Exhibit 10.1

EXECUTION COPY

LOGO [g57127ex10_1covpg001.jpg]

CREDIT AGREEMENT

dated as of September 1, 2009

among

VIRTUS INVESTMENT PARTNERS, INC.,

as Borrower,

The Lenders Party Hereto,

and

THE BANK OF NEW YORK MELLON,

as Administrative Agent and as Issuing Bank

 

 

THE BANK OF NEW YORK MELLON,

as Lead Arranger

Bryan Cave LLP

1290 Avenue of the Americas

New York, New York 10104 3300

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

TABLE OF CONTENTS

 

    

Page

ARTICLE 1. DEFINITIONS    1

Section 1.1

   Defined Terms    1

Section 1.2

   Classification of Loans and Borrowings    22

Section 1.3

   Terms Generally    22

Section 1.4

   Accounting Terms; GAAP    23

Section 1.5

   Rounding    23

Section 1.6

   Resolution of Drafting Ambiguities    23 ARTICLE 2. THE CREDITS    23

Section 2.1

   Revolving Commitments    23

Section 2.2

   Revolving Loans and Revolving Borrowings    24

Section 2.3

   Requests for Borrowings    24

Section 2.4

   Funding of Borrowings    25

Section 2.5

   Termination and Reduction of Revolving Commitments    25

Section 2.6

   Repayment of Loans; Evidence of Debt    26

Section 2.7

   Prepayment of Loans    27

Section 2.8

   Letters of Credit    28

Section 2.9

   Payments Generally; Administrative Agent’s Clawback    32 ARTICLE 3.
INTEREST, FEES, YIELD PROTECTION, ETC.    35

Section 3.1

   Interest    35

Section 3.2

   Interest Elections    36

Section 3.3

   Fees    37

Section 3.4

   Alternate Rate of Interest    38

Section 3.5

   Increased Costs; Illegality    39

Section 3.6

   Break Funding Payments    41

Section 3.7

   Taxes    41

Section 3.8

   Mitigation Obligations; Replacement of Lenders    43 ARTICLE 4.
REPRESENTATIONS AND WARRANTIES    44

Section 4.1

   Organization; Powers    44

Section 4.2

   Authorization; Enforceability    45

Section 4.3

   Governmental Approvals; No Conflicts    45

Section 4.4

   Financial Condition; No Material Adverse Change    45

Section 4.5

   Properties    45

Section 4.6

   Litigation and Environmental Matters    46

Section 4.7

   Compliance with Laws and Agreements    47

Section 4.8

   Investment Company Status    47

Section 4.9

   Taxes    47

Section 4.10

   ERISA    47

Section 4.11

   Subsidiaries    48

 

(i)

Virtus Investment Partners, Inc. Credit Agreement

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

TABLE OF CONTENTS

 

    

Page

Section 4.12

   Insurance    48

Section 4.13

   Labor Matters    48

Section 4.14

   Solvency    48

Section 4.15

   Federal Reserve Regulations, etc.    49

Section 4.16

   Absence of Certain Restrictions    49

Section 4.17

   Material Licenses, Permits, Privileges and Franchises    49

Section 4.18

   Security Documents    49

Section 4.19

   Disclosure    50

Section 4.20

   Inactive Subsidiaries    51 ARTICLE 5. CONDITIONS    51

Section 5.1

   Closing Date    51

Section 5.2

   Each Credit Event    55 ARTICLE 6. AFFIRMATIVE COVENANTS    55

Section 6.1

   Financial Statements and Other Information    55

Section 6.2

   Notices of Material Events    57

Section 6.3

   Existence; Conduct of Business    59

Section 6.4

   Payment and Performance of Obligations    59

Section 6.5

   Maintenance of Properties    59

Section 6.6

   Books and Records; Inspection Rights    59

Section 6.7

   Compliance with Laws    59

Section 6.8

   Use of Proceeds    59

Section 6.9

   Information Regarding Collateral    60

Section 6.10

   Insurance    60

Section 6.11

   Casualty and Condemnation    60

Section 6.12

   Additional Subsidiaries    61

Section 6.13

   Further Assurances    61

Section 6.14

   Compliance with Environmental Laws    62 ARTICLE 7. NEGATIVE COVENANTS    63

Section 7.1

   Indebtedness; Equity Securities    63

Section 7.2

   Liens    64

Section 7.3

   Fundamental Changes; Business; Fiscal Year    65

Section 7.4

   Investments, Loans, Advances, Guarantees and Acquisitions    66

Section 7.5

   Asset Sales; Issuances of Equity Interests by Subsidiaries    68

Section 7.6

   Sale and Lease Back Transactions    69

Section 7.7

   Hedging Agreements    69

Section 7.8

   Restricted Payments    69

Section 7.9

   Transactions with Affiliates    70

Section 7.10

   Restrictive Agreements    70

Section 7.11

   Amendment of Material Documents    70

Section 7.12

   Financial Covenants    70

 

(ii)

Virtus Investment Partners, Inc. Credit Agreement

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

TABLE OF CONTENTS

 

    

Page

Section 7.13

   Government Regulation    71 ARTICLE 8. EVENTS OF DEFAULT    71

Section 8.1

   Events of Default    71

Section 8.2

   Remedies Upon Event of Default    73

Section 8.3

   Application of Funds    74 ARTICLE 9. THE ADMINISTRATIVE AGENT    75

Section 9.1

   Appointment and Authority    75

Section 9.2

   Rights as a Lender    75

Section 9.3

   Exculpatory Provisions    75

Section 9.4

   Reliance by Administrative Agent    76

Section 9.5

   Delegation of Duties    77

Section 9.6

   Resignation of Administrative Agent    77

Section 9.7

   Non Reliance on Administrative Agent and Other Credit Parties    78

Section 9.8

   No Other Duties, etc.    78 ARTICLE 10. MISCELLANEOUS    78

Section 10.1

   Notices    78

Section 10.2

   Waivers; Amendments    79

Section 10.3

   Expenses; Indemnity; Damage Waiver    80

Section 10.4

   Successors and Assigns    82

Section 10.5

   Survival    85

Section 10.6

   Counterparts; Integration; Effectiveness; Electronic Execution    85

Section 10.7

   Severability    86

Section 10.8

   Right of Setoff    86

Section 10.9

   Governing Law; Jurisdiction; Consent to Service of Process    86

Section 10.10

   WAIVER OF JURY TRIAL    87

Section 10.11

   Headings    88

Section 10.12

   Interest Rate Limitation    88

Section 10.13

   Treatment of Certain Information; Confidentiality    88

Section 10.14

   USA Patriot Act Notice    89

Section 10.15

   Publication; Advertisement    89

 

(iii)

Virtus Investment Partners, Inc. Credit Agreement

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

SCHEDULES:

 

Schedule 1.1    Other Permitted Investments Schedule 2.1    List of Commitments
Schedule 4.6    List of Disclosed Matters Schedule 4.11    List of Subsidiaries
Schedule 4.12    List of Insurance Schedule 4.18    List of UCC Filing Offices
Schedule 7.1    List of Existing Indebtedness Schedule 7.2    List of Existing
Liens Schedule 7.4    List of Existing Investments Schedule 7.10    List of
Existing Restrictions EXHIBITS: Exhibit A    Form of Assignment and Assumption
Exhibit B-1    Form of Opinion of Kevin Carr, Esq. Exhibit B-2    Form of
Opinion of Day Pitney LLP Exhibit C    Form of Credit Request Exhibit D    Form
of Note Exhibit E    Form of Guarantee Agreement Exhibit F    Form of Security
Agreement Exhibit G    Form of Compliance Certificate Exhibit H    Form of
Notice of Conversion or Continuation Exhibit I    Form of Officers’ Closing
Certificate Exhibit J    Form of Intercompany Note Exhibit K    Form of Asset
Coverage Ratio Certificate Exhibit L    Form of Post-Closing Letter Exhibit M   
Form of Pledge Agreement

 

(iv)

Virtus Investment Partners, Inc. Credit Agreement

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

CREDIT AGREEMENT, dated as of September 1, 2009, among VIRTUS INVESTMENT
PARTNERS, INC., the LENDERS party hereto and THE BANK OF NEW YORK MELLON, as
Administrative Agent and as Issuing Bank.

The parties hereto agree as follows:

ARTICLE 1.

DEFINITIONS

Section 1.1 Defined Terms. As used in this Credit Agreement, the following terms
have the meanings specified below:

“ABR”, when used in reference to any Revolving Loan or Borrowing, refers to
whether such Revolving Loan, or the Revolving Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Alternate Base
Rate.

“Adjusted EBITDA” means, for any period, EBITDA for such period adjusted, on a
consistent basis, to reflect issuances and retirements of Equity Interests by
Subsidiaries and purchases, acquisitions, sales, transfers and other
dispositions, and issuances of Equity Interests, made by the Borrower and the
Subsidiaries during such period as if they occurred at the beginning of such
period.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next  1/16 of 1%) equal to (i) the LIBO Rate for such Interest Period
multiplied by (ii) the Statutory Reserve Rate.

“Adjusted One Month Eurodollar Rate” means, on any day, the rate of interest per
annum as determined by the Administrative Agent, equal to (i) the LIBO Rate
(determined in the manner set forth in the definition thereof) for a deposit in
an amount approximately equal to $1,000,000 with a maturity of one month at
approximately 11:00 a.m., London time, on such day, provided that if the day for
which such rate is to be determined is not a Business Day, the Adjusted One
Month Eurodollar Rate for such day shall be such rate on the next preceding
Business Day multiplied by (ii) the Statutory Reserve Rate.

“Administrative Agent” means BNYM, in its capacity as administrative agent for
the Lenders hereunder.

“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.

“Agent” means, BNYM in its capacity as Administrative Agent.

 

Virtus Investment Partners, Inc. Credit Agreement

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

“Agreement Date” means the first date appearing in this Credit Agreement.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (i) the Prime Rate in effect on such day, (ii) the Federal Funds Effective
Rate in effect on such day plus 0.50%, and (iii) the Adjusted One Month
Eurodollar Rate in effect on such day plus 1.00%. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
the Adjusted One Month Eurodollar 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 One Month Eurodollar Rate.

“Applicable Margin” means, at all times from and after the Agreement Date and
during the applicable periods set forth below: (i) with respect to ABR
Borrowings, the percentage set forth in the following table under the heading
“ABR Margin”, and (ii) with respect to Eurodollar Borrowings and the Letter of
Credit participation fee payable under Section 3.3(b)(i), the percentage set
forth in the following table under the heading “Eurodollar Margin and LC Fee”:

 

When the Leverage Ratio is:            

greater than or
equal to

  and less than   ABR Margin     Eurodollar
Margin and LC
Fee   2.50:1.00   n/a   2.50 %    3.50 %  2.00:1.00   2.50:1.00   2.00 %    3.00
%  n/a   2.00:1.00   1.75 %    2.75 % 

Changes in the Applicable Margin resulting from a change in the Leverage Ratio
as evidenced by the Compliance Certificate most recently delivered under
Section 6.1(c) shall become effective five Business Days after the later to
occur of (a) the date such Compliance Certificate is delivered to the
Administrative Agent, and (b) 120 days after the fiscal year end or 60 days
after the fiscal quarter end (in the case of the first three fiscal quarters of
any fiscal year), in either case in respect of which such Compliance Certificate
shall have been delivered. Notwithstanding anything to the contrary in this
definition, (i) if the Borrower shall fail to deliver to the Administrative
Agent a Compliance Certificate on or prior to any date required hereby, the
Leverage Ratio for purposes of this defined term only shall be deemed to be
greater than or equal to 2.50:1.00 from and including such date to the fifth
Business Day following the date of delivery to the Administrative Agent of such
Compliance Certificate, and (ii) during the period commencing on the Agreement
Date and ending on the fifth Business Day after the later to occur of the
(A) date the first such Compliance Certificate is delivered to the
Administrative Agent, and (B) 90th day after the fiscal year end or the 45th day
after the fiscal quarter end (in the case of the first three fiscal quarters of
any fiscal year) in respect of which such first Compliance Certificate shall
have been delivered, the Leverage Ratio for purposes of this defined term only
shall be based on the certificate delivered pursuant to Section 5.1(d).

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

 

- 2 -

Virtus Investment Partners, Inc. Credit Agreement

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

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

“Asset Coverage Amount” means, as of any date, an amount equal to (a) the sum of
the following (as set forth on the then most recently delivered monthly Asset
Coverage Ratio Certificate) with respect to the Borrower on a consolidated basis
(provided that VPDI shall be eliminated for all purposes of such calculation):
(i) the book value of all cash, (ii) the book value of all marketable securities
(including all investments in Virtus Funds, in each case to the extent
constituting marketable securities, but excluding any such investment in a
Virtus Short-term Bond Fund to the extent in excess of $2,000,000), and
(iii) the net book value of all investment management receivables minus (b) the
aggregate Excluded Amount.

“Asset Coverage Ratio” means, as of any date, the ratio of (a) the Asset
Coverage Amount, to (b) the aggregate Revolving Credit Exposures of all Lenders.

“Asset Coverage Ratio Certificate” means a certificate, substantially in the
form of Exhibit K.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.4), and accepted by the Administrative Agent, in
substantially 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 Maturity Date and, if different, the date of
termination of the Revolving Commitments.

“BNYM” means The Bank of New York Mellon.

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

“Borrower” means Virtus Investment Partners, Inc., a Delaware corporation.

“Borrower Materials” has the meaning assigned to such term in Section 6.2.

“Borrowing” means Revolving Loans of the same Type made, converted or continued
on the same date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.

“Business” means, collectively, (i) the business of the Borrower and the
Subsidiaries on the Agreement Date and (ii) any business that is the same,
similar or otherwise reasonably related, ancillary or complementary thereto.

 

- 3 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Hartford, CT 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, the aggregate of all expenditures
(whether paid in cash or other consideration or accrued as a liability) by the
Borrower or any of the Subsidiaries during such period that, in accordance with
GAAP, are or should be included in “additions to property, plant and equipment”
or similar items reflected in the consolidated statement of cash flows of the
Borrower and the Subsidiaries for such period (including the amount of assets
leased by incurring any Capital Lease Obligation or Synthetic Lease Obligation);
provided that expenditures for permitted acquisitions shall not constitute
Capital Expenditures.

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

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

“Certificate of Designations” means the Certificate of Designations with respect
to the Convertible Preferreds.

“CFC” means a controlled foreign corporation within the meaning of
Section 957(a) of the Code.

A “Change in Control” shall be deemed to have occurred if (a) any Person or
group (within the meaning of Rule 13d 5 of the Securities Exchange Act of 1934
as in effect on the Agreement Date) shall own directly or indirectly,
beneficially or of record, shares representing more than 25% of the aggregate
ordinary voting power or economic interests represented by the issued and
outstanding Equity Interests of the Borrower on a fully diluted basis, (b) a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower shall at any time be occupied by Persons who were neither (i) nominated
by the board of directors of the Borrower nor (ii) appointed by directors so
nominated; or (c) any change in control (or similar event, however denominated)
with respect to the Borrower or any of the Subsidiaries shall occur under and as
defined in any indenture or agreement in respect of Indebtedness in an
outstanding principal amount in excess of $1,000,000 to which the Borrower or
any Subsidiary is a party.

“Change in Law” means the occurrence, after Agreement Date, of any of the
following: (i) the adoption or taking effect of any law, rule, regulation or
treaty, (ii) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (iii) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

 

- 4 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Closing Date” means the date on which the conditions specified in Section 5.1
are satisfied (or waived in accordance with Section 10.2).

“Code” means the Internal Revenue Code of 1986.

“Collateral” means any and all “Collateral” as defined in any applicable
Security Document.

“Commitment Reduction Event” means, without duplication:

(a) any sale, transfer, lease or other disposition (including pursuant to a sale
and leaseback transaction) of any property or asset of the Borrower or any
Subsidiary, other than (i) dispositions described in clauses (a), (b) and (c) of
Section 7.5, (ii) the sale or redemption of shares of any Virtus General Fund,
and (ii) other dispositions resulting in aggregate Net Proceeds not exceeding
$1,000,000 during any fiscal year;

(b) any insured casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower or any Subsidiary, other than insured casualties, other
insured damages or takings resulting in aggregate Net Proceeds not exceeding
$1,000,000 during any fiscal year;

(c) the issuance of any Equity Interest by the Borrower or any Subsidiary, or
the receipt by the Borrower or any Subsidiary of any capital contribution, other
than (i) any such issuance to, or any such receipt from, the Borrower or any
Subsidiary Guarantor, (ii) any such issuance as consideration to the seller in
connection with an acquisition permitted by Section 7.4(h), and (iii) any such
issuance of restricted Equity Interests for executive compensation, or in
connection with any other employee stock ownership plan, in either case in the
ordinary course of business; and

(d) the issuance of any Indebtedness by the Borrower or any Subsidiary, other
than Indebtedness permitted by clauses (i), (ii), (iii), (iv), (v), (vi) or
(vii) of Section 7.1(a).

“Commitments” means, the Revolving Commitments (including the Letter of Credit
Commitments).

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

“Consolidated AUM” means, as of any date, the total market value of investments
managed by the Borrower and its Subsidiaries (other than investments in money
market funds), in respect of which it receives management fees based on a
percentage of such total market value, for their customers.

 

- 5 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Consolidated Net Worth” means, as of any date, the total consolidated
stockholders’ equity of the Borrower and its Subsidiaries plus, without
duplication, the aggregate liquidation preference of all outstanding Convertible
Preferreds.

“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.

“Control Agreements” means, collectively, Deposit Account Control Agreements and
Securities Account Control Agreements as such terms are defined in the Security
Agreement.

“Convertible Preferreds” means, collectively, the Series A Non-Voting
Convertible Preferred Stock of the Borrower and the Series B Voting Convertible
Preferred Stock of the Borrower.

“Credit Event” has the meaning assigned to such term in Section 5.2.

“Credit Obligations” means (i) the due and punctual payment of (a) principal of
and premium, if any, and interest (including interest accruing during the
pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding) on
the Loans, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, and (b) all other monetary
obligations, including reimbursement obligations in respect of LC Disbursements,
fees, commissions, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Secured Parties, or that are otherwise payable to any
Credit Party, in each case under the Loan Documents, and (ii) the due and
punctual performance of all covenants, agreements, obligations and liabilities
of the Loan Parties or any other party (other than a Credit Party) under or
pursuant to the Loan Documents.

“Credit Parties” means the Administrative Agent, the Issuing Bank and the
Lenders.

“Credit Request” means a Credit Request, substantially in the form of Exhibit C,
or in such other form as shall be acceptable to the Administrative Agent.

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

“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 4.6.

“Disqualified Equity” means any Equity Interest of any Person that, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable at the

 

- 6 -

Virtus Investment Partners, Inc. Credit Agreement

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

option of the holder thereof), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires or mandates payments or distributions in cash, on or prior to the date
that is one year after the Maturity Date; provided, however, that Equity
Interests that would constitute Disqualified Equity solely because the holders
thereof have the right to require such Person to repurchase or redeem such
Equity Interests upon the occurrence of one or more certain events shall not
constitute Disqualified Equity if the terms of such Equity Interest provide that
such Person may not repurchase or redeem any such Equity Interest unless such
repurchase or redemption complies with Section 7.8. The term “Disqualified
Equity” shall also include any options, warrants or other rights that are
convertible into Disqualified Equity or that are redeemable at the option of the
holder, or required to be redeemed, prior to the date that is one year after the
Maturity Date.

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

“Domestic Subsidiary” means a Subsidiary incorporated or organized under the
laws of the United States of America, any State thereof or the District of
Columbia.

