agreements the execution of assignments, and/or possession of the Collateral, each as appropriate, is effective to vest in the Secured Party a valid and perfected first priority security interest, superior to the rights of any person in and to the Collateral as set forth herein.

(d) The execution, delivery and performance by the Pledgor of this Agreement has been duly authorized by all necessary corporate action and does not result in any violation of (i) the terms of Pledgor’s certificate of incorporation, bylaws (as amended, restated, amended and restated, supplemented or modified prior to the date hereof), or other similar documents or (ii) applicable law.

(e) This Agreement constitutes a legal, valid and binding obligation of Pledgor enforceable in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

2

(f) Pledgor is the direct and beneficial owner of the Collateral set forth on Exhibit A hereto and has all governing authority under the operating agreement and certificate of incorporation of the Company.

4. Perfection of Security Interest. The Pledgor shall take any and all actions and make all filings (including the filing of UCC financing statements, continuation statements and amendments thereto) reasonably required to create and maintain, as security for the Obligations, a valid and enforceable perfected Lien and security interest in and on all of the Collateral in favor of the Secured Party for the benefit of the Secured Creditors. The Pledgor authorizes the Secured Party to file all such UCC financing statements and amendments thereto pursuant to the UCC or other notices appropriate under applicable law, as the Secured Party may reasonably require, each in form satisfactory to the Secured Party. Such financing statements and amendments may contain a description of the Collateral as set forth herein or in any generic manner and may describe the Collateral as “all assets” or words of similar effect. The Secured Party may transfer, withdraw or redeem any funds or other property in each deposit account or securities account constituting Collateral without further consent by the Pledgor; provided that the Secured Party will not exercise any of such rights other than during an Event of Default. The Pledgor also shall pay all filing or recording costs with respect thereto, and all costs of filing or recording this Agreement or any other agreement or document executed and delivered pursuant hereto or to the Obligations (including the cost of all federal, state or local mortgage, documentary, stamp or other taxes), in each case, in all public offices where filing or recording is necessary or desirable. The Pledgor authorizes the Secured Party to take all other actions which the Secured Party may reasonably deem necessary or desirable to perfect or otherwise protect the Liens created hereunder and to obtain the benefits of this Agreement. Notwithstanding anything to the contrary herein or the Intercreditor Agreement, in no event shall the Secured Party be responsible for, or have any duty or obligation with respect to, the recording, filing, registering, creation, perfection, protection or maintenance of the security interests or Liens intended to be created by this Agreement (including without limitation the filing or continuation of any UCC financing statement or continuation statements or similar documents or instruments), nor shall the Secured Party be responsible for, and the Secured Party makes no representation regarding, the validity, effectiveness or priority of the security interests or Liens intended to be created hereby.

5. Covenants Relating to Collateral. Until the Obligations shall have been paid in full, the Pledgor covenants and agrees that if the Pledgor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Collateral, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Collateral, or otherwise in respect thereof, the Pledgor shall accept the same as the agent of the Secured Party, hold the same in trust for the Secured Party and deliver the same forthwith to the Secured Party in the exact form received, duly indorsed by the Pledgor to the Secured Party, if required, together with an undated assignment covering such certificate duly executed in blank by the Pledgor and with, if the Secured Party so requests, signature guaranteed, to be held by the Secured Party, subject to the terms thereof, as additional collateral security for the Obligations. If any of the foregoing property so distributed in respect of the Collateral shall be received by the Pledgor, the Pledgor shall, until such property is paid or delivered to the Secured Party, hold such property in trust for the Secured Party, segregated from other funds or property of the Pledgor, as additional collateral security for the Obligations.

3

6. Collections; Other Rights.

(a) Except as provided herein, the Pledgor shall be entitled to receive all cash interest, dividends and distributions paid in respect of the Collateral, and to exercise all voting rights with respect to the Collateral; provided, however, that no vote shall be cast or right exercised or other action taken which would result in any violation of any provision of this Agreement or any other Note Document.

(b) All of the foregoing amounts set forth in paragraph (a) of this Section 6 so collected after the occurrence of and during the continuation of an Event of Default shall be held in trust by the Pledgor for and as the property of the Secured Party, and shall not be commingled with other funds, money or property of the Pledgor.

(c) After the occurrence and during the continuation of an Event of Default, the Pledgor will immediately upon receipt of all such checks, cash or other remittances constituting part of the Collateral or in payment for any Collateral sold, transferred, leased or otherwise disposed of, deliver any such items to the Secured Party accompanied by a remittance report in form supplied or approved by the Secured Party. The Pledgor shall deliver such items in the same form received, endorsed or otherwise assigned by the Pledgor where necessary to permit collection of such items.

7. Events of Default. The occurrence of any one or more Events of Default under the Indenture shall constitute an event of default (“Event of Default”) under this Agreement.

8. Rights and Remedies.

(a) In the event of the occurrence and continuation of any Event of Default, to the extent applicable: (i) the Secured Party may exercise exclusive control over the Collateral; (ii) the Secured Party shall have the right, with or without (to the extent permitted by applicable law) notice to the Pledgor, as to any or all of the Collateral, by any available judicial procedure or without judicial process, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral, and generally to exercise any and all rights afforded to a secured party under the UCC or other applicable law; (iii) the Secured Party shall have the right to sell, lease, or otherwise dispose of all or any part of the Collateral, whether in its then condition or after further preparation or processing, either at public or private sale or at any broker’s board, in lots or in bulk, for cash or for credit, with or without warranties or representations, and upon such terms and conditions, all as the Secured Party in its sole discretion may deem advisable; (iv) at the Secured Party’s request, the Pledgor shall assemble the Collateral and make it available to the Secured Party at places which the Secured Party shall select, whether or the Pledgor’s premises or elsewhere, and make available to the Secured Party, without rent, all of the Pledgor’s premises and facilities for the purpose of the Secured Party’s taking possession of, removing or putting the Collateral in saleable or disposable form; (v) the Secured Party shall have the right to receive any and all cash interest, dividends, distributions, payments or other proceeds paid in respect of the Collateral and made application thereof to the Obligations in accordance with Section 6.06 of the Indenture and (vi) any or all of the Collateral may be registered in the name of the Secured Party or its nominee and they may thereafter exercise (x) all voting, corporate and other rights pertaining to such Collateral and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Collateral as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all securities or securities entitlements upon any merger, consolidation, reorganization, recapitalization or other fundamental change, or upon the exercise of the Pledgor or the Secured Party of any right, privilege or option pertaining to such securities or securities entitlements, and in connection therewith, the right to deposit and deliver any and all of the securities or securities entitlements with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Secured Party may determine), in each of the foregoing cases, all without liability except to account for property actually received by it, but the Secured Party shall have no duty to the Pledgor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

4

(b) Any such sale, lease or other disposition of Collateral may be made without demand for performance or any notice of advertisement whatsoever except that where an applicable statute requires reasonable notice of sale or other disposition, the Pledgor agrees that the sending of ten days’ notice by ordinary mail, postage prepaid, to the Pledgor of the place and time of any public sale or of the time at which any private sale or other intended disposition is to be made, shall be deemed reasonable notice thereof. Notwithstanding the foregoing, if any of the Collateral may be materially diminished in value during such ten (10) day period, the Secured Party shall provide the Pledgor with such shorter notice as it deems reasonable under the circumstances.

