Document:

Exhibit 10.1

 

Change
of Control Retention and Severance Agreement

 

This
Change of Control Retention and Severance Agreement (this “Agreement”), effective December __,
2020 (the “Effective Date”), is made by and between Waddell & Reed Financial, Inc., a Delaware
corporation (the “Company”), and [Executive] (the “Executive”). This Agreement is
entered into in connection with the Company’s entry into that certain Agreement and Plan of Merger by and among the
Company, Macquarie Management Holdings, Inc., a Delaware corporation (“Buyer”), Merry Merger Sub, Inc., a
Delaware corporation and wholly owned subsidiary of Buyer, and Macquarie Financial Holdings Pty Ltd, an Australian
proprietary company formed under the laws of the Commonwealth of Australia (solely to the extent set forth therein) (the
 “Merger Agreement”, and the transactions contemplated therein, the “Merger”).

 

Whereas,
the Board considers it essential to the best interests of its stockholders to foster the continued employment, focus, objectivity
and dedication of key management personnel through the consummation of the Merger in order to maximize the value of the Company
in connection with the Merger; and

 

Whereas,
the Board recognizes that, as is the case with many publicly held corporations facing a change of control, the pending Merger creates
uncertainty and raises questions among management, which may result in the departure or distraction of key management personnel
to the detriment of the Company and its stockholders; and

 

Whereas,
the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of members of the Company’s management, including the Executive, to their assigned duties without distraction in the face
of the uncertainties occasioned by the possibility of the Merger;

 

Now,
Therefore, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby
agree as follows:

 

1.                  
Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

 

2.                  
Term of Agreement. The Term of this Agreement shall commence on the Effective Date and shall continue in effect through
the date that is twenty four (24) months following the date on which the Merger is consummated (the “Closing Date”);
provided, however, that if the Merger Agreement terminates for any reason without consummation of the Merger, this Agreement
shall be null and void and of no force or effect.

 

3.                  
Company’s Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and
in consideration of the Executive’s covenants set forth in Section 4 hereof, the Company agrees, under the conditions described
herein, to pay the Executive the Retention Payments, the Severance Payments, and the other payments and benefits described herein.
This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed
in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company
or any Subsidiary or Affiliate.

 

4.                  
The Executive’s Covenants. The Executive agrees that, subject to the terms and conditions of this Agreement,
the Executive will not, without the Company’s consent, voluntarily resign from the employ of the Company other than for Good
Reason until the earliest of (a) the date that is six (6) months following the Effective Date or (b) the Closing Date.

 

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5.                  
Compensation Other Than 2021 Target STI Opportunity, Retention Payments or Severance Payments. If the Executive’s
employment shall terminate or be terminated for any reason during the Term, the Company shall pay the Executive’s full salary
to the Executive through the Date of Termination at the rate in effect immediately prior to the Date of Termination, together with
all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company’s compensation
and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination; provided, however,
that during the period that begins on the Closing Date and ends on the last day of the Term, this Agreement shall supersede all
prior agreements, arrangements or related communications of the Company relating to separation benefits, whether formal or informal,
or written or unwritten, and any Severance Payments under this Agreement will be in lieu of separation benefits under any other
separation plan or agreement.

 

6.                  
2021 Target STI Opportunity. The Executive is eligible to receive a target cash incentive opportunity for the 2021
calendar year, as determined by the Board of Directors of the Company or a committee thereof in its sole discretion on or before
March 15, 2021 (the “2021 Target STI Opportunity”). The 2021 Target STI Opportunity shall be paid to the Executive
as soon as reasonably practicable following the end of such year unless the Executive’s employment is terminated for any
reason other than a Qualified Termination. In the event the Executive’s employment is terminated for any reason other than
a Qualified Termination, Executive shall forfeit and shall not be entitled to the 2021 Target STI Opportunity. In the event of
a Qualified Termination, Executive shall not forfeit and shall be entitled to a pro-rata portion of the 2021 Target STI Opportunity
payable no later than March 15, 2022 in the amount equal to the product of (i) the 2021 Target STI Opportunity and (ii) the quotient
obtained by dividing (A) the number of calendar days (not to exceed 365) that elapse during the period that begins January 1, 2021,
and ends on (and includes) the date of the Executive’s Qualifying Termination, by (B) 365.

