Exhibit 10.1

 

[EXECUTION COPY]

 

 

 

 

CREDIT AGREEMENT

dated as of October 5, 2009

 

 

among

 

 

WADDELL & REED FINANCIAL, INC.,

 

 

THE LENDERS PARTY HERETO,

 

 

and

 

 

BANK OF AMERICA, N.A.,
as Administrative Agent

 

 

BANC OF AMERICA SECURITIES LLC,
as Lead Arranger and Book Manager

 

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I            DEFINITIONS

1

 

 

SECTION 1.01.

Defined Terms

1

SECTION 1.02.

Terms Generally

17

SECTION 1.03.

Accounting Terms; GAAP

17

 

 

 

ARTICLE II           THE CREDITS

17

 

 

 

SECTION 2.01.

Commitments

17

SECTION 2.02.

Loans and Borrowings

18

SECTION 2.03.

Requests for Borrowings, Conversions and Continuations of Loans

18

SECTION 2.04.

Funding of Borrowings

19

SECTION 2.05.

Termination and Reduction of Commitments

20

SECTION 2.06.

Repayment of Loans; Evidence of Debt

21

SECTION 2.07.

Prepayment of Loans

22

SECTION 2.08.

Fees

22

SECTION 2.09.

Interest

23

SECTION 2.10.

Alternate Rate of Interest

24

SECTION 2.11.

Increased Costs

24

SECTION 2.12.

Break Funding Payments

25

SECTION 2.13.

Taxes

26

SECTION 2.14.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

29

SECTION 2.15.

Mitigation Obligations; Replacement of Lenders

31

SECTION 2.16.

Increase in Commitments

32

SECTION 2.17.

Defaulting Lenders

34

 

 

 

ARTICLE III          REPRESENTATIONS AND WARRANTIES

34

 

 

 

SECTION 3.01.

Organization; Powers

34

SECTION 3.02.

Authorization; Enforceability

34

SECTION 3.03.

Governmental Approvals; No Conflicts

34

SECTION 3.04.

Financial Condition; No Material Adverse Effect

34

SECTION 3.05.

Properties

35

SECTION 3.06.

Litigation and Environmental Matters

35

SECTION 3.07.

Compliance with Laws and Agreements

36

SECTION 3.08.

Investment and Holding Company Status

36

SECTION 3.09.

Taxes

36

SECTION 3.10.

ERISA

36

SECTION 3.11.

Disclosure

36

SECTION 3.12.

No Default

37

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

SECTION 3.13.

Subsidiaries

37

SECTION 3.14.

Federal Regulations

37

SECTION 3.15.

No Burdensome Restrictions

37

SECTION 3.16.

Insurance

37

SECTION 3.17.

Taxpayer Identification Number

38

 

 

 

ARTICLE IV          CONDITIONS

38

 

 

SECTION 4.01.

Conditions to Closing Date

38

SECTION 4.02.

Each Credit Event

40

 

 

 

ARTICLE V           AFFIRMATIVE COVENANTS

40

 

 

SECTION 5.01.

Financial Statements and Other Information

40

SECTION 5.02.

Notices of Material Events

42

SECTION 5.03.

Existence; Conduct of Business

43

SECTION 5.04.

Payment of Obligations

43

SECTION 5.05.

Maintenance of Properties; Insurance

43

SECTION 5.06.

Books and Records; Inspection Rights

44

SECTION 5.07.

Compliance with Laws

44

SECTION 5.08.

Use of Proceeds

44

SECTION 5.09.

Environmental Laws

44

 

 

 

ARTICLE VI          NEGATIVE COVENANTS

45

 

 

SECTION 6.01.

Financial Condition Covenants

45

SECTION 6.02.

Indebtedness

45

SECTION 6.03.

Liens

46

SECTION 6.04.

Fundamental Changes

46

SECTION 6.05.

Investments, Loans, Advances, Guarantees and Acquisitions; Hedging Agreements

47

SECTION 6.06.

Restricted Payments

47

SECTION 6.07.

Transactions with Affiliates

48

SECTION 6.08.

Restrictive Agreements

48

SECTION 6.09.

Capital Expenditures

48

SECTION 6.10.

Sales and Leasebacks

48

SECTION 6.11.

Changes in Fiscal Periods

49

SECTION 6.12.

Optional Payments and Modifications of Certain Debt Instruments

49

SECTION 6.13.

Use of Proceeds

49

 

 

 

ARTICLE VII        EVENTS OF DEFAULT

49

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

ARTICLE VIII       THE ADMINISTRATIVE AGENT

52

 

 

SECTION 8.01.

Appointment and Authority

52

SECTION 8.02.

Rights as a Lender

52

SECTION 8.03.

Exculpatory Provisions

52

SECTION 8.04.

Reliance by Administrative Agent

53

SECTION 8.05.

Delegation of Duties

54

SECTION 8.06.

Resignation of Administrative Agent

54

SECTION 8.07.

Non-Reliance on Administrative Agent and Other Lenders

54

SECTION 8.08.

No Other Duties, Etc

55

 

 

 

ARTICLE IX         MISCELLANEOUS

55

 

 

 

SECTION 9.01.

Notices; Effectiveness; Electronic Communication

55

SECTION 9.02.

Waivers; Amendments; Enforcement

57

SECTION 9.03.

Expenses; Indemnity; Damage Waiver

58

SECTION 9.04.

Successors and Assigns

60

SECTION 9.05.

Survival

63

SECTION 9.06.

Counterparts; Integration; Effectiveness

64

SECTION 9.07.

Severability

64

SECTION 9.08.

Right of Setoff

64

SECTION 9.09.

Governing Law; Jurisdiction; Consent to Service of Process

65

SECTION 9.10.

WAIVER OF JURY TRIAL

65

SECTION 9.11.

Headings

66

SECTION 9.12.

Confidentiality

66

SECTION 9.13.

Interest Rate Limitation

66

SECTION 9.14.

No Advisory or Fiduciary Responsibility

67

SECTION 9.15.

USA Patriot Act

67

 

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SCHEDULES:

 

Schedule 2.01

—

Commitments

Schedule 3.01

-

Good Standing

Schedule 3.04

-

Financial Condition

Schedule 3.06

—

Disclosed Matters

Schedule 3.13

—

Subsidiaries

Schedule 6.02

—

Existing Indebtedness

Schedule 6.03

—

Existing Liens

Schedule 6.08

—

Existing Restrictions

Schedule 6.10

—

Sale/Leaseback Properties

Schedule 9.01

—

Administrative Agent’s Office; Certain Addresses for Notices

 

EXHIBITS:

 

Exhibit A

—

Form of Assignment and Acceptance

Exhibit B

—

Form of Note

Exhibit C-1

—

Form of Report Under Section 5.01(e)(A)

Exhibit C-2

—

Form of Report Under Section 5.01(e)(B)

Exhibit D

—

Form of Revolving Borrowing Request

Exhibit E

—

Form of Compliance Certificate

 

iv

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CREDIT AGREEMENT

 

This CREDIT AGREEMENT is entered into as of October 5, 2009, among WADDELL &
REED FINANCIAL, INC. (the “Borrower”), the several financial institutions from
time to time party hereto (collectively, the “Lenders” and each individually, a
“Lender”), and BANK OF AMERICA, N.A. (“Bank of America”), as administrative
agent for the Lenders (in such capacity, together with any successors thereto in
such capacity, the “Administrative Agent”).

 

ARTICLE I

 

Definitions

 

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

 

“ABR Loan” means a Loan that bears interest based on the Alternate Base Rate.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Loan for any Interest
Period, a rate per annum determined by the Administrative Agent pursuant to the
following formula:

 

Adjusted LIBO Rate =

LIBO Rate

1.00 – Eurodollar Reserve Percentage

 

“Administrative Agent” has the meaning specified in the introductory paragraph
hereto.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 9.01, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.

 

“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.

 

“Aggregate Revenue Base” means the sum of Revenue Bases for all W&R Funds and
for all other assets managed by the Borrower or any Subsidiary of the Borrower
for other entities.

 

“Agreement” means this Credit Agreement, as amended, supplemented or otherwise
modified from time to time.

 

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“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%, or (c) the Adjusted LIBO Rate for a
one-month Interest Period (it being understood that such rate shall be used
solely as a daily reference rate for determining the Alternate Base Rate) in
effect for such date (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%.  Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate,
respectively.

 

“Applicable Percentage” means, with respect to any Lender, the percentage
(carried to the ninth decimal place) of the total Commitments represented by
such Lender’s Commitment.  If the Commitments have terminated or expired, the
Applicable Percentages shall be determined based upon the Commitments most
recently in effect, giving effect to any assignments.

 

“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the facility fees payable hereunder, as the case may
be, the following percentages per annum, based upon the Debt Rating as set forth
below:

 

Pricing
Level

 

Debt Rating

 

Facility Fee

 

Eurodollar Loans

 

ABR Loans

 

1

 

> A- / A3

 

0.350

%

2.650

%

1.650

%

2

 

BBB+ / Baa1

 

0.400

%

2.850

%

1.850

%

3

 

BBB / Baa2

 

0.450

%

3.050

%

2.050

%

4

 

BBB- / Baa3

 

0.500

%

3.500

%

2.500

%

5

 

< BBB- / Baa3

 

0.625

%

3.875

%

2.875

%

 

, where “Debt Rating” means, as of any date of determination, the rating as
determined by either S&P or Moody’s (collectively, the “Debt Ratings”) of the
Borrower’s non-credit-enhanced, senior unsecured long-term debt; provided that
(a) if the respective Debt Ratings issued by the foregoing rating agencies
differ by one level, then the Pricing Level for the higher of such Debt Ratings
shall apply (with the Debt Rating for Pricing Level 1 being the highest and the
Debt Rating for Pricing Level 5 being the lowest); (b) if there is a split in
Debt Ratings of more than one level, then the Pricing Level that is one level
lower than the Pricing Level of the higher Debt Rating shall apply; (c) if the
Borrower has only one Debt Rating, the Pricing Level that is one level lower
than that of such Debt Rating shall apply; and (d) if the Borrower does not have
any Debt Rating, Pricing Level 5 shall apply.

 

2

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Initially, the Applicable Rate shall be the percentages per annum set forth
opposite Pricing Level 3.  The Applicable Rate shall be subject to adjustment
(upwards or downwards, as appropriate), effective as of the date on which S&P or
Moody’s announces a rating change which results in a change in the Applicable
Rate.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger” means Banc of America Securities LLC, in its capacity as sole lead
arranger and sole book manager.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Administrative Agent.

 

“Availability Period” means the period from and including the Closing Date to
but excluding the earlier of the Revolving Credit Termination Date or the date
of termination of the Commitments.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Borrower” has the meaning specified in the introductory paragraph hereto.

 

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type
and, in the case of Eurodollar Loans, having the same Interest Period made by
each of the Lenders pursuant to Section 2.01.

 

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

 

“Capital Expenditures” means, for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.

 

“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)

 

3

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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.

 

“Capital Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

 

“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, and the rules of the
SEC thereunder as in effect on the date hereof) other than the Borrower, of
shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower, (b) the
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 nor (ii) appointed by directors so nominated, or
(c) the acquisition of direct or indirect Control of the Borrower by any Person
or group.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement, or (c) compliance by any Lender (or, for purposes of
Section 2.11(b), by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.

 

“Closing Date” means the date on which the conditions precedent set forth in
Section 4.01 shall have been satisfied, which date is October 5, 2009.

 

“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 hereunder, expressed as an amount representing the maximum
aggregate outstanding principal amount of such Lender’s Loans hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.05,
(b) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04, and (c) increased from time to time pursuant to
Section 2.16.  The initial amount of each Lender’s Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Commitment, as applicable, and the initial aggregate
amount of the Commitments of the Lenders (as set forth on Schedule 2.01) is
$125,000,000.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit E.

 

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“Confidential Information Memorandum” means the Confidential Information
Memorandum dated August 2009 and furnished to the Lenders.

 

“Consolidated EBITDA” means, for any period, 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 and
debt issuance costs and commissions, discounts and other fees and charges
associated with 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, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), provided, that the amounts referred to in this clause
(e) shall not, in the aggregate, exceed $1,000,000 for any fiscal year of the
Borrower, and (f) any other non-cash charges.  For the purposes of calculating
Consolidated EBITDA for any Reference Period pursuant to any determination of
the Consolidated Leverage Ratio, (i) if at any time during such Reference Period
the Borrower or any Subsidiary shall have made any Material Disposition, the
Consolidated EBITDA for such Reference Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the property that
is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period, and (ii) if during such
Reference Period the Borrower or any Subsidiary shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro forma effect thereto as if such Material Acquisition occurred
on the first day of such Reference Period.  As used in this definition,
“Material Acquisition” means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the payment
of consideration by the Borrower and its Subsidiaries in excess of $1,000,000;
and “Material Disposition” means any Disposition of property or series of
related Dispositions of property that yields gross proceeds to the Borrower or
any of its Subsidiaries in excess of $1,000,000.

 

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

 

“Consolidated Interest Expense” means, for any period, interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptance financing and net costs under Hedging Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).

 

“Consolidated Leverage Ratio” means, as at the last day of any period, the ratio
of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for such
period.

 

“Consolidated Net Income” means, for any period, the consolidated net income (or
loss) of the Borrower and its Subsidiaries, determined on a consolidated basis
in accordance

 

5

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with GAAP; provided that there shall be excluded (a) the income (or deficit) of
any Person accrued prior to the date it becomes a Subsidiary of the Borrower or
is merged into or consolidated with the Borrower or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Borrower or such Subsidiary in the form of dividends or similar distributions,
and (c) the undistributed earnings of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any Contractual
Obligation or Requirement of Law applicable to such Subsidiary.

 

“Consolidated Total Debt” means, at any date, the aggregate principal amount of
all Indebtedness of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any indenture, agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

 

“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.

 

“Debt Rating” has the meaning specified in the definition of Applicable Rate.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Default Rate” means when used with respect to any Loan, fee or other amount
payable by the Borrower under any Loan Document, an interest rate per annum
equal to (a) the Alternate Base Rate plus (b) the Applicable Rate, if any,
applicable to ABR Loans plus (c) 2% per annum; provided, however, that with
respect to a Eurodollar Loan, the Default Rate shall be an interest rate equal
to the interest rate (including any Applicable Rate) otherwise applicable to
such Loan plus 2% per annum.

 

“Defaulting Lender” means any Lender that, as determined by the Administrative
Agent, (a) has failed to perform its obligation to fund any portion of its Loans
within one Business Day of the date required to be funded by it hereunder,
unless such obligation is the subject of a good faith dispute, (b) has notified
the Borrower, the Administrative Agent or any Lender in writing that it does not
intend to comply with any of its funding obligations under this Agreement or has
made a public statement that it does not intend to comply with its funding
obligations under this Agreement or generally under other agreements in which it
commits to extend credit, (c) has failed, within one Business Day after written
request by the Administrative Agent, to confirm in a manner satisfactory to the
Administrative Agent, that it will comply with the terms of this Agreement
relating to its obligations to fund prospective Loans, (d) otherwise has failed
to pay over to the Administrative Agent or any other Lender any other amount

 

6

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required to be paid by it hereunder within one Business Day of the date when
due, unless the subject of a good faith dispute, or (e) has, or has a direct or
indirect parent company that has, (i) become the subject of a proceeding under
any bankruptcy or insolvency proceeding, or (ii) had a receiver, conservator,
trustee, administrator, assignee for the benefit of creditors or similar Person
charged with reorganization or liquidation of its business or a custodian
appointed for it, or (iii) taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in such Lender or direct or
indirect parent company thereof by a Governmental Authority.  A Lender that has
become a Defaulting Lender because of an event referenced in this definition may
cure such status and shall no longer constitute a Defaulting Lender as provided
in the last paragraph of Section 2.17.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06 or otherwise delivered in
writing to each of the Lenders on or prior to the Closing Date.

