8-K
Table of Contents

 
 
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):
February 11, 2008
 
MONEYGRAM INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
         
Delaware   1-31950   16-1690064
         
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)
     
1550 Utica Avenue South, Suite 100,
Minneapolis, Minnesota
 
55416
     
(Address of principal executive offices)   (Zip Code)
(Registrant’s telephone number, including area code): 952-591-3000
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:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


TABLE OF CONTENTS

Item 1.01. Entry into a Material Definitive Agreement.
Item 3.02. Unregistered Sales of Equity Securities.
Item 3.03. Material Modification to Rights of Security Holders.
Item 8.01. Other Events.
Item 9.01. Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
EX-4.1: FIRST AMENDMENT TO THE RIGHTS AGREEMENT
EX-10.1: PURCHASE AGREEMENT
EX-10.2: FEE ARRANGEMENT LETTER
EX-10.3: FEE ARRANGEMENT LETTER
EX-10.4: NOTE PURCHASE AGREEMENT
EX-10.5: CONTINGENT FEE LETTER
EX-99.1: PRESS RELEASE
EX-99.2: FORM OF CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
EX-99.3: FORM OF CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
EX-99.4: FORM OF CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
EX-99.5: FORM OF CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
EX-99.6: FORM OF REGISTRATION RIGHTS AGREEMENT
EX-99.7: INDICATIVE SUMMARY OF TERMS AND CONDITIONS
EX-99.8: FORM OF INDENTURE
EX-99.9: FORM OF REGISTRATION RIGHTS AGREEMENT


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Item 1.01.   Entry into a Material Definitive Agreement.
Purchase Agreement
     On February 11, 2008, MoneyGram International, Inc., a Delaware corporation (the “Corporation”), entered into a Purchase Agreement (the “Purchase Agreement”), among the Corporation and affiliates of Thomas H. Lee Partners, L.P. (“THL”) and affiliates of Goldman, Sachs & Co. (“Goldman Sachs”) (where THL and Goldman Sachs are referred to collectively as the “Investors”), pursuant to which, among other things, the Corporation agreed to sell to the Investors in private placements 710,000 shares of Series C Participating Preferred Stock of the Corporation (the “Series C Preferred Stock”), 7,366 shares of Series D Participating Convertible Preferred Stock of the Corporation (the “Series D Preferred Stock”), and 9,081,309 shares of common stock of the Corporation (the “Common Stock”) (collectively, the “Temporary Securities”) for an aggregate purchase price of $710,000,000 (the “Purchase Price”), subject to certain adjustments (the “Investment”). The Purchase Agreement provides that, upon receipt of the approval of the Corporation’s stockholders and certain required regulatory approvals, the Temporary Securities are to be exchanged for shares of Series B Participating Convertible Preferred Stock of the Corporation (the “Series B Preferred Stock”) and shares of Series B-1 Participating Convertible Preferred Stock of the Corporation (the “Series B-1 Preferred Stock”) with an aggregate liquidation preference equal to the Purchase Price plus any accrued and unpaid dividends (the “Exchange,” and together with the Investment, the “Transaction”).
     The Series C Preferred Stock will have an aggregate liquidation preference equal to the Purchase Price. The Common Stock will represent 9.9% of the shares of Common Stock of the Corporation on a pro forma basis. The total number of shares of Common Stock issued or issuable at the closing of the Transaction, including the number of shares of Common Stock into which the Series D Preferred Stock is convertible, will equal 16.6% of the shares of Common Stock of the Corporation on a pro forma basis (assuming the conversion of all shares of the Series D Preferred Stock), or 19.9% of the total outstanding shares of the Common Stock prior to the closing.
     The form of Certificate of Designations, Preferences and Rights (the “Certificate of Designations”) of each respective series of the preferred stock referenced above are attached to the Purchase Agreement and are filed as Exhibits 99.2, 99.3, 99.4 and 99.5 hereto. Under the terms of the Certificate of Designations of the Series C Preferred Stock, holders will be entitled to receive a quarterly cash dividend at the initial rate of 20% per annum, increasing by 0.5% each quarter, up to a maximum rate of 22% per annum. The dividends will be payable in cash or, at the option of the Corporation, may be accrued until the fifth anniversary of the initial funding date. The Series C Preferred Stock will also participate in dividends on the Common Stock. The Series C Preferred Stock will be redeemable at the option of the holder after five years or upon a change in control of the Corporation or certain other significant events, and the Corporation may redeem all of the Series C Preferred Stock after ten years, or after at least half of the Series C Preferred Stock has been redeemed in accordance with redemption demands from holders of the Series C Preferred Stock. The Series C Preferred Stock is nonvoting stock. However, the consent of the holders of at least a majority of the Series C Preferred Stock would be required with respect to certain specified events affecting the rights of such holders. The Series C Preferred Stock will include a Contingent Value Right component (the “CVR”), which provides

 


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that upon a liquidation, redemption, or change in control, the holders of the Series C Preferred Stock will be entitled to a cash payment depending on the then current market price of the Common Stock. The CVR is intended to provide the Investors with a portion of the economic upside that they would have received if they had held the convertible preferred stock.
     The Series D Preferred Stock is a Common Stock equivalent security that will be convertible into Common Stock. The shares of Series D Preferred Stock will vote with the Common Stock on an as-converted basis, except that any such shares beneficially owned by affiliates of Goldman Sachs will not be entitled to any voting rights. In addition, to the extent that prior notice and/or approval of regulators in certain states in which the Corporation or any of its subsidiaries is licensed to do business would be required in order for any holder (or group of related holders) to hold or vote more than 9.9%, or such other threshold as may be applicable, of the Corporation’s outstanding voting securities, then, to the extent permitted by applicable law, that portion of the Series D Preferred Stock that is in excess of the applicable threshold will be nonvoting in all respects.
     The Series B Preferred Stock will be issuable to THL, and the Series B-1 Preferred Stock will be issuable to affiliates of Goldman Sachs. The Series B Preferred Stock and the Series B-1 Preferred Stock, into which the Temporary Securities are exchangeable pursuant to the Exchange, will entitle holders to receive a quarterly cash dividend at a rate of 10% per annum. The dividends will be payable in cash or, at the option of the Corporation, may be accrued until the fifth anniversary of the initial funding date at a rate of 12.5% per annum. The Series B Preferred Stock and the Series B-1 Preferred Stock will participate in dividends with the Common Stock on an as-converted basis. The Series B Preferred Stock and the Series B-1 Preferred Stock may be redeemed at the option of the Corporation if, after five years from the date of the Exchange, the Common Stock trades above $15.00 for a period of thirty consecutive days, and the shares will be redeemable at the option of the Investors after ten years. The combined liquidation preference of the Series B Preferred and the Series B-1 Preferred Stock at the time of the Exchange will equal the Purchase Price plus any accrued and unpaid dividends on the Series C Preferred Stock. The conversion price of the Series B Preferred Stock and the Series B-1 Preferred Stock will be $5.00. The Series B Preferred Stock will vote as a class with the Common Stock of the Corporation, on an as-converted basis. The Series B-1 Preferred Stock will be nonvoting stock.
     Until the earlier of March 7, 2008 and the day prior to the Closing, the Corporation may actively solicit alternative proposals, release parties from any current standstill or similar restrictions and enter into negotiations with respect to alternative proposals. If the Corporation receives an alternative proposal that the Board concludes in good faith is a Superior Proposal (as defined below), the Board may terminate the Purchase Agreement to enter into the Superior Proposal. Prior to such termination, the Corporation must first provide the Investors with 48 hours’ notice and negotiate with the Investors to give them the opportunity to adjust the terms of the Purchase Agreement to make it more favorable than the alternative proposal. A “Superior Proposal” means a bona fide written alternative proposal that the Board in good faith determines would, if consummated, result in a transaction that is more favorable to the Corporation and its existing stockholders than the Transaction, which determination is made: (x) after receiving the advice of a financial advisor; (y) after taking into account the likelihood (and likely timing) of consummation of such

 


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transaction on the terms set forth therein (as compared to the terms of the Purchase Agreement); and (z) after taking into account all appropriate legal (with the advice of outside counsel), financial (including the financing terms of any such proposal), regulatory or other aspects of such proposal and any other relevant factors permitted by applicable law.
     In connection with the entry into the Purchase Agreement, the Corporation has paid the Investors the following fees and expenses: $22,500,000 to THL and Goldman Sachs in respect of commitment fees and $6,560,000 (including regulatory filing fees) in the aggregate in respect of the Investors’ expenses. The Corporation is obligated to pay to the Investors a maximum of $3,690,000 (exclusive of regulatory filing fees) for expenses incurred between the signing of the Purchase Agreement and the closing of the Transaction. The Corporation also paid a contingent break-up fee of $15,000,000 in connection with the entry into the Note Purchase Agreement described below. The contingent fee was deposited into an escrow account, with the proceeds to be distributed as described below. The commitment fees and contingent fee are refundable in full to the Corporation if the Purchase Agreement is terminated as a result of the failure to obtain antitrust approvals or if the Transaction is enjoined. The contingent fee is also refundable to the Corporation upon the closing of the Note Purchase Agreement (in which event a commitment fee is payable by the Corporation in accordance with the Note Purchase Agreement). Except as provided in the next sentence, if the Purchase Agreement is terminated for any other reason, $15,000,000 of the commitment fees and $10,000,000 of the contingent fee previously paid will be refunded to the Corporation, and the remainder of those fees will be retained by the Investors. Neither the commitment fees nor the contingent fee are refundable if the Purchase Agreement is terminated by the Corporation in order to enter into a Superior Proposal or as a result of a willful breach by the Corporation. In addition, the Purchase Agreement provides that, if the Corporation were to terminate the Purchase Agreement and subsequently enter into a Superior Proposal, the Corporation is required to pay the Investors a Termination Fee in the amount of $15,000,000, plus up to $3,690,000 of expenses plus the amount of any fee previously refunded to them pursuant to the commitment fee and contingent fee agreements. Amounts that are not refunded to the Corporation under the contingent fee agreement are payable to Goldman Sachs or, in certain circumstances, to THL. The fee arrangement letters entered into with THL and Goldman Sachs are filed as Exhibits 10.2 and 10.3 hereto, respectively, and the contingent fee agreement is filed as Exhibit 10.5 hereto.
     The Purchase Agreement contains customary public company representations and warranties by the Corporation to the Investors and customary representations and warranties from the Investors to the Corporation.
     Consummation of the Purchase Agreement is subject to the satisfaction of certain conditions to closing, including but not limited to the following: (i) receipt of United States and German antitrust approval; (ii) no law or injunction prohibiting the closing or restricting the ownership by the Investors from owning, voting and converting the securities, and no lawsuit having been commenced by a governmental entity seeking the foregoing; (iii) the sale by the Corporation of certain portfolio securities and the loss realized on such sale, when aggregated with any other realized and unrealized loss on portfolio securities of the Corporation as of the closing, not having exceeded $1.7 billion; (iv) entry into an amendment to the Corporation’s Amended and Restated Credit Agreement for $350 million in debt and receipt of an additional $200 million under the amended credit agreement on the terms specified in an agreed-upon term sheet described below (filed as Exhibit 99.7 hereto and incorporated herein by reference) (v) entry into the Note Purchase Agreement described below (filed as Exhibit 10.4 hereto and incorporated herein by reference), relating to the sale of up to $500,000,000 principal amount of second lien notes pursuant to the form of Indenture described below (filed as Exhibit 99.8 hereto and incorporated herein by reference), including entry into the Indenture and receipt of $500,000,000 (net of fees and expenses) in proceeds from the issuance of the second lien notes; (vi) no incurrence of, or obligation by the Corporation to incur, fees of more than $7,000,000 plus certain annual administrative fees relating to the transactions described in clause (iv) above; (vii) the applicable margin on the Corporation’s term B facility described below not having been increased by more than 1.25% per annum; (viii) no change or event having occurred which would reasonably be expected to have a Material Adverse Effect (as defined in the Purchase Agreement) on the

 


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Corporation; (ix) neither the Corporation nor its wholly owned subsidiary, MoneyGram Payment Systems, Inc. (“MPSI”), having received a notice from a state limiting the ability of the Corporation or MPSI to conduct its money transfer or payment systems business in such state or imposing materially adverse conditions on its licenses to conduct such businesses; (x) the Corporation having (on a pro forma basis) at least $150,000,000 in unrestricted assets (as defined in the Purchase Agreement) and $100,000,000 undrawn borrowing availability under its revolving credit line; (xi) the Corporation having received an unqualified opinion (and having not received a qualified opinion) from its external auditor in connection with its fiscal year 2007 consolidated financial statements and the filing of its 2007 fiscal year Form 10-K or, if no opinion is received prior to the closing, a determination by each Investor, in its sole discretion, that the Corporation will obtain an unqualified opinion within a certain period of time after the closing; (xii) no restatement (or contemplated restatement) of the Corporation’s prior financial statements; and (xiii) resolution of all outstanding comments (including having taken any requested corrective action) received by the Corporation from the Securities and Exchange Commission and (xiv) each Investor, in its sole discretion, being satisfied with the Corporation’s books and records, internal controls, procedures, and disclosures.
     The Corporation must use its best efforts to obtain shareholder approval of the Exchange, including calling and holding a shareholder meeting to seek shareholder approval within six months of the signing date, filing a proxy statement, and using best efforts to solicit proxies in favor of the Exchange. The Board has committed to unanimously recommend shareholder approval and to include its recommendation in a proxy statement. However, if required in its exercise of its fiduciary duties, the Board may withdraw or modify its recommendation. Nevertheless, in all events, the Corporation is required to call and hold a shareholder meeting for the purpose of obtaining shareholder approval and to solicit proxies with respect to the meeting. The Corporation is required to operate its business in the ordinary course consistent with past practice during the time period between the signing of the Purchase Agreement and the closing of the Transaction.
     The Purchase Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Equity Registration Rights Agreement
     The Corporation and the Investors also agreed to enter into a Registration Rights Agreement on the closing date of the Investment (the “Equity Registration Rights Agreement”), with respect to the preferred stock and the Common Stock owned by the Investors and their affiliates (collectively, the “Registrable Securities”). Under the terms of the Equity Registration Rights Agreement, the Corporation is required, after a specified holding period, to promptly file with the SEC a shelf registration statement relating to the offer and sale of the Registrable Securities. The Corporation is obligated to keep such shelf registration statement continuously effective under the Securities Act of 1933 until the earlier of (1) the date as of which all of the Registrable Securities have been sold, (2) the date as of which each of the holders of the Registrable Securities is permitted to sell its Registrable Securities without registration pursuant to Rule 144 under the Securities Act of 1933 and (3) fifteen years. The holders of the Registrable Securities are also entitled to four demand registrations and unlimited piggyback registrations during the term of the Equity Registration Rights Agreement. The Form

 


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of Equity Registration Rights Agreement is filed as Exhibit 99.6 hereto and is incorporated herein by reference. The foregoing description of the Equity Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Proposed Senior Facility
      On February 11, 2008, in connection with entering into the Purchase Agreement, the Corporation agreed to cause one or more financial institutions to provide senior secured financing (the “Proposed Senior Facility”) to one of the Corporation’s subsidiaries, MoneyGram Payment Systems Worldwide, Inc. (“Worldwide”). Such Proposed Senior Facility would, in addition to replacing the existing $350,000,000 Amended and Restated Credit Agreement, dated as of June 29, 2005, as amended, by and among the Corporation, JPMorgan Chase Bank, N.A., individually and as administrative agent, and the other financial institutions signatory thereto (the “Existing Credit Agreement”), include an additional $200,000,000 for a total facility size of $550,000,000. The Proposed Senior Facility would include $300,000,000 in two term loan tranches and a $250,000,000 revolving credit facility. The revolving credit facility would include subfacilities for letters of credit and swingline loans. The Proposed Senior Facility would have a maturity date five years after its closing date (effectively extending the maturity under the Existing Credit Agreement by approximately three years).
     The Proposed Senior Facility would require Worldwide to pay the A term loan tranche (consisting of $100,000,000 in principal amount) in full at maturity and, with respect to the B term loan tranche (consisting of $200,000,000 in principal amount), to make quarterly amortization payments equal to 0.25% of the outstanding principal amount of such term loan commencing June 30, 2008, with the outstanding principal balance payable at maturity. The Proposed Senior Facility would modify certain mandatory prepayments from the Existing Credit Agreement and would require that the term B loan tranche be prepaid in an amount equal to (1) 100% of the net cash proceeds of any incurrence of indebtedness by the Corporation and its domestic subsidiaries, subject to customary exceptions; (2) 100% of the net cash proceeds of certain asset sales and dispositions by the Corporation and its domestic subsidiaries, subject to certain exceptions and reinvestment rights; and (3) 50%, subject to reduction to a lower percentage based on our leverage ratio, of excess cash flow for the fiscal years ending December 31, 2009 and thereafter. There would be a prepayment penalty imposed in the event that the B term loan tranche is prepaid during the first two years of the facility.
     The Proposed Senior Facility would require Worldwide to pledge certain collateral as security for the indebtedness. In addition, there would be certain conditions precedent to the effectiveness of the Proposed Senior Facility, including, without limitation (1) the termination of the Corporation’s $150,000,000 364-Day Credit Agreement with the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, and J.P. Morgan Securities Inc., as sole lead arranger and sole book runner, (2) consummation of the transactions contemplated by the Purchase Agreement and the Note Purchase Agreement (defined below) and (3) the non-existence of certain material adverse changes since September 30, 2007.
     The Proposed Senior Facility would contain customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the Corporation, Worldwide and certain of Worldwide’s subsidiaries’ ability to, among other things and subject to

 


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various exceptions, (1) dispose of assets, (2) incur additional indebtedness, (3) incur liens or grant negative pledges and (4) make investments. Worldwide and its subsidiaries would also be required to comply with specified financial covenants (consisting of a leverage ratio and an interest coverage ratio) and certain affirmative covenants. The Proposed Senior Facility would also be subject to customary events of default. A copy of the term sheet related to the Proposed Senior Facility is attached hereto as Exhibit 99.7 and is incorporated herein by reference. The foregoing description of the Proposed Senior Facility does not purport to be complete and is qualified in its entirety by reference to Exhibit 99.7.
Note Purchase Agreement
     In connection with the Purchase Agreement, the Corporation also entered into a Note Purchase Agreement (the “Note Purchase Agreement”), dated on or about February 11, 2008, by and among the Corporation, Worldwide and affiliates of Goldman Sachs Mezzanine Partners (the “Initial Purchasers”). A copy of the Note Purchase Agreement is filed as Exhibit 10.4 hereto and is incorporated herein by reference.
     Pursuant to the Note Purchase Agreement, and in connection with the Purchase Agreement, Worldwide will issue up to $500,000,000 aggregate principal amount of its 13.25% Senior Secured Second Lien Notes due 2018 (the “Notes”) pursuant to an indenture (the “Indenture”) by and among the Corporation, Worldwide, the other guarantors party thereto and Wells Fargo Bank, National Association as Trustee (the “Trustee”). Worldwide will have the option to pay in kind all but 0.50% per annum of interest on the Notes prior to the second anniversary of the issuance of the Notes. Interest that is paid in kind will accrue at a rate of 14.75% per annum. The issuance of the Notes will be subject to certain conditions precedent, including the conditions precedent set forth in the Purchase Agreement, a requirement that the ratio of total indebtedness to EBITDA of Worldwide and its subsidiaries on a consolidated basis not exceed thresholds set forth in the Note Purchase Agreement, and requirements that monthly transaction volumes generated from the “Money Transfer” business segment, and monthly net revenue generated by the “Express Payment” and “Money Transfer” business segments exceed thresholds set forth in the Note Purchase Agreement. The Corporation, Worldwide and its subsidiaries will be required to pledge certain collateral on a second priority basis as security for the Notes. The Notes will be guaranteed by the Corporation and by certain of the Corporation’s subsidiaries. The guarantees will be senior secured second lien obligations of the guarantors. The Notes will mature in 2018 on the tenth anniversary of their issuance. Worldwide is entitled to redeem some or all of the Notes at any time on or after the fifth anniversary of the closing, at the redemption prices set forth in the Indenture. In addition, prior to the fifth anniversary of the closing, Worldwide may redeem some or all of the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, plus a “make whole” premium, as set forth in the Indenture. Upon a change of control, Worldwide is required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount thereof. Worldwide is required to make an offer to repurchase the Notes with proceeds of certain asset sales that have not been reinvested in accordance with the terms of the Indenture or used to repay pari passu debt. The Indenture also contains covenants that, among other things, subject to certain qualifications and exceptions, restrict the activities of the Corporation to holding company activities and limit the ability of

 


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Worldwide and its subsidiaries to: incur or guarantee additional indebtedness; pay dividends or make other restricted payments; make certain investments; create or incur certain liens; sell assets or subsidiary stock; transfer all or substantially all of their assets or enter into merger or consolidation transactions; and enter into transactions with affiliates. The covenants in the Indenture also restrict the investment of assets of Worldwide and its subsidiaries that are subject to restrictions under law, contract or otherwise for the payment of payment services obligations (the “Restricted Investment Portfolio”) and include a requirement that Worldwide and its subsidiaries maintain a minimum ratio of the fair value of the Restricted Investment Portfolio to payment services obligations of Worldwide and its subsidiaries. A copy of the form of Indenture that Worldwide, the Corporation, the other guarantors party thereto and the Initial Purchasers will execute at the time of issuance of the Notes is filed as Exhibit 99.8 hereto and is hereby incorporated into this report by reference.
Note Registration Rights Agreement
     Also in connection with the issuance of the Notes pursuant to the Note Purchase Agreement, the Corporation, Worldwide, the other guarantors party thereto and the Initial Purchasers will enter into a registration rights agreement (the “Note Registration Rights Agreement”), pursuant to which the Corporation and the other guarantors party thereto have agreed, upon the occurrence of certain events, to file a registration statement under the Securities Act to register the resale of the Notes by certain holders thereof. A copy of the form of Note Registration Rights Agreement that Worldwide, the Corporation, the other guarantors party thereto and the Initial Purchasers will execute at the time of issuance of the Notes is filed as Exhibit 99.9 hereto and is hereby incorporated into this report by reference.
Item 3.02.   Unregistered Sales of Equity Securities.
     The information set forth in Item 1.01 hereof is incorporated herein by reference.
     The issuance and sale of the Preferred Stock is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) of the Securities Act of 1933 and/or Regulation D promulgated under the Securities Act of 1933. Each of the Investors has represented to the Corporation that it is an “accredited investor” as defined in Regulation D and that the Preferred Stock is being acquired for investment. The Corporation has not engaged in general solicitation or advertising with regard to the issuance and sale of the Preferred Stock and has not offered securities to the public in connection with this issuance and sale.
Item 3.03.   Material Modification to Rights of Security Holders.
Amendment to Rights Agreement
     On February 11, 2008, in connection with entering into the Purchase Agreement, the Corporation entered into the First Amendment (“Amendment No. 1”) to the Rights Agreement, dated as of June 30, 2004 (the “Rights Agreement”), by and between the Corporation and Wells Fargo Bank, N.A., as Rights Agent (the “Rights Agent”). Amendment No. 1 supplements and adds certain definitions in the Rights Agreement and provides, among other things, that no Investor or any of its Affiliates or Associates shall be deemed to be an Acquiring Person and that

 


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no Distribution Date or Shares Acquisition Date (as each such term is defined in the Rights Agreement) shall be deemed to occur, in each case, solely by virtue of the approval, execution or delivery of the Purchase Agreement or the Transaction. The Rights Agreement is filed as Exhibit 4.2 to the Quarterly Report on Form 10-Q, filed with the SEC on August 13, 2004, and is incorporated herein by reference. Amendment No. 1 is filed as Exhibit 4.1 hereto and is incorporated herein by reference. The foregoing descriptions of the Rights Agreement and Amendment No. 1 do not purport to be complete and are qualified in their entirety by reference to such exhibits.
Item 8.01.   Other Events.
     On February 12, 2008, the Corporation issued a press release announcing that it had entered into the Purchase Agreement with the Investors. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
     Also on February 12, 2008, the Corporation announced a multi-year extension through January 2013 of its financial services agreement with Wal-Mart Stores, Inc. (“Wal-Mart”). The Corporation provides the money transfer, urgent bill payment and money order services for customers in more than 3,500 Wal-Mart stores, including Wal-Mart MoneyCenters. The Corporation’s multi-year extension with Wal-Mart is conditioned on the consummation of the Transaction.
Item 9.01.   Financial Statements and Exhibits.
(d) Exhibits.
         
Exhibit No.   Description
       
 
  4.1    
First Amendment, dated as of February 11, 2008, to the Rights Agreement, dated as of June 30, 2004, by and between MoneyGram International, Inc. and Wells Fargo Bank, N.A., as Rights Agent.
       
 
  10.1    
Purchase Agreement, dated as of February 11, 2008, among MoneyGram International, Inc. and the several Investor parties named therein.
       
 
  10.2    
Fee Arrangement Letter, dated February 11, 2008, between THL Managers VI, LLC and MoneyGram International, Inc.
       
 
  10.3    
Fee Arrangement Letter, dated February 11, 2008, between Goldman Sachs & Co. and MoneyGram International, Inc.
       
 
  10.4    
Note Purchase Agreement, dated as of February 11, 2008, among MoneyGram Payment Systems Worldwide, Inc., Moneygram International, Inc. and GSMP V Onshore US, Ltd., GSMP V Offshore US, Ltd., GSMP V Institutional US, Ltd.
       
 
  10.5    
Contingent Fee Letter, dated February 11, 2008, among MoneyGram Payment Systems Worldwide, Inc., GSMP V Onshore US, Ltd., GSMP V Offshore US, Ltd., GSMP V Institutional US, Ltd., GS Capital Partners VI Fund, L.P., GS Capital Partners VI Offshore Fund, L.P., GS Capital Partners VI GmbH & Co. KG, GS Capital Partners VI Parallel, L.P., and THL Managers VI, LLC.
       
 
  99.1    
Press Release of MoneyGram International, Inc., dated February 12, 2008.

 


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Exhibit No.   Description
       
 
  99.2    
Form of Certificate of Designations, Preferences and Rights of the Series B Participating Convertible Preferred Stock of MoneyGram International, Inc.
       
 
  99.3    
Form of Certificate of Designations, Preferences and Rights of the Series B-1 Participating Convertible Preferred Stock of MoneyGram International, Inc.
       
 
  99.4    
Form of Certificate of Designations, Preferences and Rights of the Series C Participating Preferred Stock of MoneyGram International, Inc.
       
 
  99.5    
Form of Certificate of Designations, Preferences and Rights of the Series D Participating Convertible Preferred Stock of MoneyGram International, Inc.
       
 
  99.6    
Form of Registration Rights Agreement by and among the several Investor parties named therein and MoneyGram International, Inc.
       
 
  99.7    
Indicative Summary of Terms and Conditions, MoneyGram Payment Systems Worldwide, Inc. $550 Million Senior Secured Credit Facilities, dated as of February 11, 2008.
       
 
  99.8    
Form of Indenture between MoneyGram Payment Systems Worldwide, Inc. and Wells Fargo Bank National Association, as Trustee.
       
 
  99.9    
Form of Registration Rights Agreement by and among MoneyGram Payment Systems Worldwide, Inc., MoneyGram International, Inc. and GSMP V Onshore US, Ltd., GSMP V Offshore US, Ltd., GSMP V Institutional US, Ltd.

 


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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.
         
  MoneyGram International, Inc.
 
 
February 12, 2008  By:   /s/ Teresa H. Johnson    
    Name:   Teresa H. Johnson   
    Title:   Executive Vice President, General Counsel and Secretary   

 


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EXHIBIT INDEX
         
Exhibit No.   Description
       
 
  4.1    
First Amendment, dated as of February 11, 2008, to the Rights Agreement, dated as of June 30, 2004, by and between MoneyGram International, Inc. and Wells Fargo Bank, N.A., as Rights Agent.
       
 
  10.1    
Purchase Agreement, dated as of February 11, 2008, among MoneyGram International, Inc. and the several Investor parties named therein.
       
 
  10.2    
Fee Arrangement Letter, dated February 11, 2008, between THL Managers VI, LLC and MoneyGram International, Inc.
       
 
  10.3    
Fee Arrangement Letter, dated February 11, 2008, between Goldman Sachs & Co. and MoneyGram International, Inc.
       
 
  10.4    
Note Purchase Agreement, dated as of February 11, 2008, among Moneygram Payment Systems Worldwide, Inc., Moneygram International, Inc. and GSMP V Onshore US, Ltd., GSMP V Offshore US, Ltd., GSMP V Institutional US, Ltd.
       
 
  10.5    
Contingent Fee Agreement.
       
 
  99.1    
Press Release of MoneyGram International, Inc., dated February 11, 2008.
       
 
  99.2    
Form of Certificate of Designations, Preferences and Rights of the Series B Participating Convertible Preferred Stock of MoneyGram International, Inc.
       
 
  99.3    
Form of Certificate of Designations, Preferences and Rights of the Series B-1 Participating Convertible Preferred Stock of MoneyGram International, Inc.
       
 
  99.4    
Form of Certificate of Designations, Preferences and Rights of the Series C Participating Preferred Stock of MoneyGram International, Inc.
       
 
  99.5    
Form of Certificate of Designations, Preferences and Rights of the Series D Participating Convertible Preferred Stock of MoneyGram International, Inc.
       
 
  99.6    
Form of Registration Rights Agreement by and among the several Investor parties named therein and MoneyGram International, Inc.
       
 
  99.7    
Indicative Summary of Terms and Conditions, MoneyGram Payment Systems Worldwide, Inc. $550 Million Senior Secured Credit Facilities, dated as of February 11, 2008.
       
 
  99.8    
Form of Indenture between MoneyGram Payment Systems Worldwide, Inc. and Wells Fargo Bank National Association, as Trustee.
       
 
  99.9    
Form of Registration Rights Agreement by and among MoneyGram Payment Systems Worldwide, Inc., MoneyGram International, Inc. and GSMP V Onshore US, Ltd., GSMP V Offshore US, Ltd., GSMP V Institutional US, Ltd.

 

EX-4.1
 

Exhibit 4.1
FIRST AMENDMENT TO RIGHTS AGREEMENT
     This FIRST AMENDMENT TO RIGHTS AGREEMENT (this “Amendment”) is entered into as of February 11, 2008, between MoneyGram International, Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A., as rights agent (the “Rights Agent”).
RECITALS
     WHEREAS, the Company and the Rights Agent are parties to that certain Rights Agreement, dated as of June 30, 2004 (the “Rights Agreement”); and
     WHEREAS, the several investors listed on Schedule A hereto and the Company contemplate entering into a Purchase Agreement (as defined below) that provides for, among other things, the purchase by the Investors of (i) shares of a new series of preferred stock of the Company, the Series C Participating Preferred Stock, par value $0.01 per share, (ii) shares of a new series of convertible preferred stock of the Company, the Series D Participating Convertible Preferred Stock, par value $0.01 per share, and (iii) Common Shares (as defined in the Rights Agreement) of the Company, where (i), (ii) and (iii) (collectively, the “Temporary Securities”) are, upon the terms and subject to the conditions set forth in the Purchase Agreement, mandatorily exchangeable for shares of Series B Participating Convertible Preferred Stock and Series B-1 Participating Convertible Preferred Stock (each as defined below); and
     WHEREAS, Section 27 of the Rights Agreement permits the Company, from time to time and at any time prior to such time as any person becomes an Acquiring Person, to supplement or amend the Rights Agreement without the approval of any holders of the Rights Certificates; and
     WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company and its shareholders to modify the terms of the Rights Agreement to exempt the Purchase (as defined below), the Purchase Agreement and all of the transactions contemplated thereby from the application of the Rights Agreement, and in connection therewith the Company is entering into this Amendment and directing the Rights Agent to enter into this Amendment; and
     WHEREAS, all acts and things necessary to make this Amendment a valid agreement, enforceable according to its terms have been done and performed, and the execution and delivery of this Amendment by the Company and the Rights Agent have been in all respects duly authorized by the Company and the Rights Agent.
     NOW, THEREFORE, in consideration of the premises and mutual agreements herein set forth, the parties hereby agree as follows:
     A. Amendment of Section 1. Section 1 of the Rights Agreement is supplemented to add the following definitions in the appropriate locations:
(i) “Exchange” shall mean the exchange of any Temporary Securities for shares of Series B Preferred Stock or shares of Series B-1 Preferred Stock, as the

 


 

case may be.
(ii) “Excluded Securities” shall mean (A) shares comprising Temporary Securities, (B) shares of Series B Preferred Stock, (C) shares of Series B-1 Preferred Stock, (D) Common Shares issued upon conversion of shares of Series B Preferred Stock, (E) shares of Series D Preferred Stock issued upon conversion of shares of Series B Preferred Stock or shares of Series B-1 Preferred Stock, (F) Common Shares issued upon conversion of shares of Series D Preferred Stock, and (G) Common Shares (and options, warrants or other rights to acquire Common Shares, or securities convertible into or exercisable or exchangeable for, Common Shares) (1) issued as a dividend or distribution on any shares referred to in (A) through (F) of this definition or (2) acquired by an Investor in connection with such Investor’s exercise of rights under Section 4.7 of the Purchase Agreement.
(iii) “Investors” shall mean the several investors listed on Schedule A hereto (together with their respective successors and assigns and transferees of Excluded Securities; in each case, who are Affiliates or Associates of any such Investors or who are Affiliates of Thomas H. Lee Partners, L.P. ) (and each, an “Investor”).
(iv) “Purchase Agreement” shall mean the Purchase Agreement, dated as of January 31, 2008, by and between the Company and the Investors listed on Schedule A hereto, as it may be amended or supplemented from time to time.
(v) “Purchase” shall mean all of the transactions contemplated by the Purchase Agreement.
(vi) “Series B Preferred Stock” shall mean the shares of Series B Participating Convertible Preferred Stock of the Company, par value $0.01 per share, issuable upon Exchange of Temporary Securities pursuant to the Purchase Agreement and the shares of Series B Preferred Stock issuable upon conversion of shares of Series B-1 Preferred Stock.
(vii) “Series B-1 Preferred Stock” shall mean the shares of Series B-1 Participating Convertible Preferred Stock of the Company, par value $0.01 per share, issuable upon Exchange of Temporary Securities pursuant to the Purchase Agreement.
(viii) “Series C Preferred Stock” shall mean the shares of Series C Participating Preferred Stock of the Company, par value $0.01 per share, issuable pursuant to the Purchase Agreement.
(ix) “Series D Preferred Stock” shall mean the shares of Series D Participating Convertible Preferred Stock of the Company, par value $0.01 per share, issuable pursuant to the Purchase Agreement, issuable pursuant to the conversion of shares of Series B-1 Preferred Stock, and issuable pursuant to the conversion of shares of Series B Preferred Stock.

2


 

(x) “Temporary Securities” shall mean the shares of Series C Preferred Stock, the shares of Series D Preferred Stock and the Common Shares, in each case, issued by the Company to the Investors pursuant to the Purchase Agreement.
     B. Amendment of the definition of “Acquiring Person”. The definition of “Acquiring Person” in Section 1(a) of the Rights Agreement is amended by adding the following sentence at the end thereof:
     “Notwithstanding anything in this Agreement to the contrary, no Investor nor any of its Affiliates or Associates shall be deemed to be an Acquiring Person and no Distribution Date or Shares Acquisition Date shall be deemed to occur, in each case, solely by virtue of (i) the approval, execution or delivery of the Purchase Agreement, (ii) the consummation of the Purchase or (iii) the consummation of any other transaction contemplated in the Purchase Agreement or by the respective Certificates of Designations, Preferences and Rights of the Series B Participating Convertible Preferred Stock, the Series B-1 Participating Convertible Preferred Stock, the Series C Participating Preferred Stock and the Series D Participating Convertible Preferred Stock, including, without limitation, acquisition by the Investors of beneficial ownership of Excluded Securities.”
     C. Amendment of Section 3. Section 3 of the Rights Agreement is amended to add the following sentence at the end thereof as Section 3(d):
     “(d) Nothing in this Agreement shall be construed to give any holder of the Rights or any other Person any legal or equitable rights, remedies or claims under this Agreement by virtue of the approval, execution or delivery of the Purchase Agreement or by virtue of any of the transactions provided for by the Purchase Agreement, including, without limitation, the consummation thereof, the Exchange, conversion of shares of Series B Preferred Stock into Common Shares, conversion of shares of Series B-1 Preferred Stock into shares of Series B Preferred Stock, conversion of shares of Series B-1 Preferred Stock into shares of Series D Preferred Stock, conversion of shares of Series B Preferred Stock into shares of Series D Preferred Stock, and conversion of shares of Series D Preferred Stock into Common Shares;”
     D. Effectiveness. This Amendment shall be deemed effective as of the date first written above, as if executed on such date. To the extent that the terms and provisions of the Rights Agreement do not conflict with the terms and provisions of this Amendment, then such terms and provisions shall remain in full force and legal effect. To the extent that there is a conflict between the terms and provisions of the Rights Agreement and this Amendment, the terms and provisions of this Amendment shall govern for purposes of the subject matter of this Amendment only.
     E. Miscellaneous. This Amendment may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. This Amendment shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state

3


 

applicable to contracts to be made and performed entirely within such state. If any provision, covenant or restriction of this Amendment is held by a court of competent jurisdiction or other authority to be invalid, illegal or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in full force and effect and shall in no way be effected, impaired or invalidated. Except as otherwise expressly provided herein, or unless the context otherwise requires, all terms used herein have the meanings assigned to them in the Rights Agreement. The Rights Agent and the Company hereby waive any notice requirement under the Rights Agreement pertaining to the matters covered by this Amendment.

4


 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and attested, all as of the day and year first above written.
             
Attest:   MONEYGRAM INTERNATIONAL, INC.
 
By:
  /s/ Teresa H. Johnson   By:   /s/ Philip W. Milne
 
           
 
  Name: Teresa H. Johnson       Name: Philip W. Milne
 
  Title: Secretary       Title: President and Chief Executive Officer
 
Attest:   WELLS FARGO BANK, N.A.
 
By:
  /s/ Christine A. Garrick   By:   /s/ John D. Baker
 
           
 
  Name: Christine A. Garrick       Name: John D. Baker
 
  Title: Assistant Vice President       Title: Vice President

5


 

SCHEDULE A
Investors
THOMAS H. LEE EQUITY FUND VI, L.P.
THOMAS H. LEE PARALLEL FUND VI, L.P.
THOMAS H. LEE PARALLEL (DT) FUND VI, L.P.
GS CAPITAL PARTNERS VI FUND, L.P.
GS CAPITAL PARTNERS VI OFFSHORE FUND, L.P.
GS CAPITAL PARTNERS VI GmbH & Co. KG
GS CAPITAL PARTNERS VI PARALLEL, L.P.
GSMP V ONSHORE US, LTD.
GSMP V OFFSHORE US, LTD.
GSMP V INSTITUTIONAL US, LTD.

6

EX-10.1
 

Exhibit 10.1
EXECUTION COPY
 
PURCHASE AGREEMENT
dated as of February 11, 2008
among
MONEYGRAM INTERNATIONAL, INC.
and
THE SEVERAL INVESTORS PARTY HERETO
 

 


 

TABLE OF CONTENTS
         
    Page  
Recitals
    1  
 
       
ARTICLE I
       
 
       
Purchase; Closings
       
 
       
1.1 Purchase
    2  
1.2 Closing
    4  
1.3 Exchange of Temporary Security Units
    10  
 
       
ARTICLE II
       
 
       
Representations and Warranties
       
 
       
2.1 Disclosure
    12  
2.2 Representations and Warranties of the Company
    14  
(a) Organization and Authority
    14  
(b) Company’s Subsidiaries
    14  
(c) Capitalization
    15  
(d) Authorization; No Default
    16  
(e) SEC Documents
    17  
(f) Taxes
    18  
(g) Ordinary Course
    19  
(h) Commitments and Contracts
    19  
(i) Litigation and Other Proceedings
    20  
(j) Insurance
    20  
(k) Compliance with Laws
    20  
(l) Benefit Plans
    21  
(m) Environmental Liability
    23  
(n) Intellectual Property
    24  
(o) Anti-takeover Provisions Not Applicable
    25  
(p) Board Approvals
    25  
(q) Brokers and Finders
    25  
(r) Exemption from Registration
    26  
(s) Opinion of Financial Advisor
    26  
(t) No Other Representations or Warranties
    26  
2.3 Representations and Warranties of the Investor
    26  
(a) Organization and Authority
    26  
(b) Authorization
    26  
(c) Purchase for Investment
    27  
(d) Financial Capability
    28  
(e) Brokers and Finders
    28  
(f) No Exclusivity
    28  

 


 

         
    Page  
(g) No Other Representations or Warranties
    28  
 
       
ARTICLE III
       
 
       
Covenants
       
 
       
3.1 Filings; Other Actions
    28  
3.2 Access, Information and Confidentiality
    31  
3.3 Certain Additional Covenants of the Company
    32  
 
       
ARTICLE IV
       
 
       
Additional Agreements
       
 
       
4.1 Governance Matters
    34  
4.2 Legend
    38  
4.3 Reservation for Issuance
    38  
4.4 Lost, Stolen or Destroyed Certificates
    39  
4.5 Restrictions on Transfers
    39  
(a) Transfer of Temporary Security Units
    39  
(b) Transfer of the Series B Preferred Stock and the Series B-1 Preferred Stock
    39  
4.6 Withholding
    40  
4.7 Anti-Dilution Rights
    40  
(a) Sale of New Stock
    41  
(b) Notice
    41  
(c) Purchase Mechanism
    42  
(d) Failure of Purchase
    43  
4.8 Indemnity
    44  
4.9 Go-Shop Period
    46  
4.10 Share Listing
    48  
4.11 Filing of Certificates of Designation
    48  
4.12 Public Announcements
    48  
4.13 Right to Use Trademarks
    48  
 
       
ARTICLE V
       
 
       
Termination
       
 
       
5.1 Termination
    49  
5.2 Termination Fee
    49  
5.3 Expenses
    50  
5.4 Effects of Termination
    50  
 
       
ARTICLE V
       
 
       
Miscellaneous
       
 
       
6.1 Survival of Representations, Warranties, Agreements, Etc.
    51  

 


 

         
    Page  
6.2 Amendment
    51  
6.3 Waiver
    51  
6.4 Counterparts and Facsimile
    51  
6.5 Governing Law; Jurisdiction
    51  
6.6 WAIVER OF JURY TRIAL
    51  
6.7 Notices
    51  
6.8 Entire Agreement, Etc.
    53  
6.9 Definitions of “subsidiary,” “Affiliate,” “knowledge,” “person
    53  
6.10 Captions
    54  
6.11 Severability
    54  
6.12 No Third Party Beneficiaries
    54  
6.13 Specific Performance
    54  
6.14 Several, Not Joint, Liability
    55  

 


 

LIST OF EXHIBITS
         
Form of Series B Participating Convertible Preferred Stock Certificate of Designations
    1  
Form of Series B-1 Participating Preferred Stock Certificate of Designations
    2  
Form of Series C Participating Preferred Stock Certificate of Designations
    3  
Form of Series D Convertible Participating Preferred Stock Certificate of Designations
    4  
Form of Registration Rights Agreement
    5  
Form of Rights Plan Amendment
    6  
Form of Management Rights Letter
    7  
Form of Proxy
    8  
LIST OF SCHEDULES
         
Investors
    A  
Portfolio Securities to be Sold
    B  
Valuation of Residual Portfolio Securities
    C  
Terms of Amendment to Amended and Restated Credit Agreement
    D  
Unrestricted Assets Definition and Calculation
    E  
Investment Policy
    F  
Payment of Termination Fees
    G  
INDEX OF DEFINED TERMS
     
    Location of
Term   Definition
85% Condition
  1.3(c)(ii)
85% Requisite Regulatory Approvals
  1.3(c)(ii)
95% Condition
  1.3(c)(ii)
95% Requisite Regulatory Approvals
  1.3(c)(ii)
Affiliate
  6.9(b)
Affiliated Transaction
  4.1(h)(ii)
Agreement
  Preamble
Anti-Dilution Right Entity
  4.7(a)
Applicable Threshold
  4.5(c)
beneficial ownership
  2.2(b)(i)
Benefit Plan
  2.2(l)(i)
Board Observers
  4.1(a)
Board of Directors
  2.2(d)(i)
Board Representative
  4.1(a)
Bylaws
  2.2(a)
Certificate of Incorporation
  2.2(a)
Certificates of Designations
  Recitals
Closing
  1.2(a)
Closing Date
  1.2(a)

 


 

     
    Location of
Term   Definition
Code
  2.2(f)(i)
Common Stock
  Recitals
Company
  Preamble
Company Board Recommendation
  3.1(c)
Company Disclosure Schedule
  2.1(a)
Company Intellectual Property
  2.2(n)(iii)
Company Stock Option
  2.2(c)
Company Subsidiary/Company Subsidiaries
  2.2(b)(i)
Company Transaction Proposal
  4.9(f)(i)
Confidentiality Agreements
  3.2(b)
Continuing Directors
  4.1(h)(iii)
Contract
  2.2(d)(ii)
control
  6.9(b)
Disclosed Contracts
  2.1(h)(ii)
Draft Going Concern Audit Opinion
  1.2(c)(viii)(1)
Environmental Claims
  2.2(m)
Environmental Law
  2.2(m)
ERISA
  2.2(l)(ii)
Escrow Agent
  1.3(b)
Escrow Agreement
  1.3(b)
Exchange Act
  1.2(c)(viii)
Exchange Date
  1.3(c)(i)
Exclusivity Agreement
  5.2
Existing Credit Facilities
  1.2(a)(iv)
Extended Date
  3.1(c)
Fairness Opinions
  2.2(s)
Filed SEC Documents
  2.1(c)
Foreign Plans
  2.2(l)(vii)
GAAP
  2.2(e)(i)
German Antitrust Act
  1.2(c)(i)
Governmental Entities
  2.1(b)
GS
  Preamble
GSCP
  Preamble
GSMP
  Preamble
Hazardous Materials
  2.2(m)
HSR Act
  1.2(c)(i)
Indemnified Party/Indemnified Parties
  4.8(a)
Indenture
  1.2(c)(iv)
Independent Director(s)
  4.1(h)(i)
Information
  3.2(b)
Infringe
  2.2(n)(ii)
Intellectual Property
  2.2(n)(i)
Investment
  Recitals
Investment Policy
  3.3(g)
Investors
  Preamble
IRS
  3.1(a)

 


 

     
    Location of
Term   Definition
knowledge
  6.9(c)
Law(s)
  6.9(e)
Licensee
  3.3(b)
Losses
  4.8(a)
Material Adverse Effect
  2.1(b)
Money Transfer Volume
  1.3(c)(ii)
MPSI
  1.2(c)(vi)
Multiemployer Plan
  2.2(l)(iii)
New Security
  4.7(a)
Nominating Committee
  4.1(c)
Note Purchase Agreement
  1.2(c)(iv)
Notice Period
  4.9(b)(i)
Outside Date
  4.5(a)
Outside Receipt Date
  1.2(c)(viii)(2)
Permits
  2.1(k)(i)
Permitted Liens
  2.2(b)(iii)
person
  6.9(d)
Pre-Closing Certificate
  1.2(d)
Preferred Stock/Preferred Share
  Recitals
Previously Disclosed
  2.1(c)
Private Placement
  4.7(b)(ii)
Proceeds Excess
  1.1(c)
Purchase
  1.1(a)
Purchase Price
  1.1(a)
Qualifying Ownership Interest
  4.1(a)
Regulatory Approval
  3.3(b)
Release
  2.2(m)
Representatives
  4.9(a)
Satisfaction Date
  1.1(c)
Satisfactory Audit Opinion
  1.2(c)(viii)
Schedule A Purchase Amount
  1.1(c)
SEC
  2.1(c)
SEC Documents
  2.2(e)(i)
Second Lien Notes
  1.2(c)(iv)
Securities
  Recitals
Securities Act
  2.2(e)(i)
Series B Certificate
  1.3(c)
Series B Preferred Stock/Series B Preferred Shares
  Recitals
Series B-1 Preferred Stock/Series B-1 Preferred Shares
  Recitals
Series B-1 Certificate
  1.3(c)
Series C Certificate
  1.2(b)(ii)
Series C Preferred Stock/Series C Preferred Shares
  Recitals
Series D Certificate
  1.3(a)(ii)
Series D Preferred Stock/Series D Preferred Shares
  Recitals
Shareholder Approval
  2.2(d)(iii)
State
  3.3(b)

 


 

     
    Location of
Term   Definition
subsidiary
  6.9(a)
Superior Proposal
  4.9(f)(ii)
Taxes
  2.2(f)(ii)
Tax Return
  2.2(f)(ii)
Temporary Security Unit
  1.3(a)(ii)
Termination Fee
  5.2
Third Party Licenses
  2.2(n)(ii)
THL
  Preamble
THL VI
  4.1(a)
Total Loss
  1.1(c)
Transaction Documents
  Recitals
transfer
  4.5(d)
Unaffiliated Shareholders
  4.1(h)(v)

 


 

          PURCHASE AGREEMENT, dated as of February 8, 2008 (this “Agreement”), among MoneyGram International, Inc., a Delaware corporation (the “Company”), and the parties set forth on Schedule A attached hereto under the heading THL (collectively, “THL”), the parties set forth on Schedule A attached hereto under the heading Goldman Sachs Capital Partners (collectively, “GSCP”), and the parties set forth on Schedule A attached hereto under the heading Goldman Sachs Mezzanine Partners (collectively, “GSMP,” and together with GSCP, “GS,” and GS together with THL, the “Investors”).
RECITALS:
          A. The Investment. The Company intends to sell to the Investors, and each of the Investors intends to purchase from the Company, as an investment in the Company, the securities as described herein (the “Investment”). The securities to be purchased are Series C Participating Preferred Stock of the Company (the “Series C Preferred Stock” or “Series C Preferred Shares”), Series D Participating Convertible Preferred Stock of the Company (the “Series D Preferred Stock” or the “Series D Preferred Shares”) and common stock of the Company (together with all rights associated with such common stock, the “Common Stock”) and are to be purchased at the Closing Date, as defined below, subject to the terms and conditions set forth herein, and with respect to THL, are to be exchanged for shares of Series B Participating Convertible Preferred Stock of the Company (the “Series B Preferred Stock” or the “Series B Preferred Shares”), and with respect to GS, are to be exchanged for shares of Series B-1 Participating Convertible Preferred Stock of the Company (the “Series B-1 Preferred Stock” or the “Series B-1 Preferred Shares”), in each case, at the Exchange Date, as defined below, subject to the terms and conditions set forth herein (the Series B Preferred Stock, the Series B-1 Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock are referred to collectively herein as the “Preferred Stock” or “Preferred Shares”). The Series B Preferred Stock, the Series B-1 Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock will have the designations, relative rights, preferences and limitations set forth in the certificates of designations substantially in the form attached as Exhibit 1, Exhibit 2, Exhibit 3 and Exhibit 4, respectively (the “Certificates of Designations”).
          B. The Securities. The term “Securities” refers collectively to (1) the Preferred Stock purchased under this Agreement, (2) the Common Stock purchased under this Agreement, (3) any securities into which any of the foregoing shares are converted, exchanged or exercised in accordance with the terms thereof and of this Agreement and (4) any securities into which any of the securities referred to in clause (3) are converted, exchanged or exercised in accordance with the terms thereof.
          C. Transaction Documents. The term “Transaction Documents” refers collectively to this Agreement, the Certificates of Designations and the Registration Rights Agreement in the form contained in Exhibits 1, 2, 3, 4 and 5, respectively.
          NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth herein, the parties agree as follows:

1


 

ARTICLE I
Purchase; Closings
          1.1 Purchase.
          (a) On the terms and subject to the conditions set forth herein, including the adjustment provisions of Section 1.1(c), each of the Investors will purchase from the Company, and the Company will sell to each of the respective Investors, at the Closing (as defined below) the number of Series C Preferred Shares set forth across from such Investor’s name on Schedule A, representing a total Liquidation Preference (as defined in the Series C Certificate) of the amount set forth across from such Investor’s name on Schedule A, the number of shares of Series D Preferred Stock set forth across from such Investor’s name on Schedule A, and the number of shares of Common Stock set forth across from such Investor’s name on Schedule A, for a total purchase price with respect to such Investor of the amount set forth across from such Investor’s name on Schedule A and a total purchase price (the “Purchase Price”) with respect to all Investors of $710,000,000 (the “Purchase”). Notwithstanding anything to the contrary herein, the THL Investors may, in their sole discretion, reallocate among the respective THL Investors the total THL Purchase Price and corresponding amounts set forth on Schedule A, the GS Investors may, in their sole discretion, reallocate among the respective GS Investors the total GS Purchase Price and corresponding amounts set forth on Schedule A, and all references to Schedule A herein shall be references to Schedule A as revised to reflect such reallocations.
          (b) [Intentionally omitted.]
          (c) In the event the Total Loss (as defined below) as of the Closing is less than $1,635,000,000 and the condition set forth in Section 1.2(c)(vii) is satisfied (after giving effect to any adjustment to the Schedule A Purchase Amount (as defined below) permitted by and made pursuant to this Section 1.1(c)), then the Purchase Price amounts set forth across from each Investor’s name on Schedule A (with respect to each Investor, the “Schedule A Purchase Amount”) may at the Company’s option be reduced, in accordance with the procedures set forth on Schedule A (or, if so directed by the Investors, another allocation among the Investors), by twenty-five percent (25%) of the amount by which the Total Loss is less then $1,635,000,000 (such excess, the “Proceeds Excess”), and the Company may, at its option reduce the respective Schedule A Purchase Amounts, in accordance with the procedures set forth on Schedule A (or, if so directed by the Investors, another allocation among the Investors), by another twenty-five percent (25%) (or part thereof), up to fifty percent (50%) of the Proceeds Excess. In the event the Total Loss, as of the Closing, is at least $1,635,000,000 but less than $1,700,000,000, then the Schedule A Purchase Amounts shall be increased, in accordance with the procedures set forth on Schedule A (or, if so directed by the Investors, another allocation among the Investors), by the amount by which the Total Loss is greater than $1,635,000,000 (and less than $1,700,000,000). For the avoidance of doubt, the aggregate amount the Investors shall be required to pay at the Closing shall only increase from $710,000,000 if the Total Loss exceeds $1,635,000,000, and the maximum aggregate amount that the Investors shall be required to pay at the Closing pursuant to this Agreement shall be $775,000,000. In the event the Purchase Price amounts of the respective

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Investors are adjusted pursuant to this Section 1.1(c), the number of Series C Preferred Shares issued at the Closing to the respective Investors shall be correspondingly adjusted such that the aggregate Liquidation Preference of all of the Series C Preferred Shares issued at the Closing shall be adjusted by an amount equal to the aggregate reduction or increase, as applicable, in the Purchase Price. In the event there is a Proceeds Excess and the Company opts to reduce the Investors’ Schedule A Purchase Amounts, the principal amount of Second Lien Notes (as defined below) shall be reduced by an amount equal to the difference between the Proceeds Excess and the amount by which the aggregate Purchase Price is reduced pursuant to this Section 1.1(c). “Total Loss” shall mean the sum of:
          (i) the aggregate realized loss (net of gains, if any) on the sale of securities by the Company from its securities portfolio from January 1, 2008 through the opening of business on the date hereof, which the parties agree is $383,900,000;
          (ii) the aggregate loss (net of gains, if any) that will be realized on the sale of securities listed on Schedule B hereto (including any termination payments on derivative financial instruments listed on Schedule B which shall be sold or unwound) with respect to which the Company shall have accepted bids to sell such securities on or before the third Business Day prior to the Closing (such third Business Day prior to the Closing, the “Satisfaction Date”);
          (iii) with respect to the securities set forth on Schedule C, (x) if any of the securities set forth on Schedule C-1 or C-2, as applicable, have not been sold or abandoned as of the Satisfaction Date, the unrealized loss or unrealized gain on the securities listed on Schedule C-1 or C-2, as applicable, hereto, assuming the value proposed to be assigned to such securities by the Investors as set forth on Schedule C is the value of such securities or (y) if all of the securities set forth on either Schedule C-1 or C-2, as applicable, have been sold or abandoned prior to or on the Satisfaction Date, the aggregate loss (net of gains, if any) realized on the sale or abandonment of such securities; provided, however, that with respect to the securities set forth on either Schedule C-1 or C-2, no such securities set forth on either Schedule C-1 or C-2, as the case may be, shall be sold or abandoned prior to the Satisfaction Date unless all such securities set forth on such Schedule C-1 or C-2, as applicable, are so sold or abandoned; and
          (iv) with respect to the Company’s and the Company Subsidiaries’ derivative financial instruments (other than those set forth on Schedule B), (x) if any of the securities set forth on Schedule C-1 have not been sold or abandoned, none of the Company’s and the Company Subsidiaries’ derivative financial instruments (other than those set forth on Schedule B) may be sold, assigned or unwound, and the parties agree the loss shall be $51,900,000 or (y) if all, but not less than all, of such the securities set forth on Schedule C-1 have been sold or abandoned, (A) if all, but not less than all, of such derivative financial instruments have been sold, assigned or unwound prior to or on the Satisfaction Date, the aggregate loss (net of gains, if any) realized on the sale, assignment or unwind of such instruments, and (B) otherwise, a loss based on the current market value of such derivative financial instruments, calculated using the present values of the cash flows associated with such instruments, as of the Satisfaction Date reasonably

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agreed to by the Company and the Investors (it being understood that the Company and the Investors agree that the market value of the derivative financial instruments (other than those set forth on Schedule B), is ($51,900,000) as of January 31, 2008 and agree on the methodology used to calculate such value).
For securities listed on Schedule B, or as applicable, Schedule C, sold, the loss with respect to such securities shall be equal to the net cash proceeds received upon the sale of such securities less the sum of (x) the book value of the respective securities as set forth on Schedule B, or as applicable, Schedule C, and (y) any accrued interest on such securities as of the date such securities are sold. For the Company’s and the Company Subsidiaries’ derivative financial instruments, the loss with respect to such instruments, if sold and/or unwound, shall be equal to the total net cash termination payment (net of any such payments received by the Company, if any) delivered in connection with the, sale and/or unwind of such derivatives. As promptly as practicable, and in any event, on or prior to the Satisfaction Date, the Company shall provide on a CUSIP by CUSIP basis, book value, par value, accrued interest and proceeds received or expected to be received from the sale for each of the securities with respect to which the Company and the Company Subsidiaries shall have sold (with respect to the securities referenced in Sections 1.1(c)(iii) and (iv)) or accepted bids to sell (with respect to the securities referenced in Section 1.1(c)(ii)) such securities on or prior to the Satisfaction Date.
          1.2 Closing.
          (a) The closing of the transactions contemplated by this Agreement (the “Closing”), will take place at the offices of Wachtell, Lipton, Rosen & Katz, located at 51 West 52nd Street, New York, New York, commencing at 10 a.m. local time, on the later to occur of (i) the Business Day following the date on which the conditions set forth in Section 1.2(c) (other than those conditions that by their nature are to be satisfied at the Closing, but subject to fulfillment of those conditions) are satisfied or waived (by the party entitled to waive such conditions) or (ii) a date specified by the Company (on at least one Business Day’s written notice) on which the conditions set forth in Section 1.2(c) (other than those conditions that by their nature are to be satisfied at the Closing, but subject to fulfillment of those conditions) are satisfied or waived (by the party entitled to waive such conditions) that is no later than 10:00 a.m. CST on March 13, 2008 (or if no date is specified, then at 10:00 a.m. CST on March 13, 2008), or at such other time as mutually agreed by the parties. The date of the Closing is referred to as the “Closing Date.”
          (b) At the Closing,
          (i) each Investor shall deliver by wire transfer of immediately available United States funds to the Company the Purchase Price of the Securities in the amount set forth across from such Investor’s name on Schedule A (adjusted, if and as required by Section 1.1(c));
          (ii) the Company shall deliver to the Investors certificates representing the number of Series C Preferred Shares set forth across from such Investor’s name on Schedule A, representing a total initial Liquidation Preference (as defined in the Certificate of Designations for the Series C Preferred Stock (the “Series C