(c) The proceeds of any such sale, lease or other disposition of the Collateral shall be applied first to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like, and to the reasonable attorneys’ fees and legal expenses incurred by the Secured Party, and then to satisfaction of the Obligations (in accordance with Section 6.06 of the Indenture), and to the payment of any other amounts required by applicable law. If, upon the sale, lease or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Pledgor will be liable for the deficiency, together with interest thereon, at the rate prescribed in the agreements giving rise to the Obligations, and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, the Pledgor waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral.

9. Power of Attorney. The Pledgor authorizes the Secured Party and does hereby make, constitute and appoint the Secured Party, and any officer or agent of the Secured Party, with full power of substitution, as the Pledgor’s true and lawful attorney-in-fact, with power, in its own name or in the name of the Pledgor: (i) to endorse any notes, checks, drafts, money orders, or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party; (ii) to pay or discharge any taxes, liens, security interest or other encumbrances at any time levied or placed on or threatened against the Collateral; (iii) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; (iv) to receive, open and dispose of all mail addressed to the Pledgor and to notify the post office authorities to change the address for delivery of mail addressed to the Pledgor to such address as the Secured Party may designate; (v) to exercise all membership rights, voting rights, management rights, rights to be admitted as a member, right to remove, expel, elect, appoint or designate managers of the Company, powers and privileges in connection with the Collateral to the same extent as the Pledgor is entitled to exercise such rights, powers and privileges and (vi) generally to do all acts and things which the Secured Party deems necessary to protect, preserve and realize upon the Collateral and the Secured Party’s security interest therein. The Pledgor hereby approves and ratifies all acts of said attorney or designee, who shall not be liable for any acts of commission or omission, nor for any error or judgment or mistake of fact or law except for its own gross negligence or willful misconduct. This power of attorney shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The Secured Party may exercise this power of attorney only after the occurrence and during the continuance of an Event of Default.

10. Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight delivery) to the addresses (or telecopy numbers) set forth in Section 13.1 of the Indenture. Any party hereto may change its address or telecopy

5

number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or, if mailed, the third business day following the date so mailed, if earlier.

11. Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then the Secured Party shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Party’s rights and remedies hereunder.

12. No Waiver; Rights Cumulative.

(a) No course of dealing between the Pledgor and the Secured Party, or the Secured Party’s failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Any single or partial exercise of any right, power or privilege hereunder shall not preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(b) All of the Secured Party’s rights and remedies with respect to the Collateral, whether established hereby or by any other agreements, instruments or documents or by law, shall be cumulative and may be exercised singly or concurrently.

13. Limitation on Secured Party’s Duty in Respect of Collateral. The Secured Party shall not have any duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of it or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto, except that the Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control.

14. Amendments, Etc. No alteration, modification, amendment or waiver of any terms and conditions of this Agreement shall be effective or enforceable against the Secured Party unless set forth in a writing signed by the Secured Party.

15. Successors and Assigns. This Agreement and all obligations of the Pledgor and the Secured Party hereunder shall be binding upon the successors and assigns of the Pledgor and the Secured Party, as applicable, and shall, together with the rights and remedies of the Secured Party hereunder, inure to the benefit of the Secured Party and their respective successors and assigns.

16. No Partnership. The relationship between the Secured Party and the Pledgor shall be only of creditor-debtor and no relationship of agency, partner or joint- or co-venturer shall be created by or inferred from this Agreement or the other Note Documents. The Pledgor shall indemnify, defend, and save the Secured Party harmless from any and all claims asserted against the Secured Party as being the agent, partner, or joint-venturer of the Pledgor.

17. Entire Agreement. This Agreement embodies the entire agreement and understanding between the Pledgor and the Secured Party with respect to its subject matter and supersedes all prior conflicting or inconsistent agreements, consents and understandings relating to such subject matter. The Pledgor acknowledges and agrees that there is no oral agreement between the Pledgor and the Secured Party which has not been incorporated in this Agreement.

6

18. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

19. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without effecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

20. Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and any claim, controversy or dispute related to or in connection with this Agreement, any Note Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, PLEDGOR AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, PLEDGOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10 hereto. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

21. Headings. Section headings used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

22. Pledge Continuing, Absolute, Unconditional; Waivers; Right to Deal with the Company.

7

(a) The obligations of the Pledgor hereunder shall be continuing, absolute, unlimited and unconditional, shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim the Pledgor may have against the Secured Party or the Company or any other Person, and shall remain in full force and effect without regard to, and, to the fullest extent permitted by applicable law, shall not be released, discharged or in any way affected by, any circumstance or condition (whether or not the Pledgor shall have any knowledge or notice thereof) whatsoever which might constitute a legal or equitable discharge or defense.

(b) The Pledgor unconditionally and irrevocably waive, to the fullest extent permitted by applicable law: (a) notice of any of the matters referred to in Section 22(a); (b) all notices which may be required by statute, rule of law or otherwise to preserve any rights against the Pledgor hereunder, including, without limitation, notice of the acceptance of this pledge, or the creation, renewal, extension, modification or accrual of the Obligations or notice of any other matters relating thereto, any presentment, demand, notice of dishonor, protest, nonpayment of any damages or other amounts payable under any Note Document; (c) any requirement for the enforcement, assertion or exercise of any right, remedy, power or privilege under or in respect of any Note Document, including, without limitation, diligence in collection or protection of or realization upon the Obligations or any part thereof or any collateral therefor; (d) any requirement of diligence; (e) any requirement to mitigate the damages resulting from a default by the Company under any Note Document; (f) the occurrence of every other condition precedent to which the Pledgor or the Company may otherwise be entitled; (g) the right to require the Secured Party to proceed against the Company or any other person liable on the Obligations, to proceed against or exhaust any security held by the Company or any other Person, or to pursue any other remedy in the Secured Party’s power whatsoever; (h) the right to have the property of the Company first applied to the discharge of the Obligations and (i) until such time that all Obligations have been indefeasibly paid in full, any and all rights it may now or hereafter have under any agreement or at law or in equity (including, without limitation, any law subrogating the Pledgor to the rights of the Secured Party) to assert any claim against or seek contribution, indemnification or any other form of reimbursement from the Company or any other party liable for payment of any or all of the Obligations for any payment made by the Secured Party under or in connection with this pledge or otherwise. The Secured Party may, at its election, exercise any right or remedy it may have against the Company without affecting or impairing in any way the liability of the Pledgor hereunder and the Pledgor waives, to the fullest extent permitted by applicable law, any defense arising out of the absence, impairment or loss of any right of reimbursement, contribution or subrogation or any other right or remedy of the Pledgor against the Company, whether resulting from such election by the Secured Party or otherwise. The Pledgor waives any defense arising by reason of any disability or other defense of the Company or by reason of the cessation for any cause whatsoever of the liability, either in whole or in part, of the Company to the Secured Party for the Obligations. The Pledgor assume the responsibility for being and keeping informed of the financial condition of the Company and of all other circumstances bearing upon the risk of nonpayment of the Obligations and agrees that the Secured Party shall not have any duty to advise the Pledgor of information regarding any condition or circumstance or any change in such condition or circumstance. The Pledgor acknowledges that the Secured Party has not made any representations to the Pledgor concerning the financial condition of the Company.

