Document:

EX-4.2

 

Exhibit
4.2

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. 760,000 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 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 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 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 Initial Funding Date to the applicable Dividend Payment Date (as defined
below), excluding any dividends accruing during the then-current Dividend Period

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(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-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 15.0%. 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 Initial Funding 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 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 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 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.

     (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

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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 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 (or 101% of the Liquidation amount, as
applicable) 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

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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 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 Initial Funding 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

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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
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 $2.50, 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.

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     (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 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.

     (iii) Notwithstanding anything to the contrary herein, prior to the Voting Date, to the
extent any conversion by a holder of Series B Preferred Stock would cause any holder of Series
B Preferred Stock to be entitled to vote a percentage of the Common Stock which exceeds the
Applicable Threshold, such conversion will occur and become effective on the Voting Date.

     (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

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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 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, and, to the extent that the
Corporation does not have enough authorized and unissued shares of Common Stock, subject to
the approval by the Corporation’s shareholders and Board of Directors to increase the number
of authorized shares of Common Stock, 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

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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.

     (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:

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     (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
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

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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 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

11

 

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 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

12

 

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.

     (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

13

 

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
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) Subject to the restrictions contained in this Section 9, 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) from the Initial Funding Date to the day prior to the Voting Date,
shall be entitled to a number of votes per share of Series B Preferred Stock equal to (such number
of votes, the “Series B Votes Per Share”) 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 each share 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), provided, however, that the foregoing shall not entitle any holder
(or group of holders) of Series B Preferred Stock, together with its Affiliates, to a number of
votes per share (on an as-converted in Common Stock basis) more than the Applicable Threshold,
(iii) from and after the Voting Date, the holders of the shares of Series B Preferred Stock shall
be entitled to a number of votes per share of Series B Preferred Stock equal to the Series B Votes
Per Share, and (iv) shall be entitled to notice of all stockholders’ meetings

14

 

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;

     (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 action 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 (or Series D 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-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 (or Series
D Preferred 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) From the Initial Funding Date through the day prior to the Voting Date, and also
thereafter at any time that the Corporation shall have failed to pay the redemption price for
shares of Series B Preferred Stock or Series B-1 Preferred Stock that holders of shares of Series B
Preferred Stock or Series B-1 Preferred Stock have requested be redeemed pursuant to Section
11 hereof or of the Series B-1 Certificate and ending at such time when the full applicable

15

 

redemption price, as set forth in Section 11 hereof or of the Series B-1 Certificate
(in each case, without regard to Section 11(c)), 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, 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) (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;

     (ii) adopt a plan or agreement of complete or partial liquidation or dissolution, or
otherwise voluntarily liquidate, dissolve or wind-up the Corporation; or

     (iii) increase the number of directors comprising the entire Board of Directors above 13
(except as may be required by the Purchase Agreement);

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 action 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 (or Series D 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-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 (or Series D Preferred 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(c).

     (d) From the Initial Funding Date through the day prior to the Voting Date, and also
thereafter at any time that the Corporation shall have failed to pay the redemption price for
shares of Series B Preferred Stock or Series B-1 Preferred Stock that holders of shares of Series B
Preferred Stock or Series B-1 Preferred Stock have requested be redeemed pursuant to Section
11 hereof or of the Series B-1 Certificate and ending at such time when the full applicable
redemption price, as set forth in Section 11 hereof or of the Series B-1 Certificate (in
each case,

16

 

without regard to Section 11(c)), for all such shares of Series B Preferred Stock or Series
B-1 Preferred Stock shall have been paid to the holders in cash, 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:

     (i) 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 B Preferred Stock or Series B-1 Preferred Stock 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 B Preferred Stock
or Series B-1 Preferred Stock that holders of shares of Series B Preferred Stock or Series B-1
Preferred Stock, as applicable, 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;

     (ii) 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;

     (iii) 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 B Preferred Stock and Series B-1 Preferred Stock pursuant to the Purchase Agreement and
this Certificate or the Series B-1 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 (or Series D Preferred Stock) at a
net price per share of Common Stock (or per 1/1000th of a share of Series D
Preferred Stock, as adjusted) to the Corporation 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;

