Document:

exv10w3w3

 

Exhibit 10.3.3

RECORDATION REQUESTED BY:

Cathay Bank

777 North Broadway

Los Angeles, CA 90012

WHEN RECORDED MAIL TO:

Cathay Bank

777 North Broadway

Los Angeles, CA 90012

SPACE ABOVE THIS LINE IS FOR RECORDER’S USE ONLY

MODIFICATION OF CONSTRUCTION TRUST DEED

THIS MODIFICATION OF CONSTRUCTION TRUST DEED IS DATED AS OF JUNE 28, 2004,
between DICON FIBEROPTICS, INC., a California corporation, whose address is
1689 Regatta Blvd., Richmond, CA 94804 (referred to below as “Trustor”) and
CATHAY BANK, a California banking corporation, whose address is 777 North
Broadway, Los Angeles, CA 90012 (referred to below as “Lender”). The purpose
of this Modification is to reflect the extension of the term of the loan
secured by the Deed of Trust and an agreement between Trustor and Lender with
respect to the conditions under which Lender will release and reconvey parcels
of the Real Property.

Deed of Trust. Trustor and Lender entered into a Construction Trust Deed dated
August 24, 2000, and recorded in the records of the County of Contra Costa,
California on August 25, 2000 as Document Number 2000-0182834-00, as modified
by a Modification of Construction Trust Deed dated November 20, 2001, and
recorded in the records of the County of Contra Costa, California on November
27, 2001 as Document Number 2001-0361073-00 (such Construction Trust Deed as so
modified, the “Deed of Trust”), covering that certain real property located in
the City of Richmond, County of Contra Costa, State of California, as more
particularly described on Exhibit “A” and Exhibit “B” attached hereto (the
“Real Property”). Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Deed of Trust.

Modifications. Trustor and Lender hereby modify and amend the Deed of Trust as
follows:

1. Agreement for Partial Release. Notwithstanding anything to the contrary in
the Deed of Trust or in the Term Loan Agreement between Trustor and Lender
dated November 20, 2001 (as such Term Loan Agreement is amended by that certain
Loan Modification and Extension Agreement and Amendment to Promissory Note
between the parties dated June 28 , 2004) (such Term Loan Agreement as so
amended, the “Term Loan Agreement”), so long as no Event of Default (as defined
in the Term Loan Agreement) has occurred and is then continuing, Lender will,
upon written request of Trustor and upon payment of the Release Price, grant
partial reconveyance from the lien or charge of the Deed of Trust for the
approximately eleven (11) acre portion of the Real Property constituting the
“Purchase Property” under (and as defined in) that certain Purchase and Sale
Agreement and Preliminary Escrow Instructions entered into as of February 27,
2004 between Trustor and Pulte Home Corporation (the “Pulte Agreement”). Such
“Purchase Property” and the agreed upon Release Price therefor are described
and set forth in Exhibit “C” attached hereto and made a part hereof. The
Release Price payment will be applied against the outstanding principal of the
Loan and not against accrued interest on the Loan then due. The Release Price
payment will be treated as a prepayment under the Note. Trustor shall pay all
costs of executing and recording the partial reconveyance. Delivery of the
partial reconveyance and payment of the Release Price will take place through
escrow unless otherwise agreed by the parties.

2. Definition of Note. The definition of the term “Note” is modified to read
in its entirety as follows: The word “Note” means the promissory note dated
November 20, 2001, in the principal amount of $27,000,000.00 from Trustor to
Lender, which note is an extension and renewal of the Construction Loan
Promissory Note dated August 24, 2000, as such promissory note is amended and
extended by that certain Loan Modification and Extension Agreement and
Amendment to Promissory Note dated June 28, 2004;

1

 

together with all renewals, extensions, modifications, refinancings, and
substitutions for such promissory note as so amended and extended. NOTICE TO
TRUSTOR: THE PROMISSORY NOTE CONTAINS A VARIABLE INTEREST RATE.

3. Securing Clause. The “securing” clause of the Deed of Trust is modified to
include the obligations of the Note and the Term Loan Agreement as defined in
paragraph 1 above among the obligations secured by the Deed of Trust.

4. Continuing Validity. Except as expressly modified above, the terms of the
Deed of Trust shall remain unchanged and in full force and effect. Consent by
Lender to this Modification does not waive Lender’s right to require strict
performance of the Deed of Trust as modified above nor obligate Lender to make
any future modifications. Nothing herein shall constitute a satisfaction of
the promissory note or loan agreement secured by the Deed of Trust.