(c) At any time and from time to time, without terminating, affecting or impairing the validity of this pledge or the obligations of the Pledgor hereunder, the Secured Party may deal with the Company in the same manner and as fully as if this pledge did not exist and shall be entitled, among other things, to grant the Company, without notice or demand and without affecting the Pledgor’s liability hereunder, such extension or extensions of time to perform, renew, compromise, accelerate or otherwise change the time for payment of or otherwise change the terms of Indebtedness or any part thereof contained in or arising under any Note Document or any other document evidencing obligations of the Company to the Secured Party, or to waive any obligation of the Company to perform, any act or acts as the Secured Party may deem advisable.

8

21. The Collateral Agent.

(a) The Secured Party has been appointed to act as collateral agent hereunder by the Holders pursuant to the Indenture. Without limiting the generality of any other term or provision herein, the Pledgor acknowledges that the rights and responsibilities of the Secured Party under this Agreement with respect to any action taken by the Secured Party or the exercise or non-exercise by the Secured Party of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Secured Party and the other Secured Creditors, be governed by the Indenture.

(b) In entering into this Agreement, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Secured Party shall be protected by and shall enjoy all of the rights, immunities, protections and indemnities granted to it under the Indenture.

(c) Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Secured Party or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Secured Party, it is understood that in all cases the Secured Party shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same), in each case in accordance with the Indenture. This provision is intended solely for the benefit of the Secured Party and its successors and permitted assigns and is not intended to and will not entitle the other parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

9

IN WITNESS WHEREOF, the undersigned parties have executed this Agreement to be effective for all purposes as of the date above first written.

MBIA INC., as Pledgor
By	/s/ Oliver E.W. North
Name:	Oliver E.W. North
Title:	Assistant Vice President and Treasurer
SECURED PARTY:
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Collateral Agent
By	/s/ Geoffrey J. Lewis
Name:	Geoffrey J. Lewis
Title:	Vice President

[Signature Page to Newco Equity Pledge Agreement]

MZ Funding LLC hereby acknowledges the security interest granted to the Secured Party pursuant to this Agreement and agrees that upon notice by the Secured Party that it has completed a foreclosure on the membership interests of MZ Funding LLC, MZ Funding LLC shall admit the Secured Party or its designee as a member. MZ Funding LLC hereby acknowledges the power of attorney granted to the Secured Party and agrees that the Secured Party may exercise voting rights to remove, expel, elect, appoint or designate managers of MZ Funding LLC to the extent provided in such grant.

MZ FUNDING LLC
By	/s/ Jonathan Harris
Name:	Jonathan Harris
Title:	Secretary

[Signature Page to Newco Equity Pledge Agreement Acknowledgement]

SCHEDULE I

Pledgor’s chief executive office or principal office	One Manhattanville Road, Purchase, New York 10577
Registered or Legal Name	MBIA Inc.
Other names (including business or trade names) used during the last five (5) years	None

Schedule I

EXHIBIT A

This Exhibit A to the Pledge Agreement, dated as of January 10, 2017 (as amended, restated, amended and restated, supplemented or modified from time to time, the “Pledge Agreement”), made by MBIA INC., a Connecticut corporation (the “Pledgor”) in favor of WILMINGTON SAVINGS FUND SOCIETY, FSB (the “Secured Party”) describes the Collateral granted by the Pledgor to the Secured Party pursuant to the Pledge Agreement. “UCC” means the Uniform Commercial Code as in effect in the State of New York as the UCC may be amended, supplemented or modified from time to time. Any reference to any agreement, instrument or document shall be construed as referring to such agreement, instrument or document, as amended, supplemented or modified from time to time. The Collateral shall be all of the Pledgor’s right, title and interest, whether now existing or hereafter arising or acquired, in and to any and all of the following items of personal property of the Pledgor:

1. All rights of the Pledgor embodied in or arising out of the Pledgor’s status as the holder of 100% of the limited liability company membership interests of MZ Funding LLC (the “Company”) and all of the Pledgor’s rights, powers and privileges as a limited liability company member relating to, arising out of or attributable to the operating agreement of the Company, consisting of:

a) all economic rights, including without limitation, all rights to share in the profits and losses of the Company and all rights to receive distributions of the assets of the Company;

b) all ownership, management, voting, governance or control rights, including without limitation, all rights to vote, consent to action and otherwise participate in the management of the Company pursuant to the operating agreement and certificate of formation;

c) any other membership rights or rights conferred on a member of the Company pursuant to such entity’s operating agreement; and

d) any and all other items of personal property of the Company.

2. All cash, securities, shares, certificates, notes, instruments, rights, receivables and all other property now or hereafter received or receivable by such Pledgor in connection with any sale, exchange, redemption or other disposition of any of the foregoing;

3. All dividends, instruments, interest, proceeds and other distributions from time to time received, receivable or otherwise distributed, whether in cash, securities or other property on any of the foregoing;

4. All additions to and substitutions for any of the foregoing;

5. All cash and non-cash proceeds of any and all of the foregoing, including, without limitation, all payments under insurance, or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing;

6. All other interests and rights of the Pledgor in the Company, including without limitation any right to cause the dissolution of the Company or to appoint or nominate a successor to the Pledgor as a member or other equity holder in the Company;

7. All proceeds of any of the foregoing Collateral and, to the extent not otherwise included, all payments under insurance (whether or not the Secured Party is the loss payee thereof) or under any indemnity, warranty or guaranty by reason of loss to or otherwise with respect to any of the foregoing Collateral

In each case, the foregoing property shall be covered by the Pledge Agreement, whether such Pledgor’s ownership or other rights therein are presently held or hereafter acquired and howsoever the Pledgor’s interests therein may arise or appear (whether by ownership, security interest, claim or otherwise).