 

“Distribution Fees” means all fees payable pursuant to a plan contemplated by
Rule 12b-1 under the Investment Company Act of 1940, as amended, in connection
with the distribution of shares of W&R Funds that are open-end funds.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 9.04(b)(v) and (vi) (subject to such consents, if any, as
may be required under Section 9.04(b)(iii)).

 

“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.

 

“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.

 

“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

 

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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 failure by the
Borrower or any ERISA Affiliate to make when due any required contribution
(including any required installment) under the pension funding rules to any
Plan, determined without regard to whether such required contribution may be or
has been waived, (c) the filing of an application for a waiver of any required
contribution under the pension funding rules, (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
ERISA Affiliate 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
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate 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. For this purpose, “pension funding rules” means the rules of the Code
and ERISA regarding minimum required contributions (including any installment
payment thereof) to Plans and set forth in, with respect to plan years ending
prior to the effective date as to any such Plan of the Pension Protection Act of
2006, Sections 401(a)(29) and 412 of the Code and Part 3, Subtitle I, of Title I
of ERISA each as in effect prior to the Pension Protection Act of 2006 and,
thereafter, Sections 412 and 430 through 436 of the Code and Part 3, Subtitle I,
of Title I of ERISA each as in effect from time to time.

 

“Eurodollar Loan” means a Loan that bears interest based on the Adjusted LIBO
Rate.

 

“Eurodollar Reserve Percentage” means, for any day during any Interest Period,
the reserve percentage (expressed as a decimal, carried out to five decimal
places) in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the Board for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”).  The LIBO Rate for each outstanding Eurodollar
Loan shall be adjusted automatically as of the effective date of any change in
the Eurodollar Reserve Percentage.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“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) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the jurisdiction 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 backup withholding or branch profits taxes imposed

 

8

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by the United States of America 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 Borrower under
Section 2.15(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
or is attributable to such Foreign Lender’s failure or inability to comply with
Section 2.13(e), except to the extent that such Foreign Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Borrower with respect to such withholding tax pursuant to Section 2.13(a).

 

“Existing Credit Agreement” means the Credit Agreement, dated as of October 6,
2008, among the Borrower, certain financial institutions party thereto as
lenders and Bank of America, N.A., as administrative agent for such lenders.

 

“Federal Funds Effective Rate” means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Effective Rate for such day shall be the average rate
(rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Bank of America on such day on such transactions as determined by the
Administrative Agent.

 

“Fee Letter” means the letter agreement, dated as of August 20, 2009, among the
Borrower, the Administrative Agent and the Arranger.

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located.  For purposes of
this definition, the United States of America, 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 activities.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body (including
self-regulatory body), court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or

 

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administrative powers or functions of or pertaining to government, including, in
any event, the SEC and any applicable state securities commission or similar
body.

 

“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 or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or 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 guaranty 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.

 

“Increase Effective Date” has the meaning specified in Section 2.16(a).

 

“Increasing Lender” has the meaning specified in Section 2.16(a).

 

“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, (g) all Capital Lease Obligations of such Person (but, for the
avoidance of doubt, excluding any operating lease obligations), (h) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (i) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances,
(j) net liabilities of such Person under Hedging Agreements, and (k) all
Guarantees by such Person in

 

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respect of any of the foregoing.  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.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last
Business Day of each March, June, September and December and the Revolving
Credit Termination Date, and (b) with respect to any Eurodollar Loan, the last
day of the Interest Period applicable to such Loan and the Revolving Credit
Termination Date and, in the case of a Eurodollar Loan with an Interest Period
of more than three months’ duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months’ duration, after the
first day of such Interest Period.

 

“Interest Period” means, with respect to any Eurodollar Loan, the period
commencing on the date such Eurodollar Loan is disbursed or converted to or
continued as a Eurodollar Loan and ending on the date that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period, and (c) any Interest Period
that would otherwise extend beyond the Revolving Credit Termination Date shall
end on the Revolving Credit Termination Date or such date of final payment, as
the case may be.

 

“Lenders” has the meaning specified in the introductory paragraph hereto.

 

“LIBO Rate” means, with respect to any Eurodollar Loan for any Interest Period,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA
LIBOR”), as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Administrative Agent from
time to time) at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, for dollar deposits (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period.  If such rate is not available at such time for any reason,
then the “LIBO Rate” for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

 

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“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset, and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.

 

“Loan Documents” means this Agreement, each Note and the Fee Letter.

 

“Management Contract” means an agreement, written or oral, pursuant to which the
Borrower or any Subsidiary of the Borrower provides (a) investment advisory,
management or administrative services to a W&R Fund, or (b) investment advisory
or management services to any Person, including, without limitation,
unregistered investment companies and personal or corporate investment accounts.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, property, prospects or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole, or (b) the validity or
enforceability of this Agreement or the other Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders hereunder or thereunder.

 

“Material Indebtedness” means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$5,000,000.  For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.

 

“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.

 

“Net Asset Value” means, at any date of determination and with respect to any
investment company or account manager, the “current net asset” value (as defined
in Rule 2a-4 under the Investment Company Act of 1940, as amended), in the
aggregate, of all outstanding redeemable securities issued by such investment
company at such date.

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit B.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made

 

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under the Loan Documents or from the execution, delivery or enforcement of, or
otherwise with respect to, the Loan Documents.

 

“Participant” has the meaning specified in Section 9.04(d).

 

“Participating Lender” has the meaning specified in Section 2.16(a).

 

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

 

“Permitted Acquisition” means an acquisition of a Person, or the assets of a
Person or a line of business of a Person, in the same or a related line of
business as the Borrower, provided that after giving effect to such acquisition
(a) no Default or Event of Default shall have occurred and be continuing,
(b) the Borrower shall be in compliance, on a pro forma basis, as of the end of
the most recent fiscal quarter of the Borrower with the provisions of
Section 6.01 after giving effect to such acquisition and the incurrence of any
Indebtedness in connection therewith, and (c) in the case of an acquisition
involving aggregate consideration valued at $20,000,000 or more, at least three
Business Days prior to the date of such acquisition, the Borrower shall have
furnished to the Administrative Agent and the Lenders a compliance certificate
to the effect of clauses (a) and (b) showing in reasonable detail the
calculations supporting the determination of compliance, on such a pro forma
basis, with such provisions.

 

“Permitted Encumbrances” means:

 

(a)           Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;

 

(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 30 days or are being
contested in compliance with Section 5.04;

 

(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)           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; and

 

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(f)            judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII, so long as such judgment Liens
are not in effect for more than 45 days;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.

 

“Permitted Investments” means:

 

(a)           direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, an
investment-grade credit rating from S&P or from Moody’s;

 

(c)           investments in certificates of deposit, banker’s acceptances and
time deposits maturing within 540 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;

 

(d)           investments in newly created funds or investments intended for
sale to newly created funds advised or managed by the Borrower and its
Subsidiaries, in an aggregate amount (based upon book value on the books of the
Borrower and its Subsidiaries) of not more than $40,000,000 at any time;

 

(e)           investments in funds advised or managed by the Borrower and its
Subsidiaries for the benefit of the Borrower’s and its Subsidiaries’ senior
executives and portfolio management personnel in conjunction with various
nonqualified deferral compensation arrangements adopted by the Borrower and its
Subsidiaries, in an aggregate amount (based on book value on the books of the
Borrower and its Subsidiaries) of not more than $25,000,000 at any time;

 

(f)            fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above; and

 

(g)           other than those contained in clauses (a), (b), (c) and (e) above,
United States dollar denominated fixed income securities and syndicated bank
loans not to exceed $7,500,000 per issuer, with the exception of United States
government securities, and not to exceed $7,500,000 per country, with the
exception of the United States of America.

 

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

 

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“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.

 

“Prime Rate” means the rate of interest in effect for such day as publicly
announced from time to time by Bank of America as its “prime rate.”  The “prime
rate” is a rate set by Bank of America based upon various factors including Bank
of America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.  Any change in such rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.

 

“Reference Period” means, at any date of determination, the most recently
completed four fiscal quarters of the Borrower.

 

“Register” has the meaning set forth in Section 9.04.

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates
and the partners, directors, officers, employees, agents, trustees and advisors
of such Person and of such Person’s Affiliates.

 

“Required Lenders” means Lenders having Revolving Credit Exposures and unused
Commitments representing at least 51% of the sum of the aggregate Revolving
Credit Exposures and unused Commitments of all Lenders at such time; provided
that the unused Commitment of, and the portion of the aggregate Revolving Credit
Exposures held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Required Lenders.

 

“Requirement of Law” means, as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination, order, injunction, writ or
decree of an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Restricted Payment” means (a) any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of the Borrower or any Subsidiary, or (b) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, for (i) the purchase, redemption, retirement, acquisition, cancellation
or termination of any shares of the Borrower’s capital stock, or (ii) any
option, warrant or other right to acquire any shares of the Borrower’s capital
stock.

 

“Revenue Base” means the sum of (a) the product of (i) with respect to each W&R
Fund, the Net Asset Value of the W&R Fund on the date of calculation and with
respect to assets managed for other entities, the market value or Net Asset
Value of such assets on the date of calculation, and (ii) the rate provided for
in the applicable Management Contract for

 

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determining the annual fee required for such advisory, management or
administrative services on such date, and (b) Distribution Fees for such W&R
Fund.

 

“Revolving Borrowing Request” means a notice of (a) a Borrowing, (b) a
conversion of Loans from one Type to the other, or (c) a continuation of
Eurodollar Loans, pursuant to Section 2.03, which, if in writing, shall be
substantially in the form of Exhibit D.

 

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans at such time.

 

“Revolving Credit Termination Date” means October 4, 2010 or such earlier date
as the Commitments shall terminate pursuant to the terms hereof (or, if such day
is not a Business Day, the next preceding Business Day).

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

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

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

“Subsidiary” means any subsidiary of the Borrower.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

“Transactions” means the execution, delivery and performance by the Borrower of
the Loan Documents, the borrowing of Loans and the use of the proceeds thereof.

 

“Type” when used in reference to any Loan, refers to whether the rate of
interest on such Loan is determined by reference to the Adjusted LIBO Rate or
the Alternate Base Rate.

 

“W&R Fund” means all closed-end funds and open-end mutual funds sponsored by the
Borrower or any of its Subsidiaries or for which the Borrower or any of its
Subsidiaries provides investment advisory, management, administrative,
supervisory, consulting, underwriting or similar services.

 

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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.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  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 the Borrower 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 Required 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.

 

ARTICLE II

 

The Credits

 

SECTION 2.01.  Commitments.  Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in such Lender’s Revolving Credit Exposure exceeding such Lender’s
Commitment; provided, however, that after giving effect to any Borrowing, the
aggregate Revolving Credit Exposures of all Lenders shall not exceed the
aggregate Commitments of all Lenders then in effect.  Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Loans.  Loans may be ABR Loans or Eurodollar
Loans, as further provided herein.

 

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SECTION 2.02.  Loans and Borrowings.  (a)  Each Loan to be made as a part of a
Borrowing, continuation or conversion of Loans shall be made by the Lenders
ratably in accordance with their Applicable Percentage.  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.

 

(b)           Subject to Section 2.10, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith.  Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

 

(c)           Each Borrowing of, conversion to, or continuation of Eurodollar
Loans shall be in a principal amount of $5,000,000 or a whole multiple of
$1,000,000 in excess thereof.  Each Borrowing of or conversion to ABR Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; provided that a Borrowing of ABR Loans may be in an aggregate
amount that is equal to the entire unused balance of the aggregate Commitments. 
Borrowings of more than one Type may be outstanding at the same time; provided
that there shall not at any time be more than a total of ten (10) Interest
Periods in effect with respect to Eurodollar Loans.

 

(d)           Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Eurodollar Loan if the Interest Period requested with respect thereto would
end after the Revolving Credit Termination Date.

 

SECTION 2.03.  Requests for Borrowings, Conversions and Continuations of Loans. 
Each Borrowing, each conversion of Loans from one Type to the other, and each
continuation of Eurodollar Loans shall be made upon the Borrower’s irrevocable
notice to the Administrative Agent, which may be given by telephone.  Each such
notice must be received by the Administrative Agent not later than 10:00 a.m.,
New York City time (a) three (3) Business Days before the date of the proposed
Borrowing of, conversion to or continuation of Eurodollar Loans or of any
conversion of Eurodollar Loans to ABR Loans, or (b) one (1) Business Day before
the date of the proposed Borrowing of any ABR Loans.  Each telephonic notice by
the Borrower pursuant to this Section 2.03 must be confirmed promptly by
delivery to the Administrative Agent of a written Revolving Borrowing Request,
appropriately completed and signed by a Financial Officer of the Borrower.  Each
such telephonic and written Revolving Borrowing Request shall specify the
following information in compliance with Section 2.02:

 

(i)            whether the Borrower is requesting a Borrowing, a conversion of
Loans from one Type to the other, or a continuation of Eurodollar Loans;

 

(ii)           the aggregate amount of the Loans to be borrowed, converted or
continued;

 

(iii)          the date (which shall be a Business Day) of such Borrowing,
conversion or continuation, as the case may be;

 

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(iv)          the Type of Loans to be borrowed or to which existing Loans are to
be converted;

 

(v)           in the case of a Borrowing of, conversion to, or continuation of
Eurodollar Loans, the duration of the Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of the term “Interest
Period”; and

 

(vi)          the location and number of the Borrower’s account to which Loans
are to be disbursed, which shall comply with the requirements of Section 2.04.

 

If no election as to the Type of Loan is specified in a Revolving Borrowing
Request or if the Borrower fails to give a timely notice requesting a conversion
or continuation, then the applicable Loan shall be made as, or converted to, an
ABR Loan.  Any such automatic conversion to an ABR Loan shall be effective as of
the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Loan.  If the Borrower requests a Borrowing of, conversion
to, or continuation of a Eurodollar Loan, but fails to specify an Interest
Period, then the Borrower shall be deemed to have selected an Interest Period of
one month’s duration.

 

After the occurrence and during the continuance of an Event of Default, no Loans
may be requested as, converted to or continued as Eurodollar Loans without the
consent of the Required Lenders.

 

Promptly following receipt of a Revolving Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing, conversion or continuation, and if no timely notice of a
conversion or continuation is provided by the Borrower, the Administrative Agent
shall notify each Lender of the details of any automatic conversion to ABR Loans
described in this Section.

 

SECTION 2.04.  Funding of Borrowings.  (a)  Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof in immediately available
funds by 12:00 noon, New York City time, at the Administrative Agent’s Office. 
Upon satisfaction of the applicable conditions set forth in Section 4.02, the
Administrative Agent will make such Loans available to the Borrower in like
funds as received by the Administrative Agent either by (i) crediting the
account of the Borrower on the books of the Administrative Agent with the amount
of such funds or (ii) wire transfer of such funds, in each case in accordance
with instructions provided to (and reasonably acceptable to) the Administrative
Agent by the Borrower in the applicable Revolving Borrowing Request.

 

(b)           The Administrative Agent shall promptly notify the Borrower and
the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Loans upon determination of such interest rate.  At any time that ABR
Loans are outstanding, the Administrative Agent shall notify the Borrower and
the Lenders of any change in the Prime Rate used in determining the Alternate
Base Rate promptly following the public announcement of such change.

 

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(c)           Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date 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 on such date in accordance with paragraph (a) of this
Section and may, in its sole discretion, 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 such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the
Administrative Agent in connection with the foregoing, or (ii) in the case of
the Borrower, the interest rate applicable to ABR 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 such amount to the Administrative Agent, then such amount shall
constitute such Lender’s Loan included in such Borrowing.  A notice of the
Administrative Agent to any Lender or the Borrower with respect to any amount
owing under this subsection (c) shall be conclusive, absent manifest error.

 

(d)           If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this Section 2.04, and such funds are not made available to the Borrower by
the Administrative Agent because the conditions to the applicable Borrowing set
forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.

 

(e)           Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

SECTION 2.05.  Termination and Reduction of Commitments.  (a)  Unless previously
terminated, the Commitments shall terminate on the Revolving Credit Termination
Date.

