EXECUTION COPY

 

 

 

 

$300,000,000

5-Year Credit Agreement

Dated as of November 23, 2005

 

Among

 

Legg Mason, Inc.,

as Borrower

 

THE LENDERS PARTY HERETO

 

Citicorp North America, Inc.,

as Administrative Agent

 

 

 

 

 

T

A B L E   O F   C O N T E N T S

Section

 

Page

     

ARTICLE I  DEFINITIONS

1

 

SECTION 1.01  Certain Defined Terms

1

 

SECTION 1.02  Terms Generally

16

 

SECTION 1.03  Accouting Terms; GAAP

16

ARTICLE II  AMOUNTS AND TERMS OF THE ADVANCES

17

 

SECTION 2.01  The Loans; Application of Proceeds

17

 

SECTION 2.02  Making the Loans, Evidence of Debt

17

 

SECTION 2.03  Fees

19

 

SECTION 2.04  Reducations of the Commitments

19

 

SECTION 2.05  Repayment

19

 

SECTION 2.06  Interest

19

 

SECTION 2.07  Additional Interest on Eurodollar Rate Loans

20

 

SECTION 2.08  Interest Rate Determinations; Changes in Rating Systems

20

 

SECTION 2.09  Voluntary Conversion and Continuation of Loans

22

 

SECTION 2.10  Prepayment of Loans

23

 

SECTION 2.11  Payments; Computations; Etc.

23

 

SECTION 2.12  Sharing of Payments, Etc.

25

 

SECTION 2.13  Increased Costs

25

 

SECTION 2.14  Illegality

26

 

SECTION 2.15  Taxes

27

 

SECTION 2.16  Mitigation Obligations; Replacement of Lenders

29

 

SECTION 2.17  Break Funding Payments

30

ARTICLE III CONDITIONS OF LENDING

30

 

SECTION 3.01  Conditions Precedent to Initial Borrowing

30

 

SECTION 3.02  Conditions Precedent to Each Borrowing

31

 

SECTION 3.03  Condition Precedent to the Making of the Delayed Term Loan

32

ARTICLE IV REPRESENTATIONS AND WARRANTIES

32

 

SECTION 4.01  Representations and Warranties

30

ARTICLE V COVENANTS

34

 

SECTION 5.01  Affirmative Covenants

34

 

SECTION 5.02  Negative Covenants

37

 

SECTION 5.03  Financial Covenants

38

ARTICLE VI EVENTS OF DEFAULT

38

 

SECTION 6.01  Events of Default

38

ARTICLE VII  THE ADMINISTRATIVE AGENT

40

 

SECTION 7.01  Appointment and Authority

40

 

SECTION 7.02  Rights as a Lender

41

 

SECTION 7.03  Exculpatory Provisions

41

 

SECTION 7.04  Reliance by Administrative Agent

42

 

SECTION 7.05  Delegation of Duties

42

 

SECTION 7.06  Resignation of Administrative Agent

42

 

SECTION 7.07  Non-Reliance on Administrative Agent and Other Lenders

43

ARTICLE VIII  MISCELLANEOUS

43

 

SECTION 8.01  Amendments, Etc.

43

 

SECTION 8.02  Notices, Etc.

44

 

SECTION 8.03  No Waiver; Remidies; Setoff

46

 

SECTION 8.04  Expenses; Indemnity; Damage Waiver

46

 

SECTION 8.05  Binding Effect, Successors and Assigns

48

 

SECTION 8.06  Assignments and Participations

48

 

SECTION 8.07  Governing Law; Jurisdiction; Etc.

50

 

SECTION 8.08  Severability

51

 

SECTION 8.09  Counterparts; Integration; Effectiveness; Execution

51

 

SECTION 8.10  Survival

52

 

SECTION 8.11  Waiver of Jury Trial

52

 

SECTION 8.12  Confidentiality

53

 

SECTION 8.13  No Fiduciary Relationship

53

 

SECTION 8.14  Headings

53

 

SECTION 8.15  USA PATRIOT Act

54

ii

SCHEDULES

Schedule I      Lenders and Commitments

Schedule II     Existing Liens

 

EXHIBITS

Exhibit A      Form of Note

Exhibit B      Form of Notice of Borrowing

Exhibit C      Form of Assignment and Assumption

Exhibit D-1    Form of Opinion of Borrower's Internal Counsel

Exhibit D-2    Form of Opinion of Special New York Counsel to the Borrower

Exhibit E       Form of Opinion of Special New York Counsel to the
Administrative Agent

iii

 

          CREDIT AGREEMENT

dated as of November 23, 2005 (this "Agreement") among LEGG MASON, INC., a
Maryland corporation (the "Borrower"), each of the Lenders (as defined
below) party hereto, and CITICORP NORTH AMERICA, INC., as administrative agent
for such Lenders (in such capacity, the "Administrative Agent").

          

In connection with the Acquisition (as defined below), the Borrower has
requested that the Lenders make term loans to it in aggregate amount up to but
not exceeding $300,000,000, and the Lenders are willing to make such loans on
and subject to the terms and conditions set forth herein.

          

Accordingly, the parties hereto hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

          

SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:

          

"Acquisition" means the acquisition by the Borrower (directly or through one of
its wholly-owned Subsidiaries) of the shares of capital stock of certain
subsidiaries of Citigroup Inc. known collectively as the business unit Citigroup
Asset Management.

          

"Acquisition Date" means the date of the consummation of the Acquisition.

          

"Administrative Agent" has the meaning specified in the introduction hereto.

          

"Administrative Agent's Account" means the account of the Administrative Agent
maintained by the Administrative Agent at Citicorp North America, Inc., 2 Penns
Way, Suite 200, New Castle, Delaware 19720, ABA No.:  021-00-0089, Account
No.:  36852248, Account Name: Medium Term Finance, Reference:  Legg Mason,
Attention:  John Davidson, or such other account as may be designated by the
Administrative Agent from time to time.

          

"Administrative Questionnaire" means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

          

"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

          

"Applicable Facility Fee Rate" means, while any particular Rating Level applies,
the rate per annum set forth below opposite the reference to such Rating Level:

5-YEAR CREDIT AGREEMENT

-2-

Rating Level

Applicable Facility Fee Rate

Rating Level 1

0.065%

Rating Level 2

0.080%

Rating Level 3

0.100%

Rating Level 4

0.125%

Rating Level 5

0.150%

provided

that if at any time the Debt Ratings of Moody's and S&P would lead to different
Rating Levels, the "Applicable Facility Fee Rate" will be determined based on
the Rating Level one above the lower Rating Level (Rating Level 1 being the
highest and Rating Level 5 being the lowest). Each change in the Applicable
Facility Fee Rate resulting from a Rating Level Change shall be effective on the
date on which such Rating Level Change is first announced by Moody's or S&P, as
the case may be.

          

"Applicable Lending Office" means, with respect to any Lender, such Lender's
Domestic Lending Office in the case of a Base Rate Loan and such Lender's
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

          

"Applicable Margin" means:

                    

(a)  for any Base Rate Loan, 0.000% per annum; and

                    

(b)  for any Eurodollar Rate Loan and while any particular Rating Level applies,
the rate per annum set forth below opposite the reference to such Rating Level:

Rating Level

Applicable Margin

Rating Level 1

0.185%

Rating Level 2

0.220%

Rating Level 3

0.250%

Rating Level 4

0.375%

Rating Level 5

0.475%

provided

that if at any time the Debt Ratings of Moody's and S&P would lead to different
Rating Levels, the "Applicable Margin" will be determined based on the Rating
Level one above the lower Rating Level (Rating Level 1 being the highest and
Rating Level 5 being the lowest). Each change in the Applicable Margin resulting
from a Rating Level Change shall be effective on the date on which such Rating
Level Change is first announced by Moody's or S&P, as the case may be.

          

"Assignment and Assumption" means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 8.06), and accepted by the Administrative Agent, in
substantially the form of Exhibit C or any other form approved by the
Administrative Agent.

5-YEAR CREDIT AGREEMENT

-3-

          

"Assignment Date" has the meaning specified in Section 8.06(b).

          

"Base Rate" means a fluctuating interest rate per annum which shall at any time
be equal to the higher of:

                    

(a)  the rate of interest announced publicly by Citibank in New York, New York
from time to time as Citibank's base rate; and

                    

(b)  1/2 of 1% per annum above the Federal Funds Rate.

          

"Base Rate Loan" means a Loan which bears interest at rates based upon the Base
Rate.

          

"Borrower" has the meaning specified in the introduction hereto.

          

"Borrowing" means a borrowing consisting of simultaneous Loans of the same Type
made by each of the Lenders to the Borrower pursuant to Section 2.01.

          

"Business Day" means any day of the year that is not a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Rate Loan, the term "Business Day" shall also exclude any day on
which banks are not open for dealings in U.S. Dollar deposits in the London
interbank market.

          

"CAM Transferred Shares Payment" means the payment required to be made by the
Borrower in connection with the Acquisition, pursuant to Section 6.8(b) of the
Transaction Agreement, as consideration for the CAM Transferred Shares (as
defined in the Transaction Agreement).

          

"Capital Lease Obligations" of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

          

"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934, as amended from time to time,
and the rules of the Securities and Exchange Commission thereunder as in effect
on the date hereof) of Equity Interests representing more than 51% of the issued
and outstanding Voting Shares of the Borrower or (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of the Borrower by
Persons who were neither (i) nominated by the board of directors of the Borrower
or a committee thereof nor (ii) appointed by directors so nominated.

5-YEAR CREDIT AGREEMENT

-4-

          

"Change in Law" means the occurrence, after the date of this Agreement, of any
of the following:  (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

          

"Citibank" means Citibank, N.A., a national banking association.

          

"Closing Date" means the date on which the Administrative Agent confirms to the
Borrower that the conditions precedent to the initial Borrowing set forth in
Section 3.01 have been satisfied (or waived in accordance with Section 8.01).

          

"Code" means the Internal Revenue Code of 1986, as amended from time to time.

          

"Commitment" means, with respect to each Lender, the commitment of such Lender
to make Loans to the Borrower in the aggregate amount set forth opposite such
Lender's name on Schedule I or, if such Lender has entered into an Assignment
and Assumption, set forth for such Lender in the Register, as such amount may be
reduced pursuant to Section 2.04(b). The initial aggregate amount of the
Lenders' Commitments is $300,000,000.

          

"Commitment Percentage" means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender's Commitment. If the Commitments
have terminated or expired, the Commitment Percentages shall be determined based
upon the Commitments most recently in effect, giving effect to any assignments.

          

"Commitment Termination Date" means the earlier of (a) the date on which the CAM
Transferred Shares Payment is made by the Borrower and (b) the date nine months
and 30 days after the Acquisition Date.

          

"Consolidated" refers to the consolidation of accounts of any Person and its
Subsidiaries without duplication in accordance with GAAP.