“EBITDA” means, for any period, Net Income for such period, (a) plus, without
duplication and to the extent deducted from revenues in determining Net Income
for such period, the sum of (i) the aggregate amount of Interest Expense,
(ii) the aggregate amount of income and franchise tax expense, and (iii) all
amounts attributable to depreciation and amortization, (b) excluding, to the
extent included in determining Net Income for such period, (i) unrealized mark
to market gains and losses, and (ii) other non-cash non-recurring gains,
(c) adjusted, solely for purposes of making the necessary calculations for
purposes of Section 5.1(d)(ix), for certain charges totaling not in excess of
$14,500,000 for the fiscal year ended December 31, 2008, and totaling not in
excess of $700,000 for the fiscal quarter ended March 31, 2009 and totaling not
in excess of $552,000 for the fiscal quarter ended June 30, 2009, and (d) plus,
without duplication and to the extent deducted from revenues in determining Net
Income for such period, the sum of (i) charges incurred during the two
consecutive fiscal quarters of the Borrower ended December 31, 2009, relating to
severance and other non-recurring items, to the extent not in excess of $748,000
in the aggregate, (ii) charges for non-cash stock based compensation, and
(iii) other non-cash non-recurring losses not exceeding $1,000,000 in the
aggregate for any four consecutive fiscal quarter period.

“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund, (iv) any other Person (other than a natural person) approved by
the Administrative Agent, and the Issuing Bank, and, unless an Event of Default
has occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
“Eligible Assignee” shall not include the Borrower or any of the Borrower’s
Affiliates or Subsidiaries.

“Environment” means ambient air, surface water and groundwater (including
potable water, navigable water and wetlands), the land surface or subsurface
strata, the workplace or as otherwise defined in any Environmental Law.

 

- 7 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Environmental Claim” means any written accusation, allegation, notice of
violation, claim, demand, order, directive, cost recovery action or other cause
of action by, or on behalf of, any Governmental Authority or any Person for
damages, injunctive or equitable relief, personal injury (including sickness,
disease or death), Remedial Action costs, tangible or intangible property
damage, natural resource damages, nuisance, pollution, any adverse effect on the
environment caused by any Hazardous Material, or for fines, penalties or
restrictions, resulting from or based upon (i) the existence, or the
continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (ii) exposure to any Hazardous Material,
(iii) the presence, use, handling, transportation, storage, treatment or
disposal of any Hazardous Material or (iv) the violation or alleged violation of
any Environmental Law or Environmental Permit.

“Environmental Law” means any and all applicable present and future treaties,
laws, rules, regulations, codes, ordinances, orders, decrees, judgments,
injunctions, notices or binding agreements issued, promulgated or entered into
by or with any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the presence, management,
Release or threatened Release of any Hazardous Material or to health and safety
matters.

“Environmental Permit” means any permit, approval, authorization, certificate,
license, variance, filing or permission required by or from any Governmental
Authority pursuant to any Environmental Law.

“Equity Interest” means (i) shares of corporate stock, partnership interests,
membership interests and any other interest that confers on a Person the right
to receive a share of the profits and losses of, or a distribution of the assets
of, the issuing Person and (ii) all warrants, options or other rights to acquire
any Equity Interest set forth in clause (i) of this defined term.

“ERISA” means the Employee Retirement Income Security Act of 1974.

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

“ERISA Event” means (i) 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); (ii) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(iii) the filing pursuant to Section 412(d) of the Code or Section 303(a) of
ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (iv) the incurrence by the Borrower, any Subsidiary or any
ERISA Affiliate of any liability under Title IV of ERISA with respect to the
termination of any Plan; (v) the receipt by the Borrower, any Subsidiary 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; (vi) the incurrence by the Borrower, any Subsidiary or any
ERISA Affiliate

 

- 8 -

Virtus Investment Partners, Inc. Credit Agreement

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

of any liability with respect to the withdrawal or partial withdrawal from any
Plan or Multiemployer Plan; or (vii) the receipt by the Borrower, any Subsidiary
or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan
from the Borrower, any Subsidiary 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.

“Eurodollar”, when used in reference to any Revolving Loan or Borrowing, refers
to whether such Revolving Loan, or the Revolving Loans comprising such
Borrowing, are bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Section 8.1.

“Evergreen Letter of Credit” has the meaning assigned to such term in
Section 2.8(b)(iii).

“Excluded Amount” means, as of any date and with respect to each Excluded
Investment, an amount equal to the fair market value of such Excluded
Investment, provided that on and after the Excluded Investment Termination Date
with respect to such Excluded Investment, the Excluded Amount with respect to
such Excluded Investment shall be $0.

“Excluded Investment” means each security or other investment of any one or more
of the Loan Parties listed as an “Excluded Investment” on Schedule 3.4 to the
Security Agreement.

“Excluded Investment Termination Date” means, with respect to each Excluded
Investment, the first date, if any, upon which the security interest in such
Excluded Investment granted to the Administrative Agent pursuant to the Security
Agreement has been perfected by “control” (within the meaning of Sections 8-106
and 9-106 of the UCC), and the Administrative Agent has received an opinion of
Day Pitney LLP (or such other nationally-recognized law firm as shall be
reasonably acceptable to the Administrative Agent), in form and substance
satisfactory to the Administrative Agent with respect thereto.

“Excluded Taxes” means, with respect to any Credit Party or any other recipient
of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States 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 3.8(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party hereto (or designates a new lending office) or is
attributable to such Foreign Lender’s failure or inability (other than as a
result of a Change in Law) to comply with Section 3.7, except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the Borrower with respect to such withholding tax pursuant to
Section 3.7.

 

- 9 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Existing Disqualified Equity” means 9,783 shares of the Series B Voting
Convertible Preferred held by Harris Bankcorp.

“Existing Loan Agreement” means the Loan Agreement, dated as of December 31,
2008, between the Borrower and PLC.

“Existing Loan Documents” means, collectively, the Existing Loan Agreement, all
guarantees, security agreements, security agreements, mortgages and other
documents executed and delivered in connection with the Existing Loan Agreement.

“Federal Funds Effective Rate” means, for any day, a rate per annum (expressed
as a decimal, rounded upwards, if necessary, to the next higher  1/100 of 1%)
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 (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Effective 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
(ii) if such rate is not so published for any day, the Federal Funds Effective
Rate for such day shall be the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by it.

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

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Free Cash Flow” means, for any fiscal quarter of the Borrower, (a) EBITDA for
such fiscal quarter, minus (b) the sum of the following for the Borrower on a
Consolidated basis for such fiscal quarter: (i) interest costs paid or required
to be paid in cash, (ii) income and franchise taxes paid or required to be paid
in cash, (iii) capital expenditures paid in cash, and (iv) severance obligations
paid or required to be paid in cash.

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

“GAAP” means generally accepted accounting principles in effect from time to
time in the United States of America.

 

- 10 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra national bodies such as the European Union or
the European Central Bank).

“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, (i) 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, (ii) 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, (iii) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor as to enable the primary obligor to pay such
Indebtedness or other obligation or (iv) 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. The term
“Guaranteed” has a meaning correlative thereto. The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.

“Guarantee Agreement” means the Guarantee Agreement, substantially in the form
of Exhibit E, among the Borrower, the Subsidiary Guarantors and the
Administrative Agent.

“Guarantee Documents” means the Guarantee Agreement and each other guarantee
agreement, instrument or other document executed or delivered pursuant to
Sections 6.12 or 6.13 to guarantee any of the Credit Obligations.

“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 (i) any Interest Rate Protection Agreement and
(ii) any foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price swap,
cap, collar, hedging or other like arrangement, in each case entered into 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.

 

- 11 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Inactive Subsidiary” means a Subsidiary that (i) has no assets or assets not in
excess of $50,000 and (ii) does not engage in the active conduct of a trade or
business.

“Indebtedness” of any Person means, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
or otherwise in respect of bonds, debentures, notes or similar instruments,
including seller paper, (iii) all obligations of such Person upon which interest
charges are customarily paid, (iv) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (v) all obligations of such Person in respect of the
deferred purchase price of property or services (including contingent payment,
earn out and similar obligations, but excluding current accounts payable
incurred in the ordinary course of business which are paid within 90 days of
their respective due dates), (vi) all Capital Lease Obligations and Synthetic
Lease Obligations of such Person, (vii) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (viii) all obligations, contingent or otherwise, of
such Person in respect of bankers’ acceptances, (ix) all obligations of such
Person to pay a specified purchase price for goods or services whether or not
delivered or accepted (e.g., take or pay obligations) or similar obligations,
(x) to the extent not otherwise included, all net obligations of such Person
under Hedging Agreements, (xi) any of the foregoing 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, and
(xii) all Guarantees by such Person 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 expressly provide that such Person is not liable therefor.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitee” has the meaning assigned to such term in Section 10.3(b).

“Information” has the meaning assigned to such term in Section 10.13(b).

“Intercompany Note” means a promissory note evidencing the Indebtedness of a
Subsidiary to the Borrower or another Subsidiary or of the Borrower to a
Subsidiary, in each case substantially in the form annexed hereto as Exhibit J.

“Interest Coverage Ratio” means:

(a) for purposes of Section 5.1(d)(ix), the ratio of (i) EBITDA for the 12
consecutive calendar months ended March 31, 2009, to (ii) Interest Expense for
the 12 consecutive calendar months ended March 31, 2009,

(b) as of September 30, 2009, the ratio of (i) EBITDA for the two consecutive
fiscal quarters then ended to (ii) Interest Expense (excluding, to the extent
included therein, all fees paid to the Credit Parties on or about the Closing
Date relating to the establishment of the credit facilities evidenced hereby)
for the two consecutive fiscal quarters then ended,

 

- 12 -

Virtus Investment Partners, Inc. Credit Agreement

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

(c) as of December 31, 2009, the ratio of (i) EBITDA for the three consecutive
fiscal quarters then ended to (ii) Interest Expense (excluding, to the extent
included therein, all fees paid to the Credit Parties on or about the Closing
Date relating to the establishment of the credit facilities evidenced hereby)
for the three consecutive fiscal quarters then ended, and

(d) as of any fiscal quarter end occurring on or after March 31, 2010, the ratio
of (i) EBITDA for the four consecutive fiscal quarters then ended, to
(ii) Interest Expense (excluding, to the extent included therein, all fees paid
to the Credit Parties on or about the Closing Date relating to the establishment
of the credit facilities evidenced hereby) for the four consecutive fiscal
quarters then ended.

“Interest Expense” means, for any period, the interest (whether expensed or
capitalized) paid or accrued (including the interest component in respect of
Capital Lease Obligations) by the Borrower and the Subsidiaries during such
period, determined on a consolidated basis in accordance with GAAP.

“Interest Payment Date” means (i) with respect to any ABR Loan, the last day of
each March, June, September and December, (ii) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Eurodollar Loan is a part 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, and (iii) with respect to all
Revolving Loans, the Maturity Date.

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect, provided that (i) 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, and (ii) 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. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing. Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.

“Interest Rate Protection Agreement” means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar agreement
or arrangement entered into 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.

“Issuing Bank” means BNYM, in its capacity as issuer of Letters of Credit.

 

- 13 -

Virtus Investment Partners, Inc. Credit Agreement

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

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, (i) with respect to all of the Lenders, the
sum, without duplication, of (a) the aggregate undrawn amount of all outstanding
Letters of Credit at such time plus (b) the aggregate amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time and (ii) with respect to each Lender, its Applicable Percentage of
the amount determined under clause (i) above.

“Lenders” means the Persons listed on Schedule 2.1 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.

“Letter of Credit” means any letter of credit (and any successive renewals
thereof) issued pursuant to this Credit Agreement.

“Letter of Credit Commitment” means, with respect to the Issuing Bank, the
commitment of the Issuing Bank to issue Letters of Credit hereunder. The amount
of the Issuing Bank’s Letter of Credit Commitment is $2,000,000.

“Leverage Ratio” means:

(a) for purposes of Section 5.1(d)(ix), the ratio of (i) Total Debt as of
March 31, 2009 to (ii) Adjusted EBITDA for the twelve consecutive calendar
months ended March 31, 2009,

(b) as of any date occurring on or after September 30, 2009, but before
December 31, 2009, the ratio of (i) Total Debt as of such date to (ii)(X)
Adjusted EBITDA for the two consecutive fiscal quarters ended September 30,
2009, multiplied by (Y) two (2),

(c) as of any date occurring on or after December 31, 2009, but before March 31,
2010, the ratio of (i) Total Debt as of such date to (ii)(X) Adjusted EBITDA for
the three consecutive fiscal quarters ended December 31, 2009, multiplied by
(Y)  4/3, and

(d) as of any date occurring on or after March 31, 2010, the ratio of (i) Total
Debt as of such date to (ii) Adjusted EBITDA for the four consecutive fiscal
quarters ended on such date or, if such date is not a fiscal quarter end, for
the four consecutive fiscal quarters ended immediately prior to such date.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters LIBO Page (or on any successor or
substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
deposits in Dollars in the London interbank market) at approximately 11:00 a.m.,
London time, on the day that is two Business Days prior to the first day of such
Interest Period, as the rate for deposits in Dollars with a maturity comparable
to such Interest Period. In the event that such

 

- 14 -

Virtus Investment Partners, Inc. Credit Agreement

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

rate is not available at such time for any reason, then the “LIBO Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate
of interest per annum as determined by the Administrative Agent, equal to the
rate, as reported by BNYM to the Administrative Agent, quoted by BNYM to leading
banks in the London interbank market as the rate at which BNYM is offering
dollar deposits in an amount approximately equal to its ratable share of such
Eurodollar Borrowing with a maturity comparable to such Interest Period at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

“Lien” means, with respect to any asset, (i) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (ii) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement relating to such asset and
(iii) in the case of securities, any purchase option, call or similar right of a
third party with respect to such securities.

“Loan Documents” means this Credit Agreement, the Notes, the Guarantee
Documents, the documentation in respect of each Letter of Credit, the
Post-Closing Letter and the Security Documents.

“Loan Parties” means the Borrower, the Subsidiary Guarantors and VPDI.

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

“Margin Stock” has the meaning assigned to such term in Regulation U.

“Material Adverse Effect” means a material adverse effect on (i) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and the Subsidiaries, taken as a whole, (ii) the legality, validity or
enforceability of any Loan Document, (iii) the ability of any Loan Party to
perform any of its obligations under any Loan Document, (iv) the rights of or
benefits available to any Credit Party under any Loan Document or (v) any Lien
purported to be created under the applicable Loan Documents shall cease to be,
or shall be asserted by any Loan Party not to be, a valid and perfected Lien on
any Collateral, with the priority required thereby, except (a) as a result of
the sale or other disposition of the applicable Collateral in a transaction
permitted under the Loan Documents or (b) as a result of the Administrative
Agent’s failure to maintain possession of any stock certificates, promissory
notes or other instruments delivered to it under the applicable Security
Document.

“Material Obligations” means, as of any date, Indebtedness or other obligations
(other than Indebtedness or other obligations under the Loan Documents) of any
one or more of the Borrower or any Subsidiary in an aggregate principal amount
exceeding $1,000,000. For purposes of determining Material Obligations, the
“principal amount” of any Indebtedness or other obligations at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that the
Borrower or any Subsidiary, as applicable, would be required to pay if such
Indebtedness or other obligations became due and payable on such day.

“Maturity Date” means September 1, 2011.

 

- 15 -

Virtus Investment Partners, Inc. Credit Agreement

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

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

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

“Net Proceeds” means, with respect to any event, (i) the cash proceeds received
in respect of such event, including (a) any cash received in respect of any
non-cash proceeds, but only as and when received, (b) in the case of a casualty,
insurance proceeds, (c) in the case of a condemnation or similar event,
condemnation awards and similar payments and (d) in the case of the issuance of
Equity Interests, any cash subscription payment or other cash consideration paid
in connection therewith, (ii) net of the sum of (a) all reasonable fees and out
of pocket expenses paid by the Borrower and the Subsidiaries to third parties in
connection with such event, (b) in the case of a sale, transfer, lease or other
disposition of an asset (including pursuant to a sale and leaseback
transaction), or the issuance of Equity Interests, the amount of all payments
required to be made by the Borrower and the Subsidiaries as a result of such
event to repay Indebtedness (other than Indebtedness under the Loan Documents)
secured by such asset or otherwise subject to mandatory payment as a result of
such event and (c) the amount of all taxes paid (or reasonably estimated to be
payable) by the Borrower and the Subsidiaries and the amount of any cash
reserves established by the Borrower and the Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by the
chief financial officer of the Borrower); provided that, with respect to any
sale, transfer, lease or other disposition of an asset (including pursuant to a
sale and leaseback transaction or, subject to Section 6.11, a casualty or other
insured damage or condemnation or similar proceeding), if the Borrower shall
deliver a certificate of a Financial Officer to the Administrative Agent on or
before the date of receipt by the Borrower or such Subsidiary, as applicable, of
the proceeds of such sale, transfer, lease or other disposition setting forth
the intent of the Borrower or such Subsidiary, as applicable, to use the
proceeds of such sale, transfer, lease or other disposition to replace or repair
the assets that are the subject thereof with, or otherwise purchase, other
assets within 180 days of receipt of such proceeds, such proceeds shall not
constitute Net Proceeds except to the extent not so used at the end of such 180
day period, at which time such unapplied proceeds shall be deemed Net Proceeds.

“Notes” means, with respect to each Lender, a promissory note evidencing such
Lender’s Loans payable to the order of such Lender (or, if required by such
Lender, to such Lender and its registered assigns) substantially in the form of
Exhibit D.

“Notice of Conversion or Continuation” means a Notice of Conversion or
Continuation, substantially in the form of Exhibit H, or in such other form as
shall be acceptable to the Administrative Agent.

“Notice of Non-Extension” has the meaning assigned to such term in
Section 2.8(b)(iii).

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

 

- 16 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Participant” has the meaning assigned to such term in Section 10.4(d).

“Patriot Act” has the meaning assigned to such term in Section 10.14.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA.

“Permitted Encumbrances” means:

(a) Liens imposed by law for taxes, assessments or other governmental charges
that are not yet due or are being contested in compliance with Section 6.4,
provided that enforcement of such Liens is stayed pending such contest;

(b) landlords’, vendors’, 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 6.4;

(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 (other than
contracts for the payment of money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature, in each
case in the ordinary course of business;

(e) judgment liens in respect of judgments that do not constitute an Event of
Default under Section 8.1(k);

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

(g) Liens in favor of a financial institution encumbering deposits (including
the right of setoff) held by such financial institution in the ordinary course
of its business and which are within the general parameters customary in the
banking industry; and

(h) Liens on Margin Stock to the extent that a prohibition on such Liens would
violate Regulation U.

“Permitted Investments” means:

(a) debt obligations maturing within one year from the date of acquisition
thereof to the extent the principal thereof and interest thereon is backed by
the full faith and credit of the United States of America;

 

- 17 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from Standard & Poor’s Ratings Services, a division of The
McGraw Hill Companies, or from Moody’s Investors Service, Inc.;

(c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 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 that has a combined capital
and surplus and undivided profits of not less than $500,000,000 or, to the
extent not otherwise included, any Lender, and which is rated at least A1 by
Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, and
P1 by Moody’s Investors Service, Inc. in the note or commercial paper rating
category;

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

(e) money market mutual funds, 90% of the investments of which are in cash or
investments contemplated by clauses (a), (b) and (c) of this definition; and

(f) investments in any Virtus Short-term Bond Fund to the extent permitted by
Schedule 1.1.

“Permitted Prior Liens” means (a) Liens referred to in clauses (b), (c), (d),
(f) and (g) of the defined term “Permitted Encumbrances”, and (b) Liens referred
to in clauses (c), (d), (e) and (f) of Section 7.2.

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower, any Subsidiary 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.

“Platform” has the meaning assigned to such term in Section 6.2.

“PLC” means Phoenix Life Insurance Company, a New York domiciled insurance
company.

“PLC Debt” means the Indebtedness for borrowed money of the Borrower to PLC in
the outstanding principal amount of approximately $18,000,000.

