Exhibit 10.2


 


EXECUTION VERSION


	
   

  	
   

  



 


WADDELL & REED FINANCIAL, INC.


 


$190,000,000


 


5.00% Senior Notes, Series A, due 2018

5.75% Senior Notes, Series B, due 2021


 






 


NOTE PURCHASE AGREEMENT


 






 


Dated as of August 31, 2010


 


	
   

  	
   

  



 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  AUTHORIZATION OF NOTES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  SALE AND PURCHASE OF NOTES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  CLOSING

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  CONDITIONS TO CLOSING

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Representations and Warranties

  	
   

  	
  2

  
	
  Section 4.2.

  	
  Performance; No Default

  	
   

  	
  2

  
	
  Section 4.3.

  	
  Compliance Certificates

  	
   

  	
  2

  
	
  Section 4.4.

  	
  Opinions of Counsel

  	
   

  	
  3

  
	
  Section 4.5.

  	
  Purchase Permitted By Applicable
  Law, Etc.

  	
   

  	
  3

  
	
  Section 4.6.

  	
  Sale of Other Notes

  	
   

  	
  3

  
	
  Section 4.7.

  	
  Payment of Special Counsel Fees

  	
   

  	
  3

  
	
  Section 4.8.

  	
  Private Placement Numbers

  	
   

  	
  3

  
	
  Section 4.9.

  	
  Changes in Corporate Structure

  	
   

  	
  4

  
	
  Section 4.10.

  	
  Funding Instructions

  	
   

  	
  4

  
	
  Section 4.11.

  	
  Proceedings and Documents

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Organization; Power and Authority

  	
   

  	
  4

  
	
  Section 5.2.

  	
  Authorization, Etc.

  	
   

  	
  4

  
	
  Section 5.3.

  	
  Disclosure

  	
   

  	
  4

  
	
  Section 5.4.

  	
  Organization and Ownership of
  Shares of Subsidiaries

  	
   

  	
  5

  
	
  Section 5.5.

  	
  Financial Statements; Material
  Liabilities

  	
   

  	
  5

  
	
  Section 5.6.

  	
  Compliance with Laws, Other
  Instruments, Etc.

  	
   

  	
  6

  
	
  Section 5.7.

  	
  Governmental Authorizations, Etc.

  	
   

  	
  6

  
	
  Section 5.8.

  	
  Litigation; Observance of
  Agreements, Statutes and Orders

  	
   

  	
  6

  
	
  Section 5.9.

  	
  Taxes

  	
   

  	
  6

  
	
  Section 5.10.

  	
  Title to Property; Leases

  	
   

  	
  7

  
	
  Section 5.11.

  	
  Licenses, Permits, Etc.

  	
   

  	
  7

  
	
  Section 5.12.

  	
  Compliance with ERISA

  	
   

  	
  7

  
	
  Section 5.13.

  	
  Private Offering by the Company

  	
   

  	
  8

  
	
  Section 5.14.

  	
  Use of Proceeds; Margin
  Regulations

  	
   

  	
  8

  
	
  Section 5.15.

  	
  Existing Indebtedness; Future
  Liens

  	
   

  	
  9

  
	
  Section 5.16.

  	
  Foreign Assets Control
  Regulations, Etc.

  	
   

  	
  9

  
	
  Section 5.17.

  	
  Status under Certain Statutes

  	
   

  	
  10

  
	
  Section 5.18.

  	
  Environmental Matters

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  REPRESENTATIONS OF THE PURCHASERS

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Purchase for Investment

  	
   

  	
  11

  
	
  Section 6.2.

  	
  Source of Funds

  	
   

  	
  11

  



 


i

















 


TABLE OF
CONTENTS


(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  INFORMATION AS TO COMPANY

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Financial and Business
  Information

  	
   

  	
  12

  
	
  Section 7.2.

  	
  Officer’s Certificate

  	
   

  	
  15

  
	
  Section 7.3.

  	
  Visitation

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  PAYMENT AND PREPAYMENT OF THE NOTES

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Maturity

  	
   

  	
  17

  
	
  Section 8.2.

  	
  Optional Prepayments with
  Make-Whole Amount

  	
   

  	
  17

  
	
  Section 8.3.

  	
  Prepayment in Connection with a
  Change of Control

  	
   

  	
  17

  
	
  Section 8.4.

  	
  Allocation of Partial Prepayments

  	
   

  	
  19

  
	
  Section 8.5.

  	
  Maturity; Surrender, Etc.

  	
   

  	
  19

  
	
  Section 8.6.

  	
  Purchase of Notes

  	
   

  	
  19

  
	
  Section 8.7.

  	
  Make-Whole Amount

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AFFIRMATIVE COVENANTS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Compliance with Law

  	
   

  	
  21

  
	
  Section 9.2.

  	
  Insurance

  	
   

  	
  21

  
	
  Section 9.3.

  	
  Maintenance of Properties

  	
   

  	
  21

  
	
  Section 9.4.

  	
  Payment of Taxes and Claims

  	
   

  	
  21

  
	
  Section 9.5.

  	
  Corporate Existence, Etc.

  	
   

  	
  22

  
	
  Section 9.6.

  	
  Books and Records

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  NEGATIVE COVENANTS

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 10.1.

  	
  Maintenance of Financial
  Conditions

  	
   

  	
  22

  
	
  Section 10.2.

  	
  Subsidiary Indebtedness, Etc.

  	
   

  	
  22

  
	
  Section 10.3.

  	
  Liens

  	
   

  	
  23

  
	
  Section 10.4.

  	
  Transactions with Affiliates

  	
   

  	
  24

  
	
  Section 10.5.

  	
  Merger, Consolidation, Etc.

  	
   

  	
  25

  
	
  Section 10.6.

  	
  Sales and Leasebacks

  	
   

  	
  25

  
	
  Section 10.7.

  	
  Hedging Agreements

  	
   

  	
  26

  
	
  Section 10.8.

  	
  Restricted Payments

  	
   

  	
  26

  
	
  Section 10.9.

  	
  Line of Business

  	
   

  	
  26

  
	
  Section 10.10.

  	
  Terrorism Sanctions Regulations

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  EVENTS OF DEFAULT

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  REMEDIES ON DEFAULT, ETC.

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Acceleration

  	
   

  	
  28

  
	
  Section 12.2.

  	
  Other Remedies

  	
   

  	
  29

  
	
  Section 12.3.

  	
  Rescission

  	
   

  	
  29

  
	
  Section 12.4.

  	
  No Waivers or Election of
  Remedies, Expenses, Etc.

  	
   

  	
  29

  



 


ii

















 


TABLE OF
CONTENTS


(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
  Registration of Notes

  	
   

  	
  30

  
	
  Section 13.2.

  	
  Transfer and Exchange of Notes

  	
   

  	
  30

  
	
  Section 13.3.

  	
  Replacement of Notes

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  PAYMENTS ON NOTES

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1.

  	
  Place of Payment

  	
   

  	
  31

  
	
  Section 14.2.

  	
  Home Office Payment

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 15.

  	
  EXPENSES, ETC.

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 15.1.

  	
  Transaction Expenses

  	
   

  	
  31

  
	
  Section 15.2.

  	
  Survival

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 16.

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
  AGREEMENT

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 17.

  	
  AMENDMENT AND WAIVER

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 17.1.

  	
  Requirements

  	
   

  	
  32

  
	
  Section 17.2.

  	
  Solicitation of Holders of Notes

  	
   

  	
  33

  
	
  Section 17.3.

  	
  Binding Effect, etc.

  	
   

  	
  33

  
	
  Section 17.4.

  	
  Notes Held by Company, etc.

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 18.

  	
  NOTICES

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 19.

  	
  REPRODUCTION OF DOCUMENTS

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 20.

  	
  CONFIDENTIAL INFORMATION

  	
   

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 21.

  	
  SUBSTITUTION OF PURCHASER

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 22.

  	
  MISCELLANEOUS

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 22.1.

  	
  Successors and Assigns

  	
   

  	
  36

  
	
  Section 22.2.

  	
  Payments Due on Non-Business Days

  	
   

  	
  36

  
	
  Section 22.3.

  	
  Accounting Terms; Changes in GAAP

  	
   

  	
  36

  
	
  Section 22.4.

  	
  Severability

  	
   

  	
  36

  
	
  Section 22.5.

  	
  Construction, etc.

  	
   

  	
  37

  
	
  Section 22.6.

  	
  Counterparts

  	
   

  	
  37

  
	
  Section 22.7.

  	
  Governing Law

  	
   

  	
  37

  
	
  Section 22.8.

  	
  Jurisdiction and Process; Waiver
  of Jury Trial

  	
   

  	
  37

  



 


iii

















 


	
  SCHEDULE
  A

  	
  —

  	
  INFORMATION
  RELATING TO PURCHASERS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  B

  	
  —

  	
  DEFINED
  TERMS

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.3

  	
  —

  	
  Disclosure
  Materials

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.4

  	
  —

  	
  Subsidiaries
  of the Company and Ownership of Subsidiary Stock

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.5

  	
  —

  	
  Financial
  Statements

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.8

  	
  —

  	
  Litigation

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  5.15

  	
  —

  	
  Existing
  Indebtedness

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  10.2

  	
  —

  	
  Existing
  Subsidiary Indebtedness

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  10.3

  	
  —

  	
  Existing
  Liens

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  10.6

  	
  —

  	
  Sale/Leaseback
  Properties

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1(a)

  	
  —

  	
  Form of
  5.00% Senior Note, Series A, due 2018

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 1(b)

  	
  —

  	
  Form of
  5.75% Senior Note, Series B, due 2021

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(a)(i)

  	
  —

  	
  Form of
  Signing Date Opinion of Special Counsel for the Company

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(a)(ii)

  	
  —

  	
  Form of
  Closing Opinion of Special Counsel for the Company

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(b)(i)

  	
  —

  	
  Form of
  Signing Date Opinion of Internal Counsel to the Company

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(b)(ii)

  	
  —

  	
  Form of
  Closing Opinion of Internal Counsel to the Company

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(c)(i)

  	
  —

  	
  Form of
  Signing Date Opinion of Special Counsel for the Purchasers

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 4.4(c)(ii)

  	
  —

  	
  Form of
  Closing Opinion of Special Counsel for the Purchasers

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 7.1(f)(i)

  	
  —

  	
  Form of
  Report on Net Asset Values

  
	
   

  	
   

  	
   

  
	
  EXHIBIT 7.1(f)(ii)

  	
  —

  	
  Form of
  Report on Aggregate Revenue Base

  



 


i

















 


WADDELL & REED FINANCIAL, INC.

6300 Lamar Avenue

Overland Park, Kansas 66202


 


	
   

  	
  Re:

  	
  5.00%
  Senior Notes, Series A, due 2018

  
	
   

  	
   

  	
  5.75%
  Senior Notes, Series B, due 2021

  



 


As of August 31, 2010


 


TO EACH OF THE PURCHASERS LISTED IN

SCHEDULE A HERETO:


 


Ladies
and Gentlemen:


 


Waddell &
Reed Financial, Inc., a Delaware corporation (the “Company”),
agrees with each of the purchasers whose names appear at the end hereof (each,
a “Purchaser” and, collectively, the “Purchasers”) as follows:


 


SECTION 1.                                                                            AUTHORIZATION OF NOTES.


 


The
Company has duly authorized the issue and sale of $190,000,000 aggregate
principal amount of its senior notes in two series, of which $95,000,000
aggregate principal amount shall be its 5.00% Senior Notes, Series A, due
2018 (the “Series A Notes,” such term to
include any such notes issued in substitution therefor pursuant to Section 13)
and $95,000,000 aggregate principal amount shall be its 5.75% Senior Notes, Series B,
due 2021 (the “Series B Notes,” such term to
include any such notes issued in substitution therefor pursuant to Section 13,
and, together with the Series A Notes, the “Notes”).  The Notes shall be substantially in the
respective forms set out in Exhibits 1(a) and 1(b).  The terms “Note,”
“Series A Note” and “Series B Note” mean one of the Notes, one of the Series A
Notes and one of the Series B Notes, respectively.  Certain capitalized and other terms used in
this Note Purchase Agreement (this “Agreement”) are
defined in Schedule B and references to a “Schedule” or an “Exhibit” are,
unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.


 


SECTION 2.                                                                            SALE AND PURCHASE OF NOTES.


 


Subject
to the terms and conditions of this Agreement, the Company will issue and sell
to each Purchaser and each Purchaser will purchase from the Company, at the
Closing provided for in Section 3, Notes of the series and in the
principal amount specified opposite such Purchaser’s name in Schedule A at the
purchase price of 100% of the principal amount thereof.  The Purchasers’ obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any
other Purchaser hereunder.


 

















 


SECTION 3.                                                                            CLOSING.


 


The
sale and purchase of the Notes to be purchased by each Purchaser shall occur at
the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New
York, New York 10019, at 10:00 a.m., New York City time, at a closing (the
“Closing”) on January 13, 2011 or
on such other Business Day thereafter on or prior to January 15, 2011 as
may be agreed upon by the Company and the Purchasers.  At the Closing the Company will deliver to
each Purchaser the Notes to be purchased by such Purchaser in the form of a
single Note of each series to be purchased by such Purchaser (or such greater
number of Notes in denominations of at least $1,000,000 or integral multiples
of $500,000 in excess thereof as such Purchaser may request) dated the date of
the Closing and registered in such Purchaser’s name (or in the name of its
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company as
set forth in the letter delivered pursuant to Section 4.10 hereof.


 


If
at the Closing the Company shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in Section 4
shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser
shall, at its election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.


 


SECTION 4.                                                                            CONDITIONS TO CLOSING.


 


Each
Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following conditions:


 


Section 4.1.                                                Representations and Warranties.  The
representations and warranties of the Company in this Agreement shall be
correct when made and at the time of the Closing.


 


Section 4.2.                                                Performance; No Default.  The
Company shall have performed and complied with all agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to or at the date of this Agreement and prior to or at the date of the
Closing and immediately prior to and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14)
no Default or Event of Default shall have occurred and be continuing.  Neither the Company nor any Subsidiary shall
have entered into any transaction since July 23, 2010 that would have been
prohibited by Sections 10.1 through 10.8, inclusive, had such Sections applied
since such date.  No Change of Control
shall have occurred or be contemplated.


 


Section 4.3.                                                Compliance Certificates.


 


(a)                                  Officer’s Certificate.  The Company shall have delivered
to such Purchaser an Officer’s Certificate, dated the date of this Agreement
and the date of the Closing, respectively, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.9 have been fulfilled as of such date.


 


2

















 


(b)                                 Secretary’s Certificate.  The Company shall have delivered
to such Purchaser a certificate of its Secretary or Assistant Secretary, dated
the date of this Agreement and the date of the Closing, respectively,
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of the Notes
and this Agreement or the absence of changes to such resolutions and other
corporate proceedings, if the same were previously certified to pursuant to
this Section 4.3(b).


 


Section 4.4.                                                Opinions of Counsel.  Such
Purchaser shall have received opinions in form and substance satisfactory to
such Purchaser, dated the date of this Agreement and the date of the Closing,
respectively, (a) from Fulbright & Jaworski L.L.P., counsel for
the Company, substantially in the form of Exhibits 4.4(a)(i) and
4.4(a)(ii), respectively, and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or its counsel may
reasonably request (and the Company hereby instructs its counsel to deliver
such opinion to the Purchasers), (b) from internal counsel to the Company,
substantially in the form of Exhibits 4.4(b)(i) and 4.4(b)(ii),
respectively, and covering such other matters incident to the transactions
contemplated hereby as such Purchaser or its counsel may reasonably request,
and (c) from Willkie Farr & Gallagher LLP, the Purchasers’
special counsel in connection with such transactions, substantially in the form
set forth in Exhibit 4.4(c)(i) and 4.4(c)(ii), respectively, and
covering such other matters incident to such transactions as such Purchaser may
reasonably request.


 


Section 4.5.                                                Purchase Permitted By Applicable Law, Etc.  On
the date of the Closing such Purchaser’s purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which such
Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of
the New York Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular investment,
(b) not violate any applicable law or regulation (including, without
limitation, Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof.  If requested by such Purchaser, such
Purchaser shall have received an Officer’s Certificate certifying as to such
matters of fact as such Purchaser may reasonably specify to enable such
Purchaser to determine whether such purchase is so permitted.


 


Section 4.6.                                                Sale of Other Notes. 
Contemporaneously with the Closing the Company shall sell to each other
Purchaser and each other Purchaser shall purchase the Notes to be purchased by
it at the Closing as specified in Schedule A.


 


Section 4.7.                                                Payment of Special Counsel Fees. 
Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the date of this Agreement and the date of the Closing,
respectively, the fees, charges and disbursements of the Purchasers’ special
counsel referred to in Section 4.4 to the extent reflected in a statement
of such counsel rendered to the Company at least one Business Day prior to the
date of this Agreement and the date of the Closing, as applicable.


 


Section 4.8.                                                Private Placement Numbers.  A
Private Placement Number issued by Standard & Poor’s CUSIP Service
Bureau (in cooperation with the SVO) shall have been obtained for the Notes of
each series.


 


3

















 


Section 4.9.                                                Changes in Corporate Structure.  The
Company shall not have changed its jurisdiction of incorporation or
organization, as applicable, or been a party to any merger or consolidation or
succeeded to all or any substantial part of the liabilities of any other
entity, at any time following June 30, 2010.


 


Section 4.10.                                         Funding Instructions.  At
least three Business Days prior to the date of the Closing, each Purchaser
shall have received written instructions signed by a Responsible Officer on
letterhead of the Company setting out the information contemplated by Section 3,
including (a) the name and address of the Company’s bank, (b) such
bank’s ABA number, (c) the account name and number into which the purchase
price for the Notes is to be deposited and (d) the name and telephone
number of a contact person at such bank.


 


Section 4.11.                                         Proceedings and Documents.  All
corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to such Purchaser and its special
counsel, and such Purchaser and its special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
such Purchaser or such special counsel may reasonably request.


 


SECTION 5.                                                                            REPRESENTATIONS AND WARRANTIES OF THE COMPANY.


 


The
Company represents and warrants to each Purchaser on and as of the date of this
Agreement and on and as of the date of the Closing that:


 


Section 5.1.                                                Organization; Power and Authority.  The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified as a
foreign corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect.  The Company has the corporate
power and authority to own or hold under lease the properties it purports to
own or hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Notes and to perform
the provisions hereof and thereof.


 


Section 5.2.                                                Authorization, Etc.  This
Agreement and the Notes have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).


 


Section 5.3.                                                Disclosure.  The
Company, through its agents, Bank of America Merrill Lynch and Wells Fargo &
Co., has delivered to each Purchaser a copy of a Private Placement Memorandum,
dated July 2010 (the “Memorandum”),
relating to the transactions contemplated hereby.  The Memorandum fairly describes, in all
material respects, the general nature of the 


 


4

















 


business
of the Company and its Subsidiaries. 
This Agreement, the Memorandum and the documents, certificates or other
writings delivered to the Purchasers by or on behalf of the Company in
connection with the transactions contemplated hereby and identified in Schedule
5.3 (collectively, as the “Disclosure
Documents”), and the financial statements listed in Schedule 5.5,
taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made.  Except as disclosed in the Disclosure
Documents or the financial statements listed in Schedule 5.5 as of the date of this
Agreement, since December 31, 2009, there has been no change in the
financial condition, operations, business, properties or prospects of the
Company or any Subsidiary except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect.  There is no fact known to the Company that
could reasonably be expected to have a Material Adverse Effect that has not
been set forth herein or in the Disclosure Documents.


 


Section 5.4.                                                Organization and Ownership of Shares of
Subsidiaries.  (a)  Schedule 5.4 contains (except as
noted therein or as updated prior to the Closing) complete and correct lists
(i) of the Company’s Subsidiaries, showing, as to each Subsidiary, the
correct name thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity interests
outstanding owned by the Company and each other Subsidiary, and (ii) of
the Company’s directors and senior officers.


 


(b)                                 All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4 as of the date of
this Agreement).


 


(c)                                  Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.  Each such Subsidiary has
the corporate, limited liability company or other similar power and authority
to own or hold under lease the properties it purports to own or hold under
lease and to transact the business it transacts and proposes to transact.


 


(d)                                 No Subsidiary is a party to, or otherwise subject to any legal,
regulatory, contractual or other restriction (other than this Agreement, the
agreements listed on Schedule 5.4 as of the date of this Agreement and
customary limitations imposed by regulation, corporate law or similar statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.


 


Section 5.5.                                                Financial Statements; Material Liabilities.  The
Company has delivered to each Purchaser copies of the consolidated and
consolidating financial statements of the Company listed on Schedule 5.5 (as
updated prior to the Closing).  All of
said financial


 


5
















 


statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such Schedule and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in the
notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).  The
Company and its Subsidiaries do not have any Material liabilities that are not
disclosed on such financial statements or otherwise disclosed in the Disclosure
Documents or the financial statements of the Company listed on Schedule 5.5 as
of the date of this Agreement.


 


Section 5.6.                                                Compliance with Laws, Other Instruments, Etc.  The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Company or any Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument to which the Company or any Subsidiary is bound
or by which the Company or any Subsidiary or any of their respective properties
may be bound or affected, (ii) conflict with or result in a breach of any
of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (iii) violate any provision of any statute or
other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.


 


Section 5.7.                                                Governmental Authorizations, Etc.  No
consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority is required in connection with the execution,
delivery or performance by the Company of this Agreement or the Notes.


 


Section 5.8.                                                Litigation; Observance of Agreements, Statutes
and Orders.  (a)  Except as described on Schedule 5.8
as of the date of this Agreement, there are no actions, suits, investigations
or proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any Subsidiary or any property of the Company or
any Subsidiary in any court or before any arbitrator of any kind or before or
by any Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.


 


(b)                                 Neither the Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or
any order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.


 


Section 5.9.                                                Taxes.  The
Company and its Subsidiaries have filed all tax returns that are required to
have been filed in any jurisdiction, and have paid all taxes shown to be due
and payable on such returns and all other taxes and assessments levied upon
them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which
is not individually or in the aggregate Material or (ii) the amount,
applicability 


 


6

















 


or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP.  The Company knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect.  The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate.  The Federal income tax liabilities of the
Company and its Subsidiaries have been finally determined (whether by reason of
completed audits or the statute of limitations having run) for all fiscal years
up to and including the fiscal year ended 2004 and paid for all fiscal years up
to and including the fiscal year ended 2009.


 


Section 5.10.                                         Title to Property; Leases.  The
Company and its Subsidiaries have good and sufficient title to their respective
properties that are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported
to have been acquired by the Company or any Subsidiary after said date (except
as sold or otherwise disposed of in the ordinary course of business), in each
case free and clear of Liens prohibited by this Agreement.  All leases that are Material are valid and
subsisting and are in full force and effect in all material respects.


 


Section 5.11.                                         Licenses, Permits, Etc.  (a) 
The Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, proprietary software, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without conflict with the rights of others to the
actual knowledge of the Responsible Officers after due internal inquiry.


 


(b)                                 To the actual knowledge of the Responsible Officers after due internal
inquiry, no product of the Company or any of its Subsidiaries infringes in any
material respect any license, permit, franchise, authorization, patent,
copyright, proprietary software, service mark, trademark, trade name or other
right owned by any other Person.


 


(c)                                  To the actual knowledge of the Responsible Officers after due internal
inquiry, there is no Material violation by any Person of any right of the
Company or any of its Subsidiaries with respect to any patent, copyright,
proprietary software, service mark, trademark, trade name or other right owned
or used by the Company or any of its Subsidiaries.


 


Section 5.12.                                         Compliance with ERISA.  (a) 
The Company and each ERISA Affiliate have operated and administered each Plan
in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. 
Neither the Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans (as defined in section 3(3) of
ERISA), and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such liability
by the Company or any ERISA Affiliate, or in the imposition of any Lien on any
of the rights, properties or assets of the Company or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to section 430(k) of the
Code, other than such liabilities or Liens as would not be individually or in
the aggregate Material.


 


7

















 


(b)                                 The present value of the aggregate benefit liabilities under each of the
Pension Plans, determined as of the end of such Pension Plan’s most recently
ended plan year on the basis of the actuarial assumptions specified for funding
purposes in such Pension Plan’s most recent actuarial valuation report, did not
exceed the aggregate current value of the assets of such Pension Plan allocable
to such benefit liabilities by more than $20,000,000 in the case of any single
Pension Plan.  The term “benefit liabilities” has the meaning
specified in section 4001 of ERISA and the terms “current value” and “present
value” have the meaning specified in section 3 of ERISA.


 


(c)                                  Neither the Company nor any ERISA Affiliate contributes to or is
obligated to contribute to any Multiemployer Plan.


 


(d)                                 The expected postretirement benefit obligation (determined as of the last
day of the Company’s most recently ended fiscal year in accordance with
Financial Accounting Standards Board ASC 715, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the Code) of
the Company and its Subsidiaries is not Material.


 


(e)                                  The execution and delivery of this Agreement and the issuance and sale of
the Notes at Closing hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
or penalty could be imposed pursuant to section 502(i) of ERISA or section
4975(c)(1)(A)-(D) of the Code.  The
representation by the Company to each Purchaser in the first sentence of this Section 5.12(e) is
made in reliance upon and subject to the accuracy of such Purchaser’s
representation in Section 6.2 as to the sources of the funds used to pay
the purchase price of the Notes to be purchased by such Purchaser.


 


Section 5.13.                                         Private Offering by the Company. 
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the Notes or any similar securities from, or otherwise approached or
negotiated in respect thereof with, any person other than the Purchasers and
not more than 50 other Institutional Investors, each of which has been offered
the Notes at a private sale for investment. 
Neither the Company nor anyone acting on its behalf has taken, or will
take, any action that would subject the issuance or sale of the Notes to the
registration requirements of Section 5 of the Securities Act or to the
registration requirements of any securities or blue sky laws of any applicable
jurisdiction.


