MoneyGram 2009 Annual Report Download - page 689

aggregate amount of approximately [ * ] including approximately [ * ] in New York institutions. The New York licensing examiners are aware of the
arrangements and have not indicated that Holdco is out of compliance with §652-b during any of its exams. The arrangements with [ * ]
and [ * ]
do not require Holdco to make regular principal payments.
5. Section 4.5(5) to this Holdco Disclosure Schedule is incorporated by reference herein.
6. Section 4.5(6) to this Holdco Disclosure Schedule is incorporated by reference herein.
7. Section 4.5(7) to this Holdco Disclosure Schedule is incorporated by reference herein.
8. Section 4.5(8) to this Holdco Disclosure Schedule is incorporated by reference herein.
9. As part of Holdco's recent sale of various investments and corresponding lack of anticipated incoming capital, as of March 14, 2008, Holdco has
determined MoneyGram Payment Systems, Inc. is no longer in compliance with the minimum net worth requirements of the various states in which it is
licensed to conduct its money transfer and other payment services businesses. MPSI is obligated to notify certain regulators of such status in varying
time periods.
(ii)
1. On June 8, 2007, MoneyGram International, Inc., self-reported to the U.S. Department of Commerce's Bureau of Industry and Security (Bureau)
possible violations of export regulations administered by the Bureau. The possible violations involved the use of encrypted software furnished by a
vendor that facilitated money transfers for an agent of MoneyGram Payment Systems, Inc., (MoneyGram) in Libya. The possible violations would have
been between the time period when the U.S. Department of Treasury's Office of Foreign Assets Control removed Libya from its list of sanctioned
countries in 2004, and August 31, 2006 when the U.S. Department of Commerce lifted sanctions on the use of certain forms of encryption technology
in Libya. MoneyGram conducted a thorough internal investigation but was unable to determine with certainty whether prohibited encryption technology
was used to conduct any money transfer transactions. Nonetheless, MoneyGram self-reported the possible violation. Since it self-reported, MoneyGram
has been contacted by the Bureau for additional information and MoneyGram has fully cooperated with these requests. MoneyGram does not know
what, if any, action the Bureau may take regarding this matter.
2. On November 27, 2006, MoneyGram International, Inc., self-reported to the U.S. Department of Treasury's Office of Foreign Assets Control (OFAC)
possible violations of regulations administered by OFAC. MoneyGram Payment System, Inc. (MoneyGram) is licensed by OFAC to send money
transfers from the U.S. to Cuba. Under the terms of the license, payments to money transfer recipients in Cuba were to be made in U.S. dollars or U.S.
dollar denominated instruments. In September 2006, MoneyGram learned that the
[ * ] Please refer to footnote on page 1 of this Section 4.12. 25