 

- 18 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Pledge Agreement” means the Pledge Agreement, substantially in the form of
Exhibit M, between VPDI and the Administrative Agent.

“Post-Closing Letter” means the letter agreement, dated the Closing Date,
between the Borrower and the Administrative Agent, substantially in the form of
Exhibit L.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by BNYM as its prime commercial lending rate at its principal office in
New York City; each change in the Prime Rate being effective from and including
the date such change is publicly announced as being effective. The Prime Rate is
not intended to be lowest rate of interest charged by BNYM in connection with
extensions of credit to borrowers.

“Prohibited Convertible Preferred Event” means that on and as of October 31,
2011, the Certificate of Designation shall not have been amended in form and
substance satisfactory to the Administrative Agent (and all requisite
stockholder consents therefor been obtained), to provide that all obligations
(whether or not contingent) of the Loan Parties to purchase, tender for, redeem,
retire or otherwise reacquire any portion of the Convertible Preferreds (or any
securities into which they have been converted or exchanged) shall be
subordinated to the Credit Obligations.

“Properties” has the meaning assigned to such term in Section 4.6.

“Public Lender” has the meaning assigned to such term in Section 6.2.

“Register” has the meaning assigned to such term in Section 10.4(c).

“Regulated Equity Interest” means any Equity Interest issued by a Subsidiary to
any Person other than the Borrower or a Subsidiary Guarantor.

“Regulation D” means Regulation D of the Board.

“Regulation T” means Regulation T of the Board.

“Regulation U” means Regulation U of the Board.

“Regulation X” means Regulation X of the Board.

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

“Release” has the meaning set forth in Section 101(22) of CERCLA.

“Remedial Action” means (a) “remedial action” as such term is defined in CERCLA,
42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) clean up, remove,
treat, abate or in any other way address any Hazardous Material in the
environment; (ii) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not migrate or endanger or
threaten to endanger public health, welfare or the environment; or (iii) perform
studies and investigations in connection with, or as a precondition to, (i) or
(ii) above.

 

- 19 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Required Lenders” means, at any time, Lenders having unused Revolving
Commitments and Revolving Credit Exposure representing greater than 50% of the
sum of the unused Revolving Commitments and Revolving Credit Exposure of all
Lenders, provided that at any time there are only two Lenders, Required Lenders
shall mean all Lenders.

“Restricted Payment” means, as to any Person, (i) any dividend or other
distribution by such Person (whether in cash, securities or other property) with
respect to any Equity Interests of such Person, (ii) any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interest, (iii) any payment of
principal or interest or any purchase, redemption, retirement, acquisition or
defeasance with respect to any Indebtedness of such Person which is subordinated
to the payment of the Credit Obligations, or (iv) the acquisition for value by
such Person of any Equity Interests issued by such Person or any other Person
that Controls such Person.

“Revolving Commitment” means, with respect to each Lender, the commitment of
such Lender to make Revolving Loans and to acquire participations in Letters of
Credit hereunder in an aggregate outstanding amount not exceeding the amount of
such Lender’s Revolving Commitment as set forth on Schedule 2.1 or in the
Assignment and Assumption pursuant to which such Lender shall have assumed its
Revolving Commitment in accordance with Section 10.4(b), as applicable, as such
Revolving Commitment may be adjusted from time to time pursuant to Section 2.5
or pursuant to assignments by or to such Lender pursuant to Section 10.4. The
initial aggregate amount of the Revolving Commitments on the Agreement Date is
$30,000,000.

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

“Revolving Loan” means a loan referred to in Section 2.1 and made pursuant to
Section 2.4.

“Sale and Leaseback” has the meaning assigned to such term in Section 7.6.

“Secured Parties” means the “Secured Parties” as defined in the Security
Agreement.

“Security Agreement” means the Security Agreement, substantially in the form of
Exhibit F, among the Borrower, the Subsidiary Guarantors and the Administrative
Agent.

“Security Documents” means the Security Agreement, the Pledge Agreement, each
Control Agreement and each other security agreement, instrument or other
document executed or delivered pursuant to Sections 6.12 or 6.13, or Articles 4
or 10 of the Security Agreement, to secure any of the Credit Obligations.

 

- 20 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as “Eurocurrency liabilities” in
Regulation D). Such reserve percentages shall include those imposed pursuant to
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

“subsidiary” means, with respect to any Person (the “parent”), as of 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
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power is or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Guarantor” means any Subsidiary that executes and delivers the
Security Documents and the Guarantee Agreement, in each case in accordance with
Sections 5.1(f), 5.1(g), 6.12 and 6.13.

“Synthetic Lease” means a lease of property or assets (other than inventory)
designed to permit the lessee (i) to claim depreciation on such property or
assets under U.S. tax law and (ii) to treat such lease as an operating lease or
not to reflect the leased property or assets on the lessee’s balance sheet under
GAAP.

“Synthetic Lease Obligations” means, as to any Person, an amount equal to the
sum of (i) the obligations of such Person to pay rent or other amounts under any
Synthetic Lease which are attributable to principal and, without duplication,
(ii) the amount of any purchase price payment under any Synthetic Lease assuming
the lessee exercises the option to purchase the leased property at the end of
the lease term.

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

“Total Debt” means, at any time, an amount equal to the total Indebtedness of
the Borrower and the Subsidiaries at such time (excluding Indebtedness in
respect of Hedging Agreements) determined on a consolidated basis in accordance
with GAAP.

 

- 21 -

Virtus Investment Partners, Inc. Credit Agreement

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

“Transactions” means (i) the execution, delivery and performance by each Loan
Party of each Loan Document to which it is a party, (ii) the borrowing of the
Loans and the issuance of the Letters of Credit, (iii) the use of the proceeds
of the Loans and the Letters of Credit, (iv) the repayment of the PLC Debt, and
(v) the payment of certain amounts in connection with the other transactions
contemplated hereby, all to occur on or prior to the Closing Date.

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

“UCC” has the meaning assigned to such term in the Security Agreement.

“Virtus Fund” means, as of any date, any “registered investment company” (as
defined in Section 8 of the Investment Company Act of 1940, as amended), of
which the Borrower or any Subsidiary Guarantor is the registered investment
adviser.

“Virtus General Fund” means any Virtus Fund other than a Virtus Short-term Bond
Fund.

“Virtus General Fund Proceeds” means, as of any date, the aggregate sum, without
duplication, of all cash received by the Borrower and the Subsidiary Guarantors
during the period from the Closing Date to such date (a) as a return on and of
all seed capital investments made by the Borrower and the Subsidiary Guarantors
in any Virtus General Fund (including a return of such seed capital), and
(b) from all sales or other dispositions of seed capital investments in any
Virtus General Fund.

“Virtus Short-term Bond Fund” means any Virtus Fund listed on Schedule 1.1.

“VPDI” means VP Distributors, Inc., a Connecticut corporation and a registered
broker dealer.

“Withdrawal Liability” means a 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 1.2 Classification of Loans and Borrowings. For purposes of this Credit
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”). Borrowings may also be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

Section 1.3 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

 

- 22 -

Virtus Investment Partners, Inc. Credit Agreement

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

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 Credit 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 Credit Agreement, (e) any reference to any
law or regulation herein shall, unless otherwise specified, refer to such law or
regulation as amended, modified or supplemented from time to time and (f) 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 1.4 Accounting Terms; GAAP. As used in the Loan Documents and in any
certificate, opinion or other document made or delivered pursuant thereto,
accounting terms not defined in Section 1.1, and accounting terms partly defined
in Section 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in this Credit
Agreement and (i) the Borrower notifies the Administrative Agent that the
Borrower objects to determining compliance with such financial ratio or
requirement on the basis of GAAP in effect immediately after such change becomes
effective or (ii) the Required Lenders so object, then the Borrower’s compliance
with such ratio or requirement shall be determined on the basis of GAAP in
effect immediately before such change becomes effective, until either such
notice is withdrawn by the Borrower or the Required Lenders, as the case may be,
or the Borrower and the Required Lenders otherwise agree. Except as otherwise
expressly provided herein, the computation of financial ratios and requirements
set forth in this Credit Agreement shall be consistent with the Borrower’s
financial statements required to be delivered hereunder.

Section 1.5 Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Credit Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding up if
there is no nearest number).

Section 1.6 Resolution of Drafting Ambiguities. Each Loan Party acknowledges and
agrees that it was represented by counsel in connection with the execution and
delivery of the Loan Documents to which it is a party, that it and its counsel
reviewed and participated in the preparation and negotiation hereof and thereof
and that any rule of construction to the effect that ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
hereof or thereof.

ARTICLE 2.

THE CREDITS

Section 2.1 Revolving Commitments. Subject to the terms and conditions hereof
and relying upon the representations and warranties herein set forth, each
Lender agrees to make loans to the Borrower in dollars from time to time during
the Availability Period, provided that,

 

- 23 -

Virtus Investment Partners, Inc. Credit Agreement

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

immediately after giving effect thereto (a) the aggregate Revolving Credit
Exposures of all Lenders will not exceed the aggregate Revolving Commitments,
and (b) the Asset Coverage Ratio shall not be less than 1.75:1.00. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, prepay and reborrow Revolving Loans.

Section 2.2 Revolving Loans and Revolving Borrowings

(a) Each Revolving Loan shall be made as part of a Borrowing consisting of
Revolving Loans made by the Lenders ratably in accordance with their respective
Revolving Commitments. The failure of any Lender to make any Revolving Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder, provided that the Revolving Commitments of the Lenders are several,
and no Lender shall be responsible for any other Lender’s failure to make
Revolving Loans as required.

(b) Subject to Section 3.5(e), each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans, as applicable, in each case 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 Eurodollar 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 Credit Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Borrowing,
such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $2,000,000. At the time that each ABR Borrowing is
made, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $2,000,000, provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Revolving Commitments or in an aggregate amount that is
required to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.8(e). 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 three
Eurodollar Borrowings outstanding.

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

Section 2.3 Requests for Borrowings

(a) To request a Borrowing the Borrower shall deliver a Credit Request to the
Administrative Agent by hand or facsimile (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Administrative Agent) or notify the Administrative Agent by telephone, in each
case to be promptly confirmed by the delivery to the Administrative Agent of a
signed Credit Request (i) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, on the date of the proposed Borrowing. Each such
Credit Request (including each such telephonic request) shall be irrevocable and
shall specify the following information in compliance with Section 2.2:

(i) the aggregate amount of the requested Borrowing;

 

- 24 -

Virtus Investment Partners, Inc. Credit Agreement

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

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.4; and

(vi) a reasonably detailed calculation of the Leverage Ratio on a pro forma
basis immediately after giving effect to such Borrowing.

(b) If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month’s duration. Promptly following
receipt of a Credit 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.

Section 2.4 Funding of Borrowings. Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 1:00 p.m., New York City time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders. Subject to Section 5.2, the Administrative Agent will make such
Loans available to the Borrower by promptly crediting or otherwise transferring
the amounts so received, in like funds, to an account of the Borrower maintained
with the Administrative Agent and designated by the Borrower in the applicable
Credit Request, provided that ABR Loans made to finance the reimbursement of an
LC Disbursement as provided in Section 2.8(e) shall be remitted by the
Administrative Agent to the Issuing Bank.

Section 2.5 Termination and Reduction of Revolving Commitments

(a) Unless previously terminated, the Revolving Commitments shall terminate on
the last day of the Availability Period.

(b) (i) On September 1, 2010, the aggregate Revolving Commitments of the Lenders
shall be automatically reduced, on a pro rata basis, by such amount as may be
necessary, if any, so that the aggregate Revolving Commitments of the Lenders
equals $18,000,000, (ii) upon the occurrence of each Commitment Reduction Event,
the Revolving Commitments shall be reduced by an amount equal to 50% of the Net
Proceeds thereof, and (iii) upon the occurrence of a Prohibited Convertible
Preferred Event, the Revolving Commitments shall terminate.

 

- 25 -

Virtus Investment Partners, Inc. Credit Agreement

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

(c) The Borrower may at any time terminate, or from time to time reduce, the
Revolving Commitments, provided that (i) immediately after giving effect
thereto, the sum of the Revolving Credit Exposures would not exceed the total
Revolving Commitments, (ii) each such reduction shall be in an amount that is an
integral multiple of $2,000,000 and not less than $1,000,000, and (iii) any
reduction of the Revolving Commitments to an amount below the Letter of Credit
Commitment shall automatically reduce the Letter of Credit Commitment on a
dollar for dollar basis.

(d) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Revolving Commitments under paragraph (c) of this
Section at least three 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 Revolving 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. Each reduction, and any termination, of the
Revolving Commitments shall be permanent and each reduction of the Revolving
Commitments shall be made ratably among the Lenders in accordance with their
respective Revolving Commitments.

Section 2.6 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
Revolving Loan on the Maturity Date.

(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the debt 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, if any, 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 paragraphs (b) or
(c) of this Section shall, to the extent not inconsistent with any entries made
in the Notes, be prima facie evidence of the existence and amounts of the
obligations recorded therein, provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Credit Agreement.

 

- 26 -

Virtus Investment Partners, Inc. Credit Agreement

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

(e) Any Lender may request that the Loans made by it be evidenced by a Note. In
such event, the Borrower shall prepare, execute and deliver to such Lender, a
Note payable to the order of such Lender, substantially in the form of Exhibit
D. In addition, if requested by a Lender, its Note may be made payable to such
Lender and its registered assigns in which case all Loans evidenced by such Note
and interest thereon shall at all times (including after assignment pursuant to
Section 10.4) be represented by one or more Notes in like form payable to the
order of the payee named therein and its registered assigns.

Section 2.7 Prepayment of Loans.

(a) Voluntary Prepayments. The Borrower shall have the right at any time and
from time to time to prepay any Borrowing in whole or in part, subject to the
requirements of this Section.

(b) Prepayments Resulting from the Reduction of the Total Revolving Commitments.
In the event of any partial reduction or termination of the Revolving
Commitments, then (i) at or prior to the date of such reduction or termination,
the Administrative Agent shall notify the Borrower and the Lenders of the sum of
the Revolving Credit Exposures after giving effect thereto and (ii) if such sum
would exceed the total Revolving Commitments after giving effect to such
reduction or termination, then the Borrower shall, on the date of such reduction
or termination, prepay Revolving Borrowings in an amount sufficient to eliminate
such excess.

(c) Asset Coverage Prepayments. In the event that the Asset Coverage Ratio is
less than 1.75:1.00 at any time, the Borrower shall immediately prepay the
Revolving Loans and take such other action as may be necessary to cause the
Asset Coverage Ratio to be not less than 1.75:1.00 immediately after giving
effect to such prepayment or other action.

(d) Notice of Prepayment; Application of Prepayments. The Borrower shall notify
the Administrative Agent by telephone (confirmed by facsimile) of any prepayment
hereunder (i) in the case of a prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., New York City time, on the date of the prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid, provided that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.5, then
such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.5. Promptly following receipt of any such
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing under Section 2.7(a) shall be
in an integral multiple of $1,000,000 and not less than $2,000,000. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 3.1.

 

- 27 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 2.8 Letters of Credit

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of standby letters of credit denominated in dollars for
its own account, in a form acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the period from the
Closing Date to the tenth Business Day preceding the last day of the
Availability Period. In the event of any inconsistency between the terms and
conditions of this Credit Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Credit Agreement shall control.

(b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen
Letters of Credit.

(i) To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall deliver by
hand or facsimile (or transmit by electronic communication, if arrangements for
doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (not later than three Business Days before the requested
date of issuance, amendment, renewal or extension) a Credit Request requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the Issuing Bank,
the Borrower also shall submit a letter of credit application on the Issuing
Bank’s standard form in connection with any request for the issuance, amendment,
renewal or extension of a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and, upon issuance, amendment, renewal or
extension of each Letter of Credit, the Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or
extension, (x) the aggregate LC Exposure of all Lenders shall not exceed the
Letter of Credit Commitment, (y) the aggregate Revolving Credit Exposures of all
Lenders shall not exceed the aggregate Revolving Commitments, and (z) the Asset
Coverage Ratio shall not be less than 1.75:1.00, provided that notwithstanding
anything to the contrary contained in any Loan Document, the Issuing Bank shall
have no obligation hereunder to issue, amend, renew or extend any Letter of
Credit.

(ii) Unless the Issuing Bank has received written notice from any Lender, the
Administrative Agent or any Loan Party, at least one Business Day prior to the
requested date of issuance or amendment of the applicable Letter of Credit, that
one or more applicable conditions contained in Article 5 shall not then be
satisfied, then, subject to the terms and conditions hereof, the Issuing Bank
shall, on the requested date, issue a Letter of Credit for the account of the
Borrower (or the applicable Subsidiary) or enter into the applicable amendment,
as the case may be, in each case in accordance with

 

- 28 -

Virtus Investment Partners, Inc. Credit Agreement

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

the Issuing Bank’s usual and customary business practices. Upon the issuance
amendment, renewal or extension of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuing Bank a risk participation in such Letter of Credit in an amount
equal to the product of such Lender’s Applicable Percentage multiplied by the
face amount of such Letter of Credit.

(iii) If the Borrower so requests in any Credit Request, the Issuing Bank may,
in its sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Evergreen Letter of Credit”); provided
that each such Evergreen Letter of Credit must permit the Issuing Bank to
prevent any such extension at least once in each twelve month period (commencing
with the date of issuance of such Letter of Credit) by giving prior notice (a
“Non-Extension Notice”) to the beneficiary thereof not later than a day (the
“Non-Extension Notice Date”) in each such twelve month period to be agreed upon
at the time such Letter of Credit is issued. Unless otherwise directed by the
Issuing Bank, the Borrower shall not be required to make a specific request to
the Issuing Bank for any such extension. Once an Evergreen Letter of Credit has
been issued, the Lenders shall be deemed to have authorized (but may not
require) the Issuing Bank to permit the extension of such Letter of Credit at
any time to an expiry date not later than ten Business Days prior to the
Maturity Date; provided, however, that the Issuing Bank shall not permit any
such extension if it has received notice (which may be by telephone or in
writing) on or before the day that is five Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such extension or (2) from any Credit Party
or the Borrower that one or more of the applicable conditions specified in
Section 5.2 is not then satisfied, and in each such case directing the Issuing
Bank not to permit such extension.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date that is one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is ten Business Days prior to the Maturity Date, provided that any Letter
of Credit may provide for the renewal thereof for additional one year periods
(which shall in no event extend beyond the date that is ten Business Days prior
to the Maturity Date).

(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants
to each Lender, and each such Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each such Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Bank, such Lender’s Applicable Percentage of each
LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on
the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each such Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension

 

- 29 -

Virtus Investment Partners, Inc. Credit Agreement

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

of any Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Revolving Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever; provided that the foregoing shall not be construed to excuse the
Issuing Bank from liability to any Lender to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by each Lender to the extent permitted by applicable law) suffered by
such Lender that are caused by the Issuing Bank’s failure to exercise care (the
Lenders expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court of
competent jurisdiction), the Issuing Bank shall be deemed to have exercised
care).