TRUSTOR ACKNOWLEDGES HAVING READ ALL OF THE PROVISIONS OF THIS MODIFICATION OF
TRUST DEED AND AGREES TO ITS TERMS. This Modification is dated as of the date
first set forth above.

TRUSTOR:

DICON FIBEROPTICS, INC.,

a California corporation

	 	 	 	 	 
	By:

	 	HO-SHANG LEE	 	 
	

	 	

	 	 
	

	 	President	 	 

	 	 	 
	

	 	 
	CERTIFICATE OF ACKNOWLEDGEMENT
	 	 

	 	 	 	 	 	 	 
	STATE OF CALIFORNIA

	 	 	 	 	)
	

	 	 	 	 	) ss.

	COUNTY OF

	 	Alameda
	 	 	)

     On this 28th day of June, 2004, before me, Phyllis Cariela, the
undersigned Notary Public, personally appeared Ho-Shang Lee, personally known
to me or proved to me on the basis of satisfactory evidence to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he executed the same in his authorized capacity, and that by his signature on
the instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.

     WITNESS my hand and official seal.

	 	 	 	 	 
	 

	 	Phyllis Cariela	 	 
	

	 	

	 	 
	

	 	Notary Public	 	 

2

 

Exhibit “A”

CITY OF RICHMOND

PARCEL ONE:

LOT 4, AS SHOWN ON PARCEL MAP MS 756-97, FILED FEBRUARY 3, 1998 IN BOOK 173 OF
PARCEL MAPS, PAGE 21, CONTRA COSTA COUNTY RECORDS.

PARCEL TWO:

EASEMENT AS AN APPURTENANCE TO PARCEL ONE ABOVE DESCRIBED, AS RESERVED IN THE
DEED FROM SANTA FE LAND IMPROVEMENT COMPANY TO SOUTHERN PACIFIC RAILROAD
COMPANY, RECORDED SEPTEMBER 30, 1955, BOOK 2621, OFFICIAL RECORDS, PAGE 1, AND
MORE PARTICULARLY DESCRIBED AS FOLLOWS:

“THE RIGHT TO OPERATE AND MAINTAIN ANY AND ALL EXISTING WIRE AND PIPE LINES
UPON, OVER OR UNDER THE ABOVE DESCRIBED 8.221-ACRE PARCEL OF LAND, AND THE
RIGHT TO CONSTRUCT, OPERATE, AND MAINTAIN ADDITIONAL WIRE OR PIPE LINES UPON,
ACROSS OR UNDER (A) THAT PORTION OF SAID 8.221-ACRE PARCEL OF LAND WHICH LIES
WEST OF A NORTH-SOUTH LINE PASSING THROUGH THE POINT OF BEGINNING OF THAT
CERTAIN COURSE ABOVE DESCRIBED AS BEARING “SOUTH 89o 33’ 45” EAST 1256.98
FEET”, AND NORTHEASTERLY OF THAT CERTAIN COURSE, OR PROLONGATION THEREOF, ABOVE
DESCRIBED AS BEARING “SOUTH 39o 40’ 45” EAST 40.00 FEET”, AND (B) THAT PORTION
OF SAID 8.221-ACRE PARCEL OF LAND WHICH LIES EAST OF A NORTH –SOUTH LINE
PASSING ACROSS SAID PARCEL AT A POINT DISTANT EAST 1450.00 FEET FROM THE POINT
OF BEGINNING OF SAID COURSE BEARING “SOUTH 89o 33’ 45” EAST 1256.98 FEET”;
PROVIDED, HOWEVER, THAT ANY PIPE OR WIRE LINES CONSTRUCTED PURSUANT TO THIS
RESERVATION SHALL BE CONSTRUCTED AND MAINTAINED WITHOUT COST TO SECOND PARTY
AND IN SUCH A MANNER AND OF SUCH MATERIAL THAT THEY WILL NOT IN THE REASONABLE
JUDGMENT OF SECOND PARTY’S CHIEF ENGINEER AT ANY TIME BE A SOURCE OF DANGER TO
OR INTERFERENCE WITH THE PRESENT OR FUTURE TRACKS, ROADBED AND PROPERTY OF
SECOND PARTY, OR THE SAFE OPERATION OF ITS RAILROAD.”

