Exhibit 10.1

EXECUTION VERSION

 

 

 

LOGO [g630254g1101065745447.jpg]

$100,000,000

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

dated as of

October 30, 2018

among

ERIE INDEMNITY COMPANY

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent,

JPMORGAN CHASE BANK, N.A.,

as Joint Bookrunner and Joint Lead Arranger,

PNC CAPITAL MARKETS LLC,

as Joint Bookrunner and Joint Lead Arranger

and

PNC BANK, NATIONAL ASSOCIATION,

as Syndication Agent

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I

 

Definitions

     1  

SECTION 1.01.

 

Defined Terms

     1  

SECTION 1.02.

 

Classification of Loans and Borrowings

     22  

SECTION 1.03.

 

Terms Generally

     22  

SECTION 1.04.

 

Accounting Terms; GAAP

     23  

ARTICLE II

 

The Credits

     23  

SECTION 2.01.

 

Commitments

     23  

SECTION 2.02.

 

Loans and Borrowings

     23  

SECTION 2.03.

 

Requests for Revolving Borrowings

     24  

SECTION 2.04.

 

Letters of Credit

     25  

SECTION 2.05.

 

Funding of Borrowings

     28  

SECTION 2.06.

 

Interest Elections

     29  

SECTION 2.07.

 

Termination and Reduction of Commitments

     30  

SECTION 2.08.

 

Repayment of Loans; Evidence of Debt

     31  

SECTION 2.09.

 

Prepayment of Loans

     31  

SECTION 2.10.

 

Fees

     32  

SECTION 2.11.

 

Interest

     33  

SECTION 2.12.

 

Alternate Rate of Interest; Illegality

     34  

SECTION 2.13.

 

Increased Costs

     35  

SECTION 2.14.

 

Break Funding Payments

     37  

SECTION 2.15.

 

Taxes

     37  

SECTION 2.16.

 

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

     41  

SECTION 2.17.

 

Mitigation Obligations; Replacement of Lenders

     43  

SECTION 2.18.

 

Defaulting Lenders

     43  

SECTION 2.19.

 

Use of Proceeds

     45  

ARTICLE III

 

Representations and Warranties

     45  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 3.01.

 

Organization and Qualification; Power and Authority; Compliance With Laws; Title
to Properties; Event of Default

     45  

SECTION 3.02.

 

Subsidiaries and Owners; Investment Companies

     46  

SECTION 3.03.

 

Validity and Binding Effect

     46  

SECTION 3.04.

 

No Conflict; Material Agreements; Consents

     46  

SECTION 3.05.

 

Litigation

     46  

SECTION 3.06.

 

Financial Statements

     47  

SECTION 3.07.

 

Margin Stock

     47  

SECTION 3.08.

 

Full Disclosure

     47  

SECTION 3.09.

 

Taxes

     48  

SECTION 3.10.

 

Patents, Trademarks, Copyrights, Licenses, Etc.

     48  

SECTION 3.11.

 

Liens in the Collateral

     48  

SECTION 3.12.

 

Insurance

     48  

SECTION 3.13.

 

ERISA Compliance

     48  

SECTION 3.14.

 

Environmental Matters

     49  

SECTION 3.15.

 

Solvency

     49  

SECTION 3.16.

 

Anti-Terrorism Laws

     49  

SECTION 3.17.

 

Updates to Schedules

     49  

ARTICLE IV

 

Conditions

     50  

SECTION 4.01.

 

Effective Date

     50  

SECTION 4.02.

 

Each Credit Event

     52  

ARTICLE V

 

Affirmative Covenants

     52  

SECTION 5.01.

 

Preservation of Existence, Etc.

     52  

SECTION 5.02.

 

Payment of Liabilities, Including Taxes, Etc.

     53  

SECTION 5.03.

 

Maintenance of Insurance

     53  

SECTION 5.04.

 

Maintenance of Properties and Leases

     53  

SECTION 5.05.

 

Visitation Rights

     53  

SECTION 5.06.

 

Keeping of Records and Books of Account

     53  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 5.07.

 

Compliance with Laws; Use of Proceeds

     54  

SECTION 5.08.

 

Further Assurances

     54  

SECTION 5.09.

 

Anti-Terrorism Laws

     54  

SECTION 5.10.

 

Collateral Value

     54  

SECTION 5.11.

 

Eligible Collateral Requirements

     55  

SECTION 5.12.

 

Collateral Value and Delinquency Proceedings

     55  

SECTION 5.13.

 

Reporting Requirements

     55  

SECTION 5.14.

 

Additional Information

     57  

ARTICLE VI

 

Negative Covenants

     57  

SECTION 6.01.

 

Indebtedness

     57  

SECTION 6.02.

 

Liens

     58  

SECTION 6.03.

 

Guarantees

     59  

SECTION 6.04.

 

Investments

     59  

SECTION 6.05.

 

Dividends and Related Distributions

     60  

SECTION 6.06.

 

Liquidations, Mergers, Consolidations, Acquisitions

     60  

SECTION 6.07.

 

Dispositions of Assets or Subsidiaries

     60  

SECTION 6.08.

 

Affiliate Transactions

     61  

SECTION 6.09.

 

Continuation of or Change in Business

     61  

SECTION 6.10.

 

Fiscal Year

     61  

SECTION 6.11.

 

Issuance of Stock or Other Ownership Interests

     61  

SECTION 6.12.

 

Changes in Organizational Documents

     62  

SECTION 6.13.

 

Negative Pledges

     62  

SECTION 6.14.

 

Indebtedness to Total Capitalization

     62  

SECTION 6.15.

 

[Reserved]

     62  

SECTION 6.16.

 

Attorney-in-Fact

     62  

SECTION 6.17.

 

Anti-Terrorism Laws

     63  

ARTICLE VII

 

Events of Default

     63  

SECTION 7.01.

 

Events of Default

     63  

 

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TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 7.02.

 

Consequences of Event of Default

     65  

ARTICLE VIII

 

The Administrative Agent

     66  

ARTICLE IX

 

Miscellaneous

     68  

SECTION 9.01.

 

Notices

     68  

SECTION 9.02.

 

Waivers; Amendments

     69  

SECTION 9.03.

 

Expenses; Indemnity; Damage Waiver

     70  

SECTION 9.04.

 

Successors and Assigns

     71  

SECTION 9.05.

 

Survival

     75  

SECTION 9.06.

 

Counterparts; Integration; Effectiveness

     75  

SECTION 9.07.

 

Severability

     76  

SECTION 9.08.

 

Right of Setoff

     76  

SECTION 9.09.

 

Governing Law; Jurisdiction; Consent to Service of Process

     76  

SECTION 9.10.

 

WAIVER OF JURY TRIAL

     77  

SECTION 9.11.

 

Headings

     77  

SECTION 9.12.

 

Confidentiality

     77  

SECTION 9.13.

 

Interest Rate Limitation

     78  

SECTION 9.14.

 

USA PATRIOT Act

     78  

SECTION 9.15.

 

No Advisory or Fiduciary Responsibility

     79  

SECTION 9.16.

 

Certain ERISA Matters

     79  

SECTION 9.17.

 

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     81  

SECTION 9.18.

 

Amendment and Restatement

     82  

 

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SCHEDULES:

 

Schedule 2.01 –    Commitments Schedule 2.04(j) –    Existing Letters of Credit
Schedule 3.01 –    Qualifications to Do Business Schedule 3.02 –    Subsidiaries
Schedule 3.09 –    Taxes Schedule 3.14 –    Environmental Disclosures Schedule
6.01 –    Permitted Indebtedness Schedule 6.04 –    Permitted Investments

EXHIBITS:

Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Control Agreement

Exhibit C – Form of Pledge Agreement

Exhibit D – Form of Compliance Certificate

Exhibit E – Form of Solvency Certificate

Exhibit F-1 – U.S. Tax Compliance Certificate (For Foreign Lenders That Are Not
Partnerships For U.S. Federal Income Tax Purposes)

Exhibit F-2 – U.S. Tax Compliance Certificate (For Foreign Participants That Are
Not Partnerships For U.S. Federal Income Tax Purposes)

Exhibit F-3 – U.S. Tax Compliance Certificate (For Foreign Participants That Are
Partnerships For U.S. Federal Income Tax Purposes)

Exhibit F-4 – U.S. Tax Compliance Certificate (For Foreign Lenders That Are
Partnerships For U.S. Federal Income Tax Purposes)

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT

SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 30, 2018, among
ERIE INDEMNITY COMPANY, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A.,
as Administrative Agent.