(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, then the Issuing Bank shall either (i) notify the
Borrower to reimburse the Issuing Bank therefor, in which case the Borrower
shall reimburse such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement and any accrued interest thereon not later
than 1:00 p.m., New York City time, on (A) the Business Day that the Borrower
receives such notice, if such notice is received prior to 12:00 noon, New York
City time, or (B) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such
time, provided that, if the LC Disbursement is equal to or greater than
$1,000,000, the Borrower may, subject to the conditions of borrowing set forth
herein, request in accordance with Section 2.3 that such payment be financed
with an ABR Borrowing in an equivalent amount and, to the extent so financed,
the Borrower’s obligation to make such payment shall be discharged and replaced
by the resulting ABR Borrowing, or (ii) notify the Administrative Agent that the
Issuing Bank is requesting that the Lenders make an ABR Borrowing in an amount
equal to such LC Disbursement and any accrued interest thereon, in which case
(A) the Administrative Agent shall notify each Lender of the details thereof and
of the amount of such Lender’s Loan to be made as part of such ABR Borrowing,
and (B) each Lender shall, whether or not any Default shall have occurred and be
continuing, any representation or warranty shall be accurate, any condition to
the making of any Loan hereunder shall have been fulfilled, or any other matter
whatsoever, make the Loan to be made by it under this paragraph by wire transfer
of immediately available funds to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders on (1) the
Business Day that such Lender receives such notice, if such notice is received
prior to 12:00 noon, New York City time, on the day of receipt or (2) the
Business Day immediately following the day that such Lender receives such
notice, if such notice is not received prior to such time on the day of receipt.
Such Loans shall, for all purposes hereof, be deemed to be an ABR Borrowing
referred to in Section 2.1 and made pursuant to Section 2.4, and the Lenders
obligations to make such Loans shall be absolute and unconditional. The
Administrative Agent will make such Loans available to the Issuing Bank by
promptly crediting or otherwise transferring the amounts so received, in like
funds, to the Issuing Bank for the purpose of repaying in full the LC
Disbursement and all accrued interest thereon.

(f) Obligations Absolute. The Borrower’s obligations to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Credit Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged,

 

- 30 -

Virtus Investment Partners, Inc. Credit Agreement

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

fraudulent, insufficient or invalid in any respect or any statement therein
being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank
under a Letter of Credit against presentation of a draft or other document that
does not comply with the terms of such Letter of Credit, (iv) any amendment or
waiver of or any consent to departure from all or any of the provisions of any
Letter of Credit or any Loan Document, (v) the existence of any claim, setoff,
defense or other right that the Borrower, any other party guaranteeing, or
otherwise obligated with, the Borrower, any Subsidiary or other Affiliate
thereof or any other Person may at any time have against the beneficiary under
any Letter of Credit, any Credit Party or any other Person, whether in
connection with this Credit Agreement, any other Loan Document or any other
related or unrelated agreement or transaction, or (vi) any other act or omission
to act or delay of any kind of any Credit or any other Person or any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither any Credit Party nor any of their respective Related Parties
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

(g) Disbursement Procedures. The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall promptly notify (which
may include telephonic notice, promptly confirmed by facsimile) the
Administrative Agent and the Borrower of such demand for payment and whether the
Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Lenders with
respect to any such LC Disbursement.

(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC

 

- 31 -

Virtus Investment Partners, Inc. Credit Agreement

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

Disbursement is made, the unpaid amount thereof shall bear interest, for each
day from and including the date such LC Disbursement is made to but excluding
the date that the Borrower reimburses such LC Disbursement, at the rate per
annum then applicable to ABR Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 3.1(b) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the Issuing Bank, except that interest
accrued on and after the date of payment by any Lender pursuant to paragraph
(e) of this Section to reimburse the Issuing Bank shall be for the account of
such Lender to the extent of such payment.

(i) Cash Collateral. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives notice from the Administrative Agent
or the Required Lenders (or, if the maturity of the Loans has been accelerated,
Lenders with LC Exposure representing greater than 50% of the total LC Exposure)
demanding the deposit of cash collateral pursuant to this paragraph, the
Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Lenders, an amount in
cash equal to 105% of the LC Exposure as of such date plus any accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default described in Section 8.1(h) or
Section 8.1(i). Such deposit shall be held by the Administrative Agent as
collateral for the payment and performance of the obligations of the Borrower
under this Credit Agreement. The Administrative Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Such deposit shall not bear interest, nor shall the Administrative
Agent be under any obligation whatsoever to invest the same, provided that, at
the request of the Borrower, such deposit shall be invested by the
Administrative Agent in direct short term obligations of, or short term
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America, in each case maturing no later than
the expiry date of the Letter of Credit giving rise to the relevant LC Exposure.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the satisfaction
of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the
consent of Lenders with LC Exposure representing greater than 50% of the total
LC Exposure), be applied to satisfy other obligations of the Borrower under this
Credit Agreement. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.

Section 2.9 Payments Generally; Administrative Agent’s Clawback.

(a) General. Each Loan Party (other than VPDI) shall make each payment required
to be made by it hereunder or under any other Loan Document (whether of
principal of Loans, LC Disbursements, interest or fees, or of amounts payable
under Sections 3.5, 3.6, 3.7 or 10.3, or otherwise) prior to 2:00 p.m., New York
City time, on the date when due, in immediately available funds, without setoff
or counterclaim. Any amounts received after such

 

- 32 -

Virtus Investment Partners, Inc. Credit Agreement

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

time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its office at One Wall Street, New York, New York, or
such other office as to which the Administrative Agent may notify the other
parties hereto, except payments to be made to the Issuing Bank as expressly
provided herein and except that payments pursuant to Sections 3.5, 3.6, 3.7 and
10.3, shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. 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) Pro Rata Treatment. Each Borrowing, each payment or prepayment of principal
of any Borrowing, each payment of interest on the Loans, each payment of fees,
each reduction of the Revolving Commitments and each conversion of any Borrowing
to or continuation of any Borrowing as a Borrowing of any Type shall be
allocated pro rata among the Lenders in accordance with their respective
Revolving Commitments (or, if such Revolving Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of their
outstanding Loans). Each Lender agrees that in computing such Lender’s portion
of any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender’s percentage of such Borrowing to the next higher
or lower whole dollar amount.

(c) Funding by Lenders; Presumption by Administrative Agent.

(i) 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 Section 2.4 and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the 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 (x) in the case of a payment to be made
by such Lender, a rate per annum equal to 0.50% plus the Federal Funds Effective
Rate and (y) in the case of a payment to be made by 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 its share of
the applicable Borrowing to the Administrative Agent, then the amount so paid
shall constitute such Lender’s Loan included in such Borrowing. Any payment by
the Borrower shall be without prejudice to any claim the Borrower may have
against a Lender that shall have failed to make such payment to the
Administrative Agent.

 

- 33 -

Virtus Investment Partners, Inc. Credit Agreement

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

(ii) Payments by Borrower; Presumptions by Administrative Agent. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank 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 or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders or the Issuing Bank, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the Issuing Bank, with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate. A notice of the Administrative Agent to any Lender or the
Borrower with respect to any amount owing under this paragraph (c) shall be
conclusive, absent manifest error.

(d) Obligations of Lenders Several. The obligations of the Lenders hereunder to
make Loans, to purchase participations in Letters of Credit, and to make
payments pursuant to Section 10.3(c) are several and not joint. The failure of
any Lender to make any Loan, purchase any participation in any Letter of Credit,
or make any payment under Section 10.3(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 any Loan, purchase any participation in a Letter of Credit, or make any
payment required under Section 10.3(c).

(e) Failure to Satisfy Conditions Precedent. 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 Article 2, and such funds are not
made available to the Borrower by the Administrative Agent because the
conditions to the borrowing of Loans set forth in Article 5 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.

(f) Funding Source. 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.

(g) Insufficient Payment. Subject to the provisions of Article 8, whenever any
payment received by the Administrative Agent under this Credit Agreement or any
of the other Loan Documents is insufficient to pay in full all amounts due and
payable to the Credit Parties under or in respect of this Credit Agreement and
the other Loan Documents on any date, such payment shall be distributed by the
Administrative Agent and applied by the Administrative Agent (i) first, towards
payment of all fees and expenses due to the Administrative Agent under the Loan
Documents, (ii) second, towards payment of all expenses then due hereunder,
ratably among the parties entitled thereto in accordance herewith, (iii) third,
towards payment of interest, fees and commissions then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest,
fees and commissions then due to such parties, and (iv)

 

- 34 -

Virtus Investment Partners, Inc. Credit Agreement

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

fourth, towards payment of principal of Loans and unreimbursed LC Disbursements
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of principal of Loans and unreimbursed LC Disbursements then
due to such parties.

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

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

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

Each Loan Party (other than VPDI) 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 each
such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of each such
Loan Party in the amount of such participation.

ARTICLE 3.

INTEREST, FEES, YIELD PROTECTION, ETC.

Section 3.1 Interest

(a) The Revolving Loans comprising each (i) ABR Borrowing shall bear interest
the Alternate Base Rate plus the Applicable Margin and (ii) Eurodollar Borrowing
shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin.

(b) Notwithstanding the foregoing, if any principal of or interest on any Loan,
any reimbursement obligation in respect of any LC Disbursement or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon

 

- 35 -

Virtus Investment Partners, Inc. Credit Agreement

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

acceleration or otherwise, such overdue amount shall bear interest, after as
well as before judgment, at a rate per annum equal to 2.00% plus the rate
applicable to ABR Borrowings as provided in the preceding paragraph of this
Section. In addition, notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and (x) the Administrative Agent so notifies the
Borrower, or (y) such Event of Default has occurred under Sections 8.1(h) or
8.1(i), then, so long as such Event of Default is continuing, all outstanding
principal of each Loan and all unreimbursed reimbursement obligations in respect
of all LC Disbursements shall, without duplication of amounts payable under the
preceding sentence, bear interest, after as well as before judgment, at a rate
per annum equal to 2.00% plus the rate otherwise applicable to such Loan as
provided in the preceding paragraph of this Section or to such unreimbursed
reimbursement obligations in accordance with Section 2.8(h).

(c) 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
paragraph (b) of this Section shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment, and (iii) in the event of any conversion of any Eurodollar Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.

(d) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and in each case shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day). Each of the Alternate Base Rate, the Adjusted LIBO
Rate, the Federal Funds Effective Rate, the LIBO Rate and the Adjusted One Month
Eurodollar Rate shall be determined by the Administrative Agent, and each such
determination shall be conclusive absent clearly demonstrable error.

Section 3.2 Interest Elections

(a) Each Borrowing initially shall be of the Type specified in the applicable
Credit Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Credit Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.

(b) To make an election pursuant to this Section, the Borrower shall deliver to
the Administrative Agent a signed Notice of Conversion or Continuation (or
notify the Administrative Agent by telephone, to be promptly confirmed by
delivery to the Administrative Agent of a signed Notice of Conversion or
Continuation) by the time that a Credit Request would be required under
Section 2.3 if the Borrower were requesting a Borrowing of the Type resulting
from such election to be made on the effective date of such election.

 

- 36 -

Virtus Investment Partners, Inc. Credit Agreement

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

(c) Each such telephonic and written Notice of Conversion or Continuation shall
be irrevocable and shall specify the following information:

(i) the Borrowing to which such Notice of Conversion or Continuation applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and (iv) of
this paragraph shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Notice of
Conversion or Continuation, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and

(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.

If any such Notice of Conversion or Continuation requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration.

(d) Promptly following receipt of an Notice of Conversion or Continuation, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Notice of Conversion or
Continuation prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period, such Borrowing shall be converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Borrower, then, so long as an Event of Default is continuing,
(i) no outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.

Section 3.3 Fees

(a) The Borrower agrees to pay to the Administrative Agent for the account of
each Lender, a commitment fee, which shall accrue at a rate per annum equal to
0.50% on the daily amount of such Lender’s unused Revolving Commitment during
the period from and including the date on which this Credit Agreement becomes
effective pursuant to Section 10.6 to but excluding the date on which such
Revolving Commitment terminates. Accrued commitment fees shall be payable in
arrears on the last day of March, June, September and December of each year,
each date on which the Revolving Commitments are permanently reduced and on the
date on which the Revolving Commitments terminate, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).

 

- 37 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Lender a participation fee with respect to its participations in Letters
of Credit, which shall accrue at a rate per annum equal to the Applicable Margin
on the average daily amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Closing Date to but excluding the later of the date on which
such Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure and (ii) to the Issuing Bank for its own account
a fronting fee, which shall accrue at the rate or rates per annum separately
agreed upon between the Borrower and the Issuing Bank on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the Closing
Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any LC Exposure, as well as
the Issuing Bank’s standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. Accrued participation fees and fronting fees shall be payable in
arrears on the last day of March, June, September and December of each year,
commencing on the first such date to occur after the date hereof; provided that
all such fees shall be payable on the date on which the Revolving Commitments
terminate and any such fees accruing after the date on which the Revolving
Commitments terminate shall be payable on demand. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within ten days after
demand. All participation fees and fronting 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). Notwithstanding anything
to the contrary herein, if an Event of Default has occurred and is continuing
and the Administrative Agent, in the case of participation fees, or the Issuing
Bank, in the case of fronting fees, so notifies the Borrower, then, so long as
such Event of Default is continuing, all participation fees and fronting fees
shall be calculated at a rate per annum equal to 2% plus the rate otherwise
applicable thereto and shall be payable on demand.

(c) The Borrower agrees to pay to each of the Administrative Agent, the Issuing
Bank and the Lead Arranger, for its own account, such fees and other amounts
(and at such times) as may have been separately agreed upon between the Borrower
and such Credit Party.

(d) All fees and other amounts payable hereunder shall be paid on the dates due,
in immediately available funds. Fees and other amounts paid shall not be
refundable under any circumstances.

Section 3.4 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or

 

- 38 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) the Administrative Agent is advised by Required Lenders that the Adjusted
LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not
adequately and fairly reflect the cost of making or maintaining their Loans
included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Notice of
Conversion or Continuation that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Credit Request requests a Eurodollar Borrowing, such Borrowing
shall be made as an ABR Borrowing.

Section 3.5 Increased Costs; Illegality

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

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

(ii) subject any Lender or the Issuing Bank to any tax of any kind whatsoever
with respect to this Credit Agreement, any Letter of Credit, any participation
in a Letter of Credit or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender or the Issuing Bank in respect thereof
(except for Indemnified Taxes or Other Taxes covered by Section 3.7 and the
imposition of, or any change in the rate of, any Excluded Tax payable by such
Lender or the Issuing Bank); or

(iii) impose on any Lender or the Issuing Bank or the London interbank market
any other condition, cost or expense affecting this Credit Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;

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 the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit
(or of maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the Issuing Bank hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender or the Issuing Bank, the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.

(b) Capital Requirements. If any Lender or the Issuing Bank determines that any
Change in Law affecting such Lender or the Issuing Bank or any lending office of
such Lender or such Lender’s or the Issuing Bank’s holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender’s or the Issuing Bank’s capital or on the capital of
such Lender’s or the Issuing Bank’s holding company,

 

- 39 -

Virtus Investment Partners, Inc. Credit Agreement

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

if any, as a consequence of this Credit Agreement, the Commitments of such
Lender or the Loans made by, or participations in Letters of Credit held by,
such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company could have achieved but for such Change in Law (taking
into consideration such Lender’s or the Issuing Bank’s policies and the policies
of such Lender’s or the Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender’s or the Issuing
Bank’s holding company for any such reduction suffered.

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

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

(e) Illegality. Notwithstanding any other provision of this Credit Agreement,
if, after the Agreement Date, any Change in Law shall make it unlawful for any
Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:

(i) such Lender may declare that Eurodollar Loans will not thereafter (for the
duration of such unlawfulness) be made by such Lender hereunder (or be continued
for additional Interest Periods) and ABR Loans will not thereafter (for such
duration) be converted into Eurodollar Loans, whereupon any request for a
Eurodollar Borrowing or to convert an ABR Borrowing to a Eurodollar Borrowing or
to continue a Eurodollar Borrowing, as applicable, for an additional Interest
Period shall, as to such Lender only, be deemed a request for an ABR Loan (or a
request to continue an ABR Loan as such for an additional Interest Period or to
convert a Eurodollar Loan into an ABR Loan, as applicable), unless such
declaration shall be subsequently withdrawn; and

(ii) such Lender may require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans, as of the effective date of such notice as
provided in the last sentence of this paragraph.

 

- 40 -

Virtus Investment Partners, Inc. Credit Agreement

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

In the event any Lender shall exercise its rights under clause (i) or (ii) of
this paragraph, all payments and prepayments of principal that would otherwise
have been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting from
the conversion of, such Eurodollar Loans, as applicable. For purposes of this
paragraph, a notice to the Borrower by any Lender shall be effective as to each
Eurodollar Loan made by such Lender, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.

Section 3.6 Break Funding Payments. In the event of (a) the payment or
prepayment (voluntary or otherwise) of any principal of any Eurodollar Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto, (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice may be revoked under Section 2.7(d) and is revoked in accordance
therewith), or (d) the assignment of any Eurodollar Loan other than on the last
day of the Interest Period or maturity date applicable thereto as a result of a
request by the Borrower pursuant to Section 3.8(b), then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest that would accrue on such principal amount for such period at
the interest rate that such Lender would bid were it to bid, at the commencement
of such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. 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 10 days after receipt thereof.

Section 3.7 Taxes

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) each Credit Party 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 timely
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

 

- 41 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
paragraph (a) above, the Borrower shall timely pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

(c) Indemnification by the Borrower. The Borrower shall indemnify each Credit
Party, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by such Credit Party and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Credit Party (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

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

(e) Status of Lenders. Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to the Borrower (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Borrower or the Administrative Agent, shall deliver
such other documentation prescribed by applicable law or reasonably requested by
the Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements.

Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States of America, any Foreign Lender
shall deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Credit 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) duly completed copies of Internal Revenue Service Form W 8BEN claiming
eligibility for benefits of an income tax treaty to which the United States of
America is a party,

 

- 42 -

Virtus Investment Partners, Inc. Credit Agreement

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

(ii) duly completed copies of Internal Revenue Service Form W 8ECI,

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

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

(f) Treatment of Certain Refunds. If any Credit Party determines, in its sole
discretion, that it has received a refund of any 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 of such Credit Party 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 a Credit Party, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to such Credit
Party in the event such Credit Party is required to repay such refund to such
Governmental Authority. This paragraph shall not be construed to require any
Credit Party 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 3.8 Mitigation Obligations; Replacement of Lenders

(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.5, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.7, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans or Letters
of Credit (or any participation therein) 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 to such Lender pursuant to or under Section 3.5 or
Section 3.7, 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.

 

- 43 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) Replacement of Lenders. If any Lender requests compensation under
Section 3.5, 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 3.7, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.4), all of its interests,
rights and obligations under this Credit 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 10.4;

(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 3.5) from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii) in the case of any such assignment resulting from a claim for compensation
under Section 3.5 or payments required to be made pursuant to Section 3.7, such
assignment will result in a reduction in such compensation or payments
thereafter; and

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

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

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Credit Parties that:

Section 4.1 Organization; Powers. Each of the Borrower and the Subsidiaries is
duly organized, validly existing and in good standing 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 where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.

 

- 44 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 4.2 Authorization; Enforceability. The Transactions are within the
corporate, partnership or other analogous powers of each of the Borrower and the
Subsidiaries to the extent it is a party thereto and have been duly authorized
by all necessary corporate, partnership or other analogous and, if required,
equity holder action. Each Loan Document has been duly executed and delivered by
each of the Borrower and the Subsidiaries to the extent it is a party thereto
and constitutes a legal, valid and binding obligation thereof, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally.

Section 4.3 Governmental Approvals; No Conflicts. The Transactions (i) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except for (x) filings, registrations and
recordings necessary to perfect Liens created under the Loan Documents and
(y) such as have been obtained or made and are in full force and effect,
(ii) will not violate any applicable law or regulation or the charter, by laws
or other organizational documents of the Borrower or any of the Subsidiaries or
any order of any Governmental Authority, (iii) will not violate or result in a
default under any material indenture, agreement or other instrument binding upon
the Borrower or any of the Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any of the
Subsidiaries, and (iv) will not result in the creation or imposition of any Lien
on any asset of the Borrower or any of the Subsidiaries (other than Liens
expressly permitted by Section 7.2).

