Exhibit 10.1


 


Scotiabank


THE BANK OF NOVA SCOTIA


International Banking Division


Derivative Products


44 King Street West, 14th Floor, Toronto,
Ontario, Canada M5H 1H1


 


August 8, 2005


 


WADDELL & REED FINANCIAL, INC.


6300 LAMAR AVENUE


OVERLAND PARK, KANSAS


66202


 


FAX #:  923-236-1930


 


Attention:  Daniel P.
Connealy, CFO


 


Dear Sirs,


 


Re:  Interest Rate Swap Transaction Reference ID:
S53278 (Previously S53252)


 


The purpose of this letter agreement is to set forth the terms and
conditions of the “Transaction” entered into between us on the Trade Date
specified below.


 


The definitions and provisions contained in the 2000 ISDA Definitions (as published by the
International Swap Dealers Association, Inc.) are incorporated into this
Confirmation.  In the event of any inconsistency
between those definitions and provisions and this Confirmation, this
Confirmation will govern.


 


1.         This
Confirmation evidences a complete and binding agreement between you and us as
to the terms of the Transaction to which this Confirmation relates.  In addition, you and we agree to use
reasonable efforts promptly to negotiate, execute and deliver an agreement in
the form of an ISDA Master Agreement (Multicurrency-Cross Border) (the “ISDA
Form”), with such modifications as you and we will in good faith agree.  Upon the execution by you and us of such an
agreement, this Confirmation will supplement, form a part of and be subject to
that agreement.  All provisions contained
in or incorporated by reference in that agreement upon its execution will
govern this Confirmation except as expressly modified below.


 


Until we
execute and deliver that Agreement, this Confirmation, together with all other
documents referring to the ISDA Form (each a “Confirmation”) confirming
transactions (each a “Transaction”) entered into between us (not withstanding
anything to the contrary in a Confirmation), shall supplement, form part of,
and be subject to an agreement in the form of the ISDA Form as if we had
executed an agreement in such form (but without any Schedule) except for the
following elections:


 





















 


(a)                      Governing
Law.  This Agreement will be governed by
and construed in accordance with the laws of the State of New York
(without reference to the choice of law doctrine);


 


(b)                     “Termination
Currency” means United States Dollars;


 


(c)                      Payments on
Early Termination.  For the purpose of section 6(e) of
this Agreement, Second Method and Market Quotation shall apply;


 


(d)                     “Cross
Default” shall apply to The Bank of Nova Scotia and WADDELL & REED FINANCIAL, INC., and all references
therein to “Threshold Amount” shall mean, in respect of The Bank of Nova
Scotia, 5% of its shareholders’ equity as set out in The Bank of Nova Scotia’s
most recently published audited annual financial statement, and shall mean, in
respect of WADDELL & REED FINANCIAL,
INC., USD 5,000,000.00 (or its equivalent in any other currency);


 


(e)                      The “Credit
Event Upon Merger” provisions of section 5(b)(iv) will apply to both
parties;


 


(f)                        “Credit
Support Document” in relation to WADDELL &
REED FINANCIAL, INC., shall mean each document that by its terms
secures, guarantees or otherwise supports WADDELL &
REED FINANCIAL, INC.’s obligations hereunder (whether or not this
Confirmation or the Transaction evidenced hereby is specifically referenced or
described therein), as such document(s) may be amended, revised, restated,
supplemented or replaced from time to time, and


 


(g)                     “Credit
Support Provider” in relation to WADDELL &
REED FINANCIAL, INC., shall mean any party to a Credit Support
Document that provides or is obligated to provide security, a guarantee or
other credit support for WADDELL &
REED FINANCIAL, INC.’s obligations hereunder;


 


on the Trade
Date of the first such Transaction between us. 
In the event of any inconsistency between the provisions of that
agreement and this Confirmation, this Confirmation shall prevail for the
purposes of this Transaction.