ASSESSOR’S PARCEL NO.: 560-181-092

PARCEL THREE:

BEING A PORTION OF PIERSON AVENUE, AS SAID STREET IS DESCRIBED AS PARCEL 1 IN
EASEMENT TO THE CITY OF RICHMOND, RECORDED SEPTEMBER 2, 1949, IN BOOK 1432 OF
OFFICIAL RECORDS, PAGE 409, CONTRA COSTA COUNTY, BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT THE WEST CORNER OF LOT 4, AS SHOWN ON PARCEL MAP MS 756-97, FILED
FEBRUARY 3, 1998, IN BOOK 173 OF PARCEL MAPS, AT PAGE 21 OF SAID COUNTY, SAID
POINT OF BEGINNING ALSO BEING A POINT ON THE NORTH BOUNDARY LINE OF PIERSON
AVENUE; THENCE ALONG SAID LINE, SOUTH 53o 23’ 17” EAST, 79.24 FEET; THENCE
ALONG A NON-TANGENT CURVE TO THE LEFT HAVING A RADIAL BEARING OF NORTH 36o 36’
42” EAST AND HAVING A RADIUS OF 360.00 FEET, THROUGH A CENTRAL ANGLE OF 35o 28’
26”, FOR AN ARC LENGTH OF 222.89 FEET TO A POINT OF INTERSECTION OF THE NORTH
RIGHT-OF-WAY LINE OF PIERSON AVENUE AND THE NORTH RIGHT-OF-WAY LINE OF REGATTA
BOULEVARD; THENCE ALONG THE NORTH RIGHT-OF-WAY LINE OF REGATTA BOULEVARD, NORTH
88o 51’ 44” WEST, 189.49 FEET; THENCE ALONG A TANGENT CURVE TO THE RIGHT HAVING
A RADIUS OF 745.00 FEET, THROUGH A CENTRAL ANGLE OF 05o 13’ 31”, FOR AN ARC
LENGTH OF 67.94 FEET TO A POINT OF INTERSECTION OF THE SOUTH RIGHT-OF-WAY LINE
OF PIERSON AVENUE AND THE

 

 

NORTH RIGHT-OF-WAY LINE OF REGATTA BOULEVARD; THENCE ALONG THE SOUTH
RIGHT-OF-WAY LINE OF PIERSON AVENUE, NORTH 53o 23’ 17” WEST, 79.10 FEET; THENCE
NORTH 38o 16’ 08” EAST, 80.03 FEET TO THE POINT OF BEGINNING.

PARCEL FOUR:

BEING A PORTION OF PIERSON AVENUE, AS SAID STREET IS DESCRIBED AS PARCEL 1 IN
EASEMENT TO THE CITY OF RICHMOND, RECORDED SEPTEMBER 2, 1949, IN BOOK 1432 OF
OFFICIAL RECORDS, PAGE 409, CONTRA COSTA COUNTY. BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF LOT 4, AS SHOWN ON PARCEL MAP MS-756-97,
FILED FEBRUARY 3, 1998, IN BOOK 173 OF PARCEL MAPS, AT PAGE 21 OF SAID COUNTY,
SAID POINT OF BEGINNING AT THE POINT OF INTERSECTION OF THE NORTH RIGHT-OF-WAY
LINE OF PIERSON AVENUE AND THE WEST RIGHT-OF-WAY OF MARINA BAY PARKWAY; THENCE
ALONG A NON-TANGENT CURVE TO THE RIGHT HAVING A RADIAL BEARING OF SOUTH 86o 55’
04” WEST AND HAVING A RADIUS OF 655.00 FEET, THROUGH A CENTRAL ANGLE OF 04o 13’
12”, FOR AN ARC LENGTH OF 48.24 FEET; THENCE SOUTH 01o 08’ 16” EAST, 31.79 FEET
TO THE SOUTH RIGHT-OF-WAY LINE OF PIERSON AVENUE; THENCE ALONG SAID LINE, NORTH
88o 51’ 44” WEST, 549.44 FEET; THENCE NORTH 01o 08’ 16” EAST, 40.00 FEET TO THE
CENTERLINE OF PIERSON AVENUE; THENCE ALONG SAID CENTERLINE, NORTH 88o 51’ 44”
WEST, 517.80 FEET; THENCE LEAVING SAID CENTERLINE, SOUTH 01o 08’ 16” WEST,
40.00 FEET TO THE SOUTH RIGHT-OF-WAY LINE OF PIERSON AVENUE; THENCE ALONG SAID
LINE, NORTH 88o 51’ 44” WEST, 370.85 FEET TO A POINT OF INTERSECTION OF THE
SOUTH RIGHT-OF-WAY LINE OF PIERSON AVENUE AND THE NORTH RIGHT-OF-WAY LINE OF
REGATTA BOULEVARD; THENCE ALONG SAID NORTH RIGHT-OF-WAY LINE. ALONG A
NON-TANGENT CURVE TO THE LEFT HAVING A RADIAL BEARING OF SOUTH 32o 17’ 05” WEST
AND HAVING A RADIUS OF 555.00 FEET, THROUGH A CENTRAL ANGLE OF 30o 52’ 40”, FOR
AN ARC LENGTH OF 299.10 FEET TO A POINT OF INTERSECTION OF THE NORTH
RIGHT-OF-WAY LINE OF REGATTA BOULEVARD AND THE NORTH RIGHT-OF-WAY LINE OF
PIERSON AVENUE; THENCE ALONG SAID NORTH RIGHT-OF-WAY LINE OF PIERSON AVENUE,
SOUTH 88o 51’ 44” EAST, 1720.76 FEET TO THE POINT OF BEGINNING.