Section 4.4 Financial Condition; No Material Adverse Change

(a) The Borrower has heretofore furnished to the Credit Parties (i) the
consolidated balance sheets and statements of income, stockholders equity and
cash flows of the Borrower and its subsidiaries as of and for the fiscal year
ended December 31, 2008, reported on by PricewaterhouseCoopers LLP, and (ii) the
consolidated balance sheet and statement of income, stockholders equity and cash
flows of the Borrower and its subsidiaries as of and for the fiscal quarter
ended June 30, 2009, and the portion of the fiscal year then ended. The
consolidated financial statements referred to in clauses (i) and (ii) above
present fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its subsidiaries as of such dates
and for the indicated 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.

(b) Since December 31, 2008, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries, taken as a whole.

Section 4.5 Properties

(a) Each of the Borrower and the Subsidiaries has good title to, or valid
leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.

 

- 45 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) Each of the Borrower and the Subsidiaries owns, or is entitled to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and the
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.

(c) Each of the Borrower and the Subsidiaries has complied in all material
respects with all obligations under all material leases to which it is a party
and all such leases are in full force and effect. Each of the Borrower and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.

Section 4.6 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 the Subsidiaries
(i) that, if adversely determined (and provided that there exists a reasonable
possibility of such adverse determination), 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 any Loan Document 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:

(i) the properties owned, leased or operated by the Borrower and the
Subsidiaries (the “Properties”) do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Remedial Actions and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect,

(ii) the Properties and all operations of the Borrower and the Subsidiaries are
in compliance in all material respects, and in the last five years have been in
compliance, with all Environmental Laws, and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
noncompliance or failure to obtain any necessary permits, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect,

(iii) there have been no Releases or threatened Releases at, from, under or
proximate to the Properties or otherwise in connection with the current or
former operations of the Borrower or the Subsidiaries, which Releases or
threatened Releases, in the aggregate, could reasonably be expected to result in
a Material Adverse Effect,

(iv) neither the Borrower nor any of the Subsidiaries has received any notice of
an Environmental Claim in connection with the Properties or the current or
former operations of the Borrower or the Subsidiaries or with regard to any
Person whose liabilities for environmental matters the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in

 

- 46 -

Virtus Investment Partners, Inc. Credit Agreement

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

the aggregate, could reasonably be expected to result in a Material Adverse
Effect, nor do the Borrower or the Subsidiaries have reason to believe that any
such notice will be received or is being threatened, and

(v) Hazardous Materials have not been transported from the Properties, nor have
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of the Properties in a manner that could give rise to liability under
any Environmental Law, nor have the Borrower or the Subsidiaries retained or
assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect,

(c) Since the Agreement Date, 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.

Section 4.7 Compliance with Laws and Agreements. Each of the Borrower and the
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments 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. No Default has occurred and is
continuing.

Section 4.8 Investment Company Status. Neither the Borrower nor any of the
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

Section 4.9 Taxes. Each of the Borrower and the 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
(i) 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 (ii) to the extent that the failure to do so could
not reasonably be expected to result in a Material Adverse Effect.

Section 4.10 ERISA. Each of the Borrower and its ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and
the Code and the regulations and published interpretations thereunder. No ERISA
Event has occurred or is reasonably expected to occur that, when taken together
with all other such ERISA Events for which liability is reasonably expected to
occur, could reasonably be expected to result in a Material Adverse Effect. The
present value of all accumulated benefit obligations under each Plan (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed the fair market value of the assets of such
Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of all such underfunded Plans. As of the Agreement Date,
neither the Borrower nor any Subsidiary has any obligation or liability in
respect of any Plan or Multiemployer Plan.

 

- 47 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 4.11 Subsidiaries. On the Agreement Date, the Borrower has no direct or
indirect Subsidiaries or investments (other than Permitted Investments) in, or
joint ventures or partnerships with, any Person, except as disclosed in Schedule
4.11. Such Schedule sets forth the ownership interest of the Borrower in each
Subsidiary and identifies each Subsidiary that is a Subsidiary Guarantor on the
Agreement Date. Except as disclosed in Schedule 4.11, neither the Borrower nor
any Subsidiary has issued any Disqualified Equity (other than the Existing
Disqualified Equity) and there are no outstanding options or warrants to
purchase Equity Interests of the Borrower or any Subsidiary of any class or
kind, and there are no agreements, voting trusts or understandings with respect
thereto or affecting in any manner the sale, pledge, assignment or other
disposition thereof, including any right of first refusal, option, redemption,
call or other rights with respect thereto, whether similar or dissimilar to any
of the foregoing.

Section 4.12 Insurance. Schedule 4.12 sets forth a description of all insurance
maintained by or on behalf of the Borrower and the Subsidiaries on the Agreement
Date. As of the Agreement Date, all premiums in respect of such insurance that
are due and payable have been paid.

Section 4.13 Labor Matters. Except for the Disclosed Matters, (i) there are no
strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending
or, to the knowledge of the Borrower, threatened, (ii) the hours worked by and
payments made to employees of the Borrower and the Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Federal,
state, local or foreign law dealing with such matters, except where any such
violations, individually and in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, (iii) all material payments due from the
Borrower or any Subsidiary, or for which any claim may be made against the
Borrower or any Subsidiary, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of the Borrower or such Subsidiary and (iv) the consummation of the
Transactions will not give rise to any right of termination or right of
renegotiation on the part of any union under any collective bargaining agreement
to which the Borrower or any Subsidiary is bound.

Section 4.14 Solvency. Immediately after the consummation of each Transaction,
(i) the fair value of the assets of the Borrower and the Subsidiaries, taken as
a whole, at a fair valuation, will exceed their debts and liabilities,
subordinated, contingent or otherwise, (ii) the present fair saleable value of
the property of the Borrower and the Subsidiaries, taken as a whole, will be
greater than the amount that will be required to pay the probable liability of
their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured, (iii) each of the
Borrower and the Subsidiary Guarantors will be able to pay its debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured, and (iv) each of the Borrower and the
Subsidiary Guarantors will not have unreasonably small capital with which to
conduct the business in which it is engaged as such business is now conducted
and is proposed to be conducted following such date.

 

- 48 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 4.15 Federal Reserve Regulations, etc.

(a) Neither the Borrower nor any of the Subsidiaries is engaged principally, or
as one of their important activities, in the business of extending credit for
the purpose of buying or carrying Margin Stock. Immediately before and after
giving effect to the making of each Loan and the issuance of each Letter of
Credit, Margin Stock will constitute less than 25% of the Borrower’s assets as
determined in accordance with Regulation U.

(b) No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase, acquire or carry any Margin Stock or for any
purpose that entails a violation of, or that is inconsistent with, the
provisions of the regulations of the Board, including Regulation T, U or X or
(ii) to fund a personal loan to or for the benefit of a director or executive
officer of the Borrower or any Subsidiary.

Section 4.16 Absence of Certain Restrictions. No indenture, certificate of
designation for preferred stock, agreement or instrument to which the Borrower
or any Subsidiary is a party (other than this Credit Agreement), prohibits or
limits in any way, directly or indirectly the ability of any Subsidiary to make
Restricted Payments or loans to, to make any advance on behalf of, or to repay
any Indebtedness to, the Borrower or to another Subsidiary.

Section 4.17 Material Licenses, Permits, Privileges and Franchises. The Borrower
and each Subsidiary has all licenses, permits, privileges and franchises
material to the conduct of its business, each of which is in full force and
effect and with which the Borrower and each Subsidiary is in compliance except
where the failure to be in compliance could reasonably be expected to result in
a Material Adverse Effect.

Section 4.18 Security Documents.

(a) The Security Agreement, upon execution and delivery thereof by the parties
thereto, will create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral (as defined in the Security Agreement) and the proceeds
thereof and (i) when the Pledged Collateral (as defined in the Security
Agreement), other than uncertificated securities, uncertificated limited
liability company interests and uncertificated partnership interests, is
delivered to the Administrative Agent together with the proper endorsements, the
Lien created under Security Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of the
Loan Parties in such Pledged Collateral, in each case prior and superior in
right to any other Person, and (ii) when financing statements in appropriate
form are filed in the offices specified on Schedule 4.18 and all applicable
filing fees have been paid, the Lien created under the Security Agreement will
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Collateral (other than Intellectual
Property, as defined in the Security Agreement) to the extent such security
interest may be perfected by the filing of a UCC financing statement, in each
case prior and superior in right to any other Person, other than with respect to
Permitted Prior Liens.

 

- 49 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) Upon the recordation of the Security Agreement (or a short form security
agreement in form and substance reasonably satisfactory to the Borrower and the
Administrative Agent) with the United States Patent and Trademark Office and the
United States Copyright Office, together with the financing statements in
appropriate form filed in the offices specified on Schedule 4.18, the Lien
created under the Security Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Intellectual Property (as defined in the Security Agreement), in each case
prior and superior in right to any other Person, other than with respect to
Permitted Prior Liens.

(c) Each Control Agreement with respect to Deposit Accounts and Securities
Accounts (as such terms are defined in the Security Agreement), upon execution
and delivery thereof by the parties thereto, will create in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral held therein and
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral, in each case prior and
superior in right to any other Person, other than with respect to Permitted
Prior Liens and except as otherwise expressly provided in such Control Agreement
and in Sections 9-327 and 9-340 of Article 9 of the UCC.

(d) The Pledge Agreement, upon execution and delivery thereof by the parties
thereto, will create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral (as defined in the Pledge Agreement) and the proceeds thereof
and (i) when the Pledged Collateral (as defined in the Pledge Agreement), other
than uncertificated securities, uncertificated limited liability company
interests and uncertificated partnership interests, is delivered to the
Administrative Agent together with the proper endorsements, the Lien created
under Pledge Agreement shall constitute a fully perfected first priority Lien
on, and security interest in, all right, title and interest of the VPDI in such
Pledged Collateral, in each case prior and superior in right to any other
Person, and (ii) when financing statements in appropriate form are filed in the
offices specified on Schedule 4.18 and all applicable filing fees have been
paid, the Lien created under the Pledge Agreement will constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
VPDI in such Collateral to the extent such security interest may be perfected by
the filing of a UCC financing statement, in each case prior and superior in
right to any other Person, other than with respect to Permitted Prior Liens.

Section 4.19 Disclosure. The Borrower has disclosed to the Credit Parties all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries or any other Loan Party 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 (whether in writing or
orally) by or on behalf of any Loan Party to any Credit Party in connection with
the transactions contemplated hereby and the negotiation of this Credit
Agreement or delivered hereunder or under any other Loan Document (in each case
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, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.

 

- 50 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 4.20 Inactive Subsidiaries. Each of DPCM Holdings, Inc., an Illinois
corporation, and Virtus Alternative Investment Advisers, Inc., a Connecticut
corporation, is an Inactive Subsidiary.

ARTICLE 5.

CONDITIONS

Section 5.1 Closing Date. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective
until the date on which each of the following conditions is satisfied (or waived
in accordance with Section 10.2):

(a) Credit Agreement. The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this Credit
Agreement signed on behalf of such party or (ii) written evidence satisfactory
to the Administrative Agent (which may include facsimile transmission of a
signed signature page of this Credit Agreement) that such party has signed a
counterpart of this Credit Agreement.

(b) Notes. The Administrative Agent shall have received a Note for each Lender
that shall have requested one, signed on behalf of the Borrower.

(c) Legal Opinion. The Administrative Agent shall have received favorable
written opinions (addressed to the Credit Parties and dated the Closing Date)
from (i) Kevin Carr, Esq., counsel to the Loan Parties, substantially in the
form of Exhibit B-1, and (ii) Day Pitney LLP, special counsel to the Loan
Parties, substantially in the form of Exhibit B-2, each covering such other
matters relating to the Loan Parties, the Loan Documents and the Transactions as
the Required Lenders shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinions.

(d) Officers’ Closing Certificate. The Administrative Agent shall have received
a certificate of the President or a Vice President and the Secretary or
Assistant Secretary of each Loan Party, dated the Closing Date, substantially in
the form of Exhibit I:

(i) attaching a (x) long form certificate of incorporation or formation of such
Loan Party, certified as of a recent date by the Secretary of State of the
jurisdiction of its incorporation or formation and (y) a true and complete copy
of its by laws, operating agreement or other analogous agreement,

(ii) attaching resolutions of its board of directors, general partner or other
managing Person authorizing the execution, delivery and performance of the Loan
Documents to which it is a party and the Transactions and certifying that
(x) such resolutions were duly adopted and in full force and effect and (y) no
other resolutions relating to the Loan Documents or the Transactions have been
adopted,

(iii) certifying as to the incumbency of its officer or officers who may sign
the Loan Documents, including therein a signature specimen of such officer or
officers,

 

- 51 -

Virtus Investment Partners, Inc. Credit Agreement

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

(iv) attaching certificates of good standing (or comparable certificates),
certified as of a recent date prior to the Closing Date, by the Secretaries of
State (or comparable official) of the jurisdiction of its incorporation or
formation and each other jurisdiction in which it is qualified to do business,

(v) either (A) attaching copies of all consents, licenses and approvals required
in connection with the execution, delivery and performance by such Loan Party
and the validity against such Loan Party of the Loan Documents to which it is a
party, and such consents, licenses and approvals shall be in full force and
effect, or (B) stating that no such consents, licenses or approvals are so
required,

(vi) setting forth reasonably detailed calculations demonstrating compliance
with Section 4.14,

(vii) in the case of the certificate of the Borrower, (A) certifying compliance
with the conditions set forth in paragraphs (a) and (b) of Section 5.2, and
(B) certifying that immediately after giving effect to the Transactions
occurring on or prior to the Closing Date, neither the Borrower nor any of the
Subsidiaries shall have outstanding (1) any Indebtedness other than as permitted
under Section 7.1(a), or (2) any Disqualified Equity (other than the Existing
Disqualified Equity);

(viii) in the case of the certificate of the Borrower, attaching (1) financial
projections, including projected capital expenditures, covering the period
through the Maturity Date, and (2) a business plan and model covering the period
through the Maturity Date, and

(ix) in the case of the certificate of the Borrower, certifying (together with
calculations and other evidence in appropriate detail) that (1) immediately
after giving effect to the Transactions occurring on or prior to the Closing
Date, (A) Consolidated Net Worth is not less than $65,000,000, and
(B) Consolidated AUM is not less than $15,000,000,000, (2)(A) the Leverage Ratio
is not greater than 2.25:1.00, and (B) the Interest Coverage Ratio is not less
than 3.00:1.00, and (3) on or after March 31, 2009, VPDI made one or more
distributions to the Borrower, in cash, in an aggregate amount not less than
$6,000,000.

(e) Fees and Expenses. The Administrative Agent shall have received the
following:

(i) for the account of each Lender, an upfront fee in an amount equal to 0.50%
of Revolving Commitment of such Lender on the Agreement Date, and

(ii) all other fees and other amounts due and payable on or prior to the Closing
Date, including, to the extent invoiced, reimbursement or payment of all out of
pocket expenses required to be reimbursed or paid by the Borrower hereunder.

(f) Guarantee Agreement. The Administrative Agent shall have received
counterparts of the Guarantee Agreement signed on behalf of the Borrower and
each Subsidiary (other than VPDI and each Inactive Subsidiary).

 

- 52 -

Virtus Investment Partners, Inc. Credit Agreement

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

(g) Security Agreement. The Administrative Agent shall have received
counterparts of the Security Agreement signed on behalf of the Borrower, and
each Subsidiary (other than VPDI and each Inactive Subsidiary), together with
the following:

(i) any certificated securities representing shares of capital stock or other
similar interests owned by or on behalf of any Loan Party (other than VPDI)
constituting Collateral as of the Closing Date after giving effect to the
Transactions;

(ii) any promissory notes and other instruments evidencing all loans, advances
and other debt owed or owing to any Loan Party (other than VPDI) constituting
Collateral as of the Closing Date after giving effect to the Transactions;

(iii) stock powers and instruments of transfer, endorsed in blank, with respect
to such certificated securities, promissory notes and other instruments;

(iv) duly executed Control Agreements as required by the Security Agreement;

(v) all instruments and other documents, including UCC financing statements,
required by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to be created
under the Security Agreement;

(vi) five original powers of attorney with respect to intellectual property in
the form annexed to the Security Agreement; and

(vii) results of a search of the UCC (or equivalent) filings made and tax and
judgment lien searches with respect to the Loan Parties in the jurisdictions
contemplated by the Security Agreement and copies of the financing statements
(or similar documents) disclosed by such search and evidence reasonably
satisfactory to the Administrative Agent that the Liens indicated by such
financing statements (or similar documents) are permitted by Section 7.2 or have
been released.

(h) Pledge Agreement. The Administrative Agent shall have received counterparts
of the Pledge Agreement signed on behalf of VPDI, together with the following:

(i) any certificated securities representing shares of capital stock or other
similar interests owned by or on behalf of VPDI constituting Collateral as of
the Closing Date after giving effect to the Transactions;

(ii) stock powers and instruments of transfer, endorsed in blank, with respect
to such certificated securities, promissory notes and other instruments;

(iii) all instruments and other documents, including UCC financing statements,
required by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded to create or perfect the Liens intended to be created
under the Pledge Agreement; and

 

- 53 -

Virtus Investment Partners, Inc. Credit Agreement

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

(iv) results of a search of the UCC (or equivalent) filings made and tax and
judgment lien searches with respect to VPDI in the jurisdictions contemplated by
the Pledge Agreement and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably satisfactory to the
Administrative Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 7.2 or have been released.

(i) Post-Closing Letter. The Administrative Agent shall have received the
Post-Closing Letter, duly executed by the Borrower.

(j) Insurance. The Administrative Agent shall have received a copy of, or a
certificate as to coverage under, the insurance policies required by
Section 6.10 and the applicable provisions of the Security Documents, each of
which shall be endorsed or otherwise amended to include a lender’s loss payable
endorsement as required by Section 3.1(b)(vii) of the Security Agreement and to
name the Administrative Agent as additional insured, in form and substance
satisfactory to the Administrative Agent.

(k) No Violation. The performance by each Loan Party of its obligations under
each Loan Document to which it is a party does not (i) violate any applicable
law, statute, rule or regulation or (ii) conflict with, or result in a default
or event of default under, any material agreement of any Loan Party or any other
Subsidiary.

(l) Termination of Existing Loan Documents. After giving effect to the
application of the proceeds of the Loans on the Closing Date, the Indebtedness
under the Existing Loan Documents shall have been fully repaid, the Existing
Loan Documents (including any Hedging Agreements issued by a lender or otherwise
secured thereunder) shall have been canceled or terminated, the Borrower and
each of the Subsidiaries shall have been released from all liability thereunder
(other than indemnification obligations under the existing credit agreement
which, by their terms, survive such termination), all Liens securing such
Indebtedness shall have been released and the Administrative Agent shall have
received reasonably satisfactory evidence thereof.

(m) Environmental Matters; No Litigation. Each Lender shall be reasonably
satisfied (i) with the amount and nature of any environmental and employee
health and safety exposures to which the Borrower and the Subsidiaries may be
subject, or with the plans of the Borrower with respect thereto, (ii) that there
shall be no litigation or administrative proceeding, or regulatory development,
that would reasonably be expected to have a material adverse effect on (A) the
business, assets, operations, prospects, condition (financial or otherwise) or
material agreements of the Borrower and the Subsidiaries, taken as a whole,
(B) the ability of any Loan Party to perform any of its obligations under any
Loan Document or (C) the rights of or benefits available to any Credit Party
under any Loan Document, (iii) with the current status of, and the terms of any
settlement or other resolution of, any litigation or other proceedings brought
against the Borrower or any Subsidiary relating to its business, or (iv) with
the tax position and the contingent tax and other liabilities of, and with any
tax sharing agreements among the Borrower and the Subsidiaries, and with the
plans of the Borrower with respect thereto.