 


2.                           The following provisions
shall also apply:


 


(a)                      Set
Off.  Any amount (the “Early Termination
Amount”) payable to one party (“the Payee”) by the other party (“the Payer”)
under Section 6(e) in circumstances where there is a Defaulting Party
or one Affected Party in the case where a Termination Event under Section 5(b)(iv) or
Section 5(b)(v) (if applicable) has occurred, will, at the option of
the party (“X”) other than the Defaulting Party or the Affected Party (“Y”)
(and without prior notice to Y), be reduced by its set-off against any
amount(s) (the “Other Agreement Amount”) payable (whether at such time or in
the future or upon the occurrence of a contingency) by the Payee to the Payer
(irrespective of the currency, place of payment or booking office of the
obligation) under any other


 





















 


agreement(s)
between the Payee and the Payer or instrument(s) or undertaking(s) issued or
executed by one party to, or in favor of, the other party (and the Other
Agreement Amount will be discharged promptly and in all respects to the extent
it is so set-off).  X will give notice to
Y and any set-off effected under this section.


 


For this
purpose, either the Early Termination Amount or the Other Agreement Amount (or
the relevant portion of such amounts) may be converted by X into the currency
in which the other is denominated at the rate of exchange at which such party
is able, acting in a reasonable manner and in good faith, to purchase the
relevant amount of such currency.


 


If an
obligation is unascertained, X may in good faith estimate that obligation and
set-off in respect of the estimate, subject to the relevant party accounting to
the other when the obligation is ascertained.


 


Nothing
contained in this section shall be effective to create a charge or other
security interest, and shall be without prejudice and in addition to any right
of set-off, combination of accounts, lien or other right to which any party is
at any time otherwise entitled (whether by operation of law, contract or
otherwise).


 


3.                           The
terms of the particular Transaction to which this Confirmation relates are as
follows:


 


	
  Trade Date:

  	
  August 8, 2005

  
	
   

  	
   

  
	
  Notional Amount:

  	
  USD 100,000,000.00

  
	
   

  	
   

  
	
  Effective Date:

  	
  January 18, 2006

  
	
   

  	
   

  
	
  Termination Date:

  	
  January 18, 2011

  
	
   

  	
   

  
	
  Fixed Amounts:

  	
   

  
	
   

  	
   

  
	
  Fixed Rate Payer:

  	
  WADDELL & REED FINANCIAL, INC.

  
	
   

  	
   

  
	
  Fixed Rate Payer Payment Dates:

  	
  The 18th of each January and July commencing on July 18,
  2006, to and including the Termination Date, subject to adjustment in
  accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  
	
  Fixed Rate Period End Dates:

  	
  The 18th of each January and July commencing on July 18,
  2006, to and including the Termination Date.

  
	
   

  	
   

  
	
  Fixed Rates:

  	
  4.84%

  



 





















 


	
  Fixed Rate Day Count Fraction:

  	
  30/360

  
	
   

  	
   

  
	
  Business Days for Payments:

  	
  London, New York

  
	
   

  	
   

  
	
  Business Day Convention:

  	
  Modified Following Business Day Convention

  
	
   

  	
   

  
	
  Floating Amounts:

  	
   

  
	
   

  	
   

  
	
  Floating Rate Payer:

  	
  The Bank of Nova Scotia

  
	
   

  	
   

  
	
  Floating Rate Payer Payment Dates:

  	
  The 18th of each January, April, July and October commencing
  on April 18, 2006, to and including the Termination Date, subject to
  adjustment in accordance with the Modified Following Business Day Convention.

  
	
   

  	
   

  
	
  Floating Rate Payer Period End Dates:

  	
  The 18th of each January, April, July and October commencing
  on April 18, 2006 to and including the Termination Date.

  
	
   

  	
   

  
	
  Floating Rate for initial Calculation Period:

  	
  To be determined

  
	
   

  	
   

  
	
  Floating Rate Option:

  	
  USD-LIBOR-BBA

  
	
   

  	
   

  
	
  Floating Rate Day Count Fraction:

  	
  Actual/360

  
	
   

  	
   

  
	
  Designated Maturity:

  	
  3-month

  
	
   

  	
   

  
	
  Spread:

  	
  None

  
	
   

  	
   

  
	
  Reset Dates:

  	
  The first day of the relevant Calculation period.