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Certificate”)) of the amount set forth across from such Investor’s name on Schedule A (adjusted, if and as required by Section 1.1(c)), the number of shares of Series D Preferred Stock set forth across from such Investor’s name on Schedule A, and the number of shares of Common Stock set forth across from such Investor’s name on Schedule A;
          (iii) the Company and each of the respective Investors shall execute the Registration Rights Agreement in the form of Exhibit 5 attached hereto and, if applicable, the Escrow Agreement;
          (iv) the Company shall deliver to each of the Investors certified copies of Certificates of Designations for the Preferred Stock, in the form attached as Exhibits 1, 2, 3, and 4 hereto as filed with the Secretary of State of the State of Delaware;
          (v) the Company shall deliver to each of Thomas H. Lee Equity Fund VI, L.P., Thomas H. Lee Parallel Fund VI, L.P., Thomas H. Lee Parallel (DT) Fund VI, L.P., GS Capital Partners VI Parallel, L.P. and GS Mezzanine Partners V Institutional, L.P. a Management Rights Letter, in the form attached as Exhibit 7 hereto; and
          (vi) the Investors shall deliver to the Company the proxy in the form attached as Exhibit 8 hereto.
          (c) Closing Conditions. Subject to the final sentence of Section 1.2(d), the respective obligation of each of the respective Investors and the Company to consummate the Closing is subject to the fulfillment or written waiver by all of the Investors and the Company prior to the Closing of the following conditions:
          (i) expiration or termination of any applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”) and any applicable waiting period under the German Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschrankungen) (the “German Antitrust Act”), in each case, required to consummate the Investment and the Closing and for the Investors to own, and fully vote and convert into Common Stock, all of the Securities;
          (ii) no provision of any applicable Law or regulation and no judgment, injunction, order or decree shall prohibit the Closing or the consummation of any of the transactions contemplated by the Transaction Documents or shall prohibit or restrict any Investor or its Affiliates from owning, or fully voting and converting, the Securities to be acquired by such Investor pursuant to the terms of such respective Securities, and no lawsuit shall have been commenced by a Governmental Entity seeking to effect any of the foregoing;
          (iii) the Company shall have (A) on the Satisfaction Date, accepted bids to sell the securities held in its investment portfolio listed on Schedule B hereto

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that if consummated would result in the Company incurring a Total Loss of not more than $1,700,000,000, (B) incurred a Total Loss of not more than $1,700,000,000, and (C) on or prior to the Closing, received or receive, as the case may be, full proceeds from such sales in accordance with the bids accepted on the Satisfaction Date;
          (iv) the Company shall have (A) amended its existing Amended and Restated Credit Agreement, dated as of June 29, 2005, in accordance with the terms set forth on Schedule D attached hereto, such other material alterations or additional material terms as are acceptable to both the Company and the Investors (each acting in their sole discretion), and such other non-material terms and conditions as are acceptable to the Company (acting reasonably); (B) received an additional $200,000,000 of term loans (less any original issue discount otherwise permitted under this Agreement) under its existing Amended and Restated Credit Agreement following such amendment described in clause (A) above; (C) never borrowed any funds under, and shall have terminated, its existing 364-Day Credit Agreement, dated as of November 15, 2007, as amended (together with the credit facility referenced in clause (A), the “Existing Credit Facilities”); (D) (i) entered into and not amended the Note Purchase Agreement, dated as of the date hereof (the “Note Purchase Agreement”) with the purchasers set forth therein, relating to the sale to such purchasers of up to $500,000,000 principal amount of Senior Secured Second Lien Notes (the “Second Lien Notes”) pursuant to the indenture referred to in the Note Purchase Agreement (the “Indenture”) and (ii) entered into and not amended the Indenture; and (E) received $500,000,000 in proceeds (net of any closing payment referred to in the Note Purchase Agreement) from the issuance of the Second Lien Notes pursuant to the Indenture; provided, however, the amount of Second Lien Notes issued pursuant to the Note Purchase Agreement may be reduced in accordance with Section 1.1(c); provided, further that the parties acknowledge that each of the terms set forth on Schedule D are material;
          (v) Except as Previously Disclosed, since September 30, 2007, no change or event shall have occurred and no circumstances shall exist which have had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.  With respect to matters which have been Previously Disclosed, in determining whether this condition is satisfied, any circumstance, event or condition occurring after the date hereof shall be taken into account, including any deterioration, worsening or adverse consequence of such Previously Disclosed matters occurring after the date hereof;
          (vi) neither the Company nor MoneyGram Payment Systems, Inc., a wholly owned subsidiary of the Company (“MPSI”), shall have received written or oral notice from any State to the effect that such State has determined that the Company or MPSI can no longer conduct its money transfer or payment systems businesses in such State or has revoked, or intends to revoke, the Company’s or MPSI’s license to

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conduct such businesses in such State, or imposed, or intends to impose, one or more conditions on the Company’s or MPSI’s license to conduct such businesses in such State (which conditions are materially adverse to the Company or MPSI and are not generally applicable to other persons conducting money transfer or payments systems businesses in such State);
          (vii) after giving effect to the transactions and the payment of expenses payable by the Company in connection with the transactions contemplated hereby, including, without limitation, the expenses incurred in connection with the transactions contemplated by clause (iv) of this Section 1.2(c) , the expenses contemplated by Section 5.3 hereof and the Exclusivity Agreement (as defined below), and the fees and expenses of the Company’s advisors, on a pro forma basis, the Company shall have at least $150,000,000 in Unrestricted Assets (as defined on Schedule E) and $100,000,000 undrawn borrowing availability under the Company’s revolving credit facility (which availability for the purposes of this Section 1.2(c)(vii) shall take into account all letters of credit outstanding either through the Existing Credit Facilities or otherwise);
          (viii) (A) on or prior to the Satisfaction Date, the Company (x) shall have received from Deloitte & Touche LLP an unqualified opinion regarding the consolidated financial statements of the Company and its subsidiaries as of and for the year ended December 31, 2007, prepared in accordance with GAAP (which opinion shall not contain any going concern modification or qualification or other explanatory paragraph) (such an opinion referred to herein as a “Satisfactory Audit Opinion”) and (y) shall have filed its Annual Report on Form 10-K in compliance with all applicable rules promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) or, (B) if the conditions set forth in clause (A) of this sentence have not been satisfied on or prior to the Satisfaction Date, then:
               (1) the Investors shall have received, (v) at least two (2) business days prior to the Satisfaction Date, a draft of the Company’s Annual Report on Form 10-K delivered by the Company in a substantially complete form, (w) at least two (2) business days prior to the Satisfaction Date, a draft opinion delivered by Deloitte & Touche LLP to the Company regarding the consolidated financial statements of the Company and its subsidiaries as of and for the year ended December 31, 2007, prepared in accordance with GAAP (which draft opinion shall be unqualified, except that it may contain a going concern qualification referring solely to the Company’s need to raise additional capital to address the reduced valuation of the Company’s investment portfolio and shall not contain any other going concern modification or similar qualification or other explanatory paragraph) (such a draft opinion referred to herein as a “Draft Audit Opinion”), (x) verbal confirmation (on both the date the draft opinion referred to in clause (v) is delivered and on the Satisfaction Date) from Deloitte & Touche LLP to the effect that the Draft Audit Opinion is in a final form that could be delivered to the Company as of the Satisfaction Date, and if the Draft Audit Opinion contains a Going Concern qualification, verbal confirmation from Deloitte & Touche LLP that the sale of portfolio securities and the receipt of the funds from the transactions contemplated by the Transaction Documents will

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result in a Satisfactory Audit Opinion, with an assumption that the amount of the Total Loss does not exceed $1,700,000,000 (provided, however, that on the Satisfaction Date such assumption shall take into account any actual securities sold and the bids received on the securities to be sold), (y) on both the date the draft opinion referred to in clause (v) is delivered and on the Satisfaction Date, a written description delivered by Deloitte & Touche LLP to the Company as of these dates of all remaining audit procedures that need to be completed for Deloitte & Touche LLP to issue a Satisfactory Audit Opinion, which procedures relate solely to confirming the receipt of funds from the sale of portfolio securities and the receipt of the funds from the transactions contemplated by the Transaction Documents, and (z) at least two (2) business days prior to the Satisfaction Date, a written description from the Company, based on discussions with Deloitte & Touche LLP, of all steps the Company and Deloitte & Touche LLP will take in order for the Company to obtain from Deloitte & Touche LLP a Satisfactory Audit Opinion on or prior to the Outside Receipt Date; and
               (2) each of THL, GSMP and GSCP shall have determined (and shall have notified the Company not later than the Satisfaction Date that it has determined) in its sole judgment and discretion that the Company will obtain from Deloitte & Touche LLP, a Satisfactory Audit Opinion on or prior to March 14, 2008 (the “Outside Receipt Date”), and will file its Annual Report on Form 10-K in compliance with all applicable rules promulgated under the Exchange Act on or prior to the Outside Receipt Date; it being understood that in making the determination, the Investors shall be entitled to consider the foregoing information delivered under clause (B)(1) above, as well as any other factors as they deem relevant, including without limitation any and all information obtained through the Company’s full compliance with Section 3.2;
     (ix) each of THL, GSMP and GSCP shall have had a full and complete opportunity to review the Company’s books and records, internal controls and procedures, and to interview current and former Company personnel as determined to be necessary by each of THL, GSMP and GSCP, and each shall have determined (and shall have notified the Company not later than the Satisfaction Date that this condition has been satisfied) that the Company’s books and records, internal controls and procedures, as well as the Company’s prior disclosures, are acceptable to each of THL, GSMP and GSCP in its sole judgment and discretion; and it is understood and agreed that such determination by THL, GSMP and GSCP shall be based on, among other things, but not limited to, the subjective view of each of THL, GSMP and GSCP of the Company’s potential exposure, if any, to claims and investigations related to the Company’s books and records, internal controls and procedures, and prior disclosures;
     (x) neither Deloitte & Touche LLP nor any other accounting firm shall have issued to the Company any opinion regarding the consolidated financial statements of the Company and its subsidiaries as of and for the year ended December 31, 2007 which is not a Satisfactory Audit Opinion;

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          (xi) there shall not have been a restatement (nor shall any restatement be under consideration by the Company, its external auditors or, to the knowledge of the Company, the SEC) of any prior period financial statements of the Company;
          (xii) the Company shall have resolved to the satisfaction of the SEC (including having taken any and all corrective action requested by the Staff of the SEC, if any) all comments received by the Company from the SEC on the SEC Documents;
          (xiii) the Company shall not have incurred (or become obligated to incur) fees of more than $7,000,000 relating to the transactions described in Section 1.2(c)(iv) (other than clauses (D) and (E)) of this Agreement plus annual administrative agency fees in an amount not exceeding $150,000 per annum payable quarterly;
          (xiv) the Applicable Margin (as defined in Schedule D) on the Term B Loans (as defined in Schedule D) shall not have been increased by more than 1.25% per annum (all of which may take the form of original issue discount over a four-year life to maturity (i.e. 5% or $10,000,000)); provided that any increase shall have been necessary in the reasonable discretion of the Lead Arranger (as defined in Schedule D) to place the Term B Loans and the Lead Arranger shall first consider (in consultation with the Company and the Investors) using increases in the margin prior to imposing original issue discount;
          (xv) the Pre-Closing Certificate (as defined in Section 1.2(d)) shall have been delivered by both the Company and the Investors on the Satisfaction Date; and
          (xvi) the Investors shall have received a certificate signed on behalf of the Company by an executive officer of Company confirming that the Pre-Closing Certificate was true and accurate when delivered and that each of the conditions set forth in Sections 1.2(c)(iii) and (iv) have been satisfied, or as applicable, will be satisfied simultaneously with, and are satisfied as of the Closing Date.
          (d) Pre-Closing Certificate. On the Satisfaction Date, the Company shall deliver to each of the Investors a certificate (the “Pre-Closing Certificate”) signed on behalf of the Company by an executive officer of the Company confirming that each of the conditions set forth in Sections 1.2(c)(i), (ii), (iii)(A), (iv)(A), (iv)(C), (iv)(D), and (v) through (xiv) have been satisfied and are satisfied as of the Satisfaction Date. Provided that each Investor, in its good faith determination, agrees with the Company’s statements in the Pre-Closing Certificate, each Investor shall acknowledge the Pre-Closing Certificate. After each Investor has acknowledged the Pre-Closing Certificate, provided that the Pre-Closing Certificate was true and accurate when delivered and that the conditions in Sections 1.2(c)(iii) and (iv) are satisfied as of the Closing Date, the Company and each of the Investors shall be required to effect the Closing on the Closing Date.

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          1.3 Exchange of Temporary Security Units.
               (a) Temporary Security Units. Each share of Series C Preferred Stock issued to an Investor on the Closing Date shall have associated with it:
     (i) a number of shares of Common Stock (including any fractional interests) equal to (x) (A) the total number of shares of Common Stock issued to the Investors at the Closing divided by (B) the total number of shares of Series C Preferred issued to the Investors at the Closing, and (y) any non-cash dividends or distributions on such Common Stock; and
     (ii) a number of shares of Series D Preferred Stock (or the shares of Common Stock received on conversion thereof pursuant to the Certificate of Designations for the Series D Preferred Stock (the “Series D Certificate”)) (including any fractional interests) equal to (x) (A) the total number of shares of Series D Preferred Stock issued to the Investors at the Closing divided by (B) the total number of shares of Series C Preferred Stock issued to the Investors at the Closing, and (y) any non-cash dividends or distributions on such Series D Preferred Stock;
     where a single share of Series C Preferred Stock, along with (i) and (ii), shall be referred to collectively as a “Temporary Security Unit.”
               (b) Escrow. If and to the extent an Investor desires to transfer Temporary Security Units in accordance with Section 4.5(a) prior to the earlier of receipt of Shareholder Approval and the Outside Date (or, if applicable, pursuant to Section 3.1(c), the Extended Date), and following such transfer the transferred Temporary Security Units will not be held in the name or custody of such transferring Investor or an entity created by such transferring Investor over which such Investor or its Affiliates maintain voting and dispositive control, the Company, such Investor, and an escrow agent reasonably acceptable to both parties (the “Escrow Agent”) will enter into an escrow agreement (the “Escrow Agreement”) reasonably satisfactory to all parties designed to eliminate risk that the certificates representing components of any Temporary Security Unit may be held or possessed by different entities.
               (c) Receipt of Series B Preferred Shares.
     (i) On the later of the day on which Shareholder Approval is received and the day on which the Regulatory Approvals have been obtained in all of the States (such later day, the “Exchange Date”), each Temporary Security Unit shall be manditorily exchanged (the “Exchange”) for a number of shares of Series B Preferred Stock of the Company or, in the case of GS, of Series B-1 Preferred Stock of the Company, as applicable, that is equal to (A) the sum of (1) the Liquidation Preference (as defined in the Series C Certificate) with respect to all Series C Preferred Stock included in such Temporary Security Unit, (2) the unpaid Accumulated Dividend Amount (as defined in the Series C Certificate) with respect to all Series C Preferred Stock included in such Temporary Security Unit and (3) the value of any dividends or distributions declared with respect to such Temporary Security Unit not already included in clause (2) above, divided by (B) the initial Liquidation Preference of a single share of Series B Preferred Stock (as

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defined in and determined pursuant to the Certificate of Designations for the Series B Preferred Stock (the “Series B Certificate”)) or, as applicable, the initial Liquidation Preference of a single share of Series B-1 Preferred Stock (as defined in and determined pursuant to the Certificate of Designations for the Series B-1 Preferred Stock (the “Series B-1 Certificate”)). The Exchange shall be effected at 12:00 p.m. EST on the Exchange Date.
     (ii) Notwithstanding anything contained in Section 1.3(c)(i), the Investors may, in their sole discretion, elect to effect the Exchange at any time after the later of the day on which Shareholder Approval is received and the day on which the 85% Requisite Regulatory Approvals have been obtained, and in the event of such election, such date shall be deemed to be the Exchange Date. In the event the 85% Requisite Regulatory Approvals are obtained after the day on which Shareholder Approval is received (the “85% Condition”) and the Investors do not elect to effect the Exchange, the Applicable Percentage (as defined in the Series C Certificate) from and after the later of the day on which the last of the 85% Requisite Regulatory Approvals have been obtained and the day on which Shareholder Approval is received shall be sixteen percent (16%) in accordance with the terms of the Series C Preferred Stock. In the event the 95% Requisite Regulatory Approvals are obtained after the day on which Shareholder Approval is received (the “95% Condition”) and the Investors do not elect to effect the Exchange, the Applicable Percentage (as defined in the Series C Certificate) from and after the later of the day on which the last of the 95% Requisite Regulatory Approvals have been obtained and the day on which Shareholder Approval is received shall be thirteen percent (13%) in accordance with the terms of the Series C Preferred Stock. “85% Requisite Regulatory Approvals” means receipt of Regulatory Approvals from regulators in states representing not less than 85% of the total Money Transfer Volume in the United States, including in any event approvals of the applicable regulators in the States set forth on Schedule 1.3(c) (and such approval shall be deemed to have been obtained in each state in which no such Regulatory Approval is required). “95% Requisite Regulatory Approvals” shall have the same definition as 85% Requisite Regulatory Approvals except that the reference to “85%” shall be a reference to “95%.” “Money Transfer Volume” means the fees and commissions earned by the Company from all of the “send” and Express Payment payment transactions, during the calendar year 2007, processed by the Company, originating in the United States.
           (d) Exchange of Certificates.
     (i) On the Exchange Date, each holder of a Temporary Security Unit shall (or, as applicable, shall cause the Escrow Agent to) surrender the certificate or certificates representing the individual components of such Temporary Security Unit at the office of the Company (or any transfer agent of the Company previously designated by the Company to the holders of Series C Preferred Stock for this purpose). Unless the shares of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, issuable upon exchange are to be issued in the same name as the name in which all of the Securities that are components of such Temporary Security Unit are registered, each Temporary Security Unit surrendered for exchange shall be accompanied by instruments of transfer, in form reasonably satisfactory to the Company, duly executed by the holder thereof or

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such holder’s duly authorized attorney and in an amount sufficient to pay any transfer or similar tax in accordance with Section 1.3(d)(ii) (or evidence reasonably satisfactory to the Company that such tax has been or will be timely paid). As promptly as practicable (and in any event within two (2) Business Days) after the surrender by the applicable Investors or, as applicable, the Escrow Agent of the certificates representing the individual components of the Temporary Security Units to be exchanged, as aforesaid, the Company shall issue and shall deliver to the holder of record of such certificate, or, on the holder’s written order, to the holder’s transferee, a certificate or certificates for the number of shares (including fractional interests) of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, issuable upon the exchange of such Temporary Security Units as provided in Section 1.3(d)(iii).
     (ii) Issuances of certificates for shares of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, upon exchange of the Temporary Security Units shall be made without charge to any holder of any Temporary Security Units for any issue or transfer tax (other than taxes in respect of any transfer occurring contemporaneously therewith) or other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of shares of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, in a name other than that of the holder of the Temporary Security Unit to be exchanged, and no such issuance or delivery shall be made unless and until the person requesting such issuance or delivery has paid to the Company the amount of any such tax or has established, to the reasonable satisfaction of the Company, that such tax has been, or will timely be, paid.
     (iii) In connection with the exchange of the Temporary Security Units, no cash adjustments in respect of fractional interests of shares of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, shall be paid, but in lieu thereof, fractions of shares of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, shall be issued.
ARTICLE II
Representations and Warranties
          2.1 Disclosure. (a) On or prior to the date hereof, the Company delivered to the Investors a schedule (the “Company Disclosure Schedule”) setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of the Company’s representations or warranties contained in Section 2.2.
          (b) “Material Adverse Effect” means, (x) with respect to the Company, any circumstance, event, change, development or effect that, individually or in the aggregate: (1) is material and adverse to the financial position, results of operations, business, assets or

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liabilities of the Company and the Company Subsidiaries taken as a whole or (2) would materially impair the ability of the Company to perform its obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the Purchase and the other transactions contemplated by this Agreement; provided, however, that Material Adverse Effect, under clause (1) shall be deemed not to include the impact of (A) changes in general economic, financial market, credit market, regulatory or political conditions (whether resulting from acts of war or terrorism, an escalation of hostilities or otherwise) generally affecting the U.S. economy, foreign economies or the industries in which the Company or the Company Subsidiaries operate, (B) changes in generally accepted accounting principles, (C) changes in laws of general applicability or interpretations thereof by any United States or foreign governmental or regulatory agency, commission, court, body, entity or authority (each a “Governmental Entity,” and together “Governmental Entities”), (D) any change in the Company’s stock price or trading volume, in and of itself, or any failure, in and of itself, by the Company to meet revenue or earnings guidance published or otherwise provided to the Investor (provided that any fact, condition, circumstance, event, change, development or effect underlying any such failure or change, other than any of the foregoing that is otherwise excluded pursuant to clauses (A) through (H) hereof, may be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur), (E) losses resulting from any change in the valuations of the Company’s portfolio of securities or sales of such securities, (F) actions or omissions of either party taken as required by this Agreement or with the prior written consent of the other party in contemplation of the transactions contemplated hereby, (G) public announcement, in and of itself, by a third party not affiliated with the Company of any proposal to acquire the outstanding securities or all or substantially all of the assets of the Company and (H) the public announcement of this Agreement and the transactions contemplated hereby (provided that this clause (H) shall not apply with respect to Sections 1.2(c)(v), 2.2(d), 2.2(h) and 2.2(k)); provided further, however, that Material Adverse Effect shall be deemed not to include the impact of the foregoing clauses (A), (B) and (C), in each case only insofar and to the extent that such circumstances, events, changes, developments or effects described in such clauses do not have a disproportionate effect on the Company and the Company Subsidiaries (exclusive of its payments systems business) relative to other participants in the industry, and (y) with respect to the Investors, any circumstance, event, change, development or effect that, individually or in the aggregate, would materially impair the ability of the Investors to perform their respective obligations under this Agreement or otherwise materially threaten or materially impede the consummation of the Purchase and the other transactions contemplated by this Agreement.
          (c) “Previously Disclosed” means information (i) set forth in the Company Disclosure Schedule corresponding to the provision of this Agreement to which such information relates (provided that any disclosure with respect to a particular paragraph or section of the Agreement or the Company Disclosure Schedule shall be deemed to be disclosed for other paragraphs and sections of the Agreement or the Company Disclosure Schedule to the extent that the relevance of such disclosure would be reasonably apparent to a reader of such disclosure) or (ii) otherwise disclosed on a SEC Document filed or furnished, and publicly available on the EDGAR system of the Securities and Exchange Commission (the “SEC”), prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents and any disclosure of risks included in any “forward-looking

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statements” disclaimer or other statements that are similarly non-specific, predictive or forward-looking in nature) (“Filed SEC Documents”).
          2.2 Representations and Warranties of the Company. Except as Previously Disclosed, the Company represents and warrants to each of the Investors that:
          (a) Organization and Authority. The Company is duly organized and validly existing under the Laws of its jurisdiction of organization and has all requisite corporate, company or partnership power and authority to carry on its business as presently conducted. The Company is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has made available to the Investors prior to the execution of this Agreement a true and complete copy of the Amended and Restated Certificate of Incorporation of the Company (the “Certificate of Incorporation”) and the bylaws of the Company (the “Bylaws”), in each case as in effect on the date of this Agreement.
          (b) Company Subsidiaries.
     (i) The Company has Previously Disclosed a complete and correct list of all of its subsidiaries, and all shares of the outstanding capital stock of each of which are owned directly or indirectly by the Company. The subsidiaries of the Company are referred to herein individually as a “Company Subsidiary” and collectively as the “Company Subsidiaries.” All of such shares so owned by the Company (or its subsidiaries) are fully paid and nonassessable and are owned by it free and clear of any lien, claim, charge, option, encumbrance or agreement with respect thereto, except for Permitted Liens. Other than the Previously Disclosed Company Subsidiaries or as otherwise Previously Disclosed, the Company does not own beneficially (the concept of “beneficial ownership” having the meaning assigned thereto in Section 13(d) of the Exchange Act, and the rules and regulations thereunder), directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation or other entity, and is not, directly or indirectly, a partner in any partnership or party to any joint venture.
     (ii) Each Company Subsidiary is duly organized and validly existing under the Laws of its jurisdiction of organization and has all requisite corporate, company or partnership power and authority to carry on its business as presently conducted. Each Company Subsidiary is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

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     (iii) “Permitted Liens” means (A) liens for Taxes, assessments and governmental charges or levies not yet due and payable or that are being contested in good faith and by appropriate proceedings and for which, to the extent applicable, reserves have been established on the Company’s financial statements in accordance with GAAP; (B) mechanics’, carriers’, workmen’s, repairmen’s, materialmen’s, landlords’ and other statutory liens, or other liens or security interests that secure a liquidated amount that are being contested in good faith and by appropriate proceedings (except in the case of landlord’s liens); (C) leases, subleases and licenses and other agreements pursuant to which the Company or a Company Subsidiary is a lessor, sublessor or licensor; or grants rights to use or occupy property or assets of the Company or a Company Subsidiary; (D) pledges or deposits to secure obligations under workers’ compensation Laws or similar legislation or to secure public or statutory obligations; (E) pledges and deposits to secure the performance of bids, trade contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar nature, in each case in the ordinary course of business; (F) easements, encroachments, declarations, covenants, conditions, reservations, limitations and rights of way (unrecorded and of record) and other similar restrictions or encumbrances of record, zoning, building and other similar ordinances, regulations, variances and restrictions, and all defects or irregularities in title; and (G) as to leased real estate, all liens and encumbrances and other liens of whatsoever nature created or incurred by any owner, landlord, sublandlord or other person in title, which, in each case set forth in clauses (C) through (G) above, have not had and that would not, individually, or in the aggregate, reasonably be expected to have a material adverse effect on the use or benefit to the Company or any of the Company Subsidiaries of the assets or property owned, leased, used or held for use by the Company or any of the Company Subsidiaries to which they specifically relate.
          (c) Capitalization. The authorized capital stock of the Company consists of (i) 7,000,000 shares of preferred stock, 2,000,000 shares of which have been designated as “Series A Junior Participating Preferred Stock,” and of which no shares were outstanding as of the time of execution of this Agreement, and (ii) 250,000,000 shares of Common Stock, of which 82,649,089 shares were outstanding as of the date of this Agreement. There are outstanding options (each, a “Company Stock Option”) to purchase an aggregate of not more than 4,071,039 shares of Common Stock, all of which options are outstanding under the Benefit Plans. All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and nonassessable. The shares of Common Stock and Preferred Stock to be issued at the Closing in accordance with the terms of this Agreement or in respect of or upon conversion or exchange of such Preferred Stock (or upon the conversion of Preferred Stock received upon conversion or exchange of Preferred Stock to be issued at the Closing) in accordance with the terms of this Agreement and the respective Certificate of Designations, upon such issuance, exchange or conversion, as the case may be, will be duly and validly authorized and issued and fully paid and nonassessable and not trigger any pre-emptive or similar rights of any other person. Except (A) as described above or Previously Disclosed, (B) for the rights granted pursuant to the Transaction Documents, or (C) under or pursuant to the Previously Disclosed Benefit Plans, there are no outstanding subscriptions, contracts, conversion privileges, options, warrants, calls, preemptive rights or other rights obligating the Company or any Company Subsidiary to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares of capital

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stock of the Company or any Company Subsidiary. The Company has Previously Disclosed all shares of Company capital stock that have been purchased, redeemed or otherwise acquired, directly or indirectly, by the Company or any Company Subsidiary since December 31, 2006 and all dividends or other distributions that have been declared, set aside, made or paid to stockholders of the Company since that date.
               (d) Authorization; No Default.
     (i) The Company has the power and authority to enter into the Transaction Documents and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of the Transaction Documents by the Company and the consummation of the transactions contemplated hereby and thereby have been duly authorized by the board of directors of the Company (the “Board of Directors”). The Transaction Documents are valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms. Except for the Shareholder Approval, no stockholder vote of the Company is required to authorize, approve or consummate any of the transactions contemplated hereby.
     (ii) Neither the execution, delivery and performance by the Company of the Transaction Documents and any documents ancillary thereto, nor the consummation of the transactions contemplated hereby and thereby, nor compliance by the Company with any of the provisions thereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any Company Subsidiary under, any of the material terms, conditions or provisions of (1) its certificate of incorporation or bylaws or substantially equivalent governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation (each, a “Contract”) to which the Company or any Company Subsidiary is a party or by which it may be bound, or to which the Company or any Company Subsidiary or any of the properties or assets of the Company or any Company Subsidiary may be subject, or (B) subject to compliance with the statutes and regulations and votes referred to in the next paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to the Company or any Company Subsidiary or any of their respective properties or assets; except, in the case of clauses (A)(2) and (B), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
     (iii) Other than (A) the stockholder vote that will be necessary under the Section 312.00 “Shareholder Approval Policy” of the New York Stock Exchange Listed Company Manual so that the Series C Preferred Stock, the Series D Preferred Stock and the Common Stock issued to the Investors at the Closing Date shall become exchangeable for Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, pursuant to the terms of this Agreement and the terms of the Series C Certificate (the “Shareholder Approval”), (B) the filing of the Certificates of Designations with the

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Delaware Secretary of State, (C) in connection or in compliance with the HSR Act, (D) in connection or in compliance with the German Antitrust Act and (E) such other consents, approvals, orders, authorizations, registrations, declarations, filings and notices the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, no notice to, filing with, exemption or review by, or authorization, consent or approval of, any Governmental Entity or any other person (nor expiration nor termination of any statutory waiting periods) is necessary prior to the consummation by the Company of the transactions contemplated by the Transaction Documents.
               (e) SEC Documents.
     (i) The Company has filed all reports, schedules, forms, statements and other documents with the SEC required to be filed by the Company or furnished by the Company since December 31, 2005 (including any items incorporated by reference or attached as Exhibits thereto) (the “SEC Documents”). No Company Subsidiary is required to make any filings of SEC Documents. As of their respective dates of filing, the SEC Documents complied as to form in all material respects with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable thereto, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except as Previously Disclosed, there are no outstanding comments from the SEC with respect to any SEC Document. The audited consolidated financial statements and the unaudited quarterly financial statements (including, in each case, the notes thereto) of the Company included in the SEC Documents when filed complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, have been prepared in all material respects in accordance with United States generally accepted accounting principles (“GAAP”) (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end adjustments). Except as specifically reflected or reserved against in the audited consolidated balance sheet of the Company as at September 30, 2007 included in the Filed SEC Documents, neither the Company nor any of the Company Subsidiaries have any liabilities or obligations (whether absolute, accrued, contingent, fixed or otherwise) of any nature that would be required under GAAP, as in effect on the date of this Agreement, to be reflected on a consolidated balance sheet of the Company (including the notes thereto), except liabilities and obligations that (A) were incurred in the ordinary course of business consistent with past practice since September 30, 2007 or (B) have not had and would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect.

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     (ii) The Company (A) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to the chief executive officer and the chief financial officer of the Company by others within those entities, and (B) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit committee of the Board of Directors (1) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting. As of the date of this Agreement, the Company has no knowledge of any reason that its outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due. Since December 31, 2005, (x) neither the Company nor any Company Subsidiary nor, to the knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any Company Subsidiary, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of the Company or any Company Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in questionable accounting or auditing practices, and (y) no attorney representing the Company or any Company Subsidiary, whether or not employed by the Company or any such subsidiary, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Board of Directors or any committee thereof or to any director or officer of the Company.
               (f) Taxes.
     (i) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) the Company and each of the Company Subsidiaries have prepared and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate, (B) the Company and each of the Company Subsidiaries have paid all Taxes that are required to be paid by any of them, (C) as of the date of this Agreement, there are no audits, examinations, investigations, actions, suits, claims or other proceedings in respect of Taxes pending or threatened in writing nor has any deficiency for any Tax been assessed by any Governmental Entity in writing against the Company or any of the Company Subsidiaries, and (D) all Taxes required to be withheld by the Company and the Company Subsidiaries have been withheld and paid over to the appropriate Tax authority (except, in the case of this clause (D) or clause (A) or (B) above, with respect to matters contested in good faith and for which adequate reserves have been established on the Company’s financial statements in accordance with

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GAAP). The Company has not been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date of this Agreement that was intended to be governed by Section 355 of the Internal Revenue Code of 1986, as amended (the “Code”). Neither the Company nor any Company Subsidiary has entered into any “listed transaction” as defined under Section 1.6011-4(b)(2) of the Treasury Regulations promulgated under the Code.
     (ii) As used in this Agreement, (A) “Taxes” means any and all domestic or foreign, federal, state, local or other taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation or net worth, and taxes in the nature of excise, withholding, ad valorem or value added, and including any liability in respect of any items described above as a transferee or successor, pursuant to Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign Law), or as an indemnitor, guarantor, surety or in a similar capacity under any contract, arrangement, agreement, understanding or commitment (whether oral or written) and (B) “Tax Return” means any return, report or similar filing (including the attached schedules) filed or required to be filed with respect to Taxes (and any amendments thereto), including any information return, claim for refund or declaration of estimated Taxes.
          (g) Ordinary Course. Except as Previously Disclosed, since September 30, 2007, the Company and each of the Company Subsidiary has conducted its respective businesses in all material respects in the ordinary course of business, consistent with prior practice (and, without limiting the generality of the foregoing, none of the Company nor any Company Subsidiary has taken any action referred to in clauses (a) and (b) of Section 3.3 hereof, assuming said Section had been in effect at all times since September 30, 2007).
          (h) Commitments and Contracts.
     (i) Except for the Benefit Plans, the Contracts filed as exhibits or incorporated by reference in or to the SEC Documents, and the Contracts Previously Disclosed, neither the Company nor any Company Subsidiary is a party to or bound by any Contract that: (A) is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act) to be performed in full or in part after the date of this Agreement; (B) creates any material partnership, limited liability company agreement, joint venture or similar agreement entered into with any third party; (C) is a voting agreement or registration rights agreement; (D) relates to any indebtedness, or interest rate or currency hedging agreements, having an outstanding principal or notional amount in excess of $50,000,000, or any guarantees thereof, or the sale, securitization or servicing of loans or loan portfolios, in each case in connection with which the aggregate actual or contingent obligations of the Company and the Company Subsidiaries under such contract are greater than $50,000,000; (E) relates to the acquisition or disposition of any material assets other than in the ordinary course of business consistent with past practice, where such contract contains

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continuing material obligations or contains continuing indemnity obligations of the Company or any of the Company Subsidiaries; or (F) is a commitment or agreement to enter into any of the foregoing. Except as set forth on Section 2.1(h)(i) of the Company Disclosure Schedule, neither the Company nor any Company Subsidiary is a party to or bound by any Contract (X) that contains provisions that purport to limit the ability of the Company or any of the Company Subsidiaries, or any Affiliate, stockholder or director of the Company in their capacities as such, to compete in any line of business or with any person or which involve any restriction of the geographical area in which, or method by which or with whom, the Company or any of the Company Subsidiaries may carry on any business or (Y) is a commitment or agreement to enter into any such Contract.
     (ii) The Contracts set forth in this Section 2.2(h) (together with any and all amendments, disclosure schedules and side letters thereto) are collectively referred to herein as the “Disclosed Contracts.” Except as has not had and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) neither the Company nor any Subsidiary of the Company is in breach, default or violation of the terms of any Disclosed Contract, no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by the Company or any of the Company Subsidiaries, and the Company has no knowledge of (and has not received notice of) any breach, default or violation (or any condition which with the passage of time or the giving of notice, or both, would cause such a breach, default or violation) by any party under any Disclosed Contract; and (B) each Disclosed Contract is a valid and binding obligation of the Company (or the Subsidiaries of the Company party thereto), is in full force and effect and is enforceable against the Company and the Company Subsidiaries and, to the knowledge of the Company, the other parties thereto in accordance with its terms, except that (1) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (2) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
          (i) Litigation and Other Proceedings. There is no claim, suit, action, investigation or proceeding pending or, to the knowledge of the Company, threatened, against the Company or any Company Subsidiary that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, nor is the Company or any Company Subsidiary subject to any order, judgment or decree that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
          (j) Insurance. The Company and each Company Subsidiary are presently insured, and during each of the past five calendar years (or during such lesser period of time as the Company has owned such Company Subsidiary) has been insured, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.

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          (k) Compliance with Laws.
     (i) The Company and each Company Subsidiary have all permits, licenses, authorizations, orders and approvals of, and have made all filings, applications and registrations with, Governmental Entities (collectively, the “Permits”) that are required in order to permit them to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and the Company Subsidiaries, taken as a whole; and all such Permits are in full force and effect and, to the knowledge of the Company, no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company, (i) the conduct by the Company and each Company Subsidiary of their business and the condition and use of their properties does not violate or Infringe any applicable domestic (federal, state or local) or foreign Law, statute, ordinance, license or regulation, (ii) neither the Company nor any Company Subsidiary is in default under any order, license, regulation, demand, writ, injunction or decree of any Governmental Entity, and (iii) the Company and the Company Subsidiaries currently are complying with all, and, to the knowledge of the Company, none of them is under investigation with respect to or has been threatened to be charged with or given notice of any material violation of any, applicable federal, state, local and foreign Law, statute, regulation, rule, license, judgment, injunction or decree.
     (ii) Without limiting the generality of the foregoing, the Company and each of its Subsidiaries have acted in conformity with all applicable Laws and regulations pertaining to export controls, economic sanctions, national security controls, and similar regulations of international commerce, including, but not limited to, the U.S. Export Administration Regulations, 15 C.F.R. pt. 730 et seq., the U.S. antiboycott rules, 15 C.F.R. pt. 760 et seq. and 26 U.S.C. § 908 & 999, the Office of Foreign Assets Control regulations, 31 C.F.R. pt. 500 et seq., U.S. anti-money laundering Laws (e.g., 18 U.S.C. §§ 1956-57, 18 U.S.C. § 1960 and 31 U.S.C. §§ 5311-32), and all non-U.S. counterparts or equivalents of the foregoing, except as, individually or in the aggregate, would not reasonably expected to have a Material Adverse Effect on the Company. Also, without limiting the generality of the foregoing, the Company, each of its Subsidiaries, and each of the Company’s and its Subsidiaries’ employees and agents have acted in conformity with all applicable Laws and regulations pertaining to corrupt, illegal or unauthorized payments, including, but not limited to, the U.S. Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq., except as, individually or in the aggregate, would not reasonably expected to have a Material Adverse Effect on the Company.
          (l) Benefit Plans.
     (i) The Company has Previously Disclosed or has previously filed as an exhibit to the SEC Document or made available to the Investor or its representative each of the following to which the Company or any Company Subsidiary is a party or subject: any plan, contract or understanding providing for any bonus, pension, option, deferred compensation, retirement payment, profit sharing welfare, severance, change in control, or fringe benefits or other compensation with respect to any present or former officer, director, employee or consultant of the Company or any Company Subsidiary (each, other than a Multiemployer Plan, a “Benefit Plan”), in each case, requiring aggregate

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annual payments or contributions by the Company and any of the Company Subsidiaries in an aggregate amount in excess of $1,000,000 or which has aggregate unfunded liabilities in an amount in excess of $1,000,000 individually provided that the aggregate unfunded liabilities of the Benefit Plans not Previously Disclosed or filed as an SEC Document do not exceed $3,000,000. Section 2.2(l) of the Company Disclosure Schedule sets forth a complete list of the Benefit Plans.
     (ii) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) with respect to each Benefit Plan, the Company and the Company Subsidiaries have complied, and are now in compliance with, all provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the Code and all Laws and regulations applicable to such Benefit Plans and each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that such Benefit Plan is so qualified and exempt from federal income taxes under Sections 401(a) and 501(a) of the Code, and such determination letter has not been revoked and nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification; (B) each Benefit Plan has been administered in accordance with its terms including all requirements to make contributions; (C) there is not now, nor do any circumstances exist that are likely to give rise to any requirement for the posting of security with respect to a Benefit Plan or the imposition of any material liability or material lien on the assets of the Company or any Company Subsidiary under ERISA or the Code in respect of any Benefit Plan, and no liability (other than for premiums to the Pension Benefit Guaranty Corporation) under Title IV of ERISA or under Sections 412 or 4971 of the Code has been or is reasonably expected to be incurred by the Company or any Company Subsidiary; (D) there are no pending or, to the Company’s knowledge, threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations which have been asserted or instituted against the Benefit Plans or the assets of any of the trusts under any of the Benefit Plans; (E) to the Company’s knowledge, there are no pending or threatened claims against any fiduciary of any of the Benefit Plans with respect to their duties to the Benefit Plans; (F) to the Company’s knowledge, no set of circumstances exists which may reasonably give rise to a claim or lawsuit, against the Benefit Plans, any fiduciaries thereof with respect to their duties to the Benefit Plans or the assets of any of the trusts under any of the Benefit Plans; and (G) the Company and each Company Subsidiary have reserved the right to amend, terminate or modify at any time all plans or arrangements providing for retiree health or life insurance coverage, and there have been no communications to employees or former employees which could reasonably be interpreted to promise or guarantee such employees or former employees any retiree health or life insurance or other retiree death benefits on a permanent basis, other than those retirement benefits provided for under the Company’s collective bargaining agreements.
     (iii) None of the Company, any of the Subsidiaries or any other person or entity under common control with the Company within the meaning of Section 414(b), (c), (m) or (o) of the Code participates in, or is required to contribute to, any “multiemployer plan” (within the meaning of Section 3(37) of ERISA) (a “Multiemployer Plan”).

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     (iv) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each individual who performs services for the Company or any Company Subsidiary (other than through a contract with an entity other than the Company or any Company Subsidiary) and who is not treated as an employee of the Company or any Company Subsidiary has been properly characterized as not being an employee for such purposes.
     (v) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (alone or in conjunction with any termination of employment or other event) will (A) result in any material payment (including, without limitation, severance or “excess parachute payments” (within the meaning of Section 280G of the Code), or forgiveness of indebtedness) or other material obligation becoming due to any current or former employee, officer or director of the Company or any Company Subsidiary under any Benefit Plan or otherwise, (B) limit or restrict the right of the Company or any Company Subsidiary to merge, amend or terminate any of the Benefit Plans, or (C) materially increase or accelerate or require the funding of any benefits otherwise payable under any Benefit Plan.
     (vi) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) no work stoppage involving the Company or any Company Subsidiary is pending or, to the knowledge of the Company, threatened; (B) neither the Company nor any Company Subsidiary is involved in, or threatened with or affected by, any labor dispute, arbitration, lawsuit or administrative proceeding that could affect the business of the Company or such Company Subsidiary; and (C) employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.
     (vii) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, with respect to each Benefit Plan that is maintained substantially for employees who are situated outside the United States (the “Foreign Plans”), (i) each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities; and (ii) all Foreign Plans that are required to be funded are funded in accordance with applicable Laws, and with respect to all other Foreign Plans, adequate reserves therefor have been established on the accounting statements of the applicable Company or Company Subsidiary.
          (m) Environmental Liability. Except for those matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each of the Company and the Company Subsidiaries is in compliance with all applicable Environmental Laws, and neither the Company nor any Company Subsidiary has received any written communication alleging that the Company is in violation of, or has any liability under, any Environmental Law, (ii) each of the Company and the Company Subsidiaries validly possesses and is in compliance with all Permits required under Environmental Laws to conduct its business as presently conducted, and all such Permits are valid and in good standing, (iii) there are no Environmental Claims pending or, to the knowledge of the

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Company, threatened against the Company or any of the Company Subsidiaries and (iv) none of the Company or any of the Company Subsidiaries has Released any Hazardous Materials in a manner that would reasonably be expected to result in an Environmental Claim against the Company or any of the Company Subsidiaries. As used in this Agreement, (1) the term “Environmental Claims” means any administrative or judicial actions, suits, orders, claims, proceedings or written notices of noncompliance by or from any person alleging liability arising out of the Release of Hazardous Materials or the failure to comply with Environmental Law; (2) the term “Environmental Law” means any Law relating to pollution, the environment or natural resources; (3) the term “Hazardous Materials” means (x) petroleum and petroleum by-products, asbestos that is friable, radioactive materials, medical or infectious wastes or polychlorinated biphenyls and (y) any other material, substance or waste that is prohibited, limited or regulated by Environmental Law because of its hazardous, toxic or deleterious properties or characteristics; and (4) the term “Release” means any release, spill, emission, leaking, pumping, emitting, discharging, injecting, escaping, leaching, dumping, disposing or migrating into or through the environment in derogation of Environmental Law.
          (n) Intellectual Property.
     (i) As used in this Agreement, “Intellectual Property” means the following and all rights pertaining thereto: (A) patents, patent applications, provisional patent applications and statutory invention registrations (including all utility models and other patent rights under the Laws of all countries), (B) trademarks, service marks, trade dress, logos, trade names, service names, corporate names, domain names and other brand identifiers, registrations and applications for registration thereof, (C) copyrights, proprietary designs, computer software, mask works, databases, and registrations and applications for registration thereof, (D) confidential and proprietary information, trade secrets, know-how and show-how, and (E) all similar rights, however denominated, throughout the world.
     (ii) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) the Company and the Company Subsidiaries own, free of all encumbrances except Permitted Liens, or have the valid right to use all the Intellectual Property used in the conduct of the business of the Company and the Company Subsidiaries and (B) the conduct of the business of the Company and the Company Subsidiaries as currently conducted does not infringe upon, misappropriate or violate (“Infringe”) any Intellectual Property rights of any third party. Except as would not reasonably be expected to have a Material Adverse Effect, no claim or demand has been given in writing to the Company or any Company Subsidiary to the effect that the conduct of the business of the Company or such Company Subsidiary Infringes upon the Intellectual Property rights of any third party. Except as would not reasonably be expected to have a Material Adverse Effect, the Company and the Company Subsidiaries use the Intellectual Property of third parties only pursuant to valid, effective written license agreements (collectively, the “Third Party Licenses”). Except as would not reasonably be expected to have a Material Adverse Effect, to the knowledge of the Company, no third parties are infringing the Intellectual Property rights of the Company.

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     (iii) All registered trademarks and registered service marks, trademark and service mark applications and, to the knowledge of the Company, all patents and patent applications, currently owned by the Company and the Company Subsidiaries that are material to the business of the Company and the Company Subsidiaries, taken as a whole, as currently conducted (the “Company Intellectual Property”) have been duly registered or application filed with the U.S. Patent and Trademark Office or applicable foreign governmental authority. Except as would not reasonably be expected to have a Material Adverse Effect, (A) none of the Company Intellectual Property has been adjudged to be invalid or unenforceable in whole or in part and (B) there are no actual or, to the knowledge of the Company, threatened opposition proceedings, cancellation proceedings, interference proceedings or other similar action challenging the validity, existence or ownership of any Company Intellectual Property.
          (o) Anti-takeover Provisions Not Applicable. The provisions of Section 203 of the Delaware General Corporation Law as they relate to the Company do not and will not apply to the Investors’ acquisition of Securities pursuant to the Transaction Documents or to any of the transactions contemplated hereby or thereby. The acquisition of Securities by the Investors pursuant to the Transaction Documents and the transactions contemplated hereby or thereby, including, without limitation, the exchange of the Temporary Security Units, the dividends required or contemplated by the respective Certificates of Designations of the respective series of Preferred Stock and the redemptions required or contemplated by the respective Certificates of Designations of the respective series of Preferred Stock, have been approved by the Continuing Directors (as defined in Article IX of the Certificate of Incorporation). The Board of Directors has adopted the Rights Plan Amendment in the form set forth in Exhibit 6 hereto and the same has been duly executed and delivered by the parties thereto.
          (p) Board Approvals. The transactions contemplated by the Transaction Documents, including without limitation the issuance of the Preferred Stock and the compliance with the terms thereof and the compliance with the terms of this Agreement, have been approved unanimously by the Board of Directors. The Board of Directors has unanimously (i) adopted, approved and declared advisable all of the transactions contemplated by the Transaction Documents and the Shareholder Approval, (ii) directed that the Shareholder Approval be submitted to the stockholders of the Company for their approval and adoption and (iii) recommended that the stockholders of the Company adopt and grant the Shareholder Approval.
          (q) Brokers and Finders. Neither the Company nor any Company Subsidiary nor any of their respective officers, directors or employees has incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees in connection with the Transaction Documents or the transactions contemplated hereby and thereby, other than JPMorgan Chase & Co., the fees and expenses of which will be paid by the Company. The Company has provided the Investors a copy of the documentation pursuant to which JPMorgan Chase & Co. may receive a fee in connection with the Transaction Documents or the transactions contemplated hereby and thereby.

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          (r) Exemption from Registration. Assuming the accuracy of the representations and warranties made by the Investors in Section 2.3(c) of this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the Securities Act.
          (s) Opinions of Financial Advisors. The Board of Directors of the Company has received the opinion of JPMorgan Chase & Co., dated the date of this Agreement, and the opinion of Duff & Phelps, LLC, each to the effect that, as of such date, and subject to the various assumptions and qualifications set forth therein, the consideration to be received by the Company pursuant to this Agreement is fair from a financial point of view to the Company (the “Fairness Opinions”). Correct and complete copies of the Fairness Opinions have been delivered to the Investors. The Company has been authorized by JPMorgan Chase & Co. and by Duff & Phelps, LLC to permit the inclusion of their respective Fairness Opinions and references thereto in the proxy statement materials to be sent in connection with obtaining Shareholder Approval.
          (t) No Other Representations or Warranties. Except for the representations and warranties contained in this Section 2.2, each of the Investors severally and not jointly acknowledge that neither the Company nor any person on behalf of the Company makes any other express or implied representation or warranty with respect to the Company or the Company Subsidiaries, or with respect to any other information provided to the Investor in connection with the transactions contemplated by this Agreements.
          2.3 Representations and Warranties of the Investors. Each of THL (jointly and severally among the THL Investors), GSMP (jointly and severally among the GSMP Investors), and GSCP (jointly and severally among the GSCP Investors) severally but not jointly, hereby represents and warrants to the Company that:
          (a) Organization and Authority. Such Investor is a partnership, limited liability company or corporation, as applicable, duly organized and validly existing under the Laws of its jurisdiction of organization and has all requisite partnership, company or corporate, as applicable, power and authority to carry on its business as presently conducted. Such Investor is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on such Investor.
          (b) Authorization.
     (i) Such Investor has the partnership, company or corporate, as applicable, power and authority to enter into the Transaction Documents and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of the Transaction Documents by such Investor and the consummation of the transactions contemplated hereby and thereby have been duly authorized by such Investor and no further approval or authorization by such Investor is required. The Transaction Documents are valid and binding obligations of such Investor enforceable against such Investor in accordance with their respective terms.

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     (ii) Neither the execution, delivery and performance by such Investor of the Transaction Documents, nor the consummation of the transactions contemplated hereby and thereby, nor compliance by such Investor with any of the provisions thereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any lien, security interest, charge or encumbrance upon any of the properties or assets of such Investor under any of the material terms, conditions or provisions of (1) its certificate of limited partnership, partnership agreement, limited liability company agreement, certificate of incorporation or bylaws, as applicable, or (2) any material note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which such Investor is a party or by which it may be bound, or to which such Investor or any of the properties or assets of such Investor may be subject, or (B) subject to compliance with the statutes and regulations referred to in the next paragraph, materially violate any statute, rule or regulation or, to the knowledge of any Investor, any judgment, ruling, order, writ, injunction or decree applicable to such Investor or any of its properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have a Material Adverse Effect on such Investor.
     (iii) Other than (A) in connection or in compliance with the HSR Act, (B) in connection or in compliance with the German Antitrust Act, (C) Regulatory Approvals, and (D) such other consents, approvals, orders, authorizations, registrations, declarations, filings and notices the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on such Investor, no notice to, filing with, exemption or review by, or authorization, consent or approval of, any Governmental Entity or any other person (nor expiration nor termination of any statutory waiting periods) is necessary for the consummation by such Investor of the transactions contemplated by the Transaction Documents.
          (c) Purchase for Investment. Such Investor acknowledges that the Securities have not been registered under the Securities Act and the rules and regulations thereunder or under any state securities Laws and that there is no public or other market for the Preferred Shares. Such Investor (i) is acquiring the Securities for its own account pursuant to an exemption from registration under the Securities Act solely for investment and not with a view to distribution in violation of the securities Laws, (ii) will not sell or otherwise dispose of any of the Securities, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Securities and of making an informed investment decision and (iv) is an Accredited Investor (as that term is defined by Rule 501 of the Securities Act).