The granting of the foregoing security interest does not make the Secured Party a successor to the Pledgor as a member of the Company, and no Secured Party nor any of their respective successors, assigns or agents hereunder shall be deemed to have become a member of the Company by accepting this Agreement or exercising any right granted herein unless and until such time, if any, when the Secured Party or any such successor or assign expressly becomes a member of the Company after a foreclosure. Notwithstanding anything herein to the contrary (except to the extent, if any, that the Secured Party or any of its successors or assigns hereafter expressly becomes a member of the Company, neither the Secured Party nor any of their respective successors, assigns or agents shall be deemed to have assumed or otherwise become liable for any debts or obligations of the Company or of the Pledgor to the Company.

[Remainder of page intentionally left blank]

The undersigned has executed this Exhibit A as of the date first written above.

MBIA INC.
By	/s/ Oliver E.W. North
Name:	Oliver E.W. North
Title:	Assistant Vice President and Treasurer

EX-99.10

EXHIBIT 99.10

EXECUTION COPY

INTERCREDITOR AGREEMENT

INTERCREDITOR AGREEMENT, dated as of January 10, 2017 (this “Agreement”), among WILMINGTON SAVINGS FUND SOCIETY, FSB, solely in its capacity as Senior Notes Trustee, MZ FUNDING LLC, MBIA INSURANCE CORPORATION, as Insurer, and WILMINGTON SAVINGS FUND SOCIETY, FSB, solely in its capacity as Subordinated Notes Trustee. The parties hereto hereby agree as follows:

ARTICLE I: DEFINITIONS

Section 1.1 Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“Bankruptcy Code” means Title 11 of the United States Code, as now and hereafter in effect, as may be amended, or any successor statute.

“Cash Collateral” has the meaning set forth in Section 5.2(a).

“Collateral” means all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to the Senior Debt Documents or the Subordinated Debt Document, including any proceeds and products thereof.

“Issuer” means MZ Funding LLC.

“Insurer” means MBIA Insurance Corporation.

“Insolvency Proceeding” means any case, proceeding or other action by or against the Issuer or Insurer (a) under any existing or future law (including by any governmental agency or department with jurisdiction over insurance companies) of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, rehabilitation, liquidation, conservatorship, receivership or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition, rehabilitation or other relief with respect to it or its debts, or (b) seeking appointment of a receiver, trustee, custodian, conservator, rehabilitator, liquidator or other similar official for it or for all or any substantial part of its assets.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Majority Senior Noteholders” means the holders of not less than a majority in aggregate principal amount of the outstanding Senior Notes.

“Obligor” means the Issuer and the Insurer.

“Person” means any person, individual, sole proprietorship, partnership, joint venture, corporation, limited liability company, trust, business trust, joint stock company, unincorporated organization, association, institution, party, including any governmental authority or any other entity of whatever nature.

“Senior Debt Agreements” means the Senior Notes Indenture and the Senior Note Purchase Agreement.

“Senior Debt Documents” means the Senior Debt Agreements, the Senior Notes, this Agreement, the Senior Security Agreement, the Senior Notes Insurance Policy and any other documents delivered to the Senior Creditor by any Obligor evidencing, securing or insuring the Senior Obligations.

“Senior Creditor” means, collectively, the Senior Notes Trustee and the holders of the Senior Notes.

“Senior Note Purchase Agreement” means that certain Note Purchase Agreement, dated as of the date hereof, by and among the purchasers named therein, as purchasers, and the Senior Notes Trustee.

“Senior Notes” means the 14% senior secured notes due 2020 of the Issuer purchased and sold pursuant to the Senior Note Purchase Agreement and governed by the Senior Notes Indenture.

“Senior Notes Indenture” means that certain Indenture, dated as of the date hereof, by and between the Issuer and the Senior Notes Trustee, as trustee and collateral agent.

“Senior Notes Insurance Policy” means insurance policy no. 541511 dated January 10, 2017, issued by the Insurer and insuring the timely payment of all amounts due under the Senior Notes.

“Senior Notes Trustee” means Wilmington Savings Fund Society, FSB, solely in its capacity as indenture trustee and collateral agent under the Senior Notes Indenture (and not in its individual or corporate capacity).

“Senior Obligations” means any, and now existing or hereafter arising, obligations of any Obligor to the Senior Creditor under the Senior Debt Documents, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses, indemnification obligations, reimbursement obligations or otherwise (including any applicable Make-Whole Premium (as defined in the Senior Notes Indenture), and including, without limitation, interest, fees, costs or other payments on the Senior Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding.

“Senior Security Agreement” means that certain (a) Pledge Agreement, dated as of the date hereof by MBIA, Inc. in favor of the Senior Notes Trustee, and (b) Security Agreement, dated as of the date hereof, by and among the Issuer and the Senior Notes Trustee.

“Subordinated Debt Agreements” means the Subordinated Notes Indenture and the Subordinated Note Purchase Agreement.

- 2 -

“Subordinated Debt Documents” means the Subordinated Debt Agreements, the Subordinated Notes, the Subordinated Security Agreement, the Subordinated Notes Insurance Policy and any other documents delivered to the Subordinated Creditor by any Obligor evidencing, securing or insuring the Subordinated Obligations.

“Subordinated Creditor” means, collectively, the Subordinated Notes Trustee and the holders of the Subordinated Notes.

“Subordinated Note Purchase Agreement” means that certain Subordinated Note Purchase Agreement, dated as of the date hereof, by and among the Issuer, MBIA Inc. and the Subordinated Notes Trustee.

“Subordinated Notes” means the 14% subordinated secured notes due 2020 of the Issuer purchased and sold pursuant to the Subordinated Note Purchase Agreement and governed by the Subordinated Notes Indenture.

“Subordinated Notes Indenture” means that certain Subordinated Indenture, dated as of the date hereof, by and between the Issuer and the Subordinated Notes Trustee, as trustee and collateral agent.

“Subordinated Notes Insurance Policy” means insurance policy no. 541512, dated January 10, 2017, issued by the Insurer and insuring the timely payment of all amounts due under the Subordinated Notes.

“Subordinated Notes Trustee” means Wilmington Savings Fund Society, FSB, solely in its capacity as indenture trustee and collateral agent under the Subordinated Notes Indenture (and not in its individual or corporate capacity).

“Subordinated Obligations” means any, and now existing or hereafter arising, obligations of any Obligor to the Subordinated Creditor under the Subordinated Debt Documents, whether primary or secondary, direct or indirect, absolute or contingent, joint or several, secured or unsecured, due or not, liquidated or unliquidated, arising by operation of law or otherwise, whether for principal, interest, fees, expenses, indemnification obligations, reimbursement obligations or otherwise (including any applicable Make-Whole Premium (as defined in the Subordinated Notes Indenture), and including, without limitation, interest, fees, costs or other payments on the Subordinated Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), together with all costs of collection or enforcement, including, without limitation, reasonable attorneys’ fees incurred in any collection efforts or in any action or proceeding.