The Borrower, JPM and the other financial institutions party thereto (JPM and
such other financial institutions are collectively, the “Existing Lenders”), and
JPMorgan Chase Bank, N.A., as administrative agent for the Existing Lenders (in
such capacity, the “Existing Agent”), entered into that certain Amended and
Restated Credit Agreement, dated October 25, 2013 (as amended through the date
hereof, the “Existing Credit Agreement”).

The Existing Lenders and the Existing Agent will permit the amendment and
restatement of the Existing Credit Agreement, pursuant to the terms and
conditions set forth herein, to, among other things, provide a revolving credit
facility to the Borrower in an aggregate principal amount not to exceed
$100,000,000 and extend the Maturity Date. In consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS

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

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

“Account Bank” means any “bank” within the meaning of Section 9-102(a)(8) of the
UCC at which any deposit account constituting a Collateral Account is held,
which (a) shall be located in the United States of America, (b) shall have a
Moody’s rating at all times equal to or greater than “A3” and a S&P’s rating at
all times equal to or greater than “A-”, and (c) shall be otherwise acceptable
to the Administrative Agent in its discretion.

“Act” has the meaning assigned to such term in Section 9.14.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100th of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

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“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” means this Second Amended and Restated Credit Agreement as from time
to time amended, modified, supplemented, restated, refunded or renewed and in
effect.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on
such day plus 1⁄2 of 1%, and (c) the Adjusted LIBO Rate for a one-month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that, for the purpose of this
definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen
Rate (or if the LIBO Screen Rate is not available for such one month Interest
Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such
day. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the NYFRB Rate or the
Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used as an
alternate rate of interest pursuant to Section 2.12 hereof, then the Alternate
Base Rate shall be the greater of clause (a) and (b) above and shall be
determined without reference to clause (c) above. For the avoidance of doubt, if
the Alternate Base Rate as so determined would be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement.

“Anti-Terrorism Laws” means any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering, bribery or
corruption, and any regulation, order, or directive promulgated, issued or
enforced pursuant to such Laws, all as amended, supplemented or replaced from
time to time.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment; provided that in the
case of Section 2.18 when a Defaulting Lender shall exist, “Applicable
Percentage” shall mean the percentage of the total Commitments (disregarding any
Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments and to any Lender’s status as a Defaulting Lender at the time of
determination.

“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar
Revolving Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth (expressed in basis points)
below under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment Fee
Rate”, as the case may be, based upon the Borrower’s Indebtedness to
Capitalization Ratio:

 

2

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Level

   ABR Spread    Eurodollar
Spread    Commitment
Fee Rate

I

   0    50    8

II

   0    75    10

III

   0    100    12.5

For purposes of the foregoing, “Level I” shall exist at any date if, on such
date, the Borrower’s Indebtedness to Capitalization Ratio is less than or equal
to 15%; “Level II” shall exist at any date if, on such date, the Borrower’s
Indebtedness to Capitalization Ratio is greater than 15% but less than or equal
to 25%; and “Level III” shall exist at any date if, on such date, the Borrower’s
Indebtedness to Capitalization Ratio is greater than 25%. The Applicable Rate
shall be based on the Borrower’s Indebtedness to Capitalization Ratio, which
will be recomputed as of December 31, 2017, and the end of each fiscal quarter
ending thereafter based on the Borrower’s Indebtedness to Capitalization Ratio
as of such quarter end. Any increase or decrease in the Applicable Rate computed
as of a quarter end shall be effective on the first day of the immediately
succeeding fiscal quarter.

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

“Arrangers” means JPM and PNC Capital Markets LLC in their capacities as joint
lead arrangers.

“Asset Backed Securities” shall mean securities issued by a special purpose
vehicle that are primarily serviced by the cash flows of a discrete pool of
receivables or other financial assets that by their terms convert into cash
within a finite time period, plus any rights or other assets designed to assure
the servicing or timely distributions of proceeds to the security holders;
provided that in the case of financial assets that are leases, those assets may
convert to cash partially by the cash proceeds from the disposition of the
physical property underlying such leases. Asset Backed Securities must be rated
and able to be traded by investors in a secondary market.

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

“Attorney-in-Fact” means Erie Indemnity Company, a Pennsylvania corporation, in
its capacity as the attorney-in-fact for Erie Exchange or such successor
attorney-in-fact for Erie Exchange approved by the Administrative Agent in
accordance with Section 6.16.

“Authorized Officer” means, with respect to the Borrower, the Chief Executive
Officer, President, Vice President, Executive Vice President, Chief Financial
Officer, Treasurer, Corporate Treasurer or Assistant Treasurer or such other
individuals, designated by written notice to the Administrative Agent from the
Borrower, authorized to execute notices, reports and other documents on behalf
of the Borrower required hereunder. The Borrower may amend such list of

 

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individuals from time to time by giving written notice of such amendment to the
Administrative Agent.

“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.

“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers
by the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” shall mean, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule.

“Bankruptcy Event” means, with respect to any Person, such Person or such
Person’s direct or indirect parent company becomes the subject of a bankruptcy
or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it, or, in the good faith determination of the Administrative Agent, has
taken any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any such proceeding or appointment, provided that a
Bankruptcy Event shall not result solely by virtue of any ownership interest, or
the acquisition of any ownership interest, in such Person or such Person’s
direct or indirect parent company by an Official Body or instrumentality thereof
if, and only if, such ownership interest does not result in or provide such
Person with immunity from the jurisdiction of courts within the United States or
from the enforcement of judgments or writs of attachment on its assets or permit
such Person (or such Official Body or instrumentality) to reject, repudiate,
disavow or disaffirm any contracts or agreements made by such Person.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in
Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as
defined in Section 4975 of the Code to which Section 4975 of the Code applies,
and (c) any Person whose assets include (for purposes of the Plan Asset
Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the
Code) the assets of any such “employee benefit plan” or “plan”.

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

“Borrower” means Erie Indemnity Company, a Pennsylvania corporation.

 

4

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

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.

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

“Cash” means dollars held in a Collateral Account.

“Cash Equivalents” means at any time:

(a)    time deposits and certificates of deposit, maturing not more than two
(2) years after the date of determination, which are issued by the applicable
Securities Intermediary; and

(b)    Short-term asset management accounts offered by the Securities
Intermediary which are reasonably acceptable to the Administrative Agent or
investments in money market funds.

“CEA” means the Commodity Exchange Act (7 U.S.C.§1 et seq.), as amended from
time to time, and any successor statute.

“CFTC” means the Commodity Futures Trading Commission.

“Change in Law” means the occurrence after the date of this Agreement of any of
the following: (a) the adoption of or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
Official Body or (c) compliance by any Lender or the Issuing Bank (or, for
purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline, requirement or directive (whether or not having the force of law) of
any Official Body made or issued after the date of this Agreement; provided
that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines,
requirements or directives thereunder or issued in connection therewith or in
the implementation thereof, and (y) all requests, rules, guidelines,
requirements or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the U.S. or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted, issued or implemented.

 

5

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“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means the collateral under the Pledge Agreement.

“Collateral Account” means (a) account no. 791841 at The Bank of New York Mellon
Trust Company, N.A., as to which the Borrower, The Bank of New York Mellon Trust
Company, N.A., and the Administrative Agent have entered into a Control
Agreement, and (b) any other account at The Bank of New York Mellon Trust
Company, N.A., or another Securities Intermediary or Account Bank as to which
such Securities Intermediary or Account Bank, as the case may be, the Borrower
and the Administrative Agent have entered into a Control Agreement.

“Collateral Shortfall” shall have the meaning specified in Section 5.10.

“Collateral Value” means, on any date, an amount equal to the sum of the Fair
Market Value of all Eligible Collateral; provided, however, that the portion of
Eligible Collateral of any issuer (other than an issuer of Government Debt)
which exceeds five percent (5%) of the Fair Market Value of all Eligible
Collateral shall be excluded from such calculation.

“Collateralized Loan Obligations” shall mean Asset Backed Securities that are
backed primarily by a pool of senior secured corporate floating rate loans.
Collateralized Loan Obligations must be rated and able to be traded by investors
in a secondary market.

“Commercial Mortgage Backed Securities” shall mean Asset Backed Securities that
are backed by a mortgage loan or a pool of mortgage loans that are secured by
commercial real estate, including commercial, multi-family, hospitality, and
manufactured housing community properties. Commercial Mortgage Backed Securities
must be rated and able to be traded by investors in a secondary market.

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Revolving Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender’s Revolving Credit Exposure hereunder, as such commitment may be
(a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set
forth on Schedule 2.01, or in the Assignment and Assumption pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders’ Commitments is $100,000,000.