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          (d) Financial Capability. Such Investor has available funds to make the Purchase on the terms and conditions contemplated by this Agreement.
          (e) Brokers and Finders. Neither such Investor nor its Affiliates nor any of their respective officers, directors or employees has incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees in connection with the Transaction Documents or the transactions contemplated hereby and thereby.
          (f) No Exclusivity. Neither any Investor nor any of its Affiliates is a beneficiary of or is subject to any exclusivity or similar arrangement or agreement with respect to any debt or equity related to any potential investment in the Company.
          (g) No Other Representations or Warranties. Except for the representations and warranties contained in this Section 2.3, the Company acknowledges that neither the Investors nor any other person on behalf of the Investors makes any other express or implied representation or warranty with respect to any Investor or with respect to any other information provided to the Company in connection with the transactions contemplated by this Agreement.
ARTICLE III
Covenants
          3.1 Filings; Other Actions. (a)  Each of the Investors and the Company will cooperate and consult with the others and use best efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents, orders, approvals, clearances and authorizations of, or any exemption by, all Governmental Entities (and in the case of the Company, also third parties) necessary or advisable to consummate the transactions contemplated by this Agreement. In particular, each of the Investors and the Company will use their best efforts to obtain, and will use their best efforts to help the others obtain, as promptly as practicable, all approvals, authorizations, consents, clearances, expirations or terminations of waiting periods or exemptions required from all necessary Governmental Entities for the transactions contemplated by the Transaction Documents, including, but not limited to, filings and notifications with respect to, and expiration or termination of any applicable waiting period, under the HSR Act and any other applicable competition or merger control laws, and all notices to, filings and registrations with, and approvals, authorizations, consents, clearances or exemptions from, all Governmental Entities referred to on Section 3.3(b) of the Company Disclosure Schedule. Notwithstanding the foregoing, (i) neither Goldman, Sachs & Co. nor any of its Affiliates shall be required to use efforts to seek or obtain Regulatory Approvals and (ii) the Company shall not be required to seek Regulatory Approvals from those States that require Regulatory Approvals for a Person to hold 25% or more of the then outstanding securities of the Company (but for the avoidance of doubt, shall be required to seek Regulatory Approvals from those states that require Regulatory Approvals for a Person to hold less than 25% of the outstanding securities of the Company) if any Temporary Securities Unit (other than as a whole) shall have been transferred so that all

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components of such Temporary Security Unit cease to be beneficially owned by the same Person (and each Investor agrees to notify the Company if it transfers any components of a Temporary Securities Unit in any manner that results in any component of a Temporary Securities Unit being beneficially owned in such manner), or if any Investor is in violation of its obligations under Section 1.3(b) hereof. Each of the Investors and the Company will have the right to review in advance, and to the extent practicable each will consult with the others, in each case subject to applicable Laws relating to the exchange of information, with respect to all the information relating to the other parties, and any of their respective subsidiaries, which appears in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement (including any proxy materials in connection with the Shareholder Approval). In exercising the foregoing right, each of the parties hereto agrees to act reasonably and as promptly as practicable. Each party hereto agrees to keep the other parties apprised of the status of matters relating to completion of the transactions contemplated hereby. The Investors and the Company shall promptly furnish each other with copies of written communications received by them or their subsidiaries from, or delivered by any of the foregoing to, any Governmental Entity in respect of the transactions contemplated by this Agreement or by the other Transaction Documents, other than any communications received by an Investor from, or delivered by an Investor to, the Internal Revenue Service (the “IRS”) (and other than in respect of information filed or otherwise submitted confidentially to any such Governmental Entity and other than in respect of routine audits or ordinary course communications which could not reasonably be expected to be material to the Company). Each party shall execute and deliver both before and after the Closing such further certificates, agreements and other documents and take such other actions as the other party may reasonably request to consummate or implement such transactions or to evidence such events or matters. Notwithstanding anything to the contrary in this Agreement, neither any Investor nor its Affiliates shall be obligated to make (or offer to make) any divestiture of, or otherwise limit (or offer to limit) Investor’s or its Affiliates’ freedom of action with respect to, Investor’s or its Affiliates’ assets or businesses presently owned or hereafter acquired.
          (b) The Investors and the Company shall not, and shall not permit any of their Subsidiaries or Affiliates to, acquire or agree to acquire by merger or consolidation, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof or otherwise acquire or agree to acquire any assets that would delay or make materially more difficult the obtaining of any approvals, authorizations, consents, clearances, expirations or terminations of waiting periods or exemptions approval or authorization required under the HSR Act or the German Antitrust Act for the transactions contemplated by the Transaction Documents. Notwithstanding anything herein to the contrary, Goldman, Sachs & Co. and its affiliates may engage in any brokerage, investment advisory, financial advisory, anti-raid advisory, merger advisory, financing, asset management, trading, market making, arbitrage and other similar activities conducted in the ordinary course of their business.
          (c) The Company agrees to use its best efforts to obtain the Shareholder Approval. In connection with the foregoing, the Company shall call and hold a meeting of its stockholders to seek Shareholder Approval prior to the Outside Date, and file with the SEC a

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proxy statement and shall use its best efforts to solicit proxies in favor of Shareholder Approval, and shall use its best efforts to respond to any comments of the SEC or its staff and to cause a definitive proxy statement related to such shareholders’ meeting to be mailed to the Company’s shareholders. The Board of Directors shall unanimously recommend Shareholder Approval and such unanimous recommendation shall be included in each proxy statement filed with the SEC and disseminated to Company shareholders in connection with such shareholder meeting (such recommendations, the “Company Board Recommendation”), except that the Board of Directors may withdraw or modify such recommendation, and cease exercising the efforts described above (but shall continue to be required to call and hold the shareholder meeting or meetings for the purpose of obtaining Shareholder Approval and to solicit proxies with respect to such meeting), if the Board of Directors determines, in good faith, after consultation with outside legal counsel, that such action is required for the Board of Directors to comply with its fiduciary duties to the Company’s shareholders under applicable Law. The Company shall notify the Investors promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to such proxy statement or for additional information and will supply the Investors with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to such proxy statement. If at any time prior to such shareholders’ meeting there shall occur any event that is required to be set forth in an amendment or supplement to the proxy statement, the Company shall as promptly as practicable prepare and mail to its shareholders such an amendment or supplement. Each of the Investors and the Company agree promptly to correct any information provided by it or on its behalf for use in the proxy statement if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall as promptly as practicable prepare and mail to its shareholders an amendment or supplement to correct such information to the extent required by applicable laws and regulations. The Company shall provide each of the Investors with drafts of each such proxy statement, or amendment or supplement thereto, and consult with each of the Investors regarding the same, in each case, prior to filing or mailing the same. Without limiting the generality of the foregoing, the Company’s obligations pursuant to the first two sentences of this Section 3.1(c) shall not be affected by (i) the commencement, public proposal, public disclosure or communication to the Company of any Company Transaction Proposal (as defined below) or (ii) the withdrawal or modification by the Board of Directors of the Company or any committee thereof of the Company Board Recommendation. In the event that Shareholder Approval is not obtained at the first meeting of shareholders at which Shareholder Approval is sought, at the written request of the Investors, the Company shall call and convene a subsequent meeting of shareholders for the purpose of obtaining Shareholder Approval (and the Board of Directors will unanimously recommend Shareholder Approval, except that the Board of Directors may withdraw or modify such recommendation (but shall continue to be required to call and hold the shareholder meeting for the purpose of obtaining Shareholder Approval and to solicit proxies with respect to such meeting), if the Board of Directors determines, in good faith, after consultation with outside legal counsel, that such action is required for the Board of Directors to comply with its fiduciary duties to the Company’s shareholders under applicable Law), which meeting may not be delayed by the Company, and all covenants between the parties set forth in this Section 3.1 shall apply equally with respect to any subsequent meeting of shareholders; provided, however, that the Company shall be required to comply with the

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obligations of this sentence only in the event that, at the time that the Investors deliver such written notice to the Company, (x) each Temporary Security Unit required to be subject to the Escrow Account shall remain subject to the Escrow Account and no Investor shall have transferred any component of any Temporary Security Unit (other than transfer of a Temporary Security Unit as a whole), (y) each holder of a Temporary Security Unit shall have agreed in writing with the Company that the restrictions on transfer set forth in Section 4.5(a) hereof and the restrictions set forth in Section 1.3(b) hereof shall continue until the first business day following the shareholder meeting at which such proposal shall be considered (the “Extended Date”), and (z), as applicable, the Escrow Agent and each beneficial owner of Temporary Security Units subject to the Escrow Account shall have agreed that the Escrow Agreement shall be extended, and each such Temporary Security Unit shall remain subject to the Escrow Account, until the Extended Date. Unless otherwise required by Law, the Company shall not call or convene a meeting of its stockholders prior to the meeting of stockholders at which Shareholder Approval is sought.
          (d) Each party agrees, upon request, to furnish the other parties with all information concerning itself, its subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in connection with the proxy statement in connection with any meeting of the Company’s stockholders, to be held no later than the Outside Date (defined herein), at which meeting the Company intends to seek Shareholder Approval, and any other statement, filing, notice or application made by or on behalf of such other party or any of its subsidiaries to any Governmental Entity in connection with the Purchase and the other transactions contemplated by the Transaction Documents.
     3.2 Access, Information and Confidentiality.
          (a) With respect to each respective Investor, (i) from the date hereof until the Closing Date or the termination of this Agreement and (ii) if applicable, from the Closing Date until the date when such Investor and its Affiliates cease to own in the aggregate Securities representing, directly or indirectly, an initial Purchase Price under this Agreement (irrespective of the then current value of such Securities) (“Initial Cost”) that is at least 10% of the aggregate Initial Cost of the Securities acquired by such Investor and its Affiliates at the Closing, the Company will ensure that upon reasonable notice, the Company and the Company Subsidiaries (1) will afford to such Investor and such Investor’s representatives (including, without limitation, officers and employees of such Investor, and counsel, accountants and other professionals retained by such Investor) such access during normal business hours to its books, records (including, without limitation, Tax Returns and appropriate work papers of independent auditors under normal professional courtesy), properties, personnel, accountants and other professional retained by the Company and to such other information as such Investor may reasonably request; (2) will furnish such Investor with such financial and operating data and other information with respect to the business and properties of the Company as the Company prepares and compiles for members of its Board of Directors in the ordinary course and as such Investor may from time to time reasonably request; and (3) permit such Investor to discuss the affairs, finances and accounts of the Company, and to furnish advice with respect thereto, with the principal officers of the Company within thirty days after the end of each fiscal quarter of the Company. All requests

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for access and information shall be coordinated through senior corporate officers of the Company.
          (b) Each party to this Agreement will hold, and will cause its respective subsidiaries and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless compelled to disclose by judicial or administrative process or, in the advice of its counsel, by other requirement of Law or the applicable requirements of any regulatory agency or relevant stock exchange, all non-public records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other party furnished to it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such party on a non-confidential basis, (2) in the public domain through no fault of such party or (3) later lawfully acquired from other sources by the party to which it was furnished), and neither party shall release or disclose such Information to any other person, except its to auditors, attorneys, financial advisors, and other consultants and advisors. Subject to the foregoing, any party compelled to disclose Information pursuant to this Section 3.2(b) shall (x) as promptly as practicable, provide the other parties with notice of such request to disclose Information so that the parties may seek an appropriate protective order or other appropriate remedy (and the other parties shall cooperate in connection therewith), and (y) may furnish, that portion (and only that portion) of the Information that, on the advice of its counsel, such party is legally compelled or is otherwise required to disclose. In addition, all information furnished to the Investors and their respective representatives and all analyses, compilations, data, studies or other documents prepared by any Investor or its representatives containing or based in whole or in part on any such furnished information or reflecting such Investor’s review of, or interest in, the Company shall be used solely as set forth and permitted by the confidentiality agreement, dated as of November 28, 2007, between the Company and THL and the confidentiality agreement, dated as of December 11, 2007 (and the side letter thereto dated January 2, 2008) between the Company and GS (the “Confidentiality Agreements”); provided, however, that each Investor may provide Information to potential permitted transferees of Securities so long as the recipient enters into a confidentiality agreement (as to which the Company is a third party beneficiary and may enforce the agreement) with disclosure terms at least as restrictive as the disclosure terms in the Confidentiality Agreements. Notwithstanding the foregoing, in connection with a syndication to co-investors as permitted by Section 4.5, any Investor shall be permitted to provide Information to a potential syndicate member subject to customary confidentiality protections enforceable by the Company.
     3.3 Certain Additional Covenants of the Company.
          (a) Except as otherwise expressly permitted or required by the Transaction Documents, permitted by Section 4.9 or as set forth on Section 3.3(a) of the Company Disclosure Schedule, during the period from the date of this Agreement until the earlier of the Closing Date and the termination of this Agreement pursuant to Section 5.1, the Company shall conduct its business, and shall cause its subsidiaries to conduct their respective businesses, in all material respects in the ordinary course, including, without limitation, paying its obligations, including customer signing bonuses, capital expenditures, taxes and other accounts payable, in the ordinary course of business consistent with past practice. Prior to the

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earlier of the Closing Date and the termination of this Agreement pursuant to Section 5.1, except as expressly permitted or required by the Transaction Documents, neither the Company nor any Company Subsidiary shall, without the prior approval of the Investors (such approval not to be unreasonably withheld or delayed) take any action that (i) would require a separate series vote of the holders of Series C Preferred Stock under Section 9 of Series C Certificate if the Series C Preferred Stock was outstanding at such time, (ii) would trigger a redemption right under Section 11 of the Series C Certificate if Series C Preferred Stock was outstanding at such time (and, if applicable, holders of Series C Preferred Stock did not approve a Trigger Event (as defined in the Series C Certificate), or (iii) would result in an adjustment to be made under Section 7(c) of the Series B Certificate if Series B Preferred Stock was outstanding at such time.
          (b) The Company shall not declare or pay any dividend or distribution on any securities of the Company on or prior to the Closing. If, prior to the Closing, the Company shall take any action that would require any adjustment to be made under Section 7(c) of the Series B Certificate as if shares of Series B Preferred Stock were issued on the date of this Agreement, the Company must make appropriate and equitable adjustments with respect to the Investors such that the Investors will receive the benefit of such transaction as if (x) all of the Securities to be acquired by the Investor had been outstanding as of the date of such action and (y) Shareholder Approval and all required Regulatory Approvals had been obtained. “Regulatory Approval” means confirmation by a State, reasonably satisfactory to the Company and the Investors, that the Licensee and/or the Investors have complied with applicable prior notice or prior approval procedures for change of control under such State’s laws or regulations applicable to entities engaged in the money transfer or payment systems business or the parties to be deemed to control such parties. “Licensee” means MoneyGram Payment Systems, Inc., a wholly-owned subsidiary of the Company. “State” means any of the jurisdictions listed on Section 3.3(b) of the Company Disclosure Schedule.
          (c) The Company shall use its reasonable best efforts to satisfy the closing conditions set forth in Section 1.2(c) of this Agreement in a timely manner. Each of the Investors will cooperate reasonably with the Company in the Company’s efforts to satisfy the conditions set forth in Sections 1.2(c)(i), (ii) and (iv).
          (d) At THL’s written request, the Company shall convert CAG, Inc. into a limited liability company that is treated as a disregarded entity for Tax purposes prior to the Closing.
          (e) The parties shall not treat any of the Series B Preferred Shares, the Series B-1 Preferred Shares, the Series C Preferred Shares or the Series D Preferred Stock as “preferred stock” for purposes of Section 305 of the Code, unless required to do so by a change in applicable Tax Laws (or the interpretation thereof) or a good faith resolution of a Tax contest.
          (f) Without the prior written consent of all of the Investors, neither the Company nor any of the Company Subsidiaries shall directly or indirectly use any proceeds from the Investment, the Existing Credit Facilities or the Second Lien Notes to acquire any obligations the interest on which is exempt from taxes imposed by subtitle A of the Code.

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          (g) Without the prior written consent of all of the Investors, prior to the Closing, the Company shall not and shall not permit the Company Subsidiaries to make investments in a manner that is in contravention of the investment policy as set forth on Schedule F hereto (the “Investment Policy”); provided that, notwithstanding the foregoing, any securities held or sold by the Company set forth on Schedule B or Schedule C hereto shall not be considered to be held or sold in contravention of the Investment Policy.
ARTICLE IV
Additional Agreements
     4.1 Governance Matters. (a) As of the Closing Date, the Investors, together with their Affiliates, shall be entitled, in their capacity as holders of record of 9.9% of the Company’s currently issued and outstanding Common Stock, to nominate and cause the Company to appoint one individual to the Board of Directors to serve as a director (a “Board Representative”), subject to satisfaction of all legal and governance requirements regarding service as a director of the Company, which Board Representative is reasonably acceptable to the Board of Directors, and which Board Representative the Company will be required to recommend to its stockholders for election to the Board of Directors at the Company’s stockholder meetings. If such director ceases to be a director prior to the issuance of Series B Preferred Stock, but while the Investors and their respective Affiliates, as a whole, own in the aggregate Securities representing, directly or indirectly, an Initial Cost of not less than $75,000,000 (a “Qualifying Ownership Interest”), the Investors shall be entitled, in such capacity, to nominate and cause the Company to appoint a replacement for such director. At any time prior to the Exchange Date, if the Investors’ nomination and appointment of two individuals to the Board of Directors would not result in a violation of applicable rules and regulations promulgated by the New York Stock Exchange, the Investors shall be entitled to nominate and appoint two individuals to the Board of Directors. As of the Closing Date, the Investors, together with their Affiliates, shall also be entitled to appoint two observers to the Board of Directors (the “Board Observers”), which Board Observers are reasonably acceptable to the Board of Directors. The Board Observers shall be entitled to participate fully in all meetings of the Board of Directors, but shall not have the authority to vote thereat. At any time that the Investors, together with their Affiliates, have a right to nominate one or more Board Representatives, Thomas H. Lee Equity Fund VI, L.P. (“THL VI”) shall have the right to select the individual or individuals who the Investors will nominate to be at least one of such Board Representatives so long as THL VI and its Affiliates beneficially own in the aggregate Securities representing, directly or indirectly, an Initial Cost that is not less than 10% of the aggregate Initial Cost of the Securities acquired by THL VI and its Affiliates at the Closing.
          (b) Upon issuance to the Investors of the Series B Preferred Stock, the Investors shall lose their right to have the Board Observers attend meetings of the Board and shall instead be entitled to nominate and cause the Company to appoint such additional Board Representatives to the Board as shall, when aggregated with the Board Representative already designated by the Investors at the Closing Date, provide the Investors with that number of directors as is proportionate to Investors’ Common Stock ownership, calculated on a fully-

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converted basis (assuming all shares of Series B-1 Preferred Stock were converted into Series B Preferred Stock and all Series B Preferred Stock was converted into Common Stock), where the Board of Directors may elect to (i) increase the size of the Board of Directors (subject to Section 4.1(f)), (ii) fill any vacancies resulting from resignations, or (iii) a combination of (i) and (ii) to accomplish such proportionate representation of Investor on the Board of Directors. These Board Representatives shall satisfy all legal and governance requirements regarding service as a director of the Company and shall be reasonably acceptable to the Board of Directors and the Company shall be required to recommend to its stockholders the election of such Board Representatives to the Board of Directors at the Company’s stockholder meetings. The Investors shall also be entitled to nominate and cause the Company to appoint individuals to fill any vacancies in such directorships at any time, up to a number of directors as is proportionate to the Investors’ Common Stock ownership, calculated on a fully-converted basis (as described above). In addition, the Company agrees that the Board Representatives shall be entitled to the same rights, privileges and compensation as the other members of the Board of Directors in their capacity as such, including with respect to insurance coverage and reimbursement for Board of Directors participation and related expenses. The Company agrees that the Board Observers shall be entitled to reimbursement for the Board Observers’ participation and related expenses. The Board Representatives shall be spread as even as practicable among the classes of directors. From and after the Closing Date, the Company shall use its best efforts to purchase and maintain, at its expense, insurance, from reputable carriers and in an amount determined from, and from time to time after, the Closing Date in good faith by the Board of Directors to be appropriate, on behalf of and covering the individuals who at any time on or after the Closing Date are or become directors of the Company, against any and all expense, liability or loss asserted against or incurred by such individual in such capacity or arising out of such individual’s status as such, subject to customary exclusions.
          (c) Subject to the further provisions of this Section 4.1, the Company’s Governance and Nominating Committee (or any other committee exercising a similar function) (the “Nominating Committee”) shall recommend to the Board of Directors that such persons designated by the Investors to be Board Representatives pursuant to Sections 4.1(a) and (b) (or any successor designated by the Investors and reasonably acceptable to the Company) be included in the slate of nominees recommended by the Board of Directors to stockholders for election as directors at each annual meeting of stockholders of the Company at which such person’s term expires. The Company shall use reasonable best efforts to have the Board Representatives elected as directors of the Company and the Company shall solicit proxies for them to the same extent as it does for any of its other nominees to the Board of Directors.
          (d) Subject to applicable Law and any rules and regulations promulgated by the New York Stock Exchange, for so long as the Investors are entitled to appoint a Board Representative pursuant to Section 4.1, the Investors shall also be entitled to representation proportionate to Investors’ aggregate Common Stock ownership, calculated on a fully-converted basis (as described above), on all committees of the Board of Directors, provided that notwithstanding the foregoing, the Investors shall be entitled to have a minimum of one Board Representative serving on each committee of the Board of Directors (except where a Board Representative is in a conflict position, such Board Representative may not serve on a

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special committee of the Board of Directors, and where an Investor is in a conflict position, none of the such Investor’s Board Representatives may serve on the relevant special committee of the Board of Directors). If applicable Law or New York Stock Exchange rules and regulations prevent any Board Representative from serving on a committee, the Investors shall be entitled to appoint a Board Observer to such committee, so long as any such Board Observer meets any applicable independence rules of the New York Stock Exchange.
          (e) At any time the Investors have a right to nominate and appoint one or more individuals to the Board of Directors to serve as a director, if any Board Representative shall cease to serve as a director for any reason, the Company and its Board of Directors will use its reasonable best efforts to take all action required to fill the vacancy resulting therefrom with a person designated by the Investors and reasonably acceptable to the Company, subject to satisfaction of all legal and governance requirements regarding service as a director of the Company.
          (f) Subject to the Certificate of Incorporation and Bylaws, (i) prior to the issuance of Series B Preferred Stock, for so long as the Investors have the right to nominate directors under this Section 4.1, the maximum size of the Board of Directors shall be capped at 13 directors and (ii) from and after the Exchange, the Company shall use its reasonable best efforts to maintain a Board of Directors with at least 11 members.
          (g) If the Investors and their Affiliates at any time cease, as a whole, to beneficially own in the aggregate a Qualifying Ownership Interest, the Investors will have no further rights under Sections 4.1(a) through (f) and, if so requested by the Company, shall promptly cause to resign, and take all other action reasonably necessary, or reasonably requested by the Company, to cause the prompt removal of, the Board Representative.
          (h) Following the issuance of the Series B Preferred Stock and Series B-1 Preferred Stock to Investors and so long as Unaffiliated Shareholders (as defined below) beneficially own at least 10% of the outstanding Common Stock, on a fully-diluted basis:
     (i) there shall be at least three (3) Independent Directors, where “Independent Director” means a director who has been nominated or approved by the Continuing Directors and satisfies all standards for independence promulgated by (A) the New York Stock Exchange, (B) the Company’s Corporate Governance Guidelines, as amended November 15, 2007, as available on the Company’s website, and (C) any other applicable Laws;
     (ii) the Company shall not engage in any Affiliated Transaction that is not approved by the Independent Directors. In no event shall the Investors charge the Company any ongoing monitoring or other similar fee. “Affiliated Transaction” means any transaction or series of related transactions, directly or indirectly between the Company, any Company Subsidiary, or another other controlled Affiliates of the Company or any Company Subsidiary on the one hand, and any Investor or any Affiliate of an Investor or any Associated Person of any Investor (except for, in the case of Affiliates and Associated Persons (as defined in the Exchange Act), the Company or any Company Subsidiary), on the other hand, that have a fair market value in excess of

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$2,000,000; provided that none of the following shall constitute an Affiliated Transaction:
     (A) acquisitions of securities, or payments, transactions, Board of Directors rights, access rights, anti-dilution rights, registration rights and all other matters, contemplated by this Agreement or the other Transaction Documents, including, without limitation, the respective Certificates of Designations for the Preferred Shares (including the respective dividends, and exercising and consummating the respective conversion or exchange rights and redemption rights, contemplated by such Certificates of Designations);
     (B) customary compensation arrangements (whether in the form of cash or equity awards), expense reimbursement, D&O insurance coverage, and indemnification arrangements (and related advancement of expenses) in each case for Board of Directors designees and Board Observers, or any use by such persons, for Company business purposes, of aircraft, vehicles, property, equipment or other assets owned or provided by the Company or Company Subsidiaries;
     (C) transactions and arrangements (i) after the Closing Date if the same is in the ordinary course of the Company’s business and does not involve payments by the Company in excess of $5,000,000 in the aggregate for any transaction or series of related transactions and is on terms and conditions not less favorable to the Company in any material respect than those available with non-Affiliates for comparable transactions or arrangements or (ii) pursuant to agreements in effect as of the Closing Date;
     (D) acquisition of Common Stock or other securities pursuant to any stock split, stock dividend, pro rata rights offering, or the like;
     (E) any amendment or termination of the Company’s Rights Agreement, or any redemption of rights outstanding under the Rights Agreement; or
     (F) sale of investment securities in the ordinary course of the Company’s business.
     (iii) the members of the Board of Directors who are unaffiliated with the Investors and were members of the Board of Directors prior to the Closing (or persons specifically approved by such directors or their successors as successors for these purposes) (the “Continuing Directors”) shall have the right to select the persons that will be nominated by the Company as Independent Directors;
     (iv) upon a resolution of the committee of Independent Directors, the Company shall exercise its right to redeem the Series B Preferred Stock and Series B-1 Preferred Stock at any time that such right is exercisable in each case, pursuant to the respective Certificates of Designations therefor; and
     (v) Holders of shares of Common Stock beneficially owned by persons not affiliated with the Investors (“Unaffiliated Shareholders”) shall be third party beneficiaries to this Section 4.1(h).

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          (i) The Company shall keep the Investors informed, on a current basis, of any events, discussions, notices or changes with respect to any Tax (other than ordinary course communications which could not reasonably be expected to be material to the Company), criminal or regulatory investigation or action involving the Company or any of its Subsidiaries (other than routine audits or ordinary course communications which could not reasonably be expected to be material to the Company), and shall reasonably cooperate with the Investors, their members and their respective Affiliates in an effort to avoid or mitigate any cost or regulatory consequences to them that might arise from such investigation or action (including by reviewing written submissions in advance, attending meetings with authorities and coordinating and providing assistance in meeting with regulators).
     4.2 Legend. (a) Each of the Investors agrees that all certificates or other instruments representing the Securities subject to this Agreement will bear a legend substantially to the following effect:
     “THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE ALSO SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THAT CERTAIN PURCHASE AGREEMENT DATED AS OF FEBRUARY 8, 2008 AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”) AND THE OTHER PARTY OR PARTIES NAMED THEREIN. A COPY OF THE PROVISIONS OF SUCH AGREEMENT SETTING FORTH SUCH RESTRICTIONS ON TRANSFER IS ON FILE WITH THE SECRETARY OF THE ISSUER.
          (b) Upon request of an Investor, upon receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that the first sentence of such legend is no longer required under the Securities Act, the Company shall promptly cause the first sentence of such legend to be removed from any certificate for any Securities so to be Transferred. Upon request of an Investor, the remainder of the legend shall be removed upon the expiration of the applicable transfer restrictions set forth in this Agreement. Each Investor acknowledges that the Securities have not been registered under the Securities Act or under any state securities Laws and agrees that it will not sell or otherwise dispose of any of the Securities, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities Laws.
     4.3 Reservation for Issuance. The Company will reserve that number of (x) shares of Common Stock sufficient for issuance upon conversion of Series B Preferred Shares, Series B-1 Preferred Stock and Series D Preferred Stock owned at any time by the Investors (up to the number of shares of Common Stock authorized in the Certificate of Incorporation), (y) Series B Preferred Shares or Series B-1 Preferred Shares sufficient for issuance upon exchange of Temporary Security Units or Series B-1 Preferred Shares owned at any time by the Investors

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without regard to any limitation on such conversion, and (z) Series D Preferred Shares sufficient for issuance upon exchange of Temporary Security Units or Series B-1 Preferred Shares owned at any time by the Investors without regard to any limitation on such conversion. In the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full of the rights contained in this Agreement or in the Certificates of Designations, (i) the Company shall use its best efforts to take all such action as may be necessary to authorize additional shares of Common Stock for issuance upon exercise of such rights and (ii) the Company shall, at an Investor’s request, exchange all or any portion of such Investor’s Common Stock for non-voting securities of the Company with equivalent economic rights.
     4.4 Lost, Stolen or Destroyed Certificates. If from and after the Closing, any certificate for shares of Preferred Stock or Common Stock shall be mutilated, lost, stolen or destroyed, the Company shall issue, in exchange and in substitution the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new certificate of like tenor and representing an equivalent amount and kind of shares. If reasonably required by the Company in connection with replacing a share certificate as aforesaid, the applicable record holder of such shares shall furnish the Company with an indemnity on customary terms for such situations, reasonably sufficient to protect the Company from any out-of-pocket loss which it may suffer from replacing such certificate.
     4.5 Restrictions on Transfers.
          (a) Transfer of Temporary Security Units. Prior to the Outside Date, no Investor shall be permitted to sell or otherwise transfer the Temporary Security Units, except, as applicable, subject in any event to the provisions of Section 1.3(b), (x) to an Affiliate, and/or with respect to THL, to any coinvestor who is an Affiliate of Thomas H. Lee Partners, L.P., that agrees to become bound by the terms of this Agreement including the transfer restrictions set forth in this Section 4.5(a) and the exchange obligations set forth in Section 1.3, (y) pursuant to a merger or consolidation of the Company or (z) pursuant to a syndication arrangement (A) under which such Investor syndicates Temporary Security Units constituting no more than 50% of the Securities purchased at the Closing; (B) pursuant to which such Investor retains voting and dispositive control over the transferred Temporary Security Units and the transferred Temporary Security Units remain subject to the provisions of this Agreement, including the transfer restrictions set forth in this Section 4.5(a) and the exchange obligations set forth in Section 1.3; and (C) which shall be completed within 120 days from the Closing Date. Notwithstanding anything to the contrary herein, from and after the Outside Date, if Shareholder Approval has not been obtained, the Investors shall be permitted to sell Temporary Security Units or any component thereof except that the Investors will agree not to sell Temporary Security Units or any component thereof to any person listed on Schedule 4.5 hereto or any of such person’s Affiliates (unless such sale is pursuant to a merger or consolidation of the Company). “Outside Date” shall mean the date that is six (6) months from the date hereof.
          (b) Transfer of the Series B Preferred Stock and the Series B-1 Preferred Stock. No Investors shall be permitted to sell or otherwise transfer the Series B Preferred Stock, the Series B-1 Preferred Stock or the Common Stock or other securities issued upon

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conversion thereof prior to January 1, 2009, except (x) to an Affiliate, and/or with respect to THL, to any coinvestor who is an Affiliate of Thomas H. Lee Partners, L.P., that agrees to become bound by the terms of this Agreement including the transfer restrictions set forth in this Section 4.5(b) and the exchange obligations set forth in Section 1.3, (y) pursuant to a merger or consolidation of the Company, or (z) pursuant to a syndication arrangement (A) under which such Investor syndicates a number of shares of Series B Preferred Stock or Series B-1 Preferred Stock, as applicable constituting no more than 50% of the Securities purchased at the Closing; (B) pursuant to which the Investors retain voting and dispositive control over the transferred securities and the transferred securities remain subject to the provisions of this Agreement, and (C) which shall be completed within 90 days from date on which Shareholder Approval is obtained. After January 1, 2009, the Investors shall be permitted to sell all Company securities except that each Investor will agree not to sell in a private sale any Preferred Stock or Common Stock or other securities received in the Investment to any person listed on Schedule 4.5 hereto or any such person’s affiliates (unless such sale is pursuant to a merger or consolidation of the Company).
          (c) If any Investor desires to transfer in a private transaction any securities (including Temporary Security Units) to any person, who, to the Investors’ knowledge, after giving effect to such transfer, would beneficially own more than 9.9% or such other threshold as may be applicable as a result of applicable state regulations concerning money transfers (the “Applicable Threshold”) of the outstanding voting securities of the Company, such Investor shall notify the Company prior to effecting such transfer, and the Company will cooperate with such Investor so that such Investor may, as soon as practicable but in any event within two (2) business days of such notification, to the extent the amount of securities to be transferred is in excess of the Applicable Threshold and any applicable approvals have not yet been received, transfer non-voting securities to such person (in lieu of voting securities) such that prior notice and/or approval under the laws relating to money transmission or the sale of check of any State would not be required to effect such transfer.
          (d) For purposes of this Section 4.5, “transfer” shall mean any sale, transfer, pledge, assignment or other disposition. The Investors shall not transfer any Securities in violation of Law.
     4.6 Withholding. The Company shall be entitled to deduct and withhold from amounts payable to an Investor or any of its Affiliate funds in respect of the Securities such amounts as it is required to deduct and withhold under applicable Law. To the extent that amounts are so withheld by the Company, such withheld amounts shall be treated for all purposes as having been paid to such Investor or any such Affiliate fund in respect of which such deduction and withholding was made by the Company. Prior to an Investor or any of its Affiliate funds receiving any Securities, the Investor shall, and shall cause such Affiliate fund to, deliver to the Company a duly executed IRS Form W-9 or the appropriate IRS Form W-8, as applicable, and such other IRS forms as may reasonably requested by the Company from time to time. Each Investor shall, and cause such Affiliate fund to, update all such IRS Forms, as appropriate, from time to time.

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     4.7 Anti-Dilution Rights.
          (a) Sale of New Stock. From and after the Closing, so long as the Investors and their Affiliates own (in the aggregate) a Qualifying Ownership Interest (before giving effect to any issuances triggering this Section), (i) each of the respective Investors shall have the right, or shall at any time and from time to time have the right to appoint an Affiliate of such Investor that agrees in writing for the benefit of the Company to be bound by the terms of this Agreement (any such Affiliate shall be included in the term “Investors” for purposes of this Section) to exercise, the anti-dilution rights set forth in this Section (the Investors or such Affiliate, an “Anti-Dilution Right Entity”); and (ii) if at any time after the Closing, the Company at any time or from time to time makes any public or non-public offering of any equity (including Common Stock, preferred stock or restricted stock), or any securities, options or debt that are convertible or exchangeable into equity or that include an equity component (such as an “equity” kicker) (including any hybrid security) (any such security, a “New Security”) (other than (1) pursuant to the granting or exercise of employee stock options or other stock incentives pursuant to the Company’s stock incentive plans or the issuance of stock pursuant to the Company’s employee stock purchase plan, in each case in the ordinary course of equity compensation awards, or (2) issuances for the purposes of consideration to fund acquisition transactions), the Anti-Dilution Right Entity shall be afforded the opportunity to acquire from the Company for the same price (net of any underwriting discounts or sales commissions) and on the same terms (except that, to the extent permitted by Law and the Certificate of Incorporation and Bylaws, the Anti-Dilution Right Entity may elect to receive such securities in nonvoting form, convertible into voting securities upon certain transfers to non-Affiliates or upon a widely dispersed offering) as such securities are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable the Investors and their controlled Affiliates to maintain their aggregate proportionate Common Stock-equivalent interest in the Company. The amount of New Securities that the Anti-Dilution Right Entity shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total number of such offered shares of New Securities by (y) a fraction, the numerator of which is the number of shares of Common Stock beneficially owned by the Investors held at such time by the Investors (assuming, to the extent it has not occurred, exchange of all Temporary Security Units for Series B Preferred Shares and Series B-1 Preferred Stock and receipt of all Regulatory Approvals), and the denominator of which is the number of shares of Common Stock then outstanding. If and to the extent the issuance of New Securities to a Anti-Dilution Right Entity would cause such Anti-Dilution Right Entity to hold more New Securities than applicable money transmitter or similar Laws allow such Anti-Dilution Right Entity to hold, the Company shall reduce the number of New Securities issuable to the Anti-Dilution Right Entity to the extent necessary to comply with applicable money transmitter or similar Laws and shall instead issue such Anti-Dilution Right Entity the number of Series D Preferred Stock or other applicable securities of the Company with equivalent economic rights. Notwithstanding anything to the contrary in this Agreement, it is understood and agreed that prior to the Exchange, the Investors need not be granted voting rights in excess of 19.9% of the voting rights or rights to appoint directors or observers in excess of the rights to appoint directors and observers contemplated by this Agreement, and that the inability to grant any such right shall not prohibit an issuance of New Securities.
          (b) Notice. At any time at which the anti-dilution rights contemplated by this Section 4.7 apply:

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     (i) In the event the Company proposes to offer New Securities in an underwritten public offering or a private offering made to financial institutions for resale pursuant to Rule 144A, no later than five (5) business days after the initial filing of a registration statement with respect to such underwritten offering or the commencement of such Rule 144A offering, it shall give the Anti-Dilution Right Entity written notice of its intention (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering) describing, to the extent possible, the price (or range of prices), anticipated amount of securities, timing and other terms of such offering. The Anti-Dilution Right Entity shall have five (5) business days from the date of receipt of such a notice to notify the Company in writing that it intends to exercise such anti-dilution purchase rights and as to the amount of New Securities the Anti-Dilution Right Entity desires to purchase, up to the maximum amount calculated pursuant to Section 4.7(a). Such notice shall constitute a non-binding indication of interest of the Anti-Dilution Right Entity to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it. The failure of the Anti-Dilution Right Entity to respond within such five (5) business day period shall be deemed to be a waiver of the Anti-Dilution Right Entity’s rights under this Section 4.7 only with respect to the offering described in the applicable notice and a notice purporting to exercise anti-dilution rights for more than the maximum amount contemplated by this Section 4.7 shall be deemed to be an election to acquire the maximum amount.
     (ii) If the Company proposes to offer New Securities in a transaction that is not an underwritten public offering or Rule 144A offering (a “Private Placement”), the Company shall (A) give the Investors written notice of its intention, describing the anticipated amount of securities, price and other terms upon which the Company proposes to offer the same and (B) promptly provide the Investors with an updated notice reflecting any changes to such anticipated amount of securities, price or other material terms. Each Investor shall have ten (10) business days from the date of receipt of the last notice required by the immediately preceding sentence to notify the Company in writing that it intends to exercise such anti-dilution purchase rights and as to the amount of New Securities the Anti-Dilution Right Entity desires to purchase, up to the maximum amount calculated pursuant to Section 4.7(a). Such notice shall constitute a non-binding indication of interest of the Anti-Dilution Right Entity to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it; provided that the closing of the Private Placement with respect to which such rights has been exercised takes place within fifteen (15) calendar days after the giving of notice of such exercise by the Anti-Dilution Right Entity. The failure of the Anti-Dilution Right Entity to respond within such ten (10) business day period referred to in the second preceding sentence shall be deemed to be a waiver of the Anti-Dilution Right Entity’s rights under this Section 4.7 only with respect to the offering described in the applicable notice and a notice purporting to exercise anti-dilution rights for more than the maximum amount contemplated by this Section 4.7 shall be deemed to be as election to acquire the maximum amount.

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          (c) Purchase Mechanism.
     (i) Private Placement. If the Anti-Dilution Right Entity exercises its anti-dilution purchase rights provided in Section 4.7(b)(ii) above, the closing of the purchase of the New Securities with respect to which such right has been exercised shall be conditioned on the consummation of the sale of securities pursuant to the Private Placement with respect to such right has been exercised and shall take place within ten (10) business days after the closing of the Private Placement; provided, that such time period shall be extended for a maximum of 95 days in order to comply with applicable Laws and regulations; provided, further that the actual amount of securities to be sold to the Anti-Dilution Right Entity pursuant to its exercise of anti-dilution rights hereunder shall be proportionally reduced if the aggregate amount of New Securities sold in the Private Placement is reduced and, at the option of the Anti-Dilution Right Entity, shall be increased if such aggregate amount of New Securities sold in the Private Placement is increased. Each of the Company and the Anti-Dilution Right Entity agrees to use its reasonable best efforts to secure any regulatory or stockholder approvals or other consents, and to comply with any Law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.
     (ii) Underwritten Public Offering or Rule 144A Offering. If the Anti-Dilution Right Entity exercises its anti-dilution purchase rights provided in Section 4.7(b)(i) above, the Company shall offer the Anti-Dilution Right Entity the amount of New Securities determined in accordance with Section 4.7(b)(i) (as adjusted to reflect the actual size of such offering when priced) on the same terms as the New Securities are offered to the underwriters. The Anti-Dilution Right Entity shall further enter into an agreement to purchase the New Securities to be acquired contemporaneously with the execution of any underwriting agreement or purchase agreement entered into between the Company and the underwriters or initial purchasers of such underwritten public offering or Rule 144A offering, and the failure to enter into such an agreement at or prior to such time shall constitute a waiver of the anti-dilution rights in respect of such offering. Any offers and sales pursuant to this Section 4.7 in the context of a registered public offering shall be conditioned upon reasonably acceptable representations and warranties of the Anti-Dilution Right Entity regarding its status as the type of offeree to whom a private sale can be made concurrently with a registered public offering in compliance with applicable securities laws.
          (d) Failure of Purchase. In the event the Anti-Dilution Right Entity fails to exercise its anti-dilution purchase rights provided in this Section 4.7 within the applicable period or, if so exercised, the Anti-Dilution Right Entity is unable to consummate such purchase within the time period specified in Section 4.7(c) above because of its failure to obtain any required regulatory or stockholder consent or approval or because of the failure to purchase any or all of the New Securities contemplated to be purchase by the election notice, the Company shall thereafter be entitled during the period of 120 days following the conclusion of the applicable period to sell or enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated, if at all, within 30 days from the date of said agreement) to sell the New Securities not elected to be purchased pursuant to this Section 4.7 or which the Anti-Dilution Right Entity is unable to purchase because of such failure to obtain any such consent or approval or otherwise fails to purchase, at a price and upon terms no more favorable to the purchasers of such securities in the Private

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Placement, the underwritten public offering or Rule 144A offering, as the case may be, than were specified in the Company’s notice to the Anti-Dilution Right Entity. Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory or stockholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five (5) business days after all such approvals or consents have been obtained or waiting periods expired, but in no event shall such time period exceed 180 days from the date of the applicable agreement with respect to such sale. In the event the Company has not sold the New Securities or entered into an agreement to sell the New Securities within said 120-day period (or sold and issued New Securities in accordance with the foregoing within thirty (30) days from the date of said agreement (as such period may be extended in the manner described above for a period not to exceed 180 days from the date of said agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such securities to the Anti-Dilution Right Entity in the manner provided above.
          (e) The Anti-Dilution Right Entity shall not have any rights to participate in the negotiations of the proposed terms of any Private Placement, underwritten public offering, or Rule 144A offering. Subject to any restrictions contained herein, the Anti-Dilution Right Entity shall receive the same rights (including, without limitation, anti-dilution rights, rights relating to closing conditions and indemnification rights, if any) as other purchasers in the Private Placement.
          (f) The Company and the Investors shall cooperate in good faith to facilitate the exercise of the Anti-Dilution Right Entity’s anti-dilution rights hereunder in a manner that does not jeopardize the timing, marketing, pricing or execution of any offering of the Company’s securities, including securing any required approvals or consents.
          (g) In the case of the offering of securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as reasonably determined by the Board of Directors, provided, however, that such fair value as determined by the Board of Directors shall not exceed the aggregate market price of the securities being offered as of the date the Board of Directors authorizes the offering of such securities.
     4.8 Indemnity. (a) The Company agrees to indemnify and hold harmless each Investor and its Affiliates and each of their respective officers, directors, partners, employees and agents, and each person who controls such Investor within the meaning of the Exchange Act and the regulations thereunder (the “Indemnified Parties” and each, an “Indemnified Party”), to the fullest extent lawful, from and against any and all actions, suits, claims, proceedings, costs, losses, liabilities, damages, expenses (including reasonable and documented fees of counsel), amounts paid in settlement and other costs (collectively, “Losses”) relating to the Company’s authorization, execution, delivery or performance of this Agreement and any other Transaction Document (other than any Losses attributable to the acts, errors or omissions on the part of the Investor, but not including the transactions contemplated hereby).

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          (b) An Indemnified Party shall give written notice to the Company of any claim with respect to which it seeks indemnification promptly after the discovery by such Indemnified Party of any matters giving rise to a claim for indemnification; provided that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Company of its obligations under this Section 4.8 unless and to the extent that the Company shall have been actually prejudiced by the failure of such Indemnified Party to so notify such party. Such notice shall describe in reasonable detail such claim. In case any such action, suit, claim or proceeding is brought against an Indemnified Party, the Indemnified Party shall be entitled to hire, at its own expense, separate counsel and participate in the defense thereof; provided, however, that the Company shall be entitled to assume and conduct the defense, unless the Company determines otherwise and following such determination the Indemnified Party assumes responsibility for conducting the defense (in which case the Company shall be liable for any legal fees and expenses of one law firm and other out-of-pocket expenses reasonably incurred by the Indemnified Party in connection with assuming and conducting the defense). If the Company assumes the defense of any claim, all Indemnified Parties shall thereafter deliver to the Company copies of all notices and documents (including court papers) received by the Indemnified Party relating to the claim, and any Indemnified Party shall cooperate in the defense or prosecution of such claim. Such cooperation shall include the retention and (upon the Company’s request) the provision to the Company of records and information that are reasonably relevant to such claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Company shall not be liable for any settlement of any action, suit, claim or proceeding effected without its written consent; provided, however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company further agrees that it will not, without the Indemnified Party’s prior written consent, settle or compromise any claim or consent to entry of any judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in respect of which indemnification has been sought hereunder unless such settlement or compromise includes an unconditional release of such Indemnified Party from all liability arising out of such action, suit, claim or proceeding.
          (c) The obligations of the Company under this Section 4.8 shall survive the transfer, redemption, exchange or conversion of the Securities issued pursuant to this Agreement, or the closing or termination of this Agreement and any other Transaction Document. The agreements contained in this Section 4.8 shall be in addition to any other rights of the Indemnified Party against the Company or others, at common law or otherwise.
          (d) The amount the Company shall pay to the Indemnified Party with respect to a claim made pursuant to this Section 4.8 shall be an amount equal to the Loss incurred by the Indemnified Party on receipt of any indemnification hereunder with respect to such claim, after giving effect to any Taxes payable by the Indemnified Party on receipt of any indemnification hereunder with respect to such claim and any Tax benefit actually realized (including deductions) by the Indemnified Party with respect to such claim for tax purposes; provided, however, that unless required to do otherwise by Law, the Company, the Indemnified Parties and their respective Affiliates shall treat any and all indemnification payments pursuant to this Section 4.8 as an adjustment to the Purchase Price for Tax purposes.

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     4.9 Go-Shop Period. (a) Notwithstanding any other provision of this Agreement to the contrary, during the period (the “Go-Shop Period”) beginning on the date of this Agreement and continuing until 11:59 p.m. (EST) on the earlier of (x) the day prior to the Closing and (y) March 7, 2008, the Company and the Company Subsidiaries and their respective officers, directors, employees, consultants, agents, advisors, affiliates and other representatives (“Representatives”) shall have the right to directly or indirectly: (i) initiate, solicit and encourage Company Transaction Proposals (as hereinafter defined), including by way of providing access to non-public information pursuant to one or more customary confidentiality agreements and eliminating any existing standstill clause of which the Company is a beneficiary, or any other burden or restriction that would prohibit or inhibit any person actually or potentially interested in making an offer to the Company from pursuing such offer; provided that the Company shall promptly provide to each of the Investors any material non-public information concerning the Company or any Company Subsidiary that is provided to any person given such access that was not previously provided to the Investors; and (ii) enter into and maintain discussions or negotiations with respect to Company Transaction Proposals or otherwise cooperate with or assist or participate in, or facilitate any such inquiries, proposals, discussions or negotiations.
          (b) Notwithstanding any other provisions of this Agreement to the contrary, if, at any time prior to the Closing, the Company receives a Company Transaction Proposal which the Board of Directors of the Company concludes in good faith constitutes a Superior Proposal, the Board of Directors of the Company may terminate this Agreement prior to the Closing to contemporaneously enter into a definitive agreement implementing such Superior Proposal; provided, however, that the Company shall not terminate this Agreement pursuant to the foregoing, and any purported termination pursuant to the foregoing shall be void and of no force or effect, unless prior to or concurrently with such termination the Company transmits the Termination Fee payable pursuant to Section 5.2; and provided, further, that the Board of Directors may not terminate this Agreement pursuant to the foregoing unless:
     (i) the Company shall have provided prior written notice to the Investors, at least forty-eight (48) hours in advance (the “Notice Period”), of its intention to terminate this Agreement to enter into a definitive agreement with respect to such Superior Proposal, which notice shall (A) specify the material terms and conditions of any such Superior Proposal (including the identity of the party making such Superior Proposal and reasonably complete copies of all forms of agreements with respect to such Superior Proposal) and (B) provide a brief summary of the reasons why such Company Transaction Proposal constitutes a Superior Proposal, which such summary shall only be required to provide sufficient specificity necessary to enable a reasonable person to understand why the proposal is a Superior Proposal; and
     (ii) prior to terminating this Agreement to enter into a definitive agreement with respect to such Superior Proposal, the Company shall, and shall cause its financial and legal advisors to, during the Notice Period, negotiate with Investors in good faith (to the extent the Investors also seek so to negotiate) to make such adjustments in the terms and conditions of this Agreement and the Transaction Documents, and, after making any such adjustments, this Agreement and the Transaction Documents do not result in a transaction

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that is more favorable to the Company than any Company Transaction Proposal that is deemed to constitute a Superior Proposal.
     In the event of any material revisions to the Superior Proposal, the Company shall be required to promptly update the Investors as to such revisions.
               (c) On the Satisfaction Date (or the end of the Go-Shop Period if the Closing occurs within three (3) business days of the end of the Go-Shop Period), the Company shall not, and shall cause its Subsidiaries and Representatives not to, directly or indirectly (i) solicit, initiate, cause, facilitate or knowingly encourage (including by way of furnishing information) any inquiries or proposals that constitute, or may reasonably be expected to lead to, any Company Transaction Proposal, (ii) participate in any discussions or negotiations with any third party regarding any Company Transaction Proposal or (iii) enter into any agreement related to any Company Transaction Proposal.
               (d) [Intentionally omitted.]
                (e) The Company agrees that any violations of the restrictions set forth in this Section 4.9 by any Representative of the Company or any of its Subsidiaries, shall be deemed to be a breach of this Section 4.9 by the Company.
                (f) As used in this Agreement, the terms:
     (i) “Company Transaction Proposal” means any inquiry, proposal or offer from any person or group of persons other than Investors or their respective Affiliates (it being understood that lending affiliates of GS shall not be considered Affiliates of GS for purposes of this Section 4.9) relating to any direct or indirect acquisition or purchase of a business that constitutes 15% or more of the net revenues, net income or assets of the Company and the Company Subsidiaries, taken as a whole, or 15% or more of any class or series of securities of the Company, any tender offer or exchange offer that if consummated would result in any person or group of persons beneficially owning 15% or more of the voting rights of any class or series of capital stock of the Company, or any merger, reorganization, consolidation, share exchange, business combination, recapitalization, liquidation, dissolution, equity infusion or similar transaction involving the Company (or any Subsidiary or Subsidiaries of the Company whose business constitutes 15% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole); and
     (ii) “Superior Proposal” means a bona fide written Company Transaction Proposal that the Board of Directors of the Company in good faith determines, would, if consummated, result in a transaction that is more favorable to the Company and its existing stockholders than the transactions contemplated hereby, which determination is made, (x) after receiving the advice of a financial advisor (who shall be a nationally recognized investment banking firm), (y) after taking into account the likelihood (and likely timing) of consummation of such transaction on the terms set forth therein (as compared to the terms herein) and (z) after taking into account all appropriate legal (with the advice of outside counsel), financial (including the financing terms of any such

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proposal), regulatory or other aspects of such proposal and any other relevant factors permitted by applicable Law, including, without limitation, the likelihood that the Superior Proposal will satisfy applicable financial ratios and tests under the Company’s applicable commercial contracts and Laws applicable to entities engaged in the money transfer or payment systems business.
               (g) Nothing contained in this Section 4.9 or elsewhere in this Agreement shall prohibit the Board of Directors of the Company from (i) complying with its disclosure obligations under U.S. federal or state Law with respect to a Company Transaction Proposal, including taking and disclosing to its stockholders a position contemplated by Rule 14d-9 and 14e-2(a) promulgated under the Exchange Act (or any other similar communication to stockholders), or (ii) making any “stop, look and listen” communication or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act.
          4.10 Share Listing. The Company shall as promptly as practicable use its reasonable best efforts to cause the shares of Common Stock issuable upon conversion of the Preferred Stock to be approved for listing on the New York Stock Exchange, subject to official notice of issuance.
          4.11 Filing of Certificates of Designation. Prior to the Closing, the Company shall file the Certificates of Designations of the Preferred Stock in the form attached as and Exhibits 1, 2, 3 and 4 hereto with the Secretary of State of the State of Delaware in accordance with all applicable provisions of Law and the Certificate of Incorporation.
          4.12 Public Announcements. Subject to each party’s disclosure obligations imposed by applicable Law, each of the parties hereto will cooperate with each other in the development and distribution of all news releases and other public information disclosures with respect to this Agreement and any of the transactions contemplated by this Agreement, and no party hereto will make any such news release or public disclosure without first consulting with the other parties hereto and receiving their consent (which shall not be unreasonably withheld or delayed) and each party shall coordinate with the others with respect to any such news release or public disclosure.
          4.13 Right to Use Trademarks. The Company hereby grants to each Investor the right to use the Company’s name and logo in such Investor’s marketing materials for the purpose of indicating an ownership interest in the Company by the Investor; provided, however, that such Investor shall include a trademark attribution notice giving notice of the Company’s ownership of its trademarks in any such marketing materials in which the Company’s name and/or logo appear. The Company reserves the right to require any Investor to cease using the Company’s name or logo in any manner in which the Company, in its sole discretion, desires, and the Investor shall cease any such action as soon as reasonably practicable upon the Company’s request.

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ARTICLE V
Termination
     5.1 Termination. This Agreement may be terminated at any time prior to the Closing:
     (a) by mutual written agreement of the parties;
     (b) by either the Company or any Investor, if the Closing has not occurred by the 10:00 a.m. CST on March 13, 2008 (provided that the right to terminate this Agreement under this clause (b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the primary cause of the failure of the Closing to occur on or prior to such date);
     (c) by either the Company or any Investor, if any Governmental Entity shall have issued a non-appealable final judgment, injunction, order or decree that shall prohibit the Closing or shall prohibit or restrict an Investors or its Affiliates from owning, and exercising in full all exchange, conversion and voting rights of the Securities contemplated to be exercisable by the Investors (it being understood that failure to receive Regulatory Approval prior to the Closing, and any regulatory requirement that GS hold a non-voting stock, shall be deemed not to be such a judgment, injunction, order or decree) (provided that the right to terminate this Agreement under this clause (c) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the primary cause of such non-appealable final judgment, injunction, order or decree);
     (d) by any Investor if the Board of Directors of the Company shall have approved or recommended to the stockholders of the Company a Superior Proposal, or shall have resolved to effect the foregoing; and
     (e) by the Company at any time prior to the Closing, in accordance with, and subject to the terms and conditions of, Section 4.9(b).
     5.2 Termination Fee. In the event that (i) this Agreement is terminated (A) by the Company pursuant to Section 5.1(e) or (B) by an Investor pursuant to Section 5.1(d) or (ii) this Agreement is terminated for any reason (other than primarily as a result of the Investors’ breach of their obligations under this Agreement which resulted in the failure to satisfy conditions set forth in Section 1.3(c)) and the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by any Company Transaction Proposal (other than a transaction entered into or consummated following a voluntary or involuntary petition by the Company or any Company Subsidiary under the federal bankruptcy code) within nine (9) months of the date this Agreement is terminated, then the Company shall pay the Termination Fee to the accounts specified on Schedule G hereto, at or prior to the time of termination in the case of a termination pursuant to Section 5.1(e), as promptly as possible (but in any event within two (2) Business Days) following termination of this Agreement in the case of a termination pursuant to Section 5.1(d), or on the earlier of entering into a definitive agreement with respect to or consummating a Company Transaction Proposal. The “Termination Fee” means the sum of (x)

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$15,000,000 and (y) all fees and expenses of THL not previously paid or reimbursed to THL to date pursuant to the terms of the Exclusivity Agreement between the Company and Thomas H. Lee Partners, L.P., dated as of January 3, 2008 (the “Exclusivity Agreement”) and all expenses of GS and THL not previously paid or reimbursed to GS or THL, as applicable, pursuant to Section 5.3 hereof; provided, however, that in the event the Termination Fee is paid because the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by any Company Transaction Proposal within nine (9) months of the date this Agreement is terminated, the Termination Fee shall be increased by any and all amounts refunded by the Investors to the Company pursuant to the several letter agreements among the Investors and the Company dated as of the date hereof.
     5.3 Expenses. This Section 5.3 shall replace and supersede the fee and expense provisions in the Exclusivity Agreement with respect to all fees and expenses not reimbursed prior to the date hereof. On the date hereof, the Company shall reimburse the Investors for all out-of-pocket expenses incurred by the Investors in connection with due diligence, the negotiation and preparation of the Transaction Documents, the Note Purchase Agreement and the Financing Documents (as defined in the Note Purchase Agreement) and undertaking of the transactions contemplated by the Transaction Documents, the Note Purchase Agreement and the Financing Documents (as defined in the Note Purchase Agreement) incurred prior to the date hereof in the amount of $3,810,000. The Company shall reimburse the Investors for all out-of-pocket expenses incurred by the Investors in connection with due diligence, the negotiation and preparation of the Transaction Documents, the Note Purchase Agreement and the Financing Documents (as defined in the Note Purchase Agreement) and undertaking of the transactions contemplated by the Transaction Documents, the Note Purchase Agreement and the Financing Documents (as defined in the Note Purchase Agreement) incurred from the date hereof through the earlier of the Closing Date or the date this Agreement is terminated pursuant to Section 5.1, up to a maximum amount of $3,690,000 (exclusive of all HSR Act, German Antitrust Act and other regulatory filing fees incurred by or on behalf of THL or its Affiliates in connection with the transactions contemplated hereby, which the Company shall be responsible for). Other than as set forth in the foregoing sentence, each of the parties will bear and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated under the Transaction Documents, the Note Purchase Agreement and the Financing Documents (as defined in the Note Purchase Agreement) including fees and expenses of its own financial or other consultants, investment bankers, accountants and counsel.
     5.4 Effects of Termination. In the event of any termination of this Agreement as provided in Section 5.1, this Agreement (other than, Section 4.8, Section 5.2, Section 5.3, this Section 5.4 and Article VI, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect. Termination pursuant to Section 5.1 shall not, under any circumstance, eliminate or otherwise alter either party’s liability to the other party for such party’s breach of this Agreement.

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ARTICLE VI
Miscellaneous
          6.1 Survival of Representations, Warranties, Agreements, Etc. Each of the representations and warranties set forth in this Agreement (or any certificate delivered pursuant hereto) shall survive the execution and delivery of this Agreement and the Closing but only for a period of 12 months following the Closing Date and thereafter shall expire and have no further force and effect (except with respect to claims made before the expiration of such period); provided that the representations and warranties set forth in Sections 2.2(a), (b), (c), (d) and (p), and corresponding representations and warranties in any certificate, shall survive the execution and delivery of this Agreement and the Closing indefinitely. Except as otherwise provided herein, all covenants and agreements contained herein shall survive for the duration of any statutes of limitations applicable thereto or until, by their respective terms, they are no longer operative.
          6.2 Amendment. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer of a duly authorized representative of such party.
          6.3 Waiver. The conditions to each party’s obligation to consummate the Purchase are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable Law. No waiver will be effective unless it is in a writing signed by a duly authorized officer of the waiving party that makes express reference to the provision or provisions subject to such waiver.
          6.4 Counterparts and Facsimile. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile and such facsimiles will be deemed as sufficient as if actual signature pages had been delivered.
          6.5 Governing Law; Jurisdiction. This Agreement will be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and to be performed entirely within such State. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the Delaware Chancery Court for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby
          6.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
          6.7 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by telecopy or facsimile, upon

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confirmation of receipt, (b) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third business day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
(a) If to THL:
c/o Thomas H. Lee Partners, L.P.
100 Federal Street, 35th Floor
Boston, Massachusetts 02110
Fax No.: (617) 227-3514
Attn: Thomas M. Hagerty
           Seth W. Lawry
            Scott L. Jaeckel
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Manges LLP
100 Federal Street, 34th Floor
Boston, Massachusetts 02110
Fax No.: (617) 772-8333
Attn: James Westra, Esq.
          Malcolm Landau, Esq.
(b) If to GS:
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Edward Pallesen
                  Bradley Gross
Fax: (212) 357-5505
with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attention: Robert Schwenkel, Esq.
                 David Shaw, Esq.
Fax: (212) 859-4000
(c) If to the Company:
MoneyGram International Inc.
1500 Utica Avenue South, MS 8020
Minneapolis, Minnesota 55416
Fax No.: (952) 591-3859
Attn: Teresa H. Johnson, Esq.

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with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd St.
New York, NY 10019
Fax No.: 212.403.2000
Attn: David M. Silk, Esq.
          6.8 Entire Agreement, Etc. (a) This Agreement (including the Schedules, Exhibits and Disclosure Schedules hereto) constitutes the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, both written and oral, between the parties, with respect to the subject matter hereof, and (b) no party may directly or indirectly assign any or all of its rights or delegate any or all of its obligations under this Agreement without the prior written consent of each other party to this Agreement (any attempted assignment in contravention hereof being null and void), except following the Closing as set forth in Section 4.5 hereof.
     6.9 Definitions of “subsidiary,” “Affiliate,” “knowledge,” “person” and “Law”. (a) When a reference is made in this Agreement to a subsidiary of a person, the term “subsidiary” means those corporations and other entities of which such person owns or controls more than 50% of the outstanding equity securities either directly or through an unbroken chain of entities as to each of which more than 50% of the outstanding equity securities is owned directly or indirectly by its parent; provided, however, that there shall not be included any such entity to the extent that the equity securities of such entity were acquired in satisfaction of a debt previously contracted in good faith or are owned or controlled in a bona fide fiduciary capacity.
          (b) The term “Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with, such other person. For purposes of this definition, “control” when used with respect to any person, means the possession, directly or indirectly, of the power to cause the direction of management and/or policies of such person, whether through the ownership of voting securities, by contract or otherwise.
          (c) The term “knowledge” or any similar formulation of knowledge shall mean, (i) in the case of the Company, the actual knowledge after due inquiry of an executive officer of the Company (which, for the purposes of this definition shall include, without limitation, Philip Milne, Teresa Johnson, David Parrin, Anthony Ryan, Jean Benson, Dan Collins and Thomas Haider) (which due inquiry shall include reasonable inquiry of the direct reports to such executive officer and appropriate senior executives of the Company Subsidiaries) and (ii) in the case of an Investor, the actual knowledge after due inquiry of a managing director of the entity that manages such Investor.