 

 

Exhibit “B”

CITY OF RICHMOND

BEING A PORTION OF PIERSON AVENUE, AS SAID STREET IS DESCRIBED AS PARCEL 1 IN
EASEMENT TO THE CITY OF RICHMOND, RECORDED SEPTEMBER 2, 1949 IN BOOK 1432 OF
OFFICIAL RECORDS, PAGE 409, CONTRA COSTA COUNTY; SAID PORTION ALSO BEING A
PORTION OF PROPERTY DESCRIBED IN GRANT DEED RECORDED FEBRUARY 8, 1989 IN BOOK
14872 OF OFFICIAL RECORDS, PAGE 768-770 AND BEING MORE PARTICULARLY DESCRIBED
AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF THAT PARCEL DESCRIBED IN BOOK 14872, AT
PAGE 768; THENCE SOUTH 01o 08’ 16” WEST, 40.00 FEET TO THE SOUTHERN BOUNDARY
LINE OF SAID PIERSON AVENUE; THENCE ALONG SAID SOUTHERN BOUNDARY LINE NORTH 88o
51’ 44” WEST, 517.80 FEET TO A POINT ON THE WESTERN BOUNDARY LINE OF SAID
DESCRIBED PARCEL; THENCE ALONG SAID WESTERN BOUNDARY LINE NORTH 01o 08’ 16”
EAST, 40.00 FEET TO THE NORTH BOUNDARY LINE OF SAID PARCEL. SAID LINE ALSO
BEING THE CENTERLINE OF SAID PIERSON AVENUE; THENCE ALONG SAID CENTERLINE SOUTH
88o 51’ 44” EAST, 517.80 FEET TO THE POINT OF BEGINNING.

EXCEPTING THEREFROM:

ALL MINERALS CONTAINED IN THE ABOVE DESCRIBED LAND, INCLUDING, WITHOUT LIMITING
THE GENERALITY THEREOF, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES, AS WELL AS
METALLIC OR OTHER SOLID MINERALS, PROVIDED THAT SANTA FE SHALL NOT HAVE THE
RIGHT TO GO UPON OR USE THE SURFACE OF SAID LAND, OR ANY PART THEREOF, FOR THE
PURPOSE OF DRILLING FOR, MINING, OR OTHERWISE REMOVING, ANY OF SAID MINERALS.
SANTA FE MAY, HOWEVER, AND HEREBY RESERVES THE RIGHT TO, REMOVE ANY OF SAID
MINERALS FROM SAID LAND BY MEANS OF WELLS, SHAFTS, TUNNELS OR OTHER MEANS OF
ACCESS TO SAID MINERALS WHICH MAY BE CONSTRUCTED, DRILLED OR DUG FROM OTHER
LAND, PROVIDED THAT THE EXERCISE OF SUCH RIGHTS BY SANTA FE SHALL IN NO WAY
INTERFERE WITH OR IMPAIR THE USE OF THE SURFACE OF THE LAND HEREBY CONVEYED OR
OF ANY IMPROVEMENTS THEREON, AS RESERVED IN THE DEED FROM SANTA FE LAND
IMPROVEMENT COMPANY, RECORDED MAY 23, 1967, BOOK 5374, PAGE 72, OFFICIAL
RECORDS OF CONTRA COSTA COUNTY.

 

 

Exhibit “C”

	(1)	 	The “Purchase Property” means an approximately eleven (11) acre
portion of the Real Property covered under the Deed of Trust, as
generally depicted in the crosshatched area shown on Exhibit “C-1”
hereto, together with any improvements situated thereon and all
easements and rights appurtenant to such real property and improvements.
	 
	(2)	 	The Release Price for the “Purchase Property” is the amount of
$7,250,000.00 less the total amount of additional principal repaid by
Trustor under the Loan Modification and Extension Agreement and
Amendment to Promissory Note dated June 28, 2004 up to (but not
including) the close of Escrow contemplated by the Pulte Agreement.