“Compliance Authority” means each and all of the (a) U.S. Treasury
Department/Office of Foreign Assets Control, (b) U.S. Treasury
Department/Financial Crimes Enforcement Network, (c) U.S. State
Department/Directorate of Defense Trade Controls, (d) U.S. Commerce
Department/Bureau of Industry and Security, (e) the U.S. Internal Revenue
Service, (f) the U.S. Justice Department, and (g) the U.S. Securities and
Exchange Commission.

“Compliance Certificate” shall have the meaning specified in Section 5.13(c).

 

6

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“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means the Notification and Control Agreement by and among
the Borrower, the applicable Securities Intermediary or Account Bank, as the
case may be, and the Administrative Agent with respect to any Collateral Account
substantially in the form of Exhibit B.

“Corporate Securities” means publicly traded debt securities (other than
preferred stock) denominated in dollars issued by a corporation, limited
liability company, limited partnership or similar entity organized in the United
States of America.

“Covered Entity” means (a) the Borrower, each of the Borrower’s Subsidiaries and
all pledgors of Collateral and (b) each Person that, directly or indirectly, is
in control of a Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the direct or indirect (x) ownership
of, or power to vote, twenty-five percent (25%) or more of the issued and
outstanding equity interests having ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for such
Person, or (y) power to direct or cause the direction of the management and
policies of such Person whether by ownership of equity interests, contract or
otherwise.

“Credit Party” means the Administrative Agent, each Issuing Bank or any other
Lender.

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

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
(iii) pay over to any Credit Party any other amount required to be paid by it
hereunder, unless, in the case of clause (i) above, such Lender notifies the
Administrative Agent in writing that such failure is the result of such Lender’s
good faith determination that a condition precedent to funding (specifically
identified and including the particular default, if any) has not been satisfied,
(b) has notified the Borrower or any Credit Party in writing, or has made a
public statement to the effect, that it does not intend or expect to comply with
any of its funding obligations under this Agreement (unless such writing or
public statement indicates that such position is based on such Lender’s good
faith determination that a condition precedent (specifically identified and
including the particular default, if any) to funding a loan under this Agreement
cannot be satisfied) or generally under other agreements in which it commits to
extend credit, (c) has failed, within two (2) Business Days after request by a
Credit Party, acting in good faith, to provide a certification in writing from
an authorized officer of such Lender that it will comply with its obligations
(and is financially able to meet such obligations) to fund prospective Loans and
participations in then outstanding Letters of Credit under this Agreement,

 

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provided that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon such Credit Party’s receipt of such certification in form and
substance satisfactory to it and the Administrative Agent, (d) has become the
subject of a Bankruptcy Event or (e) has become the subject of a Bail-in Action.

“Delinquency Proceeding” shall have the meaning specified in Section 221.3 of
the Suspension of Business-Involuntary Dissolutions Article in the Insurance
Act, 40 P.S. § 221.3.

“Dispositions” shall have the meaning specified in Section 6.07.

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

“EEA Financial Institution” means (a) any institution established in any EEA
Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.

“EEA Member Country” means any member state of the European Union, Iceland,
Liechtenstein and Norway.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Eligibility Date” means, with respect to the Borrower and each Swap, the date
on which this Agreement or any Loan Document becomes effective with respect to
such Swap (for the avoidance of doubt, the Eligibility Date shall be the
Effective Date of such Swap if this Agreement or any Loan Document is then in
effect with respect to the Borrower, and otherwise it shall be the Effective
Date of this Agreement and/or such Loan Document(s) to which the Borrower is a
party).

“Eligible Collateral” means Cash, Cash Equivalents, Corporate Securities,
Federal Agency Debt, Government Debt and Municipal Securities, Commercial
Mortgage Backed Securities, Collateralized Loan Obligations, and Asset Backed
Securities which (a) are denominated in dollars, (b) meet the requirements set
forth in the Pledge Agreement and Section 5.12, if any, (c) are capable of being
marked to market on a daily basis and capable of being cleared by the Depository
Trust Company (other than United States Federal Governmental Securities which
will clear through the Federal Reserve System) and (d) are held in a Collateral
Account.

 

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“Eligible Contract Participant” means an “eligible contract participant” as
defined in the CEA and regulations thereunder.

“Environmental Laws” means any applicable federal, state, local, tribal,
territorial and foreign Laws (including common law), constitutions, statutes,
treaties, regulations, rules, ordinances and codes and any consent decrees,
settlement agreements, judgments, orders, directives, policies or programs
issued by or entered into with an Official Body pertaining or relating to:
(i) pollution or pollution control; (ii) protection of human health from
exposure to regulated substances; (iii) protection of the environment and/or
natural resources; (iv) employee safety in the workplace; (v) the presence, use,
management, generation, manufacture, processing, extraction, treatment,
recycling, refining, reclamation, labeling, packaging, sale, transport, storage,
collection, distribution, disposal or release or threat of release of regulated
substances; (vi) the presence of contamination; (vii) the protection of
endangered or threatened species; and (viii) the protection of environmentally
sensitive areas.

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

“Equity Interests” shall have the meaning specified in Section 3.02.

“Erie Exchange” means Erie Insurance Exchange, a reciprocal inter-insurance
exchanged domiciled in Pennsylvania.

“ERISA” means the Employee Retirement Income Security Act of 1974, as the same
may be amended or supplemented from time to time, and any successor statute of
similar import, and the rules and regulations thereunder, as from time to time
in effect.

“ERISA Affiliate” means, at any time, any trade or business (whether or not
incorporated) under common control with the Borrower and are treated as a single
employer under Section 414 of the Code.

“ERISA Event” means (a) a reportable event (under Section 4043 of ERISA and
regulations thereunder) with respect to a Pension Plan, for which a waiver of
the reporting requirement is not available; (b) a withdrawal by the Borrower or
any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during
a plan year in which it was a substantial employer (as defined in
Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial
withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination under Sections 4041 or 4041A of ERISA, or the commencement of

 

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proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“ERISA Group” means, at any time, the Borrower and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control and all other entities which, together with the Borrower,
are treated as a single employer under Section 414 of the Internal Revenue Code
or Section 4001(b)(1) of ERISA.

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

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

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

“Excluded Hedge Liability or Liabilities” means, with respect to the Borrower,
each of its Swap Obligations if, and only to the extent that, all or any portion
of this Agreement or any Loan Document that relates to such Swap Obligation is
or becomes illegal under the CEA, or any rule, regulation or order of the CFTC,
solely by virtue of such Borrower’s failure to qualify as an Eligible Contract
Participant on the Eligibility Date for such Swap. Notwithstanding anything to
the contrary contained in the foregoing or in any other provision of this
Agreement or any Loan Document, the foregoing is subject to the following
provisos: (a) if a Swap Obligation arises under a master agreement governing
more than one Swap, this definition shall apply only to the portion of such Swap
Obligation that is attributable to Swaps for which such guaranty or security
interest is or becomes illegal under the CEA, or any rule, regulations or order
of the CFTC, solely as a result of the failure by such Borrower for any reason
to qualify as an Eligible Contract Participant on the Eligibility Date for such
Swap; (b) if a guarantee of a Swap Obligation would cause such obligation to be
an Excluded Hedge Liability but the grant of a security interest would not cause
such obligation to be an Excluded Hedge Liability, such Swap Obligation shall
constitute an Excluded Hedge Liability for purposes of the guaranty but not for
purposes of the grant of the security interest; and (c) if there is more than
one Borrower or executing this Agreement or the Loan Documents and a Swap
Obligation would be an Excluded Hedge Liability with respect to one or more of
such Persons, but not all of them, this definition of Excluded Hedge Liability
or Liabilities with respect to each such Person shall only be deemed applicable
to (i) the particular Swap Obligations that constitute Excluded Hedge
Liabilities with respect to such Person, and (ii) the particular Person with
respect to which such Swap Obligations constitute Excluded Hedge Liabilities.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes

 

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imposed on or measured by net income (however denominated), franchise Taxes, and
branch profits Taxes, in each case, (i) imposed as a result of such Recipient
being organized under the laws of, or having its principal office or, in the
case of any Lender, its applicable lending office located in, the jurisdiction
imposing such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in a Loan, Letter of Credit or Commitment pursuant to a
law in effect on the date on which (i) such Lender acquires such interest in the
Loan, Letter of Credit or Commitment (other than pursuant to an assignment
request by the Borrower under Section 2.17(b)) or (ii) such Lender changes its
lending office, except in each case to the extent that, pursuant to
Section 2.15, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender acquired the applicable
interest in a Loan, Letter of Credit or Commitment or to such Lender immediately
before it changed its lending office, (c) Taxes attributable to such Recipient’s
failure to comply with Section 2.15(f) and (d) any withholding Taxes imposed
under FATCA.