     (iv) 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 $1,100,000,000;

17

 

     (v) make investments in a manner that is in contravention of the Investment Policy (as
defined in the Purchase Agreement);

     (vi) effect 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;

     (vii) make 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;

     (viii) hire, terminate or change the compensation of any executive officer except for
ordinary raises consistent with past practices (provided that, beginning at any time that the
Corporation shall have failed to pay the redemption price for shares of Series B Preferred
Stock or Series B-1 Preferred Stock that holders of shares of Series B Preferred Stock or
Series B-1 Preferred Stock have requested be redeemed pursuant to Section 11 hereof or
of the Series B-1 Certificate and ending at such time when the full applicable redemption
price, as set forth in Section 11 hereof or of the Series B-1 Certificate (in each
case, without regard to Section 11(c)), 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, (A) the holders of the
Series B Preferred Stock shall not unreasonably withhold or delay approval of any such hiring
or termination and, provided further, (B) if the holders of Series B 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 B
Preferred Stock is hired and (C) 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);

     (ix) make any new, or renew any existing, loans to any of the money transfer or payment
systems agents of the Corporation or its Subsidiaries; or

     (x) 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);

provided, that no such consent or vote of the holders of 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 Preferred Stock at the time outstanding shall have been converted into Common Stock (or Series D
Preferred Stock) pursuant to Section 7 or redeemed by the Corporation in accordance with

18

 

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.

     (e) The consent or votes required in Section 9(b), Section 9(c) or Section
9(d) 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).

     (f) Restrictions on Voting Rights. Except as provided in this Section 9(f), any portion of
the Series B Preferred Stock that is held as nonvoting shall be identical in all respects to Series
B Preferred Stock that is voting. If, and to the extent that, prior notice and/or approval under
the laws relating to money transmission or the sale of checks of any state is required in order for
any holder (or group of related holders together with their Affiliates) of record to hold or vote
more than the Applicable Threshold of the Corporation’s outstanding voting securities, then, to the
extent permitted by applicable law, that portion of the Series B Preferred Stock that is in excess
of the Applicable Threshold shall be nonvoting in all respects. This Section 9(f) shall terminate
on the Voting Date.

     (g) The Corporation shall not take or permit to occur any stockholder vote (or action by
written consent) on any matter with a record date prior to the Voting Date, except to the extent
required by law or by Section 9(b), (c) or (d) of this Certificate
or Section 9(b) of the Series B-1 Certificate. If required by law to have a record date
that is earlier than the Voting Date, then the Voting Date shall occur no later than immediately
prior to such record date.

     (h) Notwithstanding anything to the contrary in this Certificate, the Corporation shall be
permitted to take the actions contemplated by Section 4.14 of the Purchase Agreement.

     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.

     “Applicable Threshold” means the percentage of Common Stock which, as reasonably
determined by the Corporation and each of THL, GSMP and GSCP (as defined in the Purchase
Agreement), between the Initial Funding Date and the day prior to the Voting Date, the
holders of the Series B Preferred Stock as of the Initial Funding

19

 

Date (such holders, collectively, “THL”) may hold without any further prior notice
and/or approval under the laws relating to money transmission or the sale of checks of any
state. As of the Initial Funding Date, the Applicable Threshold will be 9.9%, and shall
increase prior to the Voting Date to the extent permitted by applicable state regulatory
laws.

     “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.

     “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.

20

 

     “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).

     “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 Amended and Restated Purchase Agreement, dated as of
March 17, 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.

21

 

     “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.

     “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.

     “Voting Date” means the earlier of (i) such date as all applicable state regulatory
approvals for the acquisition by THL of control of the Corporation have been obtained as
reasonably determined by the Corporation and THL, or (ii) such other date requested in
writing by THL on or after June 15, 2008; provided, however, that if a record date for a
stockholder vote (or action by written consent) on any matter is required by law to occur
prior to the Voting Date as described in the foregoing clauses (i) and (ii) without giving
effect to this proviso, then the Corporation shall provide notice of the record date to THL
not less than ten Business Days prior to the record date of such stockholder vote (or action
by written consent), and the Voting Date shall occur immediately prior to such record date
unless THL notifies the Corporation that the Voting Date shall not occur on such date.