 

(b)           The Borrower may, upon notice to the Administrative Agent pursuant
to Section 2.05(c), at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $10,000,000,
and (ii) the Borrower shall not terminate or reduce the Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.07, the aggregate Revolving Credit Exposures of all Lenders would
exceed the aggregate Commitments of all Lenders then in effect.

 

(c)           The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (b) of this Section at
least three (3) 

 

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Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof.  Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable; provided that a notice of termination of the
Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied.  Any
termination or reduction of the Commitments shall be permanent.  Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their Applicable Percentage.  All fees accrued until the effective date of any
termination of the Commitments shall be paid on the effective date of such
termination.

 

SECTION 2.06.  Repayment of Loans; Evidence of Debt.  (a)  The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Revolving
Credit Termination Date (or such earlier date on which the Loans become due and
payable pursuant to Article VII).

 

(b)           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.

 

(c)           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.

 

(d)           The entries made in the accounts maintained pursuant to paragraph
(b) or (c) 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 limit or otherwise affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.  In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error.

 

(e)           Upon the request of any Lender made through the Administrative
Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records maintained pursuant to paragraph (b).  Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.

 

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SECTION 2.07.  Prepayment of Loans.  (a)  The Borrower shall have the right at
any time and from time to time to prepay any Loans in whole or in part, subject
to prior notice in accordance with paragraph (b) of this Section.

 

(b)                                 The Borrower shall notify the Administrative
Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in
the case of prepayment of a Eurodollar Loan, not later than 11:00 a.m., New York
City time, three (3) Business Days before the date of prepayment, or (ii) in the
case of prepayment of an ABR Loan, not later than 11:00 a.m., New York City
time, one (1) Business Day before the date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of the Loans to be prepaid and the Type(s) of Loans to be prepaid and, if
Eurodollar Loans are to be prepaid, the Interest Period(s) of such Loans;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by
Section 2.05, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.05.  Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof and of the amount of such Lender’s ratable share of such
prepayment.  Each partial prepayment of any Loans shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
provided in Section 2.02.  Any prepayment of a Eurodollar Loan shall be
accompanied by all accrued interest on the amount prepaid as required pursuant
to Section 2.09(d), together with any additional amounts required pursuant to
Section 2.12.  Each such prepayment shall be applied to the Loans of the Lenders
ratably in accordance with their respective Revolving Credit Exposure.

 

(c)                                  If for any reason the aggregate Revolving
Credit Exposures of all Lenders at any time exceeds the aggregate Commitments of
all Lenders then in effect, the Borrower shall immediately prepay Loans in an
aggregate amount equal to such excess.

 

SECTION 2.08.  Fees.  (a)  The Borrower agrees to pay to the Administrative
Agent for the account of each Lender, a facility fee which shall accrue at the
Applicable Rate on the daily amount of the Commitment of such Lender (whether
used or unused), during the Availability Period, including at any time during
which one or more of the conditions in Section 4.02 is not met; provided,
however, that (i) if such Lender continues to have any outstanding Loans after
the Availability Period, then such facility fee shall continue to accrue on the
daily amount of the outstanding Loans of such Lender from and including the date
on which the aggregate Commitments of all Lenders are terminated to, but
excluding, the date on which such Lender ceases to have any outstanding Loans
and (ii) if such Lender is a Defaulting Lender at any time, such facility fee
shall cease to accrue on, and the Borrower shall not be required to pay a
facility fee with respect to, the daily unused amount of the Commitment of such
Lender during such period of time such Lender is a Defaulting Lender.  Accrued
facility fees shall be payable in arrears on the last Business Day of March,
June, September and December of each year and on the date on which the
Commitments terminate, commencing on the first such date to occur after the
Closing Date; provided that any facility fees accruing after the date on which
the aggregate Commitments terminate shall be payable on demand.  The facility
fee owing with respect to each Lender shall be calculated quarterly in arrears,
and if there is any change in the Applicable Rate during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect. 
All

 

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facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

(b)                                 The Borrower shall pay to the Arranger and
the Administrative Agent, for their own respective accounts, fees in the amounts
and at the times specified in the Fee Letter.  Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.

 

(c)                                  The Borrower shall pay to the Lenders such
fees as shall have been separately agreed upon in writing in the amounts and at
the times so specified.  Such fees shall be fully earned when paid and shall not
be refundable for any reason whatsoever.

 

SECTION 2.09.  Interest.  (a)  Subject to the provisions of subsection
(c) below, the ABR Loans shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the Applicable Rate.

 

(b)                                 Subject to the provisions of subsection
(c) below, each Eurodollar Loan shall bear interest at a rate per annum equal to
the Adjusted LIBO Rate for the Interest Period in effect for such Eurodollar
Loan plus the Applicable Rate.

 

(c)                                  (i)                                     If
any amount of principal of any Loan is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable law.

 

(ii)                                  If any amount (other than principal of any
Loan) payable by the Borrower under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then upon the request of the Required Lenders, such
amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable law.

 

(iii)                               Upon the request of the Required Lenders,
while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Loans or any fee or other amount payable by
the Borrower hereunder at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable law.

 

(d)                                 Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan; provided that
(i) interest accrued pursuant to subsection (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than a prepayment of an ABR Loan prior to the end of the Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment, (iii) in the event of any conversion
of any Eurodollar Loan prior to the end of the Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion,
and (iv) all accrued interest shall be payable upon the Revolving Credit
Termination Date.

 

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(e)                                  All interest hereunder shall be computed on
the basis of a year of 365 days (or 366 days in a leap year), and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day); provided that any Loan that is repaid on the same day
on which it is made shall, subject to Section 2.14(a), bear interest for one
day.  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall
be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.

 

SECTION 2.10.  Alternate Rate of Interest.  (a)  If, in connection with any
request for a Eurodollar Loan or a conversion to or continuation thereof, the
Required Lenders determine that for any reason (which determination shall be
conclusive absent manifest error) that (a) dollar deposits are not being offered
to banks in the London interbank eurodollar market for the applicable amount and
Interest Period of such Eurodollar Loan, (b) adequate and reasonable means do
not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for any requested Interest Period with respect to a proposed
Eurodollar Loan; or (c) the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for any requested Interest Period with respect to a proposed Eurodollar Loan
will not adequately and fairly reflect the cost to such Lenders of funding such
Loan, then the Administrative Agent shall give notice thereof to the Borrower
and each Lender by telephone or telecopy as promptly as practicable thereafter. 
Until the Administrative Agent (upon the instruction of the Required Lenders)
revokes such notice, (i) any Revolving Borrowing Request that requests the
conversion of any Loan to, or continuation of any Loan as, a Eurodollar Loan
shall be ineffective, and (ii) if any Revolving Borrowing Request requests a
Borrowing of Eurodollar Loans, such Borrowing shall be made as an ABR Loan.

 

(b)                                 If any Lender determines that any law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable lending office to make, maintain or
fund Eurodollar Loans, or to determine or charge interest rates based upon the
LIBOR Rate, or any Governmental Authority has imposed material restrictions on
the authority of such Lender to purchase or sell, or to take deposits of,
dollars in the London interbank market, then, on notice thereof by such Lender
to the Borrower through the Administrative Agent, any obligation of such Lender
to make or continue Eurodollar Loans or to convert ABR Loans to Eurodollar Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist.  Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Loans of such Lender to ABR Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Loans to such day, or immediately, if such Lender may
not lawfully continue to maintain such Eurodollar Loans.

 

SECTION 2.11.  Increased Costs.  (a)  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 by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate); or

 

(ii)                                  subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Eurodollar Loan made by it, or
change the basis of taxation of

 

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payments to such Lender in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 2.13 and the imposition of, or any change in the
rate of, any Excluded Tax payable by such Lender); or

 

(iii)                               impose on any Lender or the London interbank
market any other condition affecting this Agreement or Eurodollar 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 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.

 

(b)                                 If any Lender determines that any Change in
Law 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 hereunder, 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)                                  A certificate of a Lender setting forth the
amount or amounts necessary to compensate such Lender or its holding company, as
the case may be, as specified in paragraph (a) or (b) of this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error.  The
Borrower shall pay such Lender the amount shown as due on any such certificate
within ten (10) days after receipt thereof.

 

(d)                                 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 or reductions incurred more than six (6) months 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; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect
thereof.

 

(e)                                  Subject to Section 2.11(d), all of the
Borrower’s obligations under this Section 2.11 shall survive termination of the
Commitments, repayment of all Loans and other obligations hereunder, and
resignation of the Administrative Agent.

 

SECTION 2.12.  Break Funding Payments.  In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (whether voluntary, mandatory, by reason of
acceleration, or otherwise), (b) the

 

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conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise), (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable under
Section 2.07(b) and is revoked in accordance herewith), or (d) the assignment of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.15, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event.  The Borrower shall also pay any
customary administrative fees charged by such Lender in connection with the
foregoing.  In the case of a Eurodollar Loan, the loss to any Lender
attributable to any such event shall be deemed to include an amount determined
by such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such
Loan for the period from the date of such payment, conversion, failure or
assignment to the last day of the then current Interest Period for such Loan
(or, in the case of a failure to borrow, convert or continue, the duration of
the Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate (in the case of a Eurodollar Loan) for such Interest Period,
over (ii) the amount of interest that such Lender would earn on such principal
amount for such period if such Lender were to invest such principal amount for
such period at the interest rate that would be bid by such Lender (or an
affiliate of such Lender) for dollar deposits from other banks in the eurodollar
market at the commencement of such period.  A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error.  The Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.  All of the
Borrower’s obligations under this Section 2.12 shall survive termination of the
Commitments, repayment of all Loans and other obligations hereunder, and
resignation of the Administrative Agent.

 

SECTION 2.13.  Taxes.  (a)  Any and all payments by or an account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

 

(b)                                 In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.

 

(c)                                  (i) The Borrower shall indemnify the
Administrative Agent and each Lender within ten (10) days after written 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) paid by the Administrative

 

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Agent or such Lender, as the case may be, 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.  The Borrower shall also, and
does hereby, indemnify the Administrative Agent, and shall make payment in
respect thereof within ten (10) days after demand therefor, for any amount which
a Lender for any reason fails to pay indefeasibly to the Administrative Agent as
required by clause (ii) of this subsection.  A certificate as to the amount of
such payment or liability delivered to the Borrower by a Lender or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(ii)                                  Without limiting the provisions of
subsection (a), (b) or (c) above, each Lender shall, and does hereby, indemnify
the Borrower and the Administrative Agent, and shall make payment in respect
thereof within ten (10) days after demand therefor, against any and all Taxes
and any and all related losses, claims, liabilities, penalties, interest and
expenses (including the fees, charges and disbursements of any counsel for the
Borrower or the Administrative Agent) incurred by or asserted against the
Borrower or the Administrative Agent by any Governmental Authority as a result
of the failure by such Lender to deliver, or as a result of the inaccuracy,
inadequacy or deficiency of, any documentation required to be delivered by such
Lender to the Borrower or the Administrative Agent pursuant to subsection (e). 
Each Lender hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender under this Agreement or any
other Loan Document against any amount due to the Administrative Agent under
this clause (ii).  The agreements in this clause (ii) shall survive the
resignation and/or replacement of the Administrative Agent, any assignment of
rights by, or the replacement of, a Lender.

 

(d)                                 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.

 

(e)                                  (i)  Each Lender shall deliver to the
Borrower and to the Administrative Agent, at the time or times prescribed by
applicable laws or when reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable laws or by the taxing authorities of any jurisdiction
and such other reasonably requested information as will permit the Borrower or
the Administrative Agent, as the case may be, to determine (A) whether or not
payments made hereunder or under any other Loan Document are subject to Taxes,
(B) if applicable, the required rate of withholding or deduction, and (C) such
Lender’s entitlement to any available exemption from, or reduction of,
applicable Taxes in respect of all payments to be made to such Lender by the
Borrower pursuant to this Agreement or otherwise to establish such Lender’s
status for withholding tax purposes in the applicable jurisdiction.

 

(ii)                                  Without limiting the generality of the
foregoing, if the Borrower is resident for tax purposes in the United States,

 

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(A)                              any Lender that is a “United States person”
within the meaning of Section 7701(a)(30) of the Code shall deliver to the
Borrower and the Administrative Agent executed originals of Internal Revenue
Service Form W-9 or such other documentation or information prescribed by
applicable laws or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent, as the case may
be, to determine whether or not such Lender is subject to backup withholding or
information reporting requirements; and

 

(B)                                each Foreign Lender that is entitled under
the Code or any applicable treaty to an exemption from or reduction of
withholding tax with respect to payments hereunder or under any other Loan
Document 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 the request of the Borrower or the Administrative
Agent, but only if such Foreign Lender is legally entitled to do so), whichever
of the following is applicable:

 

(I)                                    properly completed and executed originals
of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an
income tax treaty to which the United States is a party,

 

(II)                                properly completed and executed originals of
Internal Revenue Service Form W-8ECI,

 

(III)                            properly completed and executed originals of
Internal Revenue Service Form W-8IMY and all required supporting documentation,

 

(IV)                            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, in form and substance reasonably acceptable to the
Borrower, 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) properly completed and executed originals of  Internal Revenue Service
Form W-8BEN, or

 

(V)                                properly completed and executed originals of
any other form prescribed by applicable laws as a basis for

 

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claiming exemption from or a reduction in United States Federal withholding tax
together with such supplementary documentation as may be prescribed by
applicable laws to permit the Borrower or the Administrative Agent to determine
the withholding or deduction required to be made.

 

(iii)                               Each Lender shall promptly (A) notify the
Borrower and the Administrative Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (B) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its lending office) to avoid any requirement of applicable
laws of any jurisdiction that the Borrower or the Administrative Agent make any
withholding or deduction for taxes from amounts payable to such Lender.

 

(f)                                    Unless required by applicable laws, at no
time shall the Administrative Agent have any obligation to file for or otherwise
pursue on behalf of a Lender, or have any obligation to pay to any Lender, any
refund of Taxes withheld or deducted from funds paid for the account of such
Lender.

 

(g)                                 All of the Borrower’s obligations under this
Section 2.13 shall survive termination of the Commitments, repayment of all
Loans and other obligations hereunder, and resignation of the Administrative
Agent.

 

(h)                                 If the Administrative Agent or any Lender
determines, in its sole 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, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by the Borrower under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses incurred by
the 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), provided that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund 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 2.14.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 
(a)  All payments to be made by the Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff.  The Borrower
shall make each payment required to be made by it hereunder (whether of
principal, interest, fees, or under Sections 2.11, 2.12 or 2.13, or otherwise)
to the Administrative Agent, for the account of the respective Lenders to which
such payment is owed, at the Administrative Agent’s Office prior to 12:00 noon,
New

 

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York City time, on the date when due, in immediately available funds.  Any
amounts received after such time on any date shall be deemed to have been
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.  The Administrative Agent will promptly distribute to
each Lender its Applicable Percentage (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to such
Lender (or as otherwise directed by such Lender).  If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension.  All payments hereunder shall be made in dollars.

 

(b)                                 If at any time the funds received by the
Administrative Agent hereunder are insufficient to pay fully all principal,
interest, fees and other amounts then due and payable under this Agreement or
any other Loan Document, such funds shall be applied as set forth in
Article VII.

 

(c)                                  If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Loans and accrued
interest thereon than the proportion received by any other Lender, then the
Lender receiving such greater proportion shall (i) notify the Administrative
Agent of such fact and (ii) purchase (for cash at face value) participations in
the Loans of other Lenders, or make such other adjustments as shall be
equitable, to the extent necessary 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; 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 paragraph shall not be construed to
apply to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
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 set-off 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.

 

(d)                                 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

 

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the greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.  A notice of the Administrative Agent to any Lender with respect
to any amount owing under this subsection (d) shall be conclusive, absent
manifest error.

 

(e)                                  The obligations of the Lenders hereunder to
make Loans and to make payments pursuant to Section 9.03(c) are several and not
joint.  The failure of any Lender to make any Loan or to make any payment under
Section 9.03(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Loan or
to make its payment under Section 9.03(c).