          

"Consolidated EBITDA" means, for any period, for the Borrower and its
Consolidated Subsidiaries on a Consolidated basis, Consolidated net income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated net income for such period, the sum of
(a) income tax expense, (b) interest expense, amortization or writeoff of debt
discount with respect to Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary expenses or
losses (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated net income for such period, losses on sales of
assets outside of the ordinary course of business), and (f) any other non-cash
charges, and minus, to the extent included in the statement of such Consolidated
net income for such period, the sum of (a) any extraordinary income or gains
(including, whether or not otherwise includable as a separate item in the
statement

5-YEAR CREDIT AGREEMENT

-5-

of such Consolidated net income for such period, gains on the sales of assets
outside of the ordinary course of business) and (b) any other non-cash income,
all as determined without duplication on a Consolidated basis in accordance with
GAAP, in each case exclusive of the cumulative effect of foreign currency gains
or losses. For the purposes of calculating Consolidated EBITDA for any period in
connection with any determination of the Leverage Ratio, if during such period
the Borrower or any Subsidiary shall have made an acquisition or incurred or
assumed any Indebtedness (without duplication of any Indebtedness incurred to
refinance such assumed Indebtedness), Consolidated EBITDA for such period shall
be calculated after giving pro forma effect thereto as if such acquisition
occurred and such Indebtedness had been incurred or assumed or refinanced on the
first day of such period.

          

"Continuation", "Continue" and "Continued" each refers to a continuation of
Eurodollar Rate Loans from one Interest Period to the next Interest Period
pursuant to Section 2.09(b).

          

"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

          

"Convert", "Conversion" and "Converted" each refers to a conversion of Loans of
one Type into Loans of the other Type pursuant to Section 2.08 or
Section 2.09(a).

          

"Debt Rating" means the long-term, senior unsecured non-credit-enhanced debt
ratings of the Borrower by Moody's and/or S&P.

          

"Default" means an event that, with notice or lapse of time or both, would
become an Event of Default.

          

"Delayed Term Loan" has the meaning specified in Section 2.01(b).

          

"Domestic Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Domestic Lending Office" in the Administrative
Questionnaire of such Lender or in the Assignment and Assumption pursuant to
which it became a Lender, or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.

          

"Eligible Assignee" means an Affiliate of a Lender.

          

"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

5-YEAR CREDIT AGREEMENT

-6-

          

"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

          

"Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest.

          

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

          

"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

          

"ERISA Event" means (a) any "reportable event", as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or
a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by the Borrower or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by the Borrower or any of its ERISA Affiliates of any notice, or
the receipt by any Multiemployer Plan from the Borrower or any of its ERISA
Affiliates of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

          

"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from time
to time.

          

"Eurodollar Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Eurodollar Lending Office" in the Administrative
Questionnaire

5-YEAR CREDIT AGREEMENT

-7-

of such Lender or in the Assignment and Assumption pursuant to which it became a
Lender (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify to
the Borrower and the Administrative Agent.

          

"Eurodollar Rate" means, for any Interest Period for each Eurodollar Rate Loan,
the rate appearing on Telerate Page 3750 at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as
the rate for U.S. Dollar deposits with a maturity comparable to such Interest
Period. In the event that such rate is not available at such time for any
reason, then the "Eurodollar Rate" with respect to such Eurodollar Rate Loan for
such Interest Period shall be the rate equal to the average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the respective rates notified to the
Administrative Agent by the Reference Banks as the rate at which U.S. Dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by such Reference Banks in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, subject, however, to the
provisions of Section 2.08.

          

"Eurodollar Rate Loan" means a Loan which bears interest at rates based upon the
Eurodollar Rate.

          

"Eurodollar Rate Reserve Percentage" of any Lender, for any Interest Period for
any Eurodollar Rate Loan, means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.

          

"Events of Default" has the meaning specified in Section 6.01.

          

"Excluded Representations" means the representations and warranties set forth in
the last sentence of Section 4.01(e) and in Section 4.01(f)(i).

          

"Excluded Taxes" means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) Taxes imposed on or measured by its overall net
income, overall gross income or overall gross receipts (however denominated),
and franchise taxes imposed on it (in lieu of net income taxes) or capital
taxes, by the jurisdiction (or any political subdivision thereof) under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States or any
similar Tax imposed by any other jurisdiction in which the Borrower is located
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the

5-YEAR CREDIT AGREEMENT

-8-

Borrower under Section 2.16(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto (or designates a new lending office) or is attributable to such Foreign
Lender's failure or inability (other than as a result of a Change in Law) to
comply with Section 2.15(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.15(a).

          

"Federal Funds Rate" means, for any day, the weighted average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average (rounded upwards, if necessary, to the next 1/100
of 1%) of the quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.

          

"Final Maturity Date" means the date five years after the Closing Date, provided
that if such date is not a Business Day, the Final Maturity Date shall be the
immediately preceding Business Day.

          

"Financial Officer" means the chief financial officer, principal financial
officer, treasurer or controller of the Borrower.

          

"Foreign Lender" means a Lender that is organized under the laws of a
jurisdiction other than the United States. For purposes of this definition, the
United States, each State thereof and the District of Columbia shall be deemed
to constitute a single jurisdiction.

          

"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

          

"GAAP" means generally accepted accounting principles in the United States as in
effect from time to time.

          

"Governmental Authority" means the government of the United States, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

          

"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of the guarantor,

5-YEAR CREDIT AGREEMENT

-9-

direct or indirect, (a) to purchase or pay (or to advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of
guarantee issued to support such Indebtedness or obligation; provided that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.

          

"Hazardous Materials" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

          

"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.

          

"Indebtedness" of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed (the amount of such Indebtedness at any time to be deemed to be an
amount equal to the fair market value of the property subject to such Lien if
such Indebtedness has not been assumed), (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit and letters of guarantee, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances and
(k) the net liability of such Person in respect of Hedging Agreements. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

          

"Indemnified Taxes" means Taxes other than Excluded Taxes.

5-YEAR CREDIT AGREEMENT

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"Indemnitee" has the meaning specified in Section 8.04(b).

          

"Initial Term Loan" has the meaning specified in Section 2.01(a).

          

"Initial Term Loan Maturity Date" means the date five Business Days after the
Acquisition Date, provided that if such date is not a Business Day, the Initial
Term Loan Maturity Date shall be the immediately preceding Business Day.

          

"Interest Coverage Ratio" means, for any period, the ratio of (a) Consolidated
EBITDA for such period to (b) Interest Expense for such period.

          

"Interest Expense" means, for any period, for the Borrower and its Subsidiaries
on a Consolidated basis, the sum of all cash interest payable in respect of
Indebtedness of the kinds referred to in clauses (a), (b) and (h) of the
definition of Indebtedness herein (and of the kind referred to in clause (g) of
such definition to the extent it relates to Indebtedness of the kinds referred
to in clauses (a), (b) and (h) of the definition thereof).

          

"Interest Period" means (a) with respect to any Eurodollar Rate Loan comprising
the Initial Term Loan, the period beginning on the date the Initial Term Loan is
made and ending on the Initial Term Loan Maturity Date, subject to the
provisions below, and (b) with respect to any Eurodollar Rate Loan comprising
the Delayed Term Loan, the period beginning on the date such Eurodollar Rate
Loan is made, or Continued or Converted from a Base Rate Loan, and ending on the
last day of the period selected by the Borrower, subject to the provisions
below. The duration of each Interest Period with respect to any Eurodollar Rate
Loan comprising the Delayed Term Loan shall be one, two, three, six or, with the
consent of all of the Lenders, nine or twelve months, as the Borrower may, upon
notice received by the Administrative Agent not later than 12:00 noon (New York
City time) on the third Business Day prior to the first day of such Interest
Period, select. Anything in herein to the contrary notwithstanding, with respect
to any Eurodollar Rate Loan comprising any Loan:

                    

(i)  the Borrower may not select any Interest Period that ends after the
Maturity Date for such Loan;

                    

(ii)  each Interest Period that begins on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month; and

                    

(iii)  whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that, if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day.

          

"Lead Arranger" means Citigroup Global Markets Inc. in its capacity as Lead
Arranger and Book Manager.

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"Lender" means each bank or other financial institution listed on the signature
pages hereof and each Person that shall become a party hereto pursuant to
Section 2.16(b) or 8.06(b).

          

"Leverage Ratio" means, at any time, the ratio of (a) the aggregate outstanding
principal amount of all Indebtedness of the kinds referred to in clauses (a),
(b) and (h) of the definition of "Indebtedness" herein (and of the kind referred
to in clause (g) of such definition to the extent it relates to Indebtedness of
the kinds referred to in clauses (a), (b) and (h) of the definition thereof) of
the Borrower and its Subsidiaries at such time to (b) Consolidated EBITDA for
the then most recently concluded period of four consecutive fiscal quarters of
the Borrower.

          

"Lien" means, with respect to any asset, any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset.

          

"LM Brazil" means, collectively, Legg Mason Participações Limitada and Western
Asset Participações Limitada.

          

"LM Chile" means Legg Mason Inversiones Holding Limitada.

          

"LM Singapore" means Legg Mason Asset Management Asia Pte Limited.

          

"Loan" means the Initial Term Loan or the Delayed Term Loan by a Lender to the
Borrower as part of a Borrowing thereof under Section 2.01 and refers to a Base
Rate Loan or a Eurodollar Rate Loan.

          

"Loan Documents" means, collectively, this Agreement and the Notes.

          

"Majority Lenders" means at any time (a) Lenders holding more than 50% of the
Commitments, or (b) if the Commitments have terminated, Lenders having more than
50% of the aggregate amount of the unpaid principal amount of the Loans.

          

"Margin Stock" means "margin stock" within the meaning of Regulation U.

          

"Material Adverse Effect" means a material adverse effect on (i) the business,
financial condition or operations of the Borrower and its Subsidiaries, taken as
a whole, (ii) the ability of the Borrower to perform any of its material
obligations under any Loan Document or (iii) the rights of or benefits available
to the Lenders under any Loan Document.

          

"Material Indebtedness" means Indebtedness issued or incurred under any
agreement or instrument (or series of related agreements or instruments) in an
aggregate outstanding principal amount of $50,000,000 or more. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
a Person in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving

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effect to any netting agreements) that such Person would be required to pay if
such Hedging Agreement were terminated at such time.

          

"Maturity Date" means (a) with respect to the Initial Term Loan, the Initial
Term Loan Maturity Date and (b) with respect to the Delayed Term Loan, the Final
Maturity Date.

          

"Moody's" means Moody's Investors Service, Inc. and any successor thereto.

          

"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

          

"Note" has the meaning specified in Section 2.02(g).

          

"Notice of Borrowing" has the meaning specified in Section 2.02(a).

          

"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.

          

"Participant" has the meaning assigned to such term in Section 8.06(d).

          

"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

          

"Permitted Encumbrances" means:

          

(a)  Liens imposed by law for Taxes that are not yet due or are being contested
in compliance with Section 5.01(d);

          

(b)  carriers', warehousemen's, mechanics', materialmen's, repairmen's and other
like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 60 days or are being
contested in compliance with Section 5.01(d);

          

(c)  pledges and deposits made in the ordinary course of business in compliance
with workers' compensation, unemployment insurance and other social security
laws or regulations;

          

(d)  deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;

          

(e)  judgment liens in respect of judgments that do not constitute an Event of
Default under Section 6.01(k); and

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(f)  easements, zoning restrictions, rights-of-way and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary thereof;

provided

that the term "Permitted Encumbrances" shall not include any Lien securing
Indebtedness.