  
	
   

  	
   

  
	
  Compounding:

  	
  Inapplicable

  
	
   

  	
   

  
	
  Business Days for Payments:

  	
  London, New York

  
	
   

  	
   

  
	
  Business Day Convention:

  	
  Modified Following Business Day Convention

  
	
   

  	
   

  
	
  Calculation Agent:

  	
  The Bank of Nova Scotia

  



 





















 


	
  Mandatory Early Termination Provision:

  	
   

  
	
   

  	
   

  
	
  Mandatory Early Termination:

  	
  Applicable

  
	
   

  	
   

  
	
  Mandatory Early Termination Date:

  	
  January 13, 2006

  
	
   

  	
   

  
	
  Cash Settlement Payment Date:

  	
  January 18, 2006

  
	
   

  	
   

  
	
  Cash Settlement Valuation Time:

  	
  New York

  
	
   

  	
   

  
	
  Cash Settlement Method:

  	
  Par Yield Curve – Adjusted

  
	
   

  	
   

  
	
  Cash Settlement Reference Banks:

  	
  As selected by The Bank of Nova
  Scotia in its sole discretion and in good faith

  
	
   

  	
   

  
	
  Quotation Rate:

  	
  Mid

  



 


4.                           Relationship
Between Parties:


 


Each party will be deemed to represent to the
other party on the date of this Confirmation on which it enters into a
Transaction that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that Transaction):


 


(a)                      Non-Reliance.  It is acting for its own account, and it has
made its own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisers as it has deemed necessary.  It is not relying on any communication
(written or oral) of the other party as investment advice or as a recommendation
to enter into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction shall not be
considered investment advice or a recommendation to enter into that
Transaction.  It has not received from
the other party any assurance or guarantee as to the expected results of that
Transaction.


 


(b)                     Assessment and Understanding.  It
is capable of assessing the
merits of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions and
risks of that Transaction.  It is also
capable of assuming and assumes the risks of that Transaction.


 


(c)                      Status of Parties.  The other party is not acting as a fiduciary
for or as an adviser to it in respect of that Transaction.


 


(d)                     Commitment to
Unwind.  Neither party has committed to
unwind any Transaction.


 





















 


5.                           Offices


 


(a)                      For purposes of this Transaction,
the Office of THE BANK OF NOVA SCOTIA,
is Toronto, Ontario.


 


(b)                     For purposes of this Transaction,
the Office of WADDELL & REED
FINANCIAL, INC. is Overland Park, Kansas.


 


6.                           Account Details


 


Payments to THE BANK OF NOVA SCOTIA:


 


	
  Accounts for Payment in USD:

  	
   

  	
  Bank of Nova Scotia, New York

  
	
   

  	
   

  	
  A/C #602736

  
	
   

  	
   

  	
  Swift Code: NOSCUS33

  
	
   

  	
   

  	
  //FW026002532

  
	
   

  	
   

  	
  Favour: Bank of Nova Scotia, Toronto

  
	
   

  	
   

  	
  Attn: Derivative Products

  



 


Payments to WADDELL & REED
FINANCIAL, INC.:


 


Accounts for payments in USD:                           (Please Advise)


 


7.                           The
parties hereto agree that this Confirmation, whether received in original or
facsimile form, may be executed in counterparts, which execution may be
effected by means of facsimile transmission, and which when taken together
shall constitute a single and original agreement between the parties and a
binding supplement to the Agreement. 
Where execution is effected by means of facsimile transmission, the
parties agree that the sender’s signature as printed by the recipient’s
facsimile machine shall be deemed to be the sender’s original signature.


 


Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Confirmation enclosed for that purpose
and returning it to us by facsimile, Attention: 
WBO Derivative Product Confirmations, Telephone:  (416) 866-5415/3622, Facsimile:  (416) 933-2291.


 


 


	
   

  	
  Yours sincerely,

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Regina Magdaluyo

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorized Signature

  
	
   

  	
  Regina Magdaluyo M0060

  



 





















 


	
   

  	
  /s/ Gita Singh

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorized Signature

  
	
   

  	
  Gita Singh S117

  



 


Confirmed as of the date first written:


 


WADDELL & REED FINANCIAL, INC.


 


 


	
  /s/ Daniel P. Connealy

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Daniel P. Connealy

  
	
  Title:

  	
  Senior Vice President and Chief Financial Officer