53


 

          (d) The term “person” or shall mean an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
          (e) The term “Law” shall mean any federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, code, order, injunction, arbitration award, agency requirement, license or permit of any Governmental Entity.
          (f) The words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation.”
          6.10 Captions. The Article, Section and paragraph captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
          6.11 Severability. If any provision of this Agreement or the application thereof to any person (including, without limitation, the officers and directors of an Investor and the Company) or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
          6.12 No Third Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any person or entity other than the parties hereto or permitted transferees of an Investor, any benefit right or remedies, except that the provisions of Sections 4.1(h) and 4.8 shall inure to the benefit of the persons referred to in that Section.
          6.13 Specific Performance. The transactions contemplated by this Agreement are unique. Accordingly, the Company and each of the respective Investors, severally and not jointly, acknowledge and agree that, in addition to all other remedies to which it may be entitled, each of the parties hereto is entitled to seek a decree of specific performance, provided that such party hereto is not in material default hereunder. The parties hereto agree that, if for any reason a party shall have failed to perform its obligations under this Agreement, then the party seeking to enforce this Agreement against such nonperforming party shall be entitled to specific performance and injunctive and other equitable relief, and the parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. This provision is without prejudice to any other rights that any party may have against another party for any failure to perform its obligations under this Agreement including the right to seek damages for a material breach of any provision of this Agreement, and all rights, powers and remedies available (at law or in equity) to a party in respect hereof by the other party shall be cumulative and not alternative or exclusive, and the exercise or beginning of the exercise of any thereof by a party shall not preclude the simultaneous or later exercise of any other rights, powers or remedies by such party. Notwithstanding anything to the contrary, (i) in no event shall any Investor’s aggregate liability

54


 

under this Agreement if the Closing does not occur exceed an amount equal to the aggregate Purchase Price such Investor may be obligated to pay pursuant to Section 1.2 and (ii) in no event shall any Investor be liable for any consequential, incidental, punitive or special damages, including loss of future revenue, income or profits, diminution of value or loss of business opportunity (provided that the limitation in this sentence shall not limit the Company’s rights to recover contract damages from an Investor (subject to the limitations in clause (i) of this sentence) in connection with a failure by such Investor to close on the Purchase in violation of this Agreement).
          6.14 Several, Not Joint, Liability. The obligations of THL under this Agreement or any other Transaction Document are several and not joint with the obligations of GS, and THL shall not be responsible in any way for the performance of the obligations of GS under this Agreement or any other Transaction Document; provided, however, that notwithstanding anything to the contrary in this Agreement, the obligations of THL shall be joint and several among the THL Investors. The obligations of GS under this Agreement or any other Transaction Document are several and not joint with the obligations of THL, and GS shall not be responsible in any way for the performance of the obligations of THL under this Agreement or any other Transaction Document; provided, however, that notwithstanding anything to the contrary in this Agreement, the obligations of GSMP shall be joint and several among the GSMP Investors and the obligations of GSCP shall be joint and several among the GSCP Investors. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or the other Transaction Documents. The obligations of an Investor under this Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to such obligations may only be made against, such Investor and its successors and assigns, and no past, present or future Affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any Investor shall have any liability for any obligations of an Investor under this Agreement or for any claim based on, in respect of, or by reason of, the negotiation, execution or performance of this Agreement or the transactions contemplated hereby.
[The rest of this page intentionally left blank.]

55


 

          IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto as of the date first herein above written.
         
  MONEYGRAM INTERNATIONAL, INC.
 
 
  By:   /s/ Philip W. Milne  
    Name:   Philip W. Milne  
    Title:   Chief Executive Officer  
 
[Signature Page to Purchase Agreement ]

 


 

         
    THOMAS H. LEE EQUITY FUND VI, L.P.
 
       
 
  By:   THL EQUITY ADVISORS VI, LLC,
 
      its general partner
 
       
 
  By:   /s/ Seth Lawry
 
       
 
      Name: Seth Lawry
 
      Title: Managing Director
         
    THOMAS H. LEE PARALLEL FUND VI, L.P.
 
       
 
  By:   THL EQUITY ADVISORS VI, LLC
 
      its general partner
 
       
 
  By:   /s/ Seth Lawry
 
       
 
      Name: Seth Lawry
 
      Title: Managing Director
         
    THOMAS H. LEE PARALLEL (DT) FUND VI, L.P.
 
       
 
  By:   THL EQUITY ADVISORS VI, LLC
 
      its general partner
 
       
 
  By:   /s/ Seth Lawry
 
       
 
      Name: Seth Lawry
 
      Title: Managing Director
[Signature Page to Purchase Agreement ]

 


 

         
    GS CAPITAL PARTNERS VI FUND, L.P.
 
  By:   GSCP VI Advisors, L.L.C.
 
           its General Partner
 
       
 
  By:   /s/ Bradley Gross
 
       
 
      Name: Bradley Gross
 
      Title: Managing Director and Vice President
         
    GS CAPITAL PARTNERS VI OFFSHORE FUND, L.P.
 
  By:   GSCP VI Offshore Advisors, L.L.C.
 
           its General Partner
 
 
  By:   /s/ Bradley Gross
 
       
 
      Name: Bradley Gross
 
      Title: Managing Director and Vice President
         
    GS CAPITAL PARTNERS VI GmbH & Co. KG
 
  By:   GS Advisors VI, L.L.C.
 
           its Managing Limited Partner
 
       
 
  By:   /s/ Bradley Gross
 
       
 
      Name: Bradley Gross
 
      Title: Managing Director and Vice President
[Signature Page to Purchase Agreement ]

 


 

         
  GS CAPITAL PARTNERS VI PARALLEL, L.P.

By: GS Advisors VI, L.L.C.
          its General Partner
 
 
  By:   /s/ Bradley Gross  
    Name:   Bradley Gross  
    Title:   Managing Director and Vice President  
 
         
  GSMP V ONSHORE US, LTD.
 
 
  By: /s/ Bradley Gross  
  Name:   Bradley Gross  
  Title:   Managing Director and Vice President  
 
         
  GSMP V OFFSHORE US, LTD.
 
 
  By:   /s/ Bradley Gross  
  Name:   Bradley Gross  
  Title:   Managing Director and Vice President  
 
         
  GSMP V INSTITUTIONAL US, LTD.
 
 
  By:   /s/ Bradley Gross  
  Name:   Bradley Gross  
  Title:   Managing Director and Vice President  
 
[Signature Page to Purchase Agreement ]

 

EX-10.2
 

Exhibit 10.2
[MoneyGram Letterhead]
February 11, 2008
THL Managers VI, LLC
c/o Thomas H. Lee Partners, L.P.
100 Federal Street
Boston, MA 02110
Ladies and Gentlemen:
          Reference is hereby made to that certain Purchase Agreement dated as of February 7, 2008 by and among MoneyGram International, Inc., a Delaware corporation (the “Company”), and the Investors party thereto (the “Purchase Agreement”). All terms not defined herein shall have the meaning ascribed to them in the Purchase Agreement.
          In connection with the THL Investors entering into the Purchase Agreement and undertaking the obligations therein, and in consideration of the services provided by THL Managers VI, LLC (“THL Managers”), an affiliate of the THL Investors, with respect thereto, the Company agrees to pay THL Managers $15,000,000 (the “Arrangement Fee”) immediately following the execution of the Purchase Agreement. All amounts paid to THL Managers pursuant to this letter agreement shall be paid in immediately available funds to the account set forth on Exhibit A attached hereto.
          In the event the Purchase Agreement is terminated pursuant to Section 5.1(b) of the Purchase Agreement as a result of failure of the closing condition in Section 1.2(c)(i) of the Purchase Agreement to be satisfied or pursuant to Section 5.1(c), then the full Arrangement Fee shall be repaid to the Company, as soon as practicable, but in no event more than 48 hours following such termination. In the event the Purchase Agreement is terminated (1) as a result of or arising out of the willful breach of this Agreement by the Company or (2) pursuant to Section 5.1(d) of the Purchase Agreement or Section 5.1(e) of the Purchase Agreement, then no amount of the Arrangement Fee shall be repaid to the Company. In the event the Purchase Agreement is terminated for any other reason, then two-thirds (2/3) of the Arrangement Fee shall be repaid to the Company, as soon as practicable, but in no event more than 48 hours following such termination. For the avoidance of doubt, the provisions of this letter agreement shall not require any repayment of any amounts paid to THL Managers or any of Affiliates thereof prior to the date hereof or of any expenses of THL Managers or any of its Affiliates reimbursed or reimbursable under the Purchase Agreement or otherwise. All amounts paid to the Company pursuant to this letter agreement shall be paid in immediately available funds to the account set forth on Exhibit B attached hereto.

 


 

          This letter agreement shall be deemed to be made in, and in all respects shall be interpreted, construed and governed by and in accordance with the internal laws of, the State of Delaware. This letter agreement may be executed in one or more counterparts, each of which together be deemed an original, but all of which together shall constitute one and the same instrument.
**Remainder of this page intentionally left blank**

 


 

             
    MONEYGRAM INTERNATIONAL, INC.    
 
           
 
  By:   /s/ Teresa H. Johnson    
 
           
 
  Name:   Teresa H. Johnson    
 
  Title:   Executive Vice President, General Counsel and Secretary    
         
Accepted and agreed as of    
the date first written above:    
 
       
THL MANAGERS VI, LLC    
By:
  Thomas H. Lee Partners, L.P.,    
its managing member    
 
       
By:
  Thomas H. Lee Advisors, LLC,    
its general partner    
 
       
By:
  /s/ Seth Lawry    
 
       
Name: Seth Lawry    
Title: Managing Director    

 

EX-10.3
 

Exhibit 10.3
[MoneyGram Letterhead]
February 11, 2008
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
          Reference is hereby made to that certain Purchase Agreement, dated as of February 7, 2008, by and among MoneyGram International, Inc., a Delaware corporation (the “Company”), and the Investors party thereto (the “Purchase Agreement”). All terms not defined herein shall have the meanings ascribed to them in the Purchase Agreement.
          In connection with the GS Investors entering into the Purchase Agreement and undertaking the obligations therein, and in consideration of the services provided by Goldman, Sachs & Co. (“GS&Co”), an affiliate of the GS Investors, with respect thereto, the Company agrees to pay GS&Co $7,500,000 (the “Arrangement Fee”) immediately following the execution of the Purchase Agreement. All amounts paid to GS&Co pursuant to this letter agreement shall be paid in immediately available funds to the account set forth on Exhibit A attached hereto.
          In the event the Purchase Agreement is terminated pursuant to Section 5.1(b) of the Purchase Agreement as a result of failure of the closing condition in Section 1.2(c)(i) of the Purchase Agreement to be satisfied or pursuant to Section 5.1(c), then the full Arrangement Fee shall be repaid to the Company, as soon as practicable, but in no event more than 48 hours following such termination. In the event the Purchase Agreement is terminated (1) as a result of or arising out of the willful breach of this Agreement by the Company or (2) pursuant to Section 5.1(d) of the Purchase Agreement or Section 5.1(e) of the Purchase Agreement, then no amount of the Arrangement Fee shall be repaid to the Company. In the event the Purchase Agreement is terminated for any other reason, then two-thirds (2/3) of the Arrangement Fee shall be repaid to the Company, as soon as practicable, but in no event more than 48 hours following such termination. For the avoidance of doubt, the provisions of this letter agreement shall not require any repayment of any amounts paid to GS&Co or any of Affiliates thereof prior to the date hereof or of any expenses of GS&Co or any of its Affiliates reimbursed or reimbursable under the Purchase Agreement or otherwise. All amounts paid to the Company pursuant to this letter agreement shall be paid in immediately available funds to the account set forth on Exhibit B attached hereto.
          This letter agreement shall be deemed to be made in, and in all respects shall be interpreted, construed and governed by and in accordance with the internal laws of, the State of Delaware. This letter agreement may be executed in one or more counterparts, each of which

 


 

together be deemed an original, but all of which together shall constitute one and the same instrument.
         
  MONEYGRAM INTERNATIONAL, INC


 
 
  By:   /s/ Teresa H. Johnson    
    Name:   Teresa H. Johnson   
    Title:   Executive Vice President, General Counsel and Secretary   
 
         
Accepted and agreed as of    
the date first written above:    
 
       
GOLDMAN, SACHS & CO.    
 
       
 
       
 
       
By:
  /s/ Ed Pallesen    
 
       
 
  Name: Ed Pallesen    
 
  Title: Managing Director    

 

EX-10.4
 

Exhibit 10.4
 
NOTE PURCHASE AGREEMENT
among
MONEYGRAM PAYMENT SYSTEMS WORLDWIDE, INC.

MONEYGRAM INTERNATIONAL, INC.

And

GSMP V ONSHORE US, LTD.

GSMP V OFFSHORE US, LTD.

GSMP V INSTITUTIONAL US, LTD.
Dated as of February 11, 2008

Relating to:

$500,000,000

13.25% Senior Secured Second Lien Notes Due 2018
 

 


 

TABLE OF CONTENTS
             
        Page  
 
           
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS     2  
 
           
1.1.
  Definitions.     2  
1.2.
  Computation of Time Periods.     9  
1.3.
  Terms Generally.     10  
 
           
SECTION 2. AUTHORIZATION AND ISSUANCE OF NOTES     10  
 
           
2.1.
  Authorization of Issue.     10  
2.2.
  Sale and Purchase of the Notes.     10  
2.3.
  Closing.     11  
2.4.
  Signing Date Certificate.     11  
 
           
SECTION 3. CONDITIONS TO CLOSING     12  
 
           
3.1.
  No Violation; No Legal Constraints; Consents, Authorizations and Filings, Etc.     12  
3.2.
  Indebtedness.     13  
3.3.
  Material Adverse Change.     13  
3.4.
  Regulatory.     13  
3.5.
  Fees and Expenses.     14  
3.6.
  Holdco Audit/10-K/Absence of Restatement.     14  
3.7.
  Representations and Warranties.     15  
3.8.
  Performance; No Default.     15  
3.9.
  Equity Contribution.     16  
3.10.
  Pre-Closing Certificate     16  
3.11.
  Compliance Certificates.     16  
3.12.
  Opinion of Counsel.     17  
3.13.
  Financial Information.     17  
3.14.
  Transaction Documents.     18  
3.15.
  Execution and Authentication of Indenture and Notes.     18  
3.16.
  Security Documents and Collateral.     18  
3.17.
  Bank Clearing Arrangements.     18  
3.18.
  Company Credit Facilities.     18  
3.19.
  Pre-Closing Certificate     19  
 
           
SECTION 4. REPRESENTATIONS AND WARRANTIES     19  
 
           
4.1.
  Disclosure.     19  
4.2.
  Organization and Authority.     19  
4.3.
  Holdco Subsidiaries.     20  
4.4.
  Capitalization.     20  
4.5.
  Authorization; No Default.     21  
4.6.
  SEC Documents.     21  
4.7.
  Taxes.     23  
4.8.
  Ordinary Course.     23  
4.9.
  Commitments and Contracts.     23  

i


 

             
        Page  
4.10.
  Litigation and Other Proceedings.     24  
4.11.
  Insurance.     24  
4.12.
  Compliance with Laws.     24  
4.13.
  Benefit Plans.     25  
4.14.
  Environmental Liability.     26  
4.15.
  Intellectual Property.     27  
4.16.
  Board Approvals.     27  
4.17.
  Brokers and Finders.     27  
4.18.
  Collateral.     28  
4.19.
  [Reserved].     28  
4.20.
  [Reserved].     28  
4.21.
  Disclosure.     28  
4.22.
  [Reserved].     28  
4.23.
  Properties.     28  
4.24.
  Solvency.     29  
4.25.
  No Registration Required.     29  
4.26.
  No Integration of Offerings or General Solicitation.     29  
4.27.
  Eligibility for Resale under Rule 144A.     29  
4.28.
  Margin Regulations.     29  
4.29.
  Investment Company Act.     30  
 
           
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PURCHASERS     30  
 
           
5.1.
  Representation and Warranties.     30  
5.2.
  Notice of Transfers of the Notes.     31  
 
           
SECTION 6. PRE-CLOSING COVENANTS     31  
 
           
6.1.
  Access.     31  
6.2.
  Investment Policy.     32  
6.3.
  Ordinary Course.     32  
 
           
SECTION 7. POST-CLOSING AFFIRMATIVE COVENANTS     32  
 
           
7.1.
  Future Reports to Purchasers.     33  
7.2.
  Patriot Act and Anti-Money Laundering.     34  
7.3.
  U.S. Economic Sanctions.     35  
7.4.
  FCPA and Anti-Bribery Limitations.     35  
7.5.
  Export Control Limitations.     36  
7.6.
  Customs and Trade Remedy Laws.     36  
7.7.
  Anti-Boycott Laws.     37  
7.8.
  Cross-Border Investment Restrictions.     37  
7.9.
  Information Related to Alternative Transactions.     37  
7.10.
  Board Observer Rights.     37  
7.11.
  Changes to Investment Policy.     38  
 
           
SECTION 8. PROVISIONS RELATING TO RESALES OF NOTES     38  
 
           
8.1.
  Private Offerings.     38  
8.2.
  Procedures and Management Cooperation in Private Offerings.     40  

ii


 

             
        Page  
8.3.
  No Integration.     41  
 
           
SECTION 9. EXPENSES AND INDEMNIFICATION     41  
 
           
9.1.
  Expenses.     41  
9.2.
  Indemnification.     41  
9.3.
  Waiver of Punitive Damages.     42  
9.4.
  Survival.     42  
9.5.
  Tax Treatment of Indemnification Payments.     42  
 
           
SECTION 10. MISCELLANEOUS     42  
 
           
10.1.
  Notices.     42  
10.2.
  Benefit of Agreement and Assignments.     43  
10.3.
  No Waiver; Remedies Cumulative.     43  
10.4.
  Amendments, Waivers and Consents.     43  
10.5.
  Counterparts.     44  
10.6.
  Reproduction.     44  
10.7.
  Headings.     44  
10.8.
  Survival of Covenants and Indemnities; Representations.     44  
10.9.
  Governing Law; Submission to Jurisdiction; Venue.     44  
10.10.
  Severability.     45  
10.11.
  Entirety.     45  
10.12.
  Construction.     45  
10.13.
  Incorporation.     46  
10.14.
  Confidentiality.     46  
10.15.
  Termination; Survival.     46  
10.16.
  Maximum Rate.     46  
10.17.
  Patriot Act.     47  
10.18.
  Currency.     47  
10.19.
  Further Assurances.     47  
EXHIBITS:
     
Exhibit A
  Form of Indenture
Exhibit B
  Form of Registration Rights Agreement
Exhibit 2.4
  Form of Signing Date Certificate
Exhibit 3.11(a)
  Form of Secretary’s Certificate
Exhibit 3.11(b)
  Form of Officer’s Certificate
Exhibit 3.11(c)
  Form of Solvency Certificate
Exhibit 4
  Financial information
 
   
SCHEDULES:
   
 
   
Schedule I
  Holdco Disclosure Schedules
 
   
Schedule 2.2
  Information Relating to the Purchasers

iii


 

NOTE PURCHASE AGREEMENT
     NOTE PURCHASE AGREEMENT, dated as of February 11, 2008, among MoneyGram Payment Systems Worldwide, Inc., a Delaware corporation (the “Company”), Moneygram International, Inc., a Delaware Corporation (“Holdco”), GSMP V Onshore US, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“GSMP Onshore”), GSMP V Offshore US, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“GSMP Offshore”) and GSMP V Institutional US, Ltd., an exempted company incorporated in the Cayman Islands with limited liability (“GSMP Institutional” and together with GSMP Onshore and GSMP Offshore, the “Purchasers”).
RECITALS
     WHEREAS, pursuant to that certain Purchase Agreement, dated as of February 11, 2008 (such agreement, together with all of the exhibits and schedules thereto, in each case, as in effect on the date hereof, the “Equity Purchase Agreement”), between Holdco and the parties named as “Investors” therein (the “Equity Investors”), Holdco has agreed, subject to the terms and conditions set forth therein, to issue and sell to the Equity Investors, on the Closing Date, for an aggregate cash purchase price as determined in the Equity Purchase Agreement (the “Equity Contribution”), the number of shares of Series C participating preferred stock of Holdco (the “Series C Preferred Stock”), Series D participating convertible preferred stock of Holdco (the “Series D Preferred Stock”) and common stock of Holdco (the “Common Stock” and, together with the Series C Preferred Stock and the Series D Preferred Stock issued at the closing pursuant to the Equity Purchase Agreement, the “Initial Equity Securities”) set forth in the Equity Purchase Agreement. In accordance with the Equity Purchase Agreement, investment units comprised of shares of Series C Preferred Stock, shares of Series D Preferred Stock and Common Stock are to be exchanged, subject to the terms and conditions set forth therein, for shares of Series B participating convertible preferred stock of Holdco (the “Series B Preferred Stock”) and shares of Series B-1 participating convertible preferred stock of Holdco (“Series B-1 Preferred Stock”). The Equity Investors include investment funds affiliated with Thomas H. Lee Partners L.P. (the “Lead Sponsor”) and investment funds affiliated with GS Capital Partners VI, L.P. (“GSCP” and, together with the Lead Sponsor, the “Sponsors”) and also include the Purchasers.
     WHEREAS, the consummation of the Equity Contribution in accordance with the Equity Purchase Agreement is subject to the consummation of certain concurrent transactions (such transactions, together with the Equity Contribution, the “Transactions”), including:
  (a)   that the Company shall have amended and restated the existing $350 million Amended and Restated Credit Agreement, dated as of June 29, 2005, of Holdco, as amended through the date hereof, in accordance with the terms set forth in Schedule D to the Equity Purchase Agreement, to provide the Company with amended and restated senior credit facilities consisting of $300 million of term loans, of which $100 million has been previously funded and $200 million of which shall be new term loans to be funded on the Closing Date contemplated hereby, and a $250 million revolving credit facility (of which no more than $150 million will be drawn on the Closing Date) (collectively, the “Company Credit Facilities”);
 
  (b)   that Holdco shall have (A) on the Satisfaction Date, accepted bids to sell the securities held in its investment portfolio listed on Schedule B to the Equity Purchase Agreement, (B) incurred a Total Loss of not more than $1,700,000,000, and (C) on or prior to the Closing, received full proceeds from such sales in accordance with the bids accepted on the Satisfaction Date; and

 


 

  (c)   that the Company shall have received the proceeds of the issuance of its 13.25% senior secured second lien notes due 2018 (the “Notes”) issued pursuant to the indenture substantially in the form attached hereto as Exhibit A (as amended, supplemented, restated or otherwise modified from time to time in accordance with its terms, the “Indenture”).
     WHEREAS, the proceeds from the purchase of the Notes will be used by the Company and its Subsidiaries for investments in accordance with the provisions of the Indenture to supplement the Company’s unrestricted assets, to repay existing indebtedness and to pay related transaction costs and expenses.
     NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
  1.1.   Definitions.
     As used herein, defined terms which are defined in the Indenture shall have, except where otherwise expressly set forth herein, the same respective meanings as such defined terms have in the Indenture, and, in addition, the following terms shall have the meanings specified herein unless the context otherwise requires (it being understood that defined terms shall include in the singular number the plural and in the plural the singular):
     “Agreement” is defined in Section 10.4.
     “AML Laws” means any anti-money laundering law or regulation applicable to Holdco or any Holdco Subsidiary.
     “Anti-boycott Laws” means the Export Administration Act and the Internal Revenue Code and any other applicable law regarding boycotts issued by a foreign government and not endorsed by the United States.
     “Bank Secrecy Act” means the Currency and Foreign Transactions Report Act, as amended.
     “Bank Term Sheet” means the term sheet relating to the Company Credit Facilities set forth on Schedule D to the Equity Purchase Agreement.
     “Benefit Plan” has the meaning given to it in Section 4.13(a).
     “Board of Directors” has the meaning given to it in Section 4.5(a).
     “Board Observer” has the meaning given to it in Section 7.10.
     “Board Papers” is defined in Section 7.10.
     “Certificate of Designations” has the definition given to it in the Equity Purchase Agreement.
     “Closing” is defined in Section 2.3(a).
     “Closing Date” is defined in Section 2.3(a).

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     “Closing Payment” means on the Closing Date, an amount equal to $15,000,000 (i.e., representing 3.00% of the $500,000,000 of Notes committed to be purchased by the Purchasers pursuant to the Agreement, whether or not the Purchasers purchase all such Notes).
     “Code” means the Internal Revenue Code of 1986, as amended from time to time. Section references to the Code are to the Code as in effect at the date of this Agreement, and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.
     “Collateral” means the collateral described in the Security Documents.
     “Collateral Agent” means the Trustee in its capacity as Collateral Agent under the Indenture and under the Security Documents and any successor thereto in such capacity.
     “Common Stock” is defined in the recitals.
     “Company Credit Facilities” is defined in the recitals.
     “Contract” has the meaning given to it in Section 4.5(b).
     “Credit Documents” means the Company Credit Facilities and all agreements, guarantees, collateral documents, certificates, instruments, and other documents made or delivered in connection therewith.
     “Default” has the meaning given to it in the Indenture.
     “DTC” means The Depository Trust Company.
     “DTC Agreement” means a letter of representations between the Company and DTC.
     “Environmental Claims” means any administrative or judicial actions, suits, orders, claims, proceedings or written notices of noncompliance by or from any person alleging liability arising out of the Release of Hazardous Materials or the failure to comply with Environmental Law.
     “Environmental Law” means any Law relating to pollution, the environment or natural resources.
     “Equity Contribution” is defined in the recitals.
     “Equity Documents” means the Equity Purchase Agreement and all agreements, certificates, instruments, and other documents made or delivered in connection therewith.
     “Equity Interest” is defined in the Indenture.
     “Equity Investors” is defined in the recitals.
     “Equity Purchase Agreement” is defined in the recitals.
     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated thereunder. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefore.

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     “ERISA Event” means (a) an event described in Section 4043 of ERISA and the regulations thereunder with respect to any Benefit Plan, other than any event as to which the thirty day notice period has been waived; or (b) the failure of any Benefit Plan to satisfy the minimum funding standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA.
     “Event of Default” means “Event of Default”, as such term is defined in the Indenture.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and regulations thereunder.
     “Export Administration Act” means The Export Administration Act of 1979, as amended, and the executive orders, rules and regulations pursuant to the President’s invocation of emergency powers under the International Emergency Economic Powers Act.
     “Fee Letter” means that certain Contingent Fee Letter dated as of the date hereof by and between the Sponsors, the Purchasers, Holdco and the Company.
     “Financing Documents” means collectively, this Agreement, the Indenture, the Notes, the Registration Rights Agreements, the Fee Letter and the Management Rights Agreement, and all certificates, instruments, and other documents made or delivered in connection herewith and therewith.
     “Foreign Plan” means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by the Company or any of its subsidiaries with respect to employees employed outside the United States.
     “GAAP” is defined in Section 4.6.
     “German Antitrust Act” means the German Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschrankungen).
     “Governmental Authority” means any nation, sovereign or government, any state, province, territory or other political subdivision thereof, and any entity or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including a central bank or stock exchange.
     “Governmental Entity” means any United States or foreign governmental or regulatory agency, commission, court, body, entity or authority.
     “GSCP” is defined in the recitals.
     “Guarantors” has the definition given to it in the Indenture.
     “Hazardous Materials” means (x) petroleum and petroleum by-products, asbestos that is friable, radioactive materials, medical or infectious wastes or polychlorinated biphenyls and (y) any other material, substance or waste that is prohibited, limited or regulated by Environmental Law because of its hazardous, toxic or deleterious properties or characteristics.
     “Holdco Disclosure Schedule” means a schedule attached hereto as Schedule I setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an

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express disclosure requirement contained in a provision hereof or as an exception to one or more of Holdco’s or the Company’s representations or warranties contained in Section 4.
     “Holdco Intellectual Property” means all patents and patent applications currently owned by Holdco and the Holdco Subsidiaries that are material to the business of Holdco and the Holdco Subsidiaries, taken as a whole, as currently conducted.
     “Holdco Subsidiary” is defined in Section 4.3.
     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
     “Infringe” means, in relation to Intellectual Property, infringing upon, misappropriating or violating the rights of any third party.
     “Indemnitee” has the meaning given to it in Section 9.2.
     “Indenture” has meaning given to it in the recitals.
     “Initial Equity Securities” is defined in the recitals.
     “Intellectual Property” means the following and all rights pertaining thereto: (A) patents, patent applications, provisional patent applications and statutory invention registrations (including all utility models and other patent rights under the Laws of all countries), (B) trademarks, service marks, trade dress, logos, trade names, service names, corporate names, domain names and other brand identifiers, registrations and applications for registration thereof, (C) copyrights, proprietary designs, computer software, mask works, databases, and registrations and applications for registration thereof, (D) confidential and proprietary information, trade secrets, know-how and show-how, and (E) all similar rights, however denominated, throughout the world.
     “Investment Company Act” means the Investment Company Act of 1940 as from time to time in effect and any successor act to all or a portion thereof.
     “Investment Policy” is defined in Section 6.2.
     “Investors” has the definition given to it in the Equity Purchase Agreement.
     “IRS” means the Internal Revenue Service of the United States of America.
     “Law” means any federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, code, order, injunction, arbitration award, writ, decree, agency requirement, license or permit of any Governmental Entity.
     “Lead Sponsor” is defined in the recitals.
     “Management Rights Agreement” means the management rights agreement dated as of the Closing Date among Holdco, the Company and GS Mezzanine Partners V Institutional, L.P. (the indirect owner of GSMP Institutional).
     “Material Adverse Effect” means: (1) for any purpose under this Agreement other than Section 7, any circumstance, event, change, development or effect that, (a) is material and adverse to the financial position, results of operations, business, assets or liabilities of Holdco and the Holdco Subsidiaries, taken

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as a whole, (b) would materially impair the ability of Holdco and the Holdco Subsidiaries, taken as a whole, to perform their obligations under this Agreement or any of the other Financing Documents, (c) would materially impair the rights and remedies of the Purchasers under this Agreement or any of the other Financing Documents, taken as a whole, or (d) would materially impair the ability of Holdco to perform its obligations under the Equity Purchase Agreement or otherwise materially threaten or materially impede the consummation of the Purchase (as defined in the Equity Purchase Agreement) and the other transactions contemplated by the Equity Purchase Agreement; provided, however, that the impact of the following matters shall be disregarded: (i) changes in general economic, financial market, credit market, regulatory or political conditions (whether resulting from acts of war or terrorism, an escalation of hostilities or otherwise) generally affecting the U.S. economy, foreign economies or the industries in which Holdco or its Subsidiaries operate, (ii) changes in generally accepted accounting principles, (iii) changes in laws of general applicability or interpretations thereof by any Governmental Authority, (iv) any change in Holdco’s stock price or trading volume, in and of itself, or any failure, in and of itself, by Holdco to meet revenue or earnings guidance published or otherwise provided to the Purchaser (provided that any fact, condition, circumstance, event, change, development or effect underlying any such failure or change, other than any of the foregoing that is otherwise excluded pursuant to clauses (i) through (viii) hereof, may be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur), (v) losses resulting from any change in the valuations of Holdco’s portfolio of securities or sales of such securities and any effect resulting from such changes or sales, (vi) actions or omissions of Holdco or the Sponsors taken as required by the Equity Purchase Agreement or with the prior written consent of the Purchaser, (vii) public announcement, in and of itself, by a third party not affiliated with Holdco of any proposal to acquire the outstanding securities or all or substantially all of the assets of Holdco and (viii) the public announcement of the Equity Purchase Agreement and the transactions contemplated thereby (provided that this clause (viii) shall not apply with respect to Sections 1.2(c)(v), 2.2(d), 2.2(h) and 2.2(k) of the Equity Purchase Agreement); provided further, however, that Material Adverse Effect shall be deemed not to include the impact of the foregoing clauses (i), (ii) and (iii), in each case only insofar and to the extent that such circumstances, events, changes, developments or effects described in such clauses do not have a disproportionate effect on Holdco and the Holdco Subsidiaries (exclusive of its payments systems business) relative to other participants in the industry; and (2) for any purpose under Section 7 of this Agreement, any circumstance, event, change, development or effect that, (a) is material and adverse to the financial position, results of operations, business, assets or liabilities of Holdco and the Holdco Subsidiaries, taken as a whole, (b) would materially impair the ability of Holdco and the Holdco Subsidiaries, taken as a whole, to perform their obligations under this Agreement or any of the other Financing Documents, or (c) would materially impair the rights and remedies of the Purchasers under this Agreement or any of the other Financing Documents, taken as a whole.
     “MSPI” means MoneyGram Payment Systems Inc., a wholly owned subsidiary of the Company.
     “Multiemployer Plan” is defined in Section 4.13(e).
     “Notes” is defined in the recitals.
     “OFAC” means the Office of Foreign Assets Control of the United States Treasury Department.
     “Officer’s Certificate” is defined in Section 3.11(b).
     “Outside Receipt Date” is defined in Section 3.6 (c).
     “Patriot Act” is defined in Section 10.17.

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     “Pre-Closing Certificate” is defined in Section 3.18
     “Preferred Stock” means the Series B Preferred Stock, the Series B-1 Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock.
     “Previously Disclosed” means information: (i) set forth in the Holdco Disclosure Schedule corresponding to the provision of this Agreement to which such information relates (provided that any disclosure with respect to a particular paragraph or section of this Agreement or the Holdco Disclosure Schedule shall be deemed to be disclosed for other paragraphs and sections of this Agreement or the Holdco Disclosure Schedule to the extent that the relevance of such disclosure would be reasonably apparent to a reader of such disclosure); or (ii) otherwise disclosed on a SEC Document, prior to the date of this Agreement (excluding any risk factor disclosures contained in such documents and any disclosure of risks included in any “forward-looking statements” disclaimer or other statements that are similarly non-specific, predictive or forward-looking in nature) (“Filed SEC Documents”).
     “Private Offering” means any offer and/or sale by one or more of the Purchasers of some or all of the Notes without registration under the Securities Act but in compliance with Rule 144A, Rule 144, Regulation S, Section 4(1) or any other applicable rule or provision under the Securities Act.
     “Purchase Price” is defined in Section 2.2(b).
     “Purchasers” is defined in the Preamble.
     “Qualified Institutional Buyer” means any Person that is a “qualified institutional buyer” within the meaning of Rule 144A.
     “Registration Rights Agreement” means the Registration Rights Agreement among the Company, Holdco and each Purchaser, to be dated as of the Closing Date, substantially in the form attached hereto as Exhibit B, as amended, supplemented, restated or otherwise modified from time to time.
     “Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.
     “Regulation T” means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.
     “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.
     “Regulation X” means Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor regulation to all or a portion thereof.
     “Release” means any release, spill, emission, leaking, pumping, emitting, discharging, injecting, escaping, leaching, dumping, disposing or migrating into or through the environment in derogation of Environmental Law.
     “Responsible Officer” means the chairman, the chief executive officer, the president, the chief financial officer, the chief operating officer, the chief accounting officer or the treasurer.
     “Rule 144” has the meaning given to it in the Indenture.

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     “Rule 144A” has the meaning given to it in the Indenture.
     “Rule 502” means Rule 502 of Regulation D under the Securities Act as from time to time in effect and any successor regulation to all or a portion thereof.
     “Satisfaction Date” has the meaning given to it in the Equity Purchase Agreement.
     “SEC” means the United States Securities and Exchange Commission.
     “SEC Documents” is defined in Section 4.6(a).
     “Securities” has the meaning given to it in the Equity Purchase Agreement.
     “Security Documents” means the security agreements, pledge agreements, collateral assignments and related agreements, as amended, supplemented, restated, renewed, refunded, replaced, restructured, repaid, refinanced or otherwise modified from time to time, creating the security intents in the Collateral as contemplated by the Indenture, which will be identical to the agreement for the First Priority Liens Obligations, but on a second priority lien basis and shall be with respect to the Collateral as described in the Bank Term Sheet.
     “Series B Preferred Stock” is defined in the recitals.
     “Series B-1 Preferred Stock” is defined in the recitals.
     “Series C Certificate” has the meaning given to it in the Equity Purchase Agreement.
     “Series C Preferred Stock” is defined in the recitals.
     “Series D Preferred Stock” is defined in the recitals.
     “Shareholder Approval” means the stockholder vote that will be necessary under the Section 312.00 “Shareholder Approval Policy” of the New York Stock Exchange Listed Company Manual so that the Series C Preferred Stock, the Series D Preferred Stock and the Common Stock issued to the Investors at the Closing Date shall become exchangeable for Series B Preferred Stock or Series B-1 Preferred Stock, as applicable, pursuant to the terms of the Equity Purchase Agreement and the terms of the Series C Certificate.
     “Solvency Certificate” is defined in Section 3.11(c).
     “Solvent” means, with respect to any Person, that (a) the sum of such Person’s debt (including contingent liabilities) does not exceed the present fair saleable value of such Person’s present assets; (b) such Person’s capital is not unreasonably small in relation to its business as contemplated; and (c) such Person has not incurred and does not intend to incur, or believe that it will incur, debts including current obligations beyond its ability to pay such debts as they become due (whether at maturity or otherwise). For purposes of this definition, the amount of any contingent liability at any time shall be computed by Holdco and the Company as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that such Person reasonably expects to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under GAAP).
     “Sponsors” is defined in the recitals.

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     “State” means any of the jurisdictions listed on Section 3.3(b) of the Company Disclosure Schedule (as defined in the Equity Purchase Agreement).
     “Subsequent Purchaser” means a purchaser of any Note who acquired such Note in a Private Offering in accordance with Section 8.1.
     “Tax” or “Taxes” means any and all domestic or foreign, federal, state, local or other taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation or net worth, and taxes in the nature of excise, withholding, ad valorem or value added, and including any liability in respect of any items described above as a transferee or successor, pursuant to Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or foreign Law), or as an indemnitor, guarantor, surety or in a similar capacity under any contract, arrangement, agreement, understanding or commitment (whether oral or written)
     “Tax Return” means any return, report or similar filing, (including attached schedules) filed or required to be filed with respect to Taxes (and any amendments thereto), including any information return, claim for refund or declaration of estimated Taxes.
     “Termination Date” is defined in Section 2.2(e).
     “Total First Lien Indebtedness” means, as of any date of determination, funded Total Indebtedness that in each case is secured by First Priority Liens on property or assets of Holdco and its Subsidiaries.
     “Total Loss” has the meaning given to it in the Equity Purchase Agreement.
     “Transaction Documents” means the Credit Documents, the Equity Documents and the Financing Documents.
     “Transactions” is defined in the recitals.
     “Trustee” means Wells Fargo Bank National Association.
     “Unrestricted Assets” has the meaning given to it in Schedule E to the Equity Purchase Agreement.
     “U.S. Economic Sanction” means any economic sanction imposed by any rule, regulation or statute of the United States, including without limitation, those administered by OFAC and any other applicable laws imposing economic sanctions.
     “U.S. Foreign Corrupt Practices Act” is defined in Section 4.12(b)
     1.2. Computation of Time Periods.
     For purposes of computation of periods of time hereunder, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding.”

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     1.3. Terms Generally.
     Unless the context otherwise requires:
     (1) a term has the meaning assigned to it;
     (2) “or” is not exclusive;
     (3) an accounting term not otherwise defined has the meaning assigned to it, and shall be construed, in accordance with GAAP;
     (3) words in the singular include the plural, and in the plural include the singular;
     (4) “will” shall be interpreted to express a command;
     (5) the word “including” means “including without limitation”;
     (6) any reference to any Person shall be construed to include such Person’s successors and permitted assigns;
     (7) 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);
     (8) for purposes of computation of periods of time hereunder, the word “from” means “from and including” and the words “to” and “until” each mean “to but excluding”; and
     (9) references to sections of or rules under the Securities Act and the Exchange Act will be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.
SECTION 2.
AUTHORIZATION AND ISSUANCE OF NOTES
     2.1. Authorization of Issue.
     On or prior to the Closing, the Company will authorize the issuance and sale of the Notes. The Notes shall be substantially in the form specified in the Indenture.
     2.2. Sale and Purchase of the Notes.
     (a) Subject to the terms and conditions of this Agreement, on or prior to the Termination Date, the Company will issue and sell to each of the Purchasers and each of the Purchasers will purchase from the Company, at the Closing provided for in Section 2.3, the Notes in the principal amounts and for the portion of the Purchase Price as may be allocated between the Purchasers in their sole discretion. Notwithstanding the foregoing, in the event there is a Proceeds Excess (as defined in the Equity Purchase Agreement), the principal amount of the Notes may, pursuant to the Equity Purchase Agreement, be reduced by an amount equal to the difference between the Proceeds Excess and the amount by which the aggregate purchase price of the Equity Contribution is reduced pursuant to the Equity Purchase Agreement.

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     (b) The aggregate cash purchase price (the “Purchase Price”) for the Notes shall be equal to the principal face amount of the Notes being so purchased, net of the aggregate amount of the Closing Payment.
     (c) The parties agree to report the sale and purchase of the Notes for all federal, state, local and foreign Tax purposes in a manner consistent with the foregoing and agree to take no position inconsistent with the foregoing, except as required by applicable law.
     (d) The obligations hereunder of the Purchasers to purchase and pay for the Notes are several and not joint and no Purchaser will have any liability to any Person for the performance or non-performance by any other Purchaser.
     (e) The obligation of the Purchasers to purchase the Notes and the obligation of the Company to sell and issue the Notes in accordance with the terms of this Agreement shall terminate on the date of the termination of the Equity Purchase Agreement in accordance with its terms (the “Termination Date”).
     2.3. Closing.
     (a) The sale and purchase of the Notes shall occur at the offices of Wachtell, Lipton, Rosen & Katz located at 51 West 52nd Street, New York, New York, commencing at 10 a.m. local time, at a closing (the “Closing”) on the third Business Day following the date on which the conditions set forth in Section 3 (other than those conditions that are expressly required to be satisfied at the Closing, but subject to fulfillment of those conditions) are satisfied or waived by the Purchasers, but in any event the Closing shall be no later than 10:00 a.m. CST on March 13, 2008, or at such other time as mutually agreed by the Company and the Purchasers. The date and time of the Closing is referred to herein as the “Closing Date”.
     (b) At the Closing, the Company will deliver to each Purchaser purchasing Notes, in such denominations as such Purchaser may request (subject to the terms of the Indenture), representing in the aggregate the full principal amount of Notes to be purchased by such Purchaser on the Closing Date, each such Note dated the Closing Date and registered in such Purchaser’s name, against payment by such Purchaser to the Company of the amount of the applicable portion of the Purchase Price (as provided in Section 2.2) net of the applicable Closing Payment, by wire transfer of immediately available funds to such bank account or accounts as the Company may request in writing at least one Business Day prior to the Closing Date.
     (c) If at the Closing the Company shall fail to deliver to the Purchasers the Notes as provided in Section 2.3(b), or any of the conditions specified in Section 3 shall not have been fulfilled to the Purchasers’ reasonable satisfaction or waived, then each Purchaser shall, at its election, be relieved of all further obligations under this Agreement.
     2.4. Signing Date Certificate.
     On the date of this Agreement, Holdco shall deliver to the Purchasers a certificate, substantially in the form of Exhibit 2.4 to this Agreement from Holdco, signed by the Chief Executive Officer and the Chief Financial Officer of Holdco, certifying: (i) that each of the representations and warranties contained in Sections 4.1 through 4.17, 4.23 and 4.29 of this Agreement shall be true and correct in all material respects (unless qualified by “material” or “Material Adverse Effect” or similar references to materiality, in which case such representations and warranties must be true and correct in all respects) on or as of the execution date of this Agreement as if made on and as of the execution date of this Agreement (unless expressly stated to relate to a specific earlier date, in which case each of such representations and

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warranties shall be true and correct in all material respects (unless qualified by “material” or “Material Adverse Effect” or similar references to materiality, in which case the representation and warranties must be true and correct in all respects) as of such earlier date), (ii) to the knowledge of the applicable officer: (x) that none of the written factual information and written data (taken as a whole) furnished by or on behalf of Holdco or any of the Holdco Subsidiaries or any of their respective authorized representatives to the Purchasers on or before the date hereof for purposes of or in connection with this Agreement contained, when furnished, any untrue statement of any material fact or omitted to state any material fact necessary to make such information and data (taken as a whole) not materially misleading at such time in light of the circumstances under which such information or data was furnished, it being understood and agreed that for purposes of such certificate, such factual information and data shall not include projections (including financial estimates, forecasts and/or any other forward-looking information) and information of a general economic or general industry nature, and (y) that the projections (including financial estimates, forecasts and other forward-looking information) contained in the information and data referred to in clause (ii)(x) above were based on good faith estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Purchasers that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results, and (iii) that the financial information, data and performance information listed on Exhibit 4 hereto furnished by or on behalf of Holdco or the Company to the Purchasers on or before the date hereof for purposes of or in connection with this Agreement was true, complete and accurate as and when furnished to the Purchasers.
     2.5 Fees.
     On the date of this Agreement, Holdco shall pay the fees set forth, and otherwise satisfy the other terms and conditions set forth in, the Fee Letter.
SECTION 3.
CONDITIONS TO CLOSING
     Subject to the final sentence of Section 3.18, each Purchaser’s obligation to purchase and pay for the Notes to be purchased by it at the Closing is subject to the reasonable satisfaction or waiver by it prior to or at the Satisfaction Date (or the Closing Date if such condition expressly requires that it be satisfied prior to or at the Closing Date) of each of the conditions specified below in this Section 3:
     3.1. No Violation; No Legal Constraints; Consents, Authorizations and Filings, Etc.
     (a) the expiration or termination of: (i) any applicable waiting period under the HSR Act and (ii) any applicable waiting period under the German Antitrust Act in each case, required to consummate the purchase from Holdco at the Closing, of the Securities as contemplated by the Equity Purchase Agreement and for the Investors to own, and fully vote and convert into Common Stock, all of the Securities;
     (b) no provision of any applicable Law or regulation and no judgment, injunction, order or decree shall prohibit the Closing or the consummation of any of the transactions contemplated by the Transaction Documents or shall prohibit or restrict any Investor or its Affiliates from owning, or fully voting and converting, the Securities to be acquired by such Investor pursuant to the terms of such respective Securities, and no lawsuit shall have been commenced by a Governmental Entity seeking to effect any of the foregoing;
     (c) On the Closing Date, each Purchaser’s purchase of the Notes shall be permitted by all applicable laws of each jurisdiction to which it is subject; and

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     (d) On the Closing Date, the Purchasers shall have received a certificate signed for and on behalf of Holdco by a senior executive officer of Holdco confirming that prior to or concurrently with the Closing, Holdco shall have (A) on the Satisfaction Date, accepted bids to sell the securities held in its investment portfolio listed on Schedule B to the Equity Purchase Agreement that if consummated would result in Holdco incurring a Total Loss of not more than $1,700,000,000, (B) incurred a Total Loss of not more than $1,700,000,000, and (C) on or prior to the Closing, received or receive, as the case may be, full proceeds from such sales in accordance with the bids accepted on the Satisfaction Date.
     3.2. Indebtedness.
     On the Closing Date, the Company and Holdco shall have (i) (A) amended Holdco’s existing Amended and Restated Credit Agreement, dated as of June 29, 2005, in accordance with the terms set forth on Schedule D to the Equity Purchase Agreement, such other material alterations or additional material terms as are acceptable to both the Company and the Purchasers (each acting in their sole discretion), and such other non-material terms and conditions as are acceptable to the Company (acting reasonably); provided, further that the parties acknowledge that each of the terms set forth on Schedule D to the Equity Purchase Agreement are material, (B) received an additional $200 million of term loans (less any original issue discount otherwise permitted under the Equity Purchase Agreement) under its existing Amended and Restated Credit Agreement following such amendment described in clause (A) above; (C) never borrowed any funds under, and shall have terminated, its existing 364-Day Credit Agreement, dated as of November 15, 2007, as amended; (ii) the Purchasers shall have received final drafts of the Company Credit Facilities, five (5) Business Days prior to the Closing Date; and (iii) no Indebtedness (as determined on a consolidated basis in accordance with GAAP) shall remain outstanding immediately after giving effect to the Transaction other than: (x) the loans under the Company Credit Facilities and (y) the Notes and (z) indebtedness incurred in the ordinary course of business not to exceed, individually or in the aggregate, $5 million. After giving effect to the transactions contemplated hereby, there shall not exist (pro forma for such transactions and the financing thereof) any Default or Event of Default under the Indenture or the Notes.
     3.3. Material Adverse Change.
     Except as Previously Disclosed, since September 30, 2007, no change or event shall have occurred and no circumstances shall exist which have had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. With respect to matters which have been Previously Disclosed, in determining whether this condition is satisfied, any circumstance, event or condition occurring after the date hereof shall be taken into account, including any deterioration, worsening or adverse consequence of such Previously Disclosed matters occurring after the date hereof.
     3.4. Regulatory.
     None of the Company or MPSI shall have received written or oral notice from any State to the effect that such State has determined, that the Company or MPSI can no longer conduct their money transfer or payment systems businesses in such State or has revoked, or intends to revoke, the Company’s or MPSI’s license to conduct such businesses in such State, or imposed or intends to impose, one or more conditions on the Company’s or MPSI’s license to conduct businesses in such State (which conditions are materially adverse to the Company or MPSI and are not generally applicable to other persons conducting money transfer or payments systems businesses in such State).

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     3.5. Fees and Expenses.
     (a) At the Closing each Purchaser shall have received from the Company, the Closing Payments required to be paid under Section 2.3(b), by netting such amounts from the applicable portion of the principal amount of the Notes being purchased by such Purchaser, as provided in Section 2.3(b).
     (b) At the Closing, all the fees and expenses payable by Holdco and the Company to the Purchasers pursuant to the Transaction Documents, including without limitation, the fees and expenses of each Purchaser and counsel for the Purchasers for which invoices have been presented (including the fees of Fried, Frank, Harris, Shriver & Jacobson LLP, counsel to the Purchasers), shall have been paid in full.
     3.6. Holdco Audit/10-K/Absence of Restatement.
     (a)(i) On or prior to the Satisfaction Date, Holdco (x) shall have received from Deloitte & Touche LLP an unqualified opinion regarding the consolidated financial statements of Holdco and its subsidiaries as of and for the year ended December 31, 2007, prepared in accordance with GAAP (which opinion shall not contain any going concern modification or qualification or other explanatory paragraph) (such an opinion referred to herein as a “Satisfactory Audit Opinion”) and (y) shall have filed its Annual Report on Form 10-K in compliance with all applicable rules promulgated under the Exchange Act or (ii) if the conditions set forth in clause (a)(i) of this sentence have not been satisfied on or prior to the Satisfaction Date, then:
     (A) the Purchasers shall have received, (v) at least two (2) business days prior to the Satisfaction Date, a draft of Holdco’s Annual Report on Form 10-K delivered by Holdco in substantially complete form, and (w) at least two (2) business days prior to the Satisfaction Date, a draft opinion from Deloitte & Touche LLP to Holdco regarding the consolidated financial statements of Holdco and its subsidiaries as of and for the year ended December 31, 2007, prepared in accordance with GAAP (which draft opinion shall be unqualified, except that it may contain a going concern qualification referring solely to Holdco’s need to raise additional capital to address the reduced valuation of Holdco’s investment portfolio and shall not contain any other going concern modification or similar qualification or other explanatory paragraph) (such a draft opinion referred to herein as a “Draft Audit Opinion”), (x) verbal confirmation (on both the date the draft opinion referred to in clause (w) is delivered and on the Satisfaction Date) from Deloitte & Touche LLP to the effect that the Draft Audit Opinion is in a final form that could be delivered to Holdco as of the Satisfaction Date, and if the Draft Audit Opinion contains a Going Concern qualification, verbal confirmation from Deloitte & Touche LLP that the sale of portfolio securities and the receipt of the funds from the transactions contemplated by the Transaction Documents will result in a Satisfactory Audit Opinion, with an assumption that the amount of the Total Loss does not exceed $1,700,000,000 (provided, however, that on the Satisfaction Date such assumption shall take into account any actual securities sold and the bids received on the securities to be sold), (y) on both the date the draft opinion referred to in clause (w) is delivered and on the Satisfaction Date, a written description delivered by Deloitte & Touche LLP to Holdco as of these dates of all remaining audit procedures that need to be completed for Deloitte & Touche LLP to issue a Satisfactory Audit Opinion, which procedures relate solely to confirming the receipt of funds from the sale of portfolio securities and receipt of the funds from the transactions contemplated by the Transaction Documents; and (z) at least two (2) business days prior to the Satisfaction Date, a written description from Holdco, based on discussions with Deloitte & Touche LLP, of all steps Holdco and Deloitte & Touche LLP will take in order for Holdco to obtain from Deloitte & Touche LLP a Satisfactory Audit Opinion on or prior to the Outside Receipt Date; and

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     (B) each of the Purchasers shall have determined (and shall have notified Holdco not later than the Satisfaction Date that it has determined) in its sole judgment and discretion that Holdco will obtain from Deloitte & Touche LLP, a Satisfactory Audit Opinion on or prior to March 14, 2008 (“Outside Receipt Date”) and will file its Annual Report on Form 10-K in compliance with all applicable rules promulgated under Exchange Act on or prior to the Outside Receipt Date; it being understood that in making the determination, the Purchasers shall be entitled to consider the foregoing information delivered under clause (A) above, as well as any other factors as they deem relevant, including without limitation any and all information obtained through Holdco’s full compliance with Section 3.2 of the Equity Purchase Agreement and Section 6.1 of this Agreement;
     (b) each of the Purchasers shall have had a full and complete opportunity to review Holdco’s books and records, internal controls and procedures, and to interview current and former Holdco personnel as determined to be necessary by each of the Purchasers, and will have determined (and shall have notified Holdco not later than the Satisfaction Date that this condition has been satisfied) that Holdco’s books and records, internal controls and procedures, as well as Holdco’s prior disclosures, are acceptable to each Purchaser in its sole judgment and discretion; and it is understood and agreed that such determination by the Purchasers shall be based on, among other things, but not limited to, the subjective view of each of the Purchasers of Holdco’s potential exposure, if any, to claims and investigations related in any to Holdco’s books and records, internal controls and procedures, and prior disclosures;
     (c) neither Deloitte & Touche LLP nor any other accounting firm shall have issued to Holdco any opinion regarding the consolidated financial statements of Holdco and its subsidiaries as of and for the year ended December 31, 2007 which is not a Satisfactory Audit Opinion;
     (d) there shall not have been a restatement (nor shall any restatement be under consideration by Holdco, its external auditors or, to the knowledge of Holdco, the SEC) of any prior period financial statements of Holdco; and
     (e) Holdco shall have resolved to the satisfaction of the SEC (including having taken any and all corrective action requested by the Staff of the SEC, if any) all comments received by Holdco from the SEC on the SEC Documents.
     3.7. Representations and Warranties.
     Each of the representations and warranties contained herein shall be true and correct in all material respects (unless qualified by “material” or “Material Adverse Effect” or similar references to materiality, in which case the representation and warranties must be true and correct in all respects) on or as of the Satisfaction Date as if made on and as of the Satisfaction Date (unless expressly stated to relate to a specific earlier date, in which case each of such representations and warranties shall be true and correct in all material respects (unless qualified by “material” or “Material Adverse Effect” or similar references to materiality, in which case the representation and warranties must be true and correct in all respects) as of such earlier date), in each case after giving pro forma effect to the consummation on the Closing Date of the Transactions, the issuance of the Notes to be issued on the date hereof and the application of the proceeds thereof.
     3.8. Performance; No Default.
     The Company and Holdco shall have performed and complied in all material respects with all agreements and covenants contained herein and therein required to be performed or complied with by them prior to or at the Closing (or such compliance shall have been waived on terms and conditions

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reasonably satisfactory to the Purchasers) and, as of the Satisfaction Date, after giving effect to the Transactions, the issuance of the Notes and the application of the proceeds thereof, no Default shall have occurred and be continuing.
     3.9. Equity Contribution.
     At the Closing, the Equity Contribution shall have been made to Holdco in accordance with the Equity Purchase Agreement, and Holdco shall have received the Equity Contribution. All conditions precedent set forth in the Equity Documents shall have been satisfied or waived (with the prior consent of the Purchasers if the Purchasers reasonably determine such waiver is adverse to the Purchasers).
     3.10. Pre-Closing Certificate
     (a) The Pre-Closing Certificate shall have been delivered by the Company and acknowledged by the Purchasers pursuant to Section 3.18 on the Satisfaction Date.
     (b) The Purchasers shall have received a certificate signed on behalf of the Company by a senior executive officer confirming that the Pre-Closing Certificate was true and accurate when delivered and that each of the conditions set forth in Sections 3.1(c), 3.1(d), 3.2, 3.5, 3.9, 3.11(c), 3.12, and 3.15 have been satisfied, or as applicable, will be satisfied simultaneously with, and are satisfied as of the Closing Date.
     3.11. Compliance Certificates.
     (a) Secretary’s Certificate.   The Company and each Guarantor shall have delivered to the Purchasers a Secretary’s Certificate, dated as of the Satisfaction Date (the “Secretary’s Certificate”), in the form of Exhibit 3.11(a) hereto, certifying, among other things, as to (i) the Company’s and the Guarantors’ certificate or articles of incorporation or deed of incorporation (or, if an unlimited liability company, limited liability company or limited partnership, certificate of formation) and bylaws or articles of association (or, if an unlimited liability company or limited liability company, unlimited or limited liability company agreement, or, if a limited partnership, limited partnership agreement), (ii) the incumbency and signatures of certain officers of the Company and the Guarantors and (iii) the corporate proceedings of the Company and the Guarantors (including a Board consent in a form reasonably agreed to by the Purchasers) relating to the authorization, execution and delivery of the Notes, this Agreement and the other Financing Documents to which the Company or any Guarantor is a party.
     (b) Officer’s Certificate.   The Company shall have delivered to the Purchasers an Officer’s Certificate, each dated as of the Satisfaction Date (the “Officer’s Certificate”), in the form of Exhibit 3.11(b) hereto, certifying, on and as of the Satisfaction Date (after giving “pro forma” effect to the consummation on the Closing Date of the Transactions, the issuance of the Notes to be issued on the Closing Date and the application of the proceeds thereof) as to (i) the representations and warranties of the Company, (ii) the performance and compliance in all material respects with all agreements and covenants contained herein, and (iii) no Default or Event of Default shall have occurred and be continuing under the Indenture or the Notes.
     (c) Solvency Certificate and Solvency Opinion.   On the Closing Date, the Company shall have delivered to the Purchasers a certificate from the Chief Financial Officer of the Company, dated as of the Satisfaction Date (the “Solvency Certificate”), in the form of Exhibit 3.11(c), and (if and to the extent delivered under the Company Credit Facilities) letters from a nationally recognized appraisal firm or valuation consultant satisfactory to the Purchasers, in each case certifying or attesting, as applicable, that the Company on a consolidated basis with its Subsidiaries immediately after giving effect to the

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consummation of the Transactions, the issuance and sale of the Notes and after giving effect to the application of the proceeds of Notes, will be Solvent.
     3.12. Opinion of Counsel.
     On the Closing Date, the Purchasers shall have received an opinion from Kirkland & Ellis LLP, special New York counsel for the Company, or another counsel for the Company acceptable to the Purchasers, in form and substance reasonably satisfactory to the Purchasers.
     3.13. Financial Information.
     (a) The Purchasers shall have received: (a) as soon as monthly and quarterly financial statements are available to Holdco and its subsidiaries, unaudited consolidated financial statements for any interim period or periods of Holdco and its Subsidiaries ended after the date of the most recent audited financial statements; and (b) customary pro forma consolidated financial statements. The most recent financial statements will show on a pro forma basis on the Closing Date: (i) funded Total Indebtedness of no more than $950 million plus indebtedness incurred in the ordinary course of business not to exceed, individually or in the aggregate, $5 million; (ii) Total First Lien Indebtedness of no more than $450 million; (iii) the Leverage Ratio (but excluding for purposes of the calculation thereof from the definition of Adjusted EBITDA (as defined in the Indenture) any gains or losses associated with the sale of securities held in Holdco or any of its Subsidiaries investment portfolio listed on Schedule B to the Equity Purchase Agreement for Holdco and its Subsidiaries, as at the Closing Date, after giving pro forma effect to the Transactions, for the last twelve-month period then ended for which internal financial statements are then available (but in any event the latest internal financial statement for the most recently ended month immediately prior to the Closing Date shall be available within 10 days after the end of such month) is not greater than: (A) if such last 12 month period ends in January 2008, 3.8:1.00 or (B) if such last 12 month period ends in February 2008, 3.85:1.00 and (iv)(A) the transaction volumes generated from the “Money Transfer” business segment shall be no less than 3,170,700 for the month ended January, 2008 and 3,238,200 for the month ended February, 2008, and (B) the net revenue generated from the “Money Transfer” and the “Express Payment” business segments on a combined basis shall be no less than $35,063,244 for the month ended January 2008 and no less than $35,737,927 for the month ended February, 2008. For purposes of clause (iv)(A) and (iv)(B) of this Section 3.13, the internal monthly financial statements for the months ended January 2008 and February 2008 shall be prepared on the same basis in all material respects to the monthly budgets for January 2008 and February 2008 and the historical monthly results previously provided to the Purchasers and included on Exhibit 4 to this Agreement.
     (b) After giving effect to the Transactions and the payment of fees and expenses payable by Holdco in connection with the transactions contemplated by the Equity Purchase Agreement and the transactions contemplated hereby, including, without limitation, the expenses incurred in connection with the transactions contemplated by clause (iv) of Section 1.2(c) of the Equity Purchase Agreement, the expenses contemplated by Section 5.3 of the Equity Purchase Agreement and the Exclusivity Agreement (as defined in the Equity Purchase Agreement), the fees and expenses of Holdco’s advisors, and the fees and expenses of each Purchaser and counsel for the Purchasers, on a pro forma basis, Holdco shall have (x) at least $150,000,000 in Unrestricted Assets and no more than $150,000,000 will be drawn on the Closing Date, under Holdco’s revolving credit facility (which availability, for the purposes of this Section 3.13(b) shall take into account all letters of credit outstanding either through such facility or otherwise).