          

"Permitted 12b-1 Recourse Financing Transaction" means a pledge by the Borrower
or a Subsidiary of 12b-1 Fees to a third party in order to secure Indebtedness
extended by such third party to the Borrower or such Subsidiary, provided that
the aggregate principal amount of such Indebtedness does not exceed
$250,000,000.

          

"Permitted 12b-1 Transactions" means a Permitted 12b-1 True Sale Transaction or
a Permitted 12b-1 Recourse Financing Transaction.

          

"Permitted 12b-1 True Sale Transaction" means a sale by the Borrower or a
Subsidiary of 12b-1 Fees to a 12b-1 Purchaser in a true sale transaction without
recourse based upon the collectibility of the 12b-1 Fees sold and the sale or
pledge of such 12b-1 Fees (or an interest therein) by such 12b-1 Purchaser, in
each case without any Guarantee by, or other recourse to or credit support by,
the Borrower or any Subsidiary or recourse to any assets of the Borrower or any
Subsidiary other than customary recourse in similar transactions.

          

"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

          

"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

          

"Process Agent" has the meaning specified in Section 8.07(d).

          

"Rating Level" means Rating Level 1, Rating Level 2, Rating Level 3, Rating
Level 4 or Rating Level 5.

          

"Rating Level 1" means that the Debt Rating is A1 or better by Moody's or A+ or
better by S&P.

          

"Rating Level 2" means that Rating Level 1 does not apply and the Debt Rating is
A2 by Moody's or A by S&P.

5-YEAR CREDIT AGREEMENT

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"Rating Level 3" means that Rating Level 1 and Rating Level 2 do not apply and
the Debt Rating is A3 by Moody's or A- by S&P.

          

"Rating Level 4" means that Rating Level 1, Rating Level 2 and Rating Level 3 do
not apply and the Debt Rating is Baa1 by Moody's or BBB+ by S&P.

          

"Rating Level 5" means that Rating Level 1, Rating Level 2, Rating Level 3 and
Rating Level 4 do not apply and the Debt Rating is Baa2 or lower by Moody's or
BBB or lower by S&P, and shall include any period during which neither Moody's
nor S&P shall have in effect a Debt Rating.

          

"Rating Level Change" means a change in the Debt Rating by either or both of
Moody's or S&P (other than as a result of a change in the rating system of such
rating agency) that results in the change from one Rating Level to another,
which Rating Level Change shall be effective on the date on which the relevant
change in the Debt Rating is first announced by Moody's or S&P, as the case may
be.

          

"Reference Banks" means the principal London office of each of Bank of
America, N.A., Citibank and JPMorgan Chase Bank, N.A.

          

"Register" has the meaning specified in Section 8.06(c).

          

"Regulations T, U and X" means Regulations T, U and X issued by the Board of
Governors of the Federal Reserve System, as from time to time amended.

          

"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.

          

"Responsible Officer" of the Borrower means the Chief Financial Officer, the
Treasurer, any Executive Vice President, any Senior Vice President, any Vice
President, any Director and any Counsel to the Borrower.

          

"S&P" means Standard and Poor's Ratings Services, presently a division of The
McGraw-Hill Companies, Inc., and any successor thereto.

          

"Securities Laws" means the Securities Act of 1933, the Securities Exchange Act
of 1934, the Sarbanes-Oxley Act of 2002, and the applicable accounting and
auditing principles, rules, standards and practices promulgated, approved or
incorporated by the U.S. Securities and Exchange Commission or the Public
Company Accounting Oversight Board.

          

"Significant Subsidiary" shall mean, at any time, a Subsidiary that as of such
time meets the definition of a "significant subsidiary" contained in Regulation
S-X of the Securities and Exchange Commission as in effect on the date hereof.

5-YEAR CREDIT AGREEMENT

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"Subsidiary" means any corporation, partnership, limited liability company or
other entity of which at least a majority of the Voting Shares are at the time
directly or indirectly owned or controlled by the Borrower or one or more
Subsidiaries of the Borrower, or by the Borrower and one or more Subsidiaries of
the Borrower.

          

"Syndicated Term Loan Agreement" means the $700,000,000 Term Loan Agreement
dated as of October 14, 2005 among the Borrower, the lenders party thereto and
Citibank, N.A., as the administrative agent for such lenders.

          

"Taxes" means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to Tax or penalties applicable
thereto.

          

"Telerate Page 3750" means Page 3750 of the Telerate Service or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
U.S. Dollar deposits in the London interbank market.

          

"Transaction Agreement" means the Transaction Agreement dated as of June 23,
2005 by and between Citigroup Inc. and the Borrower relating to the Acquisition.

          

"12b-1 Fees" means certain charges and fees, permitted by Rule 12b-1 of the
Investment Company Act of 1940, payable by an investor in a fund offered by the
Borrower or any Subsidiary.

          

"12b-1 Purchaser" means a Subsidiary or a financial institution or trust that
purchases 12b-1 Fees in connection with a Permitted 12b-1 True Sale Transaction.

          

"Type" refers to whether a Loan is a Base Rate Loan or a Eurodollar Rate Loan.

          

"United States" means the United States of America.

          

"U.S. Dollars" and "$" means the lawful currency of the United States.

          

"Voting Shares" means, with respect to any Person, Equity Interests having by
terms thereof voting power to elect a majority of the board of directors, or
other individuals performing similar functions, of such Person.

          

"Wholly-Owned Subsidiary" means, with respect to any Person, any Subsidiary of
which all of the Equity Interests (other than, in the case of a corporation,
directors' qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more Wholly-Owned Subsidiaries of such Person or by such
Person and one or more Wholly-Owned Subsidiaries of such Person.

5-YEAR CREDIT AGREEMENT

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"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

          

SECTION 1.02.  Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" mean
"to but excluding". The words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation". The word "will" shall
be construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.

 

          SECTION 1.03.  Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that it requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Majority Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. To enable the ready
and consistent determination of compliance with the covenants set forth in
Section 5.03, the Borrower will cause the last day of its fiscal year to be
March 31 or, with prior written notice to the Administrative Agent, December 31.

5-YEAR CREDIT AGREEMENT

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ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

           SECTION 2.01. The Loans; Application of Proceeds.

           (a)  The Initial Term Loan. The Lenders severally agree, on the terms
and conditions hereinafter set forth, to make loans to the Borrower
(collectively, the "Initial Term Loan") on any Business Day from the Closing
Date until the Acquisition Date, in an aggregate amount up to but not exceeding
$150,000,000, as specified in the related Notice of Borrowing.

           (b)  The Delayed Term Loan.  The Lenders severally agree, on the
terms and conditions hereinafter set forth, to make loans to the Borrower
(collectively, the "Delayed Term Loan"), on any Business Day from the
Acquisition Date until the Commitment Termination Date, in an aggregate amount
equal to the amount of the CAM Transferred Shares Payment, as specified in the
related Notice of Borrowing.

           (c)  Application of Proceeds. The Borrower shall apply the proceeds
of the Loans as follows:

                     (i)  proceeds of the Initial Term Loan shall be used solely
to capitalize LM Brazil, LM Chile and LM Singapore to (directly or indirectly)
pay the consideration for certain assets to be acquired in Brazil, Chile and
Singapore in connection with the Acquisition; and

                     (ii)  proceeds of the Delayed Term Loan shall be applied
solely to the making of the CAM Transferred Shares Payment.

 

          SECTION 2.02. Making the Loans, Evidence of Debt.

                     (a)  (i)  Each Borrowing by the Borrower shall be made on
notice, given not later than 11:00 a.m. (New York City time) on the third
Business Day prior to the date of such Borrowing (in the case of a Borrowing
consisting of Eurodollar Rate Loans) or given not later than 11:00 a.m. (New
York City time) on the Business Day of such Borrowing (in the case of a
Borrowing consisting of Base Rate Loans), by the Borrower to the Administrative
Agent, which shall give to each Lender prompt notice thereof.

                     (ii)  Each such notice of a Borrowing (a "Notice of
Borrowing") shall be irrevocable and binding on the Borrower and shall be in
writing in substantially the form of Exhibit B, specifying therein the requested
(1) date of such Borrowing, (2) Type of Loans comprising such Borrowing,
(3) aggregate amount of such Borrowing, and (4) in the case of a Borrowing
consisting of Eurodollar Rate Loans, initial Interest Period for each such Loan.

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                     (iii)  Each Lender shall, before 2:00 p.m. (New York City
time) on the date of such Borrowing, make available for the account of its
Applicable Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of such
Borrowing.

                     (iv)  After the Administrative Agent's receipt of such
funds, and subject to the satisfaction of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds available to the
Borrower by promptly crediting the amounts so received, in like funds, to the
account of the Borrower maintained at the Administrative Agent's address
referred to in Section 8.02(a)(iii).

           (b)  Each Borrowing and each Conversion or Continuation thereof shall
consist of Loans of the same Type (and, if such Loans are Eurodollar Rate Loans,
having the same Interest Period) made, Continued or Converted on the same day by
the Lenders ratably according to their respective Commitments. Anything in
subsection (a) above to the contrary notwithstanding, (i) if no election as to
the Type of Loans is specified, then the requested Loans shall be comprised of
Base Rate Loans, and (ii) if no Interest Period is specified with respect to any
Eurodollar Rate Loans, then the Borrower shall be deemed to have selected an
Interest Period of one month's duration.

           (c)  The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder. The
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required. 

           (d)  Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

           (e)  The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.

           (f)  The entries made in the accounts maintained pursuant to
subsection (d) or (e) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans made to the Borrower in accordance with the terms of this
Agreement.

           (g)  Any Lender may, through the Administrative Agent, request that
each Loan made by it to the Borrower be evidenced by a promissory note of the
Borrower. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to

5-YEAR CREDIT AGREEMENT

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such Lender (or its registered assigns), substantially in the form of Exhibit A
(each such promissory note, a "Note"), in the amount of such Loan and dated the
date of such Loan.

 

          SECTION 2.03. Fees. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a facility fee on the daily average amount
of (a) such Lender's Commitment, whether or not utilized, for each day during
the period from the date hereof until the Commitment Termination Date, and
(b) the aggregate outstanding amount of the Loans, for each day during the
period from Commitment Termination Date until the Final Maturity Date, in each
case, at a rate per annum equal to the Applicable Facility Fee Rate in effect
from time to time, payable in arrears on the last Business Day of each March,
June, September and December of each year, and on the Final Maturity Date,
commencing on the first such date to occur after the date hereof.

 

          SECTION 2.04. Reductions of the Commitments.

           (a)  The Commitment of each Lender shall be automatically reduced to
zero on the Commitment Termination Date.

           (b)  In addition, the Borrower shall have the right, upon at least
three Business Days' notice to the Administrative Agent, to terminate in whole
or reduce ratably in part the unused portions of the respective Commitments of
the Lenders, provided that each partial reduction shall be in a minimum
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof. Once terminated or reduced, the Commitments may not be reinstated.

 

SECTION 2.05. Repayment.

           (a)  Initial Term Loan. The Borrower agrees to repay the full
principal amount of the Initial Term Loan, and the Initial Term Loan shall
mature, on the Initial Term Loan Maturity Date.