Exhibit “C”exv4w2

 

Exhibit 4.2

MONEYGRAM

INTERNATIONAL, INC.

and

WELLS FARGO BANK, NA.

Rights Agreement

Dated as of June 30, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	Number

	Section 1.
	 	Definitions	 	 	1	 
	Section 2.
	 	Appointment of Rights Agent	 	 	6	 
	Section 3.
	 	Issue of Right Certificates	 	 	6	 
	Section 4.
	 	Form of Right Certificates	 	 	9	 
	Section 5.
	 	Countersignature and Registration	 	 	9	 
	Section 6.
	 	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	 	 	10	 
	Section 7.
	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	 	11	 
	Section 8.
	 	Cancellation and Destruction of Right Certificates	 	 	13	 
	Section 9.
	 	Availability of Preferred Shares	 	 	14	 
	Section 10.
	 	Preferred Shares Record Date	 	 	14	 
	Section 11.
	 	Adjustment of Purchase Price, Number of Shares or Number of Rights	 	 	15	 
	Section 12.
	 	Certificate of Adjusted Purchase Price or Number of Shares	 	 	26	 
	Section 13.
	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 	 	26	 
	Section 14.
	 	Fractional Rights and Fractional Shares	 	 	28	 
	Section 15.
	 	Rights of Action	 	 	30	 
	Section 16.
	 	Agreement of Right Holders	 	 	30	 
	Section 17.
	 	Right Certificate Holder Not Deemed a Stockholder	 	 	31	 
	Section 18.
	 	Concerning the Rights Agent	 	 	32	 
	Section 19.
	 	Merger or Consolidation or Change of Name of Rights Agent	 	 	32	 

-i-

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	Number

	Section 20.
	 	Duties of Rights Agent	 	 	33	 
	Section 21.
	 	Change of Rights Agent	 	 	36	 
	Section 22.
	 	Issuance of New Right Certificates	 	 	38	 
	Section 23.
	 	Redemption	 	 	38	 
	Section 24.
	 	Exchange	 	 	39	 
	Section 25.
	 	Notice of Certain Events	 	 	41	 
	Section 26.
	 	Notices	 	 	42	 
	Section 27.
	 	Supplements and Amendments	 	 	43	 
	Section 28.
	 	Successors	 	 	44	 
	Section 29.
	 	Benefits of this Agreement	 	 	44	 
	Section 30.
	 	Severability	 	 	44	 
	Section 31.
	 	Governing Law	 	 	45	 
	Section 32.
	 	Counterparts	 	 	45	 
	Section 33.
	 	Descriptive Headings	 	 	45	 
	Signatures 
	 	 	 	 	47	 

	 	 	 	 	 
	Exhibit A

	 	-
	 	Form of Certificate of Designations
	Exhibit B

	 	-
	 	Form of Right Certificate
	Exhibit C

	 	-
	 	Summary of Rights to Purchase Preferred Shares

-ii-

 

Exhibit C

          Agreement, dated as of June 30, 2004, between MoneyGram International,
Inc., a Delaware corporation (the “Company”), and Wells Fargo Bank, N.A., as
rights agent (the “Rights Agent”).

          The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a “Right”) for each Common
Share (as hereinafter defined) of the Company outstanding on June 24, 2004 (the
“Record Date”), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).

          Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

          Section 1. Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:

          (a) “Acquiring Person” shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an “Acquiring Person” as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
Common

 

 

Shares of the Company outstanding, increases the proportionate number of
Common Shares of the Company beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; provided, however, that,
if a Person shall become the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an “Acquiring Person.” Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an “Acquiring Person,” as defined pursuant
to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement.

          (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement.

          (c) “Associate” shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act as in effect on the
date of this Agreement.

          (d) A Person shall be deemed the “Beneficial Owner” of and shall be deemed
to “beneficially own” any securities:

-2-

 

     (i) which such Person or any of such Person’s Affiliates or
Associates beneficially owns, directly or indirectly;

     (ii) which such Person or any of such Person’s Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report); or

     (iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of se-

-3-

 

curities) for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section 1(d)(ii)(B) hereof) or
disposing of any securities of the Company.

          Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase “then outstanding,” when used with reference to a Person’s
Beneficial Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder.

          (e) “Business Day” shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in Minnesota are authorized or obligated by
law or executive order to close.

          (f) “Close of Business” on any given date shall mean 5:00 P.M.,
Minneapolis, Minnesota time, on such date; provided, however, that, if such
date is not a Business Day, it shall mean 5:00 P.M., Minneapolis, Minnesota
time, on the next succeeding Business Day.