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     3.14. Transaction Documents.
     On the Satisfaction Date, the Purchasers shall have received true and correct copies of all Transaction Documents (including without limitation, the Indenture, the Notes, the Registration Rights Agreement and the Management Rights Agreement and the other Financing Documents, all of which shall be in form and substance reasonably acceptable to the Purchasers) and such documents (i) shall have been duly authorized, executed and delivered by parties thereto; and (ii) shall be valid and binding obligations of the parties thereto, enforceable against each of them in accordance with its respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and subject to general principles of equity. Without limiting the generality of the preceding sentence, the Purchasers shall have received all such counterpart originals or certified or other copies of this Agreement and the other Financing Documents required to be delivered on the Closing Date.
     3.15. Execution and Authentication of Indenture and Notes.
     On the Closing Date, the Trustee shall have executed the Indenture and authenticated the Notes to be purchased by the Purchasers pursuant to this Agreement.
     3.16. Security Documents and Collateral.
     On the Satisfaction Date, the Trustee, as Collateral Agent, shall have received all Security Documents duly executed by all parties thereto and the provisions of the Security Documents shall create legal, valid and continuing second-priority Liens (subject only to Permitted Liens) on all the Collateral described therein in favor of the Collateral Agent, for the benefit of the Collateral Agent and the Purchasers securing the Obligations (as defined in the Security Documents), enforceable against Holdco, the Company and their respective Subsidiaries, as applicable, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or similar laws affecting creditors’ rights generally and subject to general principles of equity, which Security Documents and Collateral shall be substantially similar to the Security Documents (as defined in the Company Credit Facilities) and Collateral (as defined in the Company Credit Facilities) provided to the Lenders (as defined in the Company Credit Facilities) under the Company Credit Facilities and shall be in form and substance satisfactory to the Purchasers in their reasonable discretion.
     3.17. Bank Clearing Arrangements.
     The Company shall have demonstrated to the reasonable satisfaction of the Purchasers that adequate bank clearing arrangements are in effect on the Satisfaction Date.
     3.18. Company Credit Facilities.
     (a) Holdco shall not have incurred (or become obligated to incur) fees of more than $7,000,000 relating to the transactions described in Section 1.2(c)(iv) of the Equity Purchase Agreement (other than clauses (D) and (E)) of the Equity Purchase Agreement plus annual administrative agency fees in an amount not exceeding $150,000 per annum payable quarterly; and
     (b) the Applicable Margin (as defined in Schedule D to the Equity Purchase Agreement) on the Term B Loans (as defined in Schedule D to the Equity Purchase Agreement) shall not have been increased by more than 1.25% per annum (all of which may take the form of original issue discount over a four-year life to maturity (i.e. 5% or $10,000,000)); provided that any increase shall have been necessary in the reasonable discretion of the Lead Arranger (as defined in Schedule D to the Equity

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Purchase Agreement) to place the Term B Loans and the Lead Arranger shall first consider (in consultation with Holdco and the Investors) using increases in the margin prior to imposing original issue discount.
     3.19. Pre-Closing Certificate.   At the opening of business on the Satisfaction Date, the Company shall deliver to each of the Purchasers a certificate (the “Pre-Closing Certificate”) signed on behalf of the Company by a senior executive officer of the Company confirming that each of the conditions set forth in Section 3 (other than those conditions that are expressly required hereunder to be satisfied on the Closing Date; provided, however, the certificate must confirm that such conditions would be satisfied in the hypothetical event that the Closing Date had taken place on the Satisfaction Date) have been satisfied and are satisfied as of the Satisfaction Date. Provided that each Purchaser, in its good faith determination, has no reason to believe at such that time any of the Company’s statements in the Pre-Closing Certificate are false or inaccurate, each Purchaser shall provide an acknowledgement that at such time it has no reason to believe that each of the conditions set forth in Section 3 (other than those conditions that are expressly required hereunder to be satisfied on the Closing Date) are not satisfied at such time. After each Purchaser has provided such acknowledgment, provided that the Pre-Closing Certificate was true and correct when delivered and that the conditions in Sections 3.1(c), 3.1(d), 3.2, 3.5, 3.9. 3.10, 3.11(c), 3.12, and 3.15 are satisfied as of the Closing Date, the Company and each of the Purchasers shall be required to effect the Closing on the Closing Date.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
     Except as Previously Disclosed (but only with respect to Sections 4.2 through and including 4.17), each of Holdco and the Company represents and warrants to the Purchasers on and as of the date hereof (after giving “pro forma” effect to the consummation on the Closing Date of the Transactions, the issuance of the Notes to be issued on the date hereof and the application of the proceeds thereof) and on the Satisfaction Date, except as set forth in this Section 4, that:
     4.1. Disclosure.
     On or prior to the date hereof, Holdco delivered to the Purchasers the Holdco Disclosure Schedules.
     4.2. Organization and Authority.
     Each of Holdco and the Company is duly organized and validly existing under the Laws of its jurisdiction of organization and has all requisite corporate, company or partnership power and authority to carry on its business as presently conducted. Each of Holdco and the Company is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each of Holdco and the Company has made available to the Purchasers prior to the execution of this Agreement, (i) a true and complete copy of the Certificate of Incorporation of the Company and the bylaws of the Company, in each case as in effect on the date of this Agreement and (ii) a complete copy of the Amended and Restated Certificate of Incorporation of Holdco and the bylaws of Holdco, in each case as in effect on the date of this Agreement.

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     4.3. Holdco Subsidiaries.
     (a) Holdco has Previously Disclosed a complete and correct list of all of its subsidiaries, and all shares of the outstanding capital stock of each of which are owned directly or indirectly by Holdco. The subsidiaries of Holdco are referred to herein individually as a “Holdco Subsidiary” and collectively as the “Holdco Subsidiaries.” All of such shares so owned by Holdco (or its subsidiaries) are fully paid and non assessable and are owned by it free and clear of any lien, claim, charge, option, encumbrance or agreement with respect thereto, except for Permitted Liens. Other than as Previously Disclosed, none of Holdco or any Holdco Subsidiary beneficially owns (the concept of “beneficial ownership” having the meaning assigned thereto in Section 13(d) of the Exchange Act), directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation or other entity, and none is, directly or indirectly, a partner in any partnership or party to any joint venture.
     (b) Each Holdco Subsidiary is duly organized and validly existing under the Laws of its jurisdiction of organization and has all requisite corporate, company or partnership power and authority to carry on its business as presently conducted. Each Holdco Subsidiary is duly qualified or licensed to do business and is in good standing (where such concept is recognized under applicable Law) in each jurisdiction where the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, other than where the failure to be so qualified, licensed or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
     4.4. Capitalization.
     The authorized capital stock of Holdco consists of (i) 7,000,000 shares of preferred stock, 2,000,000 shares of which have been designated as “Series A Junior Participating Preferred Stock”, and of which no shares were outstanding as of the time of execution of the Equity Purchase Agreement, and (ii) 250,000,000 shares of Common Stock, of which 82,649,089 shares were outstanding as of the date of the Equity Purchase Agreement. There are outstanding options to purchase an aggregate of not more than 4,071,039 shares of Common Stock, all of which options are outstanding under the Benefit Plans. All of the outstanding shares of capital stock of Holdco have been duly and validly authorized and issued and are fully paid and non assessable. The shares of Common Stock and Preferred Stock to be issued at the Closing in accordance with the terms of the Equity Purchase Agreement or in respect of or upon conversion or exchange of such Preferred Stock (or upon the conversion of Preferred Stock received upon conversion or exchange of Preferred Stock to be issued at Closing) in accordance with the terms of the Equity Purchase Agreement and the respective Certificate of Designations, upon such issuance, exchange or conversion, as the case may be, will be duly and validly authorized and issued and fully paid and non assessable and not trigger any pre-emptive or similar rights of any other person. Except (A) as described above or Previously Disclosed, (B) for the rights granted pursuant to the Transaction Documents, or (C) under or pursuant to the Previously Disclosed Benefit Plans, there are no outstanding subscriptions, contracts, conversion privileges, options, warrants, calls, preemptive rights or other rights obligating Holdco or any Holdco Subsidiary to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire, any shares of capital stock of Holdco or any Holdco Subsidiary. Each of Holdco and any Holdco Subsidiary has Previously Disclosed all shares of Holdco capital stock that have been purchased, redeemed or otherwise acquired, directly or indirectly, by Holdco or any Holdco Subsidiary since December 31, 2006 and all dividends or other distributions that have been declared, set aside, made or paid to stockholders of Holdco since that date.

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     4.5. Authorization; No Default.
     (a) Each of Holdco and each Holdco Subsidiary has the power and authority to enter into the Transaction Documents to which it is a party and to carry out its obligations hereunder and thereunder. The execution, delivery and performance of the Transaction Documents by Holdco and each Holdco Subsidiary and the consummation of the transactions contemplated hereby and thereby have been duly authorized by the board of directors of each of Holdco and each Holdco Subsidiary (the “Board of Directors”). The Transaction Documents to which Holdco and each Holdco Subsidiary are a party are valid and binding obligations of Holdco and each Holdco Subsidiary enforceable against Holdco and each Holdco Subsidiary in accordance with their respective terms. Except for the Shareholder Approval, no stockholder vote of Holdco or any Holdco Subsidiary is required to authorize, approve or consummate any of the transactions contemplated hereby.
     (b) Neither the execution, delivery and performance by Holdco and each Holdco Subsidiary of the Transaction Documents to which it is a party and any documents ancillary thereto, nor the consummation of the transactions contemplated hereby and thereby, nor compliance by Holdco and each Holdco Subsidiary with any of the provisions thereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any lien, security interest, charge or encumbrance upon any of the properties or assets of Holdco or any Holdco Subsidiary under any of the material terms, conditions or provisions of (1) its certificate of incorporation or bylaws or substantially equivalent governing documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation (each a “Contract”) to which Holdco or any Holdco Subsidiary is a party or by which it may be bound, or to which Holdco or any Holdco Subsidiary or any of the properties or assets of Holdco or any Holdco Subsidiary may be subject (other than Liens created under the Credit Documents), or (B) subject to compliance with the statutes, and regulations and votes referred to in the next paragraph, violate any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to Holdco or any Holdco Subsidiary or any of their respective properties or assets; except, in the case of clauses (A)(2) and (B), as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
     (c) Other than (A) the Shareholder Approval, (B) the filing of the Certificates of Designations with the Delaware Secretary of State, (C) the filings in connection or in compliance with the HSR Act, (D) the filings in connection or in compliance with the German Antitrust Act, (E) any actions described in the Security Documents necessary to perfect the security interest granted pursuant thereto and (F) such other consents, approvals, orders, authorizations, registrations, declarations, filings and notices the failure of which to be obtained or made would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no notice to, filing with, exemption or review by, or authorization, consent or approval of, any Governmental Entity or any other person (nor expiration nor termination of any statutory waiting periods) is necessary prior to the consummation by Holdco or any Holdco Subsidiary of the transactions contemplated by the Transaction Documents to which it is a party.
     4.6. SEC Documents.
     (a) Each of Holdco and the Company has filed all reports, schedules, forms, statements and other documents with the SEC required to be filed by Holdco or the Company or furnished by Holdco or the Company since December 31, 2005 (including any items incorporated by reference or attached as Exhibits thereto) (the “SEC Documents”). No Holdco Subsidiary is required to make any filings of SEC Documents. As of their respective dates of filing, the SEC Documents complied as to form in all material respects with the requirements of the Securities Act, or the Exchange Act, as the case may be, and the

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rules and regulations of the SEC promulgated thereunder applicable thereto, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except as Previously Disclosed, there are no outstanding comments from the SEC with respect to any SEC Document. The audited consolidated financial statements and the unaudited quarterly financial statements (including, in each case, the notes thereto) of Holdco included in the SEC Documents when filed complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, have been prepared in all material respects in accordance with United States generally accepted accounting principles (“GAAP”) (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of Holdco and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end adjustments). Except as specifically reflected or reserved against in the audited consolidated balance sheet of Holdco as at September 30, 2007 included in the Filed SEC Documents, neither Holdco nor any Holdco Subsidiary has any liabilities or obligations (whether absolute, accrued, contingent, fixed or otherwise) of any nature that would be required under GAAP, as in effect on the date of this Agreement, to be reflected on a consolidated balance sheet of Holdco (including the notes thereto), except liabilities and obligations that (A) were incurred in the ordinary course of business consistent with past practice since September 30, 2007 or (B) have not had and would not, individually or in the aggregate, reasonably be expected to have, a Material Adverse Effect.
     (b) Holdco (A) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to Holdco, including its consolidated subsidiaries, is made known to the chief executive officer and the chief financial officer of Holdco by others within those entities, and (B) has disclosed, based on its most recent evaluation prior to the date hereof, to Holdco’s outside auditors and the audit committee of the Board of Directors (1) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Exchange Act, Rule 13a-15(f)) that are reasonably likely to adversely affect Holdco and each Holdco Subsidiary’s ability to record, process, summarize and report financial information and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in Holdco or each Holdco Subsidiary’s internal controls over financial reporting. As of the date of this Agreement, Holdco has no knowledge of any reason that its outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, without qualification, when next due. Since December 31, 2005, (x) neither Holdco nor any Holdco Subsidiary nor, to the knowledge of Holdco, any director, officer, employee, auditor, accountant or representative of Holdco or any Holdco Subsidiary, has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Holdco or any Holdco Subsidiary or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that Holdco or any Holdco Subsidiary has engaged in questionable accounting or auditing practices, and (y) no attorney representing Holdco or any Holdco Subsidiary, whether or not employed by Holdco or any such subsidiary, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by Holdco or any of its officers, directors, employees or agents to the Board of Directors or any committee thereof or to any director or officer of Holdco or any Holdco Subsidiary.

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     4.7. Taxes.
     Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) Holdco and each of Holdco’s Subsidiaries have prepared and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate, (B) Holdco and each of Holdco’s Subsidiaries have paid all Taxes that are required to be paid by any of them, (C) as of the date of this Agreement, there are no audits, examinations, investigations, actions, suits, claims or other proceedings in respect of Taxes pending or threatened in writing nor has any deficiency for any Tax been assessed by any Governmental Entity in writing against Holdco or any of Holdco’s Subsidiaries, and (D) all Taxes required to be withheld by Holdco and Holdco’s Subsidiaries have been withheld and paid over to the appropriate Tax authority (except, in the case of this clause (D) or clause (A) or (B) above, with respect to matters contested in good faith and for which adequate reserves have been established on Holdco’s financial statements in accordance with GAAP). Holdco has not been a “controlled corporation” or a “distributing corporation” in any distribution occurring during the two-year period ending on the date of this Agreement that was intended to be governed by Section 355 of the Code. Neither Holdco nor any Holdco’s Subsidiary has entered into any “listed transaction” as defined under Section 1.6011-4(b)(2) of the Treasury Regulations promulgated under the Code.
     4.8. Ordinary Course.
     Except as Previously Disclosed since September 30, 2007, Holdco and each Holdco Subsidiary has conducted its respective businesses in all material respects in the ordinary course of business, consistent with prior practice (and, without limiting the generality of the foregoing, none of Holdco nor any Holdco Subsidiary has taken any action referred to in clauses (a) and (b) of Section 3.3 of the Equity Purchase Agreement, assuming the said Section had been in effect at all times since September 30, 2007).
     4.9. Commitments and Contracts.
     (i) Except for the Benefit Plans, the Contracts filed as exhibits or incorporated by reference in or to the SEC Documents, and the Contracts Previously Disclosed, neither Holdco nor any Holdco Subsidiary is a party to or bound by any Contract that: (A) is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under the Securities Act) to be performed in full or in part after the date of this Agreement; (B) creates any material partnership, limited liability company agreement, joint venture or similar agreement entered into with any third party; (C) is a voting agreement or registration rights agreement; (D) relates to any indebtedness, or interest rate or currency hedging agreements, having an outstanding principal or notional amount in excess of $50,000,000, or any guarantees thereof, or the sale, securitization or servicing of loans or loan portfolios, in each case in connection with which the aggregate actual or contingent obligations of Holdco and the Holdco Subsidiaries under such contract are greater than $50,000,000; (E) relates to the acquisition or disposition of any material assets other than in the ordinary course of business consistent with past practice, where such contract contains continuing material obligations or contains continuing indemnity obligations of Holdco or any of the Holdco Subsidiaries; or (F) is a commitment or agreement to enter into any of the foregoing. Except as set forth on Section 4.9 of the Holdco Disclosure Schedule, neither Holdco nor any Holdco Subsidiary is a party to or bound by any Contract (x) that contains provisions that purport to limit the ability of Holdco or any of the Holdco Subsidiaries, or any Affiliate, stockholder or director of Holdco or any Holdco Subsidiary in their capacities as such, to compete in any line of business or with any person or which involve any restriction of the geographical area in which, or method by which or with whom, Holdco or any of the Holdco Subsidiaries may carry on any business or (y) is a commitment or agreement to enter into any such Contract.

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     (ii) The Contracts set forth in this Section 4.9(ii) (together with any and all amendments, disclosure schedules and side letters thereto) are collectively referred to herein as the “Disclosed Contracts.” Except as has not had and would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) neither Holdco nor any Holdco Subsidiary is in breach, default or violation of the terms of any Disclosed Contract, no event has occurred that with the lapse of time or the giving of notice or both would constitute a default thereunder by Holdco or any of the Holdco Subsidiaries, and Holdco has no knowledge of (and has not received notice of) any breach, default or violation (or any condition which with the passage of time or the giving of notice, or both, would cause such a breach, default or violation) by any party under any Disclosed Contract; and (B) each Disclosed Contract is a valid and binding obligation of Holdco (or the Subsidiaries of Holdco party thereto), is in full force and effect and is enforceable against Holdco and the Holdco Subsidiaries and, to the knowledge of Holdco, the other parties thereto in accordance with its terms, except that (1) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (2) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
     4.10. Litigation and Other Proceedings.
     There is no claim, suit, action, investigation or proceeding pending or, to the knowledge of Holdco, threatened, against Holdco or any Holdco Subsidiary that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect, nor is Holdco or any Holdco Subsidiary subject to any order, judgment or decree that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.
     4.11. Insurance.
     Holdco and each Holdco Subsidiary are presently insured, and during each of the past five calendar years (or during such lesser period of time as Holdco has owned such Holdco Subsidiary) has been insured, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured.
     4.12. Compliance with Laws.
     (a) Holdco and each Holdco Subsidiary have all permits, licenses, authorizations, orders and approvals of, and have made all filings, applications and registrations with, Governmental Entities (collectively, the “Permits”) that are required in order to permit them to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of Holdco and the Holdco Subsidiaries, taken as a whole; and all such Permits are in full force and effect and, to the knowledge of Holdco, no suspension or cancellation of any of them is threatened, and all such filings, applications and registrations are current. Except as would not individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) the conduct by Holdco and each Holdco Subsidiary of their business and the condition and use of their properties does not violate or Infringe any applicable domestic (federal, state or local) or foreign Law, statute, ordinance, license or regulation, (ii) neither Holdco nor any Holdco Subsidiary is in default under any order, license, regulation, demand, writ, injunction or decree of any Governmental Entity, and (iii) Holdco currently is complying with all, and, to the knowledge of the Holdco and the Holdco Subsidiaries, none of them is under investigation with respect to or has been threatened to be charged with or given notice of any material violation of any, applicable federal, state, local and foreign Law, statute, regulation, rule, license, judgment, injunction or decree.

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     (b) Without limiting the generality of the foregoing, Holdco and each of the Holdco Subsidiaries have acted in conformity with all applicable Laws and regulations pertaining to export controls, economic sanctions, national security controls, and similar regulations of international commerce, including, but not limited to, the U.S. Export Administration Regulations, 15 C.F.R. pt. 730 et seq., the U.S. antiboycott rules, 15 C.F.R. pt. 760 et seq. and 26 U.S.C. § 908 & 999, the Office of Foreign Assets Control regulations, 31 C.F.R. pt. 500 et seq., U.S. anti-money laundering Laws (e.g., 18 U.S.C. §§ 1956-57, 18 U.S.C. § 1960 and 31 U.S.C. §§5311-32), and all non-U.S. counterparts or equivalents of the foregoing, in each case, except as, individually or in the aggregate, would not reasonably expected to have a Material Adverse Effect. Also, without limiting the generality of the foregoing, the Company, each of its Subsidiaries, and each of Holdco’s and its Subsidiaries’ employees and agents have acted in conformity with all applicable Laws and regulations pertaining to corrupt, illegal or unauthorized payments, including, but not limited to, the U.S. Foreign Corrupt Practices Act of 1977, as amended, 15 U.S.C. §§ 78dd-1, et seq., in each case, except as, individually or in the aggregate, would not reasonably expected to have a Material Adverse Effect.
     4.13. Benefit Plans.
     (a) Holdco has Previously Disclosed or has previously filed as an exhibit to an SEC Document or made available to the Purchasers or its representative each of the following to which Holdco or any Holdco Subsidiary is a party or subject: any plan, contract or understanding providing for any bonus, pension, option, deferred compensation, retirement payment, profit sharing welfare, severance, change in control, or fringe benefits or other compensation with respect to any present or former officer, director, employee or consultant of Holdco or any Holdco Subsidiary (each, other than a Multiemployer Plan, a “Benefit Plan”), in each case, requiring aggregate annual payments or contributions by Holdco and any Holdco Subsidiary in an aggregate amount in excess of $1,000,000 or which has aggregate unfunded liabilities in an amount in excess of $1,000,000 individually provided that the aggregate unfunded liabilities of the Benefit Plans not Previously Disclosed or filed as an SEC Document do not exceed $3,000,000. Section 4.13 of the Holdco Disclosure Schedule sets forth a complete list of the Benefit Plans.
     (b) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) with respect to each Benefit Plan, Holdco and any Holdco Subsidiary have complied, and are now in compliance with ERISA, the Code and all Laws and regulations applicable to such Benefit Plans and each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that such Benefit Plan is so qualified and exempt from federal income taxes under Sections 401(a) and 501(a) of the Code, and such determination letter has not been revoked and nothing has occurred, whether by action or failure to act, that could reasonably be expected to cause the loss of such qualification; (B) each Benefit Plan has been administered in accordance with its terms including all requirements to make contributions; (C) there is not now, nor do any circumstances exist that are likely to give rise to any requirement for the posting of security with respect to a Benefit Plan or the imposition of any material liability or material lien on the assets of Holdco or any Holdco Subsidiary under ERISA or the Code in respect of any Benefit Plan, and no liability (other than for premiums to the Pension Benefit Guaranty Corporation) under Title IV of ERISA or under Sections 412 or 4971 of the Code has been or is reasonably expected to be incurred by Holdco or any Holdco Subsidiary; (D) there are no pending or, to Holdco’s knowledge, threatened claims (other than claims for benefits in the ordinary course), lawsuits or arbitrations which have been asserted or instituted against the Benefit Plans or the assets of any of the trusts under any of the Benefit Plans; (E) to Holdco’s knowledge, there are no pending or threatened claims against any fiduciary of any of the Benefit Plans with respect to their duties to the Benefit Plans; (F) to Holdco’s knowledge, no set of circumstances exists which may reasonably give rise to a claim or lawsuit, against the Benefit Plans, any fiduciaries thereof with respect to their duties to the Benefit Plans or the assets of any of the trusts under

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any of the Benefit Plans; (G) Holdco and each Holdco Subsidiary has reserved the right to amend, terminate or modify at any time all plans or arrangements providing for retiree health or life insurance coverage, and there have been no communications to employees or former employees which could reasonably be interpreted to promise or guarantee such employees or former employees any retiree health or life insurance or other retiree death benefits on a permanent basis, other than those retirement benefits provided for under Holdco and any Holdco Subsidiary’s collective bargaining agreement;
     (c) None of Holdco, or any Holdco Subsidiary or any other person or entity under common control with Holdco within the meaning of Section 414(b), (c), (m) or (o) of the Code participates in, or is required to contribute to, any “multiemployer plan” (within the meaning of Section 3(37) of ERISA) (a “Multiemployer Plan”).
     (d) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, each individual who performs services for Holdco or any Holdco Subsidiary (other than through a contract with an entity other than Holdco or any Holdco Subsidiary) and who is not treated as an employee of Holdco or any Holdco Subsidiary has been properly characterized as not being an employee for such purposes.
     (e) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (alone or in conjunction with any termination of employment or other event) will (A) result in any material payment (including, without limitation, severance or “excess parachute payments” (within the meaning of Section 280G of the Code), or forgiveness of indebtedness) or other material obligation becoming due to any current or former employee, officer or director of Holdco or any Holdco Subsidiary under any Benefit Plan or otherwise, (B) limit or restrict the right of Holdco or any Holdco Subsidiary to merge, amend or terminate any of the Benefit Plans, or (C) materially increase or accelerate or require the funding of any benefits otherwise payable under any Benefit Plan.
     (f) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) no work stoppage involving Holdco or any Holdco Subsidiary is pending or, to the knowledge of Holdco threatened; (B) neither Holdco nor any Holdco Subsidiary is involved in, or threatened with or affected by, any labor dispute, arbitration, lawsuit or administrative proceeding that could affect the business of Holdco or such Holdco Subsidiary; and (C) employees of Holdco and Holdco’s Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees.
     (g) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, with respect to each Foreign Plan, (i) each Foreign Plan required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities; and (ii) all Foreign Plans that are required to be funded are funded in accordance with applicable Laws, and with respect to all other Foreign Plans, adequate reserves therefore have been established on the accounting statements of Holdco or any Holdco Subsidiary.
     4.14. Environmental Liability.
     Except for those matters that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each of Holdco and the Holdco Subsidiaries is in compliance with all applicable Environmental Laws, and neither Holdco nor any Holdco Subsidiary has received any written communication alleging that Holdco is in violation of, or has any liability under, any Environmental Law, (ii) each of Holdco and the Holdco Subsidiaries validly possesses and is in compliance with all Permits required under Environmental Laws to conduct its business as presently

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conducted, and all such Permits are valid and in good standing, (iii) there are no Environmental Claims pending or, to the knowledge of Holdco, threatened against Holdco or any of the Holdco Subsidiaries and (iv) none of Holdco or any of the Holdco Subsidiaries has Released any Hazardous Materials in a manner that would reasonably be expected to result in an Environmental Claim against Holdco or any of the Holdco Subsidiaries.
     4.15. Intellectual Property.
     (a) Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (A) Holdco and the Holdco Subsidiaries own, free of all encumbrances except Permitted Liens, or have the valid right to use all the Intellectual Property used in the conduct of the business of Holdco and the Holdco Subsidiaries and (B) the conduct of the business of Holdco and the Holdco Subsidiaries as currently conducted does not Infringe any Intellectual Property rights of any third party. Except as would not reasonably be expected to have a Material Adverse Effect, no claim or demand has been given in writing to Holdco or any Holdco Subsidiary to the effect that the conduct of the business of Holdco or such Holdco Subsidiary Infringes upon the Intellectual Property rights of any third party. Except as would not reasonably be expected to have a Material Adverse Effect, Holdco and the Holdco Subsidiaries use the Intellectual Property of third parties only pursuant to valid, effective written license agreements. Except as would not reasonably be expected to have a Material Adverse Effect, to the knowledge of Holdco and the Company, no third parties are infringing the Intellectual Property rights of Holdco or the Company.
     (b) All registered trademarks and registered service marks, trademark and service mark applications and, to the knowledge of Holdco, all Holdco Intellectual Property has been duly registered or application filed with the U.S. Patent and Trademark Office or applicable foreign governmental authority. Except as would not reasonably be expected to have a Material Adverse Effect, (A) none of the Holdco Intellectual Property has been adjudged to be invalid or unenforceable in whole or in part and (B) there are no actual or, to the knowledge of Holdco or the Company, threatened opposition proceedings, cancellation proceedings, interference proceedings or other similar action challenging the validity, existence or ownership of any Holdco Intellectual Property.
     4.16. Board Approvals.
     The transactions contemplated by the Transaction Documents, including without limitation the issuance of the Securities and the compliance with the terms thereof and the compliance with the terms of the Equity Purchase Agreement, this Agreement and the other Financing Documents have been approved unanimously by the board of directors of each of Holdco, the Company and the Guarantors, as applicable. Each board of directors of Holdco and the Company have unanimously (i) adopted, approved and declared advisable all of the transactions contemplated by the Transaction Documents and the Shareholder Approval, (ii) directed that the Shareholder Approval be submitted to the stockholders of Holdco for their approval and adoption and (iii) recommended that the stockholders of Holdco adopt and grant the Shareholder Approval.
     4.17. Brokers and Finders.
     Neither Holdco, the Company nor any of their respective officers, directors or employees has incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees in connection with the Transaction Documents or the transactions contemplated hereby and thereby, other than JPMorgan Chase & Co., the fees and expenses of which will be paid by Holdco. Holdco has provided the Purchasers with a copy of the documentation pursuant to which JPMorgan Chase & Co. may

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receive a fee in connection with the Transaction Documents or the transactions contemplated hereby and thereby.
     4.18. Collateral.
     As of the Closing Date, upon execution and delivery thereof by the parties thereto, the Security Documents will be effective to create (to the extent described therein), in favor of and for the ratable benefit of the applicable Holders of the Notes, a legal, valid and enforceable security interest in the Collateral described therein, except as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. When the actions specified in each Security Document have been duly taken, the security interests granted pursuant thereto shall constitute (to the extent described therein) a perfected security interest (subject only to Permitted Liens) in all right, title and interest of each pledgor party thereto in the Collateral described therein with respect to such pledgor if and to the extent perfection can be achieved by taking such actions.
     4.19. [Reserved].
     4.20. [Reserved].
     4.21. Disclosure.
     (a) To the knowledge of the Company, none of the written factual information and written data (taken as a whole) furnished by or on behalf of the Company or any of the Subsidiaries or any of their respective authorized representatives to the Purchasers on or before the Closing Date for purposes of or in connection with this Agreement contained, when furnished, any untrue statement of any material fact or omitted to state any material fact necessary to make such information and data (taken as a whole) not materially misleading at such time in light of the circumstances under which such information or data was furnished, it being understood and agreed that for purposes of this Section 4.21(a), such factual information and data shall not include projections (including financial estimates, forecasts and/or any other forward-looking information) and information of a general economic or general industry nature.
     (b) The projections (including financial estimates, forecasts and other forward-looking information) contained in the information and data referred to in clause (a) above were based on good faith estimates and assumptions believed by such Persons to be reasonable at the time made, it being recognized by the Purchasers that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results.
     4.22. [Reserved].
     4.23. Properties.
     Holdco and each of its Subsidiaries have good and marketable title to or leasehold interests in all properties that are necessary for the operation of their respective businesses as currently conducted and as proposed to be conducted, free and clear of all Liens (other than any Permitted Liens), except where the failure to have such good title has not or is not reasonably likely to have a Material Adverse Effect.

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     4.24. Solvency.
     As of the Closing Date, immediately after giving effect to the issuance and sale of the Notes and the consummation of the Transactions, and after giving effect to the application of the proceeds of Notes and the Company Credit Facilities, Holdco and the Company on a consolidated basis with their Subsidiaries will be Solvent.
     4.25. No Registration Required.
     As of the Closing Date, subject to compliance by the Purchasers with the representations and warranties set forth in this Section 4 and with the procedures set forth in Section 8 hereof, it is not necessary in connection with the offer, sale and delivery of the Notes to the Purchasers in the manner contemplated by this Agreement, the Indenture and the other Financing Documents, (i) to register the Notes under the Securities Act or pursuant to any of the laws of the States or the United States, or (ii) to qualify the Indenture under the TIA.
     4.26. No Integration of Offerings or General Solicitation.
     As of the Closing Date, none of Holdco, its Affiliates, or any person acting on any of their behalf (other than the Purchasers, as to whom the Company makes no representation or warranty) within the six-month period immediately prior to the date hereof, directly or indirectly, solicited any offer to buy or offered to sell, sold, or issued and will not, for six months immediately following the date hereof, directly or indirectly, solicit any offer to buy or offer to sell, sell, or issue in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Notes in a manner that would require the Notes to be registered under the Securities Act.
     As of the Closing Date, none of Holdco, its Affiliates, or any person acting on any of their behalf (other than the Purchasers, as to whom the Company makes no representation or warranty) has engaged or will engage, in connection with the offering of the Notes, in any form of general solicitation or general advertising within the meaning of Rule 502 under the Securities Act.
     As of the Closing Date, with respect to those Notes sold in reliance upon Regulation S, (i) none of Holdco, its respective Affiliates, or any person acting on any of their behalf (other than the Purchasers, as to whom the Company makes no representation or warranty) has engaged or will engage in any directed selling efforts within the meaning of Regulation S and (ii) each of the Company and its Affiliates and any person acting on any of their behalf (other than the Purchasers, as to whom the Company makes no representation or warranty) has complied and will comply with the offering restrictions set forth in Regulation S.
     4.27. Eligibility for Resale under Rule 144A.
     As of the Closing Date, the Notes will be eligible for resale pursuant to Rule 144A and will not be of the same class as securities listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.
     4.28. Margin Regulations.
     As of the Closing Date, neither the issuance and sale of the Notes nor the use of the proceeds thereof will violate the provisions of Regulation T, Regulation U or Regulation X.

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     4.29. Investment Company Act.
     None of Holdco, the Company and the Guarantors is an “investment company” within the meaning of, and subject to registration under, the Investment Company Act or controlled by such a company.
SECTION 5.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PURCHASERS
     5.1. Representation and Warranties.
     Each Purchaser, severally and not jointly, represents and warrants to the Company as of the date hereof as follows:
     (a) Purchase.
     (i) Such Purchaser is acquiring the Notes for its own account, for investment and not with a view to any distribution thereof within the meaning of the Securities Act.
     (ii) Such Purchaser understands that the Notes have not been and, except as provided in the Registration Rights Agreement with respect to the Notes, when issued, will not be registered under the Securities Act or any state or other securities law, that the Notes will be issued by the Company in transactions exempt from the registration requirements of the Securities Act, that it must hold the Notes indefinitely and not offer or sell the Notes except pursuant to an effective registration statement under the Securities Act or pursuant to an applicable exemption from registration under the Securities Act and in compliance with applicable state laws and in compliance with Section 8.
     (iii) Such Purchaser further understands that the exemption from registration afforded by Rule 144 (the provisions of which are known to such Purchaser) promulgated under the Securities Act depends on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.
     (iv) Such Purchaser is a Qualified Institutional Buyer or an “institutional accredited investor” (within the meaning of Regulation D).
     (v) Except as otherwise disclosed by such Purchaser to the Company, such Purchaser did not employ any broker or finder in connection with the transactions contemplated in this Agreement and no fees or commissions are payable to the Purchasers except as otherwise provided for in the Agreement.
     (vi) Such Purchaser has been furnished with or has had access to the information it has requested from the Company and its Subsidiaries and has had an opportunity to discuss with the management of the Company and its Subsidiaries the business and financial affairs of the Company and its Subsidiaries, and has generally such knowledge and experience in business and financial matters and with respect to investments in securities of privately held companies so as to enable it to understand and evaluate the risks of such investment and form an investment decision with respect thereto.
     (b) Due Organization; Power and Authority.

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     Each Purchaser is an: exempted company with limited liability, corporation, limited liability company or partnership, as the case may be, duly incorporated or formed, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, other than any failures to so qualify or to be in good standing which has not or is not reasonably likely to have a Material Adverse Effect.
     (c) Power; Authorization; Enforceability.
     The execution, delivery and performance of this Agreement and the other Financing Documents to which such Purchaser is a party are within its corporate, limited liability company or limited partnership, as the case may be, power and authority and have been duly authorized by all necessary action of such Purchaser, and constitute legal, valid and binding agreements of such Purchaser enforceable against it in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’ rights generally and subject to general principles of equity and except that no representation or warranty made with respect to any matter related to indemnification and contribution or exculpation contained herein.
     (d) No Actions or Proceedings.
     There are no legal or governmental actions, suits or proceedings pending or, to any Purchaser’s knowledge, threatened against or affecting such Purchaser, or any of their respective properties or assets which, if adversely determined, either individually or in the aggregate, would reasonably be expected to materially and adversely affect the ability of such Purchaser to consummate any of the transactions contemplated by the Financing Documents.
     (e) No Violation.
     Neither the execution, delivery or performance by any Purchaser of the Financing Documents to which it is a party nor compliance with the terms and provisions thereof nor the consummation the transactions contemplated hereby or thereby will (a) contravene any applicable provision of any material Law, or (b) violate any provision of the certificate of incorporation, by-laws or other organizational documents of any Purchaser or any contract to which such Purchaser is a party except in each case as has not or is not reasonably likely to have a material adverse effect on such Purchaser’s ability to consummate the transactions contemplated hereby and thereby and perform its obligations hereunder or thereunder.
     5.2. Notice of Transfers of the Notes.
     The Purchasers hereby covenant and agree to provide prompt written notice to the Company upon consummation of any transaction pursuant to which the Purchasers cease to constitute the Required Holders.
SECTION 6.
PRE-CLOSING COVENANTS
     6.1. Access.
     From and after the date hereof until the Closing Date, Holdco and the Company will, and will cause their Subsidiaries to:

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     (a) (i) provide the Purchasers, as soon as available, with (x) monthly and quarterly unaudited consolidated financial statements of Holdco and its Subsidiaries, audited consolidated annual financial statements of Holdco and its Subsidiaries and an annual budget of Holdco and its Subsidiaries; and (y) updates and “flash reports” of the same type and in the same frequency of delivery in all material respects as had been delivered to the Purchasers by Holdco immediately prior to the date hereof; (ii) permit access to, and make available to the Purchasers’ representatives and their accounting and legal advisors for inspection and review, the properties, books, records, accounts and documents of or relating to Holdco and its Subsidiaries, and (b) make available at reasonable times and to a reasonable extent officers and employees of Holdco and its Subsidiaries to discuss with the Purchasers and their accounting and legal advisors the business and affairs of Holdco and its Subsidiaries. In addition, Holdco and its Subsidiaries shall provide the Purchasers with substantially the same information as shall be provided to the lead arranger, the administrative agent and/or the lenders in respect of the Company Credit Facilities. Subject to Section 10.14, the Purchasers may share the foregoing information with their respective lenders and their respective consultants and advisors (including rating agencies), so long as such lenders or other parties have entered into a customary confidentiality agreement with the Purchasers.
     (b) subject to compliance with applicable laws and confidentiality obligations to third parties, promptly provide true and correct copies of all documents, reports, financial data, and such additional financial and other information with respect to Holdco, the Company and their Subsidiaries as each Purchaser (and any parent company of a Purchaser that is a venture capital operating company) may from time to time reasonably request.
     6.2. Investment Policy.
     Without the prior written consent of all of the Purchasers, prior to the Closing, Holdco shall not and shall not permit the Holdco Subsidiaries to make investments in a manner that is in contravention of the investment policy as set forth on Schedule F to the Equity Purchase Agreement (the “Investment Policy”); provided that, notwithstanding the foregoing, any securities held by the Company set forth on Schedule B or Schedule C to the Equity Purchase Agreement shall not be considered to be held or sold in contravention of the Investment Policy.
     6.3. Ordinary Course.
     Except as otherwise expressly permitted or required by the Transaction Documents, permitted by Section 4.9 of the Equity Purchase Agreement or as set forth on Section 3.3(a) of the Company Disclosure Schedule (as defined in the Equity Purchase Agreement), during the period from the date of this Agreement until the earlier of the Closing Date and the Termination Date, Holdco shall conduct its business, and shall cause its subsidiaries to conduct their respective businesses, in all material respects in the ordinary course, including, without limitation, paying its obligations, including customer signing bonuses, capital expenditures, taxes and other accounts payable, in the ordinary course of business consistent with past practice.
SECTION 7.
POST-CLOSING AFFIRMATIVE COVENANTS
     The Company covenants and agrees with each Purchaser that so long as such Purchaser holds any Notes and until the principal amount of (and premium, if any, on) such Notes, and all interest, and other obligations hereunder in respect thereof (other than indemnity obligations that have not yet become due and payable), shall have been paid in full:

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     7.1. Future Reports to Purchasers.
     The Company will deliver (x) to each Purchaser copies of all financial statements, reports certificates and notices that are provided to the lead arranger, the administrative agent, or the Lenders (as defined in the Company Credit Facilities) under the Company Credit Facilities concurrently with the delivery thereof under the Company Credit Facilities and (y) to each Purchaser (unless such Purchaser no longer holds any Notes) and any Holder that is an Affiliate of the Purchasers:
     (a) Financial Statements. As soon as available, but in any event not later than thirty (30) days after the end of each of the first two months of each fiscal quarter of Holdco, a company-prepared consolidated balance sheet of Holdco and its consolidated Subsidiaries, and the Company and its consolidated Subsidiaries as at the end of such period and related company-prepared statements of income and of cash flows in a form customarily prepared by management for each of Holdco and its consolidated Subsidiaries and the Company and its consolidated Subsidiaries (such form having previously been provided to the Purchasers) for such monthly period, to fairly present in all material respects the consolidated financial condition of Holdco and its consolidated Subsidiaries and the Company and its consolidated Subsidiaries (subject to normal year-end adjustments and the absence of footnotes) and to be prepared in reasonable detail, and such financial statements, shall be accompanied by a compliance certificate executed by the Chief Financial Officer or other senior executive officer setting forth in reasonable details the calculations evidencing compliance with the Minimum Liquidity Ratio set forth in Section 4.27 of the Indenture.
     (b) Adjusted EBITDA calculation. As soon as it is available, but in any event not later than 90 days after the end of each fiscal year, and within 45 days after the end of each of the first three fiscal quarters of each fiscal year, a presentation of Adjusted EBITDA of Holdco and the Holdco Subsidiaries and the Company and the Company Subsidiaries.
     (c) Budget. Within 60 days after the commencement of each fiscal year of each of Holdco and its consolidated Subsidiaries (commencing with the fiscal year ending December 31, 2008), a budget of Holdco and its consolidated Subsidiaries for such fiscal year in the form approved by the Board of Directors of Holdco.
     (d) Auditors’ Reports. Promptly upon receipt thereof, copies of all final written reports submitted to Holdco, the Company or to any of their Subsidiaries by independent certified public accountants in connection with each annual, interim or special audit of the books of Holdco, the Company or any of its Subsidiaries made by such accountants.
     (e) Other Information. Promptly, copies of all financial statements, proxy statements, notices and reports that Holdco or any of its Subsidiaries will send to the holders of any publicly issued debt or equity of Holdco or any of its Subsidiaries as a group and, with reasonable promptness, such other non-confidential relevant information (financial or otherwise) as any Purchaser may reasonably request in writing from time to time.
     (f) Inspection. Upon the reasonable request of the Required Holders, the Company will, and will cause each of its Subsidiaries to, at the Company’s reasonable expense, permit any Holder to visit and inspect any of the properties of the Company and any of its Subsidiaries, to inspect, copy and take extracts from its and their financial and accounting records, and to discuss its and their affairs, finances and accounts with its and their officers and independent public accountants (provided that such Company may, if it so chooses, be present and participate in any such discussion), in each case upon reasonable notice and at such reasonable times during normal business hours and as often as may reasonably be requested.

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     (g) Notices. The Company will promptly furnish to the Purchasers written notice of the following (and in no event later than five (5) Business Days) after any Responsible Officer of the Company becomes aware thereof:
     (i) any breach or non-performance of, or any default under, any contract of Holdco or any of its Subsidiaries, or any violation of, or non-compliance with, any Law, which has or is reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non-compliance and the steps, if any, such Person has taken, is taking or proposes to take in respect thereof, or the filing or commencement of, or any written threat or notice of intention of any person to file or commence, any action, suit or proceeding, whether at law or in equity or by or before any Governmental Authority or in arbitration, against Holdco any of its Subsidiaries which has or is reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect;
     (ii) the occurrence of any ERISA Event that, together with all other ERISA Events that have occurred and are continuing, has or is reasonably likely to have a Material Adverse Effect;
     (iii) (A) the receipt by the Company or any of its Subsidiaries of any written notice of violation of or potential liability or similar notice under Environmental Law, (B)(x) unpermitted releases, (y) the existence of any condition that could reasonably be expected to result in violations of or liabilities under, any Environmental Law or (z) the commencement of, or any material change to, any action, investigation, suit, proceeding, audit, claim, demand, dispute alleging a violation of or liability under any Environmental Law, that, for each of clauses (x), (y) and (z) above (and, in the case of clause (z), if adversely determined), in the aggregate for each such clause, could reasonably be expected to result in liabilities in excess of $10,000,000, and (C) the receipt by the Company or any of its Subsidiaries of notification that any property of the Company or any of its Subsidiaries is subject to any Lien in favor of any Governmental Authority securing, in whole or in part, any liabilities from Environmental Matters;
     (iv) any labor controversy resulting in or threatening to result in any strike, work stoppage, boycott, shutdown or other labor disruption against or involving Holdco or any of its Subsidiaries if the same has or is reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect;
     (v) the creation, establishment or acquisition of any Subsidiary or the issuance by or to Holdco or any of its Subsidiaries of any Equity Interest; and
     (vi) any other development that results in, or has or is reasonably likely to have a Material Adverse Effect.
          Each notice delivered under this Section 7.1(g) shall be accompanied by a statement of a Responsible Officer of the Company setting forth the details of the event or development requiring such notice (including a description with particularity of any and all clauses or provisions of this Agreement or any Financing Document that have been breached or violated) and any action taken or proposed to be taken with respect thereto.
     7.2. Patriot Act and Anti-Money Laundering.
     Holdco and its Subsidiaries:

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     (a) will comply with the Patriot Act and all applicable regulations and executive orders issued thereto and any other applicable AML Laws,
     (b) will refrain from taking any action that would result in a violation by the Purchasers of the Patriot Act and all applicable regulations and executive orders issued thereto or any other applicable AML Laws, and
     (c) without limiting the generality of the foregoing, will:
     (i) establish and adhere to a program to ensure the filing of all required reports under the AML Laws, and
     (ii) establish and adhere to a program and all other requirements to perform due diligence as required by the Bank Secrecy Act,
in each case, except as could not reasonably be expected to have a Material Adverse Effect.
     7.3. U.S. Economic Sanctions.
     Holdco and its Subsidiaries:
     (a) will comply with any U.S. Economic Sanction imposed by any rule, regulation or statute of the United States, including, without limitation, those administered by OFAC and any other applicable laws imposing economic sanctions,
     (b) will refrain from taking any action that would result in a violation by the Purchasers of U.S. Economic Sanctions, and
     (c) without limiting the generality of the foregoing, will not approve, facilitate, or fund, directly or indirectly, any business activities with, or for the benefit of, a government, national, resident or legal entity of any country with respect to which U.S. persons, as defined in U.S. Economic Sanctions, are prohibited by U.S. Economic Sanctions from doing business, except to the extent otherwise permitted by the relevant Governmental Authority,
in each case, except as could not reasonably be expected to have a Material Adverse Effect.
     7.4. FCPA and Anti-Bribery Limitations.
     Holdco and its Subsidiaries:
     (a) will comply with the U.S. Foreign Corrupt Practices Act and all other applicable anti-bribery or anti-corruption laws,
     (b) will refrain from taking any action that would result in a violation by the Purchasers of the U.S. Foreign Corrupt Practices Act or any other applicable anti-bribery or anti-corruption laws, and
     (c) without limiting the generality of the foregoing, neither the Holdco nor any of its Subsidiaries, will offer, promise to pay, or authorize the payment of any money, or will offer, give, promise to give, or authorize the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any Governmental Entity, to any Governmental Official or to any person under circumstances where such Affiliate knows or is aware of a high probability that all or a portion of

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such money or thing of value will be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:
     (i) influencing any act or decision of such Government Official in his official capacity,
     (ii) inducing such Government Official to do or omit to do any act in violation of his lawful duty,
     (iii) securing any improper advantage,
     (iv) inducing such Government Official to influence or affect any act or decision of any Governmental Entity, or
     (v) in order to assist Holdco or any of its Subsidiaries in obtaining or retaining business for or with, or directing business to any company or a subsidiary thereof,
in each case, except as could not reasonably be expected to have a Material Adverse Effect.
     7.5. Export Control Limitations.
     Holdco and its Subsidiaries:
     (a) will comply with the export controls administered by the United States Department of Commerce, the International Traffic in Arms Regulations administered by the United States Department of State and any other laws imposing export controls, and
     (b) will refrain from taking any action that would result in a violation by the Purchasers of the export controls imposed by the United States Department of Commerce, the International Traffic in Arms Regulations administered by the United States Department of State or any other applicable laws imposing export controls,
in each case, except as could not reasonably be expected to have a Material Adverse Effect.
     7.6. Customs and Trade Remedy Laws.
     Holdco and its Subsidiaries:
     (a) will comply with Title 19 of the United States Code and with any other applicable customs and trade remedy law,
     (b) will refrain from taking any action that would result in a violation by the Purchasers of Title 19 of the United States Code or any other applicable customs or trade remedies law, and
     (c) without limiting the generality of the foregoing, will pay all tariffs and penalties lawfully imposed by the U.S. Customs and Border Protection Agency, U.S. Department of Commerce, or any other government agency on the importation of goods and will not import or attempt to import any goods prohibited by any applicable customs law,
in each case, except as could not reasonably be expected to have a Material Adverse Effect.

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     7.7. Anti-Boycott Laws.
     Holdco and its Subsidiaries:
     (a) will comply with the Export Administration Act and the Code and with any other applicable Anti-boycott Laws,
     (b) will refrain from taking any action that would result in a violation by the Purchasers of the Export Administration Act and the Code or any other applicable law regarding boycotts issued by a foreign government and not endorsed by the United States, and
     (c) without limiting the generality of the foregoing, will not refuse or agree to refuse to do business with Israel or any other nation or company subject to a boycott not endorsed by the United States, agree to discriminate or discriminate against any person on the basis of race, religion, sex, national origin, or nationality, nor implement letters of credit containing terms or conditions prohibited by the Anti-boycott Laws,
in each case, except as could not reasonably be expected to have a Material Adverse Effect.
     7.8. Cross-Border Investment Restrictions.
     Holdco and its Subsidiaries will comply with any and all conditions imposed on Holdco and its Subsidiaries by any Governmental Authority as a result of obtaining the approval of or licensing from such Authority in order for the Transactions and this Agreement to have full legal effect under all applicable laws, except as could not reasonably be expected to have a Material Adverse Effect.
     7.9. Information Related to Alternative Transactions.
     Until the expiration of the Go-Shop Period (as defined in the Equity Purchase Agreement) and prior to the Termination Date, Holdco and the Company shall provide promptly to the Purchasers any bonafide bid which may replace or supplement the Transactions, subject to any ordinary or customary confidentiality obligations.
     7.10. Board Observer Rights.
     So long as the Purchasers constitute the Required Holders, Holdco agrees to insure that the Purchasers shall receive copies of all notices, reports, written presentations, board papers, minutes of meetings of the board of directors (or comparable policy-making bodies) and other written information distributed to members of the board of directors (or comparable policy-making bodies) of Holdco or to the members of the executive or similar committee of the board of Holdco (collectively, “Board Papers”) at the same time as such Board Papers are made available to the board for purposes of regular board meetings or to the members of the executive or similar committee of the board for purposes of such committee meetings. So long as the Purchasers constitute the Required Holders, the Purchasers shall have the right to designate a person to attend, and participate and furnish advice in, all meetings of the board of directors (or comparable policy-making bodies) of Holdco and the executive or similar committee of the board of Holdco in person or telephonically as a non-voting observer (the “Board Observer”), and such person shall be entitled to participate in discussions and consult with, and make proposals and furnish advice to, such board (or comparable policy-making bodies) and such committee without voting, it being understood that the Purchasers may from time to time change the identity of such observer. The observer attending board or committee meetings shall be entitled to reimbursement from Holdco for reasonable and documented travel and other out-of-pocket expenses incurred in attending such

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board and committee meetings (plus VAT or the overseas equivalent). Notwithstanding the foregoing, the Board Observer may be excluded from any such meeting (or portion of such meeting) or may not receive all or a portion of Board Papers relating to any such meeting where, in the good faith discretion of the board exercised on a case by case basis after consideration of all relevant factors, it would not be appropriate because of a conflict of interest for such Board Observer (as a representative of the Purchasers) to participate in such meeting (or portion thereof) or to receive the Board Papers relating to any such meeting (or portion thereof).
     7.11. Changes to Investment Policy.
     So long as the Purchasers constitute the Required Holders, the Purchasers agree to consider in good faith such changes to the Investment Policy relating to Holdco’s and the Holdco Subsidiaries’ investment portfolio (and the related definitions of “Highly Rated Investments” contained in the Indenture) as Holdco and the Lead Sponsor may reasonably request, taking into account, without limitation, the objective of preservation of capital, risk mitigation and liquidity, as well as the composition of and risks related to Holdco’s and its Subsidiaries’ liabilities (and, with due regard to the opinions of such third party experts the Purchasers may consult with regarding the same); provided that any decision by the Purchasers to accept any changes proposed by Holdco or the Lead Sponsor to the Investment Policy shall be made in the sole discretion of the Purchasers.
SECTION 8.
PROVISIONS RELATING TO RESALES OF NOTES
     8.1. Private Offerings.
     At any time after the date hereof, the Notes may be sold, pledged or otherwise transferred in Private Offerings (in addition to resales under a registration statement which are registered under the Securities Act), provided that the following provisions shall apply:
     (a) Offers and Sales. Offers and sales of the Notes will be made only by the Purchasers or Affiliates thereof who are qualified to do so in the jurisdictions in which such offers or sales are made. To the extent an offer or sale is intended to be made in compliance with Rule 144A, each such offer or sale shall only be made to persons who are Qualified Institutional Buyers and only in accordance with Rule 144A under the Securities Act. To the extent an offer or sale is intended to be made in accordance with Regulation S, the offer or sale shall be made to a “non-U.S. Person” and otherwise in compliance with Regulation S. Offers and sales of the Notes may also be made in accordance with any other applicable exemption under the Securities Act.
     (b) No General Solicitation. To the extent an offer or sale is intended to be made in accordance with Rule 144A, no general solicitation or general advertising (within the meaning of Rule 502(c)) will be used in the United States and to the extent an offering is intended to be made in accordance with Regulation S, no directed selling efforts (as defined in Regulation S) will be made outside the United States in connection with the offering of the Notes.
     (c) Purchases by Non-Bank Fiduciaries. In the case of a non-bank Subsequent Purchaser acting as a fiduciary for one or more third parties, in connection with an offer and sale to such purchaser pursuant to this Section 8.1, which is intended to be made in compliance with Rule 144A, such third parties shall be a Qualified Institutional Buyer, or a non- U.S. person outside the United States.
     (d) Restrictive Legend. Upon original issuance by the Company, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Notes (and all

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securities issued in exchange therefor or in substitution thereof) shall bear such legends as are required under the Indenture and the Purchasers shall obtain such opinions or certificates required by the legend thereof in any sale or pledge or other transfer of the Notes.
     (e) Restrictions on Sale/Confidentiality. Each Subsequent Purchaser must agree to be bound, and cause their transferees to be bound, by Sections 8, 10.2(c) and 10.14 of this Agreement as if it was a Purchaser hereunder.
     (f) Subsequent Purchaser. Each Subsequent Purchaser who does not purchase in an offering registered under the Securities Act shall be informed that the Notes have not been registered under the Securities Act are being sold to them on an unregistered basis under Rule 144A or another applicable exemption from registration and may only be sold in a registered offering pursuant to Rule 144 or Regulation S, or pursuant to any other available exemption.
     (g) Rule 144A Information. The Company agrees that, in order to render the Notes eligible for resale pursuant to Rule 144A under the Securities Act, while any of the Notes remain outstanding, and to the extent constitute registrable securities under the Registration Rights Agreement, it will make available, upon request, to any holder of Notes or prospective purchasers of Notes the information specified in Rule 144A(d)(4), unless the Company or Holdco is subject to the filing requirements of, and is in compliance with, Section 13 or 15(d) of the Securities Exchange Act of 1934.
     (h) Rule 144 Information. The Company agrees that, in order to render the Notes eligible for resale pursuant to Rule 144 under the Securities Act, while any of the Notes remain outstanding, it will make available “current public information” in a manner such that clause (c) of Rule 144 will be satisfied; provided such obligation does not require Holdco to file its Form 10-K for the fiscal year ended December 31, 2007 during any specific time frame and for so long as Holdco is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and is guarantor of the Notes this covenant shall be deemed satisfied by Holdco making current public information available.
     (i) [Reserved].
     (j) European Economic Area. In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each Purchaser represents and agrees that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”) it has not made and will not make an offer of Notes to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State at any time:
     (i) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;
     (ii) to any legal entity which has two or more of (A) an average of at least 250 employees during the last financial year; (B) a total balance sheet of more than 43,000,000 and (C) an annual net turnover of more than 50,000,000, as shown in its last annual or consolidated accounts; and

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     (iii) in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
     (k) Each Purchaser represents and agrees that:
     (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (as amended) (the “FSMA”)) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Company;
     (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom; and
     (iii) none of it and its Affiliates have entered nor will enter into any contractual arrangement with respect to the distribution of the Notes except with the prior written consent of the Company.
     8.2. Procedures and Management Cooperation in Private Offerings.
     The Company agrees that, at the request of the Purchasers, the Company will use commerically reasonable efforts to cause the Notes to (i) be registered in book-entry form in the name of Cede & Co., as nominee of DTC pursuant to a customary form DTC Agreement, and (ii) be eligible for the National Association of Securities Dealers, Inc. PORTAL market. At the request of the Purchasers, management of Holdco will in connection with a transfer of the Notes, use commercially reasonable efforts to cooperate with the Holders in any effort by the Holders to sell the Notes, including meeting with potential purchasers and providing due diligence information to potential purchasers; provided that (1) such efforts shall not unreasonably interfere with the conduct of the business of the Company and its Subsidiaries; (2) the Company and its Subsidiaries shall not be required to provide any assistance at any time a Shelf Registration Statement (as defined in the Registration Rights Agreement) is effective and not suspended; (3) the Company and its Subsidiaries shall not be required to provide any assistance at any time any event or development which would permit them to suspend a Shelf Registration Statement has occurred; (4) the Company and its Subsidiaries shall not be obligated to provide assistance more often than once in each 12 month period or more than three times during the term of the Notes; (5) the Company and its Subsidiaries shall not be required to incur any expense or cost other than those associated with attending meetings in its offices and producing diligence materials at such location; (6) so long as Holdco or the Company is subject to or complying with the reporting requirements of Section 13(a) or 15(d) of the Exchange Act, any private placement memorandum provided by the Company and Subsidiaries shall not be more extensive than that customarily provided by such reporting companies in a private placement; (7) other than as required by Law or as the Company may otherwise agree, the Company and its Subsidiaries shall have no indemnity obligations to the Purchasers or potential purchasers; and (8) each potential

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purchaser shall agree to be bound to confidentiality arrangements similar to those set for in Section 10.14 of this Agreement.
     8.3. No Integration.
     The Company will not, and will not permit its Affiliates to, make any offer or sale of securities of any class if, as a result of the doctrine of “integration” referred to in Rule 502, such offer or sale would render invalid, for the purpose of (i) the sale of the Notes by the Company to the Purchasers or (ii) the resale of Notes, as the case may be, by the Purchasers to Subsequent Purchasers or (iii) the resale of Notes by any such Subsequent Purchaser to others any applicable exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof or by Rule 144A thereunder or otherwise.
SECTION 9.
EXPENSES AND INDEMNIFICATION
     9.1. Expenses.
     The Company will (whether or not the Closing occurs) reimburse the Purchasers for all reasonable and documented out-of-pocket expenses (including reasonable and documented attorneys’ fees and disbursements of one firm of outside counsel and any local counsel, if necessary) incurred by the Purchasers in connection with the transactions contemplated by this Agreement and the other Financing Documents and in connection with any amendments, waivers or consents under or in respect of this Agreement or the other Financing Documents (whether or not such amendment, waiver or consent becomes effective), including the reasonable and documented out-of-pocket costs and expenses incurred in enforcing, defending or declaring (or determining whether or how to enforce, defend or declare) any rights or remedies under this Agreement or the other Financing Documents or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, or the other Financing Documents, including in connection with any insolvency or bankruptcy of the Company or any of its Subsidiaries or in connection with any work-out or restructuring of the transactions contemplated hereby, by the Financing Documents or by the Notes. Notwithstanding the immediately preceding sentence, (x) the Company’s obligation to reimburse the Purchasers for all out-of-pocket expenses incurred by the Purchasers in connection with due diligence, the negotiation and preparation of the Transaction Documents and undertaking of the transactions contemplated by the Transaction Documents incurred (1) prior to the date hereof shall be deemed satisfied in full upon the payment by Holdco of the fees and expenses to the Investors pursuant to the Equity Purchase Agreement and (2) from the date hereof through the earlier of the Closing Date or the Termination Date shall not exceed the limit set forth in the Equity Purchase Agreement; and (y) in the event the Closing does not occur, the Company’s obligations under this Section 9.1 for all out-of-pocket expenses incurred by the Purchasers after the date hereof but prior to the Termination Date shall not exceed the limit set forth in the Equity Purchase Agreement.
     9.2. Indemnification.
     The Company will indemnify and hold harmless the Purchasers and each of their respective Affiliates, partners, stockholders, members, officers, directors, agents, employees and controlling persons (each. an “Indemnitee”) from and against any and all actual losses, claims, damages or liabilities to any such Indemnitee in connection with or as a result of (i) the execution or delivery of any Financing Document or the performance by the parties to the Financing Documents of their respective obligations hereunder and thereunder or the consummation of the Transactions or any other transactions contemplated hereby or thereby, (ii) the issuance of Notes or the use of the proceeds therefrom, (iii) any liability with respect to Environmental Claims or (iv) any claim, litigation, investigation or proceeding

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relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity will not, as to any Indemnitee, be available to the extent that such losses, claims, damages or liabilities are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee.
     9.3. Waiver of Punitive Damages.
     To the extent permitted by applicable law, none of the parties hereto shall assert, and each hereby waives, any claim against the other parties (including their respective Affiliates, partners, stockholders, members, officers, directors, agents, employees and controlling persons), 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, the Transactions, this Agreement, the other Financing Documents, the Notes or the use of proceeds thereof.
     9.4. Survival.
     The obligations of the Company under this Section 9 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement.
     9.5. Tax Treatment of Indemnification Payments.
     Any indemnification payment pursuant to this Agreement shall be treated for all Tax purposes as an adjustment to the Purchase Price, except as otherwise required by applicable law.
SECTION 10.
MISCELLANEOUS
     10.1. Notices.
     Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (a) when delivered, (b) when transmitted via telecopy (or other facsimile device) to the number set out below if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), (c) the day following the day (except if not a Business Day then the next Business Day) on which the same has been delivered prepaid to a reputable national overnight air courier service or (d) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid; in each case to the respective parties at the address set forth below, or at such other address as such party may specify by written notice to the other parties hereto:
     (i) if to a Purchaser, to it at the address specified on Schedule 2.2; with a copy to Fried, Frank, Harris, Shriver & Jacobson LLP, One New York Plaza, New York, New York 10004, Attention: F. William Reindel, Esq., or at such other address as the Purchaser or its nominee shall have specified to the Company in writing;
     (ii) if to the Company or any Guarantor, to it at the address: 1550 Utica Avenue South, Suite 100, Minneapolis MN 55416, Attention: General Counsel and Chief Financial Officer; with a copy to: Kirkland & Ellis LLP, Citigroup Center, 153 East 53rd Street, New York, NY 10022, Attention: Ashley Gregory, Esq or at such other address as the Company shall have specified to the Purchasers in writing.