“Subordinated Security Agreement” means that certain Security Agreement, dated as of the date hereof, by and among the Issuer and the Subordinated Notes Trustee.

Section 1.2 Other Definitions. Capitalized terms not otherwise defined herein shall have the meanings assigned thereto in the Senior Debt Agreements.

Section 1.3 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise

- 3 -

(a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any person shall be construed to include such person’s successors and assigns, (c) the words “herein,” “hereof,” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, and Schedules shall be construed to refer to Articles and Sections of, and Schedules to, this Agreement, (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and general intangibles and (f) references to sections of, or rules under, the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the Securities and Exchange Commission from time to time.

ARTICLE II: SUBORDINATION

Section 2.1 Subordination. The Subordinated Creditor hereby subordinates any and all claims now or hereafter owing to the Subordinated Creditor by any Obligor under the Subordinated Obligations to any and all claims now or hereafter owing to the Senior Creditor by any Obligor under the Senior Obligations (including, without limitation, interest, fees, costs, indemnification obligations, reimbursement obligations or other payments on the Senior Obligations paid or accrued after the commencement of an Insolvency Proceeding and whether or not such claims are deemed allowed or recoverable in any Insolvency Proceeding, and payment of or for adequate protection pursuant to any Insolvency Proceeding), and agrees that all Senior Obligations shall be paid in full in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Documents shall have been terminated before any payment may be made on the Subordinated Obligations, whether of principal, interest, fees, expenses, indemnification obligations, reimbursement obligations or other indebtedness or debt. For the avoidance of doubt, the Subordinated Creditor hereby subordinates any and all claims now or hereafter owing to it by the Insurer under the Subordinated Notes Insurance Policy to those owing to the Senior Creditor under the Senior Notes Insurance Policy.

Section 2.2 No Permitted Payments. All Senior Obligations shall be paid in full in cash, and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Documents shall have been terminated, before any payment may be made on the Subordinated Obligations, whether of principal, interest, fees, expenses, indemnification obligations, reimbursement obligations or other indebtedness or debt. Notwithstanding the foregoing sentence, accrued and unpaid interest that is payable to the Subordinated Creditor on account of the Subordinated Obligations may be paid in kind pursuant to the terms of the Subordinated Debt Documents.

Section 2.3 Turnover. The Subordinated Creditor agrees not to accept any payment on account of the Subordinated Obligations (from any Obligor or otherwise) or take any other action designed to secure indirectly from any Obligor any payment on account of the Subordinated Obligations without the express, prior written consent of the Senior Notes Trustee, and the Subordinated Creditor agrees to pay over to the Senior Notes Trustee any payments that may be received by it from any Obligor (or otherwise with respect to the Subordinated Obligations including payments under the Subordinated Notes Insurance Policy) at any time until the Senior Obligations have been paid in full in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Documents shall have been terminated. In case any payments shall be paid or delivered to the Subordinated Creditor under the circumstances described in the preceding sentence before the Senior Obligations shall have been paid in full in cash, and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Agreements and the other Senior Debt Documents shall have been terminated, such payments shall be held in trust by the Subordinated Creditor for the benefit of the Senior Creditor and be immediately paid and delivered to the Senior Notes Trustee.

- 4 -

ARTICLE III: LIENS AND COLLATERAL

Section 3.1 Relative Priority of Liens. Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Subordinated Obligations granted on the Collateral or of any Liens securing the Senior Obligations granted on the Collateral and notwithstanding any provision of the Uniform Commercial Code or any other applicable law or the Senior Debt Documents or the Subordinated Debt Documents or any defect or deficiencies in, or failure to perfect, the Liens securing the Senior Obligations or Subordinated Obligations or any other circumstance whatsoever, the Senior Notes Trustee, on behalf of itself and/or the holders of Senior Notes, and the Subordinated Trustee, on behalf of itself and/or the applicable holders of Subordinated Notes, hereby each agree that:

(a) any Lien of the Senior Notes Trustee on the Collateral, whether now or hereafter held by or on behalf of the Senior Notes Trustee or any holders of Senior Notes or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to all Liens of any Subordinated Creditor on the Collateral; and

(b) the priority of the Liens securing the Senior Obligations set forth above, in Section 3.1(a), shall continue during any Insolvency Proceeding. In the event of any payment, distribution, division or application, partial or complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of any Collateral, or the proceeds thereof, or any securities of any Obligor, to Subordinated Creditor, by reason of any liquidation, dissolution or other winding up of any Obligor or its business or by reason of any sale or Insolvency Proceeding, then any such payment or distribution of any kind or character, whether in cash, property or securities, which, but for the subordination provisions of this Agreement, would otherwise be payable or deliverable upon or in respect of the Subordinated Obligations, shall instead be paid over or delivered directly to the Senior Notes Trustee for application to the payment of the Senior Obligations, to the extent necessary to make payment of the Senior Obligations until the Senior Obligations shall have been paid in full in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Agreements and the other Senior Debt Documents shall have been terminated, and no holder of the Subordinated Obligations shall receive any such payment or distribution or any benefit therefrom to such extent until the Senior Obligations have been fully paid in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Documents shall have been terminated, after which such payments or distributions may be applied to payment of the Subordinated Obligations. The subordination of the Subordinated Obligations, as provided for in this Agreement, establishes the relative rights of the Senior Creditor, on the one hand, and the Subordinated Creditor, on the other hand.

Section 3.2 Prohibition on Contesting Liens. The Subordinated Creditor agrees that it will not (and hereby waives any right to) contest, or support any other Person in contesting, in any proceeding (including any Insolvency Proceeding), the perfection, priority, validity or enforceability of a Lien held by or on behalf of the Senior Creditor in the Collateral.

Section 3.3 Disposition and Use of Collateral.

(a) Subject to the provisions of this Agreement, the Senior Notes Trustee shall have the exclusive right to control all matters regarding any Collateral securing the Senior Obligations and any Lien of the Senior Notes Trustee thereon including the disposition, sale and use of such Collateral, and the subordination and release of any such Lien, whether in an Insolvency Proceeding or otherwise, subject to, and in accordance with, the terms of the Senior Security Agreement.

- 5 -

(b) Until the Senior Obligations have been paid in full in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Credit Documents shall have been terminated, in the event of any disposition, sale, transfer or acceptance of any Collateral, the Liens held by the Subordinated Creditor on such Collateral shall terminate and be released automatically and without further action if the Liens securing the Senior Obligations on such Collateral are released; provided, that the Liens of the Senior Creditor and Subordinated Creditor on the proceeds of such Collateral shall continue, subject to the other provisions of this Agreement, and that the Senior Notes Trustee has provided to the Subordinated Creditor at least ten (10) days prior written notice of any such release of Liens securing the Senior Obligations. The Subordinated Creditor agrees to execute and deliver any evidence or confirmation of such release as shall be reasonably requested by the Senior Notes Trustee.