 

7.                  
Retention Payments. Subject to Section 9 hereof, Executive is eligible to receive the payments set forth below unless
Executive’s employment is terminated for any reason other than a Qualifying Termination prior to the Closing Date:

 

(a)               
A lump sum cash payment in recognition of Executive’s contribution and effort through the consummation of the Merger
(the “Fixed Retention Bonus”) equal to the sum of (i) one (1) times the sum of the Executive’s (A) Base
Salary and (B) 2020 Target Cash Bonus Opportunity, (ii) the Executive’s Prorated 2021 Target LTI Opportunity, and (iii) $50,000;
and

 

(b)               
A lump sum cash payment (the “At-Risk Retention Bonus”) up to the amount equal to the Executive’s
At-Risk Retention Bonus Opportunity, with 75% of the At-Risk Retention Bonus determined based on satisfaction of the performance
thresholds set forth in Exhibit A, and the remaining 25% determined based on the Executive’s individual performance
during the period that begins on the Effective Date and ends three days prior to the Closing Date (or the date of the Executive’s
Qualifying Termination, if earlier), as jointly determined immediately prior to the Closing Date (or the date of the Executive’s
Qualifying Termination, if earlier) by the Company’s Chief Executive Officer and Buyer in their good faith discretion;
and

 

(c)               
A lump sum cash payment (the “At-Risk Additional Bonus”) equal to the product of (i) ____% and (ii) the
bonus pool amount determined by the Company immediately prior to the Closing Date in accordance with Exhibit B; provided,
that, in no event shall the At-Risk Additional Bonus exceed $____________.

 

The Fixed Retention Bonus, At-Risk Retention
Bonus, and the At-Risk Additional Bonus shall be paid to the Executive (or his estate or personal representative, as applicable)
immediately prior to the Closing Date.

 

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8.                  
Severance Payments. Subject to Section 9 hereof, in case of a Qualifying Termination during the Term on or following
the Closing Date, then, in addition to any payments and benefits to which the Executive is entitled under Section 5, Section 6
and Section 7 hereof, the Company shall pay to the Executive the payment described in Section 8(a) below in consideration of past
services rendered by the Executive (the “Severance Payment”); provided, however, that the Executive
(or his estate or personal representative, if applicable) shall have executed a release of claims (“Release”)
substantially in the form of the release of claims then in use by the Company and such Release shall become effective within sixty
(60) days following the Date of Termination (and any applicable revocation period shall have expired).

 

(a)               
The Company shall pay to the Executive (or his estate or personal representative, if applicable) cash severance (the “Cash
Severance”) in the amount equal to the Executive’s Base Salary. Such Cash Severance will be payable in a single
lump sum, less applicable withholdings and deductions, on the first regular payroll date that occurs coincident with or following
the date that is sixty (60) days following the Date of Termination.

 

9.                  
Section 280G and Other Applicable Law.

 

(a)               
Section 280G. Notwithstanding anything contained in this Agreement to the contrary, to the extent that the payments
and benefits provided under this Agreement and under any other plan or agreement (collectively, the “Payments”)
would subject the Executive to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, the
Payments shall be reduced (but not below zero) to the extent necessary such that no portion of the Payments will be subject to
the Excise Tax. . All determinations related to the Excise Tax under this Section 9 shall be made by the 280G Firm, and all such
determinations shall be final and binding on the Executive, the Company and the Company’s Subsidiaries and Affiliates. The
fees and expenses of the 280G Firm shall be paid by the Company.

 

At the time
of the initial determination by the 280G Firm hereunder, it is possible that the total Payments will have been made to the Executive
which should not have been made (an “Overpayment”) or that an amount which will not have been made to the Executive
could have been made (an “Underpayment”), in each case, consistent with the calculations required to be made
hereunder. In the event that the 280G Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the
Executive that the 280G Firm believes has a high probability of success, determines an Overpayment has been made, any such Overpayment
paid or distributed to or for the benefit of the Executive shall be repaid by the Executive to the payor (or such person designated
by the payor) together with interest at the applicable Federal rate provided in Section 7872(f)(2) of the Code; provided,
however, that no amount shall be payable by the Executive to the payor (or such person designated by the payor) if and to
the extent such deemed payment would not either reduce the amount on which the Executive is subject to tax under Section 4999 of
the Code or generate a refund of such taxes. In the event that the 280G Firm, based upon controlling precedent or other substantial
authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid to or for the benefit of
the Executive together with interest at the applicable Federal rate provided in Section 7872(f)(2) of the Code; provided further
that any such Underpayment shall constitute a payment (within the meaning of Treasury Regulation Section 1.409A-2(b)(2)) separate
and apart from the total Payments; and provided, further that any such Underpayment shall be deemed a disputed payment
(within the meaning of Treasury Regulation Section 1.409A-3(g)) and shall be made no later than the end of the Executive’s
first taxable year in which the 280G Firm determines pursuant to this Section 9 that such Underpayment is due.