 

- 54 -

Virtus Investment Partners, Inc. Credit Agreement

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

The Administrative Agent shall notify the Borrower and the Credit Parties of
each of the Closing Date, and each such notice shall be conclusive and binding.
The Administrative Agent shall be entitled to assume that each of the conditions
set forth in Sections 5.1(k) and 5.1(m) have been satisfied unless it shall have
received notice expressly to the contrary from a Credit Party or a Loan Party.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
the Issuing Bank to issue Letters of Credit hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 10.2) at or prior to 3:00 p.m., New York City time, on October 31, 2009
(and, in the event such conditions are not so satisfied or waived, the Revolving
Commitments shall terminate at such time).

Section 5.2 Each Credit Event. The obligation of each Lender to make a Loan on
the occasion of any Borrowing, and of each Lender to participate in any
issuance, amendment, renewal or extension of a Letter of Credit (including not
giving a Notice of Non-Extension) is a “Credit Event” and is subject to the
satisfaction of the following conditions:

(a) The representations and warranties of the Loan Parties set forth in the Loan
Documents shall be true and correct on and as of the date of such Borrowing or
the date of such issuance, amend, renewal or extension (or the last day on which
the Issuing Bank could deliver a Notice of Non-Extension in respect of any
Evergreen Letter of Credit), as applicable.

(b) At the time of and immediately after giving effect to such Borrowing or such
issuance, amend, renewal or extension (or the last day on which the Issuing Bank
could deliver a Notice of Non Extension in respect of any Evergreen Letter of
Credit), as applicable, no Default shall have occurred and be continuing.

(c) The Administrative Agent shall have received such other documentation and
assurances as shall be reasonably required by it in connection therewith.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit 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. The Issuing Bank has no obligation under this Credit
Agreement to issue, amend, renew or extend any Letter of Credit to the Borrower.

ARTICLE 6.

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 under the Loan
Documents shall have been paid in full and all Letters of Credit have expired
and all LC Disbursements have been reimbursed, the Borrower covenants and agrees
with the Credit Parties that:

Section 6.1 Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and each Lender either in hard copy or by
electronic communication (including by email, internet and intranet websites)
pursuant to procedures approved by the Administrative Agent:

(a) within 120 days after the end of each fiscal year, its Form 10 K containing
its audited consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by PricewaterhouseCoopers LLP or another registered independent
public accounting firm of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;

 

- 55 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) within 60 days after the end of each of the first three fiscal quarters of
each fiscal year, its Form 10 Q containing its unaudited consolidated balance
sheet and related unaudited statements of income, stockholders’ equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year, setting forth in each case in comparative form the figures
for the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year;

(c) concurrently with any delivery of financial statements under clause (a) or
(b) above, a Compliance Certificate signed by a Financial Officer (i) attaching
reasonably detailed calculations demonstrating compliance with Section 7.8 and
Section 7.12, (ii) attaching reasonably detailed information regarding the
utilization of the baskets contained in Sections 7.1, 7.2 and 7.4, (iii) listing
each Subsidiary as of the date of such Compliance Certificate, specifying
whether such Subsidiary is a Domestic Subsidiary or a Foreign Subsidiary,
whether such Subsidiary is a Subsidiary Guarantor and, in the case of each
Foreign Subsidiary, whether such Foreign Subsidiary is a CFC, (iv) containing
either a certification that no Default exists or, specifying the nature of each
such Default or Event of Default, the nature and status thereof and any action
take or proposed to be taken with respect thereto, (v) certifying that there
have been no changes to the jurisdiction of organization nor legal name of any
Loan Party since the date of the last Compliance Certificate delivered pursuant
to the Credit Agreement, (vi) containing either a certification that there has
been no change to the information disclosed in the Schedules to the Security
Agreement or the Pledge Agreement or, after the delivery of the first
certification delivered pursuant to this subsection, as previously certified,
or, if so, specifying all such changes, and (vii) certifying that all UCC
financing statements or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and reregistrations, containing a
description of the Collateral have been filed of record in each governmental,
municipal or other appropriate office in each jurisdiction identified pursuant
to Schedule 3.1(a)(v) to the Security Agreement and each other jurisdiction as
is necessary to perfect the Liens in the Collateral, and all other actions have
been taken, to the extent necessary to protect and perfect the Security Interest
(as defined in the Security Agreement) except as noted therein with respect to
any continuation statements to be filed within the 12 month period after the
date of such certificate;

(d) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);

 

- 56 -

Virtus Investment Partners, Inc. Credit Agreement

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

(e) within 15 days after each calendar month end, an Asset Coverage Ratio
Certificate signed by a Financial Officer setting forth the Asset Coverage
Ratio, the Asset Coverage Amount and the aggregate Revolving Credit Exposures of
all Lenders as of the last day of such month;

(f) within 30 days after the beginning of each fiscal year, (i) an annual
consolidated forecast for the Borrower and the Subsidiaries for such fiscal
year, including projected consolidated statements of income of the Borrower and
the Subsidiaries, all in reasonable detail acceptable to the Administrative
Agent, and (ii) promptly upon preparation thereof, such other forecasts that the
Borrower or any Subsidiary may prepare and any revisions that may be made to any
forecast previously delivered to the Administrative Agent and the Lenders;

(g) furnish to the Administrative Agent or any Lender promptly such other
information with documentation required by bank regulatory authorities under
applicable “know your customer” and Anti Money Laundering rules and regulations
(including, without limitation, the Patriot Act), as from time to time may be
reasonably requested by the Administrative Agent or such Lender; 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 the Loan Documents, as any Credit
Party may reasonably request.

Section 6.2 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 Event of Default or Default, specifying the nature and
extent thereof;

(b) the filing or commencement of, or any threat or notice of intention of any
Person to file or commence, any action, suit or proceeding, whether at law or in
equity or by or before any Governmental Authority, against any Borrower or
Subsidiary that could reasonably be expected to result in a Material Adverse
Effect;

(c) as soon as possible after, and in any event within ten (10) Business Days
after the Borrower or any ERISA Affiliate knows or has reason to know that, any
ERISA Event has occurred that, alone or together with any other ERISA Event
could reasonably be expected to result in liability of the Borrower in an
aggregate amount exceeding $1,000,000;

(d) as soon as possible and in no event later than ten (10) Business Days after
the receipt thereof by the Borrower or any Subsidiary, a copy of any notice,
summons, citations or other written communications concerning any actual,
alleged, suspected or threatened violation of any Environmental Law, or any
Environmental Liability of the Borrower or any Subsidiary, in each case, which
could reasonably be expected to have a Material Adverse Effect;

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

 

- 57 -

Virtus Investment Partners, Inc. Credit Agreement

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

(f) promptly after the furnishing thereof, copies of any statement or report
furnished to any holder of debt securities of any Loan Party or of 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 6.2; 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.

Documents required to be delivered pursuant to Sections 6.1(a), 6.1(b), 6.2(e)
or 6.2(f) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Borrower posts
such documents, or provides a link thereto on the Borrower’s website on the
Internet at the website address listed in Section 10.1; or (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative have access
(whether a commercial, third party website or whether sponsored by the
Administrative Agent), provided that: (i) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent and each Lender (by
facsimile or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents. Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.1(c) to the Administrative Agent.
Except for such Compliance Certificates, 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 (i) the Administrative Agent will make
available to the Lenders on a confidential basis 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 (ii) certain of the Lenders may be
“public side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that it will notify the
Administrative Agent in the event that any non-public information is included in
the Borrower Materials and to cooperate with the Administrative Agent to ensure
that such non-public information is not distributed to a Public Lender.

 

- 58 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 6.3 Existence; Conduct of Business. The Borrower will, and will cause
each of the Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence 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 7.3 or any
sale, lease, transfer or other disposition permitted by Section 7.5.

Section 6.4 Payment and Performance of Obligations. The Borrower will, and will
cause each of the Subsidiaries to, pay or perform its obligations, including Tax
liabilities, that, if not paid or performed, could reasonably be expected to
result in a Material Adverse Effect before the same shall become delinquent or
in default, except where (i) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (ii) the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP and (iii) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.

Section 6.5 Maintenance of Properties. The Borrower will, and will cause each of
the Subsidiaries to, keep and maintain all property material to the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.

Section 6.6 Books and Records; Inspection Rights. The Borrower will, and will
cause each of the Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Borrower will, and will cause
each of the 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 accounting firm, all at such reasonable times and as often as
reasonably requested.

Section 6.7 Compliance with Laws. The Borrower will, and will cause each of the
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to 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. In addition, and without
limiting the foregoing sentence, the Borrower shall comply in all material
respects, with (i) the Trading with Enemy Act, as amended, and each of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or
executive order relating thereto, and (ii) the Patriot Act.

Section 6.8 Use of Proceeds

(a) The proceeds of the Loans and the Letters of Credit will be used only as
follows: (i) up to $15,000,000 to repay a portion of the outstanding principal
balance of the PLC Debt, (ii) for working capital requirements, (iii) for
general corporate purposes, including capital expenditures, and (iv) for the
issuance of Letters of Credit.

 

- 59 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to (i) purchase, acquire or carry any Margin Stock, (ii) for any
purpose that entails a violation of any of the regulations of the Board,
including Regulations T, U and X, or (iii) in any manner which would violate any
of the foreign asset control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto.

Section 6.9 Information Regarding Collateral. The Borrower will furnish to the
Administrative Agent prompt written notice of any change in (i) the legal name
or jurisdiction of incorporation or formation of any Loan Party, (ii) the
location of the chief executive office of any Loan Party, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned or held by it or on its behalf or, except as provided in the
applicable Security Documents, any office or facility at which Collateral owned
or held by it or on its behalf with an aggregate book value in excess of
$1,000,000 is located (including the establishment of any such new office or
facility), (iii) the identity or organizational structure of any Loan Party such
that a filed financing statement becomes misleading or (iv) the Federal Taxpayer
Identification Number or company organizational number of any Loan Party. The
Borrower agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the UCC or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the Collateral is damaged or
destroyed.

Section 6.10 Insurance. The Borrower will, and will cause each of the
Subsidiaries to, maintain, with financially sound and reputable insurance
companies, (i) adequate insurance for its insurable properties, all to such
extent and against such risks, including fire, casualty, business interruption
and other risks insured against by extended coverage, as is customary with
companies in the same or similar businesses operating in the same or similar
locations, (ii) adequate errors and omissions insurance as is customary with
companies in the same or similar business operating in the same or similar
locations, and (iii) such other insurance as is required pursuant to the terms
of any Security Document.

Section 6.11 Casualty and Condemnation

(a) The Borrower will furnish to the Credit Parties prompt written notice of any
casualty or other insured damage in excess of $500,000 to any portion of any
property owned or held by or on behalf of itself or any Subsidiary or the
commencement of any action or proceeding for the taking of any such property or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.

(b) If any Commitment Reduction Event results in Net Proceeds (whether in the
form of insurance proceeds, condemnation award or otherwise), the Administrative
Agent is authorized to collect such Net Proceeds and, if received by the
Borrower or any Subsidiary, such Net Proceeds shall not be commingled with any
of its other funds or property but shall be held separate and apart there from,
shall be held in trust for the benefit of the Administrative Agent hereunder and
shall be forthwith paid over to the Administrative Agent, provided that (i) to
the

 

- 60 -

Virtus Investment Partners, Inc. Credit Agreement

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

extent that the Borrower or any of the Subsidiaries intends to use any such Net
Proceeds to repair, restore, reinvest or replace assets of the Borrower or any
of the Subsidiaries as provided in the proviso of the definition of the term
“Net Proceeds”, the Administrative Agent shall, subject to the terms and
conditions of such proviso, deliver such Net Proceeds to the Borrower,
(ii) otherwise, the Administrative Agent shall, and the Borrower hereby
authorizes the Administrative Agent to, apply such Net Proceeds to prepay the
Loans in accordance with Section 2.7 and (iii) all proceeds of business
interruption insurance shall be paid over to the Borrower unless a Default has
occurred and is continuing.

(c) All proceeds received by or paid to the Administrative Agent that do not
constitute Net Proceeds shall be paid over to the Borrower, on behalf of the
relevant Loan Parties, unless an Event of Default has occurred and is
continuing.

Section 6.12 Additional Subsidiaries. If any Subsidiary is formed or acquired
after the Agreement Date or if any Subsidiary that was an Inactive Subsidiary on
the Agreement Date continues to be a Subsidiary but ceases to be an Inactive
Subsidiary, the Borrower will notify the Credit Parties in writing thereof not
later than the tenth Business Day after the date on which such Subsidiary is
formed or acquired or ceases to be an Inactive Subsidiary and (i) the Borrower
will cause such Subsidiary (unless such Subsidiary is a CFC) to (a) execute and
deliver each applicable Guarantee Document (or otherwise become a party thereto
in the manner provided therein) and become a party to each applicable Security
Document in the manner provided therein, in each case not later than the tenth
Business Day after the date on which such Subsidiary is formed or acquired and
(b) promptly take such actions to create and perfect Liens on such Subsidiary’s
assets to secure the Credit Obligations as the Administrative Agent or the
Required Lenders shall reasonably request (it being understood that not more
than 100% of the non-voting Equity Interests (if any) and 65% of the voting
Equity Interests in a Foreign Subsidiary that is a CFC shall be pledged) and
(ii) if any Equity Interests issued by any such Subsidiary are owned or held by
or on behalf of the Borrower or any Subsidiary Guarantor or any loans, advances
or other debt is owed or owing by any such Subsidiary to the Borrower or any
Subsidiary Guarantor, the Borrower will cause such Equity Interests and
promissory notes and other instruments evidencing such loans, advances and other
debt to be pledged pursuant to the Security Documents not later than the tenth
Business Day after the date on which such Subsidiary is formed or acquired.

Section 6.13 Further Assurances

(a) The Borrower will, and will cause each Subsidiary Guarantor to, execute any
and all further documents, financing statements, agreements (including guarantee
agreements and security agreements) and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings and other documents), that may be required under any applicable law, the
Post-Closing Letter or which the Administrative Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect (including as a result of
any change in applicable law) the Liens created or intended to be created by the
Security Documents or the validity or priority of any such Lien, all at the
expense of the Borrower. The Borrower also agrees to provide to the
Administrative Agent, from time to time upon request, evidence reasonably
satisfactory to the Administrative Agent as to the perfection and priority of
the Liens created or intended to be created by the Security Documents.

 

- 61 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) The Borrower hereby covenants and agrees that, if at any time on or after
the date hereof any asset or property acquired, owned or held by or on behalf of
the Borrower or any Subsidiary Guarantor that constitutes or would constitute
Collateral is not subject to a perfected Lien of the Administrative Agent under
the applicable Loan Documents with the priority required thereby (except as a
result of the Administrative Agent’s failure to maintain possession of any
instrument, stock certificate or other similar document delivered to it
hereunder or as a result of such asset or property being used or disposed of in
a manner expressly permitted by any Loan Document), then the Borrower shall, at
its own cost and expense, promptly (i) notify the Administrative Agent thereof
and (ii) execute and deliver or cause the applicable Subsidiary Guarantor to
execute and deliver, any and all agreements, instruments and other documents,
and take all further action (including the filing and recording of financing
statements and other documents), that may be necessary or reasonably requested
by the Administrative Agent to cause such asset or property to become subject to
a perfected Lien in favor of the Administrative Agent (including, where
applicable, perfection by establishing “sole dominion and control” within the
meaning of the common law and “control” within the meaning of the UCC), with the
priority required hereby. In addition, the Borrower hereby covenants and agrees
that each Compliance Certificate delivered pursuant to Section 6.1(c) after the
date hereof shall contain a certification that the representations and
warranties contained in Section 3.1(a)(v) of the Security Agreement and
Section 3.1(a)(v) of the Pledge Agreement made by it and each other Loan Party
are true and correct as of the date of such certificate.

(c) If any real estate assets with an appraised value greater than $1,000,000
are acquired by the Borrower or any Subsidiary Guarantor after the Agreement
Date (other than assets constituting Collateral under the Security Documents
that become subject to the perfected Lien of the Security Documents upon
acquisition thereof, and other than assets upon which the Administrative Agent
has a first perfected Lien), the Borrower will notify the Credit Parties
thereof, and, if requested by the Administrative Agent or the Required Lenders,
the Borrower will cause such assets to be subjected to a Lien securing the
Credit Obligations and will take, and cause the Subsidiaries Guarantors to take,
such actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in paragraph
(a) of this Section, all at the expense of the Borrower and the Subsidiaries
Guarantors.

Section 6.14 Compliance with Environmental Laws. The Borrower will, and will
cause each Subsidiary and each lessee and other Person occupying its Properties
to, comply, in all material respects with all Environmental Laws and
Environmental Permits applicable to its operations and Properties; obtain and
renew all material Environmental Permits necessary for its operations and
Properties, and conduct any Remedial Action in accordance with Environmental
Laws; provided, however, that neither the Borrower nor any of the Subsidiaries
shall be required to undertake any Remedial Action to the extent that its
obligation to do so is being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such
circumstances.

 

- 62 -

Virtus Investment Partners, Inc. Credit Agreement

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

ARTICLE 7.

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 under the Loan
Documents shall have been paid in full and all Letters of Credit have expired
and all LC Disbursements have been reimbursed, the Borrower covenants and agrees
with the Credit Parties that:

Section 7.1 Indebtedness; Equity Securities

(a) The Borrower will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Indebtedness, except:

(i) Indebtedness under the Loan Documents;

(ii) Indebtedness existing on the Agreement Date and set forth in Schedule 7.1,
and any extensions, renewals or replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof;

(iii) Indebtedness of the Borrower or any Subsidiary (other than VPDI) incurred
to finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations, Synthetic 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 (A) such
Indebtedness is incurred prior to or within 90 days after such acquisition or
the completion of such construction or improvement and (B) the aggregate
outstanding principal amount of Indebtedness permitted by this clause
(iii) shall not, without duplication, exceed $2,000,000 at any time;

(iv) Indebtedness of any Person that becomes a Subsidiary after the Agreement
Date, provided that (A) 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 and (B) the aggregate outstanding principal amount
of Indebtedness permitted by this clause (iv) shall not, without duplication,
exceed $1,000,000 at any time;

(v) intercompany Indebtedness of the Borrower or any Subsidiary (other than
VPDI) owing to and held by the Borrower or any of its Subsidiaries; provided,
however, that (x) if the Borrower or any Subsidiary Guarantor is the obligor on
such Indebtedness and any Subsidiary (other than a Subsidiary Guarantor) is the
obligee thereof, such Indebtedness must be unsecured and expressly subordinated
to the prior payment in full in cash of all Credit Obligations (including, with
respect to any Subsidiary Guarantor, its obligations under the Guarantee
Documents), (y) Indebtedness owed to the Borrower or any Subsidiary Guarantor
must be evidenced by an unsubordinated promissory note pledged to the
Administrative Agent under the

 

- 63 -

Virtus Investment Partners, Inc. Credit Agreement

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

applicable Security Document and (z) Indebtedness of a Subsidiary which is not a
Subsidiary Guarantor to the Borrower or a Subsidiary Guarantor shall be subject
to the limitations set forth in clause (vi) below;

(vi) Guarantees by the Borrower of Indebtedness of any Subsidiary Guarantor and
by any Subsidiary Guarantor of Indebtedness of the Borrower or any other
Subsidiary Guarantor, provided that such Indebtedness is otherwise permitted by
this Section 7.1(a); and

(vii) obligations under any Hedging Agreements permitted by Section 7.7; and

(viii) so long as at the time of the incurrence thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing, other
unsecured Indebtedness of the Borrower and the Subsidiary Guarantors in an
aggregate outstanding principal amount not, without duplication, exceeding
$5,000,000 at any time.