“Existing Credit Agreement” has the meaning assigned to such term in the
introductory paragraphs hereto.

“Existing Letters of Credit” has the meaning assigned to such term in
Section 2.04(j).

“Fair Market Value” means (a) with respect to any Government Debt, Federal
Agency Debt, or other publicly-traded security (other than those set forth in
clause (b)) the closing price for such security on Bloomberg, Inc., and with
respect to Municipal Securities, S&P’s/J.J. Kenny or, if Bloomberg, Inc. or
S&P’s/J.J. Kenny with respect to Municipal Securities is not available, another
quotation service or services reasonably acceptable to the Administrative Agent,
(b) with respect to Cash and Cash Equivalents, the amounts thereof, and (c) with
respect to any Eligible Collateral (other than those set forth in clauses (a),
and (b)), the price for such Eligible Collateral on the date of calculation
obtained from a generally recognized source approved by the Administrative Agent
or the most recent bid quotation from such approved source (or, if no generally
recognized source exists as to such Eligible Collateral, any other source
specified by the Borrower to which the Administrative Agent does not object).

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Official Bodies and implementing such
Sections of the Code.

“Federal Agency” means any of the following agencies of the federal government
of the United States: (a) Government National Mortgage Association; (b) the
Export-Import Bank of the United States; (c) the Farmers Home Administration, an
agency of the United States Department of Agriculture; (d) the United States
General Services Administration; (e) the United States Maritime Administration;
(f) the United States Small Business Administration; (g) the

 

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Commodity Credit Corporation; (h) the Rural Electrification Administration;
(i) the Rural Telephone Bank; (j) Washington Metropolitan Area Transit
Authority; (k) the Federal National Mortgage Association; (l) the Federal Home
Loan Mortgage Corporation, (m) the Federal Home Loan Bank System; and (n) such
other federal agencies as are reasonably acceptable to the Administrative Agent.

“Federal Agency Debt” means evidence of Freely Transferable Indebtedness that
constitutes obligations of a Federal Agency including interests in
mortgage-backed security pools and collateralized mortgage obligations issued or
guaranteed by any such Federal Agency.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depositary institutions,
as determined in such manner as the NYFRB shall set forth on its public website
from time to time, and published on the next succeeding Business Day by the
NYFRB as the effective federal funds rate, provided that, if the Federal Funds
Effective Rate as so determined would be less than zero, such rate shall be
deemed to zero for the purposes of this Agreement.

“Fee Letter” the letter agreement, dated as of October 2, 2018, among the
Borrower, the Administrative Agent, the Syndication Agent and the Arrangers.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Freely Transferable” means securities which are freely transferable and traded
in established and recognized markets and as to which there are readily
available price quotations.

“GAAP” means generally accepted accounting principles as are in effect from time
to time, subject to the provisions of Section 1.04, and applied on a consistent
basis both as to classification of items and amounts.

“Government Debt” means Freely Transferable Indebtedness issued by the U.S.
Treasury Department or backed by the full faith and credit of the United States
of America.

“Guarantee” means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether

 

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or not such Indebtedness or other obligation is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to obtain any
such Lien). The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion
thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith. The term “Guarantee” as a
verb has a corresponding meaning.

“Hazardous Materials” means: (a) any substance, material, or waste that is
included within the definitions of “hazardous substances,” “hazardous
materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic
waste,” or words of similar import in any Environmental Law; (b) those
substances listed as hazardous substances by the United States Department of
Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) (40
C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or
waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos
or asbestos-containing material, polychlorinated biphenyls, flammable,
explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any
other agricultural chemical.

“Indebtedness” means, as to any Person at any time, any and all indebtedness,
obligations or liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute or contingent, or joint or several)
of such Person for or in respect of: (i) borrowed money, (ii) amounts raised
under or liabilities in respect of any note purchase or acceptance credit
facility, (iii) reimbursement obligations (contingent or otherwise) under any
letter of credit, (iv) obligations under any currency swap agreement, equity
hedge agreement, interest rate swap, cap, collar or floor agreement or other
interest rate management device, in each case to the extent such agreements or
devices are required to be reflected as a liability on the balance sheet of the
Borrower, (v) any other transaction (including forward sale or purchase
agreements, capitalized leases and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to finance
its operations or capital requirements (but not including trade payables and
accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than forty-five (45) days past due), or (vi) any Guarantee of
Indebtedness for borrowed money.

“Indebtedness to Capitalization Ratio” has the meaning assigned to it in
Section 6.14.

“Indemnified Taxes” means (i) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower under any Loan Document, and (ii) to the extent not otherwise described
in the preceding clause (i), Other Taxes.

“Ineligible Institution” has the meaning assigned to it in Section 9.04(b).

“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.06.

 

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

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, three or six months
thereafter, as the Borrower may elect; provided, that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless, in the case of a Eurodollar
Borrowing only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.

“Interest Rate Hedge” means foreign exchange agreements, currency swap
agreements, interest rate exchange, equity hedge agreements, collar, cap, swap
(including, but not limited to, a Swap), adjustable strike cap, adjustable
strike corridor agreements or similar hedging agreements entered into by the
Borrower or its Subsidiaries in the ordinary course of business and not for
speculative purposes.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period (for which the LIBO Screen Rate is available) that is shorter
than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest
period (for which the LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time; provided that, if any Interpolated
Rate shall be less than zero, such rate shall be deemed to be zero for purposes
of this Agreement.

“Investments” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person or (b) a
loan, advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person.

“IRS” means the United States Internal Revenue Service.

 

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“ISP” means International Standby Practices (ICC Publication Number 590).

“Issuing Bank” means PNC Bank, National Association or JPM in its capacity as an
issuer of Letters of Credit hereunder, and their respective successors in such
capacity as provided in Section 2.04(i). Each Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.

“JPM” means JPMorgan Chase Bank, N.A.

“Joint Venture” means a corporation, partnership, limited liability company or
other entity in which any Person other than the Borrower and its Subsidiaries
holds, directly or indirectly, an equity interest.

“Law” means any law(s) (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, issued guidance, release, ruling, order,
executive order, injunction, writ, decree, bond, judgment, authorization or
approval, lien or award of or any settlement arrangement, by agreement, consent
or otherwise, with any Official Body.

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

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

“Lender Provided Interest Rate Hedge” means an Interest Rate Hedge which is
provided by any Lender or its Affiliate and with respect to which the
Administrative Agent confirms: (i) is documented in a standard International
Swap Dealer Association Agreement, and (ii) provides for the method of
calculating the reimbursable amount of the provider’s credit exposure in a
reasonable and customary manner.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.

“Letter of Credit” means any standby letter of credit subject to ISP 98 issued
or deemed issued pursuant to this Agreement.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period or for any ABR Borrowing, the LIBO Screen Rate at approximately
11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period; provided that, if the LIBO Screen Rate shall not be available
at such time for such Interest Period (an “Impacted Interest Period”), then the
LIBO Rate shall be the Interpolated Rate, subject to Section

 

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2.12 in the event that the Administrative Agent shall conclude that it shall not
be possible to determine such Interpolated Rate (which conclusion shall be
conclusive and binding absent manifest error). Notwithstanding the above, to the
extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an
ABR Borrowing, such rate shall be determined as modified by the definition of
Alternate Base Rate.

“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar
Borrowing for any Interest Period or for any ABR Borrowing, the London interbank
offered rate as administered by ICE Benchmark Administration (or any other
Person that takes over the administration of such rate for Dollars) for a period
equal in length to such Interest Period as displayed on such day and time on
pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in
the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate, or on the
appropriate page of such other information service that publishes such rate from
time to time as selected by the Administrative Agent in its reasonable
discretion); provided that, if the LIBO Screen Rate as so determined would be
less than zero, such rate shall be deemed to be zero for the purposes of this
Agreement.

“Lien” means any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
whether voluntarily or involuntarily given, including any conditional sale or
title retention arrangement, and any assignment, deposit arrangement or lease
intended as, or having the effect of, security and any filed financing statement
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).

“Loan Documents” means this Agreement, the Notes (if any), the Fee Letter, the
Pledge Agreement, the Control Agreement, and any other instruments, certificates
or documents delivered in connection herewith or therewith, as the same may be
amended, restated, modified or supplemented from time to time in accordance
herewith or therewith.