           (b)  Delayed Term Loan. The Borrower agrees to repay the full
principal amount of the Delayed Term Loan, and the Delayed Term Loan shall
mature, on the Final Maturity Date.

 

SECTION 2.06. Interest.

           (a)  Ordinary Interest. The Borrower agrees to pay interest on the
unpaid principal amount of each Loan, from the date of such Loan until such
principal amount shall be paid in full, at the following rates per annum:

                     (i)  Base Rate Loans. While such Loan is a Base Rate Loan,
a rate per annum equal to the Base Rate in effect from time to time plus the
Applicable Margin for Base Rate Loans as in effect from time to time, payable
quarterly in arrears on the last

5-YEAR CREDIT AGREEMENT

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Business Day of each March, June, September and December and on the date such
Base Rate Loan shall be Converted or paid in full.

                     (ii)  Eurodollar Rate Loans. While such Loan is a
Eurodollar Rate Loan, a rate per annum for each Interest Period for such Loan
equal to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin for Eurodollar Rate Loans as in effect from time to time,
payable on the last day of such Interest Period and, if such Interest Period has
a duration of more than three months, on each day prior to the last day of such
Interest Period that occurs at intervals of three months after the first day of
such Interest Period, and on each date on which such Eurodollar Rate Loan shall
be Continued, Converted or paid in full.

           (b)  Default Interest. Notwithstanding the foregoing, if any Event of
Default under Section 6.01(a) or (b) shall have occurred and be continuing, the
Borrower shall pay interest on:

                     (i)  the unpaid principal amount of each Loan owing to each
Lender, payable on demand (and in any event in arrears on the dates referred to
in Section 2.06(a)(i) or (a)(ii) above), at a rate per annum equal at all times
to two percent (2%) per annum above the rate per annum required to be paid on
such Loan pursuant to said Section 2.06(a)(i) or (a)(ii), as applicable,
provided that any Eurodollar Rate Loan shall be Converted into a Base Rate Loan
pursuant to Section 2.08(g)(i) and then bear interest as aforesaid in this
Section 2.06(b)(i); and

           (ii)  the amount of any interest, fee or other amount payable by the
Borrower hereunder that is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable on demand (and in any event
in arrears on the date such amount shall be paid in full), at a rate per annum
equal at all times to two percent (2%) per annum above the rate per annum
required to be paid on Base Rate Loans pursuant to Section 2.06(a)(i) above.

 

          SECTION 2.07. Additional Interest on Eurodollar Rate Loans. The
Borrower shall pay to each Lender additional interest on the unpaid principal
amount of each Eurodollar Rate Loan of such Lender, from the date of such Loan
until such principal amount is paid in full, at an interest rate per annum equal
at all times to the remainder obtained by subtracting (i) the Eurodollar Rate
for each Interest Period for such Loan from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage of such Lender for such Interest Period, payable on each date
on which interest is payable on such Loan. Such additional interest shall be
determined by such Lender and notified to the Borrower through the
Administrative Agent.

 

          SECTION 2.08. Interest Rate Determinations; Changes in Rating Systems.

           (a)  Each Reference Bank agrees to furnish to the Administrative
Agent timely information for the purpose of determining each Eurodollar Rate. If
any one or more of the Reference Banks shall not furnish such timely information
to the Administrative Agent for the

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purpose of determining any such interest rate, the Administrative Agent shall
determine such interest rate on the basis of timely information furnished by the
remaining Reference Banks (subject to the provisions set forth in the definition
of "Eurodollar Rate" in Section 1.01 and to clause (c) below).

           (b)  The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rates determined by the
Administrative Agent for the purposes of Section 2.06.

           (c)  If (1) fewer than two Reference Banks furnish timely information
to the Administrative Agent for determining the Eurodollar Rate for any Interest
Period for any Eurodollar Rate Loans and (2) the relevant rates do not appear on
Telerate Page 3750,

                     (i)  the Administrative Agent shall forthwith notify the
Borrower and the Lenders that the interest rate cannot be determined for such
Eurodollar Rate Loans for such Interest Period;

                     (ii)  each Eurodollar Rate Loan will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Loan; and

                     (iii)  the obligation of the Lenders to make or Continue,
or to Convert Loans into, Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.

           (d)  If, with respect to any Eurodollar Rate Loans, the Majority
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Loans will not adequately and fairly reflect the cost
to such Majority Lenders of making, funding or maintaining their respective
Eurodollar Rate Loans for such Interest Period, the Administrative Agent shall
so notify the Borrower and the Lenders, whereupon:

                     (i)  any Notice of Borrowing requesting a Borrowing
comprised of Eurodollar Rate Loans shall be ineffective;

                     (ii)  each Eurodollar Rate Loan will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Loan; and

                     (iii)  the obligation of the Lenders to make or Continue,
or to Convert Loans into, Eurodollar Rate Loans shall be suspended until the
Administrative Agent shall notify the Borrower and such Lenders that the
circumstances causing such suspension no longer exist.

           (e)  If the Borrower shall fail to select the duration of any
Interest Period following the initial Interest Period for any Eurodollar Rate
Loans in accordance with the provisions contained in the definition of "Interest
Period" in Section 1.01, the Administrative Agent shall so notify the Borrower
and the Lenders and such Loans will automatically, on the last day of the then
existing Interest Period therefor, Convert into Base Rate Loans.

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           (f)  On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Loans comprising any Borrowing shall be reduced, by prepayment
or otherwise, to less than $5,000,000, such Loans shall automatically Convert
into Base Rate Loans.

           (g)  Upon the occurrence and during the continuance of any Event of
Default, (i) each Eurodollar Rate Loan will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Loan and
(ii) the obligation of the Lenders to make or Continue, or to Convert Loans
into, Eurodollar Rate Loans shall be suspended.

           (h)  If the rating system of either Moody's or S&P shall change, or
if either such rating agency shall cease to be in the business of rating
corporate debt obligations, the Borrower and the Administrative Agent (on behalf
of the Lenders) shall negotiate in good faith to amend the references to
specific ratings in this Agreement to reflect such changed rating system or the
non-availability of ratings from such rating agency (provided that any such
amendment to such specific ratings shall not be effective without the approval
of the Majority Lenders).

 

          SECTION 2.09. Voluntary Conversion and Continuation of Loans.

           (a)  The Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than 11:00 a.m. (New York City time) on the third
Business Day prior to the date of the proposed Conversion, and subject to the
provisions of Sections 2.08 and 2.14, Convert all or any portion of the
outstanding Loans of one Type comprising part of the same Borrowing into Loans
of the other Type; provided that in the case of any such Conversion of a
Eurodollar Rate Loan into a Base Rate Loan on a day other than the last day of
an Interest Period therefor, the Borrower shall reimburse the Lenders in respect
thereof pursuant to Section 2.17. Each such notice of a Conversion shall, within
the restrictions specified above, specify (i) the date of such Conversion,
(ii) the Loans to be Converted, and (z) if such Conversion is into Eurodollar
Rate Loans, the duration of the initial Interest Period for each such Loan. Each
notice of Conversion shall be irrevocable and binding on the Borrower.

           (b)  The Borrower may, on any Business Day, upon notice given to the
Administrative Agent not later than 11:00 a.m. (New York City time) on the third
Business Day prior to the date of the proposed Continuation, and subject to the
provisions of Sections 2.08 and 2.14, Continue all or any portion of the
outstanding Eurodollar Rate Loans comprising part of the same Borrowing for one
or more Interest Periods; provided that in the case of any such Continuation on
a day other than the last day of an Interest Period therefor, the Borrower shall
reimburse the Lenders in respect thereof pursuant to Section 2.17. Each such
notice of a Continuation shall, within the restrictions specified above, specify
(i) the date of such Continuation, (ii) the Eurodollar Rate Loans to be
Continued and (y) the duration of the initial Interest Period (or Interest
Periods) for the Eurodollar Rate Loans subject to such Continuation. Each notice
of Continuation shall be irrevocable and binding on the Borrower.

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           SECTION 2.10. Prepayments of Loans.

           (a)  The Borrower shall have no right to prepay any principal amount
of any Loan other than as provided in subsection (b) below.

           (b)  The Borrower may, on notice (given not later than 11:00 a.m.
(New York City time) on the second Business Day prior to the date of the
proposed prepayment of Loans (in the case of an Eurodollar Rate Loans) or given
not later than 11:00 a.m. (New York City time) on the Business Day of the
proposed prepayment of Loans (in the case of Base Rate Loans)), stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amounts of
the Loans comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (i) each partial prepayment shall be in
an aggregate principal amount not less than $5,000,000 or integral multiples of
$1,000,000 in excess thereof and (ii) in the case of any such prepayment of a
Eurodollar Rate Loan on a day other than the last day of an Interest Period
therefor, the Borrower shall reimburse the Lenders in respect thereof pursuant
to Section 2.17. Amounts prepaid hereunder may not be reborrowed; provided that,
notwithstanding the foregoing, prepayments of the Initial Term Loan, if any,
shall not prohibit the Borrowing of the Delayed Term Loan.

 

           SECTION 2.11. Payments; Computations; Etc.

           (a)  Payments. The Borrower shall make each payment hereunder and
under each other Loan Document to which it is a party without set-off or
counterclaim not later than 11:00 a.m. (New York City time) on the day when due
in U.S. Dollars to the Administrative Agent at the Administrative Agent's
Account in same day funds. The Administrative Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal or
interest ratably (other than amounts payable pursuant to Section 2.13, 2.15 or
2.17) to the Lenders for the account of their respective Applicable Lending
Offices, and like funds relating to the payment of any other amount payable to
any Lender to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement. Upon its
acceptance of an Assignment and Assumption and recording of the information
contained therein in the Register pursuant to Section 8.06(c), from and after
the Assignment Date set forth therein, the Administrative Agent shall make all
payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to such Assignment
and Assumption shall make all appropriate adjustments in such payments for
periods prior to such Assignment Date directly between themselves.

           (b)  Computations. All computations of interest based on Citibank's
base rate shall be made by the Administrative Agent on the basis of a year of
365 or 366 days, as the case may be, for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest is payable. All computations of interest based on the Eurodollar Rate
or the Federal Funds Rate and of facility fee shall be made by the
Administrative Agent, and any computations of interest pursuant to Section 2.07
shall be made by a Lender, on the basis of a year of 360 days, for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest is payable. Each

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determination by the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

           (c)  Payment Dates. Whenever any payment hereunder or under the Notes
would be due on a day other than a Business Day, such due date shall be extended
to the next succeeding Business Day, and any such extension of such due date
shall in such case be included in the computation of payment of interest;
provided, however, that if such extension would cause payment of interest on or
principal of Eurodollar Rate Loans to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.

           (d)  Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed time of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available at such time in
accordance with Section 2.02(a)(iii) and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Borrowing to the Administrative
Agent, then the amount so paid shall constitute such Lender's Loan included in
such Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

           (e)  Payments by Borrower; Presumptions by Administrative Agent.
Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.