(c) Absent the consent of the Majority Senior Noteholders, the Subordinated Creditor shall not consent, to the extent its consent is required, to any liquidation or Insolvency Proceeding of any Obligor and shall not vote for or otherwise support any plan of reorganization or liquidation of any Obligor, any of which would cause the Senior Obligations to be paid less than in full in cash.

Section 3.4 Distribution of Proceeds of Collateral. In the event of a disposition or sale of the Collateral, all proceeds thereof, received in connection with or resulting from any enforcement action or Insolvency Proceeding, shall be distributed as follows:

(a) first, the cash proceeds therefrom shall be distributed to the Senior Notes Trustee until payment in full in cash of costs and expenses of the Senior Notes Trustee in connection with such enforcement action or Insolvency to the extent permitted hereunder;

(b) second, the cash proceeds therefrom shall be distributed for application in accordance with the terms of the Senior Debt Documents until the Senior Obligations shall have been paid in full;

(c) third, the cash proceeds therefrom shall be distributed to the Subordinated Notes Trustee until payment in full in cash of costs and expenses of the Subordinated Notes Trustee in connection with such enforcement action or Insolvency to the extent permitted hereunder; and

(d) fourth, the cash proceeds therefrom shall be distributed for application in accordance with the terms of the Subordinated Debt Documents until the Subordinated Obligations shall have been paid in full.

ARTICLE IV: REMEDIES

Section 4.1 Subordinated Creditor’s Restricted Remedies. Until the Senior Obligations have been paid in full in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Documents shall have been terminated, without the express written consent of the Majority Senior Noteholders, the Subordinated Creditor shall not (a) take any action or exercise any remedy against any Obligor to enforce the Subordinated Obligations; (b) take any action or exercise any remedy against any guarantor of, or pledgor securing, the Senior Obligations in order to collect any of the Subordinated Obligations; (c) commence, or join with any other creditor of any

- 6 -

Obligor or any guarantor of or pledgor securing the Senior Obligations in commencing, any bankruptcy, reorganization or other Insolvency Proceeding against any Obligor or any guarantor of, or pledgor securing, the Senior Obligations; (d) take any action or exercise any remedy against any property or assets of any Obligor or any guarantor of, or pledgor securing, the Senior Obligations; (e) contest any Lien on any Collateral; (f) object to any proposal by the Senior Creditor to accept any Collateral in full or partial satisfaction of the Senior Obligations; or (g) contest any request by the Senior Creditor for adequate protection under the Bankruptcy Code or any applicable insurance code, or contest any objection by the Senior Creditor claiming lack of adequate protection, in each case, with respect to any Collateral securing the Senior Obligations. The Subordinated Creditor understands and agrees that the Senior Creditor shall have the right, but shall have no obligation, to cure any default under the Subordinated Obligations without the prior written consent of the Subordinated Creditor. None of the foregoing shall prevent the automatic acceleration under the Subordinated Debt Documents, pursuant to the terms thereof. Notwithstanding anything contained in this Agreement to the contrary, in no event shall the Subordinated Creditor be entitled, without the consent of the Senior Notes Trustee, to receive and retain any securities, equity or otherwise, or other consideration provided for in (i) a plan of reorganization or otherwise in connection with any bankruptcy or other Insolvency Proceeding or (ii) any other judicial or nonjudicial proceeding for the liquidation, dissolution or winding up of any Obligor or the assets or properties of any Obligor, in any case unless the Senior Obligations are paid in full in cash and all commitments by the Senior Creditor to provide credit accommodations under the Senior Debt Agreements and the other Senior Debt Documents shall have been terminated.

Section 4.2 Appointment of Attorney-In-Fact. In order to enable the Senior Creditor to enforce its rights under this Agreement, with notice to the Subordinated Creditor, the Senior Notes Trustee is hereby irrevocably authorized and empowered (in its own name or in the name of the Subordinated Creditor or otherwise), but shall have no obligation, to enforce claims on account of any of the Subordinated Obligations by proof of debt, proof of claim, cause of action or otherwise, and take generally any action, which the Subordinated Creditor might otherwise be entitled to take, as the Senior Notes Trustee may deem reasonably necessary or advisable for the enforcement of its rights or interests hereunder.

Section 4.3 Further Assurances. To the extent necessary for the Senior Creditor to realize the benefits of the subordination of the Subordinated Obligations provided for herein (including, without limitation, the right to receive any and all payments and distributions that might otherwise be payable or deliverable with respect to the Subordinated Obligations in any Insolvency Proceeding or otherwise), the Subordinated Creditor shall execute and deliver to the Senior Notes Trustee such reasonably necessary instruments or documents (together with such assignments or endorsements as the Senior Notes Trustee shall reasonably deem necessary), as may be reasonably requested by the Senior Notes Trustee.

ARTICLE V: INSOLVENCY PROCEEDINGS

Section 5.1 Enforceability and Continuing Priority. This Agreement shall be applicable before, during, and after the commencement of any Insolvency Proceeding and all converted or succeeding cases in respect thereof. The relative rights of the Senior Creditor and Subordinated Creditor in or to any distributions from, or in respect of, any Collateral securing the Senior Obligations and Subordinated Obligations, or proceeds thereof, shall continue following the commencement of any Insolvency Proceeding. Accordingly, the provisions of this Agreement are intended to be and shall be deemed to constitute a “subordination agreement” within the meaning of Section 510(a) of the Bankruptcy Code and any applicable insurance code and is intended to be and shall be interpreted to be enforceable to the maximum extent permitted pursuant to applicable nonbankruptcy law. All references to any Obligor shall include such Obligor as debtor and debtor-in-possession and any receiver or trustee for such Obligor in any Insolvency Proceeding.

- 7 -

Section 5.2 Financing Issues.

(a) Until the Senior Obligations are paid in full, if any Obligor shall be subject to an Insolvency Proceeding and the Majority Senior Noteholders shall desire to permit the use, sale or lease of “cash collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code; herein “Cash Collateral”) on which the Senior Creditor or any other creditor has a Lien or to permit such Obligor to obtain financing under Sections 363 or 364 of the Bankruptcy Code or any law, whether from the Senior Creditor or any other Person (each, a “Post-Petition Financing”), then the Subordinated Creditor agrees that it will not contest, protest or object to (or support any other Person contesting, protesting or objecting to), and the Subordinated Creditor will be deemed to have consented to, such use of Cash Collateral or Post-Petition Financing and, so long as the Subordinated Creditor is permitted to retain the Liens securing the Subordinated Obligations, the Subordinated Creditor will subordinate its Liens in the Collateral securing the Subordinated Obligations to (i) the Liens securing such Post-Petition Financing (and all obligations relating thereto), (ii) any adequate protection provided to the Senior Creditor in connection therewith and (iii) any “carve-out” for professionals and United States Trustee fees agreed to by the Senior Creditor.