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

“Material Adverse Change” means any set of circumstances or events which (a) has
or could reasonably be expected to have any material adverse effect whatsoever
upon the validity or enforceability of this Agreement or any other Loan
Document, (b) is material and adverse to the business, properties, assets,
financial condition, results of operations or prospects of the Borrower,
(c) impairs materially the ability of the Borrower to duly and punctually pay or
perform its Indebtedness, or (d) impairs materially the ability of the
Administrative Agent or any of the Lenders, to the extent permitted, to enforce
their legal remedies pursuant to this Agreement or any other Loan Document.

“Maturity Date” means October 30, 2023.

“Moody’s” means Moody’s Investors Service, Inc.

 

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“Multiemployer Plan” means any employee benefit plan which is a “multiemployer
plan” within the meaning of Section 4001(a)(3) of ERISA and to which the
Borrower or any member of the ERISA Group is then making or accruing an
obligation to make contributions or, within the preceding five (5) Plan years,
has made or had an obligation to make such contributions.

“Municipal Securities” means publicly traded debt securities issued by any state
or municipality or subdivision or instrumentality thereunder located in the
United States of America.

“Net Worth” means the consolidated net worth, calculated in accordance with
GAAP, of the Borrower.

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02.

“Note” means a promissory note issued by the Borrower pursuant to
Section 2.08(e), in form and substance satisfactory to the Administrative Agent.

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day (or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received by the
Administrative Agent from a federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates as so determined
would be less than zero, such rate shall be deemed to be zero for purposes of
this Agreement.

“Obligation” means any obligation or liability of the Borrower, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under or in
connection with (i) this Agreement, the Notes, the Letters of Credit, the Fee
Letter or any other Loan Document whether to the Administrative Agent, any of
the Lenders or their Affiliates or other Persons provided for under such Loan
Documents and (ii) any Lender Provided Interest Rate Hedge; provided, however,
notwithstanding anything to the contrary contained herein, the Obligations shall
not include any Excluded Hedge Liabilities.

“Official Body” means the government of the United States of America or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank) and any group or body charged with setting financial accounting or
regulatory capital rules or standards (including, without limitation, the
Financial Accounting Standards Board, the Bank for International Settlements or
the Basel Committee on Banking Supervision or any successor or similar authority
to any of the foregoing).

 

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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient (or an agent
or affiliate thereof) and the jurisdiction imposing such Tax (other than
connections arising solely from such Recipient having executed, delivered,
become a party to, performed its obligations under, received payments under,
received or perfected a security interest under, engaged in any other
transaction pursuant to or enforced any Loan Document, or sold or assigned an
interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.17).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.-managed
banking offices of depository institutions (as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time)
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate.

“Participant” has the meaning assigned to such term in Section 9.04.

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
times during the immediately preceding five plan years.

“Permitted Liens” shall have the meaning specified in Section 6.02.

“Person” means any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization,
joint venture, government or political subdivision or agency thereof, or any
other entity.

“Plan” means at any time an employee pension benefit plan (including a Multiple
Employer Plan, but not a Multiemployer Plan) which is covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of the
Code and either (i) is maintained by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the preceding
five (5) years been maintained by any entity which was at such time

 

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a member of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by
Section 3(42) of ERISA, as amended from time to time.

“Pledge Agreement” means the Pledge Agreement in substantially the form of
Exhibit C executed and delivered by the Borrower to the Administrative Agent for
the benefit of the Lenders.

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal
as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote
such rate, the highest per annum interest rate published by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest
Rates) as the “bank prime loan” rate or, if such rate is no longer quoted
therein, any similar rate quoted therein (as determined by the Administrative
Agent) or any similar release by the Federal Reserve Board (as determined by the
Administrative Agent). Each change in the Prime Rate shall be effective from and
including the date such change is publicly announced or quoted as being
effective.

“Prior Security Interest” means a valid and enforceable perfected first-priority
security interest under the UCC in the Collateral which is subject only to
statutory Liens for taxes not yet due and payable.

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender
and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Register” has the meaning assigned to such term in Section 9.04.

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

“Relief Proceeding” means any Delinquency Proceeding or any proceeding seeking a
decree or order for relief in respect of the Borrower or any Subsidiary of the
Borrower in a voluntary or involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect, or
for the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of the Borrower or any
Subsidiary of the Borrower for any substantial part of its property, or for the
winding-up or liquidation of its affairs, or an assignment for the benefit of
its creditors.

“Reportable Compliance Event” means that any Covered Entity becomes a Sanctioned
Person, or is charged by indictment, criminal complaint or similar charging
instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate

 

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crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to
the effect that it is reasonably likely that any aspect of its operations is in
actual or probable violation of any Anti-Terrorism Law.

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing more than 50% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time; provided that
for the purpose of determining the Required Lenders needed for any waiver,
amendment, modification or consent, any Lender that is the Borrower, or any
Affiliate of the Borrower shall be disregarded.

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

“Revolving Loan” means a Loan made pursuant to Section 2.03.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

“Sanctioned Country” means a country subject to a sanctions program maintained
under any Anti-Terrorism Law.

“Sanctioned Person” means any individual person, group, regime, entity or thing
listed or otherwise recognized as a specially designated, prohibited, sanctioned
or debarred person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law.

“Securities Intermediary” means any “securities intermediary” within the meaning
of Section 8.102(a)(14) of the UCC at which any securities account constituting
a Collateral Account is held, which shall be (a) located in the United States of
America and (b) acceptable to the Administrative Agent in its reasonable
discretion.

“Solvency Certificate” means a certificate, in the form attached hereto as
Exhibit E, duly completed and executed by an Authorized Officer of the Borrower.

“Solvent” means, with respect to any Person on any date of determination, taking
into account such right of reimbursement, contribution or similar right
available to such Person from other Persons, that on such date (i) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (ii) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person is
able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (iv) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person’s ability to pay as such
debts and liabilities mature, and (v) such Person is not engaged in business or
a transaction, and is not about to engage in business or a

 

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transaction, for which such Person’s property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.

“Statements” has the meaning assigned to it in Section 3.06(a).

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

“Subscriber’s Agreement” means an agreement executed by each policyholder in a
reciprocal/inter-insurance exchange pursuant to which, among other things, the
policyholder appoints an attorney-in-fact to act on its behalf in connection
with the policyholder’s insurance business at the reciprocal/inter-insurance
exchange.

“Subsidiary” of any Person at any time shall mean any corporation, trust,
partnership, any limited liability company or other business entity (i) of which
fifty percent (50%) or more of the outstanding voting securities or other
interests normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such Person or
one or more of such Person’s Subsidiaries, or (ii) which is controlled or
capable of being controlled by such Person or one or more of such Person’s
Subsidiaries. Notwithstanding the foregoing, Erie Exchange and its Subsidiaries
shall not be Subsidiaries of the Borrower for purposes of this Agreement.

“Subsidiary Equity Interests” has the meaning assigned to it in Section 3.02.

“Swap” means any “swap” as defined in Section 1a(47) of the CEA and regulations
thereunder, other than (a) a swap entered into, or subject to the rules of, a
board of trade designated as a contract market under Section 5 of the CEA, or
(b) a commodity option entered into pursuant to CFTC Regulation 32.3(a).

“Swap Obligation” means an obligation to pay or perform under any agreement,
contract or transaction that constitutes a Swap.

 

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

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder.

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

“UCC” means the Uniform Commercial Code as in effect in each applicable
jurisdiction.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.15.

“Valuation Statement” has the meaning assigned to it in Section 5.13(d).

“Withholding Agent” means the Borrower and the Administrative Agent.

“Write-Down and Conversion Powers” shall mean, with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule.

SECTION 1.02.    Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

SECTION 1.03.    Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any definition
of or reference to any statute, rule or regulation shall be construed as
referring thereto as from time to time amended, supplemented or otherwise
modified (including by succession of comparable successor laws), (c) any
reference herein to any Person shall be construed to include

 

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such Person’s successors and assigns, (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (e) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (f) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.

SECTION 1.04.    Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. Notwithstanding any
other provision contained herein, all terms of an accounting or financial nature
used herein shall be construed, and all computations of amounts and ratios
referred to herein shall be made, without giving effect to any election under
Financial Accounting Standards Board Accounting Standards Codification 825 (or
any other Financial Accounting Standard having a similar result or effect) to
value any Indebtedness or other liabilities of the Borrower or any Subsidiary at
“fair value”, as defined therein.

ARTICLE II

THE CREDITS

SECTION 2.01.    Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make Revolving Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (a) such Lender’s Revolving Credit Exposure exceeding such
Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures
exceeding the total Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.