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     10.2. Benefit of Agreement and Assignments.
     (a) Except as otherwise expressly provided herein, all covenants, agreements and other provisions contained in this Agreement by or on behalf of any of the parties hereto shall bind, inure to the benefit of and be enforceable by their respective successors and assigns (including, without limitation, any subsequent holder of a Note); provided, however, (i) that the Company may not assign and transfer any of its rights or obligations without the prior written consent of the Required Purchasers; (ii) for purposes of clarity, any assignee of a Purchaser who is not an affiliate of such Purchaser shall not be entitled to the benefits of the covenants contained in Sections 6.1, 7, the last sentence of Section 8.2, or 9 herein; and (iii) any assignee of a Purchaser who acquires Notes in an offering registered under the Securities Act shall not be entitled to the benefit of the covenants in this Agreement.
     (b) Nothing in this Agreement or in any other Financing Document, express or implied, shall give to any Person other than the parties hereto or thereto and their permitted successors and assigns any benefit or any legal or equitable right, remedy or claim under this Agreement.
     (c) Prior to the Closing, no Purchaser may assign its rights hereunder provided the Purchasers may assign the rights to purchase all or any portion of the Notes allocated to such Purchaser pursuant to Schedule 2.2 to any, direct or indirect, wholly-owned subsidiary of such Purchaser or any Affiliate of such Purchaser, subject to such subsidiary or Affiliate, as the case may be, making the representations and warranties set forth in Section 5, and each such Person shall be entitled to the full benefit and be subject to the obligations of this Agreement as if such Person were a Purchaser hereunder.
     (d) The parties hereto expressly acknowledge and agree that that upon execution of a counterpart signature page hereto, each Purchaser to whom the rights hereunder have been assigned shall become party to this Agreement for all purposes hereof.
     (e) Notwithstanding anything to the contrary contained herein, no Purchaser may assign any right to purchase all or any portion of the Notes or any Notes to any direct competitor of the Company and its Subsidiaries or Affiliate of such competitor.
     10.3. No Waiver; Remedies Cumulative.
     No failure or delay on the part of any party hereto or any Purchaser in exercising any right, power or privilege hereunder or under the Notes and no course of dealing between the Company and any other party or Purchaser shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under the Notes preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein and in the Notes are cumulative and not exclusive of any rights or remedies that the parties or Purchasers would otherwise have. No notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the other parties hereto or the Purchasers to any other or further action in any circumstances without notice or demand.
     10.4. Amendments, Waivers and Consents.
     Subject to the second sentence of this Section 10.4, this Agreement may be amended, and the observance of any term hereof may be waived (either retroactively or prospectively), with the written consent of the Company, provided, however, that no such amendment or waiver may, without the prior written consent of the holders of a majority in principal amount of the outstanding Notes held by the Purchasers, as applicable, amend or waive the provisions of which the Purchasers are beneficiaries. No

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amendment or waiver of this Agreement will extend to or affect any obligation, covenant or agreement not expressly amended or waived or thereby impair any right consequent thereon.
     As used herein, the term “Agreement” and references thereto means this Agreement as it may from time to time be amended, restated, supplemented or modified.
     10.5. Counterparts.
     This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. For the purposes of the Closing, signatures transmitted via telecopy (or other facsimile device) will be accepted as original signatures.
     10.6. Reproduction.
     This Agreement, the other Financing Documents and all documents relating hereto and thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by the Purchasers at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished in connection herewith, may be reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and any original document so reproduced may be destroyed. Each of the Purchasers and the Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 10.6 shall not prohibit the Company, any other party hereto or any Purchaser from contesting any such reproduction to the same extent that it could contest the original or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
     10.7. Headings.
     The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement.
     10.8. Survival of Covenants and Indemnities; Representations.
     (a) All covenants and indemnities set forth herein shall survive the execution and delivery of this Agreement, the issuance of the Notes and, except as otherwise expressly provided herein with respect to covenants, the payment of principal of the Notes and any other obligations hereunder.
     (b) All representations and warranties made by Holdco and the Company herein shall survive the execution and delivery of this Agreement, the issuance and transfer of all or any portion of the Notes, and the payment of principal of the Notes and the issuance and delivery of the Notes, and any other obligations hereunder, regardless of any investigation made at any time by or on behalf of the Purchasers.
     10.9. Governing Law; Submission to Jurisdiction; Venue.
     (a) THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,

44


 

THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
     (b) If any action, proceeding or litigation shall be brought by any party hereto in order to enforce any right or remedy under this Agreement or any of the Notes, such party hereby consents and will submit, and will cause each of its subsidiaries to submit, to the jurisdiction of any state or federal court of competent jurisdiction sitting within the area comprising the Southern District of New York on the date of this Agreement. Each party hereto hereby irrevocably waives any objection, including any objection to the laying of venue or based on the grounds of forum non conveniens, which they may now or hereafter have to the bringing of any such action, proceeding or litigation in such jurisdiction.
     (c) Each party hereto irrevocably consents to the service of process of any of the aforementioned courts in any such action, proceeding or litigation by the mailing of copies thereof by registered or certified mail, postage prepaid, to such party at its address set forth in Section 10.1, such service to become effective thirty (30) days after such mailing.
     (d) Nothing herein shall affect the right of any party hereto to serve process in any other manner permitted by applicable law or to commence legal proceedings or otherwise proceed against the other party in any other jurisdiction. If service of process is made on a designated agent it should be made by either personal delivery or mailing a copy of summons and complaint to the agent via registered or certified mail, return receipt requested.
     (e) THE COMPANY, EACH PURCHASER HEREBY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE NOTES.
     10.10. Severability.
     If any provision of this Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable to the extent of such illegality, invalidity or unenforceability and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to such illegal, invalid or unenforceable provision.
     10.11. Entirety.
     This Agreement together with the other Financing Documents represents the entire agreement of the parties hereto and thereto with respect to the subject matter hereof and thereof, and supersedes all prior agreements and understandings, oral or written, if any, relating to the Financing Documents or the transactions contemplated herein or therein.
     10.12. Construction.
     Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, whether or not expressly specified in such provision.

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     10.13. Incorporation.
     All Exhibits and Schedules attached hereto or referred to herein are incorporated as part of this Agreement as if fully set forth herein.
     10.14. Confidentiality.
     (a) Subject to the provisions of clause (b) of this Section 10.14, each Purchaser agrees that it will not disclose without the prior consent of the Company (other than to its employees, auditors, investors, partners, creditors, lenders, rating agencies, advisors or counsel, in each case, to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes and such person has entered into a customary confidentiality agreement obligating such person to keep such information confidential or is otherwise bound by an appropriate confidentiality obligation) any nonpublic information which has been furnished to such Purchaser in connection with its administration of the investment in the Notes or is now or in the future furnished pursuant to this Agreement or any other Financing Document (including Section 8.1 hereof); provided that any Purchaser may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 10.14(a) by such Purchaser or any other Person to whom such Purchaser has provided such information as permitted by this Section 10.14(a), (ii) as may be required in any report, statement or testimony required to be submitted to any Governmental Authority having jurisdiction over such Purchaser or to the SEC or similar organizations (whether in the United States of America or elsewhere), (iii) as may be required or appropriate in respect of any summons or subpoena or in connection with any litigation, (iv) in order to comply with any applicable law and (v) to any prospective or actual Subsequent Purchaser in connection with any contemplated transfer of any of the Notes by such Purchaser; provided that any prospective Subsequent Purchaser expressly agrees in writing with or for the benefit of the Company to be bound by the confidentiality provisions contained in this Section 10.14 or a substantially similar confidentiality obligation. Each Purchaser agrees that in the event it intends to disclose confidential information in accordance with clauses (ii), (iii) or (iv) above, it shall, to the extent reasonably practicable, provide the Company notice of such requirement prior to making any disclosure so that the Company may seek an appropriate protective order or confidential treatment of the information being disclosed.
     (b) For the purposes set forth in Section 10.14(a), the Company hereby acknowledges and agrees that each Purchaser may share with any of its Affiliates, and such Affiliates may share with such Purchaser any information related to the Company or any of its Subsidiaries (including, without limitation, any nonpublic information regarding the creditworthiness of the Company and its Subsidiaries); provided such Persons shall be subject to the provisions of this Section 10.14 to the same extent as such Purchaser.
     10.15. Termination; Survival.
     The obligations and representations of the parties hereto shall automatically terminate upon the Termination Date; provided, however, that Sections 9, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.9, 10.10, 10.11, 10.12, 10.13, 10.14, 10.15, 10.18, 10.19 shall survive and shall remain in full force and effect notwithstanding the termination of this Agreement.
     10.16. Maximum Rate.
     In no event shall any interest or fee to be paid hereunder or under a Note exceed the maximum rate permitted by applicable law. In the event any such interest rate or fee exceeds such maximum rate,

46


 

such rate shall be adjusted downward to the highest rate (expressed as a percentage “per annum”) or fee that the parties could validly have agreed to by contract on the date hereof under applicable law.
     10.17. Patriot Act.
     The Purchasers hereby notify the Company that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), the Purchasers may be required to obtain, verify and record information that identifies the Company and its Subsidiaries, including their respective names and addresses other information that will allow the Purchasers to identify the Company and its Subsidiaries in accordance with the Patriot Act.
     10.18. Currency.
     All dollar amounts referred to in this Agreement are in lawful money of the United States.
     10.19. Further Assurances.
     Each of the parties hereto shall, upon reasonable request of any other party hereto, do, make and execute all such documents, act, matters and things as may be reasonably required in order to give effect to the transactions contemplated hereby.
[SIGNATURE PAGES FOLLOW]

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     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
         
  MONEYGRAM PAYMENT SYSTEMS WORLDWIDE, INC.
 
 
  By:   /s/ David J. Parrin  
    Name:   David J. Parrin  
    Title:   Executive Vice President and Chief Financial Officer  
 
  MONEYGRAM INTERNATIONAL, INC.
 
 
  By:   /s/ David J. Parrin  
    Name:   David J. Parrin  
    Title:   Executive Vice President and Chief Financial Officer  
 

 


 

     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
         
  GSMP V ONSHORE US, LTD.
 
 
  By:   /s/ Bradley Gross  
    Name:   Bradley Gross  
    Title:   Managing Director and Vice President  
 
  GSMP V OFFSHORE US, LTD.
 
 
  By:   /s/ Bradley Gross  
    Name:   Bradley Gross  
    Title:   Managing Director and Vice President  
 
  GSMP V INSTITUTIONAL US, LTD.
 
 
  By:   /s/ Bradley Gross
    Name:   Bradley Gross  
    Title:   Managing Director and Vice President  
 

 

EX-10.5
 

Exhibit 10.5
EXECUTION COPY
February 11, 2008
THL Managers VI, LLC
c/o Thomas H. Lee Partners, L.P.
100 Federal Street, 35th Floor
Boston, Massachusetts 02110
Fax No.: (617) 227-3514
Attn: Thomas M. Hagerty
MoneyGram Payment Systems Worldwide, Inc.
MoneyGram International Inc.
1500 Utica Avenue South, MS 8020
Minneapolis, Minnesota 55416
Fax No.: (952) 591-3859
Attn: Teresa H. Johnson, Esq.
GSMP/GSCP
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Edward Pallesen
Contingent Fee Letter
Ladies and Gentlemen:
     Reference is made to (a) that certain Note Purchase Agreement (the “Note Purchase Agreement”), dated as of February 11, 2008, by and between MONEYGRAM INTERNATIONAL, INC., a Delaware corporation (“HoldCo”), MONEYGRAM PAYMENT SYSTEMS WORLDWIDE, INC., a Delaware corporation (the “Company”), GSMP V ONSHORE US, LTD., an exempted company incorporated in the Cayman Islands with limited liability (“GSMP V Onshore”), GSMP V OFFSHORE US, LTD., an exempted company incorporated in the Cayman Islands with limited liability (“GSMP V Offshore”), and GSMP V INSTITUTIONAL US, LTD., an exempted company incorporated in the Cayman Islands with limited liability (“GSMP Institutional and, together with GSMP V Onshore and GSMP V Offshore, “GSMP”) and (b) that certain Purchase Agreement (the “Equity Purchase Agreement”), dated as of February 11, 2008, by and between Holdco, GSMP, the parties set forth on Schedule A attached thereto under the heading THL (collectively, “THL”) and the parties set forth on Schedule A attached hereto under the heading Goldman Sachs Capital Partners (collectively, “GSCP” and, together with THL and GSMP, the “Investors”). Capitalized terms used herein and not otherwise defined have the meanings given in the Note Purchase Agreement or Equity Purchase Agreement, as applicable.
  1.   Contingent Fee. In connection with the Note Purchase Agreement, the Company hereby agrees concurrently with the execution of this letter and the execution of the Note Purchase Agreement by all of the parties thereto, to deposit, by wire transfer in immediately available funds, into the escrow (the “Escrow”) established pursuant to that certain Escrow Agreement (the “Escrow Agreement”), dated as of the date hereof, among the Company, THL Managers VI, LLC (“THL Managers”), GSCP, GSMP and Fried, Frank Harris Shriver & Jacobson, LLP or any successor thereto (the “Escrow Agent”), a deposit with respect to a contingent break-up fee equal to $15,000,000, representing 3.00% of the maximum principal amount of the Notes to be purchased

 


 

      by GSMP pursuant to the Note Purchase Agreement (the “Contingent Fee”).
  2.   Payment of Contingent Fee. The parties hereto hereby agree that the Contingent Fee shall be disbursed and paid by the Escrow Agent as follows:
  a.   If the transactions contemplated by the Equity Purchase Agreement and issuance of the Notes pursuant to the Note Purchase Agreement are consummated, the Contingent Fee shall be paid by the Escrow Agent to the Company.
 
  b.   If the Equity Purchase Agreement is terminated by the Company pursuant to Section 5.1(e) thereof, or by any Investor pursuant to Section 5.1(d) thereof, and GSMP has not committed to provide financing in connection with the Superior Proposal that resulted in such termination, the Contingent Fee shall be paid by the Escrow Agent to GSMP.
 
  c.   If the Equity Purchase Agreement is terminated by the Company pursuant to Section 5.1(e) thereof, or by any Investor pursuant to Section 5.1(d) thereof, and GSMP has committed to provide financing in connection with the Superior Proposal that resulted in such termination, then (a) if such financing is consummated, the Contingent Fee shall be paid by the Escrow Agent: (i) 80 percent to THL Managers and (ii) 20 percent to GSCP and GSMP, pro rata among GSCP and GSMP, in accordance with the aggregate relative purchase price committed to be paid by each of them pursuant to the Equity Purchase Agreement (such allocation, the “80/20 Allocation”) and (b) if such financing is not consummated, then (i) the portion of the Contingent Fee, if any, equal to any fees paid to and retained by GSMP in connection with such financing shall be paid by the Escrow Agent in accordance with the 80/20 Allocation, which amounts shall be paid on the first date on which GSMP is not subject to any obligation to return or otherwise disgorge such fees, and (ii) the balance, if any, of such Contingent Fee shall be paid by the Escrow Agent to GSMP pursuant to Section 2 (b) hereof.
 
  d.   If the Equity Purchase Agreement is terminated as a result of a willful breach thereof by the Company, the Contingent Fee shall be paid by the Escrow Agent to GSMP.
 
  e.   If the Equity Purchase Agreement is terminated pursuant to Section 5.1(b) of the Equity Purchase Agreement as a result of the failure of the closing condition in Section 1.2(c)(i) of the Equity Purchase Agreement to be satisfied or pursuant to Section 5.1(c) of the Equity Purchase Agreement, the Contingent Fee shall be paid by the Escrow Agent to the Company.
 
  f.   If the Equity Purchase Agreement is terminated for any other reason, the Contingent Fee shall be paid 1/3 to GSMP and 2/3 to the Company.
  3.   Subsequent Transaction. If the Equity Purchase Agreement is terminated as described in either Section 2(e) or 2(f) above for any reason (other than primarily as a result of the Investors’ breach of their obligations under the Equity Purchase Agreement which resulted in the failure to satisfy conditions set forth in Section 1.2(c) of the Equity Purchase Agreement) and the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by any Company Transaction Proposal (other than a transaction entered into or consummated following a voluntary or involuntary petition by Holdco, the Company or any subsidiary of the Company under the federal bankruptcy code) (a “Subsequent Transaction”) within nine (9) months of the date of termination of the Equity Purchase Agreement, then the Company shall pay to GSMP an amount equal to the portion of the Contingent Fee paid to the Company pursuant to Section 2(e)

 


 

      or 2(f), as applicable, as promptly as possible (but in any event within two (2) Business Days) following the earlier of entering into a definitive agreement with respect to or consummating a Company Transaction Proposal.
     If the Equity Purchase Agreement is terminated as described in any of Section 2(e) or 2(f) above for any reason (other than primarily as a result of the Investors’ breach of their obligations under the Equity Purchase Agreement which resulted in the failure to satisfy conditions set forth in Section 1.2(c) of the Equity Purchase Agreement) and (x) the Company enters into a definitive agreement with respect to, or consummates, a Subsequent Transaction within nine (9) months of the date of termination of the Equity Purchase Agreement and (y) GSMP provides or commits to provide second lien or subordinated debt financing with respect to the Subsequent Transaction, then in lieu of making the payments referred to under the preceding paragraph: (a) if such financing is consummated, (A) the Company shall pay, in accordance with the 80/20 Allocation, an aggregate amount equal to 100% of the portion of the Contingent Fee that would have been repaid to GSMP pursuant to the preceding paragraph and (B) if the Equity Purchase Agreement is terminated as described in Section 2(f), GSMP shall pay, in accordance with the 80/20 Allocation, an aggregate amount of the portion of the Contingent Fee paid to GSMP pursuant to Section 2(f) (net of any withholding tax paid by GSMP as a result of its receipt of such portion of the Contingent Fee) in each case, as promptly as possible, but in any event on the date of the consummation of a Company Transaction Proposal and (b) if such financing is not consummated, then (A) the Company shall pay an aggregate amount equal to 100% of the portion of the Contingent Fee that would have been repaid to GSMP pursuant to the preceding paragraph, to the extent of any fees paid to and retained by GSMP in connection with such financing in accordance with the 80/20 Allocation, and (B) if the Equity Purchase Agreement is terminated as described in Section 2(f), GSMP shall also pay an aggregate amount of the portion of the Contingent Fee paid to GSMP pursuant to Section 2(f) (net of any withholding tax paid by GSMP as a result of its receipt of such portion of the Contingent Fee) in accordance with the 80/20 Allocation, which such amounts shall be paid on the first date on which GSMP is not subject to any obligation to return or otherwise disgorge such fees.
  4.   Further Agreements. The parties agree to jointly instruct the Escrow Agent, in accordance with the Escrow Agreement, to effect payment of the Contingent Fee, by wire transfer in immediately available funds, in accordance with the terms of Section 2 above. Any earnings on the funds deposited in Escrow will be paid to the party or parties entitled to received the payment of the Contingent Fee in proportion to the portion of the Contingent Fee paid to such party.
 
  5.   GOVERNING LAW; JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY SUIT OR PROCEEDING ARISING IN RESPECT TO THIS LETTER OR OUR COMMITMENT WILL BE TRIED EXCLUSIVELY (SUBJECT TO THE PROVISO BELOW) IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR, IF THAT COURT DOES NOT HAVE SUBJECT MATTER JURISDICTION, IN ANY STATE COURT LOCATED IN THE CITY OF NEW YORK, AND YOU AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF, AND TO VENUE IN, SUCH COURT. THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPALS OF CONFLICTS OF LAWS THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
 
  6.   WAIVER OF JURY TRIAL. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING IN CONNECTION WITH OR AS A RESULT OF EITHER OUR COMMITMENT OR ANY MATTER REFERRED TO IN THIS LETTER IS

 


 

      HEREBY WAIVED BY THE PARTIES HERETO.
  7.   Counterparts. This letter may be executed in counterparts, each of which shall be deemed to constitute an original but all of which shall constitute one and the same instrument. Delivery of an executed signature page of this letter by facsimile, e-mail or similar transmission shall be effective as delivery of a manually executed counterpart hereof.
[SIGNATURE PAGES FOLLOW]

 


 

     If the foregoing terms and conditions are acceptable to you, please so indicate by signing both of the enclosed copies of this letter where indicated and returning one to the undersigned, whereupon this letter shall become a binding agreement between us.
         
    Very truly yours,
 
       
    MONEYGRAM PAYMENT SYSTEMS WORLDWIDE, INC.
 
       
 
  By:   /s/  David J. Parrin
 
       
 
  Name:   David J. Parrin 
 
  Title:   Executive Vice President
and Chief Financial Officer

 


 

Goldman Sachs Mezzanine Partners
         
    GSMP V ONSHORE US, LTD.
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President
 
       
    GSMP V OFFSHORE US, LTD.
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President
 
       
    GSMP V INSTITUTIONAL US, LTD.
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President

 


 

Goldman Sachs Capital Partners
         
    GS CAPITAL PARTNERS VI FUND, L.P.
 
       
    By: GSCP VI Advisors, L.L.C., its General Partner
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President
 
       
    GS CAPITAL PARTNERS VI OFFSHORE FUND, L.P.
 
       
    By: GSCP VI Offshore Advisors, L.L.C., its General Partner
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President
 
       
    GS CAPITAL PARTNERS VI GmbH & Co. KG
 
       
    By: GS Advisors VI, L.L.C., its Managing Limited Partner
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President
 
       
    GS CAPITAL PARTNERS VI PARALLEL, L.P.
 
       
    By: GS Advisors VI, L.L.C., its General Partner
 
       
 
  By:   /s/  Bradley Gross
 
       
 
  Name:   Bradley Gross 
 
  Title:   Managing Director and Vice President

 


 

THL
         
    THL MANAGERS VI, LLC
 
       
    By: Thomas H. Lee Partners, L.P., its managing member
 
       
    By: Thomas H. Lee Advisors, LLC, its general partner
 
       
 
  By:   /s/ Scott L. Jaeckel
 
       
 
  Name:   Scott L. Jaeckel 
 
  Title:   Managing Director 

 

EX-99.1
 

MoneyGram Enters Into Definitive Agreement with Investor Group
Led By Thomas H. Lee Partners, L.P. and Goldman Sachs
Reaches Multi-Year Extension of Contract with Wal-Mart;
Provides Portfolio Update
MINNEAPOLIS February 12, 2008 — MoneyGram International, Inc. (NYSE:MGI) today announced that it has entered into a definitive agreement with an investment group (the “Investors”) led by Thomas H. Lee Partners, L.P. (THL) and Goldman, Sachs & Co. (Goldman Sachs), concerning a comprehensive recapitalization of the Company.
Components of the recapitalization include the following:
    The Investors, which include affiliates of THL and affiliates of Goldman Sachs are expected to make an equity investment of approximately $710 million (with a maximum amount of $775 million), with the exact amount to be determined by the price at which the Company is able to sell certain investment portfolio assets as required under the terms of the agreement.
 
    The Company has also entered into an agreement with affiliates of Goldman Sachs to provide debt financing of up to $500 million and the Company is expected to obtain an additional $200 million in debt financing prior to the close of the transaction.
 
    The Company also expects to have $350 million outstanding or available under its existing credit agreement, and will seek amendments from its existing lenders to modify certain terms and to permit those amounts to remain outstanding or available.
The Company also announced a multi-year extension through January 2013 of its financial services agreement with Wal-Mart. MoneyGram provides the money transfer, urgent bill payment and money order services for customers in more than 3,500 Wal-Mart stores, including Wal-Mart MoneyCenters. The Company’s multi-year extension with Wal-Mart is conditioned on the consummation of the transaction.
“The Board of Directors of MoneyGram, after careful consideration in conjunction with its independent advisors, unanimously supports this transaction and believes it is in the best interests of MoneyGram,” said Philip W. Milne, President, Chief Executive Officer and Chairman. “The Board also believes this transaction results in the best alternative available to its shareholders and is critical to the long-term health and vitality of MoneyGram. It will provide the Company the necessary additional capital to significantly strengthen its balance sheet and position us to assure the highest quality service to our customers as well as the more than 143,000 agents who represent us around the world. We believe this transaction is a long-term vote of confidence by THL and Goldman Sachs in a recapitalized MoneyGram and its future growth potential.”

 


 

Upon closing of the transaction, it is expected that the Investors will receive a combination of nonvoting preferred stock with an aggregate liquidation preference equal to approximately $710 million (assuming a $710 million investment) and common or common equivalent stock representing approximately 19.9% of the currently outstanding common stock of the Company. The nonvoting preferred stock received at the closing will have an initial interest rate of 20%, which will increase over time up to a maximum of 22%, and will have contingent value rights tied to the future value of the Company’s common stock.
Upon receipt of shareholder approval and certain state regulatory approvals, the nonvoting preferred stock, common stock, common stock equivalents and contingent value rights received will be exchanged for convertible voting preferred stock. The convertible voting preferred stock will pay a cash dividend of 10% or may accrue dividends at a rate of 12.5% in lieu of paying in cash. The Company expects it is likely that dividends will be accrued and not paid in cash for at least 4 years. The convertible voting preferred stock will be convertible into shares of common stock of the Company at a price of $5.00 per share, which is expected to give the Investors an initial equity interest of approximately 63%, assuming a $710 million investment. The committed debt from affiliates of Goldman Sachs provides for 13.25% senior second lien notes with a 10-year term, and is not callable by the Company for 5 years. The interest rate on the $200 million of additional senior debt is expected to be no more than LIBOR plus 625 basis points.
Investment Portfolio Update
Through February 11, 2008, the Company sold a total of approximately $1.8 billion of investment portfolio securities, resulting in a realized loss of approximately $380 million, which was an incremental $220 million from the unrealized losses related to its investment portfolio securities at November 30, 2007. These amounts include the results of the $1.3 billion sale previously disclosed on January 14, 2008.
Additional losses may be realized in connection with the liquidation of $1.9 billion in certain investment portfolio assets prior to closing, as required under the terms of the transaction. However, the Company believes that based on current market conditions, and taking into account the unrealized losses and additional losses from the required liquidation, it will meet the condition to closing that aggregate realized and unrealized losses related to the investment portfolio shall not exceed $1.7 billion. The investment portfolio remaining after asset sales will consist primarily of cash and cash equivalents, U.S. agencies and agency residential mortgage backed securities.
“Go Shop” Provision
The agreement includes a “go shop” provision that permits the Company’s Board with the assistance of its advisors including J.P. Morgan Securities Inc., to solicit, receive and evaluate alternative proposals from third parties, including from Euronet Worldwide, Inc. for a period through March 7, 2008. There is no assurance that such solicitation will result in an alternative superior transaction and the Investors would have the right to top any superior proposal. In accordance with the agreement, the Company may also, at any

 


 

time, subject to the agreement, respond to unsolicited proposals. If no superior offer is received during the “go shop” period, the transaction will close within 5 days of the expiration of that period, if the conditions have been satisfied. If a superior proposal leads to the execution of a definitive agreement, the Company would be obligated to pay a $15 million break-up fee to the Investors and approximately $37.5 million of other fees paid to the Investors and affiliates of Goldman Sachs as of the date of the agreement would become non-refundable. There can be no assurance that solicitation of superior proposals will result in an alternative transaction. The extension of the Wal-Mart agreement is also conditioned upon the completion of the transaction and there can be no assurance that a similar agreement could be reached between Wal-Mart and any competing bidder.
Board Approval
At its meeting on February 11, 2008, the Board of Directors of MoneyGram unanimously approved the Company’s entry into the purchase agreement with the Investors and the note purchase agreement with affiliates of Goldman Sachs. The Board retained J.P. Morgan Securities Inc. and Duff & Phelps LLC as financial advisors, each of whom provided a fairness opinion to the Board. J.P. Morgan Securities Inc. also acted as placement agent to MoneyGram on the transaction.
Closing Conditions
Closing of the Transaction is conditioned upon the Company securing the additional $200 million in debt financing discussed above at an interest rate no higher than LIBOR plus 625 basis points and on other terms contemplated by the proposed debt documentation; amendment of its $350 million credit agreement on terms set forth on an exhibit to the definitive agreement; there not having been a “material adverse effect” on the Company as defined in the purchase agreement; the Company being in compliance (on a pro forma for the Transaction basis) with certain ratios of unrestricted assets to payment services liabilities, and with certain cash cushion requirements set forth in the purchase agreement; the Company not having received a notice from any state that it cannot conduct business in such state; the Company having received an unqualified opinion from its external auditor regarding its fiscal year 2007 consolidated financial statements, or, if no opinion is received prior to the closing, a determination by each Investor in its sole discretion that the Company will obtain an unqualified opinion within a certain period of time after the closing; the Company having resolved all outstanding comments from the SEC on the Company’s prior financial statements; the Investors being satisfied with the Company’s internal controls and procedures; and the Company having liquidated approximately $1.9 billion in certain of the Company’s existing portfolio securities, and the loss realized on such sale, when aggregated with any other realized and unrealized loss on portfolio securities of the Company as of the closing not having exceeded $1.7 billion, calculated in accordance with the purchase agreement. The Transaction is also conditioned upon other customary closing conditions. There can be no assurance that the conditions will be satisfied and the transaction will close. If the transaction does not close, the Company would expect to seek alternative sources of liquidity and capital.

 


 

In connection with the execution of the equity and debt agreements, the Company paid arrangement and other fees to affiliates of THL and Goldman Sachs in an aggregate amount of $37.5 million. If the Transaction is terminated prior to the closing, two-thirds of these fees would be returned to the Company, except that no amounts would be returned in the event of termination in connection with the Company’s acceptance of a superior proposal (and an additional $15 million break-up fee would be paid, as described above) or as a result of the Company’s willful breach, and 100% of the amounts would be returned in the event that the Transaction fails to close as a result of the failure of conditions related to termination of competition act waiting periods or to the absence of injunctions, or as a result of Investors’ willful breach. The Company has also agreed to reimburse certain out of pocket expenses of THL and Goldman Sachs
About MoneyGram International, Inc.
MoneyGram International, Inc. is a leading global payment services company. The company’s major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram is a New York Stock Exchange listed company, with $1.16 billion in revenue in 2006 and approximately 143,000 global money transfer agent locations in 170 countries and territories. For more information, visit the company’s website at www.moneygram.com.
About Thomas H. Lee Partners, L.P.
Thomas H. Lee Partners, L.P. is one of the oldest and most successful private equity investment firms in the United States. Since its establishment in 1974, THL has been the preeminent growth buyout firm, raising approximately $22 billion of equity capital, investing in more than 100 businesses with an aggregate purchase price of more than $125 billion, completing over 200 add-on transactions and generating superior returns for its investors. THL focuses its high value-added strategy on growth businesses, partnering with the best managers in an industry to build great companies through strong organic growth and targeted add-on acquisitions. Notable transactions sponsored by THL include Aramark, Ceridian, Dunkin’ Brands, Experian, Fidelity National Information Services, Grupo ONO, HomeSide Lending, Houghton Mifflin, Michael Foods, The Nielsen Company, Nortek, ProSiebenSat.1, Simmons Bedding Company, Snapple, Univision, Warner Chilcott, Warner Music Group and West Corporation. For more information please visit www.THL.com.
About Goldman Sachs
Founded in 1869, Goldman Sachs is one of the world’s oldest and largest investment banking firms. Goldman Sachs is also a global leader in private corporate equity and mezzanine investing. Since 1992, Goldman Sachs’ Principal Investment Area within its Merchant Banking Division has raised 13 funds with approximately $70 billion of capital for privately negotiated equity and mezzanine investments. For more information please visit www.gs.com.

 


 

Forward Looking Statements The statements contained in this press release regarding MoneyGram International, Inc. that are not historical facts are forward-looking statements and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances due to a number of factors, including, but not limited to: (a) the Company’s ability to satisfy the conditions to consummation of the Transaction, including without limitation the amendment of the Company’s existing credit facilities and the raising of an additional $200 million of senior indebtedness at an interest rate no higher than LIBOR plus 625 basis points and other terms contemplated by the purchase agreement; (b) the Company’s ability to sell portfolio securities as agreed in the Transaction while incurring a total loss no higher than that specified in the purchase agreement, as well as any additional material changes in the market value of securities we hold and/or permanent impairments of portfolio securities; (c) the Company’s retention of clearing banks, money transfer agents and other customers during the pendency of or in the absence of a transaction; (d) additional costs and expenses incurred as a result of any recapitalization and related matters; (e) loss of one or more key customers or the inability to maintain the Company’s network in our Global Funds Transfer segment; (f) the Company’s ability to continue to effectively operate the Payments Systems segment pending the receipt of additional long-term capital and in light of changes implemented or to be implemented as a result of the previously disclosed strategic review of that business, the Transaction and the additional indebtedness expected to be incurred; (g) the Company’s ability to maintain sufficient liquidity, capital and assets; (h) the Company’s ability to maintain all required state and international licenses required to operate the Company’s business; (i) risks of shareholder or other litigation or government investigations of the Company or its agents that could result in material settlements, fines or penalties risks (j) risk of further downgrade in the Company’s credit ratings which could affect the Company’s cost of funds; (k) the Company’s ability to manage credit risk related to its investment portfolio and its use of derivatives; l) unexpected liquidity or capital needs including those arising from the exit of customer banks and requirements of clearing banks, and the Company’s ability to secure additional sources of capital; (m) ability to successfully develop and timely introduce new and enhanced products and services; n) ability to protect and defend the intellectual property rights related to the Company’s existing and any new or enhanced products and services; (o) our ability to continue to compete effectively; (p) The Company’s and its agents’ ability to comply with U.S. and international licensing and regulatory requirements; (q) conducting money transfer transactions through agents in regions that are politically volatile and/or in a limited number of cases, subject to certain OFAC restrictions; (r) ability to manage security risks related to the Company’s electronic processing and transmission of confidential customer information; (s) ability to process and settle transactions accurately and the efficient and uninterrupted operation of the Company’s computer network systems and data centers; (t) ability to manage credit and fraud risks from the Company’s retail agents; (u) ability to manage reputational damage to the Company’s brand due to the events leading to the recapitalization as well as fraudulent or other unintended use of its services; (v) fluctuations in interest rates; (w) ability to

 


 

manage risks related to opening of new retail locations and acquisition of businesses; (x) material slow down or complete disruption in international migration patterns; (y) ability for us and our agents to maintain adequate banking relationships, including relationships with clearing banks; (z) ability to manage risks associated with the Company’s international sales and operations; (aa) ability to maintain effective internal controls; and (bb) other factors more fully discussed in MoneyGram’s filings with the Securities and Exchange Commission. Actual results may differ materially from historical and anticipated results. These forward-looking statements speak only as of the date on which such statements are made, and MoneyGram undertakes no obligation to update such statements to reflect events or circumstances arising after such date.
Contacts
For MoneyGram:
Don Duffy (Investors) 203-682-8200
Michael Fox (Media) 203-682-8215 or 203-258-9527
For Thomas H. Lee Partners, L.P.:
Jeffrey Taufield/Kimberly Kriger
Kekst and Company
(212) 521-4800
For Goldman Sachs:
Andrea Raphael
212-357-0025

 

EX-99.2
 

Exhibit 99.2
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES B PARTICIPATING CONVERTIBLE PREFERRED STOCK OF
MONEYGRAM INTERNATIONAL, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
     The undersigned, pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that, pursuant to the authority expressly vested in the Board of Directors of MoneyGram International, Inc., a Delaware corporation (the “Corporation”), by the Corporation’s Amended and Restated Certificate of Incorporation, the Board of Directors has by resolution duly provided for the issuance of and created a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”), and in order to fix the designation and amount and the voting powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock, has duly adopted resolutions setting forth such rights, powers and preferences, and the qualifications, limitations and restrictions thereof, of a series of Preferred Stock as set forth in this Certificate of Designations, Preferences and Rights of the Series B Convertible Preferred Stock (the “Certificate”).
     Each share of such series of Preferred Stock shall rank equally in all respects and shall be subject to the following provisions:
     1. Number of Shares and Designation. 1,000,000 shares of Preferred Stock of the Corporation shall constitute a series of Preferred Stock designated as Series B Participating Convertible Preferred Stock (the “Series B Preferred Stock”). The number of shares of Series B Preferred Stock may be increased (to the extent of the Corporation’s authorized and unissued Preferred Stock) or decreased (but not below the number of shares of Series B Preferred Stock then outstanding plus the maximum number of shares of Series B Preferred Stock issuable pursuant to the Exchange contemplated by the Purchase Agreement and the conversion contemplated by the Series B-1 Certificate) by further resolution duly adopted by the Board of Directors and the filing of a certificate of increase or decrease, as the case may be, with the Secretary of State of the State of Delaware.
     2. Rank. The Series B Preferred Stock shall, with respect to payment of dividends, redemption payments and rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (i) rank senior and prior to the Common Stock, the Series A Junior Participating Preferred Stock of the Corporation, par value $0.01 per share, the Series D Preferred Stock, and each other class or series of equity securities of the Corporation, whether currently issued or issued in the future, that by its terms ranks junior to the Series B Preferred Stock as to payment of dividends or rights upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, including the Common Stock, are collectively referred to herein as the “Junior Securities”), (ii) rank on a parity with the Series B-1 Preferred Stock and each other class or series of equity securities of the Corporation, whether currently issued or issued in the future without violation of this

 


 

Certificate, that does not by its terms expressly provide that it ranks senior to or junior to the Series B Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, other than Junior Securities, are collectively referred to herein as the “Parity Securities”), and (iii) rank junior to each other class or series of equity securities of the Corporation, whether currently issued or issued in the future without violation of this Certificate, that by its terms ranks senior to the Series B Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities are collectively referred to herein as the “Senior Securities”). The respective definitions of Junior Securities, Parity Securities and Senior Securities shall also include any securities, rights or options exercisable or exchangeable for or convertible into any of the Junior Securities, Parity Securities or Senior Securities, as the case may be. At the time of the initial issuance of the Series B Preferred Stock there will be no Parity Securities (other than the Series B-1 Preferred Stock) or Senior Securities outstanding.
     3. Dividends.
     (a) The holders of record of the issued and outstanding shares of Series B Preferred Stock shall be entitled to receive, out of assets legally available for the payment of dividends, dividends on the terms described below:
     (i) Holders of shares of Series B Preferred Stock shall be entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends and distributions paid (whether in the form of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock or other equity of any Person other than the Corporation, or evidences of indebtedness, of any Person, including, without limitation, the Corporation or any Subsidiary) on the shares of Common Stock as if immediately prior to each Common Stock Dividend Record Date (as defined below), shares of Series B Preferred Stock then outstanding were converted into shares of Common Stock (in the manner described in Section 7 hereof without regard to any limitations contained therein); provided, however, that the holders of shares of Series B Preferred Stock shall not be entitled to participate in any such dividend or distribution to the extent that an adjustment to the Conversion Price shall be required with respect to such dividend or distribution pursuant to Section 7(c). Dividends or distributions payable pursuant to this Section 3(a)(i) shall be payable on the same date that such dividends or distributions are payable to holders of shares of Common Stock (a “Common Stock Dividend Payment Date”).
     (ii) In addition to any dividends pursuant to Section 3(a)(i) hereof, in respect of each three-month period beginning with the three-month period ending on the 90th day following the Exchange Date, the Corporation shall pay, as and when declared by the Board of Directors, out of assets legally available therefor, a quarterly dividend on each share of Series B Preferred Stock at the annual rate per share of 10% of the sum of (x) the Liquidation Preference and (y) all accumulated and unpaid dividends, if any, whether or not declared, from the Exchange Date to the applicable Dividend Payment Date (as defined below), excluding any dividends accruing during the then-current Dividend Period (such

2


 

rate, the “Dividend Rate”); provided, however, that if at any time the Corporation shall have for any reason failed to pay dividends in cash in a timely manner as required by this Certificate or the Series B-1 Certificate or failed to redeem shares of Series B Preferred Stock or Series B-1 Preferred Stock for cash in a timely manner as required by this Certificate or the Series B-1 Certificate, in each case without giving effect to Section 11(c) or any prohibition on such payment under applicable law (related to the impairment of capital or otherwise), then immediately following such failure the percentage set forth above shall be 12.5%. Dividends under this Section 3(a)(ii) shall be paid in cash; provided that, until the fifth anniversary of the Initial Funding Date, upon a determination by the Independent Directors, such determination intended to be a “fact” for purposes of Section 151(a) of the DGCL, dividends may be accrued for any Dividend Period prior to such fifth anniversary at the annual rate of 12.5% of the sum of (x) the Liquidation Preference and (y) all accumulated and unpaid dividends, if any, whether or not declared, from the Exchange Date to the applicable Dividend Payment Date, compounding quarterly, in lieu of paying such dividends in cash currently; provided, however, that immediately following any failure by the Corporation to redeem shares of Series B Preferred Stock or Series B-1 Preferred Stock for cash in a timely manner as required by this Certificate or the Series B-1 Certificate (without giving effect to Section 11(c) or any prohibition on such payment under any applicable law (related to impairment of capital or otherwise) for any reason, dividends shall be paid currently in cash. The Series B Preferred Stock and the Series B-1 Preferred Stock shall be treated as a single series for purposes of declaring and paying dividends such that any dividends paid on shares of either series shall be paid at the same time and in the same manner as dividends on the shares of the other series.
     (iii) Dividends on the Series B Preferred Stock provided for in Section 3(a)(ii) hereof shall accrue and accumulate, whether or not declared, on a daily basis from the Exchange Date, and shall, if declared, be payable quarterly on the First Payment Date, the Second Payment Date, the Third Payment Date and the Fourth Payment Date of each year (unless such day is not a Business Day (as defined below), in which event such dividends shall be payable on the next succeeding Business Day) (each such payment date being a “Dividend Payment Date” and the period from the Exchange Date to the first Dividend Payment Date and each such quarterly period thereafter until a redemption date (but only with respect to any shares redeemed on such redemption date) being a “Dividend Period”). As used herein, the term “Business Day” means any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in the City of New York. The “First Payment Date” means the 91st calendar day after the Exchange Date and each successive anniversary of such date in each successive year. The “Second Payment Date” means the 181st calendar day after the Exchange Date and each successive anniversary of such date in each successive year. The “Third Payment Date” means the 271st calendar day after the Exchange Date and each successive anniversary of such date in each successive year. The “Fourth Payment Date” means the one-year anniversary of the Exchange Date and each successive anniversary of such date in each successive year.
     (iv) Each dividend payable pursuant to Section 3(a)(i) or Section 3(a)(ii) hereof shall be payable to the holders of record of shares of Series B Preferred Stock as they appear on the stock records of the Corporation at the close of business on the record date designated

3


 

by the Board of Directors for such dividends (each, a “Dividend Payment Record Date”), which (i) with respect to dividends payable pursuant to Section 3(a)(i) hereof, shall be the same day as the record date for the payment of dividends to the holders of shares of Common Stock (the “Common Stock Dividend Record Date”) and, (ii) with respect to dividends payable pursuant to Section 3(a)(ii) hereof, shall be not more than thirty (30) days nor less than ten (10) days preceding the applicable Dividend Payment Date. Dividends in respect of any past Dividend Periods that are in arrears may be declared and paid at any time to holders of record on the Dividend Payment Record Date therefor.
     (b) During any Stoppage Period (as defined below), (i) no dividends shall be declared or paid or set apart for payment, or other distribution declared or made, upon any Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (other than, subject to Section 9, a redemption, purchase or other acquisition of shares of Common Stock from employees or directors of the Corporation or any Subsidiary of the Corporation required by the terms of any bona fide employee or director incentive or benefit plans or arrangements of the Corporation or any Subsidiary of the Corporation approved by the Board of Directors or the payment of cash in lieu of fractional shares in connection therewith) for any consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such Junior Securities) by the Corporation, directly or indirectly (except, subject to Section 9, by conversion into or exchange for Junior Securities or the payment of cash in lieu of fractional shares in connection therewith) and (ii) the Corporation shall not, directly or indirectly, make any payment on account of any purchase, redemption, retirement or other acquisition of any Parity Securities (other than, subject to Section 9, for consideration payable solely in Junior Securities). “Stoppage Period” means any period (A) beginning at any time that the Corporation shall have failed to pay any dividend contemplated by Section 3(a) hereof or the Series B-1 Certificate and ending at such time when all such dividends have been paid in full in cash, (B) in respect of which the Corporation elects to accrue dividends under Section 3(a)(ii) hereof or the Series B-1 Certificate, or (C) beginning at any time that the Corporation shall have failed to pay the redemption price for shares of Series B Preferred Stock that holders of shares of Series B Preferred Stock or the Series B-1 Preferred Stock have requested be redeemed pursuant to Section 11 hereof or the Series B-1 Certificate and ending at such time when the full applicable redemption price, as set forth in Section 11 hereof or the Series B-1 Certificate, for all such shares of Series B Preferred Stock or the Series B-1 Preferred Stock shall have been paid to the holders in cash.
     (c) For the avoidance of doubt, the shares of Series B Preferred Stock that have been redeemed upon payment of the Liquidation Payment Amount shall not be entitled to receive any dividend pursuant to this Section 3 payable on or after the redemption date.
     4. Liquidation Preference.
     (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series B Preferred Stock then outstanding shall, with respect to each share of Series B Preferred Stock, be entitled to be paid in redemption of such share out of the assets of the Corporation available for distribution to its stockholders a liquidation preference equal to the greater of (i) the sum of (x) $1,000 per share (the

4


 

Liquidation Preference”) and (y) an amount equal to all accumulated and unpaid dividends, if any (whether or not declared), to the date of payment (such amount, the “Accumulated Dividend Amount” and, together with the Liquidation Preference, the “Liquidation Payment Amount”) and (ii) the payment such holders would have received had such holders, immediately prior to such liquidation, dissolution or winding up, converted their shares of Series B Preferred Stock into shares of Common Stock (pursuant to, and at a conversion rate described in, Section 7 hereof without regard to any limitations contained therein), in each case, before any payment or distribution of any assets of the Corporation shall be made or set apart for holders of any Junior Securities. If the assets of the Corporation available for distribution to its stockholders are not sufficient to pay in full the Liquidation Payment Amounts payable to the holders of shares of Series B Preferred Stock and the liquidation preference payable to the holders of any Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series B Preferred Stock and any such other Parity Securities ratably in accordance with the Liquidation Payment Amounts and the liquidation preference for the Parity Securities, respectively.
     (b) Neither a consolidation or merger of the Corporation with or into any other entity, nor a merger of any other entity with or into the Corporation, nor a sale or transfer of all or any part of the Corporation’s assets for cash, securities or other property shall by itself be considered a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 4.
     5. Redemption by the Corporation. Subject to the provisions of Section 7, following the fifth anniversary of the Exchange Date, the Corporation shall have the right to redeem, out of assets lawfully available for the redemption of shares, all (but not less than all) of the outstanding shares of Series B Preferred Stock, for an amount in cash per share equal to the Liquidation Payment Amount as of the Corporation Redemption Date (the “Redemption Price”), but the Corporation shall have this redemption right only if at the time the Corporation exercises this option, the average Market Price of the Common Stock during a period of thirty (30) consecutive Trading Days ending on the 10th day prior to the date the Corporation exercises this option, exceeds the Redemption Trigger Price. Upon a determination by the Independent Directors, such determination intended to be a “fact” for purposes of Section 151(a) of the DGCL, the Corporation shall be required to exercise its right to redeem the Series B Preferred Stock and the Series B-1 Preferred Stock (pursuant to the terms in the Series B-1 Certificate) at any time that such right is exercisable and assets are then lawfully available to pay the aggregate Redemption Price for all shares outstanding of Series B Preferred Stock and Series B-1 Preferred Stock.
     6. Procedures for Redemption by the Corporation.
     (a) In the event of a redemption of shares of Series B Preferred Stock pursuant to Section 5, the Corporation shall deliver written notice to each holder (the “Notice of Redemption”), by first class mail, postage prepaid, mailed not less than fifteen (15) days and no more than twenty (20) days prior to the date on which the holder is to surrender to the Corporation the certificates representing shares to be redeemed (such date, or if such date is not a Business Day, the first Business Day thereafter, the “Corporation Redemption Date”), provided that the Corporation Redemption Date shall not be later than the 30th day immediately

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following the date upon which the Corporation exercises its redemption option pursuant to Section 5. The Notice of Redemption shall specify: (i) the number of shares of Series B Preferred Stock to be redeemed by the Corporation; (ii) the Corporation Redemption Date; (iii) the Liquidation Payment Amount as of the Corporation Redemption Date; and (iv) instructions on surrendering the holder’s shares for any shares to be redeemed. Any Notice of Redemption mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the Notice of Redemption.
     (b) Upon surrender in accordance with the Notice of Redemption of the certificates representing any shares so redeemed, such shares shall be redeemed by the Corporation at the Redemption Price with payment of such Redemption Price being made on the Corporation Redemption Date by wire transfer of immediately available funds to the account specified by the holder of the shares redeemed. Such redemption shall be effective on the Corporation Redemption Date, notwithstanding any failure of such holders to deliver such certificates, provided that the Redemption Price for each share of Series B Preferred Stock has either been paid to each holder on or prior to such date or deposited in a bank in a separate trust account for the sole benefit of the holders. Until redemption is effective on the Corporation Redemption Date as aforesaid, shares of Series B Preferred Stock may be converted pursuant to Section 7 and shall accrue and accumulate dividends pursuant to Section 3.
     7. Conversion.
     (a) Right to Convert.
     (i) Subject to the provisions of this Section 7, each holder of shares of Series B Preferred Stock shall have the right, at any time and from time to time, at such holder’s option, to convert any or all of such holder’s shares of Series B Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Common Stock at the conversion price equal to $5.00, subject to adjustment as described in Section 7(c) (as adjusted from time to time, the “Conversion Price”). The number of shares of Common Stock into which each share of the Series B Preferred Stock shall be convertible (calculated as to each conversion to the nearest 1/10,000th of a share) shall be determined by dividing the Liquidation Payment Amount in effect at the time of conversion by the Conversion Price in effect at the time of conversion; provided that, notwithstanding anything in this Certificate to the contrary, but subject to Section 7(a)(ii), the Series B Preferred Stock may not be converted into Common Stock under this Section 7 to the extent such conversion would result in a number of shares of Common Stock to be issued that would exceed the number of shares of Common Stock authorized for issuance by the Corporation; provided, however, that in the event that there shall not be sufficient shares of Common Stock issued but not outstanding or authorized but unissued to permit the exercise in full of the rights contained in this Certificate, the Corporation shall use its best efforts to take all such action as may be necessary to promptly authorize sufficient additional shares of Common Stock for issuance upon exercise of all such rights.
     (ii) To the extent that a holder of Series B Preferred Stock is restricted from converting such shares into Common Stock under the first proviso to Section 7(a)(i), such

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holder may (at the sole election of the holder) convert such shares of Series B Preferred Stock into the number of shares of Series D Preferred Stock, or fraction thereof, that are then convertible into the number of shares of Common Stock (in a manner described in the Series D Certificate, without regard to any restrictions contained therein) that such holder would have been entitled to receive if the first proviso in Section 7(a)(i) did not apply.
     (b) Mechanics of Conversion.
     (i) A holder of shares of Series B Preferred Stock that elects to exercise its conversion rights pursuant to Section 7(a) shall provide notice to the Corporation as follows: to exercise its conversion right pursuant to Section 7(a), a holder of shares of Series B Preferred Stock to be converted shall surrender the certificate or certificates representing such shares at the office of the Corporation (or any transfer agent of the Corporation previously designated by the Corporation to the holders of Series B Preferred Stock for this purpose) with a written notice of election to convert, completed and signed, specifying the number of shares to be converted. Unless the shares issuable upon conversion are to be issued in the same name as the name in which such shares of Series B Preferred Stock are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the holder thereof or such holder’s duly authorized attorney and an amount sufficient to pay any transfer or similar tax in accordance with Section 7(b)(v) (or evidence reasonably satisfactory to the Corporation that such tax has been or will be timely paid). As promptly as practicable (and in any event within two (2) Business Days) after the surrender by the holder of the certificates representing shares of Series B Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to such holder or, on the holder’s written order, to the holder’s transferee, a certificate or certificates representing the number of shares of Common Stock (and, if the holder so elects pursuant to Section 7(a)(ii), Series D Preferred Stock) issuable upon conversion of such shares and a check payable in an amount corresponding to any fractional interest in a share of Common Stock as provided in Section 7(b)(vi).
     (ii) Each conversion shall be deemed to have been effected immediately prior to the close of business on the first Business Day on which the certificates representing shares of Series B Preferred Stock shall have been surrendered and such notice received by the Corporation as aforesaid (the “Conversion Date”). At such time on the Conversion Date:
     (A) the Person in whose name or names any certificate or certificates representing shares of Common Stock (and, if applicable, Series D Preferred Stock) shall be issuable upon such conversion shall be deemed to have become the holder of record of the shares of Common Stock represented thereby at such time; and
     (B) such shares of Series B Preferred Stock so converted shall no longer be deemed to be outstanding, and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the right to

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receive the Common Stock (and, if applicable, Series D Preferred Stock) and other amounts payable pursuant to this Section 7.
All shares of Common Stock (and, if applicable, Series D Preferred Stock) delivered upon conversion of the Series B Preferred Stock will, upon delivery, be duly and validly authorized and issued, fully paid and nonassessable, free from all preemptive rights and free from all taxes, liens, security interests and charges (other than liens or charges created by or imposed upon the holder or taxes in respect of any transfer occurring contemporaneously therewith).
     (iii) Holders of shares of Series B Preferred Stock at the close of business on a Dividend Payment Record Date or Common Stock Dividend Record Date, as applicable, for a dividend payment for the Series B Preferred Stock shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date or Common Stock Dividend Payment Date, as applicable, notwithstanding the conversion thereof following such Dividend Payment Record Date or Common Stock Dividend Record Date, as applicable, and prior to such Dividend Payment Date or Common Stock Dividend Payment Date, as applicable. A holder of shares of Series B Preferred Stock on a Dividend Payment Record Date or a Common Stock Dividend Record Date, as applicable, whose shares of Series B Preferred Stock have been converted pursuant to Section 7(a) into shares of Common Stock prior to the close of business on such Dividend Payment Record Date, or Common Stock Dividend Record Date, as applicable, will not be entitled to receive any portion of the dividend payable by the Corporation on such shares of Series B Preferred Stock on the corresponding Dividend Payment Date or Common Stock Dividend Payment Date, as applicable. Notwithstanding anything in this Certificate, such dividends paid pursuant to this Section 7(b)(iii) shall be considered paid for purposes of determining the Liquidation Payment Amount in Section 7(a)(i).
     (iv) The Corporation will procure, at its sole expense, the listing of the shares of Common Stock, subject to issuance or notice of issuance, on the principal domestic stock exchange on which the Common Stock is then listed or traded.
     (v) Issuances of certificates representing shares of Common Stock (and, if applicable, Series D Preferred Stock) upon conversion of the Series B Preferred Stock shall be made without charge to any holder of shares of Series B Preferred Stock for any issue or transfer tax (other than taxes in respect of any transfer occurring contemporaneously therewith) or other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Corporation; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of shares of Common Stock (and, if applicable, Series D Preferred Stock) in a name other than that of the holder of the Series B Preferred Stock to be converted, and no such issuance or delivery shall be made unless and until the Person requesting such issuance or delivery has paid to the Corporation the amount of any such tax or has established, to the reasonable satisfaction of the Corporation, that such tax has been, or will be timely, paid.