(b) If any Obligor shall become subject to any Insolvency Proceeding, the Subordinated Creditor agrees that no Subordinated Creditor shall provide to any Obligor, as debtor-in-possession, any Post-Petition Financing to the extent that any Subordinated Creditor would, in connection with such financing, be granted a Lien on any existing or future property of any Obligor senior to or pari passu with the Lien of the Senior Notes Trustee with respect to such property.

Section 5.3 Post-Petition Interest. The Subordinated Creditor shall not oppose or seek to challenge any claim by the Senior Creditor for allowance in any Insolvency Proceeding of Senior Obligations consisting of post-petition interest, fees or expenses, including any Make-Whole Premium (as defined in the Senior Notes Indenture) provided for under the Senior Debt Documents. Regardless of whether any such claim for post-petition interest, fees or expenses is allowed or allowable, and without limiting the generality of the other provisions of this Agreement, this Agreement expressly is intended to include and does include the “rule of explicitness” in that this Agreement expressly entitles the Senior Creditor, and is intended to provide the Senior Creditor with the right, to receive payment of all post-petition interest, fees or expenses through distributions made pursuant to the provisions of this Agreement even if such interest, fees and expenses are not allowed or allowable against the bankruptcy estate of any Obligor under Section 502(b)(2) or Section 506(b) of the Bankruptcy Code or under any other provision of the Bankruptcy Code or any similar law.

Section 5.4 Adequate Protection. In any Insolvency Proceeding involving any Obligor:

(a) The Subordinated Creditor agrees that, prior to the payment in full of the Senior Obligations, the Subordinated Creditor shall not contest, protest or object to (or support any other Person contesting, protesting or objecting to) (i) any request by any Senior Creditor for adequate protection or (ii) any objection by any Senior Creditor to any motion, relief, action, or proceeding based on any Senior Creditor claiming a lack of adequate protection; and

(b) In the event that any Senior Creditor or Subordinated Creditor is granted adequate protection of their interest in any Collateral in the form of a superpriority administrative expense claim, such superpriority administrative expense claims shall be deemed to be subject to the terms and priorities hereunder, meaning for example that the superpriority administrative expense claims for adequate protection of the interests of the Senior Notes Trustee in the Collateral shall be senior to the Subordinated Trustee’s superpriority administrative expense claim for adequate protection in respect of the Collateral.

- 8 -

Section 5.5 Sale of Collateral. The Subordinated Creditor agrees that it will not contest, protest or object (or support any other Person contesting, protesting or objecting to), and will be deemed to have consented to and will not oppose, the disposition of any Collateral free and clear of the claims, Liens, and interests of the Subordinated Creditor under Sections 363 or 1129 of the Bankruptcy Code if the Senior Notes Trustee has consented to such disposition of such property; provided, that the interests of the Subordinated Creditor in such Collateral attach to the proceeds thereof, subject to the terms and priorities set forth in this Agreement and solely to the extent such proceeds are available.

Section 5.6 Relief from the Automatic Stay. The Subordinated Creditor agrees that it shall not (a) seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any Collateral securing the Subordinated Obligations, without the prior written consent of the Senior Notes Trustee, or (b) oppose any request by the Senior Notes Trustee or any holder of the Senior Notes to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the Collateral securing the Senior Notes Obligations.

ARTICLE VI: MISCELLANEOUS

Section 6.1 Indemnity for Breach. The holders of the Subordinated Notes shall indemnify the Senior Creditor for any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees and disbursements of counsel arising out of, in connection with or as a result of, any breach of this Agreement by the holders of Subordinated Notes.

Section 6.2 No Fiduciary Duty. The Senior Creditor shall have no duties or responsibilities and shall not, by reason of this Agreement be a trustee for the Subordinated Creditor or have any other fiduciary obligations to Subordinated Creditor. Neither the Senior Creditor nor any of its directors, officers, employees or agents shall be liable or responsible for any action taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct.

Section 6.3 Subrogation. Subject to the last sentence of this Section 6.3, the Subordinated Creditor shall not be subrogated to, or entitled to any assignment of, any Senior Obligations or Subordinated Obligations or of any Collateral for or guarantees of evidence of any thereof. The Subordinated Creditor hereby waives any and all rights to have Collateral, or any part thereof, which was granted to or is held by the Senior Creditor, marshalled upon any foreclosure or other disposition of such Collateral by the Senior Creditor or any Obligor with the consent of the Majority Senior Noteholders. Upon the payment in full in cash of all Senior Obligations and the Senior Creditor’s termination of all commitments to provide credit accommodations under the Senior Debt Documents, the Subordinated Creditor shall be automatically subrogated to the remaining rights, if any, of the Senior Creditor against any Obligor to the extent of payments received and retained by the Senior Creditor which, but for this Agreement, would have been received and retained by the Subordinated Creditor; provided that, the Subordinated Creditor would be legally entitled to such subrogation but for the provisions of this Agreement.

Section 6.4 Waiver. The Subordinated Creditor unconditionally and irrevocably waives, to the fullest extent permitted by applicable law: (a) except to the extent expressly provided in this Agreement, notice of any of the matters referred to in this Agreement; (b) all notices which may be required by statute, rule of law or otherwise to preserve any rights against the Subordinated Creditor hereunder, including, without limitation, (i) notice of the acceptance of this Agreement, (ii) notice of the creation, renewal, extension, modification or accrual of the Senior Obligations or any other matters relating thereto, and (iii) any presentment, demand, notice of dishonor, protest, or nonpayment of any

- 9 -

damages or other amounts payable under any Senior Debt Document; (c) any requirement for the enforcement, assertion or exercise of any right, remedy, power or privilege under, or in respect of, any Senior Debt Document, including, without limitation, diligence in collection or protection of, or realization upon, the Senior Obligations or any part thereof or any Collateral; (d) any requirement of diligence; (e) any requirement to mitigate the damages resulting from a default by any Obligor under any Senior Debt Document; (f) the occurrence of every other condition precedent to which the Subordinated Creditor or any Obligor may otherwise be entitled; (g) the right to require the Senior Creditor to proceed against any Obligor or any other person liable on the Senior Obligations, to proceed against or exhaust any Collateral held by any Obligor or any other person, or to pursue any other remedy in the Senior Creditor’s power whatsoever; (h) the right to have any proceeds of Collateral or the property of any Obligor first applied to the discharge of the Senior Obligations, or any other form of marshalling; and (i) until such time that all Senior Obligations have been indefeasibly paid in full in cash, any and all rights it may now or hereafter have under any agreement or at law or in equity (including, without limitation, any law subrogating the Subordinated Creditor to the rights of the Senior Creditor) to assert any claim against or seek contribution, indemnification or any other form of reimbursement from any Obligor or any other party liable for payment of any or all of the Senior Obligations for any payment made by any Obligor under, or in connection with, the Senior Debt Documents or otherwise. All of the Senior Obligations shall be deemed to have been made or incurred in reliance upon this Agreement.