SECTION 2.02.    Loans and Borrowings. (a) Each Revolving Loan shall be made as
part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.

(b)     Subject to Section 2.12, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith.

 

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Each Lender at its option may make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such Loan in accordance with the terms of this Agreement.

(c)    At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $2,000,000. At the time that each ABR
Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $100,000 and not less than $2,000,000; provided that
an ABR Revolving Borrowing may be in an aggregate amount that is equal to the
entire unused balance of the total Commitments or that is required to finance
the reimbursement of an LC Disbursement as contemplated by Section 2.04(e).

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

(e)    All loans made pursuant to the Existing Credit Agreement shall be deemed
to have been issued hereunder, be subject to and governed by the terms and
conditions hereof and constitute Obligations hereunder.

SECTION 2.03.    Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, on the date of the proposed Borrowing; provided that any such
notice of an ABR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e) may be given not later than
10:00 a.m., New York City time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery, telecopy or facsimile (or e-mail with a PDF copy
attached) to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:

(i)    the aggregate amount of the requested Borrowing;

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

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

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

 

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(v)    the location and number of the Borrower’s account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.05.

If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

SECTION 2.04.    Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit as the applicant thereof for the support of its or its Subsidiaries’
obligations, in a form reasonably acceptable to the Administrative Agent and the
applicable Issuing Bank, at any time and from time to time during the
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the applicable Issuing Bank relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.

(b)    Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver,
telecopy or facsimile (or transmit by electronic communication, if arrangements
for doing so have been approved by the applicable Issuing Bank) to the
applicable Issuing Bank and the Administrative Agent (reasonably in advance of
the requested date of issuance, amendment, renewal or extension, but in any
event no less than three Business Days) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day), the date on which such Letter of Credit is to
expire (which shall comply with paragraph (c) of this Section), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the applicable Issuing Bank, the Borrower also
shall submit a letter of credit application on the applicable Issuing Bank’s
standard form in connection with any request for a Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon issuance,
amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the LC Exposure shall not exceed $25,000,000
and (ii) the sum of the total Revolving Credit Exposures shall not exceed the
total Commitments.

(c)    Expiration Date. Each Letter of Credit shall expire (or be subject to
termination by notice from the applicable Issuing Bank to the beneficiary
thereof) at or prior to the close of business on the earlier of (i) the date one
year after the date of the issuance of such Letter of Credit (or, in the case of
any renewal or extension thereof, one year after such renewal or extension) and
(ii) the date that is seven days prior to the Maturity Date.

 

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

(e)    Reimbursement. If the applicable Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, New York City time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 12:00 noon, New York City time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower may, subject to the conditions to borrowing set forth herein,
request in accordance with Section 2.03 that such payment be financed with an
ABR Revolving Borrowing in an equivalent amount and, to the extent so financed,
the Borrower’s obligation to make such payment shall be discharged and replaced
by the resulting ABR Revolving Borrowing. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the applicable
Issuing Bank the amounts so received by it from the Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the applicable Issuing Bank, then to
such Lenders and the applicable Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse the applicable
Issuing Bank for any LC Disbursement (other than the

 

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funding of ABR Revolving Loans as contemplated above) shall not constitute a
Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

(f)    Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor any Issuing Bank,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of either Issuing Bank; provided that the foregoing shall not be
construed to excuse the applicable Issuing Bank from liability to the Borrower
to the extent of any direct damages (as opposed to special, indirect,
consequential or punitive damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the applicable Issuing Bank’s failure to exercise
care when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof. The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the part
of the applicable Issuing Bank (as finally determined by a court of competent
jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the applicable Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

(g)    Disbursement Procedures. The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The applicable Issuing Bank shall
promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy or facsimile (or e-mail with a PDF copy attached)) of
such demand for payment and whether the applicable Issuing Bank has made or will
make an LC Disbursement thereunder; provided that any failure to give or delay
in giving

 

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such notice shall not relieve the Borrower of its obligation to reimburse the
applicable Issuing Bank and the Lenders with respect to any such LC
Disbursement.

(h)    Interim Interest. If either Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.11(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the applicable
Issuing Bank, except that interest accrued on and after the date of payment by
any Lender pursuant to paragraph (e) of this Section to reimburse the applicable
Issuing Bank shall be for the account of such Lender to the extent of such
payment.

(i)    Replacement of an Issuing Bank. Each Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and any successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of either Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.10(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
applicable Issuing Bank under this Agreement with respect to Letters of Credit
to be issued thereafter and (ii) references herein to the term “Issuing Bank”
shall be deemed to refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the context shall require.
After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.

(j)    Existing Letters of Credit. The Letters of Credit identified on Schedule
2.04(j) hereto (the “Existing Letters of Credit”) which are issued and
outstanding under the Existing Credit Agreement shall, upon satisfaction of the
conditions set forth in Article IV hereto, automatically and without further
action on the part of the Administrative Agent, the Issuing Banks, the Lenders
or the Borrower be deemed Letters of Credit issued under this Agreement.

SECTION 2.05.    Funding of Borrowings. (a) Each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower designated by the Borrower in the applicable
Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.04(e) shall be
remitted by the Administrative Agent to the applicable Issuing Bank.

 

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(b)    Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing. Any payment by the Borrower shall be without prejudice to any claim
the Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.

SECTION 2.06.    Interest Elections. (a) Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and, in
the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.

(b)    To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery, telecopy or facsimile (or e-mail with a PDF copy attached) to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower.

(c)    Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:

(i)    the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below shall
be specified for each resulting Borrowing);

 

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(ii)    the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

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

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

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

(d)    Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

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

SECTION 2.07.    Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.

(b)    The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $100,000 and not less than $5,000,000 and
(ii) the Borrower shall not terminate or reduce the Commitments if, after giving
effect to any concurrent prepayment of the Loans in accordance with
Section 2.09, the sum of the Revolving Credit Exposures would exceed the total
Commitments.

(c)    The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Commitments delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower (by notice to the

 

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Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.

SECTION 2.08.    Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Revolving Loan on the
Maturity Date.

(b)    Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.

(c)    The Administrative Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.

(d)    The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

(e)    Any Lender may request that Loans made by it be evidenced by a promissory
note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.09.    Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with paragraph (b) of this Section.

(b)    The Borrower shall notify the Administrative by telephone (confirmed by
telecopy or facsimile (or e-mail with a PDF copy attached)) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment or (ii) in the case of prepayment of an ABR Revolving Borrowing, not
later than 11:00 a.m., New York City time, on the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of

 

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prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.07, then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.07. Promptly following receipt of any such notice relating to a
Revolving Borrowing, the Administrative Agent shall advise the Lenders of the
contents thereof. Each partial prepayment of any Revolving Borrowing shall be in
an amount that would be permitted in the case of an advance of a Revolving
Borrowing of the same Type as provided in Section 2.02. Each prepayment of a
Revolving Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.11.

SECTION 2.10.    Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Applicable Rate on the daily amount of the unused Commitment of such Lender
during the period from and including the Effective Date to but excluding the
date on which such Commitment terminates (the “Commitment Fee”). Accrued
facility fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof. All
facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

(b)    The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at the same Applicable Rate used to
determine the interest rate applicable to Eurodollar Revolving Loans on the
average daily amount of such Lender’s LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender’s Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the applicable Issuing Bank a fronting fee,
which shall accrue at the rate of 0.125% per annum on the average daily amount
of the LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date
on which there ceases to be any LC Exposure, as well as such Issuing Bank’s
standard fees with respect to the issuance, amendment, renewal or extension of
any Letter of Credit or processing of drawings thereunder. Participation fees
and fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to either Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
Upon the occurrence of an Event of Default and until such time such Event of
Default shall have been cured or waived, and at the discretion of the
Administrative Agent or upon written demand by the Required Lenders to the
Administrative Agent, the participation fee set forth in clause (i) above shall
be increased by 2% per annum.

 

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(c)    The Borrower agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.

(d)    All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to either Issuing Bank, in the
case of fees payable to it) for distribution, in the case of facility fees and
participation fees, to the Lenders. Fees paid shall not be refundable under any
circumstances; provided, however, that any Commitment Fee accrued with respect
to the Commitment of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall not be
payable by the Borrower so long as such Lender shall be a Defaulting Lender
except to the extent that such fees shall otherwise have been due and payable by
the Borrower prior to such time.

SECTION 2.11.    Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)    The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.

(c)    Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section. Upon the
occurrence of an Event of Default and until such time such Event of Default
shall have been cured or waived, and at the discretion of the Administrative
Agent or upon written demand by the Required Lenders to the Administrative
Agent, the rate of interest for each Loan shall be increased by 2% per annum.

