PURCHASE AGREEMENT

Exhibit 10.1

EXECUTION COPY

PURCHASE AGREEMENT

dated as of February 11, 2008

among

MONEYGRAM INTERNATIONAL, INC.

and

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:

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

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

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

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

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

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

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;

          (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.

          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

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

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

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

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.

     (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

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

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.

     (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

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

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.

          (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 th