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     (vi) In connection with the conversion of any shares of Series B Preferred Stock into Common Stock, no fractional interests of Common Stock shall be issued, but in lieu thereof, a cash adjustment in respect of such fractional shares shall be paid in an amount equal to such fractional Common Stock interest multiplied by the Market Price per share of Common Stock at the applicable Conversion Date. Appropriate fractions of a share of Series D Preferred Stock may be issued in connection with the conversion of any shares of Series B Preferred Stock into Series D Preferred Stock pursuant to Section 7(a)(ii).
     (vii) The Corporation shall ensure that each share of Common Stock and Series D Preferred Stock issued as a result of conversion of Series B Preferred Stock shall be accompanied by all rights associated generally with each other share of Common Stock and Series D Preferred Stock, respectively, outstanding as of the applicable Conversion Date, subject to any applicable restrictions on transfer of the shares of Series B Preferred Stock set forth in the Purchase Agreement.
     (c) Adjustments to Conversion Price and Redemption Trigger Price. From and after the date of the Purchase Agreement, the Conversion Price and Redemption Trigger Price shall be adjusted from time to time as follows:
     (i) Common Stock Issued at Less than Market Value. If the Corporation issues or sells any Common Stock other than Excluded Stock without consideration or for consideration per share less than the Market Price of the Common Stock, as of the day of such issuance or sale, the Conversion Price and the Redemption Trigger Price in effect immediately prior to each such issuance or sale will immediately (except as provided below) be reduced to the price determined by multiplying (A) each of the Conversion Price and the Redemption Trigger Price, respectively, in effect immediately prior to each such issuance or sale by (B) a fraction of which the numerator shall be the sum of (1) the number of shares of Common Stock outstanding immediately prior to such issuance or sale and (2) the number of additional shares of Common Stock that the aggregate consideration received by the Corporation for the number of shares of Common Stock so offered would purchase at the Market Price per share of Common Stock on the last Trading Day immediately preceding such issuance or sale, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such issuance or sale. For the purposes of any adjustment of the Conversion Price and the Redemption Trigger Price pursuant to this Section 7(c), the following provisions shall be applicable:
     (A) In the case of the issuance of Common Stock for cash, the amount of the consideration received by the Corporation shall be deemed to be the amount of the cash proceeds received by the Corporation for such Common Stock before deducting therefrom any underwriting discounts or commissions allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof.
     (B) In the case of the issuance of Common Stock (other than upon the conversion of shares of Capital Stock or other securities of the Corporation) for a consideration in whole or in part other than cash, including securities acquired in

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     exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board of Directors; provided, however, that such fair value as determined by the Board of Directors shall not exceed the aggregate Market Price of the shares of Common Stock being issued as of the date the Board of Directors authorizes the issuance of such shares.
     (C) In the case of the issuance of (x) options, warrants or other rights to purchase or acquire Common Stock (whether or not at the time exercisable) or (y) securities by their terms convertible into or exchangeable for Common Stock (whether or not at the time so convertible or exchangeable) or options, warrants or rights to purchase such convertible or exchangeable securities (whether or not at the time exercisable):
     (1) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options, warrants or other rights to purchase or acquire Common Stock shall be deemed to have been issued at the time such options, warrants or rights are issued and for a consideration equal to the consideration (determined in the manner provided in Section 7(c)(i)(A) and (B)), if any, received by the Corporation upon the issuance of such options, warrants or rights plus the minimum purchase price provided in such options, warrants or rights for the Common Stock covered thereby;
     (2) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities, or upon the exercise of options, warrants or other rights to purchase or acquire such convertible or exchangeable securities and the subsequent conversion or exchange thereof, shall be deemed to have been issued at the time such securities were issued or such options, warrants or rights were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related options, warrants or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the additional consideration (determined in the manner provided in Section 7(c)(i)(A) and (B)), if any, to be received by the Corporation upon the conversion or exchange of such securities, or upon the exercise of any related options, warrants or rights to purchase or acquire such convertible or exchangeable securities and the subsequent conversion or exchange thereof;
     (3) on any change in the number of shares of Common Stock deliverable upon exercise of any such options, warrants or rights or conversion or exchange of such convertible or exchangeable securities or any change in the consideration to be received by the Corporation upon such exercise, conversion or exchange, but excluding changes resulting

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from the anti-dilution provisions thereof (to the extent comparable to the anti-dilution provisions contained herein), the Conversion Price and the Redemption Trigger Price as then in effect shall forthwith be readjusted to such Conversion Price and Redemption Trigger Price as would have been obtained had an adjustment been made upon the issuance of such options, warrants or rights not exercised prior to such change, or of such convertible or exchangeable securities not converted or exchanged prior to such change, upon the basis of such change;
     (4) on the expiration or cancellation of any such options, warrants or rights (without exercise), or the termination of the right to convert or exchange such convertible or exchangeable securities (without exercise), if the Conversion Price and the Redemption Trigger Price shall have been adjusted upon the issuance thereof, the Conversion Price and the Redemption Trigger Price shall forthwith be readjusted to such Conversion Price and Redemption Trigger Price as would have been obtained had an adjustment been made upon the issuance of such options, warrants, rights or such convertible or exchangeable securities on the basis of the issuance of only the number of shares of Common Stock actually issued upon the exercise of such options, warrants or rights, or upon the conversion or exchange of such convertible or exchangeable securities; and
     (5) if the Conversion Price and the Redemption Trigger Price shall have been adjusted upon the issuance of any such options, warrants, rights or convertible or exchangeable securities, no further adjustment of such Conversion Price and Redemption Trigger Price shall be made for the actual issuance of Common Stock upon the exercise, conversion or exchange thereof.
     (ii) Stock Splits, Subdivisions, Reclassifications or Combinations. If the Corporation shall (1) declare a dividend or make a distribution on its Common Stock in shares of Common Stock, (2) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares or (3) combine or reclassify the outstanding Common Stock into a smaller number of shares, the Conversion Price and the Redemption Trigger Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be adjusted to the number obtained by multiplying each of the Conversion Price and the Redemption Trigger Price, respectively, in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such action, and the denominator of which shall be the number of shares of Common Stock outstanding immediately following such action.
     (iii) Certain Repurchases of Common Stock. In case the Corporation effects a Pro Rata Repurchase of Common Stock, then each of the Conversion Price and the Redemption

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     Trigger Price, respectively, shall be reduced to the price determined by multiplying each of the Conversion Price and the Redemption Trigger Price, respectively, in effect immediately prior to the effective date of such Pro Rata Repurchase by a fraction of which the numerator shall be the product of the number of shares of Common Stock outstanding (including any tendered or exchanged shares) at such effective date, multiplied by the Market Price per share of Common Stock on the Trading Day next succeeding such effective date, and the denominator of which shall be the sum of (A) the fair market value of the aggregate consideration payable to stockholders based upon the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered or exchanged and not withdrawn as of such effective date (the shares deemed so accepted, up to any maximum, being referred to as the “Purchased Shares”) and (B) the product of the number of shares of Common Stock outstanding (less any Purchased Shares) at such effective date and the Market Price per share of Common Stock on the Trading Day next succeeding such effective date, such reduction to become effective immediately prior to the opening of business on the day following such effective date.
     (iv) Other Distributions. In case the Corporation shall fix a record date for the making of a dividend or distribution to all holders of shares of its Common Stock (A) of shares of any class or of any Person other than shares of the Corporation’s Common Stock, or (B) of evidence of indebtedness of the Corporation or any Subsidiary, or (C) of assets (excluding dividends or distributions covered by Section 7(c)(ii)), or (D) of rights or warrants in respect of any of the foregoing, in each such case the Conversion Price and the Redemption Trigger Price, respectively, in effect immediately prior thereto shall be reduced immediately thereafter to the price determined by multiplying (x) the Conversion Price and Redemption Trigger Price, respectively, in effect immediately prior thereto by (y) a fraction, the numerator of which shall be the Market Price per share of Common Stock on such record date less the then fair market value (as determined by a firm of independent public accountants or an independent appraiser, in each case, of recognized national standing selected by the Board of Directors and approved by holders of a majority of the outstanding shares of Series B Preferred Stock, provided that such value shall not for purposes hereof in any event be equal to or greater than the Market Price per share of Common Stock on such record date) as of such record date of the shares, assets, evidences of indebtedness, rights or warrants so paid with respect to one share of Common Stock, and the denominator of which shall be the Market Price per share of Common Stock on such record date. In the event that such dividend or distribution is not so made, the Conversion Price and Redemption Trigger Price then in effect shall be readjusted, effective as of the date when the Board of Directors determines not to distribute such shares, evidences of indebtedness, assets, rights or warrants, as the case may be, to the Conversion Price and Redemption Trigger Price that would then be in effect if such record date had not been fixed.
     (v) Successive Adjustments. Successive adjustments in each of the Conversion Price and the Redemption Trigger Price shall be made, without duplication, whenever any event specified in Section 7(c)(i), (ii), (iii), (iv), (vi) or (vii) shall occur.

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     (vi) Rounding of Calculations; Minimum Adjustments. All calculations under this Section 7(c) shall be made to the nearest one-tenth (1/10th) of a cent. No adjustment in each of the Conversion Price or the Redemption Trigger Price is required if the amount of such adjustment would be less than $0.01; provided, however, that any adjustments which by reason of this Section 7(c)(vi) are not required to be made will be carried forward and given effect in any subsequent adjustment.
     (vii) Adjustment for Unspecified Actions. If the Corporation takes any action affecting the Common Stock, other than action described in this Section 7(c), which upon a determination by the Independent Directors, such determination intended to be a “fact” for purposes of Section 151(a) of the DGCL, would materially adversely affect the conversion rights of the holders of shares of Series B Preferred Stock, the Conversion Price and, if so, the Redemption Trigger Price, may be adjusted, to the extent permitted by law, in such manner, if any, and at such time, as such Independent Directors may determine in good faith to be equitable in the circumstances. Failure of the Independent Directors to provide for any such adjustment prior to the effective date of any such action by the Corporation affecting the Common Stock will be evidence that the Independent Directors have determined that it is equitable to make no adjustments in the circumstances.
     (viii) Statement Regarding Adjustments. Whenever either of the Conversion Price or the Redemption Trigger Price shall be adjusted as provided in this Section 7(c), the Corporation shall forthwith file, at the principal office of the Corporation, a statement showing in reasonable detail the facts requiring such adjustment, and each of the Conversion Price and the Redemption Trigger Price that shall be in effect after such adjustment and the Corporation shall also cause a copy of such statement to be sent by mail, first class postage prepaid, to each holder of shares of Series B Preferred Stock at the address appearing in the Corporation’s records.
     (ix) Notices. In the event that the Corporation shall give notice or make a public announcement to the holders of Common Stock of any action of the type described in this Section 7(c) (but only if the action of the type described in this Section 7(c) would result in an adjustment in the Conversion Price or the Redemption Trigger Price or a change in the type of securities or property to be delivered upon conversion of the Series B Preferred Stock), the Corporation shall, at the time of such notice or announcement, and in the case of any action which would require the fixing of a record date, at least ten (10) days prior to such record date, give notice to each holder of shares of Series B Preferred Stock, in the manner set forth in Section 7(c)(viii), which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth the facts with respect thereto as shall be reasonably necessary to indicate the effect on the Conversion Price and/or the Redemption Trigger Price and the number, kind or class of shares or other securities or property which shall be deliverable upon conversion or redemption of the Series B Preferred Stock. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.
     (x) Miscellaneous. Except as provided in Section 7(c), no adjustment in respect of any dividends or other payments or distributions made to holders of Series B Preferred

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Stock of securities issuable upon the conversion of the Series B Preferred Stock will be made while the Series B Preferred Stock is outstanding or upon the conversion of the Series B Preferred Stock. In addition, notwithstanding any of the foregoing, no such adjustment will be made for the issuance or conversion of any Securities (as defined in the Purchase Agreement).
     8. Status of Shares. Unless otherwise approved by the written consent of, or the affirmative vote in favor at a meeting called for that purpose by, holders of at least a majority of the outstanding shares of Series B Preferred Stock, all shares of Series B Preferred Stock that are at any time redeemed by the Corporation pursuant to Section 5 or converted pursuant to Section 7 hereof and all shares of Series B Preferred Stock that are otherwise reacquired by the Corporation shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized but unissued shares of preferred stock, without designation as to series, subject to reissuance by the Board of Directors as shares of any one or more other series.
     9. Voting Rights.
     (a) The holders of the shares of Series B Preferred Stock (i) shall be entitled to vote with the holders of the Common Stock on all matters submitted for a vote of holders of Common Stock (voting together with the holders of Common Stock as one class), (ii) shall be entitled to a number of votes per share of Series B Preferred Stock equal to the product of (x) a fraction, the numerator of which is the sum of the number of shares of Series B Preferred Stock outstanding at the time of the applicable record date and the number of shares of Series B-1 Preferred Stock outstanding at the time of the applicable record date, and the denominator of which is the number of shares of Series B Preferred Stock outstanding at the time of the applicable record date, and (y) the number of votes to which shares of Common Stock issuable upon conversion of such shares of Series B Preferred Stock would have been entitled if such shares of Common Stock had been outstanding at the time of the applicable record date (without regard to any limitations on conversion contained in this Certificate), and (iii) shall be entitled to notice of all stockholders’ meetings in accordance with the Certificate of Incorporation and the Bylaws of the Corporation as if they are holders of Common Stock The holders of the shares of Series B Preferred Stock shall also be entitled to vote with the holders of shares of Series B-1 Preferred Stock to the extent provided in Section 9 and Section 11(a) of the Series B-1 Certificate.
     (b) So long as shares of the Series B Preferred Stock or shares of the Series B-1 Preferred Stock are outstanding, the Corporation shall not, without the written consent, or affirmative vote at a meeting called for that purpose, by holders of at least a majority of the outstanding shares of Series B Preferred Stock and Series B-1 Preferred Stock (voting together as one class):
     (i) create, authorize or issue any Senior Securities, Parity Securities or any security convertible into, or exchangeable or exercisable for, shares of Senior Securities or Parity Securities, except for issuance of Series B Preferred Stock upon conversion of Series B-1 Preferred Stock pursuant to the Series B-1 Certificate;

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     (ii) split, reverse split, authorize, subdivide, reclassify or combine the Series B Preferred Stock or the Series B-1 Preferred Stock, or increase the authorized number of shares of Series B Preferred Stock or Series B-1 Preferred Stock; or
     (iii) amend, alter or repeal any provision of this Certificate or any other provision of the Corporation’s Certificate of Incorporation (or any provision of the Corporation’s by-laws) (in each case, by any means, including (without limitation) by merger, consolidation, reclassification, amendment, or otherwise) so as to, or in a manner that would, adversely affect the preferences, rights, privileges, powers or economics of the Series B Preferred Stock; provided that the creation, authorization or issuance of any Junior Securities shall not by itself be deemed to have any such adverse effect;
provided, that no such consent or vote of the holders of Series B Preferred Stock and Series B-1 Preferred Stock shall be required if, at or prior to the time when such amendment, alteration or repeal is to take effect, or when the issuance of any such securities is to be made, as the case may be, all shares of Series B Preferred Stock at the time outstanding shall have been converted into Common Stock pursuant to Section 7 or redeemed by the Corporation in accordance with Sections 5 and 6 hereof and all shares of Series B-1 Preferred Stock outstanding at the time shall have been converted into Series D Preferred Stock or redeemed by the Corporation pursuant to the Series B-1 Certificate or converted into Series B Preferred Stock and all such Series B Preferred Stock shall have been converted into Common Stock. The holders of shares of Series B Preferred Stock and Series B-1 Preferred Stock shall be entitled to one vote for each share upon all questions presented to such holders pursuant to this Section 9(b).
     (c) The consent or votes required in Section 9(b) shall be in addition to any approval of stockholders of the Corporation which may be required by law or pursuant to any provision of the Corporation’s Certificate of Incorporation or Bylaws, which approval shall be obtained by vote of the stockholders of the Corporation in the manner provided in Section 9(a).
     10. Definitions.
     Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated.
     “Affiliate” means, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person. For purposes of this definition, the term “control” (and correlative terms “controlling,” “controlled by” and “under common control with”) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person.
     “Board of Directors” means the board of directors of the Corporation.
     “Business Combination” means (i) any reorganization, consolidation, merger, share exchange or similar business combination transaction involving the Corporation

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with any Person or (ii) the sale, assignment, conveyance, transfer, lease or other disposition by the Corporation of all or substantially all of its assets.
     “Capital Stock” means (i) with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents (however designated) of capital or capital stock of such Person and (ii) with respect to any Person that is not a corporation or company, any and all partnership or other equity interests of such Person.
     “Common Stock” means the common stock of the Corporation, par value $0.01 per share.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
     “Exchange Date” shall have the meaning set forth in the Purchase Agreement.
     “Excluded Stock” means (i) shares of Common Stock issued by the Corporation as a stock dividend payable in shares of Common Stock, or upon any subdivision or split-up of the outstanding shares of Capital Stock in each case which is subject to the provisions of Section 7(c)(ii), or upon conversion of shares of Capital Stock (but not the issuance of such Capital Stock which will be subject to the provisions of Section 7(c)(i)(C)), (ii) shares of Common Stock issued in any bona fide underwritten public offering, (iii) shares of Common Stock (including shares of Common Stock issued upon exercise of options) and options to purchase Common Stock issued to current or former directors, advisors, employees or consultants of the Corporation pursuant to a stock option plan, restricted stock plan or other agreement approved by the Board of Directors or the Corporation’s employee stock purchase plan, (iv) shares of Common Stock issued in connection with acquisitions of assets or securities of another Person (other than issuances to Persons that were Affiliates of the Corporation at the time that the agreement with respect to such issuance was entered into), approved by the Board of Directors, (v) the issuance of shares of Common Stock upon conversion of the Series B Preferred Stock or Series D Preferred Stock.
     “Independent Director” shall have the meaning set forth in the Purchase Agreement.
     “Initial Funding Date” means the Closing Date (as defined in the Purchase Agreement).
     “Investor” shall have the meaning set forth in the Purchase Agreement.
     “Market Price” means, with respect to a particular security, on any given day, the volume weighted average price or, in case no such reported sales take place on such day, the average of the highest asked and lowest bid prices regular way, in either case on the principal national securities exchange on which the applicable security is listed or admitted to trading or, if not listed or admitted to trading on any national securities

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exchange, (i) the average of the highest and lowest sale prices for such day reported by the Over-The-Counter-Bulletin-Board (the “OTCBB”) or any comparable system then in use or (ii) if such security is so traded, but not so quoted, the average of the highest reported asked and lowest reported bid prices of such security as reported by the OTCBB or any comparable system then in use, or (iii) if such security is not traded on the OTCBB or any comparable system, the average of the highest asked and lowest bid prices as furnished by two members of NASD, Inc., selected from time to time by the Corporation for that purpose. If such security is not listed and traded in a manner that the quotations referred to above are available for the period required hereunder, the Market Price per share of Common Stock shall be deemed to be the fair value per share of such security as determined in good faith by the Board of Directors.
     “Person” means an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
     “Pro Rata Repurchase” means any purchase of shares of Common Stock by the Corporation or any Affiliate thereof pursuant to any tender offer or exchange offer subject to Section 13(e) of the Exchange Act, or pursuant to any other offer available to substantially all holders of Common Stock, whether for cash, shares of capital stock of the Corporation, other securities of the Corporation, evidences of indebtedness of the Corporation or any other Person or any other property (including, without limitation, shares of capital stock, other securities or evidences of indebtedness of a Subsidiary of the Corporation), or any combination thereof, effected while any shares of Series B Preferred Stock are outstanding; provided, however, that “Pro Rata Repurchase” shall not include any purchase of shares by the Corporation or any Affiliate thereof made in accordance with the requirements of Rule 10b-18 as in effect under the Exchange Act. The “Effective Date” of a Pro Rata Repurchase means the date of acceptance of shares for purchase or exchange under any tender or exchange offer which is a Pro Rata Repurchase or the date of purchase with respect to any Pro Rata Repurchase that is not a tender or exchange offer.
     “Purchase Agreement” means the Purchase Agreement, dated as of February 6, 2008 among the Corporation and the purchasers named therein, including all schedules and exhibits thereto, as the same may be amended from time to time.
     “Redemption Trigger Price” means $15.00, subject to adjustment as provided in Section 7(c).
     “Series B-1 Certificate” means the Certificate of Designations, Preferences and Rights of Series B-1 Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
     “Series B-1 Preferred Stock” means the Series B-1 Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.

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     “Series D Certificate” means the Certificate of Designations, Preferences and Rights of Series D Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
     “Series D Preferred Stock” means the Series D Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.
     “Subsidiary” of a Person means (i) a corporation, a majority of whose stock with voting power, under ordinary circumstances, to elect directors is at the time of determination, directly or indirectly, owned by such Person or by one or more Subsidiaries of such Person, or (ii) any other entity (other than a corporation) in which such Person or one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof has at least a majority ownership interest.
     “Trading Day” means any day that the New York Stock Exchange, Inc., is open for trading.
     11. Redemption at the Option of the Holder.
     (a) At any time after the tenth anniversary of the Initial Funding Date, upon the approval by holders of at least a majority of the outstanding shares of Series B Preferred Stock and shares of Series B-1 Preferred Stock voting together as a class, the Corporation shall redeem all, but not less than all, but subject to Section 11(c), of the outstanding shares of Series B Preferred Stock and Series B-1 Preferred Stock at a redemption price per share in cash equal to the Liquidation Payment Amount as of the Holder Redemption Date (as defined below), whereupon, subject to Section 11(c) hereof, the Corporation shall effect such redemption, or cause such redemption to be effected, out of assets lawfully available therefor, within 90 days after the holder’s request (such date on which the Corporation makes the full redemption payment in cash to such holders, the “Holder Redemption Date”).
     (b) Change in Control.
     (i) In connection with a Change in Control described in Section 11(b)(iii)(B) or (C) below, each holder of shares of Series B Preferred Stock shall have the right (exercisable at the holder’s option) to require, by request in writing to the Corporation during the period 60 days prior to and ending 60 days after the consummation of a Change in Control (the date of consummation being referred to as the “Change in Control Date”), that the Corporation redeem (or that the acquiring or surviving Person in such Change of Control, if not the Corporation, redeem) such holder’s shares of Series B Preferred Stock, out of funds legally available therefor, at a redemption price per share in cash equal to 101% of the Liquidation Payment Amount (as of the date the Corporation makes the full redemption payment in cash to such holders), whereupon (subject to consummation of a Change in Control) the Corporation shall effect such redemption, or cause such redemption to be effected, if the holder’s redemption request was made prior to the Change in Control Date, then on the Change in Control Date, and if the holder’s redemption request was made after the Change in Control Date, then within 20 calendar days of such request.

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     (ii) In connection with a Change in Control described in Section 11(b)(iii)(A), (D) or (E) below, each holder of shares of Series B Preferred Stock shall have the right (exercisable at the holder’s option), to require, by request in writing to the Corporation within 60 days after the public disclosure of the consummation of a Change in Control, that the Corporation redeem such holder’s shares of Series B Preferred Stock, out of funds legally available therefor, at a redemption price per share in cash equal to 101% of the Liquidation Payment Amount (as of the date the Corporation makes the full redemption payment in cash to such holders), whereupon the Corporation shall effect such redemption, or cause such redemption to be effected, within 30 calendar days of such request.
     (iii) As used herein, “Change in Control” means the happening of any of the following events:
                    (A) any Person (other than any Investor or any of its Affiliates) acquires Beneficial Ownership, directly or indirectly, of 50% or more of the combined voting power of the then-outstanding voting securities of the Corporation entitled to vote generally in the election of directors (“Outstanding Corporation Voting Stock”);
                    (B) consummation of a Business Combination, unless, following such Business Combination, (x) all or substantially all of the individuals and entities that were the Beneficial Owners of the Outstanding Corporation Voting Stock immediately prior to such Business Combination Beneficially Own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or equivalent) of the entity resulting from such Business Combination (including, without limitation, a company that, as a result of such transaction, owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the voting power of the Outstanding Corporation Voting Stock, and (y) no Person (other than any Investor or its Affiliates) Beneficially Owns, directly or indirectly, 50% or more of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or equivalent) of such entity;
                    (C) approval by the stockholders of the Corporation of a liquidation or dissolution of the Corporation;
                    (D) individuals who, as of the Initial Funding Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director pursuant to the Purchase Agreement, or whose election or nomination for election by the Corporation’s shareholders was approved by a vote of at least a majority of the directors comprising the incumbent Board of Directors as of such election or nomination, shall be considered as though such individual were a member of the Incumbent Board; or
                    (E) any event that would not otherwise constitute a Change in Control pursuant to Sections 11(b)(iii)(A), (B), (C) or (D) hereof but would constitute a “change in

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control” for purposes of the Existing Credit Facilities (as defined in the Purchase Agreement) or the Second Lien Notes (as defined in the Purchase Agreement).
     The terms “Beneficially Own” and “Beneficial Ownership” are used herein as defined in Rules 13d-3 and 13d-5 of the Exchange Act, but without taking into account any contractual restrictions or limitations on voting or other rights.
     (iv) The Corporation shall deliver written notice to each holder of Series B Preferred Stock, by first class mail, postage prepaid, of any Change in Control as promptly as practicable, together with a reasonably detailed summary of the material terms of such Change in Control.
     (c) If the Corporation (i) shall not have sufficient assets legally available under the DGCL for the redemption of all shares of Series B Preferred Stock and all shares of Series B-1 Preferred Stock that holders of Series B Preferred Stock and holders of Series B-1 Preferred Stock have requested be redeemed under Section 11(a) or (b) of this Certificate or Section 11(a) or (b) of the Series B-1 Certificate (the “Required Number of Shares”) or (ii) will be in violation of Specified Contract Terms (as defined below) if it redeems the Required Number of Shares, the Corporation shall: (A) redeem, at the applicable redemption price set forth above in this Section 11, the maximum number of shares of Series B Preferred Stock it is permitted to redeem (which aggregate redemption price will be an amount equal to the lesser of (y) the amount legally available for the redemption of shares of Series B Preferred Stock and (z) the largest amount that can be used for such redemption not prohibited by Specified Contract Terms); (B) subject to Sections 9 and 12(b)-(c), use its best efforts to promptly take all actions necessary to eliminate any limitation or other impediment on the Corporation’s ability to redeem the Required Number of Shares as soon as practicable (including, without limitation, seeking to refinance all indebtedness under the contracts containing the Specified Contract Terms, seeking to liquidate assets and otherwise seeking to raise sufficient funds legally available for the redemption of the Required Number of Shares without violation of Specified Contract Terms, and seeking a merger or other sale of the Corporation that would provide for the redemption of the Required Number of Shares); and (C) redeem, pro rata among the holders of shares of Series B Preferred Stock and Series B-1 Preferred Stock, at the applicable redemption price set forth above in this Section 11, any and all shares of Series B Preferred Stock not redeemed because of the limitations described in clause (i) or clause (ii) of this paragraph as soon as practicable to the extent it is able to make such redemption out of assets legally available for the redemption of shares of Series B Preferred Stock and without violation of Specified Contract Terms. The inability of the Corporation to make a redemption payment for any reason shall not relieve the Corporation from its obligation to effect any required redemption when, as and if permitted by law and Specified Contract Terms. As used in this paragraph, “Specified Contract Terms” means the covenants of the Corporation contained in (x) the Existing Credit Facilities (as defined in the Purchase Agreement) as amended as of the Initial Funding Date in accordance with Section 1.2(c)(iv)(A) of the Purchase Agreement and (y) the Second-Lien Debt (as defined in the Purchase Agreement) documentation in accordance with Section 1.2(c)(iv)(B) of the Purchase Agreement, in each case under clause (x) and (y) as the same shall be in effect on and as of the Initial Funding Date and not including any subsequent amendment, restatement, refinancing, replacement or other modification thereof or any successor contract thereto. In the event the

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officers or directors of the Corporation do not take the actions required in this Section 11 because they reasonably believe, after consultation with the Corporation’s outside legal counsel, that taking such action would violate their fiduciary duties, then no holder of Series B Preferred Stock shall be entitled to make any claim against such officers or directors in their individual capacities as a result of their failure to take such actions; provided, that nothing herein shall relieve the Corporation from its obligations owed to the holders of the Series B Preferred Stock provided herein and nothing herein shall preclude any holder of Series B Preferred Stock from making claims for monetary damages against the Corporation or seeking injunctions or other equitable remedies to cause the Corporation to fulfill its obligations hereunder.
     (d) Until the full redemption price applicable under Section 11(a)-(b) is paid in cash to the holders of shares of Series B Preferred Stock, shares of Series B Preferred Stock may be converted pursuant to Section 7 and shall accrue and accumulate dividends pursuant to Section 3; provided that, any such shares that are converted shall not be entitled to receive any redemption payment.
     12. Certain Other Provisions.
     (a) If any Series B Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new Series B Preferred Stock certificate of like tenor and representing an equivalent amount of Series B Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate and, if requested by the Corporation, an indemnity on customary terms for such situations reasonably satisfactory to the Corporation.
     (b) Without limiting the provisions of (or the holders’ rights under) Section 9 and Section 11, the Corporation shall not merge or consolidate with or into, or sell, transfer or lease all or substantially all of its property to, any other entity, or permit consummation of any other Business Combination, unless the surviving, successor, transferee or lessee entity, as the case may be (if not the Corporation), (i) expressly assumes, as part of the terms of such Business Combination, the due and punctual performance and observance of each and every covenant and condition of this Certificate to be performed and observed by the Corporation and (ii) expressly agrees, as part of the terms of such Business Combination, to exchange, at the holder’s option, shares of Series B Preferred Stock for shares of the surviving entity’s capital stock having terms, preferences, rights (including, without limitation, as to dividends, voting, redemption at the option of the holder, and rights to assets upon liquidation, dissolution or winding-up), privileges and powers substantially similar to the terms preferences, rights (including, without limitation, as to dividends, voting, redemption at the option of the holder, and rights to assets upon liquidation, dissolution or winding-up), privileges and powers under this Certificate, in each case, such that the rights of the holders of Series B Preferred Stock are protected against dilution or other impairment. Without limiting any of the foregoing, the Corporation shall cause lawful provision to be made as part of the terms of each Business Combination such that each holder of a share of Series B Preferred Stock then outstanding shall have the right thereafter to exchange such share for, or convert such share into, the kind and amount of securities, cash and other property receivable upon the Business Combination by a holder of a number of shares of Common Stock

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into which such share of Series B Preferred Stock would have been convertible (without regard to any limitations contained in Section 7) immediately prior to such Business Combination, and subject to anti-dilution adjustment protections substantially equivalent to those set forth in this Certificate.
     (c) The Corporation shall not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets, or otherwise, avoid or seek to avoid the observance or performance of any of the terms of this Certificate, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of Series B Preferred Stock against dilution or other impairment.
     (d) The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
     (e) This Certificate shall become effective upon the filing thereof with the Secretary of State of the State of Delaware.

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     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed and acknowledged by its undersigned duly authorized officer this ___day of _______, 2008.
         
  MONEYGRAM INTERNATIONAL, INC.
 
 
  By:      
    Name:      
    Title:      
 

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EX-99.3
 

Exhibit 99.3
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES B-1 PARTICIPATING CONVERTIBLE PREFERRED STOCK OF
MONEYGRAM INTERNATIONAL, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
     The undersigned, pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that, pursuant to the authority expressly vested in the Board of Directors of MoneyGram International, Inc., a Delaware corporation (the “Corporation”), by the Corporation’s Amended and Restated Certificate of Incorporation, the Board of Directors has by resolution duly provided for the issuance of and created a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”), and in order to fix the designation and amount and the voting powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock, has duly adopted resolutions setting forth such rights, powers and preferences, and the qualifications, limitations and restrictions thereof, of a series of Preferred Stock as set forth in this Certificate of Designations, Preferences and Rights of the Series B-1 Convertible Preferred Stock (the “Certificate”).
     Each share of such series of Preferred Stock shall rank equally in all respects and shall be subject to the following provisions:
     1. Number of Shares and Designation. 400,000 shares of Preferred Stock of the Corporation shall constitute a series of Preferred Stock designated as Series B-1 Participating Convertible Preferred Stock (the “Series B-1 Preferred Stock”). The number of shares of Series B-1 Preferred Stock may be increased (to the extent of the Corporation’s authorized and unissued Preferred Stock) or decreased (but not below the number of shares of Series B-1 Preferred Stock then outstanding plus the maximum number of shares of Series B-1 Preferred Stock issuable pursuant to the Exchange contemplated by the Purchase Agreement) by further resolution duly adopted by the Board of Directors and the filing of a certificate of increase or decrease, as the case may be, with the Secretary of State of the State of Delaware.
     2. Rank. The Series B-1 Preferred Stock shall, with respect to payment of dividends, redemption payments and rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (i) rank senior and prior to the Common Stock, the Series A Junior Participating Preferred Stock of the Corporation, par value $0.01 per share, the Series D Preferred Stock and each other class or series of equity securities of the Corporation, whether currently issued or issued in the future, that by its terms ranks junior to the Series B-1 Preferred Stock as to payment of dividends or rights upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, including the Common Stock, are collectively referred to herein as the “Junior Securities”), (ii) rank on a parity with the Series B Preferred Stock, and each other class or series of equity securities of the Corporation, whether currently issued or issued in the future without violation of this Certificate, that does not by its terms expressly provide that it ranks senior to or

 


 

junior to the Series B-1 Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, other than Junior Securities, are collectively referred to herein as the “Parity Securities”), and (iii) rank junior to each other class or series of equity securities of the Corporation, whether currently issued or issued in the future without violation of this Certificate, that by its terms ranks senior to the Series B-1 Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities are collectively referred to herein as the “Senior Securities”). The respective definitions of Junior Securities, Parity Securities and Senior Securities shall also include any securities, rights or options exercisable or exchangeable for or convertible into any of the Junior Securities, Parity Securities or Senior Securities, as the case may be. At the time of the initial issuance of the Series B-1 Preferred Stock there will be no Parity Securities (other than the Series B Preferred Stock) or Senior Securities outstanding.
     3. Dividends.
     (a) The holders of record of the issued and outstanding shares of Series B-1 Preferred Stock shall be entitled to receive, out of assets legally available for the payment of dividends, dividends on the terms described below:
     (i) Holders of shares of Series B-1 Preferred Stock shall be entitled to participate equally and ratably with the holders of shares of Series D Preferred Stock in all dividends and distributions paid (whether in the form of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock or other equity of any Person other than the Corporation, or evidences of indebtedness, of any Person, including, without limitation, the Corporation or any Subsidiary) on the shares of Series D Preferred Stock as if immediately prior to each Series D Preferred Stock Dividend Record Date (as defined below), shares of Series B-1 Preferred Stock then outstanding were converted into             shares of Series D Preferred Stock (in the manner described in Section 7 hereof); provided, however, that the holders of shares of Series B-1 Preferred Stock shall not be entitled to participate in any such dividend or distribution to the extent that an adjustment to the Conversion Price shall be required with respect to such dividend or distribution pursuant to Section 7(c) of the Series B Certificate. Dividends or distributions payable pursuant to this Section 3(a)(i) shall be payable on the same date that such dividends or distributions are payable to holders of shares of Series D Preferred Stock (a “Series D Preferred Stock Dividend Payment Date”).
     (ii) In addition to any dividends pursuant to Section 3(a)(i) hereof, in respect of each three-month period beginning with the three-month period ending on the 90th day following the Exchange Date, the Corporation shall pay, as and when declared by the Board of Directors, out of assets legally available therefor, a quarterly dividend on each share of Series B-1 Preferred Stock at the annual rate per share of 10% of the sum of (x) the Liquidation Preference and (y) all accumulated and unpaid dividends, if any, whether or not

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declared, from the Exchange Date to the applicable Dividend Payment Date (as defined below), excluding any dividends accruing during the then-current Dividend Period (such rate, the “Dividend Rate”); provided, however, that if at any time the Corporation shall have for any reason failed to pay dividends in cash in a timely manner as required by this Certificate or the Series B Certificate or failed to redeem shares of Series B Preferred Stock or Series B-1 Preferred Stock for cash in a timely manner as required by this Certificate or the Series B Certificate, in each case without giving effect to Section 11(c) or any prohibition on such payment under applicable law (related to the impairment of capital or otherwise), then immediately following such failure the percentage set forth above shall be 12.5%. Dividends under this Section 3(a)(ii) shall be paid in cash; provided that, until the fifth anniversary of the Initial Funding Date, upon a determination by the Independent Directors, such determination intended to be a “fact” for purposes of Section 151(a) of the DGCL, dividends may be accrued for any Dividend Period prior to such fifth anniversary at the annual rate of 12.5% of the sum of (x) the Liquidation Preference and (y) all accumulated and unpaid dividends, if any, whether or not declared, from the Exchange Date to the applicable Dividend Payment Date, compounding quarterly, in lieu of paying such dividends in cash currently; provided, however, that immediately following any failure by the Corporation to redeem shares of Series B Preferred Stock or Series B-1 Preferred Stock for cash in a timely manner as required by this Certificate or the Series B Certificate (without giving effect to Section 11(c) or any prohibition on such payment under any applicable law (related to impairment of capital or otherwise) for any reason, dividends shall be paid currently in cash. The Series B Preferred Stock and the Series B-1 Preferred Stock shall be treated as a single series for purposes of declaring and paying dividends such that any dividends paid on shares of either series shall be paid at the same time and in the same manner as dividends on the shares of the other series.
     (iii) Dividends on the Series B-1 Preferred Stock provided for in Section 3(a)(ii) hereof shall accrue and accumulate, whether or not declared, on a daily basis from the Exchange Date, and shall, if declared, be payable quarterly on the First Payment Date, the Second Payment Date, the Third Payment Date and the Fourth Payment Date of each year (unless such day is not a Business Day (as defined below), in which event such dividends shall be payable on the next succeeding Business Day) (each such payment date being a “Dividend Payment Date” and the period from the Exchange Date to the first Dividend Payment Date and each such quarterly period thereafter until a redemption date (but only with respect to any             shares redeemed on such redemption date) being a “Dividend Period”). As used herein, the term “Business Day” means any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in the City of New York. The “First Payment Date” means the 91st calendar day after the Exchange Date and each successive anniversary of such date in each successive year. The “Second Payment Date” means the 181st calendar day after the Exchange Date and each successive anniversary of such date in each successive year. The “Third Payment Date” means the 271st calendar day after the Exchange Date and each successive anniversary of such date in each successive year. The “Fourth Payment Date” means the one-year anniversary of the Exchange Date and each successive anniversary of such date in each successive year.

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     (iv) Each dividend payable pursuant to Section 3(a)(i) or Section 3(a)(ii) hereof shall be payable to the holders of record of shares of Series B-1 Preferred Stock as they appear on the stock records of the Corporation at the close of business on the record date designated by the Board of Directors for such dividends (each, a “Dividend Payment Record Date”), which (i) with respect to dividends payable pursuant to Section 3(a)(i) hereof, shall be the same day as the record date for the payment of dividends to the holders of shares of Series D Preferred Stock (the “Series D Preferred Stock Dividend Record Date”) and, (ii) with respect to dividends payable pursuant to Section 3(a)(ii) hereof, shall be not more than thirty (30) days nor less than ten (10) days preceding the applicable Dividend Payment Date. Dividends in respect of any past Dividend Periods that are in arrears may be declared and paid at any time to holders of record on the Dividend Payment Record Date therefor.
     (b) During any Stoppage Period (as defined below), (i) no dividends shall be declared or paid or set apart for payment, or other distribution declared or made, upon any Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (other than, subject to Section 9, a redemption, purchase or other acquisition of shares of Common Stock from employees or directors of the Corporation or any Subsidiary of the Corporation required by the terms of any bona fide employee or director incentive or benefit plans or arrangements of the Corporation or any Subsidiary of the Corporation approved by the Board of Directors or the payment of cash in lieu of fractional shares in connection therewith) for any consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such Junior Securities) by the Corporation, directly or indirectly (except, subject to Section 9, by conversion into or exchange for Junior Securities or the payment of cash in lieu of fractional shares in connection therewith) and (ii) the Corporation shall not, directly or indirectly, make any payment on account of any purchase, redemption, retirement or other acquisition of any Parity Securities (other than, subject to Section 9, for consideration payable solely in Junior Securities). “Stoppage Period” means any period (A) beginning at any time that the Corporation shall have failed to pay any dividend contemplated by Section 3(a) hereof or the Series B Certificate and ending at such time when all such dividends have been paid in full in cash, (B) in respect of which the Corporation elects to accrue dividends under Section 3(a)(ii) hereof or the Series B Certificate, or (C) beginning at any time that the Corporation shall have failed to pay the redemption price for shares of Series B-1 Preferred Stock that holders of shares of Series B-1 Preferred Stock or the Series B Preferred Stock have requested be redeemed pursuant to Section 11 hereof or the Series B Certificate and ending at such time when the full applicable redemption price, as set forth in Section 11 hereof or the Series B Certificate, for all such shares of Series B-1 Preferred Stock or the Series B Preferred Stock shall have been paid to the holders in cash.
     (c) For the avoidance of doubt, the shares of Series B-1 Preferred Stock that have been redeemed upon payment of the Liquidation Payment Amount shall not be entitled to receive any dividend pursuant to this Section 3 payable on or after the redemption date.

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     4. Liquidation Preference.
     (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series B-1 Preferred Stock then outstanding shall, with respect to each share of Series B-1 Preferred Stock, be entitled to be paid in redemption of such share out of the assets of the Corporation available for distribution to its stockholders a liquidation preference equal to the greater of (i) the sum of (x) $1,000 per share (the “Liquidation Preference”) and (y) an amount equal to all accumulated and unpaid dividends, if any (whether or not declared), to the date of payment (such amount, the “Accumulated Dividend Amount” and, together with the Liquidation Preference, the “Liquidation Payment Amount”) and (ii) the payment such holders would have received had such holders, immediately prior to such liquidation, dissolution or winding up, converted their shares of Series B-1 Preferred Stock into shares of Common Stock (pursuant to, and at a conversion rate described in, Section 7 hereof without regard to any limitations contained therein), in each case, before any payment or distribution of any assets of the Corporation shall be made or set apart for holders of any Junior Securities. If the assets of the Corporation available for distribution to its stockholders are not sufficient to pay in full the Liquidation Payment Amounts payable to the holders of shares of Series B-1 Preferred Stock and the liquidation preference payable to the holders of any Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series B-1 Preferred Stock and any such other Parity Securities ratably in accordance with the Liquidation Payment Amounts and the liquidation preference for the Parity Securities, respectively.
     (b) Neither a consolidation or merger of the Corporation with or into any other entity, nor a merger of any other entity with or into the Corporation, nor a sale or transfer of all or any part of the Corporation’s assets for cash, securities or other property shall by itself be considered a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 4.
     5. Redemption by the Corporation. Subject to the provisions of Section 7, following the fifth anniversary of the Exchange Date, the Corporation shall have the right to redeem, out of assets lawfully available for the redemption of shares, all (but not less than all) of the outstanding shares of Series B-1 Preferred Stock, for an amount in cash per share equal to the Liquidation Payment Amount as of the Corporation Redemption Date (the “Redemption Price”), but the Corporation shall have this redemption right only if at the time the Corporation exercises this option, the average Market Price of the Common Stock during a period of thirty (30) consecutive Trading Days ending on the 10th day prior to the date the Corporation exercises this option, exceeds the Redemption Trigger Price (as defined in the Series B Certificate). Upon a determination by the Independent Directors, such determination intended to be a “fact” for purposes of Section 151(a) of the DGCL, the Corporation shall be required to exercise its right to redeem the Series B-1 Preferred Stock and the Series B Preferred Stock (pursuant to the terms in the Series B Certificate) at any time that such right is exercisable and assets are then lawfully available to pay the aggregate Redemption Price for all shares outstanding of Series B-1 Preferred Stock and Series B Preferred Stock.

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     6. Procedures for Redemption by the Corporation.
     (a) In the event of a redemption of shares of Series B-1 Preferred Stock pursuant to Section 5, the Corporation shall deliver written notice to each holder (the “Notice of Redemption”), by first class mail, postage prepaid, mailed not less than fifteen (15) days and no more than twenty (20) days prior to the date on which the holder is to surrender to the Corporation the certificates representing shares to be redeemed (such date, or if such date is not a Business Day, the first Business Day thereafter, the “Corporation Redemption Date”), provided that the Corporation Redemption Date shall not be later than the 30th day immediately following the date upon which the Corporation exercises its redemption option pursuant to Section 5. The Notice of Redemption shall specify: (i) the number of shares of Series B-1 Preferred Stock to be redeemed by the Corporation; (ii) the Corporation Redemption Date; (iii) the Liquidation Payment Amount as of the Corporation Redemption Date; and (iv) instructions on surrendering the holder’s shares for any shares to be redeemed. Any Notice of Redemption mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the Notice of Redemption.
     (b) Upon surrender in accordance with the Notice of Redemption of the certificates representing any shares so redeemed, such shares shall be redeemed by the Corporation at the Redemption Price with payment of such Redemption Price being made on the Corporation Redemption Date by wire transfer of immediately available funds to the account specified by the holder of the shares redeemed. Such redemption shall be effective on the Corporation Redemption Date, notwithstanding any failure of such holders to deliver such certificates, provided that the Redemption Price for each share of Series B-1 Preferred Stock has either been paid to each holder on or prior to such date or deposited in a bank in a separate trust account for the sole benefit of the holders. Until redemption is effective on the Corporation Redemption Date as aforesaid, shares of Series B-1 Preferred Stock may be converted pursuant to Section 7 and shall accrue and accumulate dividends pursuant to Section 3.
     7. Conversion.
     (a) Right to Convert.
     (i) Each holder of shares of Series B-1 Preferred Stock shall have the right, at any time and from time to time, at such holder’s option, to convert any or all of such holder’s shares of Series B-1 Preferred Stock, in whole or in part, into fully paid and non-assessable shares of Series D Preferred Stock at the conversion price equal to the product of the Conversion Price (as defined in the Series B Certificate) and the Conversion Ratio (as defined in the Series D Certificate) (the “B-1 Conversion Price”). The number of shares of Series D Preferred Stock into which each share of the Series B-1 Preferred Stock shall be convertible (calculated as to each conversion to the nearest 1/10,000,000th of a share) shall be determined by dividing the Liquidation Payment Amount in effect at the time of conversion by the B-1 Conversion Price in effect at the time of conversion; provided, however, that in the event that there shall not be sufficient shares of Series D Preferred

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Stock issued but not outstanding or authorized but unissued to permit the exercise in full of the rights contained in this Certificate, the Corporation shall use its best efforts to take all such action as may be necessary to promptly authorize sufficient additional shares of Series D Preferred Stock for issuance upon exercise of all such rights.
     (ii) Notwithstanding the provisions of Section 7(a)(i), each share of Series B-1 Preferred Stock, subject to the transfer restrictions contained in the Purchase Agreement, if transferred by the beneficial owner of such share to any person other than an Affiliate of the transferor shall be automatically and irrevocably converted upon transfer and delivery of a Transfer Notice (as defined below) into one share of Series B Preferred Stock (the “Series B-1 Conversion”) (which share of Series B Preferred Stock shall have a conversion price with respect to conversion into Common Stock equal to the conversion price then in effect under the Series B Certificate), without any action required by any holder of Series B-1 Preferred Stock, other than notification by the transferor to the Company that such transferor is no longer the beneficial owner of the shares of Series B-1 Preferred Stock that were the subject of the transfer (the “Transfer Notice”). Upon a Series B-1 Conversion, each existing certificate representing shares of Series B-1 Preferred Stock shall be deemed to be a certificate representing the number of shares of Series B Preferred Stock into which such             shares of Series B-1 Preferred Stock were converted; provided, that a holder of such certificate may elect to surrender the certificate or certificates representing the shares so converted to the Corporation at the office of the Corporation (or any transfer agent of the Corporation previously designated by the Corporation to the holders of Series B-1 Preferred Stock for this purpose), and the Corporation shall effect the delivery within two (2) Business Days of such surrender of a new certificate or certificates in respect of the Series B Preferred Stock issued pursuant to the Series B-1 Conversion. The Corporation shall reserve and keep available for issuance such number of its authorized but unissued shares of Series B Preferred Stock equal to the number of shares of Series B Preferred Stock issuable upon conversion of all outstanding shares of Series B-1 Preferred Stock. The Corporation shall use its best efforts to take all such action as may be necessary to increase the authorized number of shares of Series B Preferred Stock if at any time there shall be insufficient authorized but unissued shares of Series B Preferred Stock to permit such reservation or to permit the conversion of all outstanding shares of Series B-1 Preferred Stock. The Corporation covenants that all Series B Preferred Stock that may be issued upon conversion of Series B-1 Preferred Stock shall upon issuance be duly authorized, fully paid and non-assessable. No economic rights of holders of Series B-1 Preferred Stock will be foregone or diminished by virtue of a conversion of the Series B-1 Preferred Stock pursuant to this Section 7(a)(ii).
     (b) Mechanics of Conversion.
     (i) A holder of shares of Series B-1 Preferred Stock that elects to exercise its conversion rights pursuant to Section 7(a)(i) shall provide notice to the Corporation as follows: to exercise its conversion right pursuant to Section 7(a)(i), a holder of             shares of Series B-1 Preferred Stock to be converted shall surrender the certificate or certificates

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representing such shares at the office of the Corporation (or any transfer agent of the Corporation previously designated by the Corporation to the holders of Series B-1 Preferred Stock for this purpose) with a written notice of election to convert, completed and signed, specifying the number of shares to be converted. Unless the shares issuable upon conversion are to be issued in the same name as the name in which such shares of Series B-1 Preferred Stock are registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form reasonably satisfactory to the Corporation, duly executed by the holder thereof or such holder’s duly authorized attorney and an amount sufficient to pay any transfer or similar tax in accordance with Section 7(b)(iv) (or evidence reasonably satisfactory to the Corporation that such tax has been or will be timely paid). As promptly as practicable (and in any event within two (2) Business Days) after the surrender by the holder of the certificates representing shares of Series B-1 Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to such holder or, on the holder’s written order, to the holder’s transferee, a certificate or certificates representing the number of             shares (including any fractional interests as provided in Section 7(b)(v)) of Series D Preferred Stock issuable upon the conversion of such shares.
     (ii) Each conversion shall be deemed to have been effected immediately prior to the close of business on the first Business Day on which the certificates representing shares of Series B-1 Preferred Stock shall have been surrendered and such notice received by the Corporation as aforesaid (the “Conversion Date”). At such time on the Conversion Date:
     (A) the Person in whose name or names any certificate or certificates representing shares of Series D Preferred Stock shall be issuable upon such conversion shall be deemed to have become the holder of record of the shares of Series D Preferred Stock represented thereby at such time; and
     (B) such shares of Series B-1 Preferred Stock so converted shall no longer be deemed to be outstanding, and all rights of a holder with respect to such shares surrendered for conversion shall immediately terminate except the right to receive the Series D Preferred Stock and other amounts payable pursuant to this Section 7.
All shares of Series D Preferred Stock delivered upon conversion of the Series B-1 Preferred Stock will, upon delivery, be duly and validly authorized and issued, fully paid and nonassessable, free from all preemptive rights and free from all taxes, liens, security interests and charges (other than liens or charges created by or imposed upon the holder or taxes in respect of any transfer occurring contemporaneously therewith).
     (iii) Holders of shares of Series B-1 Preferred Stock at the close of business on a Dividend Payment Record Date or Series D Preferred Stock Dividend Record Date, as applicable, for a dividend payment for the Series B-1 Preferred Stock shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date or Series D Preferred Stock Dividend Payment Date, as applicable, notwithstanding the

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conversion thereof following such Dividend Payment Record Date or Series D Preferred Stock Dividend Record Date, as applicable, and prior to such Dividend Payment Date or Series D Preferred Stock Dividend Payment Date, as applicable. A holder of shares of Series B-1 Preferred Stock on a Dividend Payment Record Date or a Series D Preferred Stock Dividend Record Date, as applicable, whose shares of Series B-1 Preferred Stock have been converted pursuant to Section 7(a) into shares of Series D Preferred Stock prior to the close of business on such Dividend Payment Record Date, or Series D Preferred Stock Dividend Record Date, as applicable, will not be entitled to receive any portion of the dividend payable by the Corporation on such shares of Series B-1 Preferred Stock on the corresponding Dividend Payment Date or Series D Preferred Stock Dividend Payment Date, as applicable. Notwithstanding anything in this Certificate, such dividends paid pursuant to this Section 7(b)(iii) shall be considered paid for purposes of determining the Liquidation Payment Amount in Section 7(a)(i).
     (iv) Issuances of certificates representing shares of Series D Preferred Stock upon conversion of the Series B-1 Preferred Stock shall be made without charge to any holder of             shares of Series B-1 Preferred Stock for any issue or transfer tax (other than taxes in respect of any transfer occurring contemporaneously therewith) or other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Corporation; provided, however, that the Corporation shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of shares of Series D Preferred Stock in a name other than that of the holder of the Series B-1 Preferred Stock to be converted, and no such issuance or delivery shall be made unless and until the Person requesting such issuance or delivery has paid to the Corporation the amount of any such tax or has established, to the reasonable satisfaction of the Corporation, that such tax has been, or will be timely, paid.
     (v) In connection with the conversion of any shares of Series B-1 Preferred Stock, no cash adjustment in respect of such fractional shall be paid, but in lieu thereof the Corporation shall issue fractions of shares of Series D Preferred Stock.
     (vi) The Corporation shall ensure that each share of Series D Preferred Stock issued as a result of conversion of Series B-1 Preferred Stock shall be accompanied by all rights associated generally with each other share of Series D Preferred Stock outstanding as of the applicable Conversion Date, subject to any applicable restrictions on transfer of the shares of Series B-1 Preferred Stock set forth in the Purchase Agreement.
     8. Status of Shares. Unless otherwise approved by the written consent of, or the affirmative vote in favor at a meeting called for that purpose by, holders of at least a majority of the outstanding shares of Series B-1 Preferred Stock, all shares of Series B-1 Preferred Stock that are at any time redeemed by the Corporation pursuant to Section 5 or converted pursuant to Section 7 hereof and all shares of Series B-1 Preferred Stock that are otherwise reacquired by the Corporation shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized but unissued shares of preferred stock, without

9


 

designation as to series, subject to reissuance by the Board of Directors as shares of any one or more other series.
     9. Voting Rights. Subject to the last sentence of this Section 9 and Section 11(a), the Series B-1 Preferred Stock shall be nonvoting in all respects, provided, however, that so long as shares of Series B-1 Preferred Stock or shares of Series B Preferred Stock remain outstanding, the Corporation shall not, without the written consent of, or affirmative vote in favor at a meeting called for that purpose by, holders of at least a majority of the outstanding shares of Series B-1 Preferred Stock and Series B Preferred Stock (voting together as one class), amend, alter or repeal any provision of this Certificate (whether by merger, consolidation or otherwise) in any manner adverse to the holders of the Series B-1 Preferred Stock; provided further, that (i) the creation, authorization or issuance of any Junior Securities shall not by itself be deemed to have any such adverse effect, and (ii) no such consent or vote of the holders of Series B-1 Preferred Stock and Series B Preferred Stock shall be required if, at or prior to the time when such amendment, alteration or repeal is to take effect, or when the issuance of any such securities is to be made, as the case may be, all shares of Series B-1 Preferred Stock outstanding at the time shall have been converted into Series D Preferred Stock pursuant to Section 7, converted into Series B Preferred Stock pursuant to Section 7 or redeemed by the Corporation in accordance with Sections 5 and 6 hereof and all shares of Series B Preferred Stock outstanding at the time shall have been converted into Common Stock or redeemed by the Corporation pursuant to the Series B Certificate. The holders of shares of Series B-1 Preferred Stock and Series B Preferred Stock shall be entitled to one vote for each share upon all questions presented to such holders pursuant to this Section 9. The holders of shares of Series B-1 Preferred Stock shall also be entitled to vote with the holders of shares of Series B Preferred Stock to the extent provided in Section 9(b) and Section 11(a) of the Series B Certificate.
     10. Definitions.
     Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated.
     “Affiliate” means, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person. For purposes of this definition, the term “control” (and correlative terms “controlling,” “controlled by” and “under common control with”) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person.
     “Board of Directors” means the board of directors of the Corporation.
     “Business Combination” means (i) any reorganization, consolidation, merger, share exchange or similar business combination transaction involving the Corporation with any Person or (ii) the sale, assignment, conveyance, transfer, lease or other disposition by the Corporation of all or substantially all of its assets.