 

(f)                                    If any Lender shall fail to make any
payment required to be made by it pursuant to Sections 2.04(c), 2.14(d) or
9.03(c), then the Administrative Agent may, in its discretion (notwithstanding
any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s
obligations under such Sections until all such unsatisfied obligations are fully
paid.

 

SECTION 2.15.  Mitigation Obligations; Replacement of Lenders.  (a)  If any
Lender requests compensation under Section 2.11, 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 2.13, or if the Borrower is required
to pay any additional amount as a result of a Lender, pursuant to
Section 2.02(b), making its Loans through a particular domestic or foreign
branch of such Lender or through an Affiliate of such Lender, 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 2.11 or 2.13 or as a result of the exercise of its
discretion under Section 2.02(b), 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)                                 If any Lender requests compensation under
Section 2.11, 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 2.13, or if any Lender is a Defaulting Lender, 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 9.04), 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) the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 9.04, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents from the
assignee (to the extent of such outstanding principal and accrued

 

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interest and fees) or the Borrower (in the case of all other amounts), (iii) in
the case of any such assignment resulting from a claim for compensation under
Section 2.11 or payments required to be made pursuant to Section 2.13, such
assignment will result in a reduction in such compensation or payments, and
(iv) such assignment does not conflict with any applicable law.  A Lender shall
not be required to make any such assignment and 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 2.16.  Increase in Commitments.

 

(a)                                  Provided no Default has occurred and is
continuing, upon notice to the Administrative Agent (which shall promptly notify
the Lenders), the Borrower may from time to time, request an increase in the
aggregate amount of the Commitments by an amount (for all such requests) not
exceeding $75,000,000 in the aggregate; provided that any such request for an
increase shall be in a minimum amount of $10,000,000.  Any such increase in the
aggregate Commitments may be provided by any Lender willing to participate in
such increase (each such Lender, a “Participating Lender”), or, subject to the
approval of the Administrative Agent, Eligible Assignees designated by the
Borrower that are willing to participate in such increase (each, an “Increasing
Lender”) and to become Lenders pursuant to a “Joinder Agreement”, in form and
substance reasonably satisfactory to the Administrative Agent, pursuant to which
such Increasing Lender shall become a party to this Agreement.  The
Administrative Agent and the Borrower shall determine (A) the final allocation
of such increase among the Participating Lenders and Increasing Lenders and
Schedule 2.01 attached hereto shall be automatically updated to reflect the same
and (B) the effective date (the “Increase Effective Date”) of any such
increase.  Nothing contained herein shall constitute, or otherwise be deemed to
be, a commitment on the part of any Lender to increase its Commitment hereunder.

 

(b)                                 As a condition precedent to such increase,
the Borrower shall deliver to the Administrative Agent a certificate of the
Borrower dated as of the Increase Effective Date (in sufficient copies for each
Lender) signed by a duly authorized officer of the Borrower (i) certifying and
attaching the resolutions adopted by the Borrower approving or consenting to
such increase (which may be covered in resolutions authorizing Borrowings on and
after the Closing Date), and (ii) certifying that, before and after giving
effect to such increase, (A) the representations and warranties contained in
Article III and the other Loan Documents are true and correct on and as of the
Increase Effective Date, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct as of such earlier date, and except that for purposes of this
Section 2.16, the representations and warranties contained in
Section 3.04(a) shall be deemed to refer to the most recent financial statements
furnished in connection with the statements delivered pursuant to clauses
(a) and (b) of Section 5.01, and (B) no Default has occurred and is continuing. 
The Borrower shall prepay any Loans outstanding on the Increase Effective Date
(and pay any additional amounts required pursuant to Section 2.12) to the extent
necessary to keep the outstanding Loans ratable with any revised Applicable
Percentages arising from any nonratable increase in the Commitments under this
Section.

 

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(c)                                  This Section 2.16 shall supersede any
provisions in Section 2.14(c) or Section 9.02 to the contrary.

 

SECTION 2.17.  Defaulting Lenders.  Notwithstanding anything to the contrary
contained in this Agreement, if any Lender becomes a Defaulting Lender, then,
until such time as such Lender is no longer a Defaulting Lender, to the extent
permitted by applicable law:

 

(a)                                  Waivers and Amendments.  Such Defaulting
Lender’s right to approve or disapprove any amendment, waiver or consent with
respect to this Agreement shall be restricted as set forth in Section 9.02.

 

(b)                                 Reallocation of Loan Payments. Any payment
or prepayment (i) of any portion of the principal amount of Loans of such Lender
(whether voluntary or mandatory, at maturity, pursuant to Article VII or
otherwise) shall be applied, first, to the Loans of other Lenders as if such
Defaulting Lender had no Loans outstanding, until such time as the outstanding
principal amount of all Loans of each Lender shall equal its pro rata share
thereof based on its Applicable Percentage, ratably to the Lenders in accordance
with their Applicable Percentages of Loans being repaid or prepaid; and second,
to the then outstanding amounts (including interest thereon) owed under the
terms hereof by such Defaulting Lender to the Administrative Agent or (to the
extent the Administrative Agent has received notice thereof) to any other
Lender, ratably to the Persons entitled thereto, and (ii) any other amounts
thereafter received by the Administrative Agent for the account of such
Defaulting Lender (including amounts made available to the Administrative Agent
by such Defaulting Lender pursuant to Section 9.08) to have been paid to such
Defaulting Lender and applied on behalf of such Defaulting Lender, to the
liabilities above referred to in item second of clause (i) above.  Any of such
amounts as are reallocated pursuant to this subsection 2.17(b) that are payable
or paid (including pursuant to Section 9.08) to such Defaulting Lender shall be
deemed paid to such Defaulting Lender and applied by the Administrative Agent on
behalf of such Defaulting Lender, and each Lender hereby irrevocably consents
thereto.

 

(c)                                  Fees. Such Defaulting Lender right to any
facility fee shall be limited as provided in Section 2.08.

 

A Lender that has become a Defaulting Lender because of an event referenced in
the definition of Defaulting Lender may cure such status and shall no longer
constitute a Defaulting Lender as a result of such event when (i) such
Defaulting Lender shall have fully funded or paid, as applicable, all Loans or
other amounts required to be funded or paid by it hereunder as to which it is
delinquent (together, in each case, with such interest thereon as shall be
required to any Person as otherwise provided in this Agreement), (ii) the
Administrative Agent and the Borrower shall have received a certification by
such Defaulting Lender of its ability and intent to comply with the provisions
of this Agreement going forward, and (iii) each of (x) the Administrative Agent,
(y) any other Lender as to which a delinquent obligation was owed, and (z) in
the case of the failure to fund any Loan, the Borrower, shall have determined
(and notified the Administrative Agent) that they are satisfied, in their sole
discretion, that such Defaulting Lender intends to continue to perform its
obligations as a Lender hereunder and has all approvals required to enable it,
to continue to perform its obligations as a Lender hereunder.  No reference in
this subsection to an event being “cured” shall by itself preclude any claim by
any Person

 

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against any Lender that becomes a Defaulting Lender for such direct damages as
may otherwise be available to such Person arising from any failure to fund or
pay any amount when due hereunder or from any other event that gave rise to such
Lender’s status as a Defaulting Lender.

 

This Section 2.17 shall supersede any provisions in Section 2.14(c) or
Section 9.02 to the contrary.

 

ARTICLE III

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders that:

 

SECTION 3.01.  Organization; Powers.  The Borrower is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, and has all requisite power and authority to carry on its business
as now conducted.  Each Subsidiary of the Borrower is duly organized, validly
existing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except as set forth on Schedule 3.01, is in good standing under the laws of the
jurisdiction of its organization.  Except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, each of the Borrower and its Subsidiaries (a) is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required and (b) has all requisite governmental
licenses, authorizations, consents and approvals to own or lease its assets.

 

SECTION 3.02.  Authorization; Enforceability.  The Transactions are within the
Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action.  This Agreement and the other
Loan Documents have been duly executed and delivered by the Borrower and
constitute a legal, valid and binding obligation of the Borrower, 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.

 

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority or any other Person, except such as
have been obtained or made and are in full force and effect, (b) will not
violate any Requirement of Law, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries.

 

SECTION 3.04.  Financial Condition; No Material Adverse Effect.  (a)  The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal years ended 2007 and 2008, reported on by KPMG LLP, an independent
registered public accounting firm, and (ii) as

 

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of and for the fiscal quarters and the portion of the fiscal year ended
March 31, 2009 and June 30, 2009, 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.  The
Borrower and its Subsidiaries do not have any Guarantees, contingent
liabilities, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, in each case, that
are required by GAAP to be reflected or disclosed in such financial statements,
that are not reflected or disclosed in the most recent financial statements
referred to in this paragraph, except as disclosed on Schedule 3.04.

 

(b)                                 Since December 31, 2008, there has been no
event, development or circumstance that has had or could reasonably be expected,
either individually or in the aggregate, to have a Material Adverse Effect
(other than the Disclosed Matters).

 

SECTION 3.05.  Properties.  (a)  Each of the Borrower and its Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, and none of such property is subject to any
Lien except as permitted by Section 6.03.

 

(b)                                 Each of the Borrower and its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

SECTION 3.06.  Litigation and Environmental Matters.  (a)  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 the Borrower 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 (other than the Disclosed Matters), or
(ii) that involve this Agreement, the other Loan Documents or the Transactions.

 

(b)                                 Except for the Disclosed Matters and except
with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, neither the
Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability, or (iv) knows of any basis for any Environmental
Liability.

 

(c)                                  Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.

 

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SECTION 3.07.  Compliance with Laws and Agreements.  Each of the Borrower and
its Subsidiaries is in compliance with all Requirements of Laws applicable to it
or its property and all Contractual Obligations (including any material
investment advisory or management agreements) binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

 

SECTION 3.08.  Investment and Holding Company Status.  (a)  Neither the Borrower
nor any of its Subsidiaries is (i) an “investment company”, or a company
“controlled” by an “investment company”, each as defined in, or subject to
regulation under, the Investment Company Act of 1940, or (ii) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 2005.  Except for net capital and other requirements
imposed on registered broker-dealers, neither the Borrower nor any of its
Subsidiaries is subject to any regulation under any Requirement of Law (other
than Regulation X of the Board) that limits its ability to incur Indebtedness.

 

(b)                                 The Borrower and each Subsidiary of the
Borrower which is engaged in investment advisory or investment management
activities is, and at all times will be, duly registered as an investment
adviser as and to the extent required under the Investment Advisers Act of 1940,
as amended; and each Subsidiary of the Borrower which is engaged in
broker-dealer business is, and at all times will be, duly registered as a
broker-dealer as and to the extent required under the Securities Exchange Act of
1934, as amended, and, as and to the extent required, is, and at all times will
be, a member in good standing of the Financial Industry Regulatory Authority.

 

SECTION 3.09.  Taxes.  Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves, or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.

 

SECTION 3.10.  ERISA.  No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which a
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 of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No. 158) did not, as of
the date of the most recent audited financial statements reflecting such
amounts, exceed by more than $10,000,000 the fair market value of the assets of
all such underfunded Plans.

 

SECTION 3.11.  Disclosure.  The Borrower has disclosed or made available to the
Lenders all agreements and instruments to which it or any of its Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. 
None of the reports, financial statements, certificates or other information
furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the execution and delivery of this Agreement or the
other Loan

 

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Documents or furnished to the Lenders pursuant hereto or thereto (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 and forward-looking statements, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

 

SECTION 3.12.  No Default.  Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect.  No
Default or Event of Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.

 

SECTION 3.13.  Subsidiaries.  Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, Part (a) of
Schedule 3.13 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the percentage of each class of
Capital Stock owned by the Borrower.  There are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
stock options or restricted stock granted to employees or directors and
directors’ qualifying shares) of any nature relating to any Capital Stock of the
Borrower or any Subsidiary.  The Borrower has no equity investments in any other
corporation or entity other than those specifically disclosed in Part (b) of
Schedule 3.13.  All of the outstanding Capital Stock of the Subsidiaries owned
by the Borrower have been validly issued, are fully paid and nonassessable and
are owned free and clear of all Liens.  All of the outstanding Capital Stock in
the Borrower has been validly issued and are fully paid and nonassessable.

 

SECTION 3.14.  Federal Regulations.  No part of the proceeds of any Loans will
be used for “buying” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect in any manner that violates the provisions of the
Regulations of the Board or for any other purpose that violates the provisions
of the Regulations of the Board.  If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.  No more than 25% of the consolidated assets of the Borrower and
its Subsidiaries (excluding treasury shares) consist of “margin stock” under
Regulation U as now and from time to time hereafter in effect.

 

SECTION 3.15.  No Burdensome Restrictions.  No Requirement of Law or Contractual
Obligation of the Borrower could reasonably be expected to have a Material
Adverse Effect.

 

SECTION 3.16.  Insurance.  The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where the Borrower or the applicable
Subsidiary operates.

 

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SECTION 3.17.  Taxpayer Identification Number.  The Borrower’s true and correct
U.S. taxpayer identification number is set forth on Schedule 9.01.

 

ARTICLE IV

 

Conditions

 

SECTION 4.01.  Conditions to Closing Date.  The obligations of the Lenders to
make Loans hereunder shall not become effective until the date on which each of
the following conditions precedent is satisfied (or waived in accordance with
Section 9.02):

 

(a)                                  The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a duly
authorized officer of the Borrower, each dated the Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

 

(i)                                     executed counterparts of this Agreement,
sufficient in number for distribution to the Administrative Agent, each Lender
and the Borrower;

 

(ii)                                  a Note executed by the Borrower in favor
of each Lender requesting a Note;

 

(iii)                               such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the authorization of
the Transactions and any other legal matters relating to the Borrower, this
Agreement, the other Loan Documents or the Transactions;

 

(iv)                              a favorable written opinion (addressed to the
Administrative Agent and the Lenders) of Daniel C. Schulte, the general counsel
of the Borrower, covering such matters relating to the Borrower, this Agreement,
the other Loan Documents or the Transactions as the Administrative Agent and the
Required Lenders shall reasonably request;

 

(v)                                 a favorable written opinion (addressed to
the Administrative Agent and the Lenders) of Fulbright & Jaworski L.L.P.,
counsel to the Borrower, as to the enforceability of this Agreement and the
other Loan Documents;

 

(vi)                              a certificate signed by the President, a Vice
President or a Financial Officer of the Borrower, certifying (a) that the
representations and warranties of the Borrower set forth in this Agreement are
true and correct on and as of the Closing Date, (b) that no Default has occurred
and is continuing as of the Closing Date or would result from any Borrowing to
occur on the Closing Date, (c) that since December 31, 2008, there has been no
event, development or circumstance that has had or could reasonably be expected,
either individually or in the aggregate, to have a Material Adverse Effect, and
(d) the current Debt Ratings of the Borrower;

 

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(vii)                           incumbency certificates and/or other
certificates of duly authorized officers of the Borrower as the Administrative
Agent may require evidencing the identity, authority and capacity of each
officer of the Borrower authorized to act on behalf of the Borrower in
connection with this Agreement and the other Loan Documents;

 

(viii)                        evidence that the Existing Credit Agreement has
been or concurrently with the Closing Date is being terminated;

 

(ix)                                such other assurances, certificates,
documents, consents or opinions as the Administrative Agent or the Required
Lenders reasonably may require.

 

(b)                                 The Administrative Agent shall have received
all fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all reasonable
out-of-pocket expenses (including, without limitation, fees, charges and
disbursements of counsel to the Administrative Agent (directly to such counsel
if requested by the Administrative Agent)) required to be reimbursed or paid by
the Borrower hereunder.

 

(c)                                  All governmental and third party approvals
necessary in connection with the continuing operations of the Borrower and its
Subsidiaries and the transactions contemplated hereby shall have been obtained
and be in full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
that would restrain, prevent or otherwise impose adverse conditions on the
financing contemplated hereby.