     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

22

 

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.

     (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

23

 

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
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

24

 

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
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

25

 

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 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.

26

 

     IN WITNESS WHEREOF, the Corporation has caused this Certificate to be duly executed and
acknowledged by its undersigned duly authorized officer this 24th day
of March, 2008.

	 	 	 	 	 	 	 
	 	 	MONEYGRAM INTERNATIONAL, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Teresa H. Johnson
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Teresa H. Johnson	 	 
	 

	 	 	 	Title:  Executive Vice
President, General Counsel & Secretary	 	 

27EX-4.3

 

Exhibit 4.3

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. 500,000 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) 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 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 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
declared, from the Initial Funding 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

2

 

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
15.0%. 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 Initial
Funding 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 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 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 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.

     (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”),

3

 

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 (or 101% of the Liquidation amount, as
applicable) 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-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

4

 

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 Initial Funding 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.

     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

5

 

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 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 Corporation that such

6

 

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 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.

7

 

     (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 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

8

 

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
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) 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 Series D Preferred Stock) or redeemed by the Corporation
pursuant to the Series B Certificate. The holders of shares of Series B-1 Preferred

9

 

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(a). 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), Section 9(c) and
Section 11(a) of the Series B Certificate.

     (b) From the Initial Funding Date through the day prior to the Voting Date, and also
thereafter at any time that the Corporation shall have failed to pay the redemption price for
shares of Series B Preferred Stock or Series B-1 Preferred Stock that holders of shares of Series B
Preferred Stock or Series B-1 Preferred Stock have requested be redeemed pursuant to Section
11 hereof or of the Series B Certificate and ending at such time when the full applicable
redemption price, as set forth in Section 11 hereof or of the Series B Certificate (in each
case, without regard to Section 11(c)), 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, 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) (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;

     (ii) adopt a plan or agreement of complete or partial liquidation or dissolution, or
otherwise voluntarily liquidate, dissolve or wind-up the Corporation; or

     (iii) increase the number of directors comprising the entire Board of Directors above 13
(except as may be required by the Purchase Agreement);

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 action 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 (or Series D Preferred Stock) or redeemed by the Corporation pursuant to the Series B
Certificate, and 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 or redeemed by the
Corporation pursuant to Sections 5 and 6 hereof or converted into Series B
Preferred Stock and all such Series B

10

 

Preferred Stock shall have been converted into Common Stock (or Series D Preferred 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) Notwithstanding anything to the contrary in this Certificate, the Corporation shall be
permitted to take the actions contemplated by Section 4.14 of the Purchase Agreement.

     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.

     “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).

     “Investor” shall have the meaning set forth in the Purchase Agreement.

11

 

     “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 Amended and Restated Purchase Agreement, dated as of
March 17, 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 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.

12

 

     “Voting Date” means the earlier of (i) such date as all applicable state regulatory
approvals for the acquisition of control of the Corporation have been obtained by the
holders of the Series B Preferred Stock as of the Initial Funding Date (such holders,
collectively, “THL”) as reasonably determined by the Corporation and THL, or (ii) such other
date requested in writing by THL on or after June 15, 2008; provided, however, that if a
record date for a stockholder vote (or action by written consent) on any matter is required
by law to occur prior to the Voting Date as described in the foregoing clauses (i) and (ii)
without giving effect to this proviso, then the Corporation shall provide notice of the
record date to THL not less than ten Business Days prior to the record date of such
stockholder vote (or action by written consent), and the Voting Date shall occur immediately
prior to such record date unless THL notifies the Corporation that the Voting Date shall not
occur on such date.

     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
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

13

 

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;

                         (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.

14

 

     (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 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

15

 

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 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

16

 

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
24th day of March, 2008.

	 	 	 	 	 	 	 
	 	 	MONEYGRAM INTERNATIONAL, INC.
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Teresa H. Johnson
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:  Teresa H. Johnson	 	 
	 

	 	 	 	Title:   Executive Vice President,
General Counsel & Secretary	 	 

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