 

(b)               
Other Applicable Law. Similarly, if any of the Payments which are payable after the Closing Date are subject to Part
2D.2 of the Australian Corporations Act 2011 (Cth) (the “Corporations Act”) exceeds the amount which
is permitted to be paid to the Executive under the Corporations Act (“Prohibited Benefit”), then the Prohibited
Benefit will be reduced to the greatest amount which is permitted to be paid to the Executive under the Corporations Act and paid
to the Executive, and the Executive will not be entitled to any other payment or benefit in lieu thereof.

 

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10.              
Termination Procedures and Compensation During Dispute.

 

(a)               
Notice of Termination. During the Term, any purported termination of the Executive’s employment (other than
by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance
with Section 13 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.

 

(b)               
Date of Termination. “Date of Termination,” with respect to any termination of the Executive’s
employment during the Term, shall mean (i) if the Executive’s employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s
duties during such thirty (30) day period), and (ii) if the Executive’s employment is terminated for any other reason, the
date specified in the Notice of Termination.

 

11.              
No Mitigation. The Company agrees that the Executive is not required to seek other employment or to attempt in any
way to reduce any amounts payable to the Executive by the Company pursuant to Section 8 hereof. Further, no payment or benefit
provided for in this Agreement shall be reduced by any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

 

12.              
Successors; Binding Agreement.

 

(a)               
In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

 

(b)               
This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount
would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or administrators of the Executive’s estate.

 

13.              
Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall
be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt
requested, postage prepaid, addressed, if to the Executive, to the most recent address shown in the personnel records of the Company
and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

 

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To the Company:

Waddell & Reed Financial, Inc.

[ADDRESS]

Attention: [TITLE]

 

14.              
Miscellaneous; Amendment of Related Agreements. No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack
of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other
agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been
made by either party; provided, however, that this Agreement shall supersede any agreement setting forth the terms
and conditions of the Executive’s employment with the Company only in the event that, following the Merger, the Executive’s
employment with the Company is terminated by the Company other than for Cause or by the Executive for Good Reason. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Kansas. All references
to sections of the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder
shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which
the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require
either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 8 hereof)
shall survive such expiration.

 

15.              
Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

16.              
Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument.

 

17.              
Settlement of Disputes. All claims by the Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to
the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement
relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and
shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the
Board that the Executive’s claim has been denied.

 

18.              
Section 409A. The intent of the parties is that payments and benefits under this Agreement be exempt from, or comply
with, Section 409A, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be
in accordance therewith. Notwithstanding anything contained herein to the contrary, the Executive shall not be considered to have
terminated employment with the Company for purposes of any payments under this Agreement which are subject to Section 409A until
the Executive would be considered to have incurred a “separation from service” from the Company within the meaning
of Section 409A.  Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified
payment for purposes of Section 409A, and any payments described in this Agreement that are due within the “short term deferral
period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise.
Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to
avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six (6)-month period immediately following the Executive’s separation
from service shall instead be paid on the first business day after the date that is six (6) months following the Executive’s
separation from service (or, if earlier, death).  To the extent required to avoid accelerated taxation and/or tax penalties
under Section 409A, amounts reimbursable to the Executive under this Agreement shall be paid to the Executive on or before the
last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement
(and in-kind benefits provided) during any one year may not effect amounts reimbursable or provided in any subsequent year. 
The Company makes no representation that any or all of the payments described in this Agreement shall be exempt from or comply
with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment. The Executive shall be solely
responsible for the payment of any taxes and penalties incurred under Section 409A.

 

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19.              
Definitions. For purposes of this Agreement, the following terms have the meanings indicated below:

 

(a)               
“280G Firm” means Frederic W. Cook, Inc.; provided, however, that if Frederic W. Cook, Inc. fails
or refuses to perform the calculations required under Section 9, then the “280G Firm” will mean a nationally recognized
certified public accounting firm or other professional organization that is a certified public accounting firm recognized as an
expert in determinations and calculations for purposes of Section 280G of the Code that is selected by the Board, which firm shall
not be a firm serving as accountant or auditor for the individual, entity, or group effecting the Change of Control.