 

(d)                                 The Lenders shall have received (a) audited
consolidated financial statements of the Borrower for the 2007 and 2008 fiscal
years, and (b) unaudited interim consolidated financial statements of the
Borrower for each quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (a) of this
paragraph as to which such financial statements are available, and such
financial statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition of
the Borrower, as reflected in the financial statements or projections contained
in the Confidential Information Memorandum.

 

(e)                                  The Closing Date shall have occurred on or
before October 5, 2009.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding.  Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York City time, on
October 5, 2009 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).

 

Without limiting the generality of the provisions of the last paragraph of
Section 8.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each Lender that has signed this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document or other matter required thereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative

 

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Agent shall have received notice from such Lender prior to the proposed Closing
Date specifying its objection thereto.

 

SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loan
on the occasion of any Borrowing (including, without limitation, its initial
Loan) is subject to the satisfaction of the following conditions:

 

(a)                                  The representations and warranties of the
Borrower set forth in this Agreement (with the exception of the representation
and warranty contained in Section 3.04(b)) shall be true and correct on and as
of the date of such Borrowing except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date, and except that for purposes of this
Section 4.02, the representations and warranties contained in
Section 3.04(a) shall be deemed to refer to the most recent financial statements
furnished in connection with the statements delivered pursuant to clauses
(a) and (b) of Section 5.01, as applicable.

 

(b)                                 At the time of and immediately after giving
effect to such Borrowing, no Default shall have occurred and be continuing.

 

(c)                                  The Administrative Agent shall have
received a Revolving Borrowing Request in accordance with the requirements
hereof.

 

Each Borrowing and the increase of the aggregate Commitments pursuant to
Section 2.16 shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a) and
(b) of this Section (with references to “such Borrowing” being deemed to be
references to any such increase, as appropriate), provided that such increase of
the aggregate Commitments shall also be deemed to constitute a representation
and warranty by the Borrower that the matters specified in Section 3.04(b) are
true and correct on and as of the date thereof.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other amounts payable hereunder shall
have been paid in full, the Borrower covenants and agrees with the Lenders that:

 

SECTION 5.01.  Financial Statements and Other Information.  The Borrower will
furnish to the Administrative Agent and each Lender:

 

(a)                                  within 90 days after the end of each fiscal
year of the Borrower, the annual report of the Borrower on Form 10-K filed by
the Borrower with the SEC;

 

(b)                                 within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of the Borrower, the quarterly
report of the Borrower on Form 10-Q filed by the Borrower with the SEC;

 

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(c)                                  concurrently with any delivery of financial
statements under clause (a) or (b) above, a Compliance Certificate signed by a
Financial Officer of the Borrower (i) 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, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section 6.01, and
(iii) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

 

(d)                                 promptly after the same become publicly
available, copies of all annual reports on Form 10-K, all quarterly reports on
Form 10-Q, all reports on Form 8-K (except for such reports required to be filed
pursuant to Item 2.02 of Form 8-K) and all proxy statements, filed by the
Borrower or any Subsidiary with the SEC, or with any national securities
exchange, or distributed by the Borrower to its shareholders generally, as the
case may be;

 

(e)                                  after the end of each calendar month, (i) a
schedule of the Net Asset Value of the investment companies and accounts managed
by the Borrower and its Subsidiaries on the last day of such calendar month and
certain other information, substantially in the form of Exhibit C-1, and (ii) a
schedule showing the calculation of the Aggregate Revenue Base as of the end of
such calendar month, and an analysis of changes from the preceding calendar
month, substantially in the form of Exhibit C-2, or in such other form as may be
reasonably satisfactory to the Administrative Agent;

 

(f)                                    promptly, and in any event within five
Business Days after receipt thereof by the Borrower or any of its Subsidiaries,
copies of each notice or other correspondence received from the SEC (or
comparable agency in any applicable non-U.S. jurisdiction) concerning any
non-routine investigation or possible non-routine investigation or other
non-routine inquiry by such agency regarding financial or other operational
results of the Borrower or any of its Subsidiaries;

 

(g)                                 promptly after the furnishing thereof,
copies of any statement or report furnished to any holder of debt securities of
the Borrower or any of its Subsidiaries pursuant to the terms of any indenture,
loan or credit or similar agreement and not otherwise required to be furnished
to the Lenders pursuant to any other clause of this Section 5.01; and

 

(h)                                 promptly following any request therefor,
such other information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the terms of
this Agreement and the other Loan Documents, as the Administrative Agent or any
Lender may reasonably request.

 

Documents required to be delivered pursuant to paragraphs (a), (b) and (d) of
this Section 5.01 (to the extent any such documents are included in materials
otherwise filed with the SEC) shall be deemed to have been delivered on the date
on which the Borrower provides notice to the Administrative Agent and/or the
Lenders, as required, as the case may be, that such documents have been posted
on the Borrower’s website on the Internet at the website address listed on
Schedule 9.01 or at such other website address listed in such notice and
accessible by the Administrative Agent and the Lenders without charge (whether a
commercial, third-party

 

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website or whether sponsored by the Administrative Agent); provided that the
Borrower shall deliver paper copies of the reports and financial statements
referred to in paragraphs (a), (b) and (d) of this Section 5.01 to the
Administrative Agent or any Lender who requests the Borrower to deliver such
paper copies until written notice to cease delivering paper copies is given by
the Administrative Agent or such Lender.  The Administrative Agent shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery, and each Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders (each, a
“Public Lender”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Affiliates, or the
respective securities of any of the foregoing, and who may be engaged in
investment and other market-related activities with respect to such Persons’
securities.  The Borrower hereby agrees that (w) all Borrower Materials that are
to be made available to Public Lenders shall be clearly and conspicuously marked
“PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
“PUBLIC,” the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower or
its securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
Information, they shall be treated as set forth in Section 9.12); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a
portion of the Platform designated “Public Side Information;” and (z) the
Administrative Agent and the Arranger shall be entitled to treat any Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform that is not designated “Public Side Information.” 
Notwithstanding the foregoing, the Borrower shall be under no obligation to mark
any Borrower Materials “PUBLIC.”

 

SECTION 5.02.  Notices of Material Events.  The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:

 

(a)                                  the occurrence of any Default;

 

(b)                                 the filing or commencement of any action,
suit or proceeding by or before any arbitrator or Governmental Authority against
or affecting the Borrower or any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material Adverse Effect;

 

(c)                                  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 of the Borrower and its
Subsidiaries in an aggregate amount exceeding $5,000,000;

 

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(d)                                 any suspension or termination of the
registration of the Borrower or any of its Subsidiaries as an investment adviser
under the Investment Advisers Act of 1940, as amended, or any cancellation or
expiration without renewal of any material investment advisory agreement or
similar contract to which the Borrower or any of its Subsidiaries is a party;

 

(e)                                  of any material change in accounting
policies or financial reporting practices by the Borrower or any Subsidiary;

 

(f)                                    of any announcement by Moody’s or S&P of
any change in a Debt Rating; and

 

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

 

Each notice delivered under this Section 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.  The Borrower may, by delivering
to the Administrative Agent written notice specifically referring to this
Section 5.02, notify the Lenders that the Borrower wishes to amend any Schedule
to this Agreement to include information about events, occurrences, or
transactions arising after the Closing Date that would render untrue any
representation or warranty by the Borrower under or pursuant to this Agreement. 
Such amendment will be deemed effective as of the date that such notice is
delivered to the Administrative Agent upon the Administrative Agent giving
notice to the Borrower and the Lenders within 10 Business Days from the receipt
thereof that the Required Lenders have consented thereto; provided, however,
that the consent of the Required Lenders shall not be required to amend Schedule
3.13 and Schedule 9.01.

 

SECTION 5.03.  Existence; Conduct of Business.  The Borrower will, and will
cause each of its Subsidiaries to, (a) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and good standing under the laws of the jurisdiction of its
organization and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 6.04, and (b) comply with all Contractual Obligations and Requirements
of Law except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

SECTION 5.04.  Payment of Obligations.  The Borrower will, and will cause each
of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, and (c) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse
Effect.

 

SECTION 5.05.  Maintenance of Properties; Insurance.  The Borrower will, and
will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) 

 

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maintain, with financially sound and reputable insurance companies not
Affiliates of the Borrower, 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.

 

SECTION 5.06.  Books and Records; Inspection Rights.  The Borrower will, and
will cause each of its Subsidiaries to, (a) keep proper books of record and
account in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all dealings and transactions in relation
to its business and activities, and (b) maintain such books of record and
account in material conformity with all applicable requirements of any
Governmental Authority having regulatory jurisdiction over the Borrower or such
Subsidiary, as the case may be.  The Borrower 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;
provided, however, that upon the occurrence and during the continuance of an
Event of Default, the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.

 

SECTION 5.07.  Compliance with Laws.  The Borrower will, and will cause each of
its Subsidiaries to, comply with all Requirements of Laws applicable to it or
its property and maintain all registrations and memberships with any
Governmental Authority, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

 

SECTION 5.08.  Use of Proceeds.  The proceeds of the Loans will be used to
finance the payment by the Borrower of outstanding Indebtedness under the
Existing Credit Agreement, to pay related fees and expenses and for general
corporate purposes not in contravention of any law, including but not limited
(a) to repurchase shares of the Borrower’s Class A Common Stock, and (b) to
consummate Permitted Acquisitions.  No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X.

 

SECTION 5.09.  Environmental Laws.  The Borrower will, and will cause each of
its Subsidiaries to, (a) comply with all applicable Environmental Laws, and
obtain and comply with and maintain any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, and (b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws, except in each case to the extent that non-compliance therewith could not
reasonably be expected to result in a Material Adverse Effect.

 

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ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees and other amounts payable hereunder shall
have been paid in full, the Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01.  Financial Condition Covenants.

 

(a)                                  Consolidated Leverage Ratio.  The Borrower
shall not permit the Consolidated Leverage Ratio as at the last day of any
Reference Period to equal or exceed the ratio of 3.0 to 1.0.

 

(b)                                 Consolidated Interest Coverage Ratio.  The
Borrower shall not permit the Consolidated Interest Coverage Ratio as at the
last day of any Reference Period to be less than or equal to the ratio of 4.0 to
1.0.

 

SECTION 6.02.  Indebtedness.  The Borrower will not permit any Subsidiary to
create, incur, assume or permit to exist any Indebtedness, except:

 

(a)                                  Indebtedness existing on the date hereof
and set forth in Schedule 6.02, but not any extensions, renewals or replacements
of any such Indebtedness and without increasing, or shortening the maturity of,
the principal amount thereof;

 

(b)                                 Indebtedness of any Subsidiary to the
Borrower or any other Subsidiary;

 

(c)                                  Indebtedness of any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof; provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement, and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (d) shall not exceed $10,000,000 at any
time outstanding;

 

(d)                                 Indebtedness of any Person that becomes a
Subsidiary after the date hereof; provided that such Indebtedness exists at the
time such Person becomes a Subsidiary and is not created in contemplation of or
in connection with such Person becoming a Subsidiary;

 

(e)                                  Indebtedness of any Subsidiary as an
account party in respect of trade letters of credit; and

 

(f)                                    Other unsecured Indebtedness (including
unsecured Guarantees of Indebtedness of the Borrower) in an aggregate principal
amount not exceeding $25,000,000 at any time outstanding.

 

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SECTION 6.03.  Liens.  The Borrower will not, and will not permit any Subsidiary
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:

 

(a)                                  Permitted Encumbrances;

 

(b)                                 any Lien on any property or asset of the
Borrower or any Subsidiary existing on the date hereof and set forth in Schedule
6.03; provided that (i) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary, and (ii) such Lien shall secure only those
obligations which it secures on the date hereof;

 

(c)                                  any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other property or assets of the Borrower or any
Subsidiary, and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be; and

 

(d)                                 Liens on property, plant and equipment
acquired, constructed or improved by the Borrower or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by clause (d) of
Section 6.02, (ii) such security interests and the Indebtedness secured thereby
are incurred prior to or within 90 days after such acquisition or the completion
of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed 70% of the cost of acquiring, constructing or improving such
property, plant and equipment, and (iv) such security interests shall not apply
to any other property or assets of the Borrower or any Subsidiary.

 

SECTION 6.04.  Fundamental Changes.  (a) The Borrower will not, and will not
permit any Subsidiary to, 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, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any other Person, including a Subsidiary, may
merge into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction
in which the surviving entity is a Subsidiary, (iii) any Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary, (iv) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders,
and (v) so long as no Event of Default has occurred or is continuing or would
result therefrom, the Borrower may merge into or consolidate with another Person
in a transaction in which such other Person is the surviving entity if such
other Person (x) is organized and validly existing under the laws of the United
States or any State thereof, (y) such Person shall assume all obligations of the

 

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Borrower hereunder, pursuant to an assumption agreement in form and substance
reasonably satisfactory to the Administrative Agent, and (z) the Administrative
Agent shall have received a favorable opinion of counsel to such other Person
covering such matters relating to such assumption as the Administrative Agent
may reasonably request, and which opinion shall otherwise be in form and
substance satisfactory to the Administrative Agent; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section 6.05.

 

(b)                                 The Borrower will not, and will not permit
any of its Subsidiaries to, engage to any material extent in any business other
than businesses of the type conducted by the Borrower and its Subsidiaries on
the date of execution of this Agreement and businesses reasonably related
thereto.

 

SECTION 6.05.  Investments, Loans, Advances, Guarantees and Acquisitions;
Hedging Agreements.  (a) The Borrower will not, and will not permit any of its
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:

 

(i)                                     Permitted Investments;

 

(ii)                                  investments by the Borrower in the capital
stock of its Subsidiaries (whether now existing or formed following the Closing
Date);

 

(iii)                               loans or advances made by the Borrower to
any Subsidiary and made by any Subsidiary to the Borrower or any other
Subsidiary;

 

(iv)                              Guarantees constituting Indebtedness permitted
by Section 6.02;

 

(v)                                 Permitted Acquisitions; and

 

(vi)                              other investments, loans, advances, guarantees
or acquisitions in an aggregate principal amount not exceeding $40,000,000 at
any time outstanding.

 

(b)                                 The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities and not for purposes of
speculation or taking a “market view”.

 

SECTION 6.06.  Restricted Payments.  The Borrower will not, and will not permit
any of its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except (a) the Borrower or any of its
Subsidiaries may declare and pay

 

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dividends (whether in cash, securities or other property) with respect to its
capital stock, provided that, in the case of any such declaration or payment by
the Borrower, no Default or Event of Default has occurred or is continuing or
would result therefrom, (b) the Borrower may make Restricted Payments pursuant
to and in accordance with stock option plans or other benefit plans for
management or employees of the Borrower and its Subsidiaries, and (c) the
Borrower may, in addition to the foregoing, repurchase shares of the Borrower’s
Class A Common Stock and options therefor granted by the Borrower pursuant to
its employee stock option plans.

 

SECTION 6.07.  Transactions with Affiliates.  The Borrower will not, and will
not 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 (a) 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,
(b) transactions between or among the Borrower and its wholly owned Subsidiaries
not involving any other Affiliate, and (c) any Restricted Payment permitted by
Section 6.06.

 

SECTION 6.08.  Restrictive Agreements.  The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement,
(ii) the foregoing shall not apply to restrictions and conditions existing on
the date hereof identified on Schedule 6.08 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases restricting the assignment thereof.

 

SECTION 6.09.  Capital Expenditures.  The Borrower will not, and will not permit
any of its Subsidiaries to, make or commit to make any Capital Expenditure,
except Capital Expenditures of the Borrower and its Subsidiaries in the ordinary
course of business not exceeding $40,000,000 in the aggregate during the term of
this Agreement.

 

SECTION 6.10.  Sales and Leasebacks.  The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any arrangement with any Person providing
for the leasing by the Borrower or any Subsidiary of real or personal property
that has been or is to be sold or transferred by the Borrower or such Subsidiary
to such Person or to any other Person to

 

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whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of the Borrower or such Subsidiary (a
“Sale/Leaseback Transaction”), except Sale/Leaseback Transactions entered into
with respect to the real property listed on Schedule 6.10.