 


Section 5.14.                                         Use of Proceeds; Margin Regulations.  The
Company will apply the proceeds of the sale of the Notes to repay existing
Indebtedness or for general corporate purposes or for both such purposes.  No part of the proceeds from the sale of the
Notes hereunder will be used, and no part of the proceeds of such Indebtedness
being repaid was used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of said Board
(12 CFR 220).  Margin stock does not
constitute more than 25% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 25% of the value of such assets.  As used in this Section, the terms “margin 


 


8

















 


stock” and “purpose
of buying or carrying” shall have the meanings assigned to them in
said Regulation U.


 


Section 5.15.                                         Existing Indebtedness; Future Liens.  (a) 
Except as described therein, Schedule 5.15 sets forth a complete and correct
list of all outstanding Indebtedness of the Company and its Subsidiaries as of
the date of the most recent financial statements referred to in Schedule 5.5 as
of the date of this Agreement or as updated in writing prior to the date of the
Closing, as applicable (including a description of the obligors and obligees,
principal amount outstanding and collateral therefor, if any, and Guaranty
thereof, if any), since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Subsidiaries.  Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Indebtedness of the Company or such Subsidiary and
no event or condition exists with respect to any Indebtedness of the Company or
any Subsidiary that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Indebtedness to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.


 


(b)                                 Except as disclosed in Schedule 5.15 as of the date of this Agreement,
neither the Company nor any Subsidiary has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its property, whether now owned or hereafter acquired, to be subject to a Lien
not permitted by Section 10.3.


 


(c)                                  Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Indebtedness
of the Company or such Subsidiary, any agreement relating thereto or any other
agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Indebtedness of the Company, except as specifically
indicated in Schedule 5.15 as of date of this Agreement.


 


Section 5.16.                                         Foreign Assets Control Regulations, Etc.  (a) 
Neither the Company nor any Subsidiary is in violation of, none of the holders
of Notes solely as a result of purchasing, holding, receiving any payment or
exercising any rights in respect of, any Note, will be in violation of, and
neither the issuance and sale of the Notes by the Company nor its use of the
proceeds thereof as contemplated by this Agreement will violate, (i) the
Trading with the Enemy Act, as amended, the International Emergency Economic
Powers Act, as amended, or any executive orders, proclamations or regulations issued
pursuant thereto, or any of the foreign assets control regulations of the
United States Department of Treasury (31 C.F.R., Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating thereto, or
(ii) the USA Patriot Act.


 


(b)                                 Neither the Company nor any Subsidiary (i) is a Person described or
designated in the Specially Designated Nationals and Blocked Persons List of
the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism
Order or (ii) knowingly engages in any dealings or transactions with any
such Person.  The Company and its
Subsidiaries are in compliance, in all material respects, with the USA Patriot
Act.


 


9

















 


(c)                                  No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended, assuming in all cases that such Act applies to the Company.


 


Section 5.17.                                         Status under Certain Statutes.  (a) 
Neither the Company nor any of its Subsidiaries is (i) an “investment
company,” or a company “controlled” by an “investment company,” each as defined
in, or subject to regulation under, the Investment Company Act of 1940, as
amended, (ii) a “holding company” as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 2005, or (iii) subject to
regulation under the ICC Termination Act of 1995, as amended, or the Federal
Power Act, as amended.  Except for net
capital and other requirements imposed on registered broker-dealers, neither
the Company nor any of its Subsidiaries is subject to any regulation under any
Requirement of Law (other than Regulation X of the Board of Governors of the
Federal Reserve System) that limits its ability to incur Indebtedness.


 


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


 


Section 5.18.                                         Environmental Matters.  (a) 
Neither the Company nor any Subsidiary has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of
any Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect.


 


(b)                                 Neither the Company nor any Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect.


 


(c)                                  Neither the Company nor any Subsidiary has stored any Hazardous Materials
on real properties now or formerly owned, leased or operated by any of them and
has not disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect; and


 


(d)                                 All buildings on all real properties now owned, leased or operated by the
Company or any Subsidiary are in compliance with applicable Environmental Laws,
except where failure to comply could not reasonably be expected to result in a
Material Adverse Effect.


 


10

















 


SECTION 6.                                                                         REPRESENTATIONS OF THE PURCHASERS.


 


Section 6.1.                                                Purchase for Investment.  Each
Purchaser severally represents that it is purchasing the Notes for its own
account or for one or more separate accounts maintained by such Purchaser or
for the account of one or more pension or trust funds and not with a view to
the distribution thereof, provided
that the disposition of such Purchaser’s or their property shall at all times
be within such Purchaser’s or their control. 
Each Purchaser understands that the Notes have not been registered under
the Securities Act and may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Company is not required to
register the Notes.


 


Section 6.2.                                                Source of Funds.  Each
Purchaser severally represents that at least one of the following statements is
an accurate representation as to each source of funds (a “Source”) to be used by such Purchaser to pay the
purchase price of the Notes to be purchased by such Purchaser hereunder:


 


(a)                                 the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in
respect of which the reserves and liabilities (as defined by the annual
statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general
account contract(s) held by or on behalf of any employee benefit plan
together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit
plans maintained by the same employer (or affiliate thereof as defined in PTE
95-60) or by the same employee organization in the general account do not
exceed 10% of the total reserves and liabilities of the general account
(exclusive of separate account liabilities) plus surplus as set forth in the
NAIC Annual Statement filed with such Purchaser’s state of domicile; or


 


(b)                                 the Source is a separate account that is maintained solely in connection
with such Purchaser’s fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) that
has any interest in such separate account (or to any participant or beneficiary
of such plan (including any annuitant)) are not affected in any manner by the investment
performance of the separate account; or


 


(c)                                  the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as disclosed
by such Purchaser to the Company in writing pursuant to this clause (c), no
employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated
to such pooled separate account or collective investment fund; or


 


(d)                                 the Source constitutes assets of an “investment fund” (within the meaning
of Part V of PTE 84-14 (the “QPAM
Exemption”)) managed by a “qualified professional asset manager” or “QPAM”
(within the meaning of Part V of the QPAM Exemption), no employee benefit
plan’s assets that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained by the
same employer or by an 


 


11

















 


affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(a), (c) and (g) of the QPAM
Exemption are satisfied, the QPAM does not own a 10% or more interest in the
Company and any person controlling or controlled by the QPAM (applying the
definition of “control” in Section V(e) of the QPAM Exemption) does
not own a 20% or more interest in the Company and (i) the identity of such
QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this clause (d); or


 


(e)                                  the Source constitutes assets of a “plan(s)” (within the meaning of Section IV
of PTE 96-23 (the “INHAM Exemption”))
managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV
of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of
the INHAM Exemption are satisfied, neither the INHAM nor a person controlling
or controlled by the INHAM (applying the definition of “control” in Section IV(d) of
the INHAM Exemption) owns a 5% or more interest in the Company and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit
plan(s) whose assets constitute the Source have been disclosed to the
Company in writing pursuant to this clause (e); or


 


(f)                                   the Source is a governmental plan; or


 


(g)                                  the Source is one or more employee benefit plans, or a separate account
or trust fund comprised of one or more employee benefit plans, each of which
has been identified to the Company in writing pursuant to this clause (g); or


 


(h)                                 the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA and Section 4975 of the
Code.


 


As
used in this Section 6.2, the terms “employee benefit plan,”
“governmental plan,” and “separate account” shall have the respective meanings
assigned to such terms in section 3 of ERISA.


 


SECTION 7.                                                                         INFORMATION AS TO COMPANY.


 


Section 7.1.                                                Financial and Business Information.  The
Company shall deliver to each holder of Notes that is an Institutional
Investor:


 


(a)                                 Quarterly Statements —
within 45 days after the end of each quarterly fiscal period in each fiscal
year of the Company (other than the last quarterly fiscal period of each such
fiscal year), duplicate copies of


 


(i)                                     a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarter, and


 


(ii)                                  consolidated statements of income, changes in stockholders’ equity and
cash flows of the Company and its Subsidiaries, for such quarter and (in the
case of the second and third quarters) for the portion of the fiscal year
ending with such quarter,


 


12

















 


setting
forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally,
and certified by a Senior Financial Officer as fairly presenting, in all
material respects, the financial position of the companies being reported on
and their results of operations and cash flows, subject to changes resulting
from year-end adjustments, provided that
delivery within the time period specified above of copies of the Company’s
Quarterly Report on Form 10-Q (“Form 10-Q”)
prepared in compliance with the requirements therefor and filed by the Company
with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a),
provided, further,
that the Company shall be deemed to have made such delivery of such Form 10-Q
if it shall have timely made such Form 10-Q available on “EDGAR” and on its
home page on the worldwide web (at the date of this Agreement located
at:  http//www.waddell.com) (such
availability being referred to as “Electronic Delivery”),
and provided, further,
that in the case of Electronic Delivery of any such financial statements, the
Company shall deliver to each holder of Notes that is an Institutional Investor
upon request (including by electronic mail) by such holder of Notes
(x) printed copies of such financial statements or (y) an electronic
copy of such Form 10-Q or a link to the page on the worldwide web on
which such Form 10-Q is available, free of charge, via electronic mail to
the electronic mail address or addresses of such holder set forth in Schedule A
or otherwise provided to the Company in accordance with Section 18;


 


(b)                                 Annual Statements —
within 90 days after the end of each fiscal year of the Company, duplicate
copies of


 


(i)                                     a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, and


 


(ii)                                  consolidated statements of income, changes in stockholders’ equity and
cash flows of the Company and its Subsidiaries for such year,


 


setting
forth in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail, prepared in accordance with GAAP, and accompanied
by an opinion thereon of independent public accountants of recognized national
standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have been
prepared in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in accordance with
Public Company Accounting Oversight Board standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, and provided that the delivery within the time period specified
above of the Company’s Annual Report on Form 10-K (“Form 10-K”)
for such fiscal year (together with the Company’s annual report to
stockholders, if any, prepared pursuant to Rule 14a-3 under the Exchange
Act), prepared in accordance with the requirements therefor and filed with the
SEC, shall be deemed to satisfy the requirements of this Section 7.1(b), provided, further, that
the Company shall be deemed to have made such delivery of such Form 10-K
and annual report to stockholders if it shall have timely made Electronic
Delivery thereof, and provided, further, that in the case of Electronic Delivery of any such
financial statements, the Company shall deliver to each holder of Notes that is
an Institutional Investor upon request (including by electronic mail) by such
holder of Notes (x) printed copies of such financial statements or (y) an
electronic copy 


 


13

















 


of
such Form 10-K and annual report to stockholders or a link to the page on
the worldwide web on which such Form 10-K and annual report to
stockholders is available, free of charge, via electronic mail to the
electronic mail address or addresses of such holder set forth in Schedule A or
otherwise provided to the Company in accordance with Section 18;


 


(c)                                  SEC and Other Reports — promptly upon their becoming available, one copy of each current
report on Form 8-K (except for such reports that are required to be filed
solely pursuant to Item 2.02 of Form 8-K or any successor item) and each
proxy statement filed by the Company or any Subsidiary with the SEC, provided that the Company shall be deemed to have made such
delivery of any such current report on Form 8-K or proxy statement if it
shall have timely made Electronic Delivery thereof and shall have given each
such holder of Notes prompt notice of such availability on EDGAR and on its
home page via electronic mail to the electronic mail address or addresses
of such holder set forth in Schedule A or otherwise provided to the Company in
accordance with Section 18 in connection with each such delivery;


 


(d)                                 Notice of Default or Event of Default — promptly, and in any event within five Business Days after a
Responsible Officer becoming aware of the existence of any Default or Event of
Default or that any Person has given any notice or taken any action with
respect to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type referred to
in Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to take
with respect thereto;


 


(e)                                  ERISA Matters —
promptly, and in any event within five days after a Responsible Officer
becoming aware of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Company or an ERISA Affiliate
proposes to take with respect thereto:


 


(i)                                     with respect to any Pension Plan, any reportable event, as defined in
section 4043(c) of ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such regulations as in effect from time
to time; or


 


(ii)                                  the taking by the PBGC of steps to institute, or the threatening by the
PBGC of the institution of, proceedings under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with respect to
such Multiemployer Plan; or


 


(iii)                               any event, transaction or condition that could result in the incurrence
of any liability by the Company or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant to Title I
or IV of ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse Effect;


 


14

















 


(f)                                   Net Asset Value and Aggregate Revenue Base —  after the end of each calendar month,
(i) a schedule of the Net Asset Value of the investment companies, funds
and accounts managed by the Company and its Subsidiaries on the last day of
such calendar month and certain other information, substantially in the form of
Exhibit 7.1(f)(i), and (ii) a schedule showing the calculation of the
Aggregate Revenue Base as of the end of such calendar month, and an analysis of
changes from the preceding calendar month, substantially in the form of Exhibit 7.1(f)(ii),
or in each case, in such other form as is provided to the Company’s principal
lending banks pursuant to the terms of the Existing Credit Facility or any
other Major Credit Facility; provided that
the Company shall be deemed to have made such delivery of any such schedule if
it shall have sent such schedule to the electronic mail address or addresses of
such holder set forth in Schedule A or otherwise provided to the Company in
accordance with Section 18 in connection with such delivery; and provided, further, that if, at any time, any such schedule
is not required to be (and is not) delivered to the Company’s principal lending
banks pursuant to the terms of the Existing Credit Facility or any other Major
Credit Facility, the Company shall not be required to deliver such schedule
pursuant to this Section 7.1(f);


 


(g)                                  Notices from Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies
of any notice to the Company or any Subsidiary from any Federal or state
Governmental Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse Effect;


 


(h)                                 Certain Other Events — promptly, and in any event within 30 days of any Responsible Officer
becoming aware thereof, notice of:


 


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


 


(ii)                                  any suspension or termination of the registration of the Company or any
Subsidiary as an investment adviser under the Investment Advisers Act of 1940,
as amended, or any cancellation or expiration without renewal of any Material
investment advisory agreement or similar contract to which the Company or any
Subsidiary is a party; and


 


(i)                                     Requested Information — with reasonable promptness, such other data and information relating
to the business, operations, affairs, financial condition, assets or properties
of the Company or any of its Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes as from time
to time may be reasonably requested by any such holder of Notes.


 


Each notice delivered
under Section 7.1(g) or Section 7.1(h) shall be accompanied
by a certificate of a Senior Financial Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.


 


Section 7.2.                                                Officer’s Certificate.  Each
set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or
Section 7.1(b) shall be accompanied by a certificate


 


15
















 


of a Senior Financial
Officer setting forth (which, in the case of Electronic Delivery of any such
financial statements, shall be by physical delivery of such certificate to each
holder of Notes within the applicable time period set forth in Section 7.1):


 


(a)                                  Covenant Compliance —
(i) the information (including detailed calculations) required in order to
(x) establish whether the Company was in compliance with the requirements
of Section 10.1 as at the end of the quarterly or annual period covered by
the statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum amount,
ratio or percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then in
existence), and (y) show the aggregate amount of Subsidiary Indebtedness,
secured Indebtedness and Attributable Debt in connection with Sale/Leaseback
Transactions permitted to be incurred pursuant to Sections 10.2, 10.3, 10.5 and
10.6, respectively, as of the last day of the quarterly or annual period
covered by the statements then being furnished and (ii) a full description
of any material change to the basis on which such financial statements shall
have been prepared and the impact of such change on the financial and other
covenants set forth in Sections 10.1, 10.2, 10.3, 10.5 and 10.6, including a
reasonable reconciliation of the relevant figures required for the purpose of
clause (i)(x) of this Section 7.2(a) and such other information
as shall be sufficient to enable a holder of a Note to make a reasonable
comparison between the financial position and results of operations shown by
the financial statements then being furnished and the most recent audited
financial statements previously delivered pursuant to Section 7.1(b); and


 


(b)                                 Event of Default —
a statement that such Senior Financial Officer has reviewed the relevant terms
hereof and has made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and its Subsidiaries
from the beginning of the quarterly or annual period covered by the statements
then being furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition or event
that constitutes a Default or an Event of Default and is continuing as of the
date of such statement or, if any such condition or event exists (including,
without limitation, any such event or condition resulting from the failure of
the Company or any Subsidiary to comply with any Environmental Law), specifying
the nature and period of existence thereof and what action the Company shall
have taken or proposes to take with respect thereto.


 


For the avoidance of doubt,
for the purposes of determining compliance with the requirements of Sections
10.1, 10.2 and 10.3, any election by the Company or its Subsidiaries to measure
a financial liability using fair value (as permitted by Financial Accounting
Standards Board ASC 825 and ASC 470-20 or any similar accounting standard),
shall be disregarded and such determination shall be made as if such election
had not been made.


 


Section 7.3.                                Visitation.  The
Company shall permit the representatives of each holder of Notes that is an
Institutional Investor:


 


(a)                                  No Default —
if no Default or Event of Default then exists, at the expense of such holder
and upon reasonable prior notice to the Company, to visit the principal
executive office of the Company, to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with the Company’s officers, and (with the
consent of the Company, which consent will not be 


 


16

















 


unreasonably withheld) its independent public accountants,
and (with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each
Subsidiary, during normal business hours and as often as may be reasonably
requested; and


 


(b)                                 Default —
if a Default or Event of Default then exists, at the expense of the Company to
visit and inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company authorizes
said accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries), all at such reasonable times and as often as may be
requested.


 


SECTION 8.                                                                PAYMENT AND PREPAYMENT OF THE NOTES.


 


Section 8.1.                                Maturity.  As
provided therein, the entire unpaid principal balance of the Notes of each
series shall be due and payable on the stated maturity date thereof.


 


Section 8.2.                                Optional Prepayments with Make-Whole Amount.  The
Company may, at its option, upon notice as provided below, prepay at any time
all, or from time to time any part of, the Notes (in a minimum principal amount
of $5,000,000 and integral multiples of $1,000,000 in excess thereof in the
case of a partial prepayment) at 100% of the principal amount so prepaid, plus
the applicable Make-Whole Amount for the Notes of each series determined for
the prepayment date with respect to such principal amount.  The Company will give each holder of Notes
written notice of each optional prepayment under this Section 8.2 not less
than 30 days and not more than 60 days prior to the date fixed for such
prepayment.  Each such notice shall
specify such date (which shall be a Business Day), the aggregate principal
amount of the Notes of each series to be prepaid on such date, the principal
amount of each Note held by such holder to be prepaid (determined in accordance
with Section 8.4), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated Make-Whole Amount
for the Notes of each series due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation.  Two Business
Days prior to such prepayment, the Company shall deliver to each holder of
Notes a certificate of a Senior Financial Officer specifying the calculation of
such Make-Whole Amount for the Notes of each series as of the specified
prepayment date.


 


Section 8.3.                                Prepayment in Connection with a Change of
Control.  Promptly and in any event within five
Business Days after the occurrence of a Change of Control, the Company will
give written notice thereof (a “Change of
Control Notice”) to the holders of all outstanding Notes, which
Change of Control Notice shall (a) refer specifically to this Section 8.3,
(b) describe the Change of Control in reasonable detail and specify the
Change of Control Prepayment Date and the Response Date (as respectively
defined below) in respect thereof and (c) offer to prepay all Notes at the
price specified below on the date therein specified (the “Change of Control Prepayment Date”), which
shall be a Business Day following the Response Date referred to below and in
any event not more than 90 days after the date of such Change of Control
Notice.  Each holder of a Note will
notify the Company of such holder’s 


 


17

















 


acceptance or rejection
of such offer by giving written notice of such acceptance or rejection to the
Company on or before the date for such notice specified in such Change of
Control Notice (the “Response Date”),
which specified date shall be not less than 30 days nor more than 60 days after
the date of such Change of Control Notice. 
The Company shall prepay on the Change of Control Prepayment Date all of
the Notes held by the holders as to which such offer has not been so rejected
(it being understood that failure of any holder to reject such offer on or
before the Response Date shall be deemed to constitute a rejection by such
holder), at 100% of the principal amount of each such Note, together with
interest accrued thereon to the Change of Control Prepayment Date for each such
Note.  If any holder shall reject (or is
deemed to have rejected) such offer with respect to any Note held by such
holder on or before the Response Date, such holder shall be deemed to have
waived its rights under this Section 8.3 to require prepayment of such
Note for which such offer was rejected in respect of such Change of Control but
not in respect of any subsequent Change of Control.


 


For
purposes of this Section 8.3, any holder of more than one Note may act
separately with respect to each Note so held (with the effect that a holder of
more than one Note may accept such offer with respect to one or more Notes so
held and reject such offer with respect to one or more other Notes so held).


 


As
used herein, a “Change of Control” shall be deemed
to have occurred if, whether by an event or series of events:


 


(a)                                  any “person” or “group” (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, but excluding
any employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, as amended, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an “option
right”)), directly or indirectly, of 25% or more of the equity securities of
the Company entitled to vote for members of the board of directors or
equivalent governing body of the Company on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right);


 


(b)                                 during any period of 12 consecutive months, a majority of the members of
the board of directors or other equivalent governing body of the Company cease
to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of
such election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body (excluding, in the
case of both clause (ii) and clause (iii), any individual whose initial
nomination for, or assumption of office as, a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or more
directors by any 


 


18

















 


person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of directors);
or


 


(c)                                  any Person or two or more Persons acting in concert shall have acquired
by contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation thereof, will result in its or their acquisition of
control over the equity securities of the Company entitled to vote for members
of the board of directors or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such
Person or group has the right to acquire pursuant to any option right)
representing 25% or more of the combined voting power of such securities.


 


Section 8.4.                                Allocation of Partial Prepayments.  In
the case of each partial prepayment of the Notes pursuant to Section 8.2,
the principal amount of the Notes to be prepaid shall be allocated among all of
the Notes at the time outstanding in proportion, as nearly as practicable, to
the respective unpaid principal amounts thereof not theretofore called for
prepayment.


 


Section 8.5.                                Maturity; Surrender, Etc.  In the
case of any prepayment of Notes pursuant to this Section 8, the principal
amount of each Note to be prepaid shall mature and become due and payable on
the date fixed for such prepayment (which shall be a Business Day), together
with interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any.  From and
after such date, unless the Company shall fail to pay such principal amount
when so due and payable, together with the interest and Make-Whole Amount, if
any, as aforesaid, interest on such principal amount shall cease to
accrue.  Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued,
and no Note shall be issued in lieu of any prepaid principal amount of any
Note.


 


Section 8.6.                                Purchase of Notes.  The
Company will not and will not permit any Subsidiary to purchase, redeem, prepay
or otherwise acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance with the terms
of this Agreement and the Notes.  The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment or prepayment of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.


 


Section 8.7.                                Make-Whole Amount.


 


“Make-Whole Amount” means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:


 


“Called Principal” means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to Section 12.1,
as the context requires.


 


“Discounted Value” means, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal 


 


19

















 


from
their respective scheduled due dates to the Settlement Date with respect to
such Called Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which interest
on the Notes is payable) equal to the Reinvestment Yield with respect to such
Called Principal.


 


“Reinvestment Yield” means, with respect to the Called
Principal of any Note, 0.50% (50 basis points) over the yield to maturity
implied by (i) the yields reported, as of 10:00 a.m. (New York City time)
on the second Business Day preceding the Settlement Date with respect to such
Called Principal, (x) on the Bloomberg Financial Markets News screen PX1
or the equivalent screen provided by Bloomberg Financial Markets News, or
(y) if such on-line market data is not at the time provided by Bloomberg
Financial Markets News, on the display designated as “Pages K:232 through
K:238” on the Analytics Display of the Reuters Trading System, in any case for
the most recently issued actively traded on the run U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable (including
by way of interpolation), the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded on the run U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date.


 


In
the case of each determination under clause (i) or clause (ii), as the
case may be, of the preceding paragraph, such implied yield will be determined,
if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the applicable actively traded
on the run U.S. Treasury security with a maturity closest to and greater than
such Remaining Average Life and (2) the applicable actively traded on the
run U.S. Treasury security with a maturity closest to and less than such
Remaining Average Life.


 


“Remaining Average Life” means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of
the products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (b) the
number of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.


 


“Remaining Scheduled Payments” means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that
if such Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of interest accrued to
such Settlement Date and required to be paid on such Settlement Date pursuant
to Section 8.2 or Section 12.1.


 


20

















 


“Settlement Date” means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid pursuant
to Section 8.2 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.


 


SECTION 9.                                                                AFFIRMATIVE COVENANTS.


 


So
long as any of the Purchasers have the obligation to purchase Notes on the
terms and subject to the conditions set forth herein, any of the Notes are
outstanding, or any amounts payable hereunder remain unpaid or unsatisfied, the
Company covenants that:


 


Section 9.1.                                Compliance with Law. 
Without limiting Section 10.10, the Company will, and will cause
each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
ERISA, the USA Patriot Act and Environmental Laws, and will obtain and maintain
in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to
the extent necessary to ensure that non-compliance with such laws, ordinances
or governmental rules or regulations or failures to obtain or maintain in
effect such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.


 


Section 9.2.                                Insurance.  The
Company will, and will cause each of its Subsidiaries to, maintain, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.


 


Section 9.3.                                Maintenance of Properties.  The
Company will, and will cause each of its Subsidiaries to, maintain and keep, or
cause to be maintained and kept, their respective properties in good repair,
working order and condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly conducted at all
times, provided that this Section shall not prevent the Company or any Subsidiary
from discontinuing the operation and the maintenance of any of its properties
if such discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.


 


Section 9.4.                                Payment of Taxes and Claims.  The
Company will, and will cause each of its Subsidiaries to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent the same have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax, assessment,
charge, levy or claim if (i) the amount, applicability or validity thereof
is contested by the Company or such Subsidiary on a timely basis in good faith
and in appropriate proceedings, and the Company or a 


 


21

















 


Subsidiary has
established adequate reserves therefor in accordance with GAAP on the books of
the Company or such Subsidiary or (ii) the nonpayment of all such taxes,
assessments, charges, levies and claims in the aggregate could not reasonably
be expected to have a Material Adverse Effect.


 


Section 9.5.                                Corporate Existence, Etc. 
Subject to Section 10.5, the Company will at all times preserve and
keep in full force and effect its corporate existence and the corporate
existence of each of its Subsidiaries (unless merged into the Company or a
Wholly-Owned Subsidiary) and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect such corporate
existence, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.