 

(b)               
“2020 Target Cash Bonus Opportunity” means the amount equal to the Executive’s target cash bonus
opportunity for the 2020 calendar year.

 

(c)               
“Affiliate” means (i) any corporation (other than a Subsidiary), partnership, joint venture or any entity
in which the Company owns, directly or indirectly, at least a 10% beneficial ownership interest, and (ii) the Company’s parent
company, if any.

 

(d)               
“At-Risk Additional Bonus” has the meaning given in Section 7(c).

 

(e)               
“At-Risk Retention Bonus Opportunity” means the amount equal to one (1) times the sum of Executive’s
(i) Base Salary and (ii) 2020 Target Cash Bonus Opportunity.

 

(f)                
“Base Salary” means (i) for purposes of Section 6 and Section 7, the amount equal to the Executive’s
annual base salary in effect on the Effective Date, and (ii) for purposes of Section 8, the amount equal to the highest annual
base salary in effect for the Executive during the period that begins on the Effective Date and ends on the Date of Termination.

 

(g)               
“Board” means the Board of Directors of the Company.

 

(h)               
“Cause” for termination by the Company of the Executive’s employment means the Executive’s
(i) willful misconduct or gross negligence which results in or is reasonably likely to result in material harm to the Company;
(ii) conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude; or (iii) willful
violation of Company policies which results in or is reasonably likely to result in material harm to the Company. For the purposes
of this Agreement, no act, or failure to act, on the part of the Executive shall be considered “willful” unless done,
or omitted to be done, by the Executive not in good faith and without reasonable belief that such action or omission was in the
best interests of the Company.

 

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(i)                
“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

(j)                
“Company” means Waddell & Reed Financial, Inc. and shall include any successor to its business and/or assets which assumes
and agrees to perform this Agreement by operation of law, or otherwise.

 

(k)               
“Date of Termination” has the meaning set forth in Section 10(b) hereof.

 

(l)                
“Disability” means total and permanent disability as determined under the Company’s long-term disability
program, whether or not the Executive is covered under such program. If no such program is in effect or the Executive is not a
participant in such program, “Disability” shall mean a serious physical or mental impairment of the Executive that
is expected to last for a period of at least 12 months and prevents the Executive from performing his regular duties for the Company,
its Subsidiaries and Affiliates, as determined by the Board.

 

(m)              
“Excise Tax” has the meaning set forth in Section 9 hereof.

 

(n)               
“Executive” means the individual named in the first paragraph of this Agreement.

 

(o)               
“Good Reason” for termination by the Executive of the Executive’s employment means the occurrence
(without the Executive’s consent) of any one of the following acts by the Company, or failures by the Company to act, unless,
in the case of any act or failure to act described below:

 

(i)                
a material diminution or material adverse alteration of the Executive’s base salary
or annual incentive compensation opportunity, duties or responsibilities; 

 

(ii)             
the relocation of the Executive’s principal place of employment to a location more
than fifty (50) miles from the Executive’s principal place of employment immediately prior to the Merger; or

 

(iii)           
the failure of a successor to the assets or business of the Company to assume the obligations
of the Company under this Agreement.

 

Good Reason shall only occur
if (1) the Executive provides a Good Reason notice to the Company within thirty (30) calendar days of the Executive’s
knowledge of the event giving rise to Good Reason, (2) any such reduction, change, or breach is not remedied or cured within
fifteen (15) days of such notice and (3) the Executive actually terminates his or her employment from the Company, its Subsidiaries
and its Affiliates within thirty (30) calendar days following the expiration of such cure period to the extent any such reduction,
change, or breach is not cured

 

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(p)               
“Notice of Termination” has the meaning set forth in Section 10(a) hereof.

 

(q)               
“Payments” has the meaning set forth in Section 9 hereof.

 

(r)                
“Prorated 2021 Target LTI Opportunity” means the amount equal to the product of (i) the Executive’s
target long-term incentive opportunity for the 2021 calendar year, as determined by the Committee in its sole discretion on or
before March 15, 2021, and (ii) the quotient obtained by dividing (A) the number of calendar days (not to exceed 365) that elapse
during the period that begins January 1, 2021, and ends on (and includes) the Closing Date (or, if earlier, the date of the Executive’s
Qualifying Termination), by (B) 365.