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          SECTION 2.12. Sharing of Payments, Etc. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans or other obligations
hereunder resulting in such Lender's receiving payment of a proportion of the
aggregate amount of its Loans and accrued interest thereon or other such
obligations greater than its pro rata share thereof as provided herein, then the
Lender receiving such greater proportion shall (a) notify the Administrative
Agent of such fact, and (b) purchase (for cash at face value) participations in
the Loans and such other obligations of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other amounts
owing them, provided that:

                     (i)  if any such participations are purchased and all or
any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and

                     (ii)  the provisions of this subsection shall not be
construed to apply to (x) any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or (y) any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in
any of its Loans other than to the Borrower or any Subsidiary thereof (as to
which the provisions of this subsection shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

           SECTION 2.13. Increased Costs.

           (a)  Increased Costs Generally. If any Change in Law shall:

                     (i)  impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in
by, any Lender (except any reserve requirement reflected in the Eurodollar Rate
Reserve Percentage); or

                     (ii)  impose on any Lender or the London interbank market
any other condition, cost or expense affecting this Agreement or Eurodollar Rate
Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Rate Loan (or of maintaining its
obligation to make any such Loan), or to increase the cost to such Lender, or to
reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or any other amount) then, upon request of such
Lender, the Borrower will pay to such Lender such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction
suffered. This Section 2.13(a) shall not apply to matters covered by Section
2.15.

5-YEAR CREDIT AGREEMENT

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           (b)  Capital Requirements. If any Lender determines that any Change
in Law affecting such Lender or any lending office of such Lender or such
Lender's holding company, if any, regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's capital or on
the capital of such Lender's holding company, if any, as a consequence of this
Agreement, the Commitments of such Lender or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.

           (c)  Certificates for Reimbursement. A certificate of any Lender
setting forth the amount or amounts necessary to compensate such Lender or its
holding company, as the case may be, as specified in subsection (a) or (b) of
this Section and delivered to the Borrower shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

           (d)  Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation, provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than 270 days prior to the
date that such Lender notifies the Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 270-day period referred
to above shall be extended to include the period of retroactive effect thereof).

 

          SECTION 2.14. Illegality. Notwithstanding any other provision of this
Agreement, if any Lender shall notify the Administrative Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make or Continue Eurodollar Rate
Loans or to fund or otherwise maintain Eurodollar Rate Loans hereunder, (i) the
obligation of such Lender to make or Continue, or to Convert Loans into,
Eurodollar Rate Loans shall be suspended until the Administrative Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist and (ii) each Eurodollar Rate Loan of such Lender
shall convert into a Base Rate Loan at the end of the then current Interest
Period for such Eurodollar Rate Loan.

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          SECTION 2.15. Taxes.

           (a)  Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if the Borrower shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions for Indemnified Taxes or
Other Taxes (including deductions for Indemnified Taxes or Other Taxes
applicable to additional sums payable under this Section ) the Administrative
Agent and each Lender receives an amount equal to the sum it would have received
had no such deductions for Indemnified Taxes or Other Taxes been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

           (b)  Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay any Other
Taxes that arise from any payment made by it under any Loan Document to the
relevant Governmental Authority in accordance with applicable law. Each Lender
shall notify the Borrower on or before the Closing Date of any Other Taxes that
to its knowledge are imposed with respect to any Loan Document by the
jurisdiction in which such Lender is organized or in which its applicable
lending office is located.

           (c)  Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent, and each Lender, within 30 days after demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) attributable to the Borrower under any Loan
Document and paid by the Administrative Agent or such Lender and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender
(with a copy to the Administrative Agent), or by the Administrative Agent on its
own behalf or on behalf of a Lender, shall be conclusive absent manifest error,
provided that if the Borrower has satisfied its indemnity obligation and
delivers to the Administrative Agent an opinion of nationally recognized counsel
to the effect that it is more likely than not that such assertion by the
Governmental Authority is incorrect as a matter of law, each Lender shall
reasonably assist the Borrower in contesting such Taxes (at the sole expense of
the Borrower) and seeking refund thereof and, provided further that such
assistance shall not be construed to impose on any Lender an obligation to
disclose information it reasonably considers confidential or proprietary or
arrange its tax affairs other than as such Lender sees fit.

           (d)  Evidence of Payments. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

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           (e)  Foreign Lenders. Each Foreign Lender shall deliver to the
Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon
such form becoming obsolete or invalid under applicable regulations or upon the
request of the Borrower or the Administrative Agent, but only if such Foreign
Lender remains legally entitled to do so), whichever of the following is
applicable:

                     (i)  duly completed copies of Internal Revenue Service Form
W-8BEN (or applicable substitute or successor form) claiming eligibility for
benefits of an income tax treaty to which the United States is a party,

                     (ii)  duly completed copies of Internal Revenue Service
Form W-8ECI (or applicable substitute or successor form),

                     (iii)  in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
"bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent
shareholder" of the Borrower within the meaning of section 881(c)(3)(B) of the
Code, or (C) a "controlled foreign corporation" described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN (or applicable substitute or successor form), or

                     (iv)  any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.

Each Foreign Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered form or
certificate to the Borrower. In addition, any Lender, if requested by the
Borrower or the Administrative Agent, shall deliver such other documentation
prescribed by applicable law or reasonably requested by the Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements and, without limiting the generality of the
foregoing, in the case of a Lender that is a United States person within the
meaning of Code section 7701(a)(30) shall deliver to the Administrative Agent
and the Borrower, on or before the date it becomes a party hereto, two duly
executed copies of IRS Form W-9 (or applicable substitute or successor form).

           (f)  Treatment of Certain Refunds. If the Administrative Agent or a
Lender determines, in good faith and its reasonable discretion, that it has
received a refund of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section (including, in lieu of an actual
refund, a credit against taxes provided by the taxing authority that imposed
such Indemnified Taxes or Other Taxes), it shall pay to the Borrower an amount
equal to such refund or the value of the credit in lieu thereof (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section with respect to the Indemnified Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the

5-YEAR CREDIT AGREEMENT

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Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund or credit in lieu thereof), provided that the Borrower,
upon the request of the Administrative Agent or such Lender, agrees to repay the
amount paid over to the Borrower to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay or return
such refund (or credit in lieu thereof) to such Governmental Authority. This
subsection shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its Taxes that it deems confidential) to the Borrower or any other Person.

          SECTION 2.16. Mitigation Obligations; Replacement of Lenders.

           (a)  Designation of a Different Lending Office. If any Lender
requests compensation under Section 2.13, or requires the Borrower to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

           (b)  Replacement of Lenders. If any Lender requests compensation
under Section 2.13, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.15, or if any Lender defaults in its obligation to fund
Loans hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 8.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

                     (i)  no Default or Event of Default has occurred and is
continuing on and as of the date of such notice and the date of such assignment;

                     (ii)  the Administrative Agent shall have received the
assignment fee specified in Section 8.06;

                     (iii)  such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 2.17) from the assignee (to
the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts);

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                     (iv)  in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments thereafter; and

                     (v)  such assignment does not conflict with applicable law.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

          SECTION 2.17.  Break Funding Payments. The Borrower agrees to
indemnify each Lender and to hold each Lender harmless from any loss, cost or
expense incurred by such Lender which is in the nature of funding breakage costs
or costs of liquidation or redeployment of deposits or other funds and any other
related expense (but excluding loss of margin or other loss of anticipated
profit), upon reasonable notice thereof, which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in making any Borrowing of
Eurodollar Rate Loans after the Borrower has given a Notice of Borrowing
requesting the same in accordance with the provisions of this Agreement
(including as a result of any failure to fulfill, on or before the date
specified in such Notice of Borrowing, the applicable conditions set forth in
Article III), (b) default by the Borrower in making any prepayment of Eurodollar
Rate Loan when due after the Borrower has given notice thereof in accordance
with this Agreement, (c) the making by the Borrower of a prepayment of any
Eurodollar Rate Loan on a day which is not the last day of an Interest Period
with respect thereto, (d) default by the Borrower in payment when due of the
principal of or interest on any Eurodollar Rate Loan, (e) the Conversion or
Continuation of any Eurodollar Rate Loan on a day other than on the last day of
an Interest Period for such Loan, or (f) any assignment such Lender is required
to make pursuant to Section 2.16(b) if such Lender holds Eurodollar Rate Loans
at the time of such assignment. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section and delivered to the Borrower shall be conclusive absent manifest error.
The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

ARTICLE III

CONDITIONS OF LENDING

 

          SECTION 3.01. Conditions Precedent to Initial Borrowing. The
obligation of each Lender to make a Loan on the occasion of the initial
Borrowing shall be subject to the conditions precedent that the Administrative
Agent has received (on or prior to November 23, 2005) the following, each
(unless otherwise specified below) dated the Closing Date, and each in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:

           (a)  Certified copies of (i) the articles of incorporation and
by-laws of the Borrower, (ii) the resolutions of the Board of Directors of the
Borrower authorizing and approving the execution, delivery and performance by it
of the Loan Documents and the

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transactions contemplated thereby, and (iii) all documents evidencing other
necessary corporate action and governmental, regulatory or third-party consents
and approvals, if any, with respect to the Loan Documents.

           (b)  A certificate of the Secretary or an Assistant Secretary of the
Borrower certifying the names and true signatures of the officers of the
Borrower authorized to sign the Loan Documents and any other documents to be
delivered hereunder by the Borrower.

           (c)  A certificate for the Borrower from the Secretary of State of
Maryland, dated a date reasonably close to the date hereof, as to the good
standing of and organizational documents filed by the Borrower.

           (d)  Favorable opinions of the Borrower's internal counsel,
substantially in the form of Exhibit D-1, and of Shearman & Sterling LLP,
special New York counsel to the Borrower, substantially in the form of
Exhibit D-2.

           (e)  A favorable opinion of Milbank, Tweed, Hadley & McCloy LLP,
special New York counsel to the Administrative Agent, substantially in the form
of Exhibit E.

           (f)  A certificate of a Responsible Officer of the Borrower, dated
the Closing Date, certifying that (i) the representations and warranties
contained in Section 4.01, excluding the Excluded Representations, are true and
correct in all material respects on and as of such date as though made on and as
of such date and (ii) no event has occurred and is continuing on and as of such
date which constitutes a Default or an Event of Default.

           (g)  Evidence of the payment of all invoiced fees and invoiced
expenses required to be paid on or prior to the Closing Date in connection with
this Agreement.

           (h)  Such other approvals, opinions and documents relating to this
Agreement and the transactions contemplated hereby as the Administrative Agent
or any Lender may, through the Administrative Agent, reasonably request.

 

          SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation
of each Lender to make a Loan on the occasion of each Borrowing (including the
initial Borrowing) shall be subject to the conditions precedent that on the date
of such Borrowing (i) each Lender that shall have requested a Note evidencing
such Loan shall have received such Note in accordance with Section 2.02(g), and
(ii) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are true):

           (a)  the representations and warranties contained in Section 4.01
(except the Excluded Representations) are true and correct in all material
respects on and as of the date of such Borrowing, before and after giving effect
to such Borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and

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           (b)  no event has occurred and is continuing, or would result from
such Borrowing or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default.

 

          SECTION 3.03. Condition Precedent to the Making of the Delayed Term
Loan. The obligations of the Lenders to make the Delayed Term Loan shall be
subject to the condition precedent that the Borrower shall have made timely
repayment of the Initial Term Loan in accordance with Section 2.05(a).