 


Section 9.6.                                Books and Records.  The
Company will, and will cause each of its Subsidiaries to, maintain proper books
of record and account in conformity with GAAP and all applicable requirements
of any Governmental Authority having legal or regulatory jurisdiction over the
Company or such Subsidiary, as the case may be.


 


SECTION 10.                                                         NEGATIVE COVENANTS.


 


So
long as any of the Purchasers have the obligation to purchase Notes on the
terms and subject to the conditions set forth herein, any of the Notes are
outstanding, or any amounts payable hereunder remain unpaid or unsatisfied, the
Company covenants that:


 


Section 10.1.                         Maintenance of Financial Conditions.  The
Company will not permit:


 


(a)                                  the ratio of Consolidated Total Debt on the last day of any Relevant
Period to Consolidated EBITDA in respect of such Relevant Period to equal or
exceed 3.00 to 1.00; and


 


(b)                                 the ratio of Consolidated EBITDA to Consolidated Interest Expense in
respect of any Relevant Period to be less than or equal to 4.00 to 1.


 


Section 10.2.                         Subsidiary Indebtedness, Etc.


 


(a)                                  The Company will not permit any Subsidiary to create, incur, assume,
guarantee or otherwise become liable with respect to or permit to exist any
Indebtedness other than:


 


(i)                                     Indebtedness existing on the date hereof and set forth in Schedule 10.2,
but not any extensions, renewals or replacements of any such Indebtedness;


 


(ii)                                  Indebtedness of any Subsidiary to the Company or any Wholly-Owned
Subsidiary;


 


(iii)                               Indebtedness of any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital
Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof, and extensions, renewals and replacements of any such
Indebtedness that do not increase the 


 


22

















 


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
principal amount of Indebtedness permitted by this clause (iii) shall not
exceed $10,000,000 at any time outstanding;


 


(iv)                              Indebtedness of any Person that becomes a Subsidiary after the date
hereof; provided, that such Indebtedness exists
at the time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a Subsidiary,
provided that neither the Company nor any other Subsidiary will assume or
otherwise become directly or indirectly liable for such Indebtedness;


 


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


 


(vi)                              Indebtedness not otherwise permitted by clauses (i) through (v) above;
provided, that the sum (without
duplication) of (A) the aggregate principal amount of Indebtedness of all
Subsidiaries (other than Indebtedness as permitted by clauses (i), (ii) and
(iii) above), plus (B) the aggregate principal amount of Indebtedness
secured by Liens permitted by clause (e) of Section 10.3 shall not at
any time exceed 15% of the Consolidated Net Worth of the Company.


 


(b)                                 The Company will not and will not permit any Subsidiary to become a party
to, or otherwise subject to, any agreement that materially restricts the
ability of such Subsidiary to pay dividends out of profits, repay intercompany
obligations or make any other distributions of profits to the Company or any of
its Subsidiaries that own outstanding shares of capital stock or similar equity
interests of such Subsidiary; provided, that
the foregoing shall not apply to any (i) restrictions and conditions
contained in this Agreement and (ii) customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold.


 


Section 10.3.                         Liens.  The
Company will not, and will not permit any Subsidiary to, create, incur, assume
or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:


 


(a)                                  Permitted Encumbrances;


 


(b)                                 any Lien on any property or asset of the Company or any Subsidiary
existing on the date hereof and set forth in Schedule 10.3; provided, that (i) such Lien shall not apply to any
other property or asset of the Company or any Subsidiary, and (ii) such
Lien shall secure only those obligations which it secures on the date hereof;


 


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


 


23

















 


those obligations which it secures on the date of
such acquisition or the date such Person becomes a Subsidiary, as the case may
be;


 


(d)                                 Liens on property, plant and equipment acquired, constructed or improved
by the Company or any Subsidiary; provided, that
(i) such Liens secure Indebtedness permitted by Section 10.2(a)(iii),
(ii) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the completion of
such construction or improvement, (iii) the Indebtedness secured thereby
does not exceed 70% of the cost of acquiring, constructing or improving such
property, plant and equipment, and (iv) such security interests shall not
apply to any other property or assets of the Company or any Subsidiary; and


 


(e)                                  Liens not otherwise permitted by clauses (a) through (d) above
securing Indebtedness of the Company or a Subsidiary; provided,
that the sum (without duplication) of (i) the aggregate principal amount
of Indebtedness secured by all such Liens permitted by this clause (e), plus
(ii) the aggregate principal amount of Indebtedness of all Subsidiaries
(other than Indebtedness as permitted by subclauses (i), (ii) and (iii) of
Section 10.2(a)) shall not at any time exceed 15% of the Consolidated Net
Worth of the Company.  The Company agrees
that neither it nor any of its Subsidiaries shall use any capacity under this Section 10.3(e) to
secure any amounts owed or outstanding under any Major Credit Facility unless
the Notes and this Agreement are also concurrently secured equally and ratably
pursuant to documentation in form and substance reasonably satisfactory to the
Majority Holders (including, but not limited to, documentation such as security
agreements and other necessary or desirable collateral agreements and
instruments, an intercreditor agreement and an opinion of independent legal
counsel reasonably satisfactory to the Majority Holders).


 


If the Company shall, or
shall permit any of its Subsidiaries to, directly or indirectly create or
incur, or suffer to be incurred or to exist, any Lien, other than those Liens
permitted by the provisions of clauses (a) through (e), inclusive, of this
Section 10.3, it will make or cause to be made effective provision whereby
the Notes and this Agreement will be secured equally and ratably with any and
all other obligations thereby secured pursuant to documentation in form and
substance reasonably satisfactory to the Majority Holders as provided in clause
(e) above and, in any such case, the Notes and this Agreement shall have
the benefit, to the fullest extent that, and with such priority as, the holders
of the Notes may be entitled under applicable law, of an equitable and ratable
Lien on such property.  For the avoidance
of doubt, no grant of security or other action in accordance with this
paragraph shall cure or be deemed to cure any breach of this Section 10.3.


 


Section 10.4.                         Transactions with Affiliates.  The
Company will not and will not permit any Subsidiary to enter into directly or
indirectly any transaction or group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Company or
another Subsidiary), except (a) in accordance with the Company’s Corporate
Code of Business Conduct and Ethics or as approved by a Committee of the Board
of Directors of the Company or a majority of the independent members of the
Board of Directors of the Company and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtainable in a
comparable arm’s-length transaction with a Person not an Affiliate or
(b) with respect to Restricted Payments otherwise permitted by clause (b) or
clause (c) of Section 10.8.


 


24

















 


Section 10.5.                         Merger, Consolidation, Etc.  The
Company will not and will not permit any of its Subsidiaries to consolidate,
amalgamate or merge with any other Person or convey, transfer or lease all or
substantially all of its assets in a single transaction or series of
transactions to any Person except:


 


(a)                                  a Subsidiary may consolidate, amalgamate or merge with the Company or any
Wholly-Owned Subsidiary of the Company or convey or transfer all or
substantially all of its assets to:


 


(i)                                     the Company, provided that the Company shall be the continuing, surviving
or acquiring corporation, or


 


(ii)                                  any Wholly-Owned Subsidiary of the Company.


 


(b)                                 the Company may consolidate, amalgamate or merge with any other Person or
convey or transfer all or substantially all of its assets to any other Person, provided that the successor formed by such consolidation or
amalgamation or the survivor of such merger or the Person that acquires by
conveyance, transfer or lease all or substantially all of the assets of the
Company as an entirety, as the case may be, shall be a solvent corporation
organized and existing under the laws of the United States or any State thereof
(including the District of Columbia), and, if the Company is not such
corporation, (i) such corporation shall have executed and delivered to
each holder of any Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement and the Notes and
(ii) such corporation shall have caused to be delivered to each holder of
a Note an opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Majority Holders, to the
effect that all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the terms hereof,
and provided, further, that immediately
before and immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing and the Company shall
have complied with the provisions of Section 8.3, if applicable.


 


No such conveyance,
transfer or lease of substantially all of the assets of the Company shall have
the effect of releasing the Company or any successor corporation that shall
theretofore have become such in the manner prescribed in this Section 10.5
from its liability under this Agreement or the Notes.


 


Section 10.6.                         Sales and Leasebacks.  The
Company will not, and will not permit any of its Subsidiaries to, enter into
any arrangement with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property that has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary (a “Sale/Leaseback Transaction”),
except  (a) the Sale/Leaseback
Transactions entered into with respect to the real property listed on Schedule
10.6 as of the date of this Agreement and (b) one or more Sale/Leaseback
Transactions in addition to those described in clause (a) of this Section 10.6
if after giving effect to such transaction and the incurrence of Attributable
Debt in respect thereof, the aggregate Attributable


 


25






 












 


Debt
in respect of all Sale/Leaseback Transactions entered into pursuant to this
clause (b) shall not exceed $20,000,000 (determined on the date such
transaction occurred).


 


Section 10.7.              Hedging
Agreements.  The Company will not, and will not permit any
Subsidiary to, enter into any Hedging Agreement, other than (a) Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Company or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities and not for purposes of
speculation or taking a “market view” and (b) interest rate Hedging
Agreements in respect of Indebtedness under the Notes.


 


Section 10.8.              Restricted
Payments.  The Company will not, and will not permit any
of Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) the Company or any
Subsidiary may declare and pay dividends (whether in cash, securities or other
property) with respect to its capital stock, provided
that, in the case of any such declaration or payment by the Company, no Event
of Default has occurred and is continuing or would result therefrom,
(b) the Company may make Restricted Payments pursuant to and in accordance
with stock option plans or other benefit plans for management or employees of
the Company and its Subsidiaries, (c) the Company may, in addition to the
foregoing, repurchase shares of the Company’s common stock and options therefor
granted by the Company pursuant to its employee stock option plans and
(d) the Company may repurchase shares of the Company’s common stock in the
open market or in private transactions, provided that in the case of any such
repurchase by the Company, no Event of Default has occurred and is continuing
or would result therefrom.


 


Section 10.9.              Line of
Business.  The Company will not and will not permit any
Subsidiary to engage to any material extent in any business if, as a result,
the general nature of the business in which the Company and its Subsidiaries,
taken as a whole, would then be engaged would be substantially changed from the
general nature of the business in which the Company and its Subsidiaries, taken
as a whole, are engaged on the date of this Agreement as described in the
Memorandum.


 


Section 10.10.           Terrorism
Sanctions Regulations.  The Company will not and will
not permit any Subsidiary to (a) become a Person described or designated
in the Specially Designated Nationals and Blocked Persons List of the Office of
Foreign Assets Control or in Section 1 of the Anti Terrorism Order or
(b) knowingly engage in any dealings or transactions with any such Person.


 


SECTION 11.                                                                     EVENTS OF DEFAULT.


 


An
“Event of Default” shall exist if any of
the following conditions or events shall occur and be continuing:


 


(a)           the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise; or


 


(b)           the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and payable;
or


 


26

















 


(c)           the Company defaults in the performance of or compliance
with any term contained in Section 7.1(d) or Sections 10.1, 10.2, 10.3, 10.5
and 10.6; or


 


(d)           the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in Sections 11(a),
(b) and (c)) and such default is not remedied within 30 days after the earlier
of (i) a Responsible Officer obtaining actual knowledge of such default
and (ii) the Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a “notice of default”
and to refer specifically to this Section 11(d)); or


 


(e)           any representation or warranty made in writing by or on
behalf of the Company in this Agreement or in any writing furnished in
connection with the transactions contemplated hereby proves to have been false
or incorrect in any material respect on the date as of which made; or


 


(f)            (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of
or premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal or notional amount of at least
$10,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness in an aggregate
outstanding principal or notional amount of at least $10,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled to declare
such Indebtedness to be), due and payable before its stated maturity or before
its regularly scheduled dates of payment or unwound or terminated prior to its
termination date, or (iii) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or the
right of the holder of Indebtedness to convert such Indebtedness into equity interests),
(x) the Company or any Subsidiary has become obligated to purchase or
repay Indebtedness before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount of at
least $10,000,000 or unwind or terminate any Hedging Contract in a notional
amount at least equal to $10,000,000, or (y) one or more Persons have the
right to require the Company or any Subsidiary so to purchase, repay or unwind
or terminate such Indebtedness or Hedging Contract; provided that
this clause (f) shall not apply to secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets securing
such Indebtedness; or


 


(g)           the Company or any Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of the
foregoing; or


 


27

















 


(h)           a court or Governmental Authority of competent
jurisdiction enters an order appointing, without consent by the Company or any
of its Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial part of
its property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any jurisdiction,
or ordering the dissolution, winding-up or liquidation of the Company or any of
its Subsidiaries, or any such petition shall be filed against the Company or
any of its Subsidiaries and such petition shall not be dismissed within 60
days; or


 


(i)            a final judgment or judgments for the payment of money
aggregating in excess of $25,000,000 are rendered against one or more of the
Company and its Subsidiaries and which judgments are not, within 45 days after
entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 45 days after the expiration of such stay; or


 


(j)            if (i) any Pension Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought or
granted under section 412 of the Code, (ii) a notice of intent to terminate any
Pension Plan shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to
terminate or appoint a trustee to administer any Pension Plan or the PBGC shall
have notified the Company or any ERISA Affiliate that a Pension Plan may become
a subject of any such proceedings, (iii) the aggregate “amount of unfunded
benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall exceed
$50,000,000, (iv) the Company or any ERISA Affiliate shall have incurred or is
reasonably expected to incur any liability pursuant to Title I or IV of ERISA
or the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends
any employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company or any
Subsidiary thereunder; and any such event or events described in clauses (i)
through (vi) above, either individually or together with any other such event
or events, could reasonably be expected to have a Material Adverse Effect.


 


As
used in Section 11(j), the terms “employee benefit plan”
and “employee welfare benefit plan” shall
have the respective meanings assigned to such terms in section 3 of ERISA.


 


SECTION 12.                                                                     REMEDIES ON DEFAULT, ETC.


 


Section 12.1.              Acceleration.


 


(a)           If an Event of Default with respect to the Company
described in Section 11(g) or (h) (other than an Event of Default described in
clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by
virtue of the fact that such clause encompasses clause (i) of Section 11(g))
has occurred, all the Notes then outstanding shall automatically become
immediately due and payable.


 


28

















 


(b)           If any other Event of Default has occurred and is
continuing, the Majority Holders may at any time at its or their option, by
notice or notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.


 


(c)           If any Event of Default described in Section 11(a) or (b)
has occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it
or them to be immediately due and payable.


 


Upon
any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (x) all accrued and unpaid
interest thereon (including, but not limited to, interest accrued thereon at
the Default Rate) and (y) the Make-Whole Amount for a Note of such series
determined in respect of such principal amount (to the full extent permitted by
applicable law), shall all be immediately due and payable, in each and every
case without presentment, demand, protest or further notice, all of which are hereby
waived.  The Company acknowledges, and
the parties hereto agree, that each holder of a Note has the right to maintain
its investment in the Notes free from repayment by the Company (except as
herein specifically provided for) and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.


 


Section 12.2.              Other
Remedies.  If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become
or have been declared immediately due and payable under Section 12.1, the
holder of any Note at the time outstanding may proceed to protect and enforce
the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of any
of the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise.


 


Section 12.3.              Rescission.  At
any time after any Notes have been declared due and payable pursuant to Section
12.1(b) or (c), the Majority Holders, by written notice to the Company, may
rescind and annul any such declaration and its consequences if (a) the Company
has paid all overdue interest on the Notes, all principal of and Make-Whole
Amount, if any, on any Notes that are due and payable and are unpaid other than
by reason of such declaration, and all interest on such overdue principal and
Make-Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest in respect of the Notes, at the Default Rate, (b) neither the
Company nor any other Person shall have paid any amounts which have become due
solely by reason of such declaration, (c) all Events of Default and Defaults,
other than non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and
(d) no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes.  No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.


 


Section 12.4.              No
Waivers or Election of Remedies, Expenses, Etc.  No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or 


 


29

















 


remedy
shall operate as a waiver thereof or otherwise prejudice such holder’s rights,
powers or remedies.  No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of each Note on
demand such further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection under this
Section 12, including, without limitation, reasonable attorneys’ fees, expenses
and disbursements.


 


SECTION 13.                                                                     REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.


 


Section 13.1.              Registration
of Notes.  The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes.  The name and address of each
holder of one or more Notes, each transfer thereof and the name and address of
each transferee of one or more Notes shall be registered in such register.  Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.


 


Section 13.2.              Transfer
and Exchange of Notes.  Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Section 18(iii)), for registration of transfer or exchange (and
in the case of a surrender for registration of transfer accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or such holder’s attorney duly authorized in writing and accompanied by
the relevant name, address and other information for notices of each transferee
of such Note or part thereof), within ten Business Days thereafter, the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes of the same series (as requested by the holder thereof)
in exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. 
Each such new Note shall be payable to such Person as such holder may
request and shall be substantially in the form of Exhibit 1.  Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon.  The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in
denominations of less than $500,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of Notes, one Note
may be in a denomination of less than $500,000. 
Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representations set
forth in Sections 6.1 and 6.2.


 


Section 13.3.              Replacement
of Notes.  Upon receipt by the Company at the address
and to the attention of the designated officer (all as specified in Section
18(iii)) of evidence reasonably satisfactory to it of the ownership of and the
loss, theft, destruction or mutilation of any Note (which evidence shall be, in
the case of an Institutional Investor, notice from such Institutional Investor
of such ownership and such loss, theft, destruction or mutilation), and


 


30

















 


(a)           in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note is, or
is a nominee for, an original Purchaser or any other Institutional Investor,
such Person’s own unsecured agreement of indemnity shall be deemed to be
satisfactory), or


 


(b)           in the case of mutilation, upon surrender and cancellation
thereof,


 


within
ten Business Days thereafter, the Company at its own expense shall execute and
deliver, in lieu thereof, a new Note of the same series, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.


 


SECTION 14.                                                                     PAYMENTS ON NOTES.


 


Section 14.1.              Place
of Payment.  Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made at the principal office of Bank of America, N.A. in New
York City.  The Company may at any time,
by notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the
Company in such jurisdiction or the principal office of a bank or trust company
in such jurisdiction.


 


Section 14.2.              Home
Office Payment.  So long as any Purchaser or its nominee shall
be the holder of any Note, and notwithstanding anything contained in Section
14.1 or in such Note to the contrary, the Company will pay all sums becoming
due on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below such Purchaser’s
name in Schedule A, or by such other method or at such other address as such
Purchaser shall have from time to time specified to the Company in writing for
such purpose, without the presentation or surrender of such Note or the making
of any notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, such Purchaser shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company
pursuant to Section 14.1.  Prior to any
sale or other disposition of any Note held by a Purchaser or its nominee, such
Purchaser will, at its election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes pursuant
to Section 13.2.  The Company will afford
the benefits of this Section 14.2 to any Institutional Investor that is the
direct or indirect transferee of any Note purchased by a Purchaser under this
Agreement and that has made the same agreement relating to such Note as the
Purchasers have made in this Section 14.2.


 


SECTION 15.                                                                     EXPENSES, ETC.


 


Section 15.1.              Transaction
Expenses.  Whether or not the transactions contemplated
hereby are consummated, the Company will pay all costs and expenses (including
reasonable attorneys’ fees of one special counsel) incurred by the Purchasers
in connection with such transactions and will pay all costs and expenses
(including reasonable attorneys’ fees of one special counsel and, if reasonably
required by the Majority Holders, local or other counsel) of 


 


31

















 


each
Purchaser or other holder of a Note in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending
(or determining whether or how to enforce or defend) any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or
the Notes, or by reason of being a holder of any Note, (b) the costs and
expenses, including financial advisors’ fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by
the Notes and (c) the costs and expenses incurred in connection with the
initial filing of this Agreement and all related documents and financial
information with the SVO, provided
that such costs and expenses under this clause (c) shall not exceed
$3,000.  The Company will pay, and will
save each Purchaser and each other holder of a Note harmless from, all claims
in respect of any fees, costs or expenses, if any, of brokers and finders
(other than those, if any, retained by a Purchaser or other holder in
connection with its purchase of the Notes).


 


Section 15.2.              Survival.  The
obligations of the Company under this Section 15 will survive the payment or
transfer of any Note, the enforcement, amendment or waiver of any provision of
this Agreement or the Notes, and the termination of this Agreement.


 


SECTION 16.                                                                     SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.


 


All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other holder of a Note.  All statements
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant to this Agreement shall be deemed representations and
warranties of the Company under this Agreement. 
Subject to the preceding sentence, this Agreement and the Notes embody
the entire agreement and understanding between each Purchaser and the Company
and supersede all prior agreements and understandings relating to the subject
matter hereof.


 


SECTION 17.                                                                     AMENDMENT AND WAIVER.


 


Section 17.1.              Requirements.  This
Agreement and the Notes may be amended, and the observance of any term hereof
or of the Notes may be waived (either retroactively or prospectively), with
(and only with) the written consent of the Company and the Majority Holders,
except that (a) no amendment or waiver of any of the provisions of Section
1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein),
will be effective as to any Purchaser unless consented to by such Purchaser in
writing, and (b) no such amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected thereby,
(i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation
of interest or of the Make-Whole Amount on, the 


 


32

















 


Notes,
(ii) change the percentage of the principal amount of the Notes the holders
of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.


 


Section 17.2.              Solicitation
of Holders of Notes.


 


(a)           Solicitation.  The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes.  The Company will
deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each holder
of outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.


 


(b)           Payment.  The Company will not directly or indirectly
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security or provide other
credit support, to any holder of Notes as consideration for or as an inducement
to the entering into by any holder of Notes of any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is concurrently
paid, or security is concurrently granted or other credit support concurrently
provided, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.


 


Section 17.3.              Binding
Effect, etc.  Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver.  No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon.  No course of dealing between
the Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note.  As used herein, the
term “this Agreement” and references thereto shall mean this Agreement as it
may from time to time be amended or supplemented.


 


Section 17.4.              Notes
Held by Company, etc.  Solely for the purpose of determining whether
the holders of the requisite percentage of the aggregate principal amount of
Notes then outstanding approved or consented to any amendment, waiver or
consent to be given under this Agreement or the Notes, or have directed the
taking of any action provided herein or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.


 


SECTION 18.                                                                     NOTICES.


 


Except
as otherwise provided in Sections 7.1(a), 7.1(b), 7.1(c) and 7.1(f), all
notices and communications provided for hereunder shall be in writing and sent
(a) by telecopy if the sender 


 


33

















 


on
the same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), or (b) by registered or certified mail
with return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid).  Any such notice must be sent:


 


(i)            if to any Purchaser or its nominee,
to such Purchaser or nominee at the address specified for such communications
in Schedule A, or at such other address as such Purchaser or nominee shall have
specified to the Company in writing,


 


(ii)           if to any other holder of any Note,
to such holder at such address as such other holder shall have specified to the
Company in writing, or


 


(iii)          if to the Company, to the Company at
its address set forth at the beginning hereof to the attention of Wendy J.
Hills, Esq., Vice President, Secretary and Associate General Counsel
(telecopier:  (913) 236-2627), or at such
other address as the Company shall have specified to the holder of each Note in
writing.


 


Notices
under this Section 18 will be deemed given only when actually received.


 


SECTION 19.                                                                     REPRODUCTION OF DOCUMENTS.


 


This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed, (b)
documents received by any Purchaser at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to any Purchaser, may be reproduced by such
Purchaser by any photographic, photostatic, electronic, digital, or other
similar process and such Purchaser may destroy any original document so
reproduced.  The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.  This Section 19 shall not
prohibit the Company or any other holder of Notes from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.


 


SECTION 20.                                                                     CONFIDENTIAL INFORMATION.


 


For
the purposes of this Section 20, “Confidential Information” means information
delivered to any Purchaser by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by such Purchaser as being
confidential information of the Company or such Subsidiary, provided that such
term does not include information that (a) was publicly known prior to the
time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by such Purchaser or any person acting on such Purchaser’s
behalf, (c) otherwise becomes known to such Purchaser other than through
disclosure by the Company or any Subsidiary, or (d) constitutes financial
statements delivered to such Purchaser under Section 7.1 that are 


 


34

















 


otherwise
publicly available.  Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such
Purchaser may deliver or disclose Confidential Information to (i) its
directors, officers, employees, agents, attorneys, trustees and affiliates (to the
extent such disclosure reasonably relates to the administration of the
investment represented by its Notes), (ii) its financial advisors and
other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor
to which it sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which it offers to purchase any security of the
Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over
such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access
to information about such Purchaser’s investment portfolio, or (viii) any
other Person to which such delivery or disclosure may be necessary (w) to
effect compliance with any law, rule, regulation or order applicable to such
Purchaser, (x) in response to any subpoena or other legal process,
(y) in connection with any litigation to which such Purchaser is a party
or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser’s Notes and this Agreement.  Each holder of a Note, by its acceptance of a
Note, will be deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions
of this Section 20.


 


SECTION 21.                                                                     SUBSTITUTION OF PURCHASER.


 


Each
Purchaser shall have the right to substitute any one of its Affiliates as the
purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to
such Purchaser in this Agreement (other than in this Section 21), shall be
deemed to refer to such Affiliate in lieu of such original Purchaser.  In the event that such Affiliate is so
substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon
receipt by the Company of notice of such transfer, any reference to such
Affiliate as a “Purchaser” in this Agreement (other than in this Section 21),
shall no longer be deemed to refer to such Affiliate, but shall refer to such
original Purchaser, and such original Purchaser shall again have all the rights
of an original holder of the Notes under this Agreement.


 


35
















 


SECTION 22.                                                                     MISCELLANEOUS.


 


Section 22.1.              Successors
and Assigns.  All covenants and other agreements contained
in this Agreement by or on behalf of any of the parties hereto bind and inure
to the benefit of their respective successors and assigns (including, without
limitation, any subsequent holder of a Note) whether so expressed or not.


 


Section 22.2.              Payments
Due on Non-Business Days.  Anything in this Agreement or
the Notes to the contrary notwithstanding (but without limiting the requirement
in Section 8.2 that the notice of any optional prepayment specify a
Business Day as the date fixed for such prepayment), any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest
payable on such next succeeding Business Day; provided
that if the maturity date of any Note is a date other than a Business Day, the
payment otherwise due on such maturity date shall be made on the next
succeeding Business Day and shall include the additional days elapsed in the
computation of interest payable on such next succeeding Business Day.