(b) The Borrower will not, and it will not permit any Subsidiary to, (i) issue
any Disqualified Equity, or (ii) be or become liable in respect of any
obligation (contingent or otherwise) to purchase, redeem, retire, acquire or
make any other payment in respect of any Equity Interests (other than the
Existing Disqualified Equity) of the Borrower or any Subsidiary, except as
permitted under Sections 7.5(d) and 7.8.

Section 7.2 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) Liens created under the Loan Documents;

(b) Permitted Encumbrances;

(c) any Lien on any property or asset of the Borrower or any Subsidiary existing
on the Agreement Date and set forth in Schedule 7.2, 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
Agreement Date and any extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof;

(d) security interests on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary, provided that (i) such security
interests secure Indebtedness permitted by clause (iii) of Section 7.1(a),
(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 the cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary;

 

- 64 -

Virtus Investment Partners, Inc. Credit Agreement

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

(e) security interests 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 Agreement
Date prior to the time such Person becomes a Subsidiary, provided that (i) such
security interests secure Indebtedness permitted by clause (iv) of
Section 7.1(a), (ii) such security interests are not created in contemplation of
or in connection with such acquisition or such Person becoming a Subsidiary, as
applicable, (iii) such security interests shall not apply to any other property
or assets of the Borrower or any Subsidiary and (iv) such security interests
shall secure only the Indebtedness that they secure on the date of such
acquisition or the date such Person becomes a Subsidiary, as applicable, and any
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof; and

(f) Liens permitted by any Control Agreement.

Section 7.3 Fundamental Changes; Business; Fiscal Year

(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 Equity Interests issued by any of the
Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, provided that, if at the time thereof and immediately
after giving effect thereto, no Default shall or would have occurred and be
continuing:

(i) any wholly owned Subsidiary may merge into the Borrower in a transaction in
which the Borrower is the surviving entity, and any wholly owned Subsidiary may
merge into any Subsidiary Guarantor in a transaction in which such Subsidiary
Guarantor is the surviving entity;

(ii) any Subsidiary may merge with any Person in a transaction that is not
permitted by clause (i) of this Section 7.3(a), provided that such merger is
permitted by Sections 7.4 or 7.5, as applicable;

(iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to the Borrower or to any Subsidiary Guarantor;

(iv) the Borrower or any Subsidiary may sell, transfer, lease or otherwise
dispose of its assets in a transaction that is not permitted by clause (iii) of
this Section 7.3(a), provided that such sale, transfer, lease or other
disposition is permitted by Section 7.5;

(v) any Subsidiary (other than a Subsidiary Guarantor) 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

(vi) (1) any one or more of the following Subsidiary Guarantors may liquidate or
dissolve, provided that immediately after giving effect thereto no Event of

 

- 65 -

Virtus Investment Partners, Inc. Credit Agreement

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

Default would exist: Engemann Asset Management, a California corporation, Euclid
Advisors, LLC, a New York limited liability company, Pasadena Capital
Corporation, a California corporation, and Rutherford Financial Corporation, a
Pennsylvania corporation, and (2) VPDI may merge into any other direct or
indirect wholly-owned Subsidiary, provided that (W) immediately after giving
effect thereto no Event of Default would exist, (X) the Administrative Agent
shall have received not less than 10 Business Days written notice thereof,
(Y) the Administrative Agent shall have received with respect thereto such
information, officer’s certificates and opinions of counsel as it may reasonably
request, and (Z) immediately after giving effect thereto, the Administrative
Agent shall have a first priority security interest in all of the Equity
Interests issued by such Subsidiary and Virtus Investment Advisors, Inc., which
security interest shall be perfected by “control”.

(b) The Borrower will not, and will not permit any of the Subsidiaries to,
engage to any material extent in any business other than the Business.

(c) The Borrower will not, and will not permit any of the Subsidiaries to,
change its fiscal year.

Section 7.4 Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of the Subsidiaries to, purchase,
hold or acquire (including pursuant to any 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, make or permit to exist any Guarantees of 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 (including pursuant to any merger)) any assets of any other Person
constituting a business unit, or purchase or otherwise enter into or become
party to any derivative transaction, except:

(a) Permitted Investments;

(b) investments existing on the Agreement Date and set forth in Schedules 4.12
and 7.4;

(c) investments made by the Borrower in the Equity Interests of any Subsidiary
Guarantor and made by any Subsidiary Guarantor in the Equity Interests of any
other Subsidiary Guarantor;

(d) loans or advances made by (i) the Borrower to any Subsidiary (other than
VPDI) or (ii) any Subsidiary to the Borrower or another Subsidiary (other than
VPDI), in each case subject to the limitations set forth in Section 7.1(a)(v);

(e) acquisitions made by the Borrower from any Subsidiary Guarantor and made by
any Subsidiary Guarantor from the Borrower or any other Subsidiary Guarantor;

(f) Guarantees permitted by Section 7.1(a);

(g) Hedging Agreements permitted by Section 7.7; and

 

- 66 -

Virtus Investment Partners, Inc. Credit Agreement

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

(h) other acquisitions and investments made by the Borrower or any Subsidiary
Guarantor on and subject to the following terms and conditions:

(i) immediately before and after giving effect thereto, no Default shall have
occurred and be continuing,

(ii) each such investment shall consist of the investment of seed capital in a
newly created Virtus Fund,

(iii) each such acquisition or investment, as the case may be, and all
transactions related thereto shall be consummated in accordance with all
applicable laws, ordinances, rules, regulations and requirements of all
Governmental Authorities,

(iv) the Borrower shall have delivered evidence reasonably satisfactory to the
Administrative Agent that, after giving effect to each such acquisition or
investment, as the case may be, and, if applicable, the making of a Revolving
Loan, the Borrower and its Subsidiaries are in pro forma compliance with all
covenants thereof under the Loan Documents,

(v) neither the Borrower nor any Subsidiary shall, in connection with any such
acquisition, assume or remain liable with respect to any Indebtedness (except
Indebtedness which otherwise would be permitted pursuant to Section 7.1(a) or
any material tax or ERISA liability of the related seller, except trade
obligations of such seller incurred in the ordinary course of business and
necessary or desirable to the continued operation of the underlying properties,
and any other such liabilities or obligations not permitted to be assumed or
otherwise supported by the Borrower or any Subsidiary hereunder shall be paid in
full or released as to the assets being so acquired on or before the
consummation of such acquisition,

(vi) all other assets and properties acquired in connection with any such
acquisition shall be free and clear of any Liens, other than Liens expressly
permitted under Section 7.2,

(vii) not later than ten (10) Business Days (or such shorter period as may be
reasonably practicable, if approved by the Administrative Agent) prior to the
consummation of any such acquisition, the Borrower shall have delivered to the
Administrative Agent draft copies of all proposed acquisition agreements for
such acquisition, together with all schedules thereto (followed by fully
executed acquisition agreements within five (5) Business Days after the closing
of such acquisition),

(viii) as soon as possible but in any event within the time periods set forth in
the applicable provisions of Section 6.12, the Borrower shall have complied with
the provisions of Sections 6.12 and 6.13 with respect to each such acquisition
or investment, as the case may be,

(ix) in connection with each such acquisition, the Administrative Agent shall
have received such opinions of counsel from counsel to the Loan Parties as it
shall request, each of which shall be in form and substance satisfactory to the
Administrative Agent,

 

- 67 -

Virtus Investment Partners, Inc. Credit Agreement

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

(x) the aggregate consideration paid by the Borrower or any Subsidiary
(including the maximum amount payable in respect of contingent payment, earn out
and similar obligations) in connection with all such acquisitions shall not,
when aggregated with the aggregate consideration paid by the Borrower or any
Subsidiary in connection with all investments permitted by
Section 7.4(h)(xi)(1), exceed $5,000,000 in any four consecutive fiscal
quarters, and

(xi) the aggregate consideration paid by the Borrower or any Subsidiary in
connection with all such investments shall not exceed the sum of:

(i) when aggregated with the aggregate consideration paid by the Borrower or any
Subsidiary in connection with all acquisitions permitted by Section 7.4(h)(x),
$5,000,000 in any four consecutive fiscal quarters, plus

(ii) the Virtus General Fund Proceeds.

Section 7.5 Asset Sales; Issuances of Equity Interests by Subsidiaries. The
Borrower will not, and will not permit any of the Subsidiaries to, sell,
transfer, lease or otherwise dispose (including pursuant to a merger) of any
asset, including any asset constituting an Equity Interest in any other Person,
nor will the Borrower permit any of the Subsidiaries to issue any additional
Equity Interests, except:

(a) sales, transfers, leases and other dispositions of inventory, used or
surplus equipment and Permitted Investments, in each case in the ordinary course
of business;

(b) sales, transfers, leases and other dispositions made by the Borrower to any
Subsidiary Guarantor and made by any Subsidiary Guarantor to the Borrower or any
other Subsidiary Guarantor;

(c) issuances of Equity Interests by any Subsidiary Guarantor to the Borrower or
any other Subsidiary Guarantor;

(d) issuances of Equity Interests by the Borrower (other than Disqualified
Equity) at any time and from time to time in payment of accrued and unpaid
dividends thereon, provided that immediately after giving effect thereto, no
Default shall exist or would occur; and

(e) if at the time thereof and immediately after giving effect thereto no
Default shall have occurred and be continuing, other sales, transfers, leases
and other dispositions of assets, and issuances of Equity Interests (other than
Equity Interests not constituting perpetual common Equity Interests issued by
the Borrower and other than Equity Interests issued by any Subsidiary
Guarantor), provided that (i) the aggregate fair market value of all assets
sold, transferred, leased or otherwise disposed of (other than in connection
with the sale or redemption of shares of any Virtus General Fund), and all
Equity Interests (other than Equity Interests issued by the Borrower) issued, in
each case in reliance upon this clause (e) shall not exceed $500,000 in the
aggregate for any fiscal year, and (ii) all sales, transfers, leases and other
dispositions and all issuances of Equity Interests, in each case permitted by
this clause (e), shall be made for fair value and solely for cash consideration.

 

- 68 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 7.6 Sale and Lease Back Transactions. The Borrower will not, and will
not permit any of the Subsidiaries to, enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property, real
or personal, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property that it intends to use for substantially
the same purpose or purposes as the property being sold or transferred (a “Sale
and Leaseback”).

Section 7.7 Hedging Agreements. The Borrower will not, and will not permit any
of the 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.

Section 7.8 Restricted Payments. The Borrower will not, and will not permit any
of the Subsidiaries to, declare or make, or agree to pay for or make, directly
or indirectly, any Restricted Payment, except:

(a) the Borrower may declare and pay, and agree to pay, dividends with respect
to its Equity Interests payable solely in perpetual common Equity Interests,

(b) the Borrower may declare and pay, and agree to pay, dividends with respect
to the Convertible Preferreds payable solely in additional shares of Convertible
Preferreds to the extent permitted under the Certificate of Designations,

(c) any wholly-owned Subsidiary may declare and pay dividends with respect to
its Equity Interests to the Borrower or any Subsidiary Guarantor,

(d) during the period from the Closing Date to September 30, 2009, the Borrower
and the Subsidiaries may make one or more Restricted Payments in an aggregate
amount not in excess of $1,800,000, provided that immediately before and after
each such Restricted Payment, no Event of Default shall exist or would occur,
and

(e) with respect to each fiscal quarter ending on or after September 30, 2009
(each a “Subject Fiscal Quarter”), the Borrower and the Subsidiaries may make
one or more other Restricted Payments (whether due in such Subject Fiscal
Quarter or due in an earlier fiscal quarter and unpaid) in an aggregate amount
not in excess of 75% of the Free Cash Flow for such Subject Fiscal Quarter,
provided that (i) immediately before and after each such Restricted Payment, no
Event of Default shall exist or would occur, (ii) prior to each such Restricted
Payment, the Borrower shall have delivered to the Administrative Agent and the
Lenders (1) in the event such Subject Fiscal Quarter is one of the first three
fiscal quarters of a fiscal year, the financial statements required by
Section 6.1(b) and the Compliance Certificate required by Section 6.1(c), in
each case with respect to such Subject Fiscal Quarter, or (2) in all other
cases, the financial statements required by Section 6.1(a) and the Compliance
Certificate required by Section 6.1(c), in each case with respect to such
Subject Fiscal Quarter, and (iii) each such Restricted Payment made pursuant to
this Section 7.8(e) shall be made on or before the last day of the fiscal
quarter immediately succeeding such Subject Fiscal Quarter.

 

- 69 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 7.9 Transactions with Affiliates. The Borrower will not, and will not
permit any of the Subsidiaries to, sell, transfer, lease or otherwise dispose
(including pursuant to a merger) any property or assets to, or purchase, lease
or otherwise acquire (including pursuant to a merger) any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates,
except 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 arms length basis from unrelated third parties, provided that this Section
shall not apply to any transaction that is permitted under Section 7.1, 7.3,
7.4, 7.5 or 7.8 of this Credit Agreement, or Article 9 of the Guarantee
Agreement, between or among the Loan Parties and not involving any other
Affiliate.

Section 7.10 Restrictive Agreements. The Borrower will not, and will not permit
any of the Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement binding on the Borrower or any
Subsidiary that prohibits, restricts or imposes any condition upon (i) the
ability of the Borrower or any Subsidiary to create, incur or permit to exist
any Lien upon any of its property or assets (unless such agreement or
arrangement does not prohibit, restrict or impose any condition upon the ability
of any Loan Party to create, incur or permit to exist any Lien in favor of the
Secured Parties created under the Loan Documents) or (ii) the ability of any
Subsidiary to pay dividends or make other distributions with respect to any of
its Equity Interests 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 (a) the foregoing shall not apply to restrictions and
conditions imposed by law or by the Loan Documents, (b) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on
Schedule 7.10 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(c) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided that such restrictions and conditions apply only to the Subsidiary that
is to be sold and such sale is permitted hereunder, (d) clause (i) of this
Section shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Credit Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, and (e) clause (i) of this Section shall not apply to customary
provisions in leases restricting the assignment thereof.

Section 7.11 Amendment of Material Documents. The Borrower will not, and will
not permit any Subsidiary to, amend, modify or waive any of its rights under its
certificate of formation, operating agreement or other organizational documents,
other than amendments, modifications or waivers that could not reasonably be
expected to adversely affect the Credit Parties, provided that the Borrower
shall deliver or cause to be delivered to the Administrative Agent and each
Lender a copy of each such amendment, modification or waiver promptly after the
execution and delivery thereof.

Section 7.12 Financial Covenants

(a) Leverage Ratio. The Borrower will not permit the Leverage Ratio to be
greater than (i) 3.50:1.00, at any time during the period September 30, 2009
through March 30, 2010, or (ii) 2.75:1.00, at any time thereafter.

 

- 70 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) Interest Coverage Ratio. The Borrower will not permit the Interest Coverage
Ratio to be less than (i) 2.75:1.00, as of any fiscal quarter end during the
period commencing on September 30, 2009 and ending on March 30, 2010, or
(ii) 3.00:1.00, at any time on or after March 31, 2010.

(c) Capital Expenditures. The Borrower will not permit the aggregate Capital
Expenditures made by the Borrower and the Subsidiaries on a consolidated basis
in any fiscal year to exceed $2,500,000.

(d) Minimum Consolidated Net Worth. The Borrower shall not, as of any fiscal
quarter end, permit the Consolidated Net Worth to be less than the sum of
(i) $55,000,000, plus (ii) 50% of the consolidated net income (but not loss) of
the Borrower and the Subsidiaries determined in accordance with GAAP for each
fiscal quarter ending after the Closing Date plus (iii) 75% of the aggregate net
cash proceeds of each issuance of Equity Interests by the Borrower or any
Subsidiary after the Closing Date.

(e) Minimum Consolidated AUM. The Borrower shall not, as of any fiscal quarter
end, permit Consolidated AUM to be less than $15,000,000,000.

(f) Asset Coverage Ratio. The Borrower shall not permit the Asset Coverage Ratio
to be less than 1.75:1.00 at any time.

Section 7.13 Government Regulation. The Borrower shall not, and shall not permit
any Subsidiary to, (i) be or become subject at any time to any law, regulation,
or list of any government agency (including the United States Office of Foreign
Asset Control list) that prohibits or limits any Lender from making any loans or
extension of credit including the Loans and the Letters of Credit) to any Loan
Party (other than VPDI) or from otherwise conducting business with any such Loan
Party, or (ii) fail to provide documentary and other evidence of any Loan
Party’s identity as may be requested by any Lender or the Issuing Bank at any
time to enable such Lender or the Issuing Bank to verify any Loan Party’s
identity or to comply with any applicable law or regulation, including
Section 326 of the Patriot Act.

ARTICLE 8.

EVENTS OF DEFAULT

Section 8.1 Events of Default. Any of the following shall constitute an Event of
Default:

(a) Non Payment of Principal or LC Disbursement. The Borrower shall fail to pay
any principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement 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) Other Non Payment. The Borrower shall fail to pay any interest on any Loan
or on any reimbursement obligation in respect of any LC Disbursement or any fee,
commission or any other amount (other than an amount referred to in clause
(a) of this Section) 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 three (3) Business Days.

 

- 71 -

Virtus Investment Partners, Inc. Credit Agreement

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

(c) Representations and Warranties. Any representation or warranty made or
deemed made by or on behalf of the Borrower or any Subsidiary in or in
connection with any Loan Document or any amendment or modification hereof or
waiver thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or any
amendment or modification hereof or waiver thereunder, shall prove to have been
incorrect in any material respect when made or deemed made.

(d) Specific Covenants. The Borrower shall fail to observe or perform any
covenant, condition or agreement contained in (i) Section 6.1(e) and such
failure shall continue unremedied for a period of five days, or
(ii) Sections 6.3, 6.8, or 6.12, or in Article 7.

(e) Other Covenants. Any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document to which it is a
party (other than those specified in clause (a), (b) or (d) of this Article),
and such failure shall continue unremedied for a period of 30 days after such
Loan Party shall have obtained awareness thereof.

(f) Cross Default; Payment Default on Material Obligations. The Borrower or any
Subsidiary shall fail to make any payment (whether of principal, interest or
otherwise and regardless of amount) in respect of any Material Obligations when
and as the same shall become due and payable (after giving effect to any
applicable grace period).

(g) Other Cross Defaults. Any event or condition occurs that results in any
Material Obligations becoming due prior to their scheduled maturity or payment
date, 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 Obligations or any
trustee or agent on its or their behalf to cause any Material Obligations to
become due prior to their scheduled maturity or payment date or to require the
prepayment, repurchase, redemption or defeasance thereof prior to their
scheduled maturity or payment date (in each case after giving effect to any
applicable cure period), provided that this clause (g) shall not apply to
secured Indebtedness that becomes due solely as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness.

(h) Involuntary Proceedings. 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) Voluntary Proceedings. 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

 

- 72 -

Virtus Investment Partners, Inc. Credit Agreement

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

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) Inability to Pay Debts. The Borrower or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due.

(k) Judgments. One or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 shall be rendered against the Borrower or any
Subsidiary or any combination thereof (which shall not be fully covered by
insurance without taking into account any applicable deductibles) and the same
shall remain undischarged or unbonded 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) ERISA Events. 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 liability of the Borrower
and the Subsidiaries in an aggregate amount exceeding (i) $1,000,000 in any year
or (ii) $2,000,000 for all periods.

(m) Invalidity of Loan Documents. Any Loan Document shall cease, for any reason,
to be in full force and effect, or any Loan Party shall so assert in writing or
shall disavow any of its obligations thereunder.

(n) Liens. Any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, with the priority required by the applicable
Security Document, except (i) as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Loan Documents or
(ii) as a result of the Administrative Agent’s failure to maintain possession of
any stock certificates, promissory notes or other instruments delivered to it
under the Security Documents.

(o) Licenses. There shall occur the loss, suspension or revocation of, or
failure to renew any license or permit now held or hereafter acquired if such
loss, suspension, revocation or failure to renew could reasonably be expected to
have a Material Adverse Effect.