 

SECTION 6.11.  Changes in Fiscal Periods.  The Borrower will not permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower’s method of determining fiscal quarters.

 

SECTION 6.12.  Optional Payments and Modifications of Certain Debt Instruments. 
The Borrower will not permit any of its Subsidiaries to make or offer to make
any optional or voluntary payment, prepayment, repurchase or redemption of or
otherwise optionally or voluntarily defease any Indebtedness, or amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms relating to the payment or
prepayment of principal of or interest on, any such Indebtedness (other than any
such amendment, modification, waiver or other change that would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon).

 

SECTION 6.13.  Use of Proceeds.  The Borrower will not use the proceeds of any
Loan, whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of Regulation
U of the Regulations of the Board) or to extend credit to others for the purpose
of purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose, in each case so as to result in a violation of
Regulation U.

 

ARTICLE VII

 

Events of Default

 

If any of the following events (“Events of Default”) shall occur:

 

(a)                                  the Borrower shall fail to pay any
principal of any Loan 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 any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable 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 (5) days;

 

(c)                                  any representation or warranty made or
deemed made by or on behalf of the Borrower or any Subsidiary in or in
connection with this Agreement or any amendment or modification hereof, 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, shall prove to have been materially incorrect when made or
deemed made;

 

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(d)                                 the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Sections 501, 5.02,
5.03 (with respect to the Borrower’s existence), 5.06 (with respect to the
inspection rights of the Administrative Agent and the Lenders) or 5.08 or in
Article VI;

 

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

 

(f)                                    the Borrower or any Subsidiary 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 clause (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 Subsidiary 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 Subsidiary 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 Subsidiary 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
Article, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
Subsidiary 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 Subsidiary shall
become unable, admit in writing or fail generally to pay its debts as they
become due;

 

(k)                                  one or more judgments for the payment of
money in an aggregate amount in excess of $10,000,000 shall be rendered against
the Borrower, any Subsidiary or any

 

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combination thereof and the same shall remain undischarged for a period of 30
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 Subsidiary to enforce any such judgment;

 

(l)                                     an ERISA Event shall have occurred that,
in the opinion of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in a Material
Adverse Effect;

 

(m)                               any material provision of this Agreement or
any other Loan Document, at any time after its execution and delivery and for
any reason other than as expressly permitted hereunder or thereunder or
satisfaction in full of all the obligations of the Borrower hereunder or
thereunder, ceases to be in full force and effect; or the Borrower or any other
Person contests in any manner the validity or enforceability of any provision of
any Loan Document; or the Borrower denies that it has any or further liability
or obligation under any provision of any Loan Document, or purports to revoke,
terminate or rescind any provision of any Loan Document; or

 

(n)                                 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 Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required 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/or (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 Article, 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.

 

After the exercise of remedies provided for in this Article VII (or after the
Loans have automatically become immediately due and payable after the occurrence
of any event with respect to the Borrower described in clause (h) or (i) of this
Article), any amounts received on account of all Loans, fees and other
obligations of the Borrower accrued hereunder, shall be applied by the
Administrative Agent in the following order:

 

(i)                                     First, to payment of that portion of the
obligations constituting fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Administrative
Agent and amounts payable under Sections 2.11, 2.12 and 2.13) payable to the
Administrative Agent in its capacity as such;

 

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(ii)                                  Second, to payment of that portion of the
obligations constituting fees, indemnities and other amounts (other than
principal and interest) payable to the Lenders (including fees, charges and
disbursements of counsel to the respective Lenders and amounts payable under
Sections 2.11, 2.12 and 2.13), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;

 

(iii)                               Third, to payment of that portion of the
obligations constituting accrued and unpaid interest on the Loans, ratably among
the Lenders in proportion to the respective amounts described in this clause
Third held by them;

 

(iv)                              Fourth, to payment of that portion of the
obligations constituting unpaid principal of the Loans, ratably among the
Lenders in proportion to the respective amounts described in this clause Fourth
held by them;

 

(v)                                 Last, the balance, if any, after all of the
other obligations and amounts due and payable hereunder have been indefeasibly
paid in full, to the Borrower or as otherwise required by law.

 

ARTICLE VIII

 

The Administrative Agent

 

SECTION 8.01.  Appointment and Authority.  Each of the Lenders hereby
irrevocably appoints Bank of America to act on its behalf as the Administrative
Agent hereunder and under the other 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 not have rights as
a third party beneficiary of any of such provisions.

 

SECTION 8.02.  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 8.03.  Exculpatory Provisions.  The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents.  Without limiting the generality of the foregoing, the
Administrative Agent:

 

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

 

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(b)                                 shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other 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 Requirement of Law; and

 

(c)                                  shall not, except as expressly set forth
herein and in the other 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.

 

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 Required 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 Sections 9.02 and Article VII) 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
written notice describing such Default is given to the Administrative Agent by
the Borrower or a Lender.

 

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

 

SECTION 8.04.  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

 

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any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

SECTION 8.05.  Delegation of Duties.  The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other 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 8.06.  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 Required Lenders shall have
the right, in consultation with the Borrower, to appoint a successor, which
shall be a bank with an office in the United States, or an Affiliate of any such
bank with an office in the United States.  If no such successor shall have been
so appointed by the Required 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 (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents and (2) 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 Required Lenders appoint a successor
Administrative Agent as provided for above in this Section.  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
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section).  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 hereunder and under the
other Loan Documents, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents 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 8.07.  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

 

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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 this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

 

SECTION 8.08.  No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, the Arranger shall have no powers, duties or responsibilities
under this Agreement.

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01.  Notices; Effectiveness; Electronic Communication.

 

(a)                                  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) 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, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

 

(i)                                     if to the Borrower or the Administrative
Agent to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 9.01; and

 

(ii)                                  if to any other Lender, to the address,
telecopier number, electronic mail address or telephone number specified in its
Administrative Questionnaire.

 

Notices and other communications sent by hand or overnight courier service, or
mailed by certified or registered mail, shall be deemed to have been given when
received; notices and other communications 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).  Notices and other
communications delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

 

(b)                                 Notices and other communications to the
Lenders may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender, as applicable, has notified
the Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications

 

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pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(c)                                  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER
MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
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 ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR
THE PLATFORM.  In no event shall the Administrative Agent or any of its Related
Parties (collectively, the “Agent Parties”) have any liability to the Borrower,
any Lender or any other Person for losses, claims, damages, liabilities or
expenses of any kind (whether in tort, contract or otherwise) arising out of the
Borrower’s or the Administrative Agent’s transmission of Borrower Materials
through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Agent Party; provided, however, that in no event
shall any Agent Party have any liability to the Borrower, any Lender or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

 

(d)                                 Each of the Borrower and the Administrative
Agent Lender may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to the other parties hereto.  Each
other Lender may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to the Borrower, and the
Administrative Agent.  In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender. 
Furthermore, each Public Lender agrees to cause at least one individual at or on
behalf of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and

 

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applicable law, including United States Federal and state securities laws, to
make reference to Borrower Materials that are not made available through the
“Public Side Information” portion of the Platform and that may contain material
non-public information with respect to the Borrower or its securities for
purposes of United States Federal or state securities laws.

 

(e)                                  The Administrative Agent and the Lenders
shall be entitled to rely and act upon any notices purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof.  The Borrower shall indemnify
the Administrative Agent, each Lender and the Related Parties of each of them
from all losses, costs, expenses and liabilities resulting from the reliance by
such Person on each notice purportedly given by or on behalf of the Borrower. 
All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.

 

SECTION 9.02.  Waivers; Amendments; Enforcement.  (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power.  The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver
of any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given.  Without limiting the generality of the foregoing, the making
of a Loan shall not be construed as a waiver of any Default, regardless of
whether the Administrative Agent or any Lender may have had notice or knowledge
of such Default at the time.

 

(b)                                 No Loan Document or any provision thereof
may be waived, amended or modified except pursuant to an agreement or agreements
in writing entered into by the Borrower and the Required Lenders or by the
Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) waive any condition set forth in
Section 4.01(a) without the written consent of each Lender, (ii) extend or
increase the Commitment of any Lender (or reinstate any Commitment terminated
pursuant to Article VII) without the written consent of such Lender,
(iii) reduce the principal amount of any Loan or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iv) postpone the scheduled date of payment of the
principal amount of any Loan, or any interest thereon, fees or other amounts due
to the Lenders (or any of them), or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender affected thereby, (v) change
Section 2.14(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender, or
(vi) change any of the provisions of this Section or the definition of “Required
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or

 

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modify any rights hereunder or make any determination or grant any consent
hereunder, without the  written consent of each Lender; provided further that
(x) no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent hereunder without the prior written consent
of the Administrative Agent, and (y) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties
thereto.  Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders may be effected with the consent of all Lenders other
than Defaulting Lenders), except that (x) the Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Lender and
(y) any waiver, amendment or the modification requiring the consent of all
Lenders or each affected Lender that by its terms affects any Defaulting Lender
more adversely than other affected Lenders shall require the consent of such
Defaulting Lender.

 

(c)                                  Notwithstanding anything to the contrary
contained herein or in any other Loan Document, the authority to enforce rights
and remedies hereunder and under the other Loan Documents against the Borrower
shall be vested exclusively in, and all actions and proceedings at law in
connection with such enforcement shall be instituted and maintained exclusively
by, the Administrative Agent in accordance with Article VII for the benefit of
all the Lenders; provided, however, that the foregoing shall not prohibit
(a) the Administrative Agent from exercising on its own behalf the rights and
remedies that inure to its benefit (solely in its capacity as Administrative
Agent) hereunder and under the other Loan Documents, (b) any Lender from
exercising setoff rights in accordance with Section 9.08 (subject to the terms
of Section 2.14), or (c) any Lender from filing proofs of claim or appearing and
filing pleadings on its own behalf during the pendency of a proceeding relative
to the Borrower under any bankruptcy or insolvency proceeding; and provided,
further, that if at any time there is no Person acting as Administrative Agent
hereunder and under the other Loan Documents, then (i) the Required Lenders
shall have the rights otherwise ascribed to the Administrative Agent pursuant to
Article VII and (ii) in addition to the matters set forth in clauses (b) and
(c) of the preceding proviso and subject to Section 2.14, any Lender may, with
the consent of the Required Lenders, enforce any rights and remedies available
to it and as authorized by the Required Lenders.

 

SECTION 9.03.  Expenses; Indemnity; Damage Waiver.  (a) The Borrower shall pay
(i) all reasonable, documented 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 facilities 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 protection of its rights (A) in 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.

 

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(b)                                 The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), 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 or any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
and thereto of their respective obligations hereunder and thereunder, the
consummation of the transactions contemplated hereby and thereby, or, in the
case of the Administrative Agent (and any sub-agent thereof) and its Related
Parties only, the administration of this Agreement and the other Loan Documents,
(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, 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)                                  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 sub-agent thereof), or any Related Party of the Administrative
Agent, each Lender severally agrees to pay to the Administrative Agent (or any
such sub-agent), or such Related Party, as the case may be, such Lender’s
Applicable 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 (or any such sub-agent) in its capacity as
such, or against any such Related Party acting for the Administrative Agent (or
any such sub-agent) in connection with such capacity.  The obligations of the
Lenders under this subsection (c) are subject to the provisions of
Section 2.14(e).

 

(d)                                 To the fullest extent permitted by
applicable law, the Borrower shall not assert, and hereby waives, any claim
against any Indemnitee, 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, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or the use of the proceeds
thereof.  No Indemnitee referred to in subsection (b) above shall be liable for
any damages arising from the use by unintended recipients of any

 

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information or other materials distributed to such unintended recipients by such
Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

 

(e)                                  All amounts due under this Section shall be
payable not later than five (5) days after written demand therefor.

 

(f)                                    The agreements in this Section shall
survive the resignation of the Administrative Agent, the replacement of any
Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all the other obligations hereunder.

 

SECTION 9.04.  Successors and Assigns.  (a) 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
not 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 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)                                 Any Lender may assign to one or more
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 any such assignment shall be subject to the following
conditions:

 

(i)                                     Minimum Amounts.

 

(A)                              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 or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                                in any case not described in subsection
(b)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance

 

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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
$5,000,000 unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met.

 

(ii)                                  Proportionate Amounts.  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 Loans or the Commitment assigned.

 

(iii)                               Required Consents.  No consent shall be
required for any assignment except to the extent required by subsection
(b)(i)(B) of this Section and, in addition:

 

(A)                              the consent of the Borrower (such consent not
to be unreasonably withheld or delayed) shall be required unless (1) an Event of
Default has occurred and is continuing at the time of such assignment or
(2) such assignment is to a Lender, an Affiliate of a Lender or an Approved
Fund; and

 

(B)                                the consent of the Administrative Agent (such
consent not to be unreasonably withheld or delayed) shall be required if such
assignment is to a Person that is not a Lender, an Affiliate of such Lender or
an Approved Fund with respect to such Lender;

 

(iv)                              Assignment and Assumption.  The parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee in the
amount of $3,500; provided, however, that the Administrative Agent may, in its
sole discretion, elect to waive such processing and recordation fee in the case
of any assignment.  The assignee, if it is not a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

(v)                                 No Assignment to Borrower or Defaulting
Lenders.  No such assignment shall be made to (A) the Borrower or any of the
Borrower’s Affiliates or Subsidiaries or (B) any Defaulting Lender or any of its
subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (B).

 

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(vi)                              No Assignment to Natural Persons.  No such
assignment shall be made to a natural person.

 

(vii)                           Certain Additional Payments. In connection with
any assignment of rights and obligations of any Defaulting Lender hereunder, no
such assignment shall be effective unless and until, in addition to the other
conditions thereto set forth herein, the parties to the assignment shall make
such additional payments to the Administrative Agent in an aggregate amount
sufficient, upon distribution thereof as appropriate (which may be outright
payment, purchases by the assignee of participations or subparticipations, or
other compensating actions, including funding, with the consent of the Borrower
and the Administrative Agent, the applicable pro rata share of Loans previously
requested but not funded by the Defaulting Lender, to each of which the
applicable assignee and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Administrative Agent or any Lender hereunder (and interest accrued thereon)
and (y) acquire (and fund as appropriate) its full pro rata share of all Loans
in accordance with its Applicable Percentage.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the 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 2.11, 2.12, 2.13 and 9.03 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender.  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)                                  The Administrative Agent, acting solely for
this purpose as an agent of the Borrower, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, the
designation of any Lender as a Defaulting Lender, 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.

 

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(d)           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 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, waiver or other modification described in the first proviso to
Section 9.02(b) that affects such Participant.  Subject to subsection (e) of
this Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.11, 2.12 and 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 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.14 as though it were a
Lender.

 

(e)           A Participant shall not be entitled to receive any greater payment
under Section 2.11 or 2.13 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.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 2.13 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.13(e) as though it were a Lender.

 

(f)            Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement (including under its
Note, if any) 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 9.05.  Survival.  All representations and warranties made hereunder and
in any other Loan Document or other document delivered pursuant hereto or
thereto or in connection herewith or therewith shall survive the execution and
delivery hereof and thereof.  Such representations and warranties have been or
will be relied upon by the Administrative Agent and each Lender, regardless of
any investigation made by the Administrative Agent or any Lender or on their
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Loan or any fee or any
other amount payable

 

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hereunder shall remain unpaid or unsatisfied.  The provisions of Sections 2.11,
2.12, 2.13 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.

 

SECTION 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be
executed in counterparts (and by different parties hereto on 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 4.01, 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 which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic imaging means shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 9.07.  Severability.  Any provision of this Agreement or any other Loan
Document 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 or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

 

SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all of the obligations
of the Borrower now or hereafter existing under this Agreement or any other Loan
Document owing 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 may be unmatured; provided, that in the event that any
Defaulting Lender shall exercise any such right of setoff, (x) all amounts so
set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Section 2.17 and, pending such
payment, shall be segregated by such Defaulting Lender from its other funds and
deemed held in trust for the benefit of the Administrative Agent and the
Lenders, and (y) the Defaulting Lender shall provide promptly to the
Administrative Agent a statement describing in reasonable detail the Obligations
owing to such Defaulting Lender as to which it exercised such right of setoff. 
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.