          (g) “Common Shares” when used with reference to the Company shall mean the
shares of common stock, par value $0.01 per share, of the Company. “Common
Shares” when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.

-4-

 

          (h) “Distribution Date” shall have the meaning set forth in Section 3(a)
hereof.

          (i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

          (j) “Exchange Ratio” shall have the meaning set forth in Section 24(a)
hereof.

          (k) “Final Expiration Date” shall have the meaning set forth in Section
7(a) hereof.

          (l) “NASDAQ” shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.

          (m) “Person” shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such entity.

          (n) “Preferred Shares” shall mean shares of Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company having the rights
and preferences set forth in the Form of Certificate of Designations attached
to this Agreement as Exhibit A.

          (o) “Purchase Price” shall have the meaning set forth in Section 4 hereof.

          (p) “Record Date” shall have the meaning set forth in the second paragraph
hereof.

          (q) “Redemption Date” shall have the meaning set forth in Section 7(a)
hereof.

-5-

 

          (r) “Redemption Price” shall have the meaning set forth in Section 23(a)
hereof.

          (s) “Right” shall have the meaning set forth in the second paragraph
hereof.

          (t) “Right Certificate” shall have the meaning set forth in Section 3(a)
hereof.

          (u) “Shares Acquisition Date” shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.

          (v) “Subsidiary” of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.

          (w) “Summary of Rights” shall have the meaning set forth in Section 3(b)
hereof.

          (x) “Trading Day” shall have the meaning set forth in Section 11(d)
hereof.

          Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall, prior to the Distribution
Date, also be the holders of the Common Shares of the Company) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.

          Section 3. Issue of Right Certificates. (a) Until the earlier of (i) the
tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be

-6-

 

determined by action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring Person) after the
date of the commencement by any Person (other than the Company, any Subsidiary
of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity holding Common Shares of the Company for or pursuant
to the terms of any such plan) of a tender or exchange offer the consummation
of which would result in any Person becoming the Beneficial Owner of Common
Shares of the Company aggregating 15% or more of the then outstanding Common
Shares of the Company (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the “Distribution Date”), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares of the Company registered in the names of the
holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares of the Company. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Shares of the Company as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a “Right Certificate”), evidencing one Right for each Common
Share so held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.

          (b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of

-7-

 

Exhibit C hereto (the “Summary of Rights”), by
first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company. With respect
to certificates for Common Shares of the Company outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares of the Company
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares of the Company represented thereby.

          (c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence
of this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:

This certificate also evidences and entitles the holder hereof to certain
rights as set forth in an Agreement between MoneyGram International, Inc.
(the “Corporation”) and Wells Fargo Bank, N.A., dated as of June 30,
2004, as it may be amended from time to time (the “Agreement”), the
terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the Corporation.
Under certain circumstances, as set forth in the Agreement, such Rights
(as defined in the Agreement) will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Corporation will
mail to the holder of this certificate a copy of the Agreement without
charge after receipt of a written request therefor. Under certain
circumstances, as set forth in the Agreement, Rights beneficially owned
by any Person (as defined in the Agreement) who becomes an Acquiring
Person or an Associate or Affiliate thereof (as defined in the
Agreement), or certain transferees of such Person, may become null and
void.

With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares of the Company
represented by such certificates

-8-

 

shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the
Common Shares of the Company represented thereby. In the event that the
Company purchases or acquires any Common Shares of the Company after the Record
Date but prior to the Distribution Date, any Rights associated with such Common
Shares of the Company shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
of the Company which are no longer outstanding.

          Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto,
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any applicable rule or
regulation made pursuant thereto or with any applicable rule or regulation of
any stock exchange or the National Association of Securities Dealers, Inc., or
to conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the “Purchase
Price”), but the number of such one one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.

          Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, any of its Vice Presidents or its
Treasurer, either manually or by facsimile signature,

-9-

 

shall have affixed
thereto
the Company’s seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as
though the individual who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any individual who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Agreement any
such individual was not such an officer.

          Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of each of
the Right Certificates.

          Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing Rights that have

-10-

 

become void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates entitling the
registered holder to purchase a like number of one one-hundredths of a
Preferred Share as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon
the Rights Agent shall countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.

          Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company’s request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.

          Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date, upon

-11-

 

surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on June 30, 2014 (the “Final Expiration
Date”), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the “Redemption Date”), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.

          (b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $100, and
shall be subject to adjustment from time to time as provided in Section 11 or
13 hereof, and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.