 

(s)                
“Qualifying Termination” means (i) for the period that begins on the Effective Date and ends on the date
immediately preceding the Closing Date, the termination of the Executive’s employment during the Term due to the Executive’s
death or Disability, and (ii) on and after the Closing Date, the termination of the Executive’s employment during the Term
due to the Executive’s death, Disability, involuntary termination without Cause or resignation for Good Reason.

 

(t)                
“Release” has the meaning set forth in Section 8 hereof.

 

(u)               
“Retention Payments” means the Fixed Retention Bonus and the At-Risk Retention Bonus.

 

(v)               
“Severance Payment” has the meaning set forth in Section 8 hereof.

 

(w)              
“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning
with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

 

(x)                
“Term” means the period of time described in Section 2 hereof.

 

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In
Witness Whereof, the parties have executed this Agreement as of the date first above written.

 

	 	WADDELL & REED FINANCIAL, INC.
	 	 
	 	By:	 
	 	Name:
	 	Title:
	 	 
	 	 
	 	[EXECUTIVE]

 

{Signature
Page to Change in Control Retention and Severance Agreement}

 

     

     

    

 

Exhibit A

 

Performance Conditions

 

The 75% portion of the “At-Risk Additional
Bonus” that is earned (the “Funded Percentage”) shall be determined based on the Client Consent Percentage
and the Company Advisor Percentage, as those terms are defined in the Merger Agreement, which are generally based on the level
of assets under management (“AUM”) and assets under administration (“AUA”), respectively,
that are delivered at closing under the Merger Agreement.

 

The amount by which the Client Consent
Percentage exceeds the AUM Floor shall be divided by the difference between the AUM Ceiling and the AUM Floor and expressed as
a percentage not to exceed 100% (“% of AUM Target”).

 

The amount by which the Company Advisor
Percentage exceeds the AUA Floor shall be divided by the difference between the AUA Ceiling and the AUA Floor and expressed as
a percentage not to exceed 100% (“% of AUA Target”).

 

The average of the % of AUM Target and
the % of AUA Target shall equal the Funded Percentage.

 

Following is an example calculation of
the Funded Percentage based on an estimated Client Consent Percentage and an estimated Company Advisor Percentage of 80%.

 

	Performance Conditions – Example Calculation
	“AUM Floor”	45.0%	“AUA Floor”	25.0%	Funded Percentage
	“AUM Ceiling”	90.0%	“AUA Ceiling”	75.0%	 
	Closing Condition	65.0%	Closing Condition	40.0%	 
	Client Consent Percentage	80.0%	Company Advisor Percentage	80.0%	 
	% of AUM Target	77.8%	% of AUA Target	100.0%	88.9%

 

{Exhibit
A to Change of Control Retention and Severance Agreement}

 

     

     

    

 

Exhibit B

 

Additional Bonus Pool Funding Formula

 

The “bonus pool amount” that
is used to calculate the At-Risk Additional Bonus shall be $5,000,000 with 75% of the bonus pool amount determined based on satisfaction
of the performance thresholds set forth in Exhibit A, and the remaining 25% determined based on the Executive’s individual
performance during the period that begins on the Effective Date and ends on the Closing Date (or the date of the Executive’s
Qualifying Termination, if earlier), as jointly determined immediately prior to the Closing Date (or the date of the Executive’s
Qualifying Termination, if earlier) by the Company’s and Buyer’s chief executive officers in their good faith discretion.

 

{Exhibit
B to Change of Control Retention and Severance Agreement}Exhibit 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of December 2, 2020 (the “Amendment”), is made pursuant to that certain Credit Agreement dated as of May 31, 2019 (as amended, restated, modified or supplemented from time to time, the “Credit Agreement”), among RUNWAY GROWTH CREDIT FUND INC., a Maryland corporation, as borrower (the “Borrower”); each Guarantor party thereto; the financial institutions currently party thereto as lenders (the “Lenders”); KEYBANK NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, together with its successors and assigns, the “Administrative Agent”); CIBC Bank USA, as documentation agent (together with its successors and assigns, the “Documentation Agent”); MUFG Union Bank, N.A., as co-documentation agent (together with its successors and assigns, the “Co-Documentation Agent”); and U.S. Bank National Association, not in its individual capacity but as the paying agent (together with its successors and assigns, the “Paying Agent”).
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders, the Guarantors, the Documentation Agent, the Paying Agent and the Administrative Agent have previously entered into and are currently party to the Credit Agreement; and
WHEREAS, the Borrower has requested that the Lenders make certain amendments to the Credit Agreement, and the Administrative Agent and the Lenders are willing to do so under the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
Section 1.    Defined Terms.  Unless otherwise amended by the terms of this Amendment, terms used in this Amendment shall have the meanings assigned in the Credit Agreement.
Section 2.    Joinder of New Lenders.  Bank of Hope and First Foundation Bank (each a “New Managing Agent” and collectively, the “New Managing Agents”) together with the Lenders indicated on their respective signature page hereto (each a “New Lender” and, collectively, the “New Lenders”; and each Lender together with such related New Managing Agent, a “New Lender Group” and collectively, the “New Lender Groups”), the Administrative Agent and the Borrower agree as follows:
2.1.    Borrower has requested that each New Lender Group become a “Lender Group” under the Credit Agreement.
​
​