 


Section 22.3.              Accounting
Terms; Changes in GAAP.  All accounting terms used
herein which are not expressly defined in this Agreement have the meanings
respectively given to them in accordance with GAAP.  Except as otherwise specifically provided
herein, (a) all computations made pursuant to this Agreement shall be made
in accordance with GAAP, and (b) all financial statements shall be
prepared in accordance with GAAP.


 


If
at any time after the date of this Agreement there is a change to the basis on
which the Company’s financial statements are prepared (an “Accounting
Change”), the Company and the holders of Notes shall, at the request
of the Company or the Majority Holders, negotiate in good faith with a view to
agreeing on such amendments to the financial covenants set forth in Section 10.1
and/or the related defined terms as may be necessary, after giving effect to
the Accounting Change, to provide to the holders of the Notes protection
comparable to that provided on the date of this Agreement.  Any such amendments shall take effect on the
effective date specified in the writing executed by the Company and the
Majority Holders to reflect such amendments in accordance with Section 17.  If the Company and the Majority Holders are
unable agree on such amendments within 90 days after the date of the applicable
Accounting Change, the Company shall request that its independent public
accountants prepare a certificate which sets forth the amendments to such
financial covenants and defined terms as are needed to place the Company and
the holders of the Notes in the same respective positions as they would have
been had such Accounting Change not occurred. 
Such certificate shall, in the absence of manifest error, be binding on
all of the parties hereto.


 


Section 22.4.              Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.


 


36

















 


Section 22.5.              Construction, etc.  Each
covenant contained herein shall be construed (absent express provision to the
contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.


 


For
the avoidance of doubt, all Schedules and Exhibits attached to this Agreement
shall be deemed to be a part hereof.


 


Section 22.6.              Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.


 


Section 22.7.              Governing
Law.  This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of New York excluding choice of law principles of the law of such
State that would permit the application of the laws of a jurisdiction other
than such State.


 


Section 22.8.              Jurisdiction
and Process; Waiver of Jury Trial.  (a) 
The Company irrevocably submits to the non-exclusive jurisdiction of any New
York State or federal court sitting in the Borough of Manhattan, The City of
New York, over any suit, action or proceeding arising out of or relating to
this Agreement or the Notes.  To the
fullest extent permitted by applicable law, the Company irrevocably waives and
agrees not to assert, by way of motion, as a defense or otherwise, any claim
that it is not subject to the jurisdiction of any such court, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.


 


(b)           The Company consents to process being served by or on
behalf of any holder of Notes in any suit, action or proceeding of the nature
referred to in Section 22.8(a) by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail), postage prepaid,
return receipt requested, to it at its address specified in Section 18 or
at such other address of which such holder shall then have been notified
pursuant to said Section.  The Company
agrees that such service upon receipt (i) shall be deemed in every respect
effective service of process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by applicable law, be taken
and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively
presumed received as evidenced by a delivery receipt furnished by the United
States Postal Service or any reputable commercial delivery service.


 


(c)           Nothing in this Section 22.8 shall affect the right
of any holder of a Note to serve process in any manner permitted by law, or
limit any right that the holders of any of the Notes may have to bring
proceedings against the Company in the courts of any appropriate jurisdiction 


 


37

















 


or to enforce in any lawful manner a judgment
obtained in one jurisdiction in any other jurisdiction.


 


(d)           THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER
DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.


 


*    *   
*    *    *


 


38

















 


If
you are in agreement with the foregoing, please sign the form of agreement in
the space below provided on a counterpart of this Agreement and return it to
the Company, whereupon this Agreement shall become a binding agreement between
you and the Company.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  WADDELL &
  REED FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel P. Connealy

  
	
   

  	
  Name:
  Daniel P. Connealy

  
	
   

  	
  Title:
  Senior Vice President and Chief Financial Officer

  



 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 




















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


METROPOLITAN LIFE INSURANCE COMPANY


 


METLIFE INVESTORS INSURANCE COMPANY


 


by Metropolitan Life Insurance Company,


its Investment Manager


 


METLIFE INSURANCE COMPANY OF CONNECTICUT


 


by
Metropolitan Life Insurance Company,


its
Investment Manager


 


 


	
  By:

  	
  /s/ Judith A. Gulotta

  	
   

  
	
  Name:

  	
  Judith
  A. Gulotta

  	
   

  
	
  Title:

  	
  Managing
  Director

  	
   

  



 


[Signature page to Waddell & Reed Financial,
Inc. Note Purchase Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


MIDLAND
NATIONAL LIFE INSURANCE COMPANY


By:  Guggenheim Partners Asset Management, LLC


 


 


	
  By:

  	
  /s/
  Michael Damaso

  	
   

  
	
  Name:
  

  	
  Michael
  Damaso

  	
   

  
	
  Title:

  	
  Senior
  Managing Director

  	
   

  



 


[Signature page to Waddell & Reed Financial,
Inc. Note Purchase Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


NORTH
AMERICAN COMPANY FOR LIFE AND HEALTH INSURANCE


By:  Guggenheim Partners Asset Management, LLC


 


 


	
  By:

  	
  /s/ Michael Damaso

  	
   

  
	
  Name:

  	
  Michael
  Damaso

  	
   

  
	
  Title:

  	
  Senior
  Managing Director

  	
   

  



 


[Signature page to Waddell & Reed Financial,
Inc. Note Purchase Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


SECURITY
BENEFIT LIFE INSURANCE COMPANY


By:  Guggenheim Partners Asset Management, LLC


 


 


	
  By:

  	
  /s/ Michael Damaso

  	
   

  
	
  Name:

  	
  Michael
  Damaso

  	
   

  
	
  Title:

  	
  Senior
  Managing Director

  	
   

  



 


[Signature page to Waddell & Reed Financial,
Inc. Note Purchase Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


WILTON
REASSURANCE COMPANY


By:  Guggenheim Partners Asset Management, LLC


 


 


	
  By:

  	
  /s/ Michael Damaso

  	
   

  
	
  Name:

  	
  Michael
  Damaso

  	
   

  
	
  Title:

  	
  Senior
  Managing Director

  	
   

  



 


[Signature page to Waddell & Reed Financial,
Inc. Note Purchase Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


GENWORTH
LIFE INSURANCE COMPANY


 


 


	
  By:

  	
  /s/ John R. Endres

  	
   

  
	
  Name:

  	
  John
  R. Endres

  	
   

  
	
  Title:

  	
  Investment Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GENWORTH LIFE AND ANNUITY
  INSURANCE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John R. Endres

  	
   

  
	
  Name:

  	
  John
  R. Endres

  	
   

  
	
  Title:

  	
  Investment Officer

  	
   

  



 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 
















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


JOHN
HANCOCK LIFE INSURANCE

COMPANY (U.S.A.)


 


 


	
  By:

  	
  /s/ John M. Garrison  

  	
   

  



Name:  John M. Garrison


Title:   
Managing Director


 


 


JOHN
HANCOCK LIFE INSURANCE 

COMPANY OF NEW YORK


 


 


	
  By:

  	
  /s/ John M. Garrison

  	
   

  



Name:  John M. Garrison


Title:    Authorized Signatory


 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


JPMORGAN
CHASE BANK, N.A., not

individually but solely in its capacity as

Directed Trustee of the SBC Master Pension Trust


 


 


	
  By:

  	
  /s/
  Barry O’Connor

  	
   

  



Name:  Barry O’Connor


Title:    Executive Director


 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


THE
NORTHWESTERN MUTUAL 

LIFE INSURANCE COMPANY


 


 


	
  By:

  	
  /s/
  Randal W. Ralph 

  	
   

  



Name:  Randal W. Ralph


Title:    Its Authorized Representative


 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


KNIGHTS
OF COLUMBUS


 


 


	
  By:

  	
  /s/
  Donald R. Kehoe 

  	
   

  



Name:  Donald R. Kehoe


Title:    Supreme Secretary


 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 

















 


This
Agreement is hereby accepted and 

agreed to as of the date thereof.


 


 


THE
UNION CENTRAL LIFE INSURANCE COMPANY


 


By:  Summit Investment Advisors, Inc., as
Agent


 


 


	
  By:

  	
  /s/  Andrew
  S. White

  	
   

  



Name:  Andrew S. White


Title:   
Managing Director - Private Placements


 


 


ACACIA
LIFE INSURANCE COMPANY


 


By:  Summit Investment Advisors, Inc., as
Agent


 


 


	
  By:

  	
  /s/ Andrew S. White

  	
   

  



Name:  Andrew S. White


Title:   
Managing Director - Private Placements


 


 


AMERITAS
LIFE INSURANCE CORP.


 


By:  Summit Investment Advisors, Inc., as
Agent


 


 


	
  By:

  	
  /s/  Andrew
  S. White

  	
   

  



Name:  Andrew S. White


Title:   
Managing Director - Private Placements


 


[Signature page to Waddell & Reed Financial, Inc. Note Purchase
Agreement]


 

















 


SCHEDULE A


 


INFORMATION RELATING TO PURCHASERS


 


This
Schedule A shows the names and addresses of the Purchasers under the foregoing
Note Purchase Agreement and the respective principal amounts and series of
Notes to be purchased by each.


 

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  METROPOLITAN
  LIFE INSURANCE COMPANY

  	
   

  	
  $14,000,000

  



 


METROPOLITAN
LIFE INSURANCE COMPANY

1095 Avenue of the Americas

New York, New York  10036


 


(Securities to be registered in the name of Metropolitan
Life Insurance Company)


 


(1)                                  All notices and
communications (other than as provided in (2) below):


 


	
  Metropolitan
  Life Insurance Company

  
	
  Investments,
  Private Placements

  
	
  P.O. Box
  1902

  
	
  10
  Park Avenue

  
	
  Morristown,
  New Jersey 07962-1902

  
	
  Attention:
  Director

  
	
  Facsimile
  (973) 355-4250

  



 


2

















 


With a copy OTHER than with respect to deliveries of financial
statements to:


 


Metropolitan Life Insurance Company

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention: Chief Counsel-Securities Investments (PRIV)

Email:  sec_invest_law@metlife.com


 


(2)                                  Electronic mail address for
electronic delivery of information for purposes of Sections 7.1(a), 7.1(b), 7.1(c) and
7.1(f) of the Note Purchase Agreement:


 


PPUcompliance@MetLife.com


 


(3)                                  Original notes delivered to:


 


Metropolitan Life Insurance Company

Securities Investments, Law Department

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Daniel F. Scudder, Esq.


 


3

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  METLIFE
  INSURANCE COMPANY  OF CONNECTICUT,
  on behalf of its Separate Account MGA

  	
   

  	
  $20,000,000

  



 


METLIFE
INSURANCE COMPANY OF CONNECTICUT  

c/o Metropolitan Life Insurance Company

1095 Avenue of the Americas

New York, New York  10036


 


(Securities to be registered in the name of MetLife Insurance Company of Connecticut, 

on behalf of its Separate
Account MGA)


 


(1)           All notices and communications (other
than as provided in (2) below):


 


MetLife Insurance Company of Connecticut 

c/o Metropolitan Life Insurance Company

Investments, Private Placements

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Director

Facsimile:  (973) 355-4250


 


4

















 


With a copy OTHER than with respect to deliveries of financial
statements to:


 


MetLife
Insurance Company of Connecticut 

c/o Metropolitan Life Insurance Company

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Chief Counsel-Securities
Investments (PRIV)


 


Email:  sec_invest_law@metlife.com


 


(2)                                  Electronic mail address for
electronic delivery of information for purposes of Sections 7.1(a), 7.1(b), 7.1(c) and
7.1(f) of the Note Purchase Agreement:


 


PPUcompliance@MetLife.com


 


(3)           Original notes delivered to:


 


MetLife Insurance Company of Connecticut 

c/o Metropolitan Life Insurance Company

Securities Investments, Law Department

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Daniel F. Scudder, Esq.


 


5
















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and
  Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  METROPOLITAN LIFE INSURANCE COMPANY

  	
   

  	
  $10,000,000

  



 


METROPOLITAN LIFE INSURANCE COMPANY

1095 Avenue of the Americas

New York, New York  10036


 


(Securities to be registered in the name of Metropolitan Life Insurance Company)


 


(1)           All notices and
communications (other than as provided in (2) below):


 


Metropolitan Life Insurance Company

Investments, Private Placements

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Director

Facsimile:  (973) 355-4250


 


6

















 


With a copy OTHER than with respect to deliveries of financial
statements to:


 


Metropolitan Life Insurance Company

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention: Chief Counsel-Securities Investments (PRIV)


 


Email: 
sec_invest_law@metlife.com


 


(2)           Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


PPUcompliance@MetLife.com


 


(3)           Original notes
delivered to:


 


Metropolitan Life Insurance Company

Securities Investments, Law Department

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Daniel F. Scudder, Esq.


 


7

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and
  Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  METLIFE INVESTORS INSURANCE COMPANY

  	
   

  	
  $1,500,000

  



 


METLIFE INVESTORS INSURANCE COMPANY

c/o Metropolitan Life Insurance Company

1095 Avenue of the Americas

New York, New York  10036


 


(Securities to be registered in the name of MetLife Investors Insurance Company)


 


(1)           All notices and
communications (other than as provided in (2) below):


 


MetLife Investors Insurance Company

c/o Metropolitan Life Insurance Company

Investments, Private Placements

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Director

Facsimile:  (973) 355-4250


 


8

















 


With a copy OTHER than with respect to deliveries of financial
statements to:


 


MetLife Investors Insurance Company

c/o Metropolitan Life Insurance Company

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention: Chief Counsel-Securities Investments (PRIV)

Email:  sec_invest_law@metlife.com


 


(2)           Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


PPUcompliance@MetLife.com


 


(3)           Original notes
delivered to:


 


MetLife Investors Insurance Company

c/o Metropolitan Life Insurance Company

Securities Investments, Law Department

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Daniel F. Scudder, Esq.


 


9

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and
  Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  METLIFE INSURANCE COMPANY OF CONNECTICUT

  	
   

  	
  $3,500,000

  



 


METLIFE INSURANCE COMPANY OF CONNECTICUT

c/o Metropolitan Life Insurance Company

1095 Avenue of the Americas

New York, New York  10036


 


(Securities to be registered in the name of MetLife  Insurance Company of
Connecticut)


 


(1)           All notices and
communications (other than as provided in (2) below):


 


MetLife Insurance Company of Connecticut

c/o Metropolitan Life Insurance Company

Investments, Private Placements

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Director

Facsimile: (973) 355-4250


 


10

















 


With a copy OTHER than with respect to deliveries of financial
statements to:


 


MetLife Insurance Company of Connecticut

c/o Metropolitan Life Insurance Company

P.O. Box 1902

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention: Chief Counsel-Securities Investments (PRIV)


 


Email: 
sec_invest_law@metlife.com


 


(2)           Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


PPUcompliance@MetLife.com


 


(3)           Original notes
delivered to:


 


MetLife Insurance Company of Connecticut

c/o Metropolitan Life Insurance Company

Securities Investments, Law Department

10 Park Avenue

Morristown, New Jersey 07962-1902

Attention:  Daniel F. Scudder, Esq.


 


11

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and
  Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  MIDLAND NATIONAL LIFE INSURANCE COMPANY

  	
   

  	
  $22,500,000

  



 


(1)       Address for all
notices relating to payments:


 


Midland National Life Insurance Company


c/o Guggenheim Partners


227 W. Monroe St. 48th Floor


Chicago, IL 60606


Attn:  Melissa Carlson


	
  Phone:

  	
  312-827-0192

  
	
  Fax:

  	
  201-215-9353

  
	
  Email:

  	
  gpambackoffice@guggenheimpartners.com

  



 


(2)       Address for all
other communications and notices (other than as provided in (3) below):


 


Guggenheim Partners


135 E. 57th St., 6th Floor


New York, NY 10022


Attn:  Kaitlin Trinh/Mabel Chui


	
  Phone:

  	
  212-651-0840

  
	
  Fax:

  	
  212-644-8396

  
	
  E-mail:

  	
  kaitlin.trinh@guggenheimpartners.com

  



 


12

















 


(3)       Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


kaitlin.trinh@guggenheimpartners.com


 


13
















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  NORTH AMERICAN COMPANY FOR LIFE AND HEALTH
  INSURANCE

  	
   

  	
  $13,000,000

  



 


(1)       Address for all
notices relating to payments:


 


North American Company for Life and Health Insurance


c/o Guggenheim Partners


227 W. Monroe St. 48th Floor


Chicago, IL 60606


Attn: Melissa Carlson


	
  Phone:

  	
  312-827-0192

  
	
  Fax:

  	
  201-215-9354

  
	
  Email:

  	
  gpambackoffice@guggenheimpartners.com

  



 


(2)       Address for all
other communications and notices (other than as provided in (3) below):


 


Guggenheim Partners


135 E. 57th St., 6th Floor


New York, NY 10022


Attn: Kaitlin Trinh/Mabel Chui


	
  Phone:

  	
  212-651-0840

  
	
  Fax:

  	
  212-644-8396

  
	
  E-mail:

  	
  kaitlin.trinh@guggenheimpartners.com

  



 


14

















 


(3)       Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


kaitlin.trinh@guggenheimpartners.com


 


15

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  SECURITY BENEFIT LIFE INSURANCE COMPANY

  	
   

  	
  $8,500,000

  



 


(1)       Address for all
notices relating to payments:


 


Guggenheim Partners Asset Management, Inc.


227 W. Monroe Street - Suite 4900


Chicago, IL 60606


Attn: Maureen Moster


Tel:      312-873-1477


Fax:      312-827-0157


 


16

















 


(2)       Address for all
other communications and notices (other than as provided in (3) below):


 


Guggenheim Partners


135 E. 57th St., 6th Floor


New York, NY 10022


Attn: Kaitlin Trinh/Mabel Chui


Phone:       212-651-0840


Fax:             212-644-8396


E-mail:            kaitlin.trinh@guggenheimpartners.com


 


(3)       Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


kaitlin.trinh@guggenheimpartners.com


 


17

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  WILTON REASSURANCE COMPANY

  	
   

  	
  $1,000,000

  



 


 


(1)       Address for all
notices relating to payments:


 


C/O The Bank of New York


F/A/O:


P.O. Box 19266


Newark, NJ 07195


Attn: Principal & Interest Dept


 


In addition, it is requested that duplicate
correspondence be sent to:


 


Guggenheim Partners Asset
Management, Inc.


227 W. Monroe Street - Suite 4900


Chicago, IL 60606


Attn: Maureen Moster 


Tel:        312-873-1477


Fax:         312-827-0157


 


18

















 


(2)       Address for all
other communications and notices (other than as provided in (3) below):


 


Guggenheim Partners


135 E. 57th St., 6th Floor


New York, NY 10022


Attn: Kaitlin Trinh/Mabel Chui


Phone:       212-651-0840


Fax:             212-644-8396


E-mail:            kaitlin.trinh@guggenheimpartners.com


 


(3)       Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


kaitlin.trinh@guggenheimpartners.com


 


19

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of 

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  GENWORTH LIFE AND ANNUITY INSURANCE COMPANY I/N/O
  HARE & CO.

  	
   

  	
  $5,000,000

  



 


(1)           All notices and
communications including original note agreement, conformed copy of the note
agreement, amendment requests, financial statements and other general
information to be addressed as follows (other than as provided in (2) below):


 


Genworth Financial, Inc.


Account:  Genworth Life and Annuity Insurance Company


3001 Summer Street, 2nd
Floor


Stamford, CT  06905


Attn:  Dorothy Michalowski


	
  Telephone No:

  	
  (212) 895-4031

  
	
  Fax No:

  	
  (866) 745-0947

  



 


If available, an electronic copy is additionally
requested.  Please send to the following
e-mail address:  GNW.privateplacements@genworth.com


 


20

















 


(2)           Electronic mail
address for electronic delivery of

information for purposes of Sections 7.1(a), 7.1(b), 

7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


GNW.privateplacements@genworth.com


 


(3)           All corporate actions, including payments and prepayments,
should be sent to the above address with copies to:


 


Genworth Financial, Inc.


Account: 
Genworth Life and Annuity Insurance Company


3001 Summer Street


Stamford, CT 
06905


Attn:  Trade
Operations


	
  Telephone No:

  	
  (203) 708-3368

  
	
  Fax No:

  	
  (866) 745-3305

  



 


If available, an electronic copy
is additionally requested.  Please send to
the following e-mail address:  GNWInvestmentsOperations@genworth.com


 


(4)           Notices with
respect to payments and written confirmation of each such payment, including
interest payments, redemptions, premiums, make wholes, and fees should also be
addressed as above with additional copies addressed to the following:


 


The Bank of New York

Income Collection Department

P.O. Box 19266

Newark, NJ  07195


	
  Attn:

  	
  PP P&I Department

  
	
  Ref:

  	
  GLAIC

  	
  ,

  	
  CUSIP/PPN & Security Description

  
	
  P&I Contact:

  	
  Purisima Teylan - (718) 315-3035

  



 


(5)           Physical
Delivery of the Notes:


 


The Bank of New York


One Wall Street


Window A, 3rd Floor


New York, NY  10286


 


	
  Register In Nominee Name:

  	
  HARE & CO.

  



 


21

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  GENWORTH LIFE INSURANCE COMPANY I/N/O
  HARE & CO.

  	
   

  	
  $25,000,000

  



 


(1)           All notices and
communications including original note agreement, conformed copy of the note
agreement, amendment requests, financial statements and other general
information to be addressed as follows (other than as provided in (2) below):


 


Genworth Financial, Inc.


Account:  Genworth Life Insurance Company


3001 Summer Street, 2nd
Floor


Stamford, CT  06905


Attn:  Dorothy Michalowski


	
  Telephone No

  	
  (212) 895-4031

  
	
  Fax No:

  	
  (866) 745-0947

  



 


If available, an electronic copy
is additionally requested.  Please send
to the following e-mail address:  GNW.privateplacements@genworth.com


 


(2)           Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


GNW.privateplacements@genworth.com


 


22

















 


(3)           All corporate actions, including payments and prepayments,
should be sent to the above address with copies to:


 


Genworth Financial, Inc.


Account:  Genworth Life Insurance Company


3001 Summer Street


Stamford, CT  06905


Attn:  Trade Operations


	
  Telephone No:

  	
  (203) 708-3368

  
	
  Fax No:

  	
  (866) 745-3305

  



 


If available, an electronic copy
is additionally requested.  Please send
to the following e-mail address:  GNWInvestmentsOperations@genworth.com


 


(4)           Notices with
respect to payments and written confirmation of each such payment, including
interest payments, redemptions, premiums, make wholes, and fees should also be
addressed as above with additional copies addressed to the following:


 


The Bank of New York


Income Collection Department


P.O. Box 19266


Newark, NJ 
07195


	
  Attn:

  	
  PP P&I Department

  
	
  Ref:

  	
  GLIC

  	
  ,

  	
  CUSIP/PPN & Security Description

  
	
  P&I Contact:

  	
  Purisima Teylan - (718) 315-3035

  



 


(5)           Physical
Delivery of the Notes:


 


The Bank of New York


One Wall Street


Window A, 3rd Floor


New York, NY 
10286


 


Register In Nominee Name:              HARE &
CO.


 


23

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of 

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)

  	
   

  	
  $20,000,000

  $ 3,000,000

  



 


REGISTERED NAME OF
SECURITIES:  John Hancock
Life Insurance Company (U.S.A.)


 


(1)           All notices
with respect to payments, prepayments (scheduled and unscheduled, whether
partial or in full) and maturity shall be sent to:


 


John Hancock Financial Services


197 Clarendon Street


Boston, MA 02116


Attention:  US
Securities Operations, C-4


Fax Number: 
(617) 572-0628


 


AND


 


John Hancock Financial Services


197 Clarendon Street


Boston, MA 
02116


Attention: 
Investment Administration, C-2


Fax Number: 
(617) 572-5495


 


24

















 


(2)           Other than as
provided in (3) below, all notices and communication with respect to
compliance reporting, financial statements and related certifications shall be
sent to:


 


John Hancock Financial
Services


197 Clarendon Street


Boston, MA  02116


Attention:  Bond and Corporate Finance, C-2


	
  Fax Number:

  	
  (617) 572-0073

  
	
  Email:

  	
  wdroege@jhancock.com   AND

  
	
   

  	
  TDellaPiana@jhancock.com

  



 


(3)           Electronic mail
addresses for electronic delivery of information for purposes of Sections
7.1(a), 7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


wdroege@jhancock.com   AND

TDellaPiana@jhancock.com


 


(4)           All other
notices shall be sent to:


 


John Hancock Financial
Services


197 Clarendon Street


Boston, MA  02116


Attention:  Investment Law, C-3


	
  Fax Number:

  	
  (617) 572-9269

  
	
  Email:

  	
  pmemishian@jhancock.com

  



 


AND


 


John Hancock Financial
Services


197 Clarendon Street


Boston, MA  02116


Attention:  Bond and Corporate Finance, C-2


	
  Fax Number:

  	
  (617) 572-0073

  
	
  Email:

  	
  wdroege@jhancock.com

  



 


25
















 


	
  Name
  and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK

  	
   

  	
  $2,000,000

  



 


REGISTERED NAME OF SECURITIES:  John Hancock
Life Insurance Company of New York


 


(1)                                  All notices with respect to
payments, prepayments (scheduled and unscheduled, whether partial or in full)
and maturity shall be sent to:


 


John
Hancock Financial Services

197 Clarendon Street

Boston, MA  02116

Attention:  US Securities Operations, C-4


	
  Fax Number:

  	
  (617)
  572-0628

  



 


AND


 


John
Hancock Financial Services

197 Clarendon Street

Boston, MA  02116

Attention:  Investment Administration,
C-2


	
  Fax Number:

  	
  (617)
  572-5495

  



 


26

















 


(2)                                  Other than as provided in (3) below,
all notices and communication with respect to compliance reporting, financial
statements and related certifications shall be sent to:


 


	
  John Hancock Financial Services

  
	
  197 Clarendon Street

  
	
  Boston, MA 02116

  
	
  Attention: Bond and Corporate Finance, C-2

  
	
  Fax
  Number:

  	
  (617)
  572-0073

  
	
  Email:

  	
  wdroege@jhancock.com
  AND

  
	
   

  	
  TDellaPiana@jhancock.com

  



 


(3)                                  Electronic mail addresses
for electronic delivery of information for purposes of Sections 7.1(a), 7.1(b),
7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


wdroege@jhancock.com AND


TDellaPiana@jhancock.com


 


(4)                                  All other notices shall be
sent to:


 


	
  John Hancock Financial Services

  
	
  197 Clarendon Street

  
	
  Boston, MA 02116

  
	
  Attention: Investment Law, C-3

  
	
  Fax Number:

  	
  (617)
  572-9269

  
	
  Email:

  	
  pmemishian@jhancock.com

  



 


AND


 


	
  John Hancock Financial Services

  
	
  197 Clarendon Street

  
	
  Boston, MA 02116

  
	
  Attention: Bond and Corporate Finance, C-2

  
	
  Fax Number:

  	
  (617)
  572-0073

  
	
  Email:

  	
  wdroege@jhancock.com

  



 


27

















 


	
  Name
  and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  JPMORGAN
  CHASE BANK,

  AS DIRECTED TRUSTEE FOR THE SBC MASTER PENSION TRUST I/N/O KANE &
  CO.