          (c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier’s
check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes any such transfer agent
to comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent of the Preferred Shares with such depositary
agent) and the Company hereby directs such depositary agent to comply with such

-12-

 

request; (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional shares in accordance with Section
14 hereof; (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder; and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate.

          (d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to such
holder’s duly authorized assigns, subject to the provisions of Section 14
hereof.

          Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, and in accordance with any SEC
required holding period, destroy such cancelled Right Certificates, and, in
such case, shall deliver a certificate of destruction thereof to the Company.

-13-

 

          Section 9. Availability of Preferred Shares. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7 hereof.
The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.

          The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred Shares upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by
the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company’s reasonable satisfaction that no such tax
is due.

          Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights

-14-

 

was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the Preferred Shares transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

          Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.

          (a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be proportionately

-15-

 

adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at a
time when the Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.

          (ii) Subject to Section 24 hereof, in the event any Person becomes an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (B) 50% of
the then current per share market price of the Common Shares of the Company
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such event. In the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by the
Rights.

          From and after the occurrence of such event, any Rights that are or were
acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void, and any holder of such
Rights shall thereafter have no right to exercise

-16-

 

such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
shall be cancelled.

          (iii) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit the exercise in full
of the Rights in accordance with subparagraph (ii) above, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall substitute,
for each Common Share that would otherwise be issuable upon exercise of a
Right, a number of Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by such number or
fraction is equal to the current per share market price of one Common Share as
of the date of issuance of such Preferred Shares or fraction thereof.

          (b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares (“equivalent preferred
shares”)) or securities convertible into Preferred Shares or equivalent
preferred shares at a price

-17-

 

per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on
such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or equivalent preferred
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and holders of the Rights. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and, in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

-18-

 

          (c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then-current per share market price of the
Preferred Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and holders of the Rights) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such then-
current per share market price of the Preferred Shares on such record
date; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one Right.
Such adjustments shall be made successively whenever such a record date is
fixed; and, in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.

          (d) (i) For the purpose of any computation hereunder, the “current per
share market price” of any security (a “Security” for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
immediately prior to such date; provided, however, that, in the event

-19-

 

that the
current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or Securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale price, regular
way, reported at or prior to 4:00 P.M. New York City time or, in case no such
sale takes place on such day, the average of the bid and asked prices, regular
way, reported as of 4:00 P.M. New York City time, in either case, as reported
in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price reported at
or prior to 4:00 P.M. New York City time or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported
as of 4:00 P.M. New York City time by NASDAQ or such other system then in use,
or, if on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
of the Company. The term “Trading Day” shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction

-20-

 

of business, or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.

          (ii) For the purpose of any computation hereunder, the “current per share
market price” of the Preferred Shares shall be determined in accordance with
the method set forth in Section 11(d)(i). If the Preferred Shares are not
publicly traded, the “current per share market price” of the Preferred Shares
shall be conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or
traded, “current per share market price” shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.

          (e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.

-21-

 

          (f) If, as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and
the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.

          (g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.

          (h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (A) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (B) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.

-22-

 

          (i) The Company may elect, on or after the date of any adjustment of the
Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed

-23-

 

and countersigned in the manner provided for herein, and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.

          (j) Irrespective of any adjustment or change in the Purchase Price or in
the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.

          (k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.

          (l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may
elect to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares
upon the occurrence of the event requiring such adjustment.

-24-

 

          (m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to in Section 11(b) hereof, hereafter made by the Company to
holders of the Preferred Shares shall not be taxable to such stockholders.

          (n) In the event that, at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares, or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then, in any such case, (A)
the number of one one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the number of
Common Shares outstanding immediately after such event, and (B) each Common
Share outstanding immediately after such event shall have issued with respect
to it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall

-25-

 

be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation is
effected.

          Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the Common Shares or the
Preferred Shares and the Securities and Exchange Commission a copy of such
certificate and (c) if such adjustment occurs at any time after the
Distribution Date, mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof.

          Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, at any time after a Person has
become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (b) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other Person (or the
Company) or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or more of
its wholly-owned Subsidiaries, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof
at a

-26-

 

price equal to the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable
and dividing that product by (B) 50% of the then current per share market price
of the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term “Company” shall thereafter be deemed to refer to such issuer; and (iv)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to
the Common Shares of the Company thereafter deliverable upon the exercise
of the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless, prior thereto, the Company and such issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
so providing. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits

-27-

 

intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.

          Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case, as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making

-28-

 

a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.

          (b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Company shall pay to
the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.