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

          SECTION 4.01. Representations and Warranties. The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders as follows:

           (a)  Organization; Powers. It is duly organized, validly existing and
in good standing under the laws of the State of Maryland, has all requisite
power and authority to carry on its business as now conducted and, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

           (b)  Authorization. The execution, delivery and performance by it of
this Agreement and each of its Notes, and the borrowing of Loans by it and the
use of proceeds therefrom, are within its corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action.

           (c)  Approvals; No Conflicts; Etc. The execution, delivery and
performance by it of this Agreement and each of its Notes, and the borrowing of
Loans by it and the use of proceeds therefrom (i) do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in
full force and effect, (ii) will not violate any applicable law or regulation or
its charter, by-laws or other organizational documents or any order of any
Governmental Authority, and (iii) will not violate or result in a default under
any credit agreement, loan agreement, note, indenture or other financing
agreement, or any other material agreement or instrument, binding upon it or its
assets, or give rise to a right thereunder to require any payment to be made by
it.

           (d)  Enforceability. This Agreement has been duly executed and
delivered by it and constitutes, and each Note when duly executed and delivered
by it for value will constitute, its legal, valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

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           (e)  Financial Condition; No Material Adverse Change. The Borrower
has heretofore furnished to the Lenders its Consolidated balance sheet and
Consolidated statements of income, stockholders equity and cash flows (i) as of
and for the fiscal year ended March 31, 2005, reported on by
PricewaterhouseCoopers, independent public accountants, and (ii) as of and for
the fiscal quarter and the portion of the fiscal year ended June 30, 2005
certified by its chief financial officer. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its Consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above. Since March 31, 2005, there has been no
material adverse change in the business, financial condition or operations of
the Borrower and its Subsidiaries, taken as a whole.

           (f)  No Litigation. There are no actions, suits or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting it or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect or
(ii) that involve this Agreement or, except for (x) lawsuits, filed and
threatened, in connection with the voting and soliciting of proxies for
closed-end mutual funds managed by subsidiaries of Citigroup Inc. and (y)
threatened lawsuits on behalf of Guillermo Menéndez and related entities, the
Transaction Agreement or the transactions contemplated hereby or thereby.

           (g)  Margin Regulations. It is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Loans will be used for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock. No proceeds of any
Loan will be used for any purpose that violates Regulation T or Regulation X of
the Board of Governors of the Federal Reserve System as in effect on the date or
dates of such Loan and such use of proceeds. The Borrower is, and after applying
the proceeds of each Loan will be, in compliance with its obligations under
Section 2.01(c).

           (h)  Investment and Holding Company Status. Neither the Borrower nor
any of its Subsidiaries is (i) an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940 (except that for
purposes of this representation, the term "Subsidiary" shall not include any
investment company a majority of which is owned by the Borrower or one of its
Affiliates as a result of the initial seed capital contributed by the Borrower
or such Affiliate to such investment company in exchange for its shares) or
(ii) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.

           (i)  Disclosure. No report, financial statement, certificate or other
written information furnished by or on behalf of it to the Administrative Agent
or any Lender in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, it represents only that such
information was prepared in good

5-YEAR CREDIT AGREEMENT

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faith based upon assumptions believed to be reasonable at the time and that
actual results may differ materially from such information.

           (j)  ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $10,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of all such underfunded Plans.

 

ARTICLE V

COVENANTS

 

          SECTION 5.01. Affirmative Covenants. So long as any principal of or
interest on any Loan or any other amount payable under the Loan Documents shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
covenants and agrees that, unless the Majority Lenders shall otherwise consent
in writing:

           (a)  Existence; Conduct of Business. It will do or cause to be done
all things necessary to preserve, renew and keep in full force and effect
(i) its corporate and legal existence and (ii) except to the extent that failure
to do so could reasonably be expected to have a Material Adverse Effect, the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any transaction
expressly permitted under Section 5.02(b).

           (b)  Reporting Requirements. It will furnish to the Lenders:

                     (i)  within 90 days after the end of each of its fiscal
years, its audited Consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by PricewaterhouseCoopers or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit, other than exceptions, if any, in the
audited Consolidated balance sheet and related statements for the fiscal year
ending on March 31, 2006 relating solely to the application of or compliance
with applicable Securities Laws in respect of Subsidiaries acquired in
connection with the Acquisition) to the effect that such Consolidated financial
statements present fairly in all material respects the financial

5-YEAR CREDIT AGREEMENT

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condition and results of operations of the Borrower and its Consolidated
Subsidiaries on a Consolidated basis in accordance with GAAP consistently
applied;

                     (ii)  within 45 days after the end of each of the first
three fiscal quarters of each of its fiscal years, its Consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries on a
Consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

                     (iii)  concurrently with any delivery of financial
statements under clause (i) or (ii) above, a certificate of a Financial Officer
of the Borrower (x) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (y) setting forth reasonably detailed
calculations demonstrating compliance with Section 5.03 and (z) stating whether
any material change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 4.01(e) and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;

                    (iv) promply after the same become publicly available,
copies of all periodic and other reports, proxy statements and other materials
filed by the Borrower with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by it to
its shareholders generally, as the case may be;

                     (v)  promptly after Moody's or S&P shall have announced a
change in Debt Rating, written notice thereof; and

                     (vi)  promptly upon request by the Administrative Agent on
behalf of any Lender, such other information regarding the operations, business
affairs and financial condition of the Borrower or any of its Subsidiaries, or
compliance with the terms of this Agreement, as such Lender may reasonably
request.

           (c)  Compliance with Laws. It will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property (including ERISA and all
applicable Environmental Laws), except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

           (d)  Payment Obligations. It will, and will cause each of its
Subsidiaries to, pay all of its Tax liabilities and material governmental
obligations, that, if not paid, could reasonably be expected to result in a
Material Adverse Effect before the same shall become delinquent or in

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default, except where the validity or amount thereof is being contested in good
faith by appropriate proceedings and it or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP.

           (e)  Maintenance of Properties; Insurance. It will, and will cause
each of its Significant Subsidiaries to, (i) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, except to the extent failure to do so could not
reasonably be expected to have a Material Adverse Effect, and (ii) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.

           (f)  Books and Records; Visitation and Inspection Rights. It will,
and will cause each of its Subsidiaries to, keep proper books of record and
account as are necessary to prepare Consolidated financial statements in
accordance with GAAP, in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. It will,
and will cause each of its Subsidiaries to, permit any representatives
designated by the Administrative Agent or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested, but in each case subject to and in accordance
with all applicable laws of any Governmental Authority and such confidentiality
measures relating thereto as the Borrower may reasonably require.

           (g)  Notices of Material Events. It will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

                     (i)  the occurrence of any Default;

                     (ii)  the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting it that, if adversely determined and there exists a reasonable
possibility of such adverse determination, could reasonably be expected to
result in a Material Adverse Effect;

                     (iii)  the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability in an aggregate amount exceeding $10,000,000;
and

                     (iv)  any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this subsection shall be accompanied by a statement
of a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.

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           (h)  Use of Proceeds.  It will use the proceeds of the Loans in
accordance with Section 2.01(c); provided that neither the Administrative Agent
nor any Lender shall have any responsibility as to the use of any such proceeds.

 

          SECTION 5.02. Negative Covenants. So long as any principal of or
interest on any Loan or any other amount payable under the Loan Documents shall
remain unpaid or any Lender shall have any Commitment hereunder, the Borrower
covenants and agrees that, unless the Majority Lenders shall otherwise consent
in writing:

           (a)  Liens. It will not, nor will permit any of its Significant
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:

                     (i)  Permitted Encumbrances;

                     (ii)  any Lien on any property or asset of the Borrower or
any of its Significant Subsidiaries existing on the date hereof and set forth in
Schedule II, provided that (x) such Lien shall not apply to any other property
or asset of the Borrower or any of its Significant Subsidiaries and (y) such
Lien shall secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

                     (iii)  any Lien existing on any property or asset prior to
the acquisition thereof by the Borrower or any of its Significant Subsidiaries
or existing on any property or asset of any Person that becomes a Significant
Subsidiary after the date hereof prior to the time such Person becomes a
Significant Subsidiary; provided that (x) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Significant Subsidiary, as the case may be, (y) such Lien shall not apply to
any other property or assets of the Borrower or any of its Significant
Subsidiaries and (z) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Significant Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;

                     (iv)  any Lien on any property or asset of the Borrower or
any of its Significant Subsidiaries arising in connection with a Permitted
12b-1 Transaction; and

                     (v)  Liens on properties or assets of the Significant
Subsidiaries of the Borrower (not otherwise permitted by
clauses (i) through (iv) above) securing obligations in an aggregate amount not
exceeding (as to all Significant Subsidiaries of the Borrower) $200,000,000 at
any one time outstanding.

           (b)  Mergers, Consolidations, Sales of Assets, Etc. It will not merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
its assets (in each case, whether now owned or hereafter

5-YEAR CREDIT AGREEMENT

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acquired), or liquidate or dissolve; provided that, if at the time thereof and
immediately after giving effect thereto no Default or Event of Default shall
have occurred and be continuing, any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation.

           (c)  Transactions with Affiliates. It will not, nor will permit any
of its Subsidiaries to, sell, lease or otherwise transfer any property or assets
to, or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except
(i) in the ordinary course of business at prices and on terms and conditions not
less favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties and (ii) transactions between or
among the Borrower and its Subsidiaries not involving any other Affiliate.

 

          SECTION 5.03. Financial Covenants.

           (a)  Maximum Leverage Ratio. The Borrower will not permit the
Leverage Ratio, as of the last day of any fiscal quarter of the Borrower, to
exceed 2.5:1.0.

           (b)  Minimum Interest Coverage Ratio. The Borrower will not permit
the Interest Coverage Ratio for any period of four consecutive fiscal quarters
to be less than 4.0:1.0.

 

ARTICLE VI

EVENTS OF DEFAULT

 

          SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:

           (a)  the Borrower shall fail to pay any principal of any Loan or Note
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;

           (b)  the Borrower shall fail to pay any interest on any Loan or Note
or any fee or any other amount (other than principal) payable by the Borrower
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of five Business Days;

           (c)  any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries in or in connection with this
Agreement or any amendment or modification hereof or waiver hereunder, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with this Agreement or any amendment or modification hereof or
waiver hereunder, shall prove to have been incorrect when made or deemed made in
any material respect;

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           (d)  the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01(a) (with respect to the
Borrower's existence), 5.02 or 5.03;

           (e)  the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Section, and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender);

           (f)  the Borrower or any of its Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable;

           (g)  any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this subsection (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness;

           (h)  an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any of its Significant Subsidiaries or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its Significant
Subsidiaries or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered;

           (i)  the Borrower or any of its Significant Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this
Section , (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
of its Significant Subsidiaries or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;

           (j)  the Borrower or any of its Significant Subsidiaries shall become
unable, admit in writing its inability or fail generally to pay its debts as
they become due;

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           (k)  one or more judgments for the payment of money in an aggregate
amount in excess of $50,000,000 shall be rendered against the Borrower or any if
its Significant Subsidiaries and the same shall remain undischarged for a period
of 60 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Borrower or any such Subsidiary to enforce any such
judgment;

           (l)  an ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and its Subsidiaries in an aggregate amount exceeding $10,000,000; or

           (m)  a Change in Control shall occur;

then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section, and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Majority Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in
clause (h) or (i) of this Section, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.