  	
   

  	
  $1,000,000

  



 


REGISTERED
NAME OF SECURITIES:  Kane &
Co.


 


(1)                                  All notices with respect to
payments, prepayments (scheduled and unscheduled, whether partial or in full)
and maturity shall be sent to:


 


JPMorgan
Chase Bank

3 MetroTech Center, 5th Floor

Brooklyn, NY 11245

Attn: Robert M. Lauer

Fax: (718) 242-2319


 


28

















 


(2)                                  Other than as provided in (3) below,
all notices and communication with respect to compliance reporting, financial
statements and related certifications shall be sent to:


 


	
  John Hancock Financial Services

  
	
  197 Clarendon Street

  
	
  Boston, MA 02116

  
	
  Attention: Bond and Corporate Finance, C-2

  
	
  Fax Number:

  	
  (617)
  572-0073

  
	
  Email:

  	
  wdroege@jhancock.com
  AND

  
	
   

  	
  TDellaPiana@jhancock.com

  



 


(3)                                  Electronic mail addresses
for electronic delivery of information for purposes of Sections 7.1(a), 7.1(b),
7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


wdroege@jhancock.com AND


TDellaPiana@jhancock.com


 


(4)                                  All other notices shall be
sent to:


 


John Hancock Financial Services

197 Clarendon Street

Boston, MA  02116

Attention:  Investment Law, C-3


	
  Fax Number:

  	
  (617)
  572-9269

  
	
  Email:

  	
  pmemishian@jhancock.com

  



 


AND


 


John Hancock Financial Services

197 Clarendon Street

Boston, MA  02116

Attention:  Bond and Corporate Finance,
C-2


	
  Fax Number:

  	
  (617)
  572-0073

  
	
  Email:

  	
  wdroege@jhancock.com

  



 


29

















 


	
  Name
  and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE
  NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

  	
   

  	
  $15,000,000

  	
   

  	
  $5,000,000

  



 


Name
and address of purchaser:


 


The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, WI  53202


 


(1)                                  All notices of
payments and written confirmations of such wire transfers:


 


The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, WI  53202

Attention:  Investment Operations

Email:  privates@northwesternmutual.com


 


(2)                                  All other
communications (other than as provided in (3) below):


 


The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, WI  53202

Attention:  Securities Department

Email: 
privateinvest@northwesternmutual.com


 


(3)                                  Electronic mail
address for electronic delivery of information for purposes of Sections 7.1(a),
7.1(b), 7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


privateinvest@northwesternmutual.com


 


(4)                                  Address for
delivery of Notes:


 


30

















 


The Northwestern Mutual Life Insurance Company

720 East Wisconsin Avenue

Milwaukee, WI  53202

Attention:  Abim O. Kolawole


 


31

















 


	
  Name
  and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series A

  
	
   

  	
   

  	
   

  
	
  KNIGHTS
  OF COLUMBUS

  	
   

  	
  $15,000,000

  



 


Name and Address of
Purchaser:


 


Knights of Columbus

One Columbus Plaza

New Haven, CT 06510-3326

Attn:  Investment Accounting Department,
14th Floor


 


(1)                                  Other than as provided in (2) below,
all notices and communications should be mailed and faxed to:


 


	
  Knights of Columbus

  
	
  FPA Account # 201047

  
	
  Attn: Investment Department, 19th Floor

  
	
  One Columbus Plaza

  
	
  New Haven, CT 06510-3326 USA

  
	
  Phone:

  	
  (203) 752 - 4127

  
	
  Fax:

  	
  (203) 752 - 4117

  
	
  Email:

  	
  Investments@kofc.org AND

  
	
   

  	
  Michael.Prinzivalli@kofc.org

  



 


32

















 


(2)                                  Electronic mail addresses
for electronic delivery of

information for purposes of Sections 7.1(a), 7.1(b), 

7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


Investments@kofc.org
AND

Michael.Prinzivalli@kofc.org


 


(3)                                  Name of Nominee
in which Notes are to be issued:  None


 


(4)                                  Physical
delivery of Notes to:


 


Mary
Wong, Assistant Treasurer 

Physical Delivery

The Bank of New York Mellon

One Wall Street, 3rd Floor, Window “A”

New York, NY   10286 USA


Tel.                                                    212-635-1003

Email:                                         marywong@bankofny.com


 


33
















 


	
  Name
  and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  THE
  UNION CENTRAL LIFE INSURANCE COMPANY I/N/O/ CUDD & CO.

  	
   

  	
  $3,000,000

  



 


Name
and Address of Purchaser:


 


The
Union Central Life Insurance Company

c/o Summit Investment Advisors, Inc.

390 North Cotner Blvd. 

Lincoln, NE 68505


 


(1)                                  All notices of
payments and written confirmations of such wire transfers sent to:


 


The Union Central Life Insurance Company

1876 Waycross Rd

Cincinnati, Ohio 45240

Attention:                         Treasury
Department

Fax:                                                           (513) 674-5275


 


(2)                                  Other than as
provided in (3) below, all other communications sent to:


 


The Union Central Life Insurance Company

c/o Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505


 


(3)                                  Electronic mail address for
electronic delivery of

information for purposes of Sections 7.1(a), 7.1(b), 

7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


AWhite@summitinvestments.com


 


34

















 


(4)                                  Delivery of
certificates by registered mail to:


 


JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center, 3rd Floor

Brooklyn, NY  11245-0001

ATTN:  Physical Receive Department

REF:  The Union Central Life Insurance
Company


 


To
be registered in the nominee name of CUDD & CO. as nominee for The
Union Central Life Insurance Company


 


AND


 


Copy of Certificates sent to:


 


Andy White

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505


 


35

















 


	
  Name and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  ACACIA
  LIFE INSURANCE COMPANY I/N/O/ CUDD & CO.

  	
   

  	
  $1,000,000

  



 


Name
and Address of Purchaser:


 


Acacia
Life Insurance Company

390 North Cotner Blvd.

Lincoln, NE 68505


 


(1)                                  All notices of
payments and written confirmations of such wire transfers sent to:


 


Acacia Life Insurance Company

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505

Fax:                           (402) 467-6970


 


(2)                                  Other than as
provided in (3) below, all other communications sent to:


 


Acacia Life Insurance Company

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505

Fax:                           (402) 467 -
6970


 


(3)                                  Electronic mail address for
electronic delivery of

information for purposes of Sections 7.1(a), 7.1(b), 

7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


AWhite@summitinvestments.com


 


36

















 


(4)                                  Delivery of
certificates by registered mail to:


 


JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center, 3rd Floor

Brooklyn, NY  11245-0001

ATTN:  Physical Receive Department

REF:  Acacia Life Insurance Company


 


To
be registered in the nominee name of CUDD & CO. as nominee for Acacia
Life Insurance Company


 


AND


 


Copy of Certificates sent to:


 


Andy White

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505


 


37

















 


	
  Name
  and Address of Purchaser

  	
   

  	
  Principal Amount and Series of

  Notes to be Purchased

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Series B

  
	
   

  	
   

  	
   

  
	
  AMERITAS
  LIFE INSURANCE CORP. I/N/O/ CUDD & CO.

  	
   

  	
  $1,000,000

  



 


Name
and Address of Purchaser:


 


Ameritas
Life Insurance Corp.

390 North Cotner Blvd. 

Lincoln, NE 68505


 


(1)                                  All notices of
payments and written confirmations of such wire transfers sent to:


 


Ameritas Life Insurance Corp.

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505

Fax #: (402) 467-6970


 


(2)                                  Other than as
provided in (3) below, all other communications sent to:


 


Ameritas Life Insurance Corp.

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505


 


(3)                                  Electronic mail address for
electronic delivery of

information for purposes of Sections 7.1(a), 7.1(b), 

7.1(c) and 7.1(f) of the Note Purchase Agreement:


 


AWhite@summitinvestments.com


 


38

















 


(4)                                  Delivery of
certificates by registered mail to:


 


JPMorgan Chase Bank, N.A.

4 Chase Metrotech Center, 3rd Floor

Brooklyn, NY  11245-0001

ATTN:  Physical Receive Department

REF:  Ameritas Life Insurance Corp.


 


To
be registered in the nominee name of CUDD & CO. as nominee for
Ameritas Life Insurance Corp.


 


AND


 


Copy of Certificates sent to:


 


Andy White

Summit Investment Partners

390 North Cotner Blvd.

Lincoln, NE 68505


 


39
















 


SCHEDULE B


 


DEFINED TERMS


 


As
used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:


 


“Affiliate” means, at any time, and with respect to any
Person, any other Person that at such time directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under common
Control with, such first Person, and, with respect to the Company, shall
include any Person beneficially owning or holding, directly or indirectly, 10%
or more of any class of voting or equity interests of the Company or any
Subsidiary or any corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or indirectly, 10% or more
of any class of voting or equity interests. 
As used in this definition, “Control” means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an “Affiliate” is a reference to
an Affiliate of the Company.


 


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


 


“Anti-Terrorism Order” means Executive Order No. 13,224
of September 24, 2001, Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg.
49, 079 (2001), as amended.


 


“Attributable Debt” means, as to any particular lease
relating to a Sale/Leaseback transaction, the total amount of rent (discounted
semiannually from the respective due dates thereof at the interest rate
implicit in such lease) required to be paid by the lessee under such lease
during the remaining term thereof.  The
amount of rent required to be paid under any such lease for any such period
shall be (a) the total amount of the rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account
of maintenance and repairs, insurance, taxes, assessments, utilities, operating
and labor costs and similar charges plus (b) without duplication, any
guaranteed residual value in respect of such lease to the extent such guarantee
would be included in indebtedness in accordance with GAAP.


 


“Business Day” means any day other than a Saturday, a Sunday
or a day on which commercial banks in New York City are required or authorized
to be closed.


 


“Capital Lease” means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the acquisition of an
asset and the incurrence of a liability in accordance with GAAP.


 


“Capital Lease Obligations” of any Person means, at any time,
the obligations of such Person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be classified and
accounted for as Capital Leases on a balance sheet of such Person under GAAP, 


 

















 


and
the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.


 


“Change of Control” is defined in Section 8.3.


 


“Closing” is defined in Section 3.


 


“Code” means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder
from time to time.


 


“Company” means Waddell & Reed Financial, Inc.,
a Delaware corporation, or any successor that becomes such in the manner
prescribed in Section 10.5.


 


“Confidential Information” is defined in Section 20.


 


“Consolidated EBITDA” means, for any period, Consolidated Net
Income for such period, plus (a) without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income for such
period, the sum of (i) income tax expense, (ii) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions, discounts and other fees and charges associated with Indebtedness
(including the Notes), (iii) depreciation and amortization expense,
(iv) amortization of intangibles (including, but not limited to, goodwill)
and organization costs, (v) any extraordinary, unusual or non-recurring
non-cash expenses or losses (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, non-cash losses on sales of assets outside of the ordinary course of
business), provided that the amounts referred to in
this clause (v) shall not, in the aggregate, exceed $10,000,000 for any
fiscal year of the Company, and (vi) any other non-cash charges, minus
(b) without duplication and to the extent reflected as income in the
statement of such Consolidated Net Income for such period, any extraordinary,
unusual or non-recurring non-cash income or gains (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, non-cash gains on sales of assets outside of the
ordinary course of business), provided that
the Company shall not be required to deduct more than $10,000,000 in the
aggregate of the amounts referred to in this clause (b) for any fiscal
year of the Company.  For the purposes of
calculating Consolidated EBITDA for any Relevant Period pursuant to Section 10.1(a),
(x) if at any time during such Relevant Period the Company or any
Subsidiary shall have made any Material Disposition, the Consolidated EBITDA
for such Relevant Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Relevant Period or increased by
an amount equal to the Consolidated EBITDA (if negative) attributable thereto
for such Relevant Period, and (y) if during such Relevant Period the
Company or any Subsidiary shall have made a Material Acquisition, Consolidated
EBITDA for such Relevant Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition
occurred on the first day of such Relevant Period.  As used in this definition, “Material Acquisition” means any acquisition of property or
series of related acquisitions of property that (1) constitutes assets
comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and
(2) involves the payment of consideration by the Company and its
Subsidiaries in excess of $1,000,000; and “Material Disposition”
means any Disposition of property or series 


 


2

















 


of
related Dispositions of property that yields gross proceeds to the Company or
any of its Subsidiaries in excess of $1,000,000.


 


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


 


“Consolidated Net Income” means, for any period, the
consolidated net income (or loss) of the Company and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of
the Company or is merged into or consolidated with the Company or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary
of the Company) in which the Company or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Company or such Subsidiary in the form of dividends or similar
distributions, and (c) the undistributed earnings of any Subsidiary of the
Company to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation or Requirement of Law applicable to such
Subsidiary.  As used in this definition, “Contractual Obligation” means, as to any Person, any
provision of any security issued by such Person or of any indenture, agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound; and “Requirement of Law”
means, as to any Person, the Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination, order, injunction, writ or decree of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.


 


“Consolidated Net Worth” means, at a particular date, all
amounts which would, in conformity with GAAP, be included under stockholders’
equity on a consolidated balance sheet of the Company and its Subsidiaries at
such date.


 


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


 


“Default” means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.


 


“Default Rate” means that rate of interest that is the
greater of (a) 2% per annum above the rate of interest stated in clause (a) of
the first paragraph of the Notes or (b) 2% over the rate of interest
publicly announced by Bank of America, N.A. in New York, New York as its “base”
or “prime” rate.


 


“Disclosure Document” is defined in Section 5.3.


 


3

















 


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


 


“Electronic Delivery” is defined in Section 7.1(a).


 


“Environmental Laws” means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to Hazardous Materials.


 


“ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.


 


“ERISA Affiliate” means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.


 


“Event of Default” is defined in Section 11.


 


“Existing Credit Facility” means the Credit Agreement, dated
as of August 31, 2010, by and among the Company, the lenders from
time to time party thereto, as lenders, and Bank of America, N.A., as
administrative agent.


 


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


 


“Governmental Authority” means


 


(a)                                  the government of


 


(i)                                     the United States of America or any State or other political subdivision
thereof, or


 


(ii)                                  any other jurisdiction in which the Company or any Subsidiary conducts
all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or


 


(b)                                 any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.


 


“Guaranty” means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:


 


4

















 


(a)                                  to purchase such indebtedness or obligation or any property constituting
security therefor;


 


(b)                                 to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;


 


(c)                                  to lease properties or to purchase properties or services primarily for
the purpose of assuring the owner of such indebtedness or obligation of the
ability of any other Person to make payment of the indebtedness or obligation;
or


 


(d)                                 otherwise to assure the owner of such indebtedness or obligation against
loss in respect thereof.


 


In
any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of
such Guaranty shall be assumed to be direct obligations of such obligor.


 


“Hazardous Material” means any and all pollutants, toxic or
hazardous wastes or other substances that might pose a hazard to health and
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage or
filtration of which is or shall be restricted, prohibited or penalized by any
applicable law including, but not limited to, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum, petroleum products, lead
based paint, radon gas or similar restricted, prohibited or penalized
substances.


 


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


 


“holder” means, with respect to any Note the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 13.1.


 


“Indebtedness” with respect to any Person means, at any time,
without duplication,


 


(a)                                  its liabilities for borrowed money and its redemption obligations in
respect of mandatorily redeemable Preferred Stock;


 


(b)                                 its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable arising in the ordinary course of
business but including all liabilities created or arising under any conditional
sale or other title retention agreement with respect to any such property);


 


(c)                                  (i) Capital Lease Obligations and (ii) all liabilities that
would appear on its balance sheet in accordance with GAAP in respect of
Synthetic Leases assuming such Synthetic Leases were accounted for as Capital
Leases;


 


5

















 


(d)                                 all liabilities for borrowed money secured by any Lien with respect to
any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);


 


(e)                                  all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and
other financial institutions (whether or not representing obligations for
borrowed money);


 


(f)                                    the aggregate Termination Value of all Hedging Agreements of such Person;
and


 


(g)                                 any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.


 


Indebtedness
of any Person shall include (x) all obligations of such Person of the
character described in clauses (a) through (g) to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP and (y) the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.


 


“Institutional Investor” means (a) any Purchaser of a
Note, (b) any holder of a Note holding (together with one or more of its
affiliates) more than 5.00% of the aggregate principal amount of the Notes then
outstanding, (c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment company, any
insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form, and (d) any Related Fund
of any holder of any Note.


 


“Lien” means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or
title of any vendor, lessor, lender or other secured party to or of such Person
under any conditional sale or other title retention agreement or Capital Lease,
upon or with respect to any property or asset of such Person (including in the
case of stock, stockholder agreements, voting trust agreements and all similar
arrangements).


 


“Major Credit Facility” means (a) the Existing Credit
Facility and (b) any other working capital credit, loan or borrowing
facility (including any renewal, extension, replacement or refinancing thereof)
entered into on or after the date of the Closing by the Company or any
Subsidiary in a principal amount equal to or greater than $10,000,000.


 


“Majority Holders” means, at any time, the holders of more
than 50% in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).


 


“Make-Whole Amount” is defined in Section 8.7.


 


“Management Contract” means an agreement, written or oral,
pursuant to which the Company or any Subsidiary of the Company provides
(a) investment advisory, management or administrative services to a
W&R Fund, or (b) investment advisory or management services to 


 


6

















 


any
Person, including, without limitation, unregistered investment companies and
personal or corporate investment accounts.


 


“Material” means material in relation to the business,
operations, affairs, financial condition, assets, properties, or prospects of
the Company and its Subsidiaries taken as a whole.


 


“Material Adverse Effect” means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.


 


“Memorandum” is defined in Section 5.3.


 


“Moody’s” means Moody’s Investors Service, Inc. and any
successor thereto.


 


“Multiemployer Plan” means any Plan that is a “multiemployer
plan” (as such term is defined in section 4001(a)(3) of ERISA).


 


“NAIC” means the National Association of Insurance
Commissioners or any successor thereto.


 


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


 


“Notes” is defined in Section 1.


 


“Officer’s Certificate” means a certificate of a Senior
Financial Officer or of any other officer of the Company whose responsibilities
extend to the subject matter of such certificate.


 


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


 


“Pension Plan” means a Plan, other than a Multiemployer Plan,
that is subject to Title IV of ERISA.


 


“Permitted Encumbrances” means:


 


(a)                                  Liens imposed
by law for taxes that are not yet due or are being contested in compliance with
Section 9.4;


 


(b)                                 Carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are being contested in
compliance with Section 9.4;


 


(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;


 


7

















 


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


 


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


 


(f)                                    judgment Liens
in respect of judgments that do not constitute an Event of Default under Section 11(i),
so long as such judgment Liens are not in effect for more than 45 days;


 


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


 


“Person” means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, business
entity or Governmental Authority.


 


“Plan” means an “employee benefit plan” (as defined in
section 3(3) of ERISA) subject to Title I of ERISA that is maintained, or
to which contributions are made or required to be made, by the Company or any
ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may
have any liability.


 


“Preferred Stock” means any class of capital stock of a
Person that is preferred over any other class of capital stock (or similar
equity interests) of such Person as to the payment of dividends or the payment
of any amount upon liquidation or dissolution of such Person.


 


“property” or “properties”
means, unless otherwise specifically limited, real or personal property of any
kind, tangible or intangible, choate or inchoate.


 


“PTE” is defined in Section 6.2(a).


 


“Purchaser” is defined in the first paragraph of this
Agreement.


 


“Related Fund” means, with respect to any holder of any Note,
any fund or entity that (i) invests in Securities or bank loans, and (ii) is
advised or managed by such holder, the same investment advisor as such holder
or by an affiliate of such holder or such investment advisor.


 


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


 


“Responsible Officer” means the Chief Executive Officer,
President, any Senior Financial Officer and any other officer of the Company
with responsibility for the administration of the relevant portion of this
Agreement.


 


“Restricted Payment” means (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to
any shares of any class of capital stock of the Company or any Subsidiary, or (b) any
payment (whether in cash, securities or other property), 


 


8

















 


including
any sinking fund or similar deposit, for (i) the purchase, redemption,
retirement, acquisition, cancellation or termination of any shares of the
Company’s capital stock, or (ii) any option, warrant or other right to
acquire any shares of the Company’s capital stock.


 


“Revenue Base” means, at any date of calculation, the sum of
(a) the product of (i) with respect to each W&R Fund, the Net
Asset Value of the W&R Fund on such calculation date and with respect to
assets managed for other entities, the market value or Net Asset Value of such
assets on such calculation date and (ii) the rate provided for in the
applicable Management Contract for determining the annual fee required for such
advisory, management or administrative services on such date, and
(b) Distribution Fees for such W&R Fund.


 


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


 


“Sale/Leaseback Transaction” is defined in Section 10.6.


 


“SEC” means the Securities and Exchange Commission of the
United States, or any successor thereto.


 


“Securities” or “Security” shall
have the meaning specified in Section 2(1) of the Securities Act.


 


“Securities Act” means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.


 


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


 


“Series A Notes” is defined in Section 1.


 


“Series B Notes” is defined in Section 1.


 


“Subsidiary” means, as to any Person, any other Person in
which such first Person or one or more of its Subsidiaries or such first Person
and one or more of its Subsidiaries owns sufficient equity or voting interests
to enable it or them (as a group) ordinarily, in the absence of contingencies,
to elect a majority of the directors (or Persons performing similar functions)
of such second Person, and any partnership or joint venture if more than a 50%
interest in the profits or capital thereof is owned by such first Person or one
or more of its Subsidiaries or such first Person and one or more of its Subsidiaries
(unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of
its Subsidiaries).  Unless the context
otherwise clearly requires, any reference to a “Subsidiary” is a reference to a
Subsidiary of the Company.


 


“SVO” means the Securities Valuation Office of the NAIC or
any successor to such Office.


 


“Synthetic Lease” means, at any time, any lease (including
leases that may be terminated by the lessee at any time) of any property
(a) that is accounted for as an operating lease under 


 


9

















 


GAAP
and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such Person is the lessor.


 


“Termination Value” means, in respect of any one or more
Hedging Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Agreements, (a) for
any date on or after the date such Hedging Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a),
the amounts(s) determined as the mark-to-market values(s) for such
Hedging Agreements, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Hedging
Agreements.


 


“USA Patriot Act” means United States Public Law 107-56,
Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001.


 


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


 


“Wholly-Owned Subsidiary” means, at any time, any Subsidiary
one hundred percent of all of the equity interests (except directors’
qualifying shares) and voting interests of which are owned by any one or more
of the Company and the Company’s other Wholly-Owned Subsidiaries at such time.


 


10
















 


Schedule 5.3


 


Disclosure Documents


 


1.             Private
Placement Memorandum dated July 2010.


 


2.             Note Purchase
Agreement, dated as of August 31, 2010, by and among Waddell &
Reed Financial, Inc. and the Purchasers.


 


3.             Investor
Presentation dated July 30, 2010.


 


4.             Earnings Press
Release dated July 28, 2010.


 


5.             Annual Report
and Form 10-K for the year ended December 31, 2005.


 


6.             Annual Report
and Form 10-K for the year ended December 31, 2006.


 


7.             Annual Report
and Form 10-K for the year ended December 31, 2007.


 


8.             Annual Report
and Form 10-K for the year ended December 31, 2008.


 


9.             Annual Report
and Form 10-K for the year ended December 31, 2009.


 


10.           Quarterly Report on Form 10-Q for the quarter
ended March 31, 2010.


 


11.           Quarterly Report on Form 10-Q for the quarter
ended June 30, 2010.


 

















 


Schedule 5.4


 


Subsidiaries of the Company and Ownership of Subsidiary Stock


 


(i) Subsidiaries
— The Company or a Subsidiary thereof owns, directly or indirectly, 100% of all
capital stock of each of the Company’s Subsidiaries as indicated in the table
below:


 


	
  Name

  	
   

  	
  Jurisdiction of

  Incorporation

  or Formation

  	
   

  	
  Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waddell &
  Reed Financial Services, Inc.

  	
   

  	
  Missouri

  	
   

  	
  Waddell &
  Reed Financial, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waddell &
  Reed, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Waddell &
  Reed Financial Services, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waddell &
  Reed Investment Management Company

  	
   

  	
  Kansas

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waddell &
  Reed Services Company

  	
   

  	
  Missouri

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R
  Capital Management Group, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Waddell &
  Reed Investment Management Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R
  Corporate LLC

  	
   

  	
  Delaware

  	
   

  	
  Waddell &
  Reed Services Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy
  Investment Management Company

  	
   

  	
  Delaware

  	
   

  	
  Waddell &
  Reed Financial, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy
  Funds Distributor, Inc.

  	
   

  	
  Florida

  	
   

  	
  Ivy
  Investment Management Company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiduciary
  Trust Company of New Hampshire

  	
   

  	
  New
  Hampshire

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency, Inc.

  	
   

  	
  Missouri

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency of Alabama, Inc.

  	
   

  	
  Alabama

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency of Colorado, Inc.