Section 6.5 Notices. All notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by U.S. mail or sent by telecopy (with confirmed receipt or followed by overnight delivery) to the addresses (or telecopy numbers) set forth on the signature pages hereof. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt or, if mailed, the third business day following the date so mailed, if earlier.

Section 6.6 No Impairment. No right of the Senior Creditor to enforce the subordination of the Subordinated Obligations may be impaired by any act, or failure to act, by any Obligor or Senior Creditor or by the failure of any Obligor, Senior Creditor or Subordinated Creditor to comply with this Agreement.

Section 6.7 Amendment and Waiver. No alteration, modification, amendment or waiver of any terms and conditions of this Agreement shall be effective or enforceable against the Senior Creditor unless set forth in a writing signed by the Majority Senior Noteholders.

Section 6.8 Governing Law; Jurisdiction; Consent to Service of Process.

(a) This Agreement and any claim, controversy or dispute related to or in connection with this Agreement, any Credit Document or any of the transactions contemplated hereby or thereby, the relationship of the parties hereto and the interpretation and enforcement of the rights and duties of the parties hereto shall be governed by and construed in accordance with the laws of the State of New York (including, without limitation, Section 5-1401 et seq of the New York General Obligations Law but otherwise without regard to principles of conflicts of laws).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE IN NEW YORK

- 10 -

COUNTY OR OTHER COUNTY PERMITTED BY LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT ANY SENIOR DEBT DOCUMENT, SUBORDINATED DEBT DOCUMENT OR INSTRUMENT REFERRED TO HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

(c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 6.5. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

Section 6.9 Counterparts. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other means of electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 6.10 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, except that the Subordinated Notes Trustee further agrees not to sell, assign, transfer or endorse any Subordinated Obligations to anyone unless such assignee or transferee agrees in writing to be bound by, and be a party to, this Agreement. For the avoidance of doubt, upon the sale, assignment or transfer of any Subordinated Note, the new holder of such Subordinated Note shall be automatically bound by this Agreement.

Section 6.11 The Senior Notes Trustee. Notwithstanding any other provision of this Agreement:

(a) The Senior Notes Trustee has been appointed to act as Senior Notes Trustee by the holders of the Senior Notes. Without limiting the generality of any other term or provision herein, each holder of Senior Notes, each Subordinated Creditor and each Obligor acknowledges that the rights and responsibilities of the Senior Notes Trustee under this Agreement with respect to any action taken by the Senior Notes Trustee or the exercise or non-exercise by the Senior Notes Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Senior Notes Trustee and the holders of the Senior Notes, be governed by the Senior Debt Documents.

(b) In entering into this Agreement, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Senior Notes Trustee shall be protected by and shall enjoy all of the rights, immunities, protections and indemnities granted to it under the Senior Debt Documents.

- 11 -

(c) Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Senior Notes Trustee or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Senior Notes Trustee, it is understood that in all cases the Senior Notes Trustee shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same), in each case in accordance with the Senior Debt Documents. This provision is intended solely for the benefit of the Senior Notes Trustee and its successors and permitted assigns and is not intended to and will not entitle the other parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.

Section 6.12 The Subordinated Notes Trustee. Notwithstanding any other provision of this Agreement:

(a) The Subordinated Notes Trustee has been appointed to act as Subordinated Notes Trustee by the holders of the Subordinated Notes. Without limiting the generality of any other term or provision herein, each holder of Subordinated Notes, each Senior Creditor and each Obligor acknowledges that the rights and responsibilities of the Subordinated Notes Trustee under this Agreement with respect to any action taken by the Subordinated Notes Trustee or the exercise or non-exercise by the Subordinated Notes Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Subordinated Notes Trustee and the holders of the Subordinated Notes, be governed by the Subordinated Debt Documents.

(b) In entering into this Agreement, and in taking (or refraining from) any actions under or pursuant to this Agreement, the Subordinated Notes Trustee shall be protected by and shall enjoy all of the rights, immunities, protections and indemnities granted to it under the Subordinated Debt Documents.

(c) Anything herein to the contrary notwithstanding, whenever reference is made in this Agreement to any action by, consent, designation, specification, requirement or approval of, notice, request or other communication from, or other direction given or action to be undertaken or to be (or not to be) suffered or omitted by the Subordinated Notes Trustee or to any election, decision, opinion, acceptance, use of judgment, expression of satisfaction or other exercise of discretion, rights or remedies to be made (or not to be made) by the Subordinated Notes Trustee, it is understood that in all cases the Subordinated Notes Trustee shall be acting, giving, withholding, suffering, omitting, taking or otherwise undertaking and exercising the same (or shall not be undertaking and exercising the same), in each case in accordance with the Subordinated Debt Documents. This provision is intended solely for the benefit of the Subordinated Notes Trustee and its successors and permitted assigns and is not intended to and will not entitle the other parties hereto to any defense, claim or counterclaim, or confer any rights or benefits on any party hereto.

[Remainder of page intentionally left blank]

- 12 -

IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered by their respective duly authorized representatives as of the date first above written.

MZ FUNDING LLC
Issuer
By:	/s/ Oliver E.W. North
	Name: Oliver E.W. North
	Title: Assistant Vice President and Treasurer
	Notice Address:
	c/o MBIA Inc.
	One Manhattanville Road
	Purchase, New York 10577
	Attention: Anthony Reynolds
	Telephone: (914) 765-3037
	Facsimile: (914) 989-1295
MBIA INSURANCE CORPORATION, as
Insurer
By:	/s/ Anthony McKiernan
	Name: Anthony McKiernan
	Title: Director/President and CFO
	Notice Address:
	One Manhattanville Road
	Purchase, New York 10577
	Telephone: (914) 765-3037
	Facsimile: (914) 989-1295
WILMINGTON SAVINGS FUND SOCIETY, FSB, as
Senior Notes Trustee
By:	/s/ Geoffrey J. Lewis
	Name: Geoffrey J. Lewis
	Title: Vice President
	Notice Address:
	500 Delaware Avenue
	Wilmington, DE 19801
	Telephone: 302-573-3218
	Facsimile: 302-421-9137

- 13 -

WILMINGTON SAVINGS FUND SOCIETY, FSB, as Subordinated Notes Trustee
By:	/s/ Geoffrey J. Lewis
	Name: Geoffrey J. Lewis
	Title: Vice President
	Notice Address:
	500 Delaware Avenue
	Wilmington, DE 19801
	Telephone: 302-573-3218
	Facsimile: 302-421-9137

- 14 -