 

ARTICLE VII

THE ADMINISTRATIVE AGENT

 

          SECTION 7.01. Appointment and Authority. Each of the Lenders hereby
irrevocably appoints Citicorp North America, Inc. to act on its behalf as the
Administrative Agent under and in connection with the Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent and the Lenders and the Borrower shall have no rights
as a third party beneficiary of any of such provisions.

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          SECTION 7.02. Rights as a Lender. The Person serving as the
Administrative Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

 

          SECTION 7.03. Exculpatory Provisions.

           (a)  The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:

                     (i)  shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing;

                     (ii)  shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated by the Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Majority Lenders (or
such other number or percentage of the Lenders as shall be expressly provided
for in the Loan Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel,
may expose the Administrative Agent to liability or that is contrary to any Loan
Document or applicable law; and

                     (iii)  shall not, except as expressly set forth in the Loan
Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the Administrative Agent
or any of its Affiliates in any capacity.

           (b)  The Administrative Agent shall not be liable for any action
taken or not taken by it (i) with the consent or at the request of the Majority
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Section 8.01) or (ii) in the
absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent by the
Borrower or a Lender.

           (c)  The Administrative Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or thereunder
or in connection herewith or therewith, (iii) the performance or observance of
any of the covenants, agreements or other terms or conditions set forth herein
or therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or

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genuineness of any Loan Document or any other agreement, instrument or document
or (v) the satisfaction of any condition set forth in Article III or elsewhere
herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

          SECTION 7.04. Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to have been made by the proper Person, and shall
not incur any liability for relying thereon. In determining compliance with any
condition hereunder to the making of a Loan that by its terms must be fulfilled
to the satisfaction of a Lender, the Administrative Agent may presume that such
condition is satisfactory to such Lender unless the Administrative Agent shall
have received notice to the contrary from such Lender prior to the making of
such Loan. The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.

 

          SECTION 7.05. Delegation of Duties. The Administrative Agent may
perform any and all of its duties and exercise its rights and powers under any
Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

          SECTION 7.06. Resignation of Administrative Agent. The Administrative
Agent may at any time give notice of its resignation to the Lenders and the
Borrower. Upon receipt of any such notice of resignation, the Majority Lenders
shall have the right, in consultation with the Borrower, to appoint a successor,
which shall be a nationally recognized bank with an office in New York, New York
or an Affiliate of any such bank with an office in New York, New York. If no
such successor shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may on behalf of the Lenders, appoint a successor Administrative Agent meeting
the qualifications set forth above, provided that if the Administrative Agent
shall notify the Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents and (ii) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender directly, until such time as the Majority Lenders appoint a
successor Administrative Agent as provided for above in this

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subsection. Upon the acceptance of a successor's appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or
retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations under the Loan Documents (if
not already discharged therefrom as provided above in this subsection). The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the retiring Administrative Agent's resignation, the
provisions of this Article and Section 9.04 shall continue in effect for the
benefit of such retiring Administrative Agent, its subagents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.

 

          SECTION 7.07. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon any Loan Document or any related agreement or any document
furnished hereunder or thereunder.

ARTICLE VIII

MISCELLANEOUS

 

          SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Borrower and the Majority Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders, do any of the following:
(a) waive any of the conditions specified in Section 3.01 or, in the case of the
initial Borrowing, Section 3.02, (b) increase the Commitments of such Lenders or
subject such Lenders to any additional obligations, (c) reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder,
(d) postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (e) change the percentage
of the Commitments or of the aggregate unpaid principal amount of the Notes, or
the number of Lenders, which shall be required for the Lenders or any of them to
take any action hereunder or (f) amend Section 2.12, or this Section 8.01; and
provided further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative

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Agent in addition to the Lenders required above to take such action, affect the
rights or duties of the Administrative Agent under any Loan Document. This
Agreement and the Notes constitute the entire agreement of the parties hereto
and thereto with respect to the subject matter hereof and thereof.

 

           SECTION 8.02. Notices, Etc.

           (a)  Except in the case of notices and other communications expressly
permitted to be given by telephone (and except as provided in subsections
(b) and (c) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopier as follows:

                     (i)  if to the Borrower:

                              Legg Mason, Inc.
                              100 Light Street
                              30th Floor
                              Baltimore, Maryland 21202

                              Attention: Cheryl Ruth
                              Telephone No.: 410-454-2924
                              Telecopier No.: 410-454-2986

 

                     (ii)  if to the Administrative Agent:

                              Citicorp North America, Inc.
                              2 Penns Way, Suite 200
                              New Castle, Delaware 19720

                              Attention: John Davidson
                              Telephone No.: 302-894-6171
                              Telecopier No.: 212-944-1410; and

                     (iii)  if to a Lender, to it at its address (or telecopier
number) set forth in its Administrative Questionnaire;

provided

that any party hereto may change its address or telecopier number for notices
and other communications hereunder by notice to the other parties hereto. Except
as provided in subsection (d) below, notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next Business Day for the recipient), except that notices and communications to
the Administrative Agent pursuant to Article II or VII shall not be effective
until received by the Administrative Agent. Notices delivered through electronic
communications to the extent provided in subsections (b) and (c) below, shall be
effective as provided in said subsections (b) and (c).

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           (b)  The Borrower hereby agrees that it will provide to the
Administrative Agent all information, documents and other materials that it is
obligated to furnish to the Administrative Agent pursuant to the Loan Documents,
including all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such
communication that (i) relates to the payment of any principal or other amount
due under this Agreement prior to the scheduled date therefor, (ii) provides
notice of any Default or Event of Default under this Agreement or (iii) is
required to be delivered to satisfy any condition precedent to the occurrence of
the Closing Date and/or any borrowing (all such non-excluded communications
being referred to herein collectively as "Communications"), by transmitting the
Communications in an electronic/soft medium in a format acceptable to the
Administrative Agent to oploanswebadmin@citigroup.com. In addition, the Borrower
agrees to continue to provide the Communications to the Administrative Agent in
the manner specified in the Loan Documents but only to the extent requested by
the Administrative Agent.

           (c)  The Borrower further agrees that the Administrative Agent may
make the Communications available to the Lenders by posting the Communications
on Intralinks or a substantially similar electronic transmission system (the
"Platform"). THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE". THE AGENT
PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE
COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL
THE Administrative Agent OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, THE "AGENT PARTIES") HAVE ANY LIABILITY TO ANY Obligor, ANY
Lender OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, including, without
limitation, direct or indirect, special, incidental or consequential damages,
losses or expenses (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF SUCH
Obligor'S OR THE Administrative Agent'S TRANSMISSION OF COMMUNICATIONS THROUGH
THE INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FROM SUCH AGENT PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.

           (d)  The Administrative Agent agrees that the receipt of the
Communications by the Administrative Agent at its e-mail address set forth above
shall constitute effective delivery of the Communications to the Administrative
Agent for purposes of the Loan Documents. Each Lender agrees that notice to it
(as provided in the next sentence) specifying that the Communications have been
posted to the Platform shall constitute effective delivery of the Communications
to such Lender for purposes of the Loan Documents. Each Lender agrees (i) to

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provide to the Administrative Agent in writing (including by electronic
communication), promptly after the date of this Agreement, an e-mail address to
which the foregoing notice may be sent by electronic transmission and (ii) that
the foregoing notice may be sent to such e-mail address.

           (e)  Nothing herein shall prejudice the right of the Administrative
Agent or any Lender to give any notice or other communication pursuant to any
Loan Document in any other manner specified in such Loan Document.

 

          SECTION 8.03. No Waiver; Remedies; Setoff.

           (a)  No Waiver; Remedies.  No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

           (b)  Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower against any
and all of the obligations of such now or hereafter existing under this
Agreement or any other Loan Document to such Lender irrespective of whether or
not such Lender shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and its respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or its respective Affiliates may have. Each Lender agrees to notify
the Borrower and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

          SECTION 8.04. Expenses; Indemnity; Damage Waiver.

           (a)  Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit facility
provided for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Administrative Agent or any Lender
(including the fees, charges and disbursements of any counsel for the
Administrative Agent or any Lender) in connection with the enforcement or,
during the continuance of an Event of Default, protection of its rights (A) in

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connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made hereunder,
including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.

           (b)  Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent, each Lender and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrower arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the
proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower and regardless of whether any Indemnitee is a party
thereto, provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee or (y) result from a claim brought by the
Borrower against an Indemnitee for breach in bad faith of such Indemnitee's
obligations hereunder or under any other Loan Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction.

           (c)  Reimbursement by Lenders. To the extent that the Borrower for
any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it to the Administrative
Agent or any Related Party of any of the foregoing, each Lender severally agrees
to pay to the Administrative Agent or such Related Party, as the case may be,
such Lender's Commitment Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such, or against
any Related Party of any of the foregoing acting for the Administrative Agent in
connection with such capacity.

           (d)  Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, each party hereto agrees that it will not assert,
and hereby waives, any claim against any other party hereto, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, any Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof.

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           (e)  Payments. All amounts due under this Section shall be payable
not later than 10 days after demand therefor.

 

          SECTION 8.05. Binding Effect, Successors and Assigns. This Agreement
shall become effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have been notified
by each Lender that such Lender has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent and each
Lender and their respective successors and permitted assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.

 

          SECTION 8.06. Assignments and Participations.

           (a)  Successors and Assigns Generally. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Administrative Agent and each
Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

           (b)  Assignments by Lenders. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that

                     (i)  except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at the time
owing to it, the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) or, if the applicable Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if "Trade Date" is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consent (each such consent not to be
unreasonably withheld or delayed);

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                     (ii)  each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned;

                     (iii)  any assignment of a Commitment must be approved by
the Administrative Agent (such approval not to be unreasonably withheld or
delayed) unless the Person that is the proposed assignee is itself a Lender with
a Commitment or an Affiliate of such Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and

                     (iv)  the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the Assignment Date specified
in each Assignment and Assumption (an "Assignment Date"), the Eligible Assignee
thereunder shall be a party to this Agreement and, to the extent of the interest
assigned by such Assignment and Assumption, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.13 and 8.04 with respect to facts
and circumstances occurring prior to such Assignment Date. Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this subsection shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with subsection (d) of this Section .

           (c)  Register. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at its address specified in
Section 8.02 a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

           (d)  Participations. Any Lender may at any time, without the consent
of, or notice to, the Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a
portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender

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shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower, the Administrative Agent and the
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.

           Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso of
Section 8.01 that affects such Participant. Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of 2.13 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 8.03(b) as though it were a Lender, provided such Participant agrees to
be subject to Section 2.12 as though it were a Lender.

           If a Foreign Lender sells a participating interest to a Participant
which seeks to obtain the benefits of Section 2.15, then such Lender shall
promptly provide the Borrower and the Administrative Agent with documentation
reflecting the portion of its Commitment and/or Loans sold pursuant to such
participating interest on a properly completed and duly executed Internal
Revenue Service Form W-8IMY (or any successor or substitute form) with any
required attachments and the portion of its Commitment and/or Loans retained on
a properly completed or duly executed forms or statements as required pursuant
to section 2.15(e).