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

(e)    All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted

 

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LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

SECTION 2.12.    Alternate Rate of Interest; Illegality.

(a)    If prior to the commencement of any Interest Period for a Eurodollar
Borrowing:

(i) the Administrative Agent determines (which determination shall be conclusive
and binding absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable
(including, without limitation, by means of an Interpolated Rate or because the
LIBO Screen Rate is not available or published on a current basis) for such
Interest Period; or

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

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders as provided in Section 9.01 as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (A) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and any such Eurodollar Borrowing shall be repaid or converted into an ABR
Borrowing on the last day of the then current Interest Period applicable
thereto, and (B) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

(b)    If any Lender determines that any Law has made it unlawful, or if any
Official Body has asserted that it is unlawful, for any Lender or its applicable
lending office to make, maintain, fund or continue any Eurodollar Borrowing, or
any Official Body has imposed material restrictions on the authority of such
Lender to purchase or sell, or to take deposits of, dollars in the London
interbank market, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligations of such Lender to make, maintain, fund
or continue Eurodollar Loans or to convert ABR Borrowings to Eurodollar
Borrowings will be suspended until such Lender notifies the Administrative Agent
and the Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrower will upon demand from
such Lender (with a copy to the Administrative Agent), either prepay or convert
all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Borrowings to such day, or immediately, if such Lender
may not lawfully continue to maintain such Loans. Upon any such prepayment or
conversion, the Borrower will also pay accrued interest on the amount so prepaid
or converted.

(c)    If at any time the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that (i) the circumstances set forth
in clause (a)(i) have arisen

 

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and such circumstances are unlikely to be temporary or (ii) the circumstances
set forth in clause (a)(i) have not arisen but either (w) the supervisor for the
administrator of the LIBO Screen Rate has made a public statement that the
administrator of the LIBOR Screen Rate is insolvent (and there is no successor
administrator that will continue publication of the LIBOR Screen Rate), (x) the
administrator of the LIBO Screen Rate has made a public statement identifying a
specific date after which the LIBO Screen Rate will permanently or indefinitely
cease to be published by it (and there is no successor administrator that will
continue publication of the LIBOR Screen Rate), (y) the supervisor for the
administrator of the LIBO Screen Rate has made a public statement identifying a
specific date after which the LIBO Screen Rate will permanently or indefinitely
cease to be published or (z) the supervisor for the administrator of the LIBO
Screen Rate or an Official Body having jurisdiction over the Administrative
Agent has made a public statement identifying a specific date after which the
LIBO Screen Rate may no longer be used for determining interest rates for loans,
then the Administrative Agent and the Borrower shall endeavor to establish an
alternate rate of interest to the LIBO Rate that gives due consideration to the
then prevailing market convention for determining a rate of interest for
syndicated loans in the United States at such time, and shall enter into an
amendment to this Agreement to reflect such alternate rate of interest and such
other related changes to this Agreement as may be applicable (but, for the
avoidance of doubt, such related changes shall not include a reduction of the
Applicable Rate). Notwithstanding anything to the contrary in Section 9.02, such
amendment shall become effective without any further action or consent of any
other party to this Agreement so long as the Administrative Agent shall not have
received, within five Business Days of the date notice of such alternate rate of
interest is provided to the Lenders, a written notice from the Required Lenders
stating that such Required Lenders object to such amendment. Until an alternate
rate of interest shall be determined in accordance with this clause (c) (but, in
the case of the circumstances described in clause (ii) of the first sentence of
this Section 2.12(c), only to the extent the LIBO Screen Rate for such Interest
Period is not available or published at such time on a current basis), (x) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and any such Eurodollar Borrowing shall be repaid or converted into an ABR
Borrowing on the last day of the then current Interest Period applicable
thereto, and (y) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that, if such alternate
rate of interest shall be less than zero, such rate shall be deemed to be zero
for the purposes of this Agreement.

SECTION 2.13.    Increased Costs. (a) If any Change in Law shall:

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

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

 

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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or any
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or such Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or such Issuing
Bank, as the case may be, for such additional costs incurred or reduction
suffered.

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

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

(d)    Failure or delay on the part of any Lender or any Issuing Bank to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender’s or such Issuing Bank’s right to demand such compensation; provided that
the Borrower shall not be required to compensate a Lender or a Issuing Bank
pursuant to this Section for any increased costs or reductions incurred more
than 6 months prior to the date that such Lender or such Issuing Bank, as the
case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or such Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 6-month period referred to above shall be extended to include the period of
retroactive effect thereof.

(e)    The obligations of the Borrower pursuant to this Section 2.13 are subject
to the following: no Lender shall enforce the provisions solely against the
Borrower or against a few of such Lender’s customers without in each case
generally enforcing these (or similar provisions in other contracts) with
respect to similarly situated borrowers (provided that, anything herein to

 

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the contrary notwithstanding, no Lender shall be required to disclose to the
Borrower the identity of, or the nature of such Lender’s relationship with, any
other of such Lender’s customers).

SECTION 2.14.    Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under
Section 2.09(b) and is revoked in accordance therewith), or (d) the assignment
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to
Section 2.17, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to this Section (with the
calculation thereof in reasonable detail) shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.

SECTION 2.15.    Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable Law. If
any applicable Law (as determined in the good faith discretion of an applicable
Withholding Agent) requires the deduction or withholding of any Tax from any
such payment by a Withholding Agent, then the applicable Withholding Agent shall
be entitled to make such deduction or withholding and shall timely pay the full
amount deducted or withheld to the relevant Official Body in accordance with
applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by
the Borrower shall be increased as necessary so that after such deduction or
withholding has been made (including such deductions and withholdings applicable
to additional sums payable under this Section 2.15), the applicable Recipient
receives an amount equal to the sum it would have received had no such deduction
or withholding of Indemnified Tax been made.

(b) Payment of Other Taxes by the Borrower. The Borrower shall timely pay to the
relevant Official Body in accordance with applicable Law, or at the option of
the Administrative Agent timely reimburse it for, Other Taxes.

 

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(c) Evidence of Payment. As soon as practicable after any payment of Taxes by
the Borrower to an Official Body pursuant to this Section 2.15, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Official Body evidencing such payment, a copy of the
return reporting such payment, or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

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

(e) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Official Body. A certificate as to the amount of such payment or
liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable Law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section

 

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2.15(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), an executed
copy of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the U.S. is a party (x) with respect to payments of interest
under any Loan Document, an executed copy of IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, establishing an exemption from, or reduction of, U.S.
federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan Document,
IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption
from, or reduction of, U.S. federal withholding Tax pursuant to the “business
profits” or “other income” article of such tax treaty;

(2) in the case of a Foreign Lender claiming that its extension of credit will
generate U.S. effectively connected income, an executed copy of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit F-1 to the effect that such Foreign Lender
is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) an executed copy of IRS Form W-8BEN or IRS Form W-8BEN-E,
as applicable; or

(4) to the extent a Foreign Lender is not the beneficial owner, an executed copy
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN or IRS Form
W-8BEN-E, as applicable, a U.S. Tax Compliance Certificate

 

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substantially in the form of Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or
other certification documents from each beneficial owner, as applicable;
provided that if the Foreign Lender is a partnership and one or more direct or
indirect partners of such Foreign Lender are claiming the portfolio interest
exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate
substantially in the form of Exhibit F-4 on behalf of each such direct and
indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative Agent (in such number of copies
as shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed copies of any other form prescribed by applicable Law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable Law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the Administrative Agent such documentation prescribed by applicable Law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(g) Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 2.15 (including by
the payment of additional amounts pursuant to this Section 2.15), it shall pay
to the indemnifying party an amount equal to such refund (but only to the extent
of indemnity payments made under this Section 2.15 with respect to the Taxes
giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by
the relevant Official Body with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (g) (plus any
penalties, interest or other charges imposed by the relevant Official Body) in
the event that such indemnified party

 

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is required to repay such refund to such Official Body. Notwithstanding anything
to the contrary in this paragraph (g), in no event will the indemnified party be
required to pay any amount to an indemnifying party pursuant to this paragraph
(g) the payment of which would place the indemnified party in a less favorable
net after-Tax position than the indemnified party would have been in if the Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts giving rise to such refund had never been paid. This paragraph (g) shall
not be construed to require any indemnified party to make available its Tax
returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

(h) Survival. Each party’s obligations under this Section 2.15 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Loan
Document (including the payment in full of the Obligations).

(i) Defined Terms. For purposes of this Section 2.15, the term “Lender” includes
any Issuing Bank and the term “applicable law” includes FATCA.