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2.2.    Effective as of the date of this Amendment (i) each New Lender Group shall join in and be a party to the Credit Agreement with all the rights, interests, duties and obligations of a Managing Agent and a Lender, respectively, set forth therein, (ii) the New Lenders shall join in and be a Lender party to the Credit Agreement at the commitment level indicated on its signature page hereto; and (iii) each New Lender Group agrees to be bound by the provisions of the Credit Agreement and has the rights and obligations of a Managing Agent and a Lender, respectively, thereunder and under any other Transaction Document.
2.3.    By executing and delivering this Amendment, each New Lender Group (i) confirms that it has received a copy of the Credit Agreement (as amended by this Amendment) and such Transaction Documents (as amended by this Amendment) and other documents and information requested by it, and that it has, independently and without reliance upon Borrower, any Lender, any Managing Agent or the Administrative Agent, and based on such documentation and information as it has deemed appropriate, made its own decision to enter into this Amendment, the Credit Agreement (as amended by this Amendment) and the Amended and Restated Fee Letter; (ii) agrees that it shall, independently and without reliance upon Borrower, any Lender, any Managing Agent or the Administrative Agent, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement (as amended by this Amendment) and any of the Transaction Documents (as amended by this Amendment); (iii) appoints and authorizes the Administrative Agent to take such action on its behalf and to exercise such powers and discretion under the Credit Agreement (as amended by this Amendment) and the Transaction Documents (as amended by this Amendment) as are delegated to the Administrative Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (iv) agrees that it shall perform in accordance with their terms all of the obligations that by the terms of the Credit Agreement (as amended by this Amendment) are required to be performed by it as a Managing Agent and a Lender, respectively; (v) specifies as its address for notices the office set forth beneath its name on its signature page hereto; and (vi) in the case of the New Lenders, appoints and authorizes the New Managing Agent indicated on its signature page hereto as its Managing Agent to take such action as a managing agent on its behalf and to exercise such powers under the Credit Agreement (as amended by this Amendment), as are delegated to the Managing Agents by the terms thereof.
2.4.    Each of the New Lenders (with respect to itself) and the New Managing Agents (with respect to its related New Lender) represents and warrants for the benefit of Administrative Agent and Borrower that such New Lender meets the definition of Eligible Assignee in the Credit Agreement.
2.5     Each of the parties hereto understand and agree that this Section 2 to this Amendment shall be deemed to be a Joinder Agreement for purposes of the Credit Agreement (as amended by this Amendment).
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Section 3.    Amendments to Credit Agreement. Upon satisfaction of the conditions precedent set forth in Section 3 below, as of the Effective Date (as defined below), the parties hereto agree that the Credit Agreement shall be amended as follows:
3.1.    Section 2.3(c) of the Agreement is hereby amended with text marked in underline indicating additions to the Credit Agreement and with text marked in strikethrough indicating deletions to the Credit Agreement:
(c)    Subject to the terms and conditions set forth herein, the Borrower shall have the right, at any time from the Effective Date until the Commitment Termination Date with the consent of the Administrative Agent, to increase the Facility Amount by an amount up to $100,000,000 (for a total maximum Facility Amount of $200,000,000300,000,000).  The following terms and conditions shall apply to any such increase:  (i) any such increase shall be obtained from existing Lenders or from other Eligible Assignees, in each case in accordance with the terms set forth below; (ii) the Commitment of any Lender may not be increased without the prior written consent of such Lender; (iii) any increase in the Facility Amount shall be in a minimum principal amount of (x) if such increase shall be obtained from existing Lenders, $5,000,000 and (y) if such increase shall be obtained from Eligible Assignees who are not Lenders hereunder, $15,000,000; (iv) the Borrower and Lenders shall execute an acknowledgement (or in the case of the addition of a bank or other financial institution not then a party to this Agreement, a Joinder Agreement) in form and content satisfactory to the Administrative Agent to reflect the revised Commitments and Facility Amount (the Lenders do hereby agree to execute such acknowledgement (or Joinder Agreement) without delay unless the acknowledgement purports to (i) increase the Commitment of a Lender without such Lender’s consent or (ii) amend this Agreement or the other Transaction Documents other than as provided for in this Section 2.3); (v) the Borrower shall execute such promissory notes as are necessary to reflect the increase in or creation of the Commitments; (vi) if any Advances are outstanding at the time of any such increase, the Borrower shall make such payments and adjustments on the Advances as necessary to give effect to the revised commitment