 

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SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process.  (a) 
This Agreement and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York (excluding the laws applicable to conflicts or choice of law
to the extent that the application of the law of another jurisdiction would be
required thereby).

 

(a)           The Borrower hereby 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 this
Agreement or any other Loan Document, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by 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 this Agreement or in any other Loan Document shall affect any
right that the Administrative Agent or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against the Borrower or its properties in the courts of any jurisdiction.

 

(b)           The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

(c)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01.  Nothing in this
Agreement or in any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.

 

SECTION 9.10.  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 THIS AGREEMENT OR ANY OTHER 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 THIS AGREEMENT AND THE OTHER LOAN

 

65

--------------------------------------------------------------------------------

 

DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

SECTION 9.11.  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.

 

SECTION 9.12.  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, trustees, advisors and 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, such as the National Association of Insurance Commissioners), (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 hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other 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 any
Eligible Assignee invited to be a Lender pursuant to Section 2.16 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 nonconfidential basis from a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received from
the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by the Borrower or any Subsidiary, provided that, in the
case of information received from the Borrower or any Subsidiary 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.

 

Each of the Administrative Agent and the Lenders acknowledges that (a) the
Information may include material non-public information concerning the Borrower
or a Subsidiary, as the case may be, (b) it has developed compliance procedures
regarding the use of material non-public information and (c) it will handle such
material non-public information in accordance with applicable law, including
United States Federal and state securities laws.

 

SECTION 9.13.  Interest Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with
all fees, charges

 

66

--------------------------------------------------------------------------------

 

and other amounts which are treated as interest on such Loan under applicable
law (collectively the “Charges”), shall exceed the maximum lawful rate (the
“Maximum Rate”) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan in accordance with applicable law, the
rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable in
respect of such Loan but were not payable as a result of the operation of this
Section shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or periods shall be increased (but not above the
Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.

 

SECTION 9.14.  No Advisory or Fiduciary Responsibility.  In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees, and acknowledges its
Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arranger
are arm’s-length commercial transactions between the Borrower and its
Affiliates, on the one hand, and the Administrative Agent and the Arranger, on
the other hand, (B) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate, and (C) the
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; (ii) (A) the Administrative Agent and the Arranger each is and has
been acting solely as a principal and, except as expressly agreed in writing by
the relevant parties, has not been, is not, and will not be acting as an
advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any
other Person and (B) neither the Administrative Agent nor the Arranger has any
obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent and
the Arranger and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower and
its Affiliates, and neither the Administrative Agent nor the Arranger has any
obligation to disclose any of such interests to the Borrower or its Affiliates. 
To the fullest extent permitted by law, the Borrower  hereby waives and releases
any claims that it may have against the Administrative Agent and the Arranger
with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

 

SECTION 9.15.  USA Patriot Act.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any 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 or the Administrative
Agent, as applicable, to identify the Borrower in accordance with the Act.  The
Borrower shall, promptly following a request by the Administrative Agent or any
Lender, provide all documentation and other information that the Administrative
Agent or such Lender

 

67

--------------------------------------------------------------------------------

 

requests in order to comply with its ongoing obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the
Act.

 

[Remainder of Page Left Intentionally Blank]

 

68

--------------------------------------------------------------------------------

 

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

 

 

 

Borrower:

 

 

 

 

 

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

 

 

By:

/s/ Daniel P. Connealy

 

Name:

Daniel P. Connealy

 

Title:

Senior Vice President and Chief

 

 

Financial Officer

 

 

 

 

 

 

 

Administrative Agent:

 

 

 

 

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

 

 

By:

/s/ Menna Cunningham

 

Name:

Menna Cunningham

 

Title:

Assistant Vice President

 

 

 

 

 

 

 

Lenders:

 

 

 

 

 

 

 

BANK OF AMERICA, N.A.

 

 

 

 

 

 

 

By:

/s/ Menna Cunningham

 

Name:

Menna Cunningham

 

Title:

Assistant Vice President

 

 

 

 

 

 

 

UMB BANK, N.A.

 

 

 

 

 

 

 

By:

/s/ David A. Proffitt

 

Name:

David A. Proffitt

 

Title:

Senior Vice President

 

WDR Credit Agreement (2009)

 

--------------------------------------------------------------------------------

 

 

Lenders (cont’d):

 

 

 

 

THE BANK OF NOVA SCOTIA

 

 

 

 

 

 

 

By:

/s/ David Mahmood

 

Name:

David Mahmood

 

Title:

Managing Director

 

 

 

 

 

 

 

CITIBANK, N.A.

 

 

 

 

 

 

 

By:

/s/ Clay D. Norrbom

 

Name:

Clay D. Norrbom

 

Title:

Director

 

 

 

 

 

 

 

WELLS FARGO BANK, N.A.

 

 

 

 

 

 

 

By:

/s/ Robert P. Callahan, Jr.

 

Name:

Robert P. Callahan, Jr.

 

Title:

Assistant Vice President

 

 

 

 

 

 

 

M & I MARSHALL & ILSLEY BANK

 

 

 

 

 

 

 

By:

/s/ David T. Hunt

 

Name:

David T. Hunt

 

Title:

Vice President

 

 

 

 

 

 

 

BANK MIDWEST, N.A.

 

 

 

 

 

 

 

By:

/s/ Brian Bower

 

Name:

Brian Bower

 

Title:

Vice President

 

WDR Credit Agreement (2009)

 

--------------------------------------------------------------------------------

 

 

Lenders (cont’d):

 

 

 

 

COMMERCE BANK, N.A.

 

 

 

 

 

 

 

By:

/s/ R. David Emley, Jr.

 

Name:

R. David Emley, Jr.

 

Title:

Vice President

 

WDR Credit Agreement (2009)

 

--------------------------------------------------------------------------------

 

SCHEDULE 2.01

 

COMMITMENTS

 

Lender

 

Commitment

 

Bank of America, N.A.

 

$

24,000,000.00

 

UMB Bank, N.A.

 

$

22,000,000.00

 

The Bank of Nova Scotia

 

$

17,000,000.00

 

Citibank, N.A.

 

$

17,000,000.00

 

Wells Fargo Bank, N.A.

 

$

17,000,000.00

 

M & I Marshall & Ilsley Bank

 

$

12,000,000.00

 

Bank Midwest, N.A.

 

$

8,000,000.00

 

Commerce Bank, N.A.

 

$

8,000,000.00

 

 

 

 

 

Total

 

$

125,000,000.00

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 3.01

 

GOOD STANDING

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE 3.04

 

FINANCIAL CONDITION

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE 3.06

 

DISCLOSED MATTERS

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE 3.13

 

SUBSIDIARIES

 

PART A

 

Name

 

Jurisdiction of
Incorporation
or Formation

 

% of Capital Stock
Owned by Borrower(1)

 

 

 

 

 

Waddell & Reed Financial Services, Inc.

 

Missouri

 

100%

 

 

 

 

 

Waddell & Reed, Inc.

 

Delaware

 

100%

 

 

 

 

 

Waddell & Reed Investment Management Company

 

Kansas

 

100%

 

 

 

 

 

Waddell & Reed Services Company

 

Missouri

 

100%

 

 

 

 

 

W&R Capital Management Group, Inc.

 

Delaware

 

100%

 

 

 

 

 

W&R Corporate LLC

 

Delaware

 

100%

 

 

 

 

 

Ivy Investment Management Company

 

Delaware

 

100%

 

 

 

 

 

Ivy Funds Distributor, Inc.

 

Florida

 

100%

 

 

 

 

 

W & R Insurance Agency, Inc.

 

Missouri

 

100%

 

 

 

 

 

W & R Insurance Agency of Alabama, Inc.

 

Alabama

 

100%

 

 

 

 

 

W & R Insurance Agency of Montana, Inc.

 

Montana

 

100%

 

 

 

 

 

W & R Insurance Agency of Nevada, Inc.

 

Nevada

 

100%

 

 

 

 

 

W & R Insurance Agency of Utah, Inc.

 

Utah

 

100%

 

 

 

 

 

W & R Insurance Agency of Wisconsin, Inc.

 

Wisconsin

 

100%

 

 

 

 

 

Unicon Agency, Inc.

 

New York

 

100%

 

 

 

 

 

Unicon Insurance Agency of Massachusetts, Inc.

 

Massachusetts

 

100%

 

 

 

 

 

Fiduciary Trust Company of New Hampshire

 

New Hampshire

 

100%

 

 

 

 

 

Legend Group Holdings, LLC

 

Delaware

 

100%

 

 

 

 

 

Legend Advisory Corporation

 

New York

 

100%

 

 

 

 

 

Legend Equities Corporation

 

Delaware

 

100%

 

 

 

 

 

Advisory Services Corporation

 

Nevada

 

100%

 

 

 

 

 

The Legend Group, Inc.

 

Delaware

 

100%

 

 

 

 

 

LEC Insurance Agency, Inc.

 

Texas

 

100%

 

--------------------------------------------------------------------------------

(1) Owned directly or indirectly through one or more wholly-owned subsidiaries

 

--------------------------------------------------------------------------------

 

PART B

 

Sciens Capital Partners, L.P.

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.02

 

EXISTING INDEBTEDNESS

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.03

 

EXISTING LIENS

 

1.                                      Aircraft Lease, dated as of
September 24, 2008 between Wilmington Trust Company, not in its individual
capacity, but solely as the Owner Trustee under Trust Agreement dated as of
April 3, 2006 as Lessor and Waddell & Reed, Inc. as Lessee.

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.08

 

EXISTING RESTRICTIONS

 

None

 

--------------------------------------------------------------------------------

 

SCHEDULE 6.10

 

SALE/LEASEBACK PROPERTIES

 

1.             6300 Lamar Avenue, Overland Park, Kansas

 

2.             6301 Glenwood, Overland Park, Kansas

 

--------------------------------------------------------------------------------

 

SCHEDULE 9.01

 

ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES

 

BORROWER:

 

Waddell & Reed Financial, Inc.

6300 Lamar Avenue

Overland Park, Kansas 66202

Attention:  Daniel P. Connealy, Senior Vice President and Chief Financial
Officer

Telephone: 913-236-2645

Telecopier: 913-236-1930

Electronic Mail: dconneal@waddell.com

Website Address:                                               www. waddell.com

U.S. Taxpayer Identification Number: 51-0261715

 

ADMINISTRATIVE AGENT:

 

Administrative Agent’s Office

(for payments and Requests for Borrowings):

Bank of America, N.A.

101 North Tryon Street

NC1-001-04-39

Charlotte, North Carolina 28255

Attention:  Eric Allen Smith

Telephone:  980.386.5115

Facsimile:  704.409.0273

Electronic Mail: eric.a.smith@bankofamerica.com

Account No.:   1366212250600

Ref:   Waddell & Reed Financial, Inc.

ABA# 026009593

 

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management Group

101 North Tryon Street

NC1-001-15-14

Charlotte, North Carolina 28255-0001

Attention: William A. Cessna

Telephone: 980.388.1639

Facsimile: 704.264.2501

Electronic Mail: william.a.cessna@bankofamerica.com

 

--------------------------------------------------------------------------------

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between
[the][each](1) Assignor identified in item 1 below ([the][each, an] “Assignor”)
and [the][each](2) Assignee identified in item 2 below ([the][each, an]
“Assignee”).  [It is understood and agreed that the rights and obligations of
[the Assignors][the Assignees](3) hereunder are several and not joint.](4) 
Capitalized terms used but not defined herein shall have the meanings given to
them in the Credit Agreement identified below (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][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all of [the Assignor’s][the
respective Assignors’] rights and obligations in [its capacity as a
Lender][their respective capacities as Lenders] 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 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)][the respective Assignors (in their respective capacities as Lenders)]
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 by [the][any]
Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being
referred to herein collectively as [the][an] “Assigned Interest”).  Each such
sale and assignment is without recourse to [the][any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the][any] Assignor.

 

1.                                       Assignor[s]:         
                                                                

 

--------------------------------------------------------------------------------

(1)                                     For bracketed language here and
elsewhere in this form relating to the Assignor(s), if the assignment is from a
single Assignor, choose the first bracketed language.  If the assignment is from
multiple Assignors, choose the second bracketed language.

 

(2)                                     For bracketed language here and
elsewhere in this form relating to the Assignee(s), if the assignment is to a
single Assignee, choose the first bracketed language.  If the assignment is to
multiple Assignees, choose the second bracketed language.

 

(3)                                     Select as appropriate.

 

(4)                                     Include bracketed language if there are
either multiple Assignors or multiple Assignees.

 

A-1

--------------------------------------------------------------------------------

 

                                                                

2.                                       Assignee[s]:        
                                                                

                                                                

 

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

 

3.                                      
Borrower:                                            Waddell & Reed
Financial, Inc.

 

4.                                       Administrative Agent:  Bank of America,
N.A., as the administrative agent under the Credit Agreement

 

5.                                       Credit Agreement:                      
Credit Agreement, dated as of October 5, 2009 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time), among
Waddell & Reed Financial, Inc., the Lenders from time to time party thereto, and
Bank of America, N.A., as Administrative Agent

 

6.                                       Assigned Interest:

 

Assignor[s](5)

 

Assignee[s](6)

 

Aggregate
Amount of
Commitment
for all Lenders(7)

 

Amount of
Commitment
Assigned

 

Percentage
Assigned of
Commitment

 

CUSIP
Number

 

 

 

 

 

$

 

$

 

 

%

 

 

 

 

 

 

$

 

$

 

 

%

 

 

 

 

 

 

$

 

$

 

 

%

 

 

 

[7.                                   Trade Date:          
                                                                ](8)

 

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

 

--------------------------------------------------------------------------------

(5)                                     List each Assignor, as appropriate.

 

(6)                                     List each Assignee, as appropriate.

 

(7)                                     Amounts in this column and in the column
immediately to the right to be adjusted by the counterparties to take into
account any payments or prepayments made between the Trade Date and the
Effective Date.

 

(8)                                     To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of the
Trade Date.

 

A-2

--------------------------------------------------------------------------------

 

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

 

 

ASSIGNOR

 

[NAME OF ASSIGNOR]

 

 

 

By:

 

 

 

Title:

 

 

 

ASSIGNEE

 

[NAME OF ASSIGNEE]

 

 

 

By:

 

 

 

Title:

[Consented to and](9) Accepted:

 

 

 

BANK OF AMERICA, N.A., as

 

Administrative Agent

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

[Consented to:](10)

 

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

--------------------------------------------------------------------------------

(9)                                     To be added only if the consent of the
Administrative Agent is required by the terms of the Credit Agreement.

 

(10)                                To be added only if the consent of the
Borrower is required by the terms of the Credit Agreement.

 

A-3

--------------------------------------------------------------------------------

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ASSUMPTION

 

1.                                       Representations and Warranties.

 

1.1.                              Assignor.  [The][Each] Assignor (a) represents
and warrants that (i) it is the legal and beneficial owner of [the][[the
relevant] Assigned Interest, (ii) [the][such] 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][Each] 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 the requirements to be an assignee under
Section 9.04(b)(iii), (v) and (vi) of the Credit Agreement (subject to such
consents, if any, as may be required under Section 9.04(b)(iii) of the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by [the][such] Assigned Interest and either it, or the
Person exercising discretion in making its decision to acquire [the][such]
Assigned Interest, is experienced in acquiring assets of such type, (v) it has
received a copy of the Credit Agreement, and has received or has been accorded
the opportunity to receive copies of the most recent financial statements
delivered pursuant to Section 5.01(a) and Section 5.01(b) thereof, as
applicable, and such other documents and information as it deems appropriate to
make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest, (vi) it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by
[the][such] Assignee; and (b) agrees that (i) it will, independently and without
reliance upon the Administrative Agent, [the][any] 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

 

A-4

--------------------------------------------------------------------------------

 

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 Effective
Date, the Administrative Agent shall make all payments in respect of [the][each]
Assigned Interest (including payments of principal, interest, fees and other
amounts) to [the][the relevant] Assignor for amounts which have accrued to but
excluding the Effective Date and to [the][the relevant] Assignee for amounts
which have accrued from and after the Effective Date.