(p) Change in Control. A Change in Control shall occur.

Section 8.2 Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, then, and in every such event (other than an event described in
Sections 8.1(h) or 8.1(i)), 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 (whether before or after the Closing Date), at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately and (ii) declare the Loans then outstanding to be due and
payable in whole (or in

 

- 73 -

Virtus Investment Partners, Inc. Credit Agreement

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

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 each Loan Party accrued under the
Loan Documents, 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 described in Sections 8.1(h) or 8.1(i),
the Commitments shall automatically terminate (whether before or after the
Closing Date) and the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of each Loan Party
accrued under the Loan Documents, 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.

Section 8.3 Application of Funds. After the exercise of remedies provided for in
Section 8.2 (or after the Loans have automatically become immediately due and
payable and the L/C Disbursements have automatically been required to be cash
collateralized as set forth in Section 2.8(i)), any amounts received on account
of the Credit Obligations shall be applied by the Administrative Agent in the
following order:

First, to the payment of that portion of the Credit Obligations constituting
fees, indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable under
Article 3 but excluding fees described in Section 3.3(b)), in each case payable
to the Administrative Agent in its capacity as such;

Second, to the extent of any excess of such proceeds, to the payment of that
portion of the Credit Obligations constituting fees, indemnities and other
amounts, payable to the Credit Parties (including fees, charges and
disbursements of counsel to the respective Credit Parties and amounts payable
under Article 3 but excluding fees described in Section 3.3(b)), ratably among
them in proportion to the respective amounts described in this clause Second
payable to them;

Third, to the extent of any excess of such proceeds, to the payment of that
portion of the Credit Obligations constituting accrued and unpaid fees under
Section 3.3(b) and interest on the Loans, L/C Disbursements and other Credit
Obligations, ratably among the Credit Parties in proportion to the respective
amounts described in this clause Third payable to them;

Fourth, to the extent of any excess of such proceeds, to the payment of that
portion of the Credit Obligations constituting unpaid principal of the Loans and
L/C Disbursements, ratably among the Credit Parties in proportion to the
respective amounts described in this clause Fourth held by them;

Fifth, to the extent of any excess of such proceeds, to the Administrative Agent
for the account of the Issuing Bank, to cash collateralize that portion of L/C
Disbursements comprised of the aggregate undrawn amount of Letters of Credit;

 

- 74 -

Virtus Investment Partners, Inc. Credit Agreement

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

Sixth, to the extent of any excess of such proceeds, to the payment of all other
Credit Obligations of the Loan Parties owing under or in respect of the Loan
Documents that are due and payable to the Credit Parties, or any of them, on
such date, ratably based on the respective aggregate amounts of all such Credit
Obligations owing to the Administrative Agent and the Lenders on such date; and

Last, to the extent of any excess of such proceeds, the balance, if any, after
all of the Credit Obligations have been indefeasibly paid in full, to the
Borrower or as otherwise required by Law.

Subject to Section 2.8(i), amounts used to cash collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as cash collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Credit Obligations, if any, in the order set forth above.

ARTICLE 9.

THE ADMINISTRATIVE AGENT

Section 9.1 Appointment and Authority. Each Credit Party hereby irrevocably
appoints The Bank of New York 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 Credit Parties and neither the Borrower nor any other Loan Party
shall have rights as a third party beneficiary of any of such provisions.

Section 9.2 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 9.3 Exculpatory Provisions

(a) 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:

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

 

- 75 -

Virtus Investment Partners, Inc. Credit Agreement

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

(ii) 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 applicable law; and

(iii) 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.

(b) The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the 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 10.2 and Article 9) or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or the Issuing Bank.

(c) The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Credit 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 Credit Agreement, any other
Loan Document or any other agreement, instrument or document or (v) the
satisfaction of any condition set forth in Article 5 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

Section 9.4 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 or the issuance of a Letter of Credit, that by its terms
must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the
Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Bank unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Bank prior to the making
of such

 

- 76 -

Virtus Investment Partners, Inc. Credit Agreement

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

Loan or the issuance of such Letter of Credit. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
public accounting firm and other experts selected by it, and shall not be liable
for any action taken or not taken by it in accordance with the advice of any
such counsel, accounting firm or experts.

Section 9.5 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 9.6 Resignation of Administrative Agent. The Administrative Agent may at
any time give notice of its resignation to the Credit Parties 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 New York, New York, or an Affiliate of any
such bank with an office in New York, New York. If no such successor shall have
been so appointed by the 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
Credit Parties, appoint a successor Administrative Agent meeting the
qualifications set forth above provided that if the Administrative Agent shall
notify the Borrower and the Credit Parties 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 (except that in the case of any collateral security
held by the Administrative Agent on behalf of the Credit Parties under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) 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 Credit Party directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this paragraph. 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 paragraph). 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 10.3
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.

 

- 77 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 9.7 Non Reliance on Administrative Agent and Other Credit Parties. Each
Credit Party acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Credit Party or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement. Each Credit Party also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Credit Party 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 Credit Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.

Section 9.8 No Other Duties, etc. Anything herein to the contrary
notwithstanding, none of the Bookrunners, Arrangers or Agents listed on the
cover page hereof shall have any powers, duties or responsibilities under this
Credit Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or the Issuing Bank hereunder.

ARTICLE 10.

MISCELLANEOUS

Section 10.1 Notices

(a) Notices Generally. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
paragraph (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 facsimile as follows:

(i) if to the Borrower, to it at 100 Pearl Street, Hartford, CT 06103 Attention
of: Chief Financial Officer (Telephone No. (860) 263-4710; Facsimile No.
(860) 241-1113), with a copy to it at 100 Pearl Street, Hartford, CT 06103
Attention of: In-house Counsel (Telephone No. (860) 263-4791; Facsimile No.
(860) 241-1028);

(ii) if to the Administrative Agent, or the Issuing Bank to it at One Wall
Street, New York, New York 10286, Attention of: Sandra M. Scaglione, Assistant
Vice President, (Telephone No. (212) 635-4697, Facsimile No. (212) 635-6365 or
6366 or 6367), with a copy to The Bank of New York, at One Wall Street, New
York, New York 10286, Attention of: Richard Shaw, Vice President (Telephone No.
(212) 635-7273; Facsimile No. (212) 635-8541); and

(iii) if to any other Credit Party, to it at its address (or facsimile number)
set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for

 

- 78 -

Virtus Investment Partners, Inc. Credit Agreement

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

the recipient, shall be deemed to have been given at the opening of business on
the next business day for the recipient). Notices delivered through electronic
communications to the extent provided in paragraph (b) below, shall be effective
as provided in said paragraph (b).

(b) Electronic Communications. Notices and other communications to the Credit
Parties hereunder 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 Credit Party pursuant to Article 2 if such Credit Party
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 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) Change of Address, Etc. Any party hereto may change its address or facsimile
number for notices and other communications hereunder by notice to the other
parties hereto.

Section 10.2 Waivers; Amendments

(a) No failure or delay by any Credit Party in exercising any right or power
under any Loan Document 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 Credit Parties under the Loan Documents are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party 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
and/or the issuance, amendment, extension or renewal of a Letter of Credit shall
not be construed as a waiver of any Default, regardless of whether any Credit
Party may have had notice or knowledge of such Default at the time.

(b) Neither any Loan Document nor any provision thereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by

 

- 79 -

Virtus Investment Partners, Inc. Credit Agreement

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

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) increase any Commitment of any Lender without the written consent of
such Lender or increase the Letter of Credit Commitment without the consent of
the Issuing Bank, (ii) reduce the principal amount of any Loan or any
reimbursement obligation with respect to a LC Disbursement, or reduce the rate
of any interest, or reduce any fees, payable under the Loan Documents, without
the written consent of each Credit Party affected thereby thereof (it being
understood that any amendment or modification to the financial definitions in
this Credit Agreement or to the calculation or any financial covenant shall not
constitute a reduction in the rate of interest or fees for the purposes of this
clause (ii), notwithstanding the fact that such amendment or modification
actually results in such a reduction), (iii) postpone the date of payment at
stated maturity of any Loan, the date of any mandatory reduction of the
Revolving Commitments under Section 2.5(b) or the date of payment of any
reimbursement obligation with respect to an LC Disbursement, any interest or any
fees payable under the Loan Documents, or reduce the amount of, waive or excuse
any such payment, or postpone the stated termination or expiration of the
Revolving Commitments or reduce the amount of or postpone the date of any
prepayment required by Section 2.7(b) or Section 2.7(c) without the written
consent of each Credit Party affected thereby, (iv) change any provision hereof
in a manner that would alter the pro rata sharing of payments required by
Section 2.9(b) or the pro rata reduction of Revolving Commitments required by
Section 2.5(d), without the written consent of each Credit Party affected
thereby, (v) change any of the provisions of this Section or the definition of
the term “Required Lenders” or any other provision hereof specifying the number
or percentage of Lenders required to waive, amend or modify any rights hereunder
or make any determination or grant any consent hereunder, or change the currency
in which Loans are to be made, Letters of Credit are to be issued or payment
under the Loan Documents is to be made, or add additional borrowers, without the
written consent of each Lender, (vi) release any Subsidiary Guarantor from its
Guarantee under the Guarantee Documents (except as expressly provided therein),
or limit its liability in respect of such Guarantee, without the written consent
of each Lender, or (vii) release all or substantially all of the Collateral from
the Liens of the Loan Documents (except as expressly provided in the applicable
Security Document or in connection with a transaction permitted by Section 7.3),
without the consent of each Lender, and provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent and the Issuing Bank hereunder without the prior written
consent of the Administrative Agent and the Issuing Bank.

Section 10.3 Expenses; Indemnity; Damage Waiver

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out of pocket
expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative
Agent) in connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and administration of
this Credit 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), (ii) all
reasonable out of pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) all out of pocket expenses incurred
by the Administrative Agent or any Credit Party (including the fees, charges and
disbursements of counsel for (1) the Lenders, collectively, (2)

 

- 80 -

Virtus Investment Partners, Inc. Credit Agreement

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

any Lender that reasonably believes that a conflict of interest exists between
it and any other Lender, and (3) the Administrative Agent) in connection with
the enforcement or protection of its rights (A) in connection with this Credit
Agreement and the other Loan Documents, including its rights under this Section,
or (B) in connection with the Loans made or Letters of Credit issued hereunder,
including all such out of pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub agent thereof), each Credit Party, 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 or any other Loan Party arising out of, in connection with, or as a
result of (i) the execution or delivery of this Credit Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of the transactions contemplated hereby or
thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (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 or any other Loan Party, 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 or any other Loan Party against an Indemnitee for breach in bad faith
of such Indemnitee’s obligations hereunder or under any other Loan Document, if
the Borrower or such Loan Party has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to indefeasibly pay any amount required under paragraph (a) or (b) of this
Section to be paid by it to the Administrative Agent (or any sub agent thereof),
the Issuing Bank or any Related Party of any of the foregoing, each Lender
severally agrees to pay to the Administrative Agent (or any such sub agent), the
Issuing Bank 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) or the Issuing Bank in its capacity
as such, or against any Related Party of any of the foregoing acting for the
Administrative Agent (or any such sub agent) or the Issuing Bank, in connection
with such capacity. The obligations of the Lenders under this paragraph (c) are
subject to the provisions of Section 2.9(d).

 

- 81 -

Virtus Investment Partners, Inc. Credit Agreement

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

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no Loan Party shall assert, and each Loan Party 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 Credit
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in
paragraph (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Credit Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable promptly and
in no event later than 10 days after demand therefor.

Section 10.4 Successors and Assigns

(a) Successors and Assigns Generally. The provisions of this Credit Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of paragraph (b) of this Section, (ii) by way of
participation in accordance with the provisions of paragraph (d) of this Section
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Credit 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 paragraph
(d) of this Section and, to the extent expressly contemplated hereby, the
Related Parties of each of Credit Party) any legal or equitable right, remedy or
claim under or by reason of this Credit Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Credit
Agreement (including all or a portion of its Commitments and the Loans and
obligations in respect of its LC Exposure 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 Commitments and the Loans and obligations in respect of its LC Exposure
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

 

- 82 -

Virtus Investment Partners, Inc. Credit Agreement

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

(B) in any case not described in paragraph (b)(i)(A) of this Section, the
aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date) shall not be less than $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).

(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 Credit Agreement with respect to the Loan or the
Commitment assigned.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by paragraph (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 (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund, provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the Administrative Agent within five Business Days
after having received notice thereof;

(B) the consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments if such assignment is to
a Person that is not a Lender with a Commitment in respect of such facility; and

(C) the consent of the Issuing Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters
of Credit (whether or not then outstanding).

(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 of $3,500, and the assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower
or any of the Borrower’s Affiliates or Subsidiaries.

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

 

- 83 -

Virtus Investment Partners, Inc. Credit Agreement

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

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (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
Credit Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Credit
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 Credit Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto) but shall
continue to be entitled to the benefits of Sections 3.5 and 10.3 with respect to
facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Credit Agreement that does not comply with this paragraph shall be
treated for purposes of this Credit Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d) of
this Section.

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

(d) Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any
Person (other than a natural person or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Credit 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 Credit 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 each Credit Party shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Credit 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 Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso in Section 10.2(b) that
directly affects such Participant. Subject to paragraph (e) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 3.5, 3.6 and 3.7 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 10.8 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.9(h) as though it were a Lender.

 

- 84 -

Virtus Investment Partners, Inc. Credit Agreement

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

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Sections 3.5 or 3.7 than the 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 3.7
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 3.7(e) as though it were a Lender.

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

Section 10.5 Survival. All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Credit Agreement or
any other Loan Document shall be considered to have been relied upon by the
other parties hereto and shall survive the execution and delivery of any Loan
Document and the making of any Loans and the issuance of any Letter of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Credit Party may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any LC Disbursement or any
fee or any other amount payable under the Loan Documents is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 3.5, 3.6, 3.7, 10.3,
10.9, 10.10 and Article 9 shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans and the LC Disbursements, the expiration or termination
of the Letters of Credit and the termination of the Commitments or the
termination of this Credit Agreement or any provision hereof.

Section 10.6 Counterparts; Integration; Effectiveness; Electronic Execution

(a) Counterparts; Integration; Effectiveness. This Credit Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Credit Agreement and the
other Loan Documents, and any separate letter agreements with respect to fees
payable to the Administrative Agent, 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 5.1, this Credit Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Credit Agreement
by telecopy shall be effective as delivery of a manually executed counterpart of
this Credit Agreement.

 

- 85 -

Virtus Investment Partners, Inc. Credit Agreement

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

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

Section 10.7 Severability. In the event any one or more of the provisions
contained in this Credit Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

Section 10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, the Issuing Bank and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the Issuing Bank or any such Affiliate to or for the
credit or the account of the Borrower or any other Loan Party (other than VPDI)
against any and all of the obligations of the Borrower or such Loan Party now or
hereafter existing under this Credit Agreement or any other Loan Document to
such Lender or the Issuing Bank, as the case may be, irrespective of whether or
not such Lender or the Issuing Bank, shall have made any demand under this
Credit Agreement or any other Loan Document and although such obligations of the
Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office of such Lender or the Issuing Bank different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Lender, the Issuing Bank and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the Issuing Bank, or their respective Affiliates may have.
Each Lender and the Issuing Bank, agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

Section 10.9 Governing Law; Jurisdiction; Consent to Service of Process

(a) This Credit Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to conflict of laws
principles that would require the application of the laws of another
jurisdiction.

 

- 86 -

Virtus Investment Partners, Inc. Credit Agreement

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

(b) Submission to Jurisdiction. The Borrower and each other Loan Party
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 for 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 Credit Agreement or any other Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto 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 fullest extent permitted by applicable law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Credit Agreement or in any other Loan Document shall affect any
right that any Credit Party may otherwise have to bring any action or proceeding
relating to this Credit Agreement or any other Loan Document against the
Borrower or any other Loan Party or its properties in the courts of any
jurisdiction.

(c) Waiver of Venue. The Borrower and each other Loan Party irrevocably and
unconditionally waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of venue of any action
or proceeding arising out of or relating to This Credit 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
applicable law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

(d) Service of Process. Each party hereto irrevocably consents to service of
process in the manner provided for notices in Section 10.1. Nothing in this
Credit Agreement will affect the right of any party to this Credit Agreement to
serve process in any other manner permitted by law.

Section 10.10 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 CREDIT 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 HEREBY (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 CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

- 87 -

Virtus Investment Partners, Inc. Credit Agreement

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

Section 10.11 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this Credit
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Credit Agreement.

Section 10.12 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan or LC
Disbursement, together with all fees, charges and other amounts that are treated
as interest thereon under applicable law (collectively the “charges”), shall
exceed the maximum lawful rate (the “maximum rate”) that may be contracted for,
charged, taken, received or reserved by the Lender holding an interest in such
Loan or LC Disbursement in accordance with applicable law, the rate of interest
payable in respect of such Loan or LC Disbursement hereunder, together with all
of the charges payable in respect thereof, shall be limited to the maximum rate
and, to the extent lawful, the interest and the charges that would have been
payable in respect of such Loan or LC Disbursement but were not payable as a
result of the operation of this Section shall be cumulated, and the interest and
the charges payable to such Lender in respect of other Loans or LC Disbursements
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 10.13 Treatment of Certain Information; Confidentiality

(a) Each of Credit Party agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (i) to
its Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and other representatives (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (ii) 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),
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to any other party hereto or any other
Secured Party, (v) in connection with the exercise of any remedies hereunder or
under any other Loan Document or any action or proceeding relating to this
Credit Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (vi) subject to an agreement containing provisions
substantially the same as those of this Section, to (A) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Credit Agreement or (B) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (vii) with the consent of the
Borrower or (viii) 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 Credit Party or any of their respective Affiliates
on a nonconfidential basis from a source other than the Borrower.

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

 

- 88 -

Virtus Investment Partners, Inc. Credit Agreement

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

received from the Borrower or any of its Subsidiaries after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

Section 10.14 USA Patriot Act Notice. Each Lender that is subject to the Patriot
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 “Patriot Act”), it is required to obtain, verify and
record information that identifies each Loan Party, which information includes
the name and address of each Loan Party and other information that will allow
such Lender or the Administrative Agent, as applicable, to identify each Loan
Party in accordance with the Patriot Act.

Section 10.15 Publication; Advertisement

(a) Publication. No Loan Party will directly or indirectly publish, disclose or
otherwise use in any public disclosure, advertising material, promotional
material, press release or interview, any reference to the name, logo or any
trademark of BNYM or any of its Affiliates or any reference to this Credit
Agreement or the financing evidenced hereby, in any case without the prior
written consent of BNYM.

(b) Advertisement. Each Loan Party hereby authorizes each of BNYM to publish the
name of such Loan Party and the amount of the financing evidenced hereby in any
“tombstone” or comparable advertisement which BNYM elects to publish. In
addition, each Loan Party agrees that BNYM may provide lending industry trade
organizations with information necessary and customary for inclusion in league
table measurements after the Closing Date.

[Signature pages follow]

 

- 89 -

Virtus Investment Partners, Inc. Credit Agreement

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

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

 

VIRTUS INVESTMENT PARTNERS, INC. By:  

/s/ Michael A. Angerthal

Name:   Michael A. Angerthal Title:   Executive Vice President & Chief Financial
Officer

 

Virtus Investment Partners, Inc. Credit Agreement

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

THE BANK OF NEW YORK MELLON,

individually, as Issuing Bank and as Administrative Agent

By:  

/s/ Richard G. Shaw

Name:   Richard G. Shaw Title:   Vice President

 

Virtus Investment Partners, Inc. Credit Agreement

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

PNC BANK, NATIONAL ASSOCIATION By:  

/s/ Christine Lavelle

Name:  

Christine Lavelle

Title:  

Vice President

 

Virtus Investment Partners, Inc. Credit Agreement