  	
   

  	
  Colorado

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency of Montana, Inc.

  	
   

  	
  Montana

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency of Nevada, Inc.

  	
   

  	
  Nevada

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency of Utah, Inc.

  	
   

  	
  Utah

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W &
  R Insurance Agency of Wisconsin, Inc.

  	
   

  	
  Wisconsin

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unicon
  Agency, Inc.

  	
   

  	
  New
  York

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unicon
  Insurance Agency of Massachusetts, Inc.

  	
   

  	
  Massachusetts

  	
   

  	
  Waddell &
  Reed, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Legend
  Group Holdings, LLC

  	
   

  	
  Delaware

  	
   

  	
  Waddell &
  Reed Financial, Inc.

  



 

















 


	
  Legend
  Advisory Corporation

  	
   

  	
  New
  York

  	
   

  	
  Legend
  Group Holdings, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Legend
  Equities Corporation

  	
   

  	
  Delaware

  	
   

  	
  Legend
  Group Holdings, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Advisory
  Services Corporation

  	
   

  	
  Nevada

  	
   

  	
  Legend
  Group Holdings, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The
  Legend Group, Inc.

  	
   

  	
  Delaware

  	
   

  	
  Legend
  Group Holdings, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LEC
  Insurance Agency, Inc.

  	
   

  	
  Texas

  	
   

  	
  Legend
  Equities Corporation

  



 


(ii)           Directors and Senior
Executive Officers of the Company


 


Directors


 


Sharilyn
S. Gasaway


Thomas
C. Godlasky


Henry
J. Herrmann


Alan
W. Kosloff


Dennis E. Logue


Michael F. Morrissey


James
M. Raines


Ronald
C. Reimer


William
L. Rogers


Jerry
W. Walton


 


Senior
Executive Officers


 


Henry
J. Herrmann, Chairman of the Board and Chief Executive Officer


Michael
L. Avery, President and Chief Investment Officer


Thomas
W. Butch, Executive Vice President and Chief Marketing Officer


Brent
K. Bloss, Senior Vice President — Finance, Treasurer and Principal Accounting
Officer


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


Mark
A. Schieber, Senior Vice President and Controller


Daniel
C. Schulte, Senior Vice President and General Counsel


Michael
D. Strohm, Senior Vice President and Chief Operations Officer


John
E. Sundeen, Jr., Senior Vice President and Chief Administrative Officer —
Investments


Wendy
J. Hills, Vice President, Secretary and Associate General Counsel


 


2

















 


Schedule 5.5


 


Financial Statements


 


1.             Audited
consolidated financial statements of the Company for the 2005 fiscal year.


 


2.             Audited
consolidated financial statements of the Company for the 2006 fiscal year.


 


3.             Audited
consolidated financial statements of the Company for the 2007 fiscal year.


 


4.             Audited
consolidated financial statements of the Company for the 2008 fiscal year.


 


5.             Audited
consolidated financial statements of the Company for the 2009 fiscal year.


 


6.             Unaudited
interim consolidated financial statements of the Company for the quarterly
period ended March 31, 2010.


 


7.             Unaudited
interim consolidated financial statements of the Company for the quarterly
period ended June 30, 2010.


 

















 


Schedule 5.8


 


Litigation


 


1.             Michael
E. Taylor, Kenneth B. Young, individuals, on behalf of themselves individually
and on behalf of others similarly situated v. Waddell & Reed, Inc.,
a Delaware Corporation; Waddell & Reed Financial, Inc., a
Delaware Corporation; Waddell & Reed Development, Inc., a
Delaware Corporation; Waddell & Reed Financial Advisors, a fictitious
business name; and DOES 1 through 10 inclusive; Case No. 09-CV-2909 DMS
WVG; in the United States District Court for the Southern District of
California.


 

















 


Schedule 5.15


 


Existing Indebtedness


 


1.             $190.0 million
in principal amount 5.60% senior notes due January 15, 2011.


 


2.             Credit
Agreement, dated as of August 31, 2010, by and among Waddell &
Reed Financial, Inc., the lenders party thereto from time to time, Bank of
America, N.A., as administrative agent, and Bank of America Securities LLC, as
lead arranger and book manager.


 


3.             Waddell &
Reed Financial, Inc. - $2 thousand of capital lease obligations.


 


4.             Waddell &
Reed, Inc. - $748 thousand of capital lease obligations.


 


5.             W&R
Corporate LLC - $10 thousand of capital lease obligations.


 


6.             Advisory
Services Corporation - $15 thousand of capital lease obligations.


 

















 


Schedule 10.2


 


Existing Subsidiary Indebtedness


 


1.             Waddell &
Reed, Inc. - $748 thousand of capital lease obligations.


 


2.             W&R
Corporate LLC - $10 thousand of capital lease obligations.


 


3.             Advisory Services Corporation
- $15 thousand of capital lease obligations.


 

















 


Schedule 10.3


 


Existing Liens


 


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


 

















 


Schedule 10.6


 


Sale/Leaseback Properties


 


1.             6300 Lamar
Avenue, Overland Park, Kansas


 


2.             6301 Glenwood,
Overland Park, Kansas


 






 












 


EXHIBIT 1(a)


 


[FORM OF SERIES A NOTE]


 


WADDELL & REED
FINANCIAL, INC.


 


5.00% SENIOR NOTE, SERIES
A, DUE 2018


 


	
  No. [          ]

  	
  [Date]

  
	
   

  	
   

  
	
  $[              ]

  	
  PPN[                            ]

  



 


FOR
VALUE RECEIVED, the undersigned, WADDELL & REED FINANCIAL, INC.
(herein called the “Company”), a
corporation organized and existing under the laws of the State of Delaware,
hereby promises to pay to
[                        ],
or registered assigns, the principal sum of
[                                          ]
DOLLARS (or so much thereof as shall not have been prepaid) on January 13,
2018, with interest (computed on the basis of a 360-day year of twelve 30 day
months) (a) on the unpaid balance hereof at the rate of 5.00% per annum
from the date hereof, payable semiannually, on the 13th day of January and
July in each year, commencing with the January or July next
succeeding the date hereof, until the principal hereof shall have become due
and payable, and (b) to the extent permitted by law, on any overdue payment
of interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make Whole Amount, at a rate per
annum from time to time equal to the greater of (i) 7.00% or (ii) 2%
over the rate of interest publicly announced by Bank of America, N.A. from time
to time at its principal office in New York City as its “base” or “prime” rate,
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand).


 


Payments
of principal of, interest on and any Make-Whole Amount with respect to this
Note are to be made in lawful money of the United States of America at said
principal office of Bank of America, N.A. in New York City or at such other
place as the Company shall have designated by written notice to the holder of
this Note as provided in the Note Purchase Agreement referred to below.


 


This
Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement,
dated as of August 31, 2010 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the
respective Purchasers named therein and is entitled to the benefits
thereof.  Each holder of this Note will
be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) made the representations and acknowledgements set forth
in Sections 6.1 and 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms
used in this Note shall have the respective meanings ascribed to such terms in
the Note Purchase Agreement.


 


This
Note is a registered Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer accompanied by a written
instrument of transfer 


 

















 


duly
executed, by the registered holder hereof or such holder’s attorney duly
authorized in writing, a new Note of the same series and for a like principal
amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company will not be affected by any notice to the
contrary.


 


This
Note is subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.


 


If
an Event of Default occurs and is continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in
the Note Purchase Agreement.


 


This
Note shall be construed and enforced in accordance with, and the rights of the
Company and the holder of this Note shall be governed by, the law of the State
of New York excluding choice-of-law principles of the law of such State that
would permit the application of the laws of a jurisdiction other than such
State.


 


	
   

  	
  WADDELL &
  REED FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2

















 


EXHIBIT 1(b)


 


[FORM OF SERIES B
NOTE]


 


WADDELL & REED
FINANCIAL, INC.


 


5.75% SENIOR NOTE, SERIES
B, DUE 2021


 


	
  No. [          ]

  	
  [Date]

  
	
   

  	
   

  
	
  $[              ]

  	
  PPN[                            ]

  



 


FOR
VALUE RECEIVED, the undersigned, WADDELL & REED FINANCIAL, INC.
(herein called the “Company”), a
corporation organized and existing under the laws of the State of Delaware,
hereby promises to pay to
[                        ],
or registered assigns, the principal sum of [                                          ]
DOLLARS (or so much thereof as shall not have been prepaid) on January 13,
2021, with interest (computed on the basis of a 360-day year of twelve 30 day
months) (a) on the unpaid balance hereof at the rate of 5.75% per annum
from the date hereof, payable semiannually, on the 13th day of January and
July in each year, commencing with the January or July next succeeding
the date hereof, until the principal hereof shall have become due and payable,
and (b) to the extent permitted by law, on any overdue payment of interest
and, during the continuance of an Event of Default, on such unpaid balance and
on any overdue payment of any Make Whole Amount, at a rate per annum from time
to time equal to the greater of (i) 7.75% or (ii) 2% over the rate of
interest publicly announced by Bank of America, N.A. from time to time at its
principal office in New York City as its “base” or “prime” rate, payable
semiannually as aforesaid (or, at the option of the registered holder hereof,
on demand).


 


Payments
of principal of, interest on and any Make-Whole Amount with respect to this
Note are to be made in lawful money of the United States of America at said
principal office of Bank of America, N.A. in New York City or at such other
place as the Company shall have designated by written notice to the holder of
this Note as provided in the Note Purchase Agreement referred to below.


 


This
Note is one of a series of Senior Notes (herein called the “Notes”) issued pursuant to the Note Purchase Agreement,
dated as of August 31, 2010 (as from time to time amended, the “Note Purchase Agreement”), between the Company and the
respective Purchasers named therein and is entitled to the benefits
thereof.  Each holder of this Note will
be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) made the representations and acknowledgements set forth
in Sections 6.1 and 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms
used in this Note shall have the respective meanings ascribed to such terms in
the Note Purchase Agreement.


 


This
Note is a registered Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer accompanied by a written
instrument of transfer 


 

















 


duly
executed, by the registered holder hereof or such holder’s attorney duly
authorized in writing, a new Note of the same series and for a like principal
amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company will not be affected by any notice to the
contrary.


 


This
Note is subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.


 


If
an Event of Default occurs and is continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in
the Note Purchase Agreement.


 


This
Note shall be construed and enforced in accordance with, and the rights of the
Company and the holder of this Note shall be governed by, the law of the State
of New York excluding choice-of-law principles of the law of such State that
would permit the application of the laws of a jurisdiction other than such
State.


 


	
   

  	
  WADDELL &
  REED FINANCIAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2






 












 


EXHIBITS 4.4(a)(i) and
4.4(a)(ii)


 


Forms of Opinions of
Special Counsel to the Company


 






 












 


Exhibit 4.4(a)(i)


 


Form of Special Counsel to the Company Signing Opinion


 


August 31, 2010


 


To
the Purchasers Listed on Exhibit A


 


Re:          Waddell & Reed
Financial, Inc.


 


Ladies
and Gentlemen:


 


We
have acted as counsel to Waddell & Reed Financial, Inc., a Delaware
corporation (the “Company”), in connection with that certain Note
Purchase Agreement, dated as of August 31, 2010 by and among the Company
and the Purchasers identified on Schedule A thereto (such agreement without
Exhibits and Schedules thereto being hereinafter referred to as the “Note
Purchase Agreement”).  This opinion
is being delivered to you pursuant to Section 4.4(a)(i) of the Note
Purchase Agreement.  All capitalized
terms used herein and not otherwise defined herein shall have the same meanings
herein as set forth in the Note Purchase Agreement.


 


In
connection with this opinion, we have examined the Note Purchase Agreement and
the Exhibits and Schedules thereto, including the forms of the Notes, and such
documents, corporate records and questions of law as we deem necessary for the
purposes of this opinion.  We have also
examined such certificates of public officials, corporate officers of the
Company and of other Persons as we have deemed relevant and appropriate as a
basis for the opinions expressed herein, and we have made no effort to
independently verify the facts set forth in such certificates.  Further, in making the foregoing
examinations, we have assumed the genuineness of all signatures, the legal
capacity of each person signatory to any of the documents reviewed by us, the
authenticity of all documents submitted to us as originals and the conformity
to authentic original documents of all documents submitted to us as
copies.  In making the foregoing
examinations, as to factual matters, we have assumed that all representations
and warranties made in the aforesaid documents were and are true, correct and
complete.


 


In
rendering the opinions expressed herein, we have assumed that:


 


(a)           each of the documents (other
than the Note Purchase Agreement) we examined has been duly authorized,
executed and delivered by each of the parties thereto and constitutes 


 

















 


the
legal, valid and binding obligation of each such party thereto, enforceable in
accordance with its terms;


 


(b)           the Note Purchase Agreement
has been duly authorized by each of the parties thereto (other than the
Company), that each such party (other than the Company) has the requisite power
and authority to execute, deliver and perform the Note Purchase Agreement, and
that the Note Purchase Agreement constitutes the legal, valid and binding
obligations of each such party thereto (other than the Company), enforceable in
accordance with its terms;


 


(c)           no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any court, governmental authority, or any subdivision
thereof, is required to authorize or is required in connection with, the
execution and delivery by any Person identified in the Note Purchase Agreement
as a party thereto, or in connection with the performance of its obligations
thereunder or the consummation of the transactions contemplated thereby, other
than those that have been obtained or made and are in full force and effect (provided, that we make no such assumption
with respect to consents, approvals and the like applicable to the Company to
the extent that we express our opinion rendered in paragraph 4 below);


 


(d)           that there are no facts or
circumstances relating solely to the Purchasers that might prevent the
Purchasers from enforcing any of the rights to which our opinion relates; and


 


(e)           there are no extrinsic
agreements or understandings among the parties to the Note Purchase Agreement
that would modify or affect the interpretation of the terms of the Note
Purchase Agreement or the respective rights or obligations of the parties
thereunder.


 


Based
upon the foregoing, and upon an examination of such questions of law as we have
considered necessary or appropriate, and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, we advise you that, in our
opinion:


 


1.             The Company is a corporation
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power to execute and deliver the Note Purchase Agreement
and to perform its obligations thereunder.


 


2.             The Note Purchase Agreement
has been duly authorized, executed and delivered by the Company and constitutes
the legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms.


 


3.             The Company’s execution and
delivery of, and the performance of its obligations under, the Note Purchase
Agreement do not (a) contravene, or result in a violation of, the Restated
Certificate of Incorporation or the Amended and Restated Bylaws of the Company,
in each case, as in effect on the date hereof (after giving effect to any
amendment thereto), (b) contravene, result in any breach or violation of,
or constitute a default (or give rise to any right of termination, cancellation
or acceleration) under, any existing obligation of the Company pursuant to the
express provisions of the Existing Credit Facility or any agreement or
instrument in effect on the date hereof to which the Company is a party and
that has been identified as a 


 


2

















 


material agreement in the exhibits to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2009 and Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
2010 and June 30, 2010, other than the Credit Agreement, dated as of October 5,
2009, by and among the Company, the lenders party thereto from time to time,
Bank of America, N.A., and Bank of America Securities LLC, which has been replaced
by the Existing Credit Facility, or (c) violate any provision of any
Applicable Laws (as hereinafter defined) applicable to the Company.


 


4.             No consent, approval or
authorization of or registration, designation, declaration or filing with, any
United States Federal or New York state governmental authority or pursuant to
the General Corporation Law of the State of Delaware (the “DGCL”) is
required as a condition to the execution and delivery by the Company of the
Note Purchase Agreement or the performance by the Company of its obligations
thereunder.  Please note that United
States Federal securities law require the filing of Current Reports on Form 8-K
with the Securities and Exchange Commission with respect to the execution and
delivery of the Note Purchase Agreement. 
Based in part upon the representations and warranties of each of the
Purchasers set forth in the Note Purchase Agreement, it is not necessary in
connection with the offering of the Notes and the execution and delivery of the
Note Purchase Agreement to register the Notes to be sold and delivered
thereunder under the Securities Act, or to qualify an indenture in respect of
said Notes under the Trust Indenture Act of 1939, as amended.


 


5.             The Company is not an “investment
company” or a company “controlled” by an “investment company,” each as defined
in or subject to regulation under the Investment Company Act of 1940, as
amended.


 


To
our knowledge, except as otherwise specifically disclosed in the Disclosure
Documents, there is no action, suit or proceeding before or by any court,
arbitrator or governmental agency, body or official, now pending, to which the
Company or any Subsidiary of the Company is a party or to which the business,
assets or property of the Company or any Subsidiary of the Company is subject
and, to our knowledge, no such action, suit or proceeding is threatened to
which the Company or any Subsidiary of the Company or the business, assets or
property of the Company or any Subsidiary of the Company would be subject that
in either case questions the validity of the Note Purchase Agreement.


 


The
foregoing opinions and statement are subject to the following assumptions,
exceptions, qualifications and limitations.


 


A.            The foregoing opinions are
expressly limited to matters under and governed by the DGCL, and applicable
Federal laws of the United States of America and the internal substantive laws
of the State of New York.  With respect
to laws, regulations and the like referred to herein, in addition to all other
limitations set forth herein, such references are limited to laws, regulations
and the like of the DGCL, and such applicable Federal laws of the United States
of America and laws of the State of New York as each is in effect and force as
of even date of this opinion and which, in our experience, are normally
applicable to the transactions of the type provided for in the Note Purchase
Agreement, in each case, however, 


 


3

















 


exclusive of, and without
regard to, any Excluded Laws (collectively, the “Applicable Laws”).  The term “Excluded Laws” means all
(A) municipal, political subdivision (whether created or enabled through
legislative action at the federal, state, regional or local level), local and
county ordinances, statutes, administrative decisions, laws, rules and
regulations, and (B) statutes, laws, rules and regulations relating
to (1) pollution or protection of the environment, (2) zoning, land
use, building or construction, (3) operation of any asset or property,
(4) labor, employment, employee rights and benefits, or occupational
safety and health, (5)  utility regulation or regulation of matters
pertaining to the acquisition, transportation, transmission, storage or use of
energy sources used in connection therewith or generated thereby,
(6) antitrust, (7) taxation and (8) except as set forth in the
opinion in paragraph 4 above, securities laws and laws applicable to the
regulation of broker dealers, in each case with respect to each of the
foregoing, (x) as interpreted, construed or enforced pursuant to any
judicial, arbitral or other decision or pronouncement, (y) as in effect in
any jurisdiction, including, without limitation, any State of the United States
of America and the United States of America, and (z) including, without
limitation, any and all authorizations, permits, consents, applications,
licenses, approvals, filings, registrations, publications, exemptions and the
like required by any of them.


 


B.            The foregoing opinion
regarding the enforceability of the Note Purchase Agreement is subject to the
following:


 


(1)           The enforceability of the
Note Purchase Agreement may be limited or affected by (a) bankruptcy,
insolvency, reorganization, moratorium, liquidation, rearrangement, probate,
conservatorship, fraudulent transfer, fraudulent conveyance and other similar
laws (including court decisions) now or hereafter in effect and affecting the
rights and remedies of creditors generally or providing for the relief of
debtors generally, (b) the refusal of a particular court to grant (i) equitable
remedies, including, without limiting the generality of the foregoing, specific
performance and injunctive relief, or (ii) a particular remedy sought
under the Note Purchase Agreement as opposed to another remedy provided for
therein or another remedy available at law or in equity, (c) general
principles of equity (regardless of whether such remedies are sought in a
proceeding in equity or at law), and (d) judicial discretion.


 


(2)           We express no opinion as to
the validity or enforceability of any provision of the Note Purchase Agreement
that purports to: (a) waive or otherwise affect any right, warranty or
defense that cannot be waived or otherwise affected as a matter of law,
(b) negate the effect of any course of dealing or any exercise, or failure
or delay to exercise, any right, power, privilege or remedy, (c) relate to
indemnities or contribution, or the exculpation, release or exemption of a
party from liability, to the extent prohibited by 


 


4

















 


public policy or otherwise
prohibited by applicable federal or state law, or require indemnification or
contribution (as applicable) for, or release, exculpation or exemption of a
party from, liability on account of fraud, negligence, recklessness, gross
negligence, willful misconduct, breach of the performance of an agreed
undertaking, violation of law or illegal conduct (or the public policy
underlying such action or conduct) of any Person seeking or asserting the
benefit of such indemnity, exculpation, release, exemption or contribution
provision, (d) limit liability of any Person to claims for gross
negligence or willful misconduct, (e) authorize conclusive determinations
by any party or permit a party to make determinations in its sole discretion,
(f) restrict or otherwise affect jurisdiction, venue, submission to, or
acceptance of, a court’s jurisdiction, objections to the laying of venue or
submission or acceptance of jurisdiction, limitation periods or other
procedural rights in any proceeding, (g) waive or otherwise restrict or
deny access to jury trial, claims, causes of action or remedies that may be
available or asserted in any action, or (h) permit modification thereof
only by means of an agreement signed in writing by the parties thereto.


 


(3)           We express no opinion as to
the validity or enforceability of any provision of the Note Purchase Agreement
that states that (a) prohibition, illegality, invalidity or
unenforceability of any provision of the Note Purchase Agreement in any jurisdiction
shall not (1) invalidate the remaining provisions of the Note Purchase
Agreement or (2) affect that provision in any other jurisdiction, or (b) the
right of any Person to exercise any right or remedy on the basis of any
misrepresentation or breach of warranty is not affected by any action by any
Purchaser.


 


(4)           We note that the
enforceability of specific provisions of the Note Purchase Agreement may be
subject to standards of reasonableness, care and diligence and “good faith” and
similar limitations and obligations provided for under applicable principles of
common law and judicial decisions.


 


C.            In rendering the opinion
expressed in paragraph 1 above relating to existence and good standing, as to
factual matters set forth therein we have relied solely upon a review of
certificates of public officials, without further investigation as to matters
set forth therein, and such opinion is limited to the dates of such
certificates.


 


D.            In giving the opinion in
paragraph 3, we have assumed that the proceeds of the issuance of the Notes
shall be used in accordance with the terms of the Note Purchase Agreement.


 


E.             Our opinions expressed in
paragraphs 3 and 4 above as to violations of laws, rules or regulations
applicable to the Company and as to the need for any approvals or 


 


5

















 


consents of, or any
registrations or filings with, any federal, New York or Delaware corporate
governmental authority, is based upon a review of those laws, rules and
regulations that, in our experience, are normally applicable to the
transactions contemplated by the Note Purchase Agreement.  We express no opinion with respect to the
laws, rules and regulations applicable to the regulation of broker
dealers.  Further, our opinion expressed in
paragraph 4 above does not encompass compliance with, or exemptions from, the
registration and prospectus delivery requirements of the Federal securities
laws, except as expressly set forth therein.  Further, we express no opinion
herein with respect to compliance with any of the anti-fraud provisions of
applicable Federal or state securities laws, rules or regulations.


 


F.             With respect to references
herein to “known to us”, “to our knowledge” or words or phrases of similar
import (whether or not modified by any additional phrases), such references
mean the actual knowledge that those attorneys of this Firm, who, based upon
our records as of the date hereof, devoted substantive attention to the
transactions to which this opinion relates, have obtained from the following,
which constituted the examination for the purposes of the applicable
opinions:  (A) their review of
documents in connection with rendering this opinion, and the due diligence
performed in connection therewith, which review and due diligence were limited
to reviewing the Note Purchase Agreement and the Notes, the exhibits and
schedules thereto, the stock record books, by-laws and charter documents of the
Company, and certificates of officers of the Company, and which due diligence
did not include any examination of courts, boards, other tribunals or public
records with respect to any litigation, investigation or proceedings, or
judgments, orders or decrees, in any event applicable to the Company or any of
its properties; (B) their participation in the negotiation of the Note
Purchase Agreement and the Notes; and (C) representations and warranties as
to factual matters of any of the Company set forth in the Note Purchase
Agreement and the Notes, or otherwise made to us in certifications and other
writings.


 


The
opinions expressed herein are solely for the benefit of, and may only be relied
upon by, each of the Purchasers listed in Schedule A to the Note Purchase
Agreement and its respective institutional successors and assigns in connection
with the Note Purchase Agreement and the Notes (provided that any reliance by
any successor or assign shall be to the opinions expressed herein as of the
date of this opinion letter and shall not constitute a reissuance of such
opinions as of any date subsequent to the date of this opinion letter) and may
be used only for the purposes set forth in the Note Purchase Agreement.  The opinions expressed herein are as of the
date hereof (and not as of any other date) or, to the extent a reference to a
certificate or other document is made herein, to the date thereof, and we make
no undertaking to amend or supplement such opinions as facts and circumstances
come to our attention or changes in the law occur which could affect such
opinions.


 


6

















 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  



 


7

















 


EXHIBIT A


 


Purchasers


 


Metropolitan Life
Insurance Company


 


MetLife Investors
Insurance Company


 


MetLife Insurance Company
of Connecticut


 


MetLife Insurance Company
of Connecticut, on behalf of its Separate Account MGA


 


Midland National Life
Insurance Company


 


North
American Company for Life and Health Insurance


 


Security
Benefit Life Insurance Company


 


Genworth Life and Annuity
Insurance Company


 


Genworth Life Insurance
Company


 


John Hancock Life
Insurance Company (U.S.A.)


 


John Hancock Life
Insurance Company of New York


 


JPMorgan Chase Bank as
Directed Trustee for the SBC Master Pension Trust


 


The Northwestern Mutual
Life Insurance Company


 


Knights of Columbus


 


The Union Central Life
Insurance Company


 


Acacia Life Insurance
Company


 


Ameritas Life Insurance
Corp.


 






 












 


Exhibit 4.4(a)(ii)


 


Form of Special Counsel to the Company Closing Opinion


 


January 13, 2011


 


To
the Purchasers Listed on Exhibit A


 


Re:          Waddell & Reed
Financial, Inc.


 


Ladies
and Gentlemen:


 


We
have acted as counsel to Waddell & Reed Financial, Inc., a Delaware
corporation (the “Company”), in connection with that certain Note
Purchase Agreement, dated as of August 31, 2010 by and among the Company
and the Purchasers identified on Schedule A thereto (such agreement without
Exhibits and Schedules thereto being hereinafter referred to as the “Note
Purchase Agreement”).  This opinion
is being delivered to you pursuant to Section 4.4(a)(ii) of the Note
Purchase Agreement.  All capitalized
terms used herein and not otherwise defined herein shall have the same meanings
herein as set forth in the Note Purchase Agreement.  Additionally, the term “Covered Documents”
shall mean the Note Purchase Agreement and the Notes.