percentages and outstandings of the Lenders; (vii) the Borrower may solicit commitments from Eligible Assignees that are not then a party to this Agreement so long as such Eligible Assignees are reasonably acceptable to the Administrative Agent and execute a Joinder Agreement in form and content satisfactory to the Administrative Agent; (viii) the conditions set forth in Section 3.2 shall be satisfied in all material respects; (ix) after giving effect to any such increase in the Facility Amount, no Unmatured Event of Default or Event of Default shall have occurred; (x) the Borrower shall have provided to the Administrative Agent, at least thirty (30) days prior to such proposed increase in the Facility Amount, written evidence demonstrating pro forma compliance with the Borrowing Base Test after giving effect to such proposed increase, such evidence to be satisfactory in the sole discretion of the Administrative Agent.  The amount of any increase in the Facility Amount hereunder shall be offered first to the existing Lenders, and the failure of any existing Lender to respond within five (5) Business Days of such offer shall be deemed to constitute a refusal by such Lender to increase its Commitment with no further right of first offer.  In the event the additional commitments which existing Lenders are willing to take shall
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exceed the amount requested by the Borrower, such excess shall be allocated in proportion to the commitments of such existing Lenders willing to take additional commitments.  If the amount of the additional commitments requested by the Borrower shall exceed the additional commitments which the existing Lenders are willing to take, then the Borrower may invite other Eligible Assignees reasonably acceptable to the Administrative Agent to join this Agreement as Lenders hereunder for the portion of commitments not taken by existing Lenders, provided that such Eligible Assignees shall enter into such joinder agreements to give effect thereto as the Administrative Agent and the Borrower may reasonably request.  Unless otherwise agreed by the Administrative Agent and the Lenders, the terms of any increase in the Facility Amount shall be the same as those in effect prior to any increase; provided, however, that should the terms of the increase agreed to be other than those in effect prior to the increase, then the Transaction Documents shall, with the consent of the Administrative Agent and the Lenders, be amended to the extent necessary to incorporate any such different terms.
Section 4.    Conditions Precedent.  This Amendment shall become effective as of the date (the “Effective Date”) of the satisfaction of all of the following conditions precedent:
4.1.    The Administrative Agent, the Borrower, and the Lenders shall have executed and delivered this Amendment.
4.2.    The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying as to  (i) its articles of incorporation, (ii) its operating agreement, (iii)  the resolutions or other action of the board of directors of the Company, (iii) the incumbency and specimen signature of each of its Responsible Officers authorized to execute the Amendment and the other Transaction Documents to which it is a party, and (iv) certificate of good standing in the applicable jurisdiction of organization.
4.3.    The Administrative Agent shall have received legal opinions from counsel to the Borrower covering such matters as the Administrative Agent and its counsel shall reasonably request including corporate and enforceability.
4.4.    The payment by the Borrower of all fees and other amounts due and payable on or prior to the date hereof pursuant to the Amended and Restated Fee Letter.
4.5.    Legal matters incident to the execution and delivery of this Amendment shall be satisfactory to the Administrative Agent and its counsel.
Section 5.    Representations of the Borrower.  The Borrower hereby represents and warrants to the parties hereto that as of the date hereof its representations and warranties contained in Article IV of the Credit Agreement and any other Transaction Documents to which it is a party are true and correct in all material respects as of the date hereof and after giving effect to this Amendment (except to the extent that such representations and warranties relate solely to an earlier date, and then are true and correct as of such earlier date).
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Section 6.    Credit Agreement in Full Force and Effect.  Except as specifically amended herein, the Credit Agreement shall continue in full force and effect in accordance with its original terms.  Reference to this specific Amendment need not be made in the Credit Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.
Section 7.    Execution in Counterparts.  This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement.  Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original.  Delivery of a counterpart hereof by facsimile transmission or by e-mail transmission of an Adobe Portable Document Format File (also known as an “PDF” file) shall be effective as delivery of a manually executed counterpart hereof.
Section 8.    Governing Law.  THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO CONFLICT OF LAW PRINCIPLES, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to Credit Agreement to be executed and delivered by their duly authorized officers as of the date hereof.
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	BORROWER:

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	RUNWAY GROWTH CREDIT FUND INC.

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	By:
	/s/ Thomas B. Raterman

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	Name:
	Thomas B. Raterman

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	Title:
	Chief Financial Officer, Treasurer and Secretary

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[Signature Page to Second Amendment to Credit Agreement]

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	MANAGING AGENT for the KeyBank Lender Group:

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	KEYBANK NATIONAL ASSOCIATION

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	By:
	/s/ Richard Andersen

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	Name:
	Richard Andersen

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	Title:
	Senior Vice President

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	LENDER for the KeyBank Lender Group:

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	KEYBANK NATIONAL ASSOCIATION

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	By:
	/s/ Richard Andersen

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	Name:
	Richard Andersen

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	Title:
	Senior Vice President

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[Signature Page to Second Amendment to Credit Agreement]

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	ADMINISTRATIVE AGENT:

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	KEYBANK NATIONAL ASSOCIATION

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	By:
	/s/ Richard Andersen

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	Name:
	Richard Andersen

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	Title:
	Senior Vice President

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[Signature Page to Second Amendment to Credit Agreement]

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	MANAGING AGENT for the CIBC Bank USA Lender Group:

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	CIBC BANK USA

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	By:
	/s/ Rob Dmowski

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	Name:
	Rob Dmowski

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	Title:
	Managing Director

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	LENDER for the CIBC BANK USA Lender Group:

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	CIBC BANK USA

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	By:
	/s/ Rob Dmowski

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	Name:
	Rob Dmowski

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	Title:
	Managing Director

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[Signature Page to Second Amendment to Credit Agreement]

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	MANAGING AGENT for the MUFG Union Bank, N.A. Lender Group:

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	MUFG UNION BANK, N.A.

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	By:
	/s/ J. William Bloore

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	Name:
	J. William Bloore

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	Title:
	Managing Director

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	LENDER for the MUFG Union Bank, N.A. Lender Group:

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	MUFG UNION BANK, N.A.

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	By:
	/s/ J. William Bloore

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	Name:
	J. William Bloore

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	Title:
	Managing Director

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[Signature Page to Second Amendment to Credit Agreement]

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	MANAGING AGENT for the Bank of Hope Lender Group:

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	BANK OF HOPE

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	By:
	/s/ Peter Hennessy

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	Name:
	Peter Hennessy

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	Title:
	First Vice President

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	Address: 3731 Wilshire Blvd., Suite 460

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	Los Angeles, CA 90010

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	Attn: Peter Hennessy

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	Phone: (213) 427-6374 | Ext. 56374

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	LENDER for the Bank of Hope Lender Group:

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	BANK OF HOPE

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	By:
	/s/ Peter Hennessy

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	Name:
	Peter Hennessy

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	Title:
	First Vice President

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	Commitment:  25,000,000

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	Address: 3731 Wilshire Blvd., Suite 460

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	Los Angeles, CA 90010

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	Attn: Peter Hennessy

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	Phone: (213) 427-6374 | Ext. 56374

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[Signature Page to Second Amendment to Credit Agreement]

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	MANAGING AGENT for the First Foundation Bank Lender Group:

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	FIRST FOUNDATION BANK

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	By:
	/s/ Michael Berry

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	Name:
	Michael Berry

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	Title:
	Senior Vice President

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	Address: 2233 Douglas Blvd., Suite 300,

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	Roseville, CA 95661

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	Attn: Michael Berry

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	Phone: (916) 580-2131

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	LENDER for the First Foundation Bank Lender Group:

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	FIRST FOUNDATION BANK

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	By:
	/s/ Michael Berry

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	Name:
	Michael Berry

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	Title:
	Senior Vice President

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	Commitment:  15,000,000

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	Address: 2233 Douglas Blvd., Suite 300,

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	Roseville, CA 95661

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	Attn: Michael Berry

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	Phone: (916) 580-2131

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[Signature Page to Second Amendment to Credit Agreement]

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