          (c) The holder of a Right, by the acceptance of the Right, expressly
waives such holder’s right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).

-29-

 

          Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in such holder’s own
behalf and for such holder’s own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder’s right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement, and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.

          Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

          (a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;

-30-

 

          (b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and

          (c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.

          Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.

-31-

 

          Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder,
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.

          The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.

          Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the exe-

-32-

 

cution
or filing of any paper or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and, in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and, in all such cases, such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.

          In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name or in its
changed name; and, in all such cases, such Right Certificates shall have
the full force provided in the Right Certificates and in this Agreement.

          Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:

-33-

 

          (a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.

          (b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.

          (c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.

          (d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.

          (e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its

-34-

 

countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when issued, be validly authorized and issued, fully
paid and nonassessable.

          (f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

          (g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.

-35-

 

          (h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.

          (i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided that reasonable care was exercised in
the selection and continued employment thereof.

          Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days’ notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days’ notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified

-36-

 

in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (which holder shall, with such notice,
submit such holder’s Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of Minnesota (or of any other state of the United States so long
as such corporation is authorized to do business as a banking institution in
the State of Minnesota), in good standing, having an office in the State of
Minnesota, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares or Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

-37-

 

          Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board of Directors of the Company to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.

          Section 23. Redemption. (a) The Board of Directors of the Company may, at
its option, at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the “Redemption
Price”). The redemption of the Rights by the Board of Directors of the Company
may be made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company, in its sole discretion, may establish.

          (b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of
such redemption. Within 10 days after such action of the Board of Directors of
the Company ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights

-38-

 

Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.

          Section 24. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share
per Right, appropriately
adjusted to reflect any adjustment in the number of Rights pursuant to
Section 11(i) (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding
Common Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.

          (b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section
24 and without any further action and without any notice, the right to exercise
such Rights shall terminate and the

-39-

 

only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares for Rights will be effected, and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.

          (c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common Shares for
issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof.

-40-

 

          (d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In lieu
of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.

          Section 25. Notice of Certain Events. (a) In case the Company shall, at
any time after the Distribution Date, propose (i) to pay any dividend payable
in stock of any class to the holders of the Preferred Shares or to make any
other distribution to the holders of the Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of the Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in

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Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and, in the case of any such other action,
at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.

          (b) In case the event set forth in Section 11(a)(ii) hereof shall occur,
then the Company shall, as soon as practicable thereafter, give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

          Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

	 	 	 
	

	 	MoneyGram International, Inc.
	

	 	1550 Utica Avenue South
	

	 	Minneapolis, Minnesota 55416
	

	 	Attention: Corporate Secretary

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Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:

	 	 	 
	

	 	Wells Fargo Bank, N.A.
	

	 	P.O. Box 64854
	

	 	St. Paul, Minnesota 55164
	

	 	Attention: Account Manager

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.

          Section 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that, from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the thresholds
set forth in Section 1(a) and 3(a) hereof to not less than 10% (the “Reduced
Threshold”); provided, however, that no Person who beneficially owns a number
of

-43-

 

Common Shares equal to or greater than the Reduced Threshold shall become an
Acquiring Person unless such Person shall, after the public announcement of the
Reduced Threshold, increase its beneficial ownership of the then outstanding
Common Shares (other than as a result of an acquisition of Common
Shares by the Company) to an amount equal to or greater than the greater of (x) the
Reduced Threshold or (y) the sum of (i) the lowest beneficial ownership of such
Person as a percentage of the outstanding Common Shares as of any date on or
after the date of the public announcement of such Reduced Threshold plus (ii)
..001%.

          Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

          Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Shares).

          Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.

-44-

 

          Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.

          Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

          Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

-45-

 

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

	 	 	 	 	 	 	 	 	 
	Attest:	 	MONEYGRAM INTERNATIONAL, INC.
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Carolyn J. Anderson
	 	By
	 	/s/ Teresa H. Johnson	 	 
	

	 	
 
	 	 	 	
 	 	 
	

	 	Name: Carolyn J. Anderson
	 	 	 	Name: Teresa H. Johnson	 	 
	

	 	Title: Assistant Secretary
	 	 	 	Title Vice President, General Counsel and Secretary	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:	 	WELLS FARGO BANK, N.A.
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Kenneth P. Swanson
	 	By
	 	/s/ Jennifer L. Leno	 	 
	

	 	
 
	 	 	 	
 	 	 
	

	 	Name: Kenneth P. Swanson
	 	 	 	Name: Jennifer L. Leno	 	 
	

	 	Title: Assistant Secretary
	 	 	 	Title Assistant Vice President	 	 

-46-

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