 


In
connection with this opinion, we have examined the Covered Documents and the
Exhibits and Schedules thereto, and such documents, corporate records and
questions of law as we deem necessary for the purposes of this opinion.  We have also examined such certificates of
public officials, corporate officers of the Company and of other Persons as we
have deemed relevant and appropriate as a basis for the opinions expressed
herein, and we have made no effort to independently verify the facts set forth
in such certificates.  Further, in making
the foregoing examinations, we have assumed the genuineness of all signatures,
the legal capacity of each person signatory to any of the documents reviewed by
us, the authenticity of all documents submitted to us as originals and the
conformity to authentic original documents of all documents submitted to us as
copies.  In making the foregoing
examinations, as to factual matters, we have assumed that all representations
and warranties made in the aforesaid documents were and are true, correct and
complete.


 


In
rendering the opinions expressed herein, we have assumed that:


 

















 


(a)           each of the documents (other
than the Covered Documents) we examined has been duly authorized, executed and
delivered by each of the parties thereto and constitutes the legal, valid and
binding obligation of each such party thereto, enforceable in accordance with
its terms;


 


(b)           each of the Covered
Documents has been duly authorized by each of the parties thereto (other than
the Company), that each such party (other than the Company) has the requisite
power and authority to execute, deliver and perform the Covered Documents, and
that each of the Covered Documents constitutes the legal, valid and binding
obligations of each such party thereto (other than the Company), enforceable in
accordance with its terms;


 


(c)           no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with, or exemption by, any court, governmental authority, or any subdivision
thereof, is required to authorize or is required in connection with, the
execution and delivery by any Person identified in the Covered Documents as a
party thereto, or in connection with the performance of its obligations
thereunder or the consummation of the transactions contemplated thereby, other
than those that have been obtained or made and are in full force and effect (provided, that we make no such assumption
with respect to consents, approvals and the like applicable to the Company to
the extent that we express our opinion rendered in paragraph 4 below);


 


(d)           that there are no facts or
circumstances relating solely to the Purchasers that might prevent the
Purchasers from enforcing any of the rights to which our opinion relates; and


 


(e)           there are no extrinsic
agreements or understandings among the parties to the Covered Documents that
would modify or affect the interpretation of the terms of the Covered Documents
or the respective rights or obligations of the parties thereunder.


 


Based
upon the foregoing, and upon an examination of such questions of law as we have
considered necessary or appropriate, and subject to the assumptions,
exceptions, qualifications and limitations set forth herein, we advise you
that, in our opinion:


 


1.             The Company is a corporation
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power to execute and deliver the Notes and to perform its
obligations under the Covered Documents.


 


2.             The Notes have been duly
authorized, executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company, enforceable against the Company
in accordance with its terms.


 


3.             The Company’s execution and
delivery of, and the performance of its obligations under, the Covered
Documents do not (a) contravene, or result in a violation of, the Restated
Certificate of Incorporation or the Amended and Restated Bylaws of the Company,
in each case, as in effect on the date hereof (after giving effect to any
amendment thereto), (b) contravene, result in any breach or violation of,
or constitute a default (or give rise to any right of termination, cancellation
or acceleration) under, any existing obligation of the Company 


 


2

















 


pursuant to the express provisions of the Existing
Credit Facility or any agreement or instrument in effect on the date hereof to
which the Company is a party and that has been identified as a material
agreement in the exhibits to the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2009 and Quarterly Reports on Form 10-Q
for the fiscal quarters ended March 31, 2010, June 30, 2010, and September 30,
2010 or (c) violate any provision of any Applicable Laws (as hereinafter
defined) applicable to the Company.


 


4.             No consent, approval or
authorization of or registration, designation, declaration or filing with, any
United States Federal or New York state governmental authority or pursuant to
the General Corporation Law of the State of Delaware (the “DGCL”) is
required as a condition to the execution and delivery by the Company of the
Covered Documents or the performance by the Company of its obligations
thereunder.  Please note that United
States Federal securities law require the filing of Current Reports on Form 8-K
with the Securities and Exchange Commission with respect to the execution and
delivery of the Covered Documents.  Based
in part upon the representations and warranties of each of the Purchasers set
forth in the Note Purchase Agreement, it is not necessary in connection with
the offering, sale and delivery of the Notes and the execution and delivery of
the Note Purchase Agreement to register the Notes to be sold and delivered
thereunder under the Securities Act, or to qualify an indenture in respect of
said Notes under the Trust Indenture Act of 1939, as amended.


 


5.             The borrowings by the
Company under the Covered Documents and the application of the proceeds thereof
as provided in the Note Purchase Agreement will not violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System.


 


6.             The Company is not an “investment
company” or a company “controlled” by an “investment company,” each as defined
in or subject to regulation under the Investment Company Act of 1940, as
amended.


 


To
our knowledge, except as otherwise specifically disclosed in the Disclosure
Documents, there is no action, suit or proceeding before or by any court,
arbitrator or governmental agency, body or official, now pending, to which the
Company or any Subsidiary of the Company is a party or to which the business,
assets or property of the Company or any Subsidiary of the Company is subject
and, to our knowledge, no such action, suit or proceeding is threatened to
which the Company or any Subsidiary of the Company or the business, assets or
property of the Company or any Subsidiary of the Company would be subject that
in either case questions the validity of the Covered Documents.


 


The
foregoing opinions and statement are subject to the following assumptions,
exceptions, qualifications and limitations.


 


A.            The foregoing opinions are
expressly limited to matters under and governed by the DGCL, and applicable
Federal laws of the United States of America and the internal substantive laws
of the State of New York and except as provided in paragraph 4 above, we
express no opinion as to any federal or state securities laws.  With respect to laws, regulations and the
like referred to herein, in addition to all other limitations set forth herein,
such references are limited to laws, 


 


3

















 


regulations and the like of
the DGCL, and such applicable Federal laws of the United States of America and
laws of the State of New York as each is in effect and force as of even date of
this opinion and which, in our experience, are normally applicable to the
transactions of the type provided for in the Covered Documents, in each case,
however, exclusive of, and without regard to, any Excluded Laws (collectively,
the “Applicable Laws”).  The term “Excluded
Laws” means all (A) municipal, political subdivision (whether created or
enabled through legislative action at the federal, state, regional or local
level), local and county ordinances, statutes, administrative decisions, laws, rules and
regulations, and (B) statutes, laws, rules and regulations relating
to (1) pollution or protection of the environment, (2) zoning, land
use, building or construction, (3) operation of any asset or property,
(4) labor, employment, employee rights and benefits, or occupational
safety and health, (5)  utility regulation or regulation of matters pertaining
to the acquisition, transportation, transmission, storage or use of energy
sources used in connection therewith or generated thereby, (6) antitrust,
(7) taxation and (8) except as set forth in the opinion in paragraph
4 above, securities laws and laws applicable to the regulation of broker
dealers, in each case with respect to each of the foregoing, (x) as
interpreted, construed or enforced pursuant to any judicial, arbitral or other
decision or pronouncement, (y) as in effect in any jurisdiction,
including, without limitation, any State of the United States of America and
the United States of America, and (z) including, without limitation,
any and all authorizations, permits, consents, applications, licenses,
approvals, filings, registrations, publications, exemptions and the like
required by any of them.


 


B.            The foregoing opinion
regarding the enforceability of the Covered Documents is subject to the
following:


 


(1)           The enforceability of the
Covered Documents may be limited or affected by (a) bankruptcy,
insolvency, reorganization, moratorium, liquidation, rearrangement, probate,
conservatorship, fraudulent transfer, fraudulent conveyance and other similar
laws (including court decisions) now or hereafter in effect and affecting the
rights and remedies of creditors generally or providing for the relief of
debtors generally, (b) the refusal of a particular court to grant (i) equitable
remedies, including, without limiting the generality of the foregoing, specific
performance and injunctive relief, or (ii) a particular remedy sought
under any Covered Document as opposed to another remedy provided for therein or
another remedy available at law or in equity, (c) general principles of
equity (regardless of whether such remedies are sought in a proceeding in
equity or at law), and (d) judicial discretion.


 


(2)           We express no opinion as to
the validity or enforceability of any provision of any Covered Document that
purports to: (a) waive or otherwise affect any right, warranty or defense
that cannot be waived or otherwise affected 


 


4

















 


as a matter of law,
(b) negate the effect of any course of dealing or any exercise, or failure
or delay to exercise, any right, power, privilege or remedy, (c) relate to
indemnities or contribution, or the exculpation, release or exemption of a
party from liability, to the extent prohibited by public policy or otherwise
prohibited by applicable federal or state law, or require indemnification or
contribution (as applicable) for, or release, exculpation or exemption of a
party from, liability on account of fraud, negligence, recklessness, gross
negligence, willful misconduct, breach of the performance of an agreed
undertaking, violation of law or illegal conduct (or the public policy
underlying such action or conduct) of any Person seeking or asserting the
benefit of such indemnity, exculpation, release, exemption or contribution
provision, (d) limit liability of any Person to claims for gross
negligence or willful misconduct, (e) authorize conclusive determinations
by any party or permit a party to make determinations in its sole discretion,
(f) restrict or otherwise affect jurisdiction, venue, submission to, or
acceptance of, a court’s jurisdiction, objections to the laying of venue or
submission or acceptance of jurisdiction, limitation periods or other
procedural rights in any proceeding, (g) waive or otherwise restrict or
deny access to jury trial, claims, causes of action or remedies that may be
available or asserted in any action, or (h) permit modification thereof
only by means of an agreement signed in writing by the parties thereto.


 


(3)           We express no opinion as to
the validity or enforceability of any provision of any Covered Document that
states that (a) prohibition, illegality, invalidity or unenforceability of
any provision of any Covered Document in any jurisdiction shall not (1) invalidate
the remaining provisions of any Covered Document or (2) affect that
provision in any other jurisdiction, or (b) the right of any Person to
exercise any right or remedy on the basis of any misrepresentation or breach of
warranty is not affected by any action by any Purchaser.


 


(4)           We note that the
enforceability of specific provisions of the Covered Documents may be subject
to standards of reasonableness, care and diligence and “good faith” and similar
limitations and obligations provided for under applicable principles of common
law and judicial decisions.


 


C.            In rendering the opinion
expressed in paragraph 1 above relating to existence and good standing, as to
factual matters set forth therein, we have relied solely upon a review of
certificates of public official, without further investigation as to matters
set forth therein, and such opinion is limited to the dates of such
certificates.


 


5

















 


D.            In giving the opinions in
paragraphs 3 and 5, we have assumed that the proceeds of the issuance of the
Notes shall be used in accordance with the terms of the Note Purchase
Agreement.


 


E.             Our opinions expressed in
paragraphs 3 and 4 above as to violations of laws, rules or regulations
applicable to the Company and as to the need for any approvals or consents of,
or any registrations or filings with, any federal, New York or Delaware
corporate governmental authority, is based upon a review of those laws, rules and
regulations that, in our experience, are normally applicable to the
transactions contemplated by the Covered Documents.  We express no opinion with respect to the
laws, rules and regulations applicable to the regulation of broker
dealers.  Further, our opinion expressed
in paragraph 4 above does not encompass compliance with, or exemptions from,
the registration and prospectus delivery requirements of the Federal securities
laws, except as expressly set forth therein.  Further, we express no opinion
herein with respect to compliance with any of the anti-fraud provisions of
applicable Federal or state securities laws, rules or regulations.


 


F.             In rendering our opinions in
paragraph 4 above, we have assumed that the Purchasers will comply with the
restrictions on transfer set forth in the Covered Documents.  Further, we have assumed that neither the
Company nor any Person acting on its behalf engaged in a general solicitation
or used advertising in connection with the offer and sale of the  Notes.  We express no
opinion with respect to any transfer of the Notes.


 


G.            With respect to references
herein to “known to us”, “to our knowledge” or words or phrases of similar
import (whether or not modified by any additional phrases), such references
mean the actual knowledge that those attorneys of this Firm, who, based upon
our records as of the date hereof, devoted substantive attention to the
transactions to which this opinion relates, have obtained from the following,
which constituted the examination for the purposes of the applicable
opinions:  (A) their review of
documents in connection with rendering this opinion, and the due diligence
performed in connection therewith, which review and due diligence were limited
to reviewing the Note Purchase Agreement and the Notes, the exhibits and
schedules thereto, the stock record books, by-laws and charter documents of the
Company, and certificates of officers of the Company, and which due diligence
did not include any examination of courts, boards, other tribunals or public
records with respect to any litigation, investigation or proceedings, or
judgments, orders or decrees, in any event applicable to the Company or any of
its properties; (B) their participation in the negotiation of the Covered
Documents; and (C) representations and warranties as to factual matters of
any of the Company set forth in the Covered Documents, or otherwise made to us
in certifications and other writings.


 


6

















 


The
opinions expressed herein are solely for the benefit of, and may only be relied
upon by, each of the Purchasers listed in Schedule A to the Note Purchase
Agreement and its respective institutional successors and assigns in connection
with the Covered Documents (provided that any reliance by any successor or
assign shall be to the opinions expressed herein as of the date of this opinion
letter and shall not constitute a reissuance of such opinions as of any date
subsequent to the date of this opinion letter) and may be used only for the
purposes set forth in the Note Purchase Agreement.  The opinions expressed herein are as of the
date hereof (and not as of any other date) or, to the extent a reference to a
certificate or other document is made herein, to the date thereof, and we make
no undertaking to amend or supplement such opinions as facts and circumstances
come to our attention or changes in the law occur which could affect such
opinions.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  



 


7

















 


EXHIBIT A


 


Purchasers


 


Metropolitan Life
Insurance Company


 


MetLife Investors
Insurance Company


 


MetLife Insurance Company
of Connecticut


 


MetLife Insurance Company
of Connecticut, on behalf of its Separate Account MGA


 


Midland National Life
Insurance Company


 


North American Company
for Life and Health Insurance


 


Security Benefit Life
Insurance Company


 


Genworth Life and Annuity
Insurance Company


 


Genworth Life Insurance
Company


 


John Hancock Life
Insurance Company (U.S.A.)


 


John Hancock Life
Insurance Company of New York


 


JPMorgan Chase Bank as
Directed Trustee for the SBC Master Pension Trust


 


The Northwestern Mutual
Life Insurance Company


 


Knights of Columbus


 


The Union Central Life
Insurance Company


 


Acacia Life Insurance
Company


 


Ameritas Life Insurance
Corp.


 






 












 


EXHIBITS 4.4(b)(i) and
4.4(b)(ii)


 


Forms of Opinions of Internal Counsel to the Company


 






 












 


Exhibit 4.4(b)(i)


 


Form of Internal Counsel to the Company Signing Opinion


 


August 31, 2010


 


To the Purchasers Listed on Exhibit A


 


Re:                               Note Purchase Agreement
dated as of August 31, 2010 (the “Note Purchase Agreement”) among
Waddell & Reed Financial, Inc. and the Purchasers identified on
Schedule A thereto


 


Ladies and Gentlemen:


 


I
am General Counsel of Waddell & Reed Financial, Inc. (the “Company”).  As General Counsel, I have been
requested to provide you my opinion as to certain matters in connection with
the preparation, execution and delivery of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms
used but not defined herein shall have the respective meanings set forth in the
Note Purchase Agreement.  This opinion is
furnished to you pursuant to Section 4.4(b)(i) of the Note Purchase
Agreement.


 


In
connection with this opinion, I have (a) examined (i) the Note
Purchase Agreement, signed by the Company and by the Purchasers, (ii) the
forms of the Notes attached as Exhibits 1(a) and 1(b) to the Note
Purchase Agreement, (iii) originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents,
(iv) such certificates of public officials, of officers and
representatives of the Company and other Persons, and (b) made such other
investigations as I have deemed relevant and necessary in connection with the
opinions expressed herein, and I have made no effort to independently verify
the facts set forth in such certificates.


 


In
making the foregoing examinations, I have assumed the genuineness of all
signatures (other than the signatures of the Company), the legal capacity of
each person signatory to any of the documents reviewed by me, the authenticity
of all documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as duplicates or certified or
conformed copies, and the authenticity of the originals of such latter
documents.  I have relied, as to factual
matters, on the statements of the Company set forth in the Note Purchase
Agreement and the certificates referenced above, without undertaking any
independent investigation of such factual matters, unless I know such
statements not to be true and correct.


 


Based
upon and subject to the foregoing, and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, I am of the opinion that:


 

















 


1.             Each of the
Company and its Subsidiaries (a) has been duly incorporated or formed and
is validly existing and in good standing as a corporation or limited liability
company, as applicable, under the laws of the jurisdiction in which it was so
incorporated or formed, (b) is duly qualified to do business as a foreign
corporation or limited liability company, as applicable, in each jurisdiction
where its activities require such qualification except where the failure to so
qualify would not, individually or in the aggregate, have a Material Adverse
Effect, and (c) has the corporate or limited liability company, as
applicable, power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it transacts
and proposes to transact and, in the case of the Company, to execute and
deliver the Note Purchase Agreement and the Notes and to perform its
obligations thereunder.


 


2.             The Company (a) has
duly authorized, by all requisite corporate action, the execution, delivery and
performance of its obligations under the Note Purchase Agreement and the Notes
and (b) has duly executed and delivered the Note Purchase Agreement.


 


3.             The Company’s
execution and delivery of, and performance of its obligations under, the Note
Purchase Agreement do not (a) contravene, or result in any violation of,
any corporate charter, certificate of formation, bylaws or limited liability
company agreement, as applicable of the Company or any Subsidiary of the
Company, in each case, as in effect on the date hereof (after giving effect to
any amendment thereto), (b) contravene, result in any breach or violation
of, or constitute a default (or give rise to any right of termination,
cancellation or acceleration) under, any existing obligation of the Company or
any Subsidiary of the Company pursuant to the express provisions of the
Existing Credit Facility or any material indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease or any other material agreement or
instrument, in each case, in effect on the date hereof to which the Company or
any Subsidiary of the Company is a party or by which the Company or any
Subsidiary of the Company or any of their respective properties may be bound or
affected, other than the Credit Agreement, dated as of October 5, 2009, by
and among the Company, the lenders party thereto from time to time, Bank of
America, N.A., and Bank of America Securities LLC, which has been replaced by
the Existing Credit Facility, (c) conflict in any material respect with or
result in a material breach or violation of any of the terms, conditions or
provisions of any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary of the
Company or (d) violate any provision of any Applicable Laws (as
hereinafter defined) applicable to the Company or any Subsidiary of the Company.


 


4.             Neither the
Company nor any Subsidiary of the Company is an “investment company” or a
company “controlled” by an “investment company,” each as defined in, or subject
to regulation under the Investment Company Act of 1940, as amended.


 


5.             Under
Applicable Law, no consent, approval or authorization of, or designation,
declaration or filing with, any Governmental Authority is required as a
condition to the execution and delivery by the Company of the Note Purchase
Agreement


 


2

















 


or
the performance by the Company of its obligations thereunder.  Please note that United States Federal
securities law require the filing of Current Reports on Form 8-K with the
Securities and Exchange Commission with respect to the execution and delivery
of the Note Purchase Agreement.


 


To
my knowledge, except as otherwise disclosed, there is no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body or
official, now pending, to which the Company or any Subsidiary of the Company is
a party or to which the business, assets or property of the Company or any
Subsidiary of the Company is subject and, to my knowledge, no such action, suit
or proceeding is threatened to which the Company or any Subsidiary of the
Company or the business, assets or property of the Company or any Subsidiary of
the Company would be subject that in either case questions the validity of the
Note Purchase Agreement or, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.


 


The
foregoing opinions and statement are subject to the following assumptions,
exceptions, qualifications and limitations.


 


(a)           The foregoing opinions are
expressly limited to matters under and governed by the General Corporation Law
of the State of Delaware, applicable Federal laws of the United States of
America, and the laws of the States of Kansas and Missouri, in each case in
effect on the date hereof and which, in my experience, are normally applicable to
the transactions of the type provided for in the Note Purchase Agreement, in
each case, however, exclusive of, and without regard to, any Excluded Laws
(collectively, the “Applicable Laws”). 
The term “Excluded Laws” means all (A) municipal, political
subdivision (whether created or enabled through legislative action at the
federal, state, regional or local level), local and county ordinances,
statutes, administrative decisions, laws, rules and regulations, and
(B) statutes, laws, rules and regulations relating to
(1) pollution or protection of the environment, (2) zoning, land use,
building or construction, (3) operation of any asset or property,
(4) labor, employment, employee rights and benefits, or occupational
safety and health, (5)  utility regulation or regulation of matters
pertaining to the acquisition, transportation, transmission, storage or use of
energy sources used in connection therewith or generated thereby,
(6) antitrust, (7) taxation and (8) except as set forth in the
opinion in paragraph 4 above, securities laws and laws applicable to the
regulation of broker dealers, in each case with respect to each of the
foregoing, (x) as interpreted, construed or enforced pursuant to any
judicial, arbitral or other decision or pronouncement, (y) as in effect in
any jurisdiction, including, without limitation, any State of the United States
of America and the United States of America, and (z) including,
without limitation, any and all authorizations, permits, consents,
applications, licenses, approvals, filings, registrations, publications,
exemptions and the like required by any of them.


 


(b)           In rendering the opinion
expressed in paragraph 1 above regarding valid existence and good standing, I
have relied solely on certificates of public officials of a recent date, and
have conducted no further investigation.


 


3

















 


(c)           Whenever any opinion
expressed herein with respect to the existence or absence of facts is qualified
by references to “known to me,” “to my knowledge” or words or phrases of
similar import (whether or not modified by any additional phrases), such
qualification indicates that, except as otherwise expressed, (i) no
information has come to my attention that has given me actual knowledge of the
existence of such facts, and (ii) I have not undertaken any independent
investigation to determine the existence or absence of such facts.


 


My
opinion is limited to the Applicable Laws, as appropriate, and is based on the
facts in existence and the laws in effect on the date hereof.  In rendering this opinion, note that I am a
member of the bar of the States of Kansas and Missouri.


 


The
opinions expressed herein are solely for the benefit of, and may only be relied
upon by, each of the Purchasers listed in Schedule A to the Note Purchase
Agreement and its respective institutional successors and assigns in connection
with the Note Purchase Agreement and the Notes (provided that any reliance by
any successor or assign shall be to the opinions expressed herein as of the
date of this opinion letter and shall not constitute a reissuance of such
opinions as of any date subsequent to the date of this letter) and may be used
only for the purposes set forth in the Note Purchase Agreement.  The opinions expressed herein are as of the
date hereof (and not as of any other date) or, to the extent a reference to a
certificate or other document is made herein, to the date thereof, and I make
no undertaking to amend or supplement such opinions as facts and circumstances
come to my attention or changes in the law occur which could affect such
opinions.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  



 


4

















 


EXHIBIT A


 


Purchasers


 


Metropolitan Life
Insurance Company


 


MetLife Investors
Insurance Company


 


MetLife Insurance Company
of Connecticut


 


MetLife Insurance Company
of Connecticut, on behalf of its Separate Account MGA


 


Midland National Life
Insurance Company


 


North American Company
for Life and Health Insurance


 


Security Benefit Life
Insurance Company


 


Genworth Life and Annuity
Insurance Company


 


Genworth Life Insurance
Company


 


John Hancock Life
Insurance Company (U.S.A.)


 


John Hancock Life
Insurance Company of New York


 


JPMorgan Chase Bank as
Directed Trustee for the SBC Master Pension Trust


 


The Northwestern Mutual
Life Insurance Company


 


Knights of Columbus


 


The Union Central Life
Insurance Company


 


Acacia Life Insurance
Company


 


Ameritas Life Insurance
Corp.


 
















 


Exhibit 4.4(b)(ii)


 


Form of Internal Counsel to the
Company Closing Opinion


 


January 13, 2011


 


To the Purchasers Listed on Exhibit A


 


Re:                               Note Purchase Agreement
dated as of August 31, 2010 (the “Note Purchase Agreement”) among
Waddell & Reed Financial, Inc. and the Purchasers identified on Schedule A
thereto


 


Ladies and Gentlemen:


 


I
am General Counsel of Waddell & Reed Financial, Inc. (the “Company”).  As General Counsel, I have been requested to
provide you my opinion as to certain matters in connection with the
preparation, execution and delivery of the Note Purchase Agreement and the
Notes (collectively, the “Note Documents”).  Unless otherwise indicated, capitalized terms
used but not defined herein shall have the respective meanings set forth in the
Note Purchase Agreement.  This opinion is
furnished to you pursuant to Section 4.4(b)(ii) of the Note Purchase Agreement.


 


In
connection with this opinion, I have examined the Note Purchase Agreement,
signed by the Company and by the Purchasers, and the Notes, each executed by
the Company.  In addition to the Note
Documents, I have (a) examined (i) the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and (ii) such certificates of public officials, of officers and representatives
of the Company and other Persons, and (b) made such other investigations as I
have deemed relevant and necessary in connection with the opinions expressed
herein, and I have made no effort to independently verify the facts set forth
in such certificates.


 


In
making the foregoing examinations, I have assumed the genuineness of all
signatures (other than the signatures of the Company), the legal capacity of
each person signatory to any of the documents reviewed by me, the authenticity
of all documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as duplicates or certified or
conformed copies, and the authenticity of the originals of such latter
documents.  I have relied, as to factual
matters, on the statements of the Company set forth in the Note Purchase
Agreement and the certificates referenced above, without undertaking any
independent investigation of such factual matters, unless I know such
statements not to be true and correct.


 

















 


Based
upon and subject to the foregoing, and subject to the assumptions, exceptions,
qualifications and limitations set forth herein, I am of the opinion that:


 


1.             Each of the Company and its
Subsidiaries (a) has been duly incorporated or formed and is validly existing
and in good standing as a corporation or limited liability company, as
applicable, under the laws of the jurisdiction in which it was so incorporated
or formed, (b) is duly qualified to do business as a foreign corporation or
limited liability company, as applicable, in each jurisdiction where its
activities require such qualification except where the failure to so qualify
would not, individually or in the aggregate, have a Material Adverse Effect,
and (c) has the corporate or limited liability company, as applicable, power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact and, in the case of the Company, to execute and deliver the Notes and
to perform its obligations under the Note Documents.