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     “Capital Stock” means (i) with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents (however designated) of capital or capital stock of such Person and (ii) with respect to any Person that is not a corporation or company, any and all partnership or other equity interests of such Person.
     “Common Stock” means the common stock of the Corporation, par value $0.01 per share.
     “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
     “Exchange Date” shall have the meaning set forth in the Purchase Agreement.
     “Independent Director” shall have the meaning set forth in the Purchase Agreement.
     “Initial Funding Date” means the Closing Date (as defined in the Purchase Agreement).
     “Investor” shall have the meaning set forth in the Purchase Agreement.
     “Market Price” means, with respect to a particular security, on any given day, the volume weighted average price or, in case no such reported sales take place on such day, the average of the highest asked and lowest bid prices regular way, in either case on the principal national securities exchange on which the applicable security is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, (i) the average of the highest and lowest sale prices for such day reported by the Over-The-Counter-Bulletin-Board (the “OTCBB”) or any comparable system then in use, or (ii) if such security is so traded, but not so quoted, the average of the highest reported asked and lowest reported bid prices of such security as reported by the OTCBB or any comparable system then in use, or (iii) if such security is not traded on the OTCBB or any comparable system, the average of the highest asked and lowest bid prices as furnished by two members of NASD, Inc., selected from time to time by the Corporation for that purpose. If such security is not listed and traded in a manner that the quotations referred to above are available for the period required hereunder, the Market Price per share of Common Stock shall be deemed to be the fair value per share of such security as determined in good faith by the Board of Directors.
     “Person” means an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
     “Purchase Agreement” means the Purchase Agreement, dated as of February 6, 2008 among the Corporation and the purchasers named therein, including all schedules and exhibits thereto, as the same may be amended from time to time.

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     “Series B Certificate” means the Certificate of Designations, Preferences and Rights of Series B Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
     “Series B Preferred Stock” means the Series B Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.
     “Series D Certificate” means the Certificate of Designations, Preferences and Rights of Series D Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
     “Series D Preferred Stock” means the Series D Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.
     “Subsidiary” of a Person means (i) a corporation, a majority of whose stock with voting power, under ordinary circumstances, to elect directors is at the time of determination, directly or indirectly, owned by such Person or by one or more Subsidiaries of such Person, or (ii) any other entity (other than a corporation) in which such Person or one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof has at least a majority ownership interest.
     “Trading Day” means any day that the New York Stock Exchange, Inc., is open for trading.
11. Redemption at the Option of the Holder.
     (a) At any time after the tenth anniversary of the Initial Funding Date, upon the approval by holders of at least a majority of the outstanding shares of Series B Preferred Stock and shares of Series B-1 Preferred Stock voting together as a class, the Corporation shall redeem all, but not less than all, but subject to Section 11(c), of the outstanding shares of Series B Preferred Stock and Series B-1 Preferred Stock at a redemption price per share in cash equal to the Liquidation Payment Amount as of the Holder Redemption Date (as defined below), whereupon, subject to Section 11(c) hereof, the Corporation shall effect such redemption, or cause such redemption to be effected, out of assets lawfully available therefor, within 90 days after the holder’s request (such date on which the Corporation makes the full redemption payment in cash to such holders, the “Holder Redemption Date”).
     (b) Change in Control.
     (i) In connection with a Change in Control described in Section 11(b)(iii)(B) or (C) below, each holder of shares of Series B-1 Preferred Stock shall have the right (exercisable at the holder’s option) to require by request in writing to the Corporation during the period 60 days prior to and ending 60 days after the consummation of a Change in Control (the date of consummation being referred to as the “Change in Control Date”) that the Corporation redeem (or that the acquiring or surviving Person in such Change of Control, if

12


 

not the Corporation, redeem) such holder’s shares of Series B-1 Preferred Stock, out of funds legally available therefor, at a redemption price per share in cash equal to 101% of the Liquidation Payment Amount (as of the date the Corporation makes the full redemption payment in cash to such holders), whereupon (subject to consummation of a Change in Control) the Corporation shall effect such redemption, or cause such redemption to be effected, if the holder’s redemption request was made prior to the Change in Control Date, then on the Change in Control Date, and if the holder’s redemption request was made after the Change in Control Date, then within 20 calendar days of such request.
     (ii) In connection with a Change in Control described in Section 11(b)(iii)(A), (D) or (E) below, each holder of shares of Series B-1 Preferred Stock shall have the right (exercisable at the holder’s option, to require by request in writing to the Corporation within 60 days after the public disclosure of the consummation of a Change in Control) that the Corporation redeem such holder’s shares of Series B-1 Preferred Stock, out of funds legally available therefor, at a redemption price per share in cash equal to 101% of the Liquidation Payment Amount (as of the date the Corporation makes the full redemption payment in cash to such holders), whereupon the Corporation shall effect such redemption, or cause such redemption to be effected, within 30 calendar days of such request.
     (iii) As used herein, “Change in Control” means the happening of any of the following events:
                         (A) any Person (other than any Investor or any of its Affiliates) acquires Beneficial Ownership, directly or indirectly, of 50% or more of the combined voting power of the then-outstanding voting securities of the Corporation entitled to vote generally in the election of directors (“Outstanding Corporation Voting Stock”);
                         (B) consummation of a Business Combination, unless, following such Business Combination, (x) all or substantially all of the individuals and entities that were the Beneficial Owners of the Outstanding Corporation Voting Stock immediately prior to such Business Combination Beneficially Own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or equivalent) of the entity resulting from such Business Combination (including, without limitation, a company that, as a result of such transaction, owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the voting power of the Outstanding Corporation Voting Stock, and (y) no Person (other than any Investor or its Affiliates) Beneficially Owns, directly or indirectly, 50% or more of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or equivalent) of such entity;
                         (C) approval by the stockholders of the Corporation of a liquidation or dissolution of the Corporation;

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                         (D) individuals who, as of the Initial Funding Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director pursuant to the Purchase Agreement, or whose election or nomination for election by the Corporation’s shareholders was approved by a vote of at least a majority of the directors comprising the incumbent Board of Directors as of such election or nomination, shall be considered as though such individual were a member of the Incumbent Board; or
                         (E) any event that would not otherwise constitute a Change in Control pursuant to Sections 11(b)(iii)(A), (B), (C) or (D) hereof but would constitute a “change in control” for purposes of the Existing Credit Facilities (as defined in the Purchase Agreement) or the Second Lien Notes (as defined in the Purchase Agreement).
The terms “Beneficially Own” and “Beneficial Ownership” are used herein as defined in Rules 13d-3 and 13d-5 of the Exchange Act, but without taking into account any contractual restrictions or limitations on voting or other rights.
     (iv) The Corporation shall deliver written notice to each holder of Series B Preferred Stock, by first class mail, postage prepaid, of any Change in Control as promptly as practicable, together with a reasonably detailed summary of the material terms of such Change in Control.
     (c) If the Corporation (i) shall not have sufficient assets legally available under the DGCL for the redemption of all shares of Series B Preferred Stock and all shares of Series B-1 Preferred Stock that holders of Series B Preferred Stock and holders of Series B-1 Preferred Stock have requested be redeemed under Section 11(a) or (b) of this Certificate or Section 11(a) or (b) of the Series B-1 Certificate (the “Required Number of Shares”) or (ii) will be in violation of Specified Contract Terms (as defined below) if it redeems the Required Number of Shares, the Corporation shall: (A) redeem, at the applicable redemption price set forth above in this Section 11, the maximum number of shares of Series B-1 Preferred Stock it is permitted to redeem (which aggregate redemption price will be an amount equal to the lesser of (y) the amount legally available for the redemption of shares of Series B-1 Preferred Stock and (z) the largest amount that can be used for such redemption not prohibited by Specified Contract Terms); (B) subject to Sections 9 and 12(b)-(c), use its best efforts to promptly take all actions necessary to eliminate any limitation or other impediment on the Corporation’s ability to redeem the Required Number of Shares as soon as practicable (including, without limitation, seeking to refinance all indebtedness under the contracts containing the Specified Contract Terms, seeking to liquidate assets and otherwise seeking to raise sufficient funds legally available for the redemption of the Required Number of Shares without violation of Specified Contract Terms, and seeking a merger or other sale of the Corporation that would provide for the redemption of the Required Number of Shares), and (C) redeem, pro rata among the holders of shares of Series B Preferred Stock and Series B-1 Preferred Stock, at the applicable redemption price set forth above in this Section 11, any and all shares of Series B-1 Preferred Stock not redeemed because of the limitations described in clause (i) or clause (ii) of this paragraph as soon as practicable to

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the extent it is able to make such redemption out of assets legally available for the redemption of shares of Series B-1 Preferred Stock and without violation of Specified Contract Terms. The inability of the Corporation to make a redemption payment for any reason shall not relieve the Corporation from its obligation to effect any required redemption when, as and if permitted by law and Specified Contract Terms. As used in this paragraph, “Specified Contract Terms” means the covenants of the Corporation contained in (x) the Existing Credit Facilities (as defined in the Purchase Agreement) as amended as of the Initial Funding Date in accordance with Section 1.2(c)(iv)(A) of the Purchase Agreement and (y) the Second-Lien Debt (as defined in the Purchase Agreement) documentation in accordance with Section 1.2(c)(iv)(B) of the Purchase Agreement, in each case under clause (x) and (y) as the same shall be in effect on and as of the Initial Funding Date and not including any subsequent amendment, restatement, refinancing, replacement or other modification thereof or any successor contract thereto. In the event the officers or directors of the Corporation do not take the actions required in this Section 11 because they reasonably believe, after consultation with the Corporation’s outside legal counsel, that taking such action would violate their fiduciary duties, then no holder of Series B-1 Preferred Stock shall be entitled to make any claim against such officers or directors in their individual capacities as a result of their failure to take such actions; provided, that nothing herein shall relieve the Corporation from its obligations owed to the holders of the Series B-1 Preferred Stock provided herein and nothing herein shall preclude any holder of Series B-1 Preferred Stock from making claims for monetary damages against the Corporation or seeking injunctions or other equitable remedies to cause the Corporation to fulfill its obligations hereunder.
     (d) Until the full redemption price applicable under Section 11(a)-(b) is paid in cash to the holders of shares of Series B-1 Preferred Stock, shares of Series B-1 Preferred Stock may be converted pursuant to Section 7 and shall accrue and accumulate dividends pursuant to Section 3; provided that, any such shares that are converted shall not be entitled to receive any redemption payment.
12. Certain Other Provisions.
     (a) If any Series B-1 Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new Series B-1 Preferred Stock certificate of like tenor and representing an equivalent amount of Series B-1 Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate and, if requested by the Corporation, an indemnity on customary terms for such situations reasonably satisfactory to the Corporation.
     (b) Without limiting the provisions of (or the holders’ rights under) Section 9 and Section 11, the Corporation shall not merge or consolidate with or into, or sell, transfer or lease all or substantially all of its property to, any other entity, or permit consummation of any other Business Combination, unless the surviving, successor, transferee or lessee entity, as the case may be (if not the Corporation), (i) expressly assumes, as part of the terms of such Business Combination, the due and punctual performance and observance of each and every covenant and

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condition of this Certificate to be performed and observed by the Corporation and (ii) expressly agrees, as part of the terms of such Business Combination, to exchange, at the holder’s option, shares of Series B-1 Preferred Stock for shares of the surviving entity’s capital stock having terms, preferences, rights (including, without limitation, as to dividends, voting, redemption at the option of the holder, and rights to assets upon liquidation, dissolution or winding-up), privileges and powers substantially similar to the terms preferences, rights (including, without limitation, as to dividends, voting, redemption at the option of the holder, and rights to assets upon liquidation, dissolution or winding-up), privileges and powers under this Certificate, in each case, such that the rights of the holders of Series B-1 Preferred Stock are protected against dilution or other impairment. Without limiting any of the foregoing, the Corporation shall cause lawful provision to be made as part of the terms of each Business Combination such that each holder of a share of Series B-1 Preferred Stock then outstanding shall have the right thereafter to exchange such share for, or convert such share into, the kind and amount of securities, cash and other property receivable upon the Business Combination by a holder of a number of shares of Series D Preferred Stock into which such share of Series B-1 Preferred Stock would have been convertible (without regard to any limitations contained in Section 7) immediately prior to such Business Combination, and subject to anti-dilution adjustment protections substantially equivalent to those set forth in this Certificate.
     (c) The Corporation shall not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets, or otherwise, avoid or seek to avoid the observance or performance of any of the terms of this Certificate, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of Series B-1 Preferred Stock against dilution or other impairment.
     (d) The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
     (e) This Certificate shall become effective upon the filing thereof with the Secretary of State of the State of Delaware.

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     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed and acknowledged by its undersigned duly authorized officer this ___day of ___, 2008.
         
    MONEYGRAM INTERNATIONAL, INC.
 
       
 
  By:    
 
       
 
      Name:
 
      Title:

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EX-99.4
 

Exhibit 99.4
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES C PARTICIPATING PREFERRED STOCK OF
MONEYGRAM INTERNATIONAL, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
     The undersigned, pursuant to the provisions of Section 151 of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that, pursuant to the authority expressly vested in the Board of Directors of MoneyGram International, Inc., a Delaware corporation (the “Corporation”), by the Corporation’s Amended and Restated Certificate of Incorporation, the Board of Directors has by resolution duly provided for the issuance of and created a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”), and in order to fix the designation and amount and the voting powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock, has duly adopted resolutions setting forth such rights, powers and preferences, and the qualifications, limitations and restrictions thereof, of a series of Preferred Stock as set forth in this Certificate of Designations, Preferences and Rights of Series C Preferred Stock (the “Certificate”).
     Each share of such series of Preferred Stock shall rank equally in all respects and shall be subject to the following provisions:
     1. Number of Shares and Designation. 800,000 shares of Preferred Stock of the Corporation shall constitute a series of Preferred Stock designated as Series C Participating Preferred Stock (the “Series C Preferred Stock”). Subject to Section 9, the number of shares of Series C Preferred Stock may be increased (to the extent of the Corporation’s authorized and unissued Preferred Stock) or decreased (but not below the number of shares of Series C Preferred Stock then outstanding) by further resolution duly adopted by the Board of Directors and the filing of a certificate of increase or decrease, as the case may be, with the Secretary of State of the State of Delaware.
     2. Rank. The Series C Preferred Stock shall, with respect to payment of dividends, redemption payments and rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (i) rank senior and prior to the Common Stock, the Series A Junior Participating Preferred Stock of the Corporation, par value $0.01 per share, the Series D Preferred Stock, and each other class or series of equity securities of the Corporation, whether currently issued or issued in the future, that by its terms ranks junior to the Series C Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, including the Common Stock, are collectively referred to herein as the “Junior Securities”), (ii) rank on a parity with each other class or series of equity securities of the Corporation, whether currently issued or issued in the future without violation of this Certificate, that does not by its terms expressly provide that it ranks senior to or junior to the Series C Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, other than Junior Securities, are collectively referred to

 


 

herein as the “Parity Securities”), and (iii) rank junior to each other class or series of equity securities of the Corporation, whether currently issued or issued in the future without violation of this Certificate, that by its terms ranks senior to the Series C Preferred Stock as to payment of dividends or rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities are collectively referred to herein as the “Senior Securities”). The respective definitions of Junior Securities, Parity Securities and Senior Securities shall also include any securities, rights or options exercisable or exchangeable for or convertible into any of the Junior Securities, Parity Securities or Senior Securities, as the case may be. At the time of the initial issuance of the Series C Preferred Stock there will be no Parity Securities or Senior Securities outstanding.
     3. Dividends.
     (a) The holders of record of the issued and outstanding shares of Series C Preferred Stock shall be entitled to receive, out of assets legally available for the payment of dividends, dividends on the terms described below:
     (i) Holders of shares of Series C Preferred Stock shall be entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends and distributions paid (whether in the form of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock or other equity, or evidences of indebtedness, of any Person, including, without limitation, the Corporation or any Subsidiary) on the shares of Common Stock to the extent of the excess of (x) the amount such holders would have received if, immediately prior to each Common Stock Dividend Record Date (as defined below), all shares of Series C Preferred Stock (together with the other components of the Temporary Security Units (as defined in the Purchase Agreement)) then outstanding were exchanged for shares of Series B Preferred Stock and Series B-1 Preferred Stock (in the manner described in the Purchase Agreement as if Shareholder Approval and Requisite Regulatory Approvals had been obtained and without regard to any limitations contained therein) and all such shares of Series B Preferred Stock and Series B-1 Preferred Stock were converted into shares of Common Stock or shares of Series D Preferred Stock, as applicable (in the manner described in Section 7 of the Series B Certificate or Section 7 of the Series B-1 Certificate without regard to any limitations contained therein) over (y) any dividends paid on shares of Common Stock and Series D Preferred Stock that would be required to be included with such shares of Series C Preferred Stock upon exchange for shares of Series B Preferred Stock and Series B-1 Preferred Stock (as described in Section 1.3 of the Purchase Agreement). Dividends or distributions payable pursuant to this Section 3(a)(i) shall be payable on the same date that such dividends or distributions are payable to holders of shares of Common Stock.
     (ii) In addition to any dividends pursuant to Section 3(a)(i) hereof, in respect of each three-month period beginning with the period starting on the Initial Funding Date and ending on the 90th day following the Initial Funding Date, the Corporation shall pay, as and when declared by the Board of Directors, out of assets legally available therefor, a quarterly dividend on each share of Series C Preferred Stock at the annual rate per share of the Applicable Percentage (as defined below) of the sum of (x) the Liquidation Preference and (y) all accumulated and unpaid dividends, if any, whether or not declared, from the Initial

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Funding Date to the applicable Dividend Payment Date (as defined below), excluding any dividends accruing during the then current Dividend Period (as defined below) (such rate, the “Dividend Rate”). The “Applicable Percentage” shall mean (A) 20.0%, through the date that is 90 calendar days after the Initial Funding Date, (B) 20.5%, effective as of the date that is 91 calendar days after the Initial Funding Date, (C) 21.0%, effective as of the date that is 181 calendar days after the Initial Funding Date, (D) 21.5%, effective as of the date that is 271 calendar days after the Initial Funding Date, (E) 22.0%, effective as of the date that is one year after the Initial Funding Date. Dividends under this Section 3(a)(ii) shall be paid in cash; provided that, until the fifth anniversary of the Initial Funding Date, upon a determination by the Independent Directors such determination intended to be a “fact” for purposes of Section 151(a) of the DGCL, dividends may be accrued for any Dividend Period prior to such fifth anniversary at the Applicable Percentage of the sum of (x) the Liquidation Preference and (y) all accumulated and unpaid dividends, if any, whether or not declared, from the Initial Funding Date to the applicable Dividend Payment Date, compounding quarterly, in lieu of paying such dividends in cash currently; provided, however, that following any failure by the Corporation to redeem shares of Series C Preferred Stock for cash in a timely manner as required by this Certificate (without giving effect to Section 11(d) or any prohibition on such payment under any applicable law (related to impairment of capital or otherwise)) for any reason, dividends shall be paid currently in cash. Notwithstanding anything in this Certificate to the contrary, if Shareholder Approval and 85% Requisite Regulatory Approvals have been obtained, then from and after the date that the last of the 85% Requisite Regulatory Approvals is acquired, the Applicable Percentage shall mean 16.0%, and if Shareholder Approval and 95% Requisite Regulatory Approvals have been obtained, then from and after the last of the 95% Requisite Regulatory Approvals is acquired, the Applicable Percentage shall mean 13.0%.
     (iii) Dividends on the Series C Preferred Stock provided for in Section 3(a)(ii) hereof shall accrue and accumulate, whether or not declared, on a daily basis from the Initial Funding Date, and shall, if declared, be payable quarterly on the First Payment Date, the Second Payment Date, the Third Payment Date and the Fourth Payment Date of each year (unless such day is not a Business Day (as defined below), in which event such dividends shall be payable on the next succeeding Business Day) (each such payment date being a “Dividend Payment Date” and the period from the Initial Funding Date to the first Dividend Payment Date and each such quarterly period thereafter until a redemption date (but only with respect to any such shares so redeemed on such redemption date) being a “Dividend Period”). As used herein, the term “Business Day” means any day except a Saturday, Sunday or day on which banking institutions are legally authorized to close in the City of New York. The “First Payment Date” means the 91st calendar day after the Initial Funding Date and each successive anniversary of such date in each successive year. The “Second Payment Date” means the 181st calendar day after the Initial Funding Date and each successive anniversary of such date in each successive year. The “Third Payment Date” means the 271st calendar day after the Initial Funding Date and each successive anniversary of such date in each successive year. The “Fourth Payment Date” means the one-year anniversary of the Initial Funding Date and each successive anniversary of such date in each successive year.

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     (iv) Each dividend payable pursuant to Section 3(a)(i) or Section 3(a)(ii) hereof shall be payable to the holders of record of shares of Series C Preferred Stock as they appear on the stock records of the Corporation at the close of business on the record date designated by the Board of Directors for such dividends (each, a “Dividend Payment Record Date”), which (i) with respect to dividends payable pursuant to Section 3(a)(i) hereof, shall be the same day as the record date for the payment of dividends to the holders of shares of Common Stock (the “Common Stock Dividend Record Date”) and, (ii) with respect to dividends payable pursuant to Section 3(a)(ii) hereof, shall be not more than thirty (30) days nor less than ten (10) days preceding the applicable Dividend Payment Date. Dividends in respect of any past Dividend Periods that are in arrears may be declared and paid at any time to holders of record on the Dividend Payment Record Date therefor.
     (b) During any Stoppage Period (as defined below), (i) no dividends shall be declared or paid or set apart for payment, or other distribution declared or made, upon any Junior Securities, nor shall any Junior Securities be redeemed, purchased or otherwise acquired (other than, subject to Section 9, a redemption, purchase or other acquisition of shares of Common Stock from employees or directors of the Corporation or any Subsidiary of the Corporation required by the terms of any bona fide employee or director incentive or benefit plans or arrangements of the Corporation or any Subsidiary of the Corporation approved by the Board of Directors or the payment of cash in lieu of fractional shares in connection therewith) for any consideration (nor shall any moneys be paid to or made available for a sinking fund for the redemption of any shares of any such Junior Securities) by the Corporation, directly or indirectly (except, subject to Section 9, by conversion into or exchange for Junior Securities or the payment of cash in lieu of fractional shares in connection therewith) and (ii) the Corporation shall not, directly or indirectly, make any payment on account of any purchase, redemption, retirement or other acquisition of any Parity Securities (other than, subject to Section 9, for consideration payable solely in Junior Securities). “Stoppage Period” means any period (A) beginning at any time that the Corporation shall have failed to pay any dividend contemplated by Section 3(a) hereof and ending at such time when all such dividends have been paid in full in cash, (B) in respect of which the Corporation elects to accrue dividends under Section 3(a)(ii), or (C) beginning at any time that the Corporation shall have failed to pay the redemption price for shares of Series C Preferred Stock that holders of shares of Series C Preferred Stock have requested be redeemed pursuant to Section 11 hereof and ending at such time when the full applicable redemption price, as set forth in Section 11 hereof, for all such shares of Series C Preferred Stock shall have been paid to the holders in cash.
     (c) For the avoidance of doubt, the shares of Series C Preferred Stock that have been redeemed upon payment of the Liquidation Payment Amount shall not be entitled to receive any dividend pursuant to this Section 3 payable on or after the redemption date.
     4. Liquidation Preference.
     (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series C Preferred Stock then outstanding shall, with respect to each share of Series C Preferred Stock, be entitled to be paid in redemption of such share out of the assets of the Corporation available for distribution to its stockholders a liquidation preference equal to the sum of (x) $1,000 per share (the “Liquidation Preference”),

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(y) an amount equal to all accumulated and unpaid dividends, if any (whether or not declared), to the date of payment (such amount, the “Accumulated Dividend Amount”), and (z) the Applicable Per Share CVR Amount (as defined in Section 12 and, together with the Liquidation Preference and the Accumulated Dividend Amount, the “Liquidation Payment Amount”), in each case, before any payment or distribution of any assets of the Corporation shall be made or set apart for holders of any Junior Securities. If the assets of the Corporation available for distribution to its stockholders are not sufficient to pay in full the Liquidation Payment Amounts payable to the holders of shares of Series C Preferred Stock and the liquidation preference payable to the holders of any Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the holders of shares of Series C Preferred Stock and any such other Parity Securities ratably in accordance with the Liquidation Payment Amounts and the liquidation preference for the Parity Securities, respectively.
     (b) Neither a consolidation or merger of the Corporation with or into any other entity, nor a merger of any other entity with or into the Corporation, nor a sale or transfer of all or any part of the Corporation’s assets for cash, securities or other property shall by itself be considered a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 4.
     5. Redemption by the Corporation. Subject to the provisions of Section 7, the Corporation shall have the right, exercisable at any time after the earlier of (x) the tenth (10th) anniversary of the Initial Funding Date, or (y) any time after the Corporation shall have redeemed for cash in accordance with redemption demands from holders, pursuant to Section 11, more than 50% of the shares of Series C Preferred Stock issued as of the Initial Funding Date, to redeem, at the Corporation’s option, out of assets lawfully available for the redemption of shares, all (but not less than all) of the outstanding shares of Series C Preferred Stock for an amount in cash per share equal to the Liquidation Payment Amount as of the date of the Corporation’s delivery to the holders of the Notice of Redemption (the “Redemption Price”).
     6. Procedures for Redemption by the Corporation.
     (a) In the event of a redemption of shares of Series C Preferred Stock pursuant to Section 5, the Corporation shall deliver written notice to each holder (the “Notice of Redemption”), by first class mail, postage prepaid, mailed not less than fifteen (15) days and no more than twenty (20) days prior to the date on which the holder is to surrender to the Corporation the certificates representing shares to be redeemed (such date, or if such date is not a Business Day, the first Business Day thereafter, the “Corporation Redemption Date”), provided that the Corporation Redemption Date shall not be later than the 30th day immediately following the date upon which the Corporation exercises its redemption option pursuant to Section 5. The Notice of Redemption shall specify: (i) the number of shares of Series C Preferred Stock to be redeemed by the Corporation; (ii) the Corporation Redemption Date; (iii) the Redemption Price; and (iv) instructions on surrendering the holder’s shares for any shares to be redeemed. Any Notice of Redemption mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holder receives the Notice of Redemption.
     (b) Upon surrender in accordance with the Notice of Redemption of the certificates representing any shares so redeemed, such shares shall be redeemed by the Corporation at the

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Redemption Price with payment of such Redemption Price being made on the Corporation Redemption Date by wire transfer of immediately available funds to the account specified by the holder of the shares redeemed. Such redemption shall be effective on the Corporation Redemption Date, notwithstanding any failure of such holders to deliver such certificates, provided that the Redemption Price has either been paid to each holder on or prior to such date or deposited in a bank in a separate trust account for the sole benefit of the holders. Until redemption is effective on the Corporation Redemption Date as aforesaid, shares of Series C Preferred Stock may be exchanged pursuant to Section 7 and shall accrue and accumulate dividends pursuant to Section 3.
     7. Conditional Exchange. Shares of Series C Preferred Stock are subject to the exchange provisions set forth in the Purchase Agreement.
     8. Status of Shares. Unless otherwise approved by the written consent of, or the affirmative vote in favor at a meeting called for that purpose by, holders of at least a majority of the outstanding shares of Series C Preferred Stock, all shares of Series C Preferred Stock that are at any time redeemed by the Corporation pursuant to Section 5 or exchanged pursuant to the Purchase Agreement and all shares of Series C Preferred Stock that are otherwise reacquired by the Corporation shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized but unissued shares of preferred stock, without designation as to series, subject to reissuance by the Board of Directors as shares of any one or more other series.
     9. Voting Rights.
     (a) The holders of record of shares of Series C Preferred Stock shall not be entitled to any voting rights except as hereinafter provided in this Section 9 and Section 11(f) or as otherwise provided by law.
     (b) The holders of the shares of Series C Preferred Stock shall be entitled to notice of all stockholders’ meetings in accordance with the Certificate of Incorporation and Bylaws of the Corporation as if they are holders of Common Stock.
     (c) So long as shares of Series C Preferred Stock are outstanding, the Corporation shall not, without the written consent of, or affirmative vote in favor at a meeting called for that purpose by, holders of at least a majority of the outstanding shares of Series C Preferred Stock entitled to consent or vote with respect to such matter:
     (i) create, authorize or issue any Senior Securities or Parity Securities or any security convertible into, or exchangeable or exercisable for, Senior Securities or Parity Securities;
     (ii) subject to Section 13(b), amend, alter or repeal any provision of this Certificate, the Series B Certificate, the Series B-1 Certificate, the Series D Certificate or any other provision of the Corporation’s Certificate of Incorporation or any provision of the Corporation’s by-laws (in each case, by any means, including, without limitation, by merger, consolidation, reclassification, amendment, or otherwise) so as to, or in a manner that would, adversely affect the preferences, rights, privileges, powers or economics of the Series C Preferred Stock; provided that, subject to the other provisions of this Section 9(c),

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the creation, authorization or issuance of any Junior Securities shall not by itself be deemed to have any such adverse effect;
     (iii) split, reverse split, subdivide, reclassify or combine the Series C Preferred Stock, the Series B Preferred Stock, the Series B-1 Preferred Stock, the Series D Preferred Stock or the Common Stock, or increase the authorized number of shares of Series C Preferred Stock, Series B Preferred Stock, Series B-1 Preferred Stock, Series D Preferred Stock or, except in connection with issuances of Common Stock contemplated by Section 9(c)(viii)(C) or (D),Common Stock;
     (iv) (A) institute (or permit any of its Subsidiaries to institute) a voluntary case or proceeding in respect of the Corporation or any of its Subsidiaries under the federal bankruptcy code or any other similar federal, state or foreign law (“Bankruptcy Law”) or any other case or proceeding to be adjudicated a bankrupt or insolvent, (B) consent to (or permit any of its Subsidiaries to content to) the entry of a decree or order for relief in respect of the Corporation or any of its Subsidiaries in any involuntary case or proceeding under any Bankruptcy Law or to the institution of bankruptcy or insolvency proceedings against the Corporation or any of its Subsidiaries, (C) file (or permit any of its Subsidiaries to file) a petition in respect of the Corporation or any of its Subsidiaries seeking reorganization or relief under any Bankruptcy Law, or consent to the filing of any such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of any of the Corporation or any of its Subsidiaries or of any substantial part of its property, or (D) make an assignment for the benefit of creditors;
     (v) adopt a plan or agreement of complete or partial liquidation or dissolution, or otherwise voluntarily liquidate, dissolve or wind-up the Corporation;
     (vi) declare, set aside or pay (or permit any of its Subsidiaries to pay) any dividend or other distribution of any nature on the Common Stock or on any other Junior Securities, except for ordinary cash dividends on Common Stock not in excess of the Corporation’s consolidated current year’s net income if at such time of such ordinary cash dividend (A) all dividends (including, without limitation, accumulated and accrued dividends) payable to holders of Series C Preferred Stock pursuant to Section 3(a) as of such date (whether or not declared) shall have been paid (including, without limitation, that all such dividends under Section 3(a)(ii) shall have been paid in cash) and (B) all shares of Series C Preferred Stock that holders of shares of Series C Preferred Stock have requested be redeemed pursuant to Section 11 hereof shall have been redeemed for cash at the full applicable redemption price set forth in Section 11 hereof;
     (vii) purchase, redeem or otherwise acquire or retire for value any shares of Common Stock or other Junior Securities (other than payments to purchase Junior Securities from employees or directors of the Corporation as required pursuant to any bona fide agreements in effect as of date of the Purchase Agreement and approved by the Board of Directors and in an amount not to exceed $2 million in the aggregate for all such individuals), or pay to or make available for a sinking fund for the purchase, redemption or acquisition of any shares of Common Stock or other Junior Securities;

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     (viii) issue any shares of Common Stock or other Junior Securities (or any options, warrants or rights to acquire, or securities convertible into or exchangeable for, shares of Common Stock or any other Junior Securities), except (A) issuances to holders of shares of Series C Preferred Stock pursuant to the Purchase Agreement and this Certificate, (B) issuances to employees or directors of the Corporation pursuant to bona fide compensation arrangements approved by the Board of Directors, (C) subject to Section 11(b), issuances that constitute consideration for acquisitions by the Corporation of operating companies pursuant to a transaction approved by the Board of Directors, and (D) issuances of Common Stock at a net price per share to the Company not less than 90% (after taking into account underwriting, commitment arrangement, financing or similar fees) of the then-current Market Price per share for the Common Stock;
     (ix) increase the number of directors comprising the entire Board of Directors above 13 (except as may be required by the Purchase Agreement);
     (x) incur, suffer to exist or guarantee (or permit any of the Corporation’s Subsidiaries to incur, suffer to exist or guarantee) indebtedness for borrowed money (whether by issuing debt securities, borrowing, or otherwise) in an aggregate principal amount outstanding for the Corporation and its Subsidiaries collectively in excess of $1,150,000,000;
     (xi) make investments in a manner that is in contravention of the Investment Policy (as defined in the Purchase Agreement); and
     (xii) beginning at any time that the Corporation shall have failed to pay the redemption price for shares of Series C Preferred Stock that holders of shares of Series C Preferred Stock have requested be redeemed pursuant to Section 11 hereof and ending at such time when the full applicable redemption price, as set forth in Section 11 hereof, for all such shares of Series C Preferred Stock shall have been paid to the holders in cash, (A) adopt an annual budget (provided that if such consent or vote is not obtained, the budget for the Corporation for the immediately prior year shall be utilized as the Corporation’s budget) or (B) hire or terminate any executive officer (provided that (x) the holders of the Series C Preferred Stock shall not unreasonably withhold or delay approval of any such hiring or termination and, provided further, (y) if the holders of Series C Preferred Stock shall not approve the hiring of any such executive officer the Corporation may appoint an existing employee to fill the position until a replacement approved by the holders of Series C Preferred Stock is hired and (z) nothing herein shall prohibit the Corporation from terminating any executive officer for “cause” as defined in such executive officer’s employment agreement with the Corporation);
provided, that no such consent or vote of the holders of Series C Preferred Stock shall be required if, at or prior to the time when such event described in (i) through (xii) above, all shares of Series C Preferred Stock at the time outstanding shall have been exchanged pursuant to the terms of the Purchase Agreement; provided further, that if GS (as defined in the Purchase Agreement) is a holder of outstanding shares of Series C Preferred Stock, it shall not be entitled to consent or vote with respect to an event described in (vi), (vii), (viii), (x), (xi) or (xii) above and, with respect to such event, the shares of Series C Preferred Stock held by GS shall not be considered to be outstanding for purposes of determining whether holders of the requisite

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number of shares of Series C Preferred Stock have voted, consented to or approved any such event.
     (d) The consent or votes required in Section 9(c) shall be in addition to any approval of stockholders of the Corporation which may be required by law or pursuant to any provision of the Corporation’s Certificate of Incorporation or Bylaws.
     10. Definitions.
     Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated.
85% Requisite Regulatory Approvals” shall have the meaning set forth in the Purchase Agreement.
95% Requisite Regulatory Approvals” shall have the meaning set forth in the Purchase Agreement.
Affiliate” means, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person. For purposes of this definition, the term “control” (and correlative terms “controlling,” “controlled by” and “under common control with”) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person.
Board of Directors” means the board of directors of the Corporation.
Business Combination” means (i) any reorganization, consolidation, merger, share exchange or similar business combination transaction involving the Corporation with any Person or (ii) the sale, assignment, conveyance, transfer, lease or other disposition by the Corporation of all or substantially all of its assets.
Capital Stock” means (i) with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents (however designated) of capital or capital stock of such Person and (ii) with respect to any Person that is not a corporation or company, any and all partnership or other equity interests of such Person.
Common Stock” means the common stock of the Corporation, par value $0.01 per share.
Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“Independent Director” shall have the meaning set forth in the Purchase Agreement.
Initial Funding Date” means the Closing Date (as defined in the Purchase Agreement).

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Market Price” means, with respect to a particular security, on any given day, the volume weighted average price or, in case no such reported sales take place on such day, the average of the highest asked and lowest bid prices regular way, in either case on the principal national securities exchange on which the applicable security is listed or admitted to trading or, if not listed or admitted to trading on any national securities exchange, (i) the average of the highest and lowest sale prices for such day reported by the Over-The-Counter-Bulletin-Board (the “OTCBB”) or any comparable system then in use, (ii) if such security is so traded, but not so quoted, the average of the highest reported asked and lowest reported bid prices of such security as reported by the OTCBB or any comparable system then in use or (iii) if such security is not traded on the OTCBB or any comparable system, the average of the highest asked and lowest bid prices as furnished by two members of NASD, Inc., selected from time to time by the Corporation for that purpose. If such security is not listed and traded in a manner that the quotations referred to above are available for the period required hereunder, the Market Price per share of Common Stock shall be deemed to be the fair value per share of such security as determined in good faith by the Board of Directors.
Person” means an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
Purchase Agreement” means the Purchase Agreement, dated as of February 6, 2008 among the Corporation and the purchasers named therein, including all schedules and exhibits thereto, as the same may be amended from time to time.
Series B Certificate” means the Certificate of Designations, Preferences and Rights of Series B Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
Series B-1 Certificate” means the Certificate of Designations, Preferences and Rights of Series B-1 Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
Series D Certificate” means the Certificate of Designations, Preferences and Rights of Series D Participating Convertible Preferred Stock of the Corporation in the form contemplated by the Purchase Agreement.
Series B Preferred Stock” means the Series B Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.
Series B-1 Preferred Stock” means the Series B-1 Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.
Series D Preferred Stock” means the Series D Participating Convertible Preferred Stock of the Corporation, par value $0.01 per share.
Shareholder Approval” shall have the meaning set forth in the Purchase Agreement.

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Subsidiary” of a Person means (i) a corporation, a majority of whose stock with voting power, under ordinary circumstances, to elect directors is at the time of determination, directly or indirectly, owned by such Person or by one or more Subsidiaries of such Person, or (ii) any other entity (other than a corporation) in which such Person or one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof has at least a majority ownership interest.
Trading Day” means any day that the New York Stock Exchange, Inc., is open for trading.
“Voluntary Redemption Event” means (i) any Trigger Event and (ii) any Change in Control that has been approved or recommended by the Board of Directors of the Corporation after the date of issuance of the Series C Preferred Stock (which shall include, without limitation, any Change in Control that has been excluded, after the date of issuance of the Series C Preferred Stock, from the provisions of Section 203 of the DGCL or from any rights or similar plan of the Corporation).
     11. Redemption at the Option of the Holders.
     (a) At any time after the fifth (5th) anniversary of the Initial Funding Date, upon the request by holders of at least a majority of the outstanding shares of Series C Preferred Stock, the Corporation shall redeem all, but not less than all, but subject to Section 11(d), of the outstanding shares of Series C Preferred Stock at a redemption price per share in cash equal to the sum of (i) the sum of the Liquidation Preference and the Accumulated Dividend Amount (both as of the date the Corporation makes the full redemption payment in cash to such holders) plus (ii) the Applicable Per Share CVR Amount, whereupon, subject to Section 11(d) hereof, the Corporation shall effect such redemption, or cause such redemption to be effected, within 90 calendar days after the date of the holder’s request.
     (b) If the Corporation or Board of Directors shall propose anything that, if not approved by the holders of shares of Series C Preferred Stock, would be a Trigger Event (as defined below), the Corporation shall provide to each holder of shares of Series C Preferred Stock, not less than 20 days prior to consummation of such Trigger Event, notice in writing (by first class mail, postage prepaid) describing in reasonable detail the Trigger Event, the anticipated date of consummation of the Trigger Event, and a reasonably detailed summary of the terms of the Trigger Event (together with copies of all related forms of agreements and all ancillary documents) (the “Trigger Event Notice”). The Corporation shall keep the holders of shares of Series C Preferred Stock informed on a reasonably current basis of any material changes to any of the information described in the preceding sentence of this Section 11(b). In connection with each Trigger Event, each holder of shares of Series C Preferred Stock shall have the right (exercisable at the holder’s option at any time until the later of 15 days after the Corporation mails the Trigger Event Notice and 30 days prior to consummation of the Trigger Event (“Trigger Date”)) to require, by request in writing to the Corporation, that, subject to the consummation of the Trigger Event, the Corporation redeem, out of funds legally available therefor, such holder’s shares of Series C Preferred Stock at a redemption price per share in cash equal to the sum of (A) 101% of the sum of the Liquidation Preference and the Accumulated Dividend Amount (both as of the date the Corporation makes the full redemption payment in cash to such holders) plus (B) the

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Applicable Per Share CVR Amount, whereupon the Corporation shall effect such redemption, or cause such redemption to be effected, promptly (but in any event within one Business Day) following consummation of such Trigger Event. As used herein, “Trigger Event” means any of the following effected without the written consent of, or the affirmative vote in favor at a meeting called for that purpose by, holders of at least a majority of the outstanding shares of Series C Preferred Stock (excluding any shares of Series C Preferred Stock not entitled to vote on the matter pursuant to the final proviso of Section 9(c)): (1) any direct or indirect acquisition (by purchase, merger or otherwise) by the Corporation or any of its Subsidiaries of Capital Stock, a business or division, or a material portion of the assets, of any other Person (except acquisitions of investment securities and other assets in the ordinary course of business) for consideration (whether in a single transaction or pursuant to a series of related transactions) in excess of $25 million; (2) any sale or other disposition (whether pursuant to a sale, lease, securitization, sale-leaseback or other transaction) of (x) any properties or assets of the Corporation or its Subsidiaries with a fair market value in excess of $25 million individually for any series of related transactions, except sales of investment securities in the ordinary course of business, and other sales in the ordinary course of business of assets that individually are immaterial to the Corporation, or (y) any Capital Stock of any Subsidiary of the Corporation; or (3) any reorganization, consolidation, merger, share exchange or similar business combination transaction involving the Corporation with any Person involving aggregate consideration (including assumption of debt) in excess of $25 million; provided that, a Trigger Event shall not include any event that is a Change of Control (as defined below). Notwithstanding the foregoing, beginning at any time that the Corporation shall have failed to pay the redemption price for shares of Series C Preferred Stock that holders of shares of Series C Preferred Stock have requested be redeemed pursuant to Section 11 hereof and ending at such time when the full applicable redemption price, as set forth in Section 11 hereof, for all such shares of Series C Preferred Stock shall have been paid to the holders in cash, the thresholds set forth in the preceding sentence shall be zero rather than $25 million.
     (c) Change in Control.
     (i) In connection with a Change in Control described in Section 11(c)(iii)(B) or (C) below, each holder of shares of Series C Preferred Stock shall have the right (exercisable at the holder’s option) to require, by request in writing to the Corporation during the period commencing 60 days prior to and ending 60 days after the consummation of a Change in Control (the date of consummation being referred to as the “Change in Control Date”)), that the Corporation redeem (or that the acquiring or surviving Person in such Change of Control, if not the Corporation, redeem) such holder’s shares of Series C Preferred Stock, out of funds legally available therefor, at a redemption price per share in cash equal to the sum of (A) 101% of the sum of the Liquidation Preference and the Accumulated Dividend Amount (both as of the date the Corporation makes the full redemption payment in cash to such holders) plus (B) the Applicable Per Share CVR Amount, whereupon (subject to consummation of a Change in Control) the Corporation shall effect such redemption, or cause such redemption to be effected, if the holder’s redemption request was made prior to the Change in Control Date, then on the Change in Control Date, and if the holder’s redemption request was made after the Change in Control Date, then within 20 calendar days of such request.

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     (ii) In connection with a Change in Control described in Section 11(c)(iii)(A), (D) or (E) below, each holder of shares of Series C Preferred Stock shall have the right (exercisable at the holder’s option) to require, by request in writing to the Corporation within 60 days after the public disclosure of the consummation of a Change in Control, that the Corporation redeem such holder’s shares of Series C Preferred Stock, out of funds legally available therefor, at a redemption price per share in cash equal to the sum of (A) 101% of the sum of the Liquidation Preference and the Accumulated Dividend Amount (as of the date the Corporation makes the full redemption payment in cash to such holders) plus (B) the Applicable Per Share CVR Amount, whereupon the Corporation shall effect such redemption, or cause such redemption to be effected, within 30 calendar days of such request.
     (iii) As used herein, “Change in Control” means the happening of any of the following events:
     (A) any Person acquires Beneficial Ownership, directly or indirectly, of 50% or more of the combined voting power of the then-outstanding voting securities of the Corporation entitled to vote generally in the election of directors (“Outstanding Corporation Voting Stock”);
     (B) consummation of a Business Combination, unless, following such Business Combination, (x) all or substantially all of the individuals and entities that were the Beneficial Owners of the Outstanding Corporation Voting Stock immediately prior to such Business Combination Beneficially Own, directly or indirectly, more than 50% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or equivalent) of the entity resulting from such Business Combination (including, without limitation, a company that, as a result of such transaction, owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the voting power of the Outstanding Corporation Voting Stock and (y) no Person Beneficially Owns, directly or indirectly, 50% or more of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or equivalent) of such entity;
     (C) approval by the stockholders of the Corporation of a liquidation or dissolution of the Corporation;
     (D) individuals who, as of the Initial Funding Date, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director pursuant to the Purchase Agreement, or whose election or nomination for election by the Corporation’s shareholders was approved by a vote of at least a majority of the directors comprising the incumbent Board of Directors as of such election or nomination, shall be considered as though such individual were a member of the Incumbent Board; or

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     (E) any event that would not otherwise constitute a Change in Control pursuant to Sections 11(b)(iii)(A), (B), (C) or (D) hereof but would constitute a “change in control” for purposes of the Existing Credit Facilities (as defined in the Purchase Agreement) or the Second Lien Notes (as defined in the Purchase Agreement).
The terms “Beneficially Own” and “Beneficial Ownership” are used herein as defined in Rules 13d-3 and 13d-5 of the Exchange Act, but without taking into account any contractual restrictions or limitations on voting or other rights.
     (iv) The Corporation shall deliver written notice to each holder of Series C Preferred Stock, by first class mail, postage prepaid, of any Change in Control as promptly as practicable, together with a reasonably detailed summary of the material terms of such Change in Control.
     (d) If the Corporation (i) shall not have sufficient assets legally available under the DGCL for the redemption of all shares of Series C Preferred Stock that holders of Series C Preferred Stock have requested be redeemed under Section 11(a), (b) or (c) (the “Required Number of Shares”) or (ii) will be in violation of Specified Contract Terms (as defined below) if it redeems the Required Number of Shares, the Corporation shall: (A) redeem, at the applicable redemption price set forth above in this Section 11, the maximum number of shares of Series C Preferred Stock it is permitted to redeem (which aggregate redemption price will be an amount equal to the lesser of (y) the amount legally available for the redemption of shares of Series C Preferred Stock and (z) the largest amount that can be used for such redemption in accordance with Specified Contract Terms); (B) subject to Sections 9, 11(b) and 13(b)-(c), use its best efforts to promptly take all actions necessary to eliminate any limitation or other impediment on the Corporation’s ability to redeem the Required Number of Shares as soon as practicable (including, without limitation, revaluing the assets of the Corporation so as to maximize the amount available for redemption of Series C Preferred Stock, seeking to refinance all indebtedness under the contracts containing the Specified Contract Terms, seeking to liquidate assets and otherwise seeking to raise sufficient funds legally available for the redemption of the Required Number of Shares without violation of Specified Contract Terms, and seeking a merger or other sale of the Corporation that would provide for the redemption of the Required Number of Shares), and (C) redeem pro rata among the holders of shares of Series C Preferred Stock, at the applicable redemption price set forth above in this Section 11, any and all shares of Series C Preferred Stock not redeemed because of the limitations described in clause (i) or clause (ii) of this paragraph as soon as practicable to the extent it is able to make such redemption out of assets legally available under the DGCL for the redemption of shares of Series C Preferred Stock and without violation of Specified Contract Terms. The inability of the Corporation to make a redemption payment for any reason shall not relieve the Corporation from its obligation to effect any required redemption when, as and if permitted by law and Specified Contract Terms. As used in this paragraph, “Specified Contract Terms” means the covenants of the Corporation contained in (x) the Existing Credit Facilities (as defined in the Purchase Agreement) as amended as of the Initial Funding Date in accordance with Section 1.2(c)(iv)(A) of the Purchase Agreement and (y) the Second-Lien Debt (as defined in the Purchase Agreement) documentation in accordance with Section 1.2(c)(iv)(B) of the Purchase Agreement, in each case under clause (x) and (y) as the same shall be in effect on and as of the Initial Funding Date and not including any subsequent amendment,

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restatement, refinancing, replacement or other modification thereof or any successor contract thereto. In the event the officers or directors of the Corporation do not take the actions required in this Section 11 because they reasonably believe, after consultation with the Corporation’s outside legal counsel, that taking such action would violate their fiduciary duties, then no holder of Series C Preferred Stock shall be entitled to make any claim against such officers or directors in their individual capacities as a result of their failure to take such actions; provided, that nothing herein shall relieve the Corporation from its obligations owed to the holders of the Series C Preferred Stock provided herein and nothing herein shall preclude any holder of Series C Preferred Stock from making claims for monetary damages against the Corporation or seeking injunctions or other equitable remedies to cause the Corporation to fulfill its obligations hereunder.
     (e) Until the full redemption price applicable under Section 11(a)-(c) is paid in cash to the holders of shares of Series C Preferred Stock, shares of Series C Preferred Stock shall accrue and accumulate dividends pursuant to Section 3.
     (f) Notwithstanding anything to the contrary contained herein, following the initial issuance of Series C Preferred Stock, without the prior vote or written consent of holders of a majority of the Series C Preferred Stock outstanding, no Voluntary Redemption Event may occur unless, at the time of such Voluntary Redemption Event: (i) if such Voluntary Redemption Event is a Trigger Event, the Corporation shall, prior to or simultaneously with such Voluntary Redemption Event, redeem for cash the Required Number of Shares for the redemption amount contemplated by this Section 11 (without giving effect to Section 11(d)), (ii) if such Voluntary Redemption Event is a Change in Control as defined in Sections 11(c)(iii)(B) or (C), the Corporation shall, prior to or simultaneously with such Voluntary Redemption Event, (x) with respect to all shares of Series C Preferred Stock that holders of Series C Preferred Stock have requested be redeemed under Section 11, redeem for cash the Required Number of Shares for the redemption amount contemplated by this Section 11 (without giving effect to Section 11(d)) and (y) with respect to all other Shares of Series C Preferred Stock, place in trust for the benefit of the holders of the Series C Preferred Stock in a manner reasonably acceptable to holders of a majority of the shares of Series C Preferred Stock outstanding, cash that is available for and sufficient to pay the redemption amount contemplated by this Section 11 (without giving effect to Section 11(d)) for the maximum number of the remaining Required Number of Shares that could exist in connection with the Voluntary Redemption Event, and (iii) if such Voluntary Redemption Event is any other event, the Corporation shall, prior to or simultaneously with such Voluntary Redemption Event, place in trust for the benefit of the holders of the Series C Preferred Stock in a manner reasonably acceptable to holders of a majority of the shares of Series C Preferred Stock outstanding, cash that is available for and sufficient to pay the redemption amount contemplated by this Section 11 (without giving effect to Section 11(d)) for the maximum number of Required Number of Shares that could exist in connection with the Voluntary Redemption Event. In the case of clauses (ii) or (iii) in the preceding sentence, any cash not required in fact to redeem the Required Number of Shares for the amount contemplated by this Section 11 will be returned from trust to the Corporation on the day immediately following the last day on which the holders of the Series C Preferred Stock may timely request redemption with respect to such Voluntary Redemption Event.

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     12. Contingent Value Rights.
     (a) As used herein:
     (i) A “CVR Event” means, as applicable, (A) any voluntary or involuntary liquidation, dissolution or winding up of the Corporation referred to in Section 4, (B) the date of the Corporation’s delivery of Notice of Redemption for redemption of shares of Series C Preferred Stock at the option of the Corporation pursuant to Sections 5 and 6, or (C) the date of the applicable holder’s delivery of notice requesting redemption of shares of Series C Preferred Stock at the option of the holder pursuant to paragraph (a), (b) or (c) of Section 11.
     (ii) The “Common Stock Price” in respect of a CVR Event means the average Market Price of the Common Stock during the period of ten consecutive Trading Days ending on the date of the applicable CVR Event.
     (iii) The “Applicable Per Share CVR Amount” in respect of a CVR Event means an amount equal to (A) the Applicable CVR Amount determined in accordance with the following table divided by (B) the total number of shares of Series C Preferred Stock issued and outstanding on the Initial Funding Date.
     
If the Common Stock Price in respect   then the “Applicable CVR Amount” shall be
of the applicable CVR Event is:   an amount (in dollars) equal to:
less than $10
  $0
equal to $10
  $65,000,000
 
   
greater than $10 but less than $12.50
  the sum of $65,000,000 plus the product
 
  of $125,000,000 times a fraction the
 
  numerator of which is equal to the
 
  number of cents (which may be less than,
 
  equal to, or more than 100) by which the
 
  Common Stock Price exceeds $10 and the
 
  denominator of which is 250
 
   
equal to $12.50
  $190,000,000
 
   
greater than $12.50 but less than $15
  the sum of $190,000,000 plus the product
 
  of $160,000,000 times a fraction the
 
  numerator of which is equal to the
 
  number of cents (which may be less than,
 
  equal to, or more than 100) by which the
 
  Common Stock Price exceeds $12.50 and
 
  the denominator of which is 250
 
   
equal to $15
  $350,000,000
 
   
greater than $15
  the sum of $350,000,000 plus the product
 
  of $180,000,000 times a fraction the
 
  numerator of which is
 
  equal to the
 
  number of cents (which may be less than,
 
  equal to, or more than 100) by which the
 
  Common Stock Price exceeds $15 and the
 
  denominator of which is 250

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     (b) All calculations under this Section 12 shall be appropriately adjusted for any stock split, stock dividend, subdivision, reclassification, combination or the like affecting the Common Stock, so as to protect the rights of holders of shares of Series C Preferred Stock or holders of shares of Common Stock, as applicable, from dilution or other impairment.
     13. Certain Other Provisions.
     (a) If any Series C Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new Series C Preferred Stock certificate of like tenor and representing an equivalent amount of Series C Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate and, if requested by the Corporation, an indemnity on customary terms for such situations reasonably satisfactory to the Corporation.
     (b) Without limiting the provisions of (or the holders’ rights under) Section 9 and Section 11, the Corporation shall not merge or consolidate with or into, or sell, transfer or lease all or substantially all of its property to, any other entity, or permit consummation of any other Business Combination, unless the surviving, successor, transferee or lessee entity, as the case may be (if not the Corporation), (i) expressly assumes, as part of the terms of such Business Combination that shall be enforceable by the holders of shares of Series C Preferred Stock, the due and punctual performance and observance of each and every covenant and condition of this Certificate to be performed and observed by the Corporation and (ii) expressly agrees, as part of the terms of such Business Combination that shall be enforceable by the holders of shares of Series C Preferred Stock, to exchange, at the holder’s option, shares of Series C Preferred Stock for shares of the surviving entity’s capital stock having terms, preferences, rights (including, without limitation, as to dividends, voting, redemption at the option of the holder, and rights to assets upon liquidation, dissolution or winding-up), privileges and powers substantially similar to the terms, preferences, rights (including, without limitation, as to dividends, voting, redemption at the option of the holder, and rights to assets upon liquidation, dissolution or winding-up), privileges and powers under this Certificate, in each case, such that the rights of the holders of Series C Preferred Stock are protected against dilution or other impairment. Without limiting any of the foregoing, the Corporation shall cause lawful provision to be made as part of the terms of each Business Combination such that each holder of a share of Series C Preferred Stock then outstanding shall have the right thereafter to exchange such share for, or convert such share into, the kind and amount of securities, cash and other property receivable upon the Business Combination by a holder of a number of shares of Common Stock into which such share of Series C Preferred Stock (after being exchanged into Series B Preferred Stock or Series B-1 Preferred Stock) would have been convertible (without regard to any limitations contained in Section 7 of the Series B Certificate) immediately prior to such Business Combination, and subject to anti-dilution adjustment protections substantially equivalent to those set forth in the Series B Certificate.

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Notwithstanding anything in this Section 13(b) to the contrary, the failure of such surviving entity (if not the Corporation) to assume or agree to the voting rights contained in Section 9(c) of this Certificate shall not prohibit the Corporation from engaging in any transaction that would be deemed a Change of Control under Section 11(c)(iii)(B) if in connection with such Change in Control the Corporation or such surviving entity redeems for cash all shares of Series C Preferred Stock tendered for redemption in accordance with this Certificate and otherwise complies with the terms of this Section 13(b).
     (c) The Corporation shall not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution, sale of assets, or otherwise, avoid or seek to avoid the observance or performance of any of the terms of this Certificate, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the holders of Series C Preferred Stock against dilution or other impairment.
     (d) The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.
     (e) This Certificate shall become effective upon the filing thereof with the Secretary of State of the State of Delaware.

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     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed and acknowledged by its undersigned duly authorized officer this ___day of ___, 2008.
         
  MONEYGRAM INTERNATIONAL, INC.
 
 
  By:      
    Name:      
    Title:      
 

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EX-99.5
 

Exhibit 99.5
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES D PARTICIPATING CONVERTIBLE PREFERRED STOCK OF
MONEYGRAM INTERNATIONAL, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
     The undersigned, pursuant to the provisions of Section 151 of the General Corporation Law (the “DGCL”) of the State of Delaware, does hereby certify that, pursuant to the authority expressly vested in the Board of Directors of MoneyGram International, Inc., a Delaware corporation (the “Corporation”), by the Corporation’s Amended and Restated Certificate of Incorporation, the Board of Directors has by resolution duly provided for the issuance of and created a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”), and in order to fix the designation and amount and the voting powers, designations, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock, has duly adopted resolutions setting forth such rights powers and preferences, and the qualifications, limitations and restrictions thereof, of a series of Preferred Stock as set forth in this Certificate of Designations, Preferences and Rights of the Series D Preferred Stock (the “Certificate”).
     Each share of such series of Preferred Stock shall rank equally in all respects and shall be subject to the following provisions:
     1. Number of Shares and Designation. 200,000 shares of Preferred Stock of the Corporation shall constitute a series of Preferred Stock designated as Series D Participating Convertible Preferred Stock (the “Series D Preferred Stock”). The number of shares of Series D Preferred Stock may be increased (to the extent of the Corporation’s authorized and unissued Preferred Stock) or decreased (but not below the number of shares of Series D Preferred Stock then outstanding plus the maximum number of shares of Series D Preferred Stock issuable upon conversion of all then outstanding shares of Series B Preferred Stock and Series B-1 Preferred Stock pursuant to the terms set forth in the Series B Certificate and the Series B-1 Certificate) by further resolution duly adopted by the Board of Directors and the filing of