           (e)  Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Sections 2.13 and 2.15 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent.

           (f)  Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

 

          SECTION 8.07. Governing Law; Jurisdiction; Etc.

           (a)  Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

           (b)  Submission to Jurisdiction. Each of the parties hereto
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the courts of the State of New York sitting in New
York County and of the United States District Court of the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all

5-YEAR CREDIT AGREEMENT

-51-

claims in respect of any such action or proceeding may be heard and determined
in such New York State court or, to the fullest extent permitted by applicable
law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in any Loan Document shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to any Loan Document against the Borrower or its properties
in the courts of any jurisdiction.

           (c)  Waiver of Venue. Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to any Loan Document in any court
referred to in subsection (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.

           (d)  Service of Process. The Borrower agrees that service of process
in any action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to CT Corporation System (the "Process Agent") as agent for the
Borrower in New York, New York for service of process at its address at
111 Eighth Avenue, New York, New York  10011, or at such other address of which
the Administrative Agent shall have been notified in writing by the Borrower;
provided that, if the Process Agent ceases to act as the Borrower's agent for
service of process, the Borrower will, by an instrument reasonably satisfactory
to the Administrative Agent, appoint another Person (subject to the approval of
the Administrative Agent) in the Borough of Manhattan, New York, New York to act
as the Borrower's agent for service of process. Each other party hereto
irrevocably consents to service of process in the manner provided for notices in
Section 8.02. Nothing in this Agreement will affect the right of any party
hereto to serve process in any other manner permitted by applicable law.

 

          SECTION 8.08. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

          SECTION 8.09. Counterparts; Integration; Effectiveness; Execution.

           (a)  Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 3.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery

5-YEAR CREDIT AGREEMENT

-52-

of an executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this
Agreement.

           (b)  Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

 

          SECTION 8.10. Survival. The provisions of Sections 2.13, 2.15, 2.17
and 8.04 and Article VII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans and the Commitments or the termination of this Agreement
or any provision hereof. In addition, all covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to any Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated.

          SECTION 8.11. Waiver of Jury Trial. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THE LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

5-YEAR CREDIT AGREEMENT

-53-

 

          SECTION 8.12. Confidentiality. Each of the Administrative Agent and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates' respective partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority), (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies under any Loan Document or any
action or proceeding relating to any Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the
Administrative Agent, any Lender or any of their respective Affiliates on a
non-confidential basis from a source other than the Borrower.

          For purposes of this Section, "Information" means all information
received from the Borrower or any of its Subsidiaries relating to the Borrower
or any of its Subsidiaries or any of their respective businesses, other than any
such information that is available to the Administrative Agent or any Lender on
a non-confidential basis prior to disclosure by the Borrower or any of its
Subsidiaries, provided that, in the case of information received from the
Borrower or any of its Subsidiaries after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

          SECTION 8.13. No Fiduciary Relationship. Each Borrower acknowledges
that neither any Lender nor the Administrative Agent has any fiduciary
relationship with, or fiduciary duty to, the Borrower arising out of or in
connection with any Loan Document, and the relationship between the
Administrative Agent and the Lenders, on the one hand, and the Borrower, on the
other, in connection herewith or therewith is solely that of debtor and
creditor. This Agreement does not create a joint venture among the parties.

          SECTION 8.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

5-YEAR CREDIT AGREEMENT

-54-

 

          SECTION 8.15. USA PATRIOT Act. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.

5-YEAR CREDIT AGREEMENT

-55-

           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.

 

 

LEGG MASON, INC.

 

By: /s/ Charles J. Daley, Jr.__________
Name:     Charles J. Daley
Title:      Senior Vice President, Chief Financial
Officer and Treasurer

5-YEAR CREDIT AGREEMENT

-56-

CITICORP NORTH AMERICA, INC.,
as Administrative Agent

 

By: /s/ Matthew Nicholls______
Name:     Matthew Nicholls
Title:       Director

 

LENDERS

Citicorp North America, Inc.

 

By: /s/ Matthew Nicholls______
Name:     Matthew Nicholls
Title:       Director

 

 

5-YEAR CREDIT AGREEMENT

 

SCHEDULE I

 

Lenders and Commitments

 

LENDER

COMMITMENT

Citicorp North America, Inc.

$300,000,000.00

   

TOTAL COMMITMENTS

$300,000,000.00

SCHEDULE I

 

SCHEDULE II

 

EXISTING LIENS

[See Section 5.02(a)(ii)]

 

First priority lien on all personal property assets of Western Asset Management,
Inc., located at 385 East Colorado Blvd., Pasadena, CA, including, without
limitation, the furniture, fixtures, equipment and tenant improvements of
Western Asset located on the Real Property.

Escrow Agreement dated October 1, 2001, by and among Legg Mason, Inc., the
shareholders of Royce & Associates, Inc. and the Chase Manhattan Bank.

SCHEDULE II

EXHIBIT A

[FORM OF NOTE]

 

PROMISSORY NOTE

$[_________]

[________], 20[__]

New York, New York

 

          FOR VALUE RECEIVED, Legg Mason, Inc., a Maryland corporation (the
"Borrower"), hereby promises to pay to the order of [NAME OF LENDER] (the
"Lender"), at such of the offices of Citicorp North America, Inc. in New York,
New York as shall be notified to the Borrower from time to time, the principal
sum of [DOLLAR AMOUNT] U.S. Dollars, in lawful money of the United States and in
immediately available funds, on [______], 20[__], and to pay interest on the
unpaid principal amount hereof, at such office, in like money and funds, for the
period commencing on the date hereof until the principal hereof shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement
referred to below.

          This Note evidences Loans made by the Lender under the 5-Year Credit
Agreement dated as of November 23, 2005 (as modified and supplemented and in
effect from time to time, the "Credit Agreement") among the Borrower, the
lenders party thereto (including the Lender) and Citicorp North America, Inc.,
as Administrative Agent. Terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.

          The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments hereof upon
the terms and conditions specified therein.

          Except as permitted by Section 8.06 of the Credit Agreement, this Note
may not be assigned by the Lender to any other Person.

          This Note shall be governed by, and construed in accordance with, the
law of the State of New York.

 

          LEGG MASON, INC.

 

By:_________________________
Name:
Title:

FORM OF NOTE

 

EXHIBIT B

[FORM OF NOTICE OF BORROWING]

NOTICE OF BORROWING

[Date]

Citicorp North America, Inc., as Administrative Agent
  for the Lenders parties to the Credit Agreement
  referred to below
2 Penns Ways, Suite 200
New Castle, Delaware 19720

Attention: [________]

Ladies and Gentlemen:

                The undersigned, Legg Mason, Inc. (the "Borrower"), refers to
the Credit Agreement dated as of November 23, 2005 (as from time to time
amended, the "Credit Agreement", the terms defined therein being used herein as
therein defined), among the undersigned, the Lenders party thereto and Citicorp
North America, Inc., as Administrative Agent for said Lenders, and hereby give
you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement, that
the undersigned hereby request a Borrowing of the [Initial Term Loan] [Delayed
Term Loan] thereunder, and in that connection set forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by
Section 2.02(a)(ii) of the Credit Agreement:

(i)  The Business Day of the Proposed Borrowing is ___________ __, _____.

(ii)  The Type of Loans initially comprising the Proposed Borrowing is [Base
Rate Loans] [Eurodollar Rate Loans].

(iii)  The aggregate amount of the Proposed Borrowing is $___________.

(iv)  The initial Interest Period for each Loan made as part of the Proposed
Borrowing is ______ month[s]]1.

                The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:

(A)  the representations and warranties contained in Section 4.01 (excluding the
Excluded Representations) are correct in all material respects, before and after
giving effect to the Proposed Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date; and

_____________________
1 For Eurodollar Rate Loans only.

FORM OF NOTICE OF BORROWING

 

-2-

(B)  no event has occurred and is continuing, or would result from such Proposed
Borrowing or from the application of the proceeds therefrom, which constitutes
an Event of Default or a Default.

 

Very truly yours,

LEGG MASON, INC.

 

By:__________________________
Name:
Title:

 

FORM OF NOTICE OF BORROWING

 

EXHIBIT C

[FORM OF ASSIGNMENT AND ASSUMPTION]

 

ASSIGNMENT AND ASSUMPTION

          This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Assignment Date set forth below and is entered into by and
between [Insert name of Assignor] (the "Assignor") and [Insert name of Assignee]
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment and Assumption as if set forth herein in full.

          For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Assignment Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including without limitation any guarantees
included in such facilities) and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the "Assigned Interest"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.

1. Assignor:           ______________________________

2. Assignee:           ______________________________
                             and is an Affiliate of [identify Lender]

3. Borrower:           Legg Mason, Inc.

4. Administrative Agent:            Citicorp North America, Inc., as the
administrative agent under the Credit Agreement

5. Credit Agreement:           $300,000,000 Credit Agreement dated as of
November 23, 2005 among Legg Mason, Inc., the Lenders party thereto and Citicorp
North America, Inc., as Administrative Agent

FORM OF ASSIGNMENT AND ASSUMPTION

 

2

6. Assigned Interest:

Aggregate Amount of Commitment for all Lenders

Amount of Commitment Assigned

Percentage Assigned of Commitment

Outstanding Loans

CUSIP Number

$

$

%

   

$

$

%

   

$

$

%

   

[7. Trade Date: ______________]1

Assignment Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR

[NAME OF ASSIGNOR]

 

By:__________________________
Name:
Title:

ASSIGNEE

[NAME OF ASSIGNEE]

 

By:__________________________
Name:
Title:

[Consented to and]2 Accepted:

CITICORP NORTH AMERICA, INC., as
  Administrative Agent

 

By_________________________________
   Name:
   Title:

[Consented to:]3

LEGG MASON, INC.

 

By________________________________
   Name:
   Title:

_____________________
1 To be comlpleted if the Assignor and the Assignee intend that the minimum
assignment amout is to be determined as of the Trade Date.
2 To be added only if the consent of the Administrative Agent is required by the
terms of the Credit Agreement.
3 To be added only if the consent of Legg Mason is required by the terms of the
Credit Agreement.

 

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

ANNEX 1

$300,000,000 Credit Agreement
DATED AS OF November 23, 2005 among
Legg Mason, Inc., the Lenders party thereto
and Citicorp North America, Inc., as Administrative Agent

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

          1. Representations and Warranties.

          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is
the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by the Borrower, any of its Subsidiaries or Affiliates or any other Person of
any of their respective obligations under any Loan Document.

          1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Assignment Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder,
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 5.01(b) thereof,
as applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

          2. Payments. From and after the Assignment Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Assignment Date and to the
Assignee for amounts which have accrued from and after the Assignment Date.5

_____________________
5The Administrative Agent should consider whether this method conforms to its
systems. In some circumstances, the following alternative language may be
appropriate: "From and after the Assignment Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee whether such
amounts have

FORM OF ASSIGNMENT AND ASSUMPTION

-2-

          3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

____________________________________________________________________________________________________________________________________________________________

accrued prior to, on or after the Assignment Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Administrative Agent
for periods prior to the Assignment Date or with respect to the making of this
assignment directly between themselves."

 

FORM OF ASSIGNMENT AND ASSUMPTION