 


2.             The Company (a) has duly
authorized, by all requisite corporate action, the execution, delivery and
performance of its obligations under the Note Documents and (b) has duly
executed and delivered the Notes.


 


3.             The Company’s execution and
delivery of, and performance of its obligations under, the Note Documents do
not (a) contravene, or result in any violation of, any corporate charter,
certificate of formation, bylaws or limited liability company agreement, as
applicable of the Company or any Subsidiary of the Company, in each case, as in
effect on the date hereof (after giving effect to any amendment thereto), (b)
contravene, result in any breach or violation of, or constitute a default (or
give rise to any right of termination, cancellation or acceleration) under, any
existing obligation of the Company or any Subsidiary of the Company pursuant to
the express provisions of the Existing Credit Facility or any material indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease or any other
material agreement or instrument, in each case, in effect on the date hereof to
which the Company or any Subsidiary of the Company is a party or by which the
Company or any Subsidiary of the Company or any of their respective properties
may be bound or affected, (c) conflict in any material respect with or result
in a material breach or violation of any of the terms, conditions or provisions
of any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Subsidiary of the
Company or (d) violate any provision of any Applicable Laws (as hereinafter
defined) applicable to the Company or any Subsidiary of the Company.


 


4.             Neither the Company nor any
Subsidiary of the Company is an “investment company” or a company “controlled”
by an “investment company,” each as defined in, or subject to regulation under
the Investment Company Act of 1940, as amended.


 


5.             Under Applicable Law, no
consent, approval or authorization of, or designation, declaration or filing
with, any Governmental Authority is required as a condition to the execution
and delivery by the Company of the Note Documents or the performance by the
Company of its obligations thereunder. 
Please note that United 


 


2

















 


States Federal securities law require the filing of
Current Reports on Form 8-K with the Securities and Exchange Commission with
respect to the execution and delivery of the Note Documents.


 


To
my knowledge, except as otherwise disclosed, there is no action, suit or
proceeding before or by any court, arbitrator or governmental agency, body or
official, now pending, to which the Company or any Subsidiary of the Company is
a party or to which the business, assets or property of the Company or any
Subsidiary of the Company is subject and, to my knowledge, no such action, suit
or proceeding is threatened to which the Company or any Subsidiary of the Company
or the business, assets or property of the Company or any Subsidiary of the
Company would be subject that in either case questions the validity of the Note
Documents or, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.


 


The
foregoing opinions and statement are subject to the following assumptions,
exceptions, qualifications and limitations.


 


(a)           The foregoing opinions are
expressly limited to matters under and governed by the General Corporation Law
of the State of Delaware, applicable Federal laws of the United States of
America, and the laws of the States of Kansas and Missouri, in each case in
effect on the date hereof and which, in my experience, are normally applicable
to the transactions of the type provided for in the Note Documents, in each
case, however, exclusive of, and without regard to, any Excluded Laws
(collectively, the “Applicable Laws”). 
The term “Excluded Laws” means all (A) municipal, political
subdivision (whether created or enabled through legislative action at the
federal, state, regional or local level), local and county ordinances,
statutes, administrative decisions, laws, rules and regulations, and
(B) statutes, laws, rules and regulations relating to (1) pollution
or protection of the environment, (2) zoning, land use, building or
construction, (3) operation of any asset or property, (4) labor,
employment, employee rights and benefits, or occupational safety and health,
(5)  utility regulation or regulation of matters pertaining to the
acquisition, transportation, transmission, storage or use of energy sources
used in connection therewith or generated thereby, (6) antitrust,
(7) taxation and (8) except as set forth in the opinion in paragraph
4 above, securities laws and laws applicable to the regulation of broker
dealers, in each case with respect to each of the foregoing, (x) as
interpreted, construed or enforced pursuant to any judicial, arbitral or other
decision or pronouncement, (y) as in effect in any jurisdiction,
including, without limitation, any State of the United States of America and
the United States of America, and (z) including, without limitation,
any and all authorizations, permits, consents, applications, licenses,
approvals, filings, registrations, publications, exemptions and the like
required by any of them.


 


(b)           In rendering the opinion
expressed in paragraph 1 above regarding valid existence and good standing, I
have relied solely on certificates of public officials of a recent date, and
have conducted no further investigation.


 


(c)           Whenever any opinion
expressed herein with respect to the existence or absence of facts is qualified
by references to “known to me,” “to my knowledge” or 


 


3

















 


words or phrases of similar import (whether or not
modified by any additional phrases), such qualification indicates that, except
as otherwise expressed, (i) no information has come to my attention that has
given me actual knowledge of the existence of such facts, and (ii) I have not
undertaken any independent investigation to determine the existence or absence
of such facts.


 


My
opinion is limited to the Applicable Laws, as appropriate, and is based on the
facts in existence and the laws in effect on the date hereof.  In rendering this opinion, note that I am a
member of the bar of the States of Kansas and Missouri.


 


The
opinions expressed herein are solely for the benefit of, and may only be relied
upon by, each of the Purchasers listed in Schedule A to the Note Purchase
Agreement and its respective institutional successors and assigns in connection
with the Note Documents (provided that any reliance by any successor or assign
shall be to the opinions expressed herein as of the date of this opinion letter
and shall not constitute a reissuance of such opinions as of any date
subsequent to the date of this letter) and may be used only for the purposes
set forth in the Note Purchase Agreement. 
The opinions expressed herein are as of the date hereof (and not as of
any other date) or, to the extent a reference to a certificate or other
document is made herein, to the date thereof, and I make no undertaking to
amend or supplement such opinions as facts and circumstances come to my
attention or changes in the law occur which could affect such opinions.


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  



 


4

















 


EXHIBIT A


 


Purchasers


 


Metropolitan Life
Insurance Company


 


MetLife Investors
Insurance Company


 


MetLife Insurance Company
of Connecticut


 


MetLife Insurance Company
of Connecticut, on behalf of its Separate Account MGA


 


Midland National Life
Insurance Company


 


North American Company
for Life and Health Insurance


 


Security Benefit Life
Insurance Company


 


Genworth Life and Annuity
Insurance Company


 


Genworth Life Insurance
Company


 


John Hancock Life
Insurance Company (U.S.A.)


 


John Hancock Life
Insurance Company of New York


 


JPMorgan Chase Bank as
Directed Trustee for the SBC Master Pension Trust


 


The Northwestern Mutual
Life Insurance Company


 


Knights of Columbus


 


The Union Central Life
Insurance Company


 


Acacia Life Insurance
Company


 


Ameritas Life Insurance
Corp.


 
















 


EXHIBITS 4.4(c)(i) and 4.4(c)(ii)


 


Forms of Opinions of Special Counsel to the Purchasers


 
















 


Exhibit 4.4(c)(i)


 


Form of Special Counsel to the Purchasers Signing Opinion


 


January 13,
2011


 


	
   

  	
  Re:

  	
  Waddell &
  Reed Financial, Inc.

  
	
   

  	
   

  	
  5.00%
  Senior Notes, Series A, due 2018

  
	
   

  	
   

  	
  5.75%
  Senior Notes, Series B, due 2021

  



 


To
the several Purchasers listed in 


Schedule
A to the within-mentioned 


Note
Purchase Agreement


 


Ladies
and Gentlemen:


 


We
have acted as your special counsel in connection with the issuance by Waddell &
Reed Financial, Inc. (the “Company”)
of $95,000,000 aggregate principal amount of its 5.00% Senior Notes, Series A,
due 2018 (the “Series A Notes”) and $95,000,000 aggregate principal amount
of its 5.75% Senior Notes, Series B, due 2021 (the “Series B Notes”).  The Series A Notes and the Series B
Notes (collectively, the “Notes”) are being purchased by you on this date under
and pursuant to the Note Purchase Agreement, dated as of August 31, 2010
(the “Note Purchase Agreement”), by and among you and the Company, in the
respective series and aggregate principal amounts set forth in Schedule A
to the Note Purchase Agreement.  All
capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Note Purchase Agreement.


 


We
have examined such corporate records of the Company, agreements and other
instruments, certificates of officers and representatives of the Company,
certificates of public officials, and such other documents, as we have deemed
necessary in connection with the opinions hereinafter expressed.  In such examination we have assumed the
genuineness of all signatures, the authenticity of documents submitted to us as
originals and the conformity with the authentic originals of all documents
submitted to us as copies.  As to
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon the representations set forth in the
Note Purchase Agreement and upon certifications by officers or other
representatives of the Company.


 

















 


In
addition, we attended the closing held today at our office at which you purchased
and made payment for Notes of the series and in the respective aggregate
principal amounts to be purchased by you, all in accordance with the Note
Purchase Agreement.


 


Based
upon the foregoing and having regard for legal considerations that we deem relevant,
we render our opinion to you pursuant to Section 4.4(c)(ii) of the
Note Purchase Agreement as follows:


 


1.             The Company is a validly existing
corporation in good standing under the laws of the State of Delaware and has
the corporate power to execute and deliver the Notes and perform its
obligations thereunder.


 


2.             The Notes being purchased by you
today have been duly authorized, executed and delivered and constitute legal,
valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms.


 


3.             No consent, approval or
authorization of, or declaration, registration or filing with, any New York or
United States Federal Governmental Authority by the Company is required for the
validity of the execution, delivery or performance by the Company of said
Notes.


 


4.             It was not necessary in connection
with the offering, sale and delivery of said Notes, under the circumstances
contemplated by the Note Purchase Agreement, to register said Notes under the
Securities Act of 1933, as amended, or to qualify an indenture in respect of
the Notes under the Trust Indenture Act of 1939, as amended.


 


5.             The opinions of even date herewith
of Fulbright & Jaworski L.L.P., special counsel for the Company, and
Daniel C. Schulte, Esq., Senior Vice President and General Counsel of the
Company, delivered to you pursuant to Sections 4.4(a)(ii) and 4.4(b)(ii) of
the Note Purchase Agreement, respectively, are satisfactory to us in form and
scope with respect to the matters respectively specified therein and we believe
that you are justified in relying thereon.


 


The
opinions expressed above as to the enforceability of any agreement or
instrument in accordance with its terms are subject to the exceptions that
(a) such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors’ rights generally and (ii) general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (b) the enforceability of indemnity
provisions contained in the Note Purchase Agreement may be subject to
limitations based upon public policy considerations.


 


We
express no opinion as to (a) whether a court outside the State of New York
will honor the choice of New York law to govern the Note Purchase Agreement and
the Notes, (b) Section 22.8 of the Note Purchase Agreement insofar as
said Section relates to (i) the waiver of the right to jury trial,
(ii) the subject matter jurisdiction of a United States Federal court
sitting in New York to adjudicate any controversy relating to the Note Purchase
Agreement or the Notes or 


 


2

















 


(iii) the
waiver of inconvenient forum with respect to proceedings in any such United
States Federal court, or (c) any provisions of the Note Purchase Agreement
or the Notes which purport to provide for a rate of interest after judgment.


 


We
have made no examination of and express no opinion today with respect to any
matter covered by our opinion dated August 31, 2010 and delivered to you
on such date in connection with the execution and delivery of the Note Purchase
Agreement.


 


We
are members of the bar of the State of New York and do not herein intend to
express any opinion as to any matters governed by any laws other than United
States Federal laws and the laws of the State of New York and the General
Corporation Law of the State of Delaware.


 


This
opinion is given solely for your benefit, and for the benefit of other
institutional investor holders from time to time of the Notes purchased by you
today, in connection with the closing held today of the transactions
contemplated by the Note Purchase Agreement, and may not be relied upon by any
other person for any purpose without our prior written consent.


 


	
   

  	
  Very
  truly yours,

  



 


3
















 


Exhibit 4.4(c)(ii)


 


Form of Special Counsel to the Purchasers Closing Opinion


 


August 31, 2010


 


	
   

  	
  Re:

  	
  Waddell
  & Reed Financial, Inc.

  
	
   

  	
   

  	
  5.00%
  Senior Notes, Series A, due 2018

  
	
   

  	
   

  	
  5.75%
  Senior Notes, Series B, due 2021

  



 


To
the several Purchasers listed in 

Schedule A to the within-mentioned 

Note Purchase Agreement


 


Ladies
and Gentlemen:


 


We
have acted as your special counsel in connection with the proposed issuance by
Waddell & Reed Financial, Inc. (the “Company”) of $95,000,000 aggregate
principal amount of its 5.00% Senior Notes, Series A, due 2018 and $95,000,000
aggregate principal amount of its 5.75% Senior Notes, Series B, due 2021
(collectively, the “Notes”) pursuant to the Note Purchase Agreement, dated as
of August 31, 2010 (the “Note Purchase Agreement”), by and among you and the
Company.  All capitalized terms used
herein without definition shall have the meanings ascribed thereto in the Note
Purchase Agreement.


 


We
have examined such corporate records of the Company, agreements and other
instruments, certificates of officers and representatives of the Company,
certificates of public officials, and such other documents, as we have deemed
necessary in connection with the opinions hereinafter expressed.  In such examination we have assumed the
genuineness of all signatures, the authenticity of documents submitted to us as
originals and the conformity with the authentic originals of all documents
submitted to us as copies.  As to
questions of fact material to such opinions, we have, when relevant facts were
not independently established, relied upon the representations set forth in the
Note Purchase Agreement and upon certifications by officers or other
representatives of the Company.


 

















 


Based
upon the foregoing and having regard for legal considerations that we deem
relevant, we render our opinion to you pursuant to Section 4.4(c)(i) of the
Note Purchase Agreement as follows:


 


1.             The Company is a validly existing
corporation in good standing under the laws of the State of Delaware and has
the corporate power to execute and deliver the Note Purchase Agreement and
perform its obligations thereunder.


 


2.             The Note Purchase Agreement has
been duly authorized, executed and delivered by the Company and constitutes a
legal, valid and binding agreement of Company, enforceable against the Company
in accordance with its terms.


 


3.             No consent, approval or
authorization of, or declaration, registration or filing with, any New York or
United States Federal Governmental Authority is required to be obtained or made
as a condition to the validity of the execution and delivery by the Company of
the Note Purchase Agreement or for the performance by the Company of its
obligations thereunder.


 


4.             It was not necessary in connection
with the offering of the Notes under the circumstances contemplated by the Note
Purchase Agreement to register the Notes to be sold and delivered thereunder
under the Securities Act of 1933, as amended, or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.


 


5.             The opinions of even date herewith
of Fulbright & Jaworski L.L.P., special counsel for the Company, and Daniel
C. Schulte, Esq., Senior Vice President and General Counsel of the Company,
delivered to you pursuant to Sections 4.4(a)(i) and 4.4(b)(i) of the Note
Purchase Agreement, respectively, are satisfactory to us in form and scope with
respect to the matters respectively specified therein and we believe that you
are justified in relying thereon.


 


The
opinions expressed above as to the enforceability of any agreement or
instrument in accordance with its terms are subject to the exceptions that
(a) such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the enforcement
of creditors’ rights generally and (ii) general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and (b) the enforceability of indemnity provisions
contained in the Note Purchase Agreement may be subject to limitations based
upon public policy considerations.


 


We
express no opinion as to (a) whether a court outside the State of New York
will honor the choice of New York law to govern the Note Purchase Agreement and
the Notes, (b) Section 22.8 of the Note Purchase Agreement insofar as said
Section relates to (i) the waiver of the right to jury trial,
(ii) the subject matter jurisdiction of a United States Federal court
sitting in New York to adjudicate any controversy relating to the Note Purchase
Agreement or the Notes or (iii) the waiver of inconvenient forum with
respect to proceedings in any such United States Federal court, or 


 


2

















 


(c) any
provisions of the Note Purchase Agreement or the Notes which purport to provide
for a rate of interest after judgment.


 


We
are members of the bar of the State of New York and do not herein intend to
express any opinion as to any matters governed by any laws other than United
States Federal laws, the laws of the State of New York and the General
Corporation Law of the State of Delaware.


 


3

















 


This
opinion is given solely for your benefit and for the benefit of institutional
investor holders from time to time of the Notes purchased by you pursuant to
the Note Purchase Agreement, in connection with the transactions contemplated
by the Note Purchase Agreement, and may not be relied upon by any other person
for any purpose without our prior written consent.


 


	
   

  	
  Very
  truly yours,

  



 


4
















 


EXHIBIT 7.1(f)(i)


 


Form of Report on Net Asset Values


 

















 


EXHIBIT 7.1(f)(i)


 


W A D D E L
L  &  R E E D  F I N A N C I A L, I N C.


Mutual Fund Management Fees by Fund Family


2010 Actual ($000)


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  % Inc (Dec)

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  % of

  	
   

  	
  YTD Mgmt

  	
   

  	
  Variance

  	
   

  	
  2009

  	
   

  	
  Year

  	
   

  
	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Y-T-D

  	
   

  	
  Total

  	
   

  	
  Fee Rate

  	
   

  	
  From L-Y

  	
   

  	
  Actual

  	
   

  	
  2009

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R Advisors Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accumulative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Management

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Continental Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Investment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Government Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Concepts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Retirement Shares

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax-Managed Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vanguard

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R Advisors Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy New Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital Appreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cundill Global Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  European Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Natural Resources

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Large Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Limited-Term Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Managed European/Pacific

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Managed International Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Micro Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mid Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mortgage Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pacific Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


W A D D E L
L  &  R E E D  F I N A N C I A L, I N C.


Mutual Fund Management Fees by Fund Family


2010 Actual ($000)


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  % Inc (Dec)

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  % of

  	
   

  	
  YTD Mgmt

  	
   

  	
  Variance

  	
   

  	
  2009

  	
   

  	
  Year

  	
   

  
	
   

  	
   

  	
  Jan

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  Jul

  	
   

  	
  Aug

  	
   

  	
  Sep

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Y-T-D

  	
   

  	
  Total

  	
   

  	
  Fee Rate

  	
   

  	
  From L-Y

  	
   

  	
  Actual

  	
   

  	
  2009

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy VIP Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Natural Resources

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Micro Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mid Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mortgage Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy VIP Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grand Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Daily Average

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


	
  Change in Mutual Fund Assets Under Management

  	
  July 2010

  	
   

  
	
  (Millions)

  	
  Month to Date

  	
  Exhibit C-1

  



 


	
   

  	
   

  	
  Net Assets

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Net

  	
   

  	
  Net

  	
   

  	
  Dividends

  	
   

  	
  Net Investment

  	
   

  	
  Dividends

  	
   

  	
  Valuation

  	
   

  	
  Net Assets

  	
   

  
	
   

  	
   

  	
  at 6-30-10

  	
   

  	
  Sales

  	
   

  	
  Redemptions

  	
   

  	
  Sales

  	
   

  	
  Exchanges

  	
   

  	
  Reinvested

  	
   

  	
  Income

  	
   

  	
  Paid

  	
   

  	
  Change

  	
   

  	
  at 7-31-10

  	
   

  
	
  Waddell & Reed Advisors
  Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accumulative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cont Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Investment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Government Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Concepts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax-Managed Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vanguard

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Allocation Pass-Thru (MAP/SPA)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal of Long -Term Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Management

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waddell & Reed Advisors
  Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy New Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital Appreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cundill Global Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  European Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Natural Resources

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Large Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Limited-Term Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Managed European/Pacific

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Managed Int’l Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Microcap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mid Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mortgage Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pacific Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax-Managed Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal of Long -Term Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal of Money Market

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less Eliminations- Underlying
  Funds of Funds (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


	
  Change in Mutual Fund Assets Under Management

  	
  July 2010

  	
   

  
	
  (Millions)

  	
  Month to Date

  	
   

  



 


	
   

  	
   

  	
  Net Assets

  at 6-30-10

  	
   

  	
  Sales

  	
   

  	
  Redemptions

  	
   

  	
  Net

  Sales

  	
   

  	
  Net

  Exchanges

  	
   

  	
  Dividends

  Reinvested

  	
   

  	
  Net Investment

  Income

  	
   

  	
  Dividends

  Paid

  	
   

  	
  Valuation

  Change

  	
   

  	
  Net Assets

  at 7-31-10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Conservative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy VIP Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balanced Port

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Natural Resources

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Inc

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Microcap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mid Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Mkt

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mortgage Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Agressive Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Conservative Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Moderate Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Moderately Agressive Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Moderately Conservative Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Port

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less Eliminations- Underlying
  Funds of Funds (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy VIP Funds Total *

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Summary of All Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Long-Term Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market Funds **

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less Eliminations- Underlying
  InvestEd Funds (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All Mutual Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*All
Ivy VIP Funds are considered to be Long-Term Mutual Funds. For the Ivy VIP
Funds only sales include exchanges in and redemptions include exchanges out.


**Money
Market Funds consists of Advisors Cash Management and Invested Cash
Reserves, Ivy Money Market and Ivy Cash Reserves.


(1) Eliminations-
Underlying Funds of Funds — These eliminations are to prevent double counting due
to reporting both at the fund of fund and underlying fund levels.


 


	
  BY INVESTMENT MANAGER

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub-Advised Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R Managed Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % BY INVESTMENT MANAGER

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub-Advised Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R Managed Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


	
  Change in Mutual Fund Assets Under Management

  	
  July 2010

  	
   

  
	
  (Millions)

  	
  Year to Date

  	
   

  



 


	
   

  	
   

  	
  Net Assets

  at 12-31-09

  	
   

  	
  Sales

  	
   

  	
  Redemptions

  	
   

  	
  Net

  Sales

  	
   

  	
  Net

  Exchanges

  	
   

  	
  Dividends

  Reinvested

  	
   

  	
  Net Investment

  Income

  	
   

  	
  Dividends

  Paid

  	
   

  	
  Valuation

  Change

  	
   

  	
  Net Assets

  at 7-31-2010

  	
   

  
	
  Waddell & Reed Advisors
  Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accumulative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cont Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Investment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Government Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Concepts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax-Managed Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vanguard

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Allocation Pass-Thru (MAP/SPA)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal of Long -Term Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Management

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Waddell & Reed Advisors
  Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy New Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capital Appreciation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cundill Global Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  European Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Natural Resources

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Large Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Limited-Term Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Managed European/Pacific

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Managed Int’l Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Microcap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mid Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mortgage Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Municipal High Income

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pacific Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tax-Managed Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subtotal of Long -Term Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less Eliminations- Underlying
  Funds of Funds (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 

















 


	
  Change in Mutual Fund Assets Under Management

  	
  July 2010

  	
   

  
	
  (Millions)

  	
  Year to Date

  	
   

  



 


	
   

  	
   

  	
  Net Assets

  at 12-31-09

  	
   

  	
  Sales

  	
   

  	
  Redemptions

  	
   

  	
  Net

  Sales

  	
   

  	
  Net

  Exchanges

  	
   

  	
  Dividends

  Reinvested

  	
   

  	
  Net Investment

  Income

  	
   

  	
  Dividends

  Paid

  	
   

  	
  Valuation

  Change

  	
   

  	
  Net Assets

  at 7-31-2010

  	
   

  
	
  InvestEd Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Balanced

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Conservative

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  InvestEd Funds Total

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy VIP Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asset Strategy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balanced Port

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Core Equity

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dividend Opportunities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Energy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Global Natural Resources

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  High Inc

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  International Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Microcap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mid Cap Growth

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Mkt

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mortgage Securities

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Agressive Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Conservative Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Moderate Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Moderately Agressive Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pathfinder- Moderately Conservative Portfolio

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Science & Technology

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Port

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Small Cap Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Value

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less Eliminations- Underlying
  Funds of Funds (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ivy VIP Funds Total*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Summary of All Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Long-Term Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Money Market Funds **

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less Eliminations- Underlying
  InvestEd Funds (1)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  All Mutual Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*All
Ivy VIP Funds are considered to be Long-Term Mutual Funds. For the Ivy Vip
Funds only sales include exchanges in and redemptions include exchanges out.


**Money
Market Funds consists of Advisors Cash Management and Invested Cash
Reserves, Ivy Money Market and Ivy Cash Reserves.


(1) Eliminations-
Underlying Funds of Funds — These eliminations are to prevent double counting
due to reporting both at the fund of fund and underlying fund levels.


 


	
  BY INVESTMENT MANAGER

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub-Advised Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R Managed Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  % BY INVESTMENT MANAGER

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub-Advised Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  W&R Managed Funds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


EXHIBIT 7.1(f)(ii)


 


Form of Report on Aggregate Revenue Base


 

















 


EXHIBIT 7.1(f)(ii)


 


	
   

  	
  Waddell & Reed Financial, Inc. -
  Consolidated

  	
   

  
	
   

  	
  Statement of Operations

  	
   

  
	
   

  	
  For the period indicated in each column heading

  	
   

  
	
   

  	
  Dollar amounts in thousands except per share amounts

  	
   

  



 


	
   

  	
   

  	
  QTD

  Aug-2010

  	
   

  	
  QTD

  May-2010

  	
   

  	
  Variance

  Dollars

  	
   

  	
  Variance

  Percent

  	
   

  	
  QTD

  Aug-2010

  	
   

  	
  QTD

  Aug-2009

  	
   

  	
  Variance

  Dollars

  	
   

  	
  Variance

  Percent

  	
   

  	
  YTD

  Aug-2010

  	
   

  	
  YTD

  Aug-2009

  	
   

  	
  Variance

  Dollars

  	
   

  	
  Variance

  Percent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REVENUES:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Investment Management Fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Underwriting & Distribution fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shareholder Service Fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revenue Allocation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL REVENUE

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


	
   

  	
   

  	
  Aug-2009

  	
   

  	
  Sep-2009

  	
   

  	
  Oct-2009

  	
   

  	
  Nov-2009

  	
   

  	
  Dec-2009

  	
   

  	
  Jan-2010

  	
   

  	
  Feb-2010

  	
   

  	
  Mar-2010

  	
   

  	
  Apr-2010

  	
   

  	
  May-2010

  	
   

  	
  Jun-2010

  	
   

  	
  Jul-2010

  	
   

  	
  Aug-2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  REVENUES:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Investment Management Fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Underwriting & Distribution fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Shareholder Service Fees

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revenue Allocation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL REVENUE