 

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 (excluding the laws applicable to
conflicts or choice of law to the extent that the application of the law of
another jurisdiction would be required thereby).

 

A-5

--------------------------------------------------------------------------------

 

EXHIBIT B

 

FORM OF NOTE

 

                          ,          

 

FOR VALUE RECEIVED, the undersigned (the “Borrower”), hereby promises to pay to
[NAME OF LENDER] or registered assigns (the “Lender”), in accordance with the
provisions of the Agreement (as hereinafter defined), the principal amount of
each Loan from time to time made by the Lender to the Borrower under that
certain Credit Agreement, dated as of October 5, 2009 (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
“Agreement;” the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent.

 

The Borrower promises to pay interest on the unpaid principal amount of each
Loan from the date of such Loan until such principal amount is paid in full, at
such interest rates and at such times as provided in the Agreement.  All
payments of principal and interest shall be made to the Administrative Agent for
the account of the Lender in dollars in immediately available funds at the
Administrative Agent’s Office.  If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Agreement.

 

This Note is one of the Notes referred to in the Agreement, is entitled to the
benefits thereof and may be prepaid in whole or in part subject to the terms and
conditions provided therein.  Upon the occurrence and continuation of one or
more of the Events of Default specified in the Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Agreement.  Loans made by the
Lender shall be evidenced by one or more loan accounts or records maintained by
the Lender in the ordinary course of business.  The Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto.

 

The Borrower, for itself, its successors and assigns, hereby waives diligence,
presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.

 

[Remainder of Page Left Intentionally Blank]

 

B-1

--------------------------------------------------------------------------------

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY).

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

B-2

--------------------------------------------------------------------------------

 

LOANS AND PAYMENTS WITH RESPECT THERETO

 

Date

 

Type of
Loan Made

 

Amount of
Loan Made

 

End of
Interest
Period

 

Amount of
Principal or
Interest Paid
This Date

 

Outstanding
Principal
Balance This
Date

 

Notation
Made By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B-3

--------------------------------------------------------------------------------

 

Exhibit C-1

 

WADDELL & REED, INC. MUTUAL FUND MANAGEMENT FEES

2009 Actual ($000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dec)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of

 

Variance

 

2008

 

Year

 

Management Fees

 

Jan

 

Feb

 

Mar

 

Apr

 

May

 

Jun

 

Jul

 

Aug

 

Sep

 

Oct

 

Nov

 

Dec

 

Y-T-D

 

Total

 

From L-Y

 

Actual

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

W&R ADVISORS FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Con’t Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth/Income Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Int’l Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Managed Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vanguard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Concepts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gov’t Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LONG-TERM FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL W&R ADVISORS FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IVY FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth/Income Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Large Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Appreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pacific Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Natural Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

European Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cundill Global Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Micro Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-1

--------------------------------------------------------------------------------

 

WADDELL & REED, INC. MUTUAL FUND MANAGEMENT FEES

2009 Actual ($000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dec)

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of

 

Variance

 

2008

 

Year

 

Management Fees

 

Jan

 

Feb

 

Mar

 

Apr

 

May

 

Jun

 

Jul

 

Aug

 

Sep

 

Oct

 

Nov

 

Dec

 

Y-T-D

 

Total

 

From L-Y

 

Actual

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed European/Pacific

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed International Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IVY FUNDS (cont)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited-Term Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL IVY FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IVY VIP FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Natural Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Microcap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL IVY VIP FUNDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GRAND TOTAL MGMT. FEES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAILY AVERAGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-2

--------------------------------------------------------------------------------

 

Change in Mutual Fund Assets Under Management

 

 

August 2009

 

 

 

 

 

(Millions)

 

 

Month to Date

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

Net

 

Net

 

Dividends

 

Net Investment

 

Dividends

 

Valuation

 

Net Assets

 

 

 

at 7-31-09

 

Sales

 

Redemptions

 

Sales

 

Exchanges

 

Reinvested

 

Income

 

Paid

 

Change

 

at 8-31-09

 

Waddell & Reed Advisors Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cont Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Concepts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retire Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Managed Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vanguard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal of Long -Term Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Waddell & Reed Advisors Funds Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Appreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cundill Global Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

European Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Natural Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Large Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited-Term Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed European/Pacific

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Int’l Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Microcap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-3

--------------------------------------------------------------------------------

 

Change in Mutual Fund Assets Under Management

 

 

August 2009

 

 

 

 

 

(Millions)

 

 

Month to Date

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

Net

 

Net

 

Dividends

 

Net Investment

 

Dividends

 

Valuation

 

Net Assets

 

 

 

at 7-31-09

 

Sales

 

Redemptions

 

Sales

 

Exchanges

 

Reinvested

 

Income

 

Paid

 

Change

 

at 8-31-09

 

Mid Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pacific Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Managed Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal of Long -Term Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal of Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Eliminations- Underlying Funds of Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy Funds Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Conservative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Funds Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy VIP Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced Port

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Natural Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Microcap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Mkt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Agressive Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Conservative Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Moderate Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Moderately Agressive Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Moderately Conservative Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-4

--------------------------------------------------------------------------------

 

Change in Mutual Fund Assets Under Management

 

 

August 2009

 

 

 

 

 

(Millions)

 

 

Month to Date

 

 

 

 

 

 

 

 

Net Assets

 

 

 

 

 

Net

 

Net

 

Dividends

 

Net Investment

 

Dividends

 

Valuation

 

Net Assets

 

 

 

at 7-31-09

 

Sales

 

Redemptions

 

Sales

 

Exchanges

 

Reinvested

 

Income

 

Paid

 

Change

 

at 8-31-09

 

Small Cap Port

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Eliminations- Underlying Funds of Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy VIP Funds Total *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of All Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market Funds **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Eliminations- Underlying InvestEd Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Mutual Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-5

--------------------------------------------------------------------------------

 

Change in Mutual Fund Assets Under Management

August 2009

 

(Millions)

Year to Date

 

 

 

 

Net Assets

 

 

 

 

 

Net

 

Net

 

Dividends

 

Net Investment

 

Dividends

 

Valuation

 

Net Assets

 

 

 

at 12-31-08

 

Sales

 

Redemptions

 

Sales

 

Exchanges

 

Reinvested

 

Income

 

Paid

 

Change

 

at 8-31-2009

 

Waddell & Reed Advisors Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cont Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Investment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Government Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Concepts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retire Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Managed Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vanguard

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal of Long -Term Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Waddell & Reed Advisors Funds Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Appreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cundill Global Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

European Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Natural Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Large Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Limited-Term Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed European/Pacific

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Managed Int’l Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Microcap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-6

--------------------------------------------------------------------------------

 

Change in Mutual Fund Assets Under Management

August 2009

(Millions)

Year to Date

 

 

 

Net Assets

 

 

 

 

 

Net

 

Net

 

Dividends

 

Net Investment

 

Dividends

 

Valuation

 

Net Assets

 

 

 

at 12-31-08

 

Sales

 

Redemptions

 

Sales

 

Exchanges

 

Reinvested

 

Income

 

Paid

 

Change

 

at 8-31-2009

 

Mortgage Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal High Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pacific Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Managed Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal of Long -Term Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subtotal of Money Market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Eliminations- Underlying Funds of Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy Funds Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Balanced

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Conservative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

InvestEd Funds Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy VIP Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Strategy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balanced Port

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bond

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend Opportunities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Natural Resources

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High Inc

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

International Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Microcap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mid Cap Growth

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Mkt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Agressive Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Conservative Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Moderate Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Moderately Agressive Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pathfinder- Moderately Conservative Portfolio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Science & Technology

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Port

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Cap Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-7

--------------------------------------------------------------------------------

 

Change in Mutual Fund Assets Under Management

August 2009

 

(Millions)

Year to Date

 

 

 

 

Net Assets

 

 

 

 

 

Net

 

Net

 

Dividends

 

Net Investment

 

Dividends

 

Valuation

 

Net Assets

 

 

 

at 12-31-08

 

Sales

 

Redemptions

 

Sales

 

Exchanges

 

Reinvested

 

Income

 

Paid

 

Change

 

at 8-31-2009

 

Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Eliminations- Underlying Funds of Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ivy VIP Funds Total*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary of All Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money Market Funds **

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less Eliminations- Underlying InvestEd Funds (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All Mutual Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-8

--------------------------------------------------------------------------------

 

 

Exhibit C-2

 

Waddell & Reed Financial, Inc. - Consolidated

Statement of Operations

For the period indicated in each column heading

Dollar amounts in thousands except per share amounts

 

 

 

QTD

 

QTD

 

Variance

 

Variance

 

QTD

 

QTD

 

Variance

 

Variance

 

YTD

 

YTD

 

Variance

 

Variance

 

 

 

Aug-2009

 

May-2009

 

Dollars

 

Percent

 

Aug-2009

 

Aug-2008

 

Dollars

 

Percent

 

Aug-2009

 

Aug-2008

 

Dollars

 

Percent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting & distribution fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder service fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment & other revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aug-2008

 

Sep-2008

 

Oct-2008

 

Nov-2008

 

Dec-2008

 

Jan-2009

 

Feb-2009

 

Mar-2009

 

Apr-2009

 

May-2009

 

Jun-2009

 

Jul-2009

 

Aug-2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Underwriting & distribution fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholder service fees

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment & other revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C-2-1

--------------------------------------------------------------------------------

 

 

EXHIBIT D

 

FORM OF REVOLVING BORROWING REQUEST

 

Date:                        ,                 

 

To:          Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of October 5, 2009
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among Waddell & Reed Financial, Inc. (the “Borrower”), the
several financial institutions from time to time party thereto (collectively,
the “Lenders” and each individually, a “Lender”), and Bank of America, N.A., as
administrative agent for the Lenders (in such capacity, together with any
successors thereto in such capacity, the “Administrative Agent”).

 

The undersigned hereby requests (select one):

 

o  A Borrowing of Loans

 

o  A conversion or continuation of Loans

 

1.          On                                                          (a
Business Day).

 

2.          In the amount of $                                           

 

3.          Comprised of
                                                                      
                                                                    [Type of
Loan requested/converted/continued]

 

4.          For Eurodollar Loans:  with an Interest Period of         months

 

5.          For Borrowings: to be disbursed to the following account of the
Borrower

 

                                                        

                                                        

                                                        

                                                        

                                                        

 

[The Borrowing requested herein complies with the proviso to the first sentence
of Section 2.01 of the Agreement.]

 

D-1

--------------------------------------------------------------------------------

 

The Borrower hereby represents and warrants that the conditions specified in
Sections 4.02(a) and (b) shall be satisfied on and as of the date of the
applicable Borrowing.](11)

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

--------------------------------------------------------------------------------

(11)           Include these sentences in the case of a Borrowing of Loans.

 

D-2

--------------------------------------------------------------------------------

 

EXHIBIT E

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial Statement Date:                  ,            

 

To:          Bank of America, N.A., as Administrative Agent

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of October 5, 2009
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the “Agreement;” the terms defined therein being used herein
as therein defined), among Waddell & Reed Financial, Inc. (the “Borrower”), the
several financial institutions from time to time party thereto (collectively,
the “Lenders” and each individually, a “Lender”), and Bank of America, N.A., as
administrative agent for the Lenders (in such capacity, together with any
successors thereto in such capacity, the “Administrative Agent”).

 

The undersigned hereby certifies as of the date hereof that he/she is the
                                                               (12) of the
Borrower, and that, as such, he/she is authorized to execute and deliver this
Certificate to the Administrative Agent on the behalf of the Borrower, and that:

 

[Use following paragraph 1 for fiscal year-end financial statements]

 

1.             The Borrower has delivered the year-end financial statements
required by Section 5.01(a) of the Agreement for the fiscal year of the Borrower
ended as of the above date.

 

[Use following paragraph 1 for fiscal quarter-end financial statements]

 

1.             The Borrower has delivered the financial statements required by
Section 5.01(b) of the Agreement for the fiscal quarter of the Borrower ended as
of the above date.

 

2.             The undersigned has reviewed and is familiar with the terms of
the Agreement and has made, or has caused to be made under his/her supervision,
a detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by such financial statements.

 

3.             A review of the activities of the Borrower during such fiscal
period has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its obligations under the Loan Documents, and

 

[select one:]

 

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(12) Must be a Financial Officer.

 

E-1

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[to the best knowledge of the undersigned, during such fiscal period the
Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it, and no Default has occurred and is continuing.]

 

—or—

 

[to the best knowledge of the undersigned, the following covenants or conditions
have not been performed or observed and the following is a list of each such
Default and its nature and status:]

 

4.             Since the date of the financial statements furnished pursuant to
Section 3.04 of the Agreement, to the best knowledge of the undersigned,

 

[select one:]

 

[no change in GAAP or in the application thereof has occurred.]

 

—or—

 

[the following changes in GAAP have occurred, and the effect of such change on
the financial statements accompanying this Certificate is as follows:]

 

6.             The financial covenant analyses and information set forth on
Schedule 1 attached hereto are true and accurate on and as of the date of this
Certificate.

 

[Remainder of Page Left Intentionally Blank]

 

E-2

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IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of                                    ,                        .

 

 

WADDELL & REED FINANCIAL, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

E-3

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For the Quarter/Year ended                                       ,         
(“Statement Date”)

 

SCHEDULE 1
to the Compliance Certificate
($ in 000’s)

 

I.

Section 6.01(a) – Consolidated Leverage Ratio.

 

 

 

 

 

 

A.

Consolidated Total Debt at Statement Date

 

$            

 

 

 

 

 

 

B.

Consolidated EBITDA for the period of four consecutive fiscal quarters of the
Borrower ending on above date (“Subject Period”):

 

 

 

 

 

 

 

 

 

 

1.

Consolidated Net Income for Subject Period:

 

$            

 

 

 

 

 

 

 

 

2.

Income tax expense for Subject Period:

 

$            

 

 

 

 

 

 

 

 

3.

Interest expense, amortization or writeoff of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness (including the Loans) for Subject Period:

 

$            

 

 

 

 

 

 

 

 

4.

Depreciation and amortization expenses for Subject Period:

 

$            

 

 

 

 

 

 

 

 

5.

Amortization of intangibles (including, but not limited to, goodwill) and
organization costs for Subject Period:

 

$            

 

 

 

 

 

 

 

 

6.

Extraordinary, unusual or non-recurring non-cash expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of
Consolidated Net Income for such period, non-cash losses on sales of assets
outside of the ordinary course of business) for Subject Period:

 

$            (13)

 

 

 

 

 

 

 

 

7.

Other non-cash reductions of Consolidated Net Income for Subject Period:

 

$            

 

 

 

 

 

 

 

 

8.

Consolidated EBITDA (Lines I.B.1 + 2 + 3 + 4 + 5 + 6 + 7):

 

$            

 

 

 

 

 

 

 

C.

Consolidated Leverage Ratio (Line I.A ¸ Line I.B.8):

 

            to 1

 

 

 

 

 

 

 

 

Must not equal or exceed a ratio of 3.0 to 1.0

 

 

 

 

 

 

 

 

 

 

 

In Compliance: Yes / No

 

 

 

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(13)  AMOUNTS REFERRED TO IN LINE I.B.6 SHALL NOT, IN THE AGGREGATE, EXCEED
$1,000,000 FOR ANY FISCAL YEAR OF THE BORROWER.

 

E-4

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II.

Section 6.01(b) – Consolidated Interest Coverage Ratio.

 

 

 

 

 

 

 

 

 

A.

Consolidated EBITDA for Subject Period (Line I.B.8 above):

 

$

 

 

 

 

 

 

B.

Consolidated Interest Expense for Subject Period:

 

$

 

 

 

 

 

 

 

C.

Consolidated Interest Coverage Ratio (Line II.A ¸ Line II.B):

 

            to 1

 

 

 

 

 

 

 

 

Must not be less than or equal to a ratio of 4.0 to 1.0.

 

 

 

 

 

 

 

 

 

 

 

In Compliance: Yes / No

 

 

 

E-5

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