SECTION 2.16.    Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
its offices at 270 Park Avenue, New York, New York, except payments to be made
directly to the applicable Issuing Bank as expressly provided herein and except
that payments pursuant to Sections 2.13, 2.14, 2.15 and 9.03 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.

(b)    If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

(c)    If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving Loans

 

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or participations in LC Disbursements resulting in such Lender receiving payment
of a greater proportion of the aggregate amount of its Revolving Loans and
participations in LC Disbursements and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

(d)    Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the applicable Issuing Bank hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the applicable Issuing Bank, as the case may be, the amount due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders or
the applicable Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or such Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

(e)    If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(d), 2.04(e), 2.05(b), 2.16(d) or 9.03(c), then the
Administrative Agent may, in its discretion and notwithstanding any contrary
provision hereof, apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid, and/or hold
such amounts in a segregated account over which the Administrative Agent shall
have exclusive control as cash collateral for, and application to, any future
funding obligations of such Lender under any such Section, in any order as
determined by the Administrative Agent in its discretion.

 

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SECTION 2.17.    Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.13, or if the Borrower is required
to pay any additional amount to any Lender or any Official Body for the account
of any Lender pursuant to Section 2.15, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b)    If any Lender requests compensation under Section 2.13, or if the
Borrower is required to pay any additional amount to any Lender or any Official
Body for the account of any Lender pursuant to Section 2.15, or if any Lender
becomes a Defaulting Lender or a Non-Consenting Lender, then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and
if a Commitment is being assigned, each Issuing Bank), which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.

SECTION 2.18.    Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

(a)    fees shall cease to accrue on the Commitment of such Defaulting Lender
pursuant to Section 2.10(a);

(b)    the Commitment and Revolving Credit Exposure of such Defaulting Lender
shall not be included in determining whether the Required Lenders have taken or
may take any action hereunder (including any consent to any amendment, waiver or
other modification pursuant to Section 9.02); provided, that this clause
(b) shall not apply to the vote of a Defaulting Lender in

 

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the case of an amendment, waiver or other modification requiring the consent of
such Lender or each Lender affected thereby;

(c)    if any LC Exposure exists at the time such Lender becomes a Defaulting
Lender then:

(i)    all or any part of the LC Exposure of such Defaulting Lender shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Applicable Percentages but only to the extent that (x) the sum of all
non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s
LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments
and (y) no Default or Event of Default has occurred and is continuing at such
time;

(ii)    if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent, cash collateralize for the benefit of the
Issuing Banks only the Borrower’s obligations corresponding to such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in a deposit account held at the Administrative Agent for
so long as such LC Exposure is outstanding;

(iii)    if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be
required to pay any fees to such Defaulting Lender pursuant to
Section 2.10(b)(i) with respect to such Defaulting Lender’s LC Exposure during
the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv)    if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant
to clause (i) above, then the fees payable to the Lenders pursuant to
Section 2.10(a) and Section 2.10(b)(i) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; and

(v)    if all or any portion of such Defaulting Lender’s LC Exposure is neither
reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of any Issuing Bank or any other
Lender hereunder, all Commitment Fees that otherwise would have been payable to
such Defaulting Lender (solely with respect to the portion of such Defaulting
Lender’s Commitment that was utilized by such LC Exposure) and letter of credit
fees payable under Section 2.10(b)(i) with respect to such Defaulting Lender’s
LC Exposure shall be payable to such Issuing Bank until and to the extent that
such LC Exposure is reallocated and/or cash collateralized; and

(d)    so long as such Lender is a Defaulting Lender, no Issuing Bank shall be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
LC Exposure will be 100% covered by the Commitments of the non-Defaulting
Lenders and/or cash collateral will be provided by the

 

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Borrower in accordance with Section 2.18(c), and participating interests in any
newly issued or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.18(c)(i) (and such
Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event with respect to a parent of any Lender shall occur
following the date hereof and for so long as such event shall continue or
(ii) any Issuing Bank has a good faith belief that any Lender has defaulted in
fulfilling its obligations under one or more other agreements in which such
Lender commits to extend credit, no Issuing Bank shall be required to issue,
amend or increase any Letter of Credit, unless such Issuing Bank shall have
entered into arrangements with the Borrower or such Lender, satisfactory to such
Issuing Bank to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrower and the Issuing Banks
each agrees that a Defaulting Lender has adequately remedied all matters that
caused such Lender to be a Defaulting Lender, then the LC Exposure of the
Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment
and on such date such Lender shall purchase at par such of the Loans of the
other Lenders as the Administrative Agent shall determine may be necessary in
order for such Lender to hold such Loans in accordance with its Applicable
Percentage.

SECTION 2.19.    Use of Proceeds. The proceeds of the Loans shall be used (a) to
provide working capital to the Borrower, (b) for general corporate purposes of
the Borrower, and (c) to refinance the Existing Credit Agreement. The Borrower
shall not use the Letters of Credit or the proceeds of the Loans for any
purposes that contravene any Law or any provision hereof.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to the Lenders that:

SECTION 3.01.    Organization and Qualification; Power and Authority; Compliance
With Laws; Title to Properties; Event of Default. (i) The Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, (ii) Erie Exchange is a reciprocal
insurance exchange duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, (iii) the Borrower has the lawful
power to own or lease its properties and to engage in the business it presently
conducts or proposes to conduct, (iv) the Borrower is duly licensed or qualified
and in good standing as of the Effective Date in each jurisdiction listed on
Schedule 3.01 and in all other jurisdictions where the property owned or leased
by it or the nature of the business transacted by it or both makes such
licensing or qualification necessary, (v) the Borrower has full power to enter
into, execute, deliver and carry out this Agreement and the other Loan
Documents, (vi) the Borrower has full power to incur the Indebtedness
contemplated by the Loan Documents and to perform its Obligations under the Loan
Documents, and all such actions have been duly authorized by all necessary
proceedings on its part, (vii) the Borrower is in compliance in all material
respects with all applicable laws (other than Environmental Laws which are
specifically addressed in Section 3.14) in all jurisdictions in which the
Borrower and any Subsidiary of the Borrower is presently or will be doing
business

 

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except where the failure to do so would not constitute a Material Adverse
Change, and (viii) the Borrower has good and marketable title to or valid
leasehold interest in all properties, assets and other rights which it purports
to own or lease or which are reflected as owned or leased on its books and
records, free and clear of all Liens and encumbrances except Permitted Liens. No
Default or Event of Default exists or is continuing.

SECTION 3.02.    Subsidiaries and Owners; Investment Companies. Schedule 3.02
states (i) the name of each of the Borrower’s Subsidiaries (if any), its
jurisdiction of organization and the amount, percentage and type of equity
interests in such Subsidiary (the “Subsidiary Equity Interests”), and (ii) any
options, warrants or other rights outstanding to purchase any such equity
interests referred to in clause (i) (collectively, the “Equity Interests”). The
Borrower and each Subsidiary of the Borrower has good and marketable title to
all of the Equity Interests it purports to own in its Subsidiaries, free and
clear in each case of any Lien and all such Equity Interests have been validly
issued, fully paid and nonassessable. Neither the Borrower nor any of its
Subsidiaries is an “investment company” registered or required to be registered
under the Investment Company Act of 1940 or under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of
1940 and shall not become such an “investment company” or under such “control”.

SECTION 3.03.    Validity and Binding Effect. This Agreement and each of the
other Loan Documents (i) has been duly and validly executed and delivered by the
Borrower, and (ii) constitutes, or will constitute, legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
its terms.

SECTION 3.04.    No Conflict; Material Agreements; Consents. Neither the
execution and delivery of this Agreement or the other Loan Documents by the
Borrower, nor the consummation of the transactions herein or therein
contemplated or compliance with the terms and provisions hereof or thereof by
any of them will conflict with, constitute a default under or result in any
breach of (i) the terms and conditions of the certificate of incorporation,
bylaws, Subscriber’s Agreements or other organizational documents of the
Borrower or (ii) any Law or any material agreement or instrument or order, writ,
judgment, injunction or decree to which the Borrower or any of its Subsidiaries
is a party or by which the Borrower or any of its Subsidiaries is bound or to
which the Borrower is subject, or result in the creation or enforcement of any
Lien, charge or encumbrance whatsoever upon any property (now or hereafter
acquired) of the Borrower or any of its Subsidiaries (other than Liens granted
under the Loan Documents). There is no default under any such material agreement
of the Borrower (referred to above) and neither the Borrower nor any of its
Subsidiaries is bound by any contractual obligation, or subject to any
restriction in any organizational document, or any requirement of Law which
could reasonably be expected to result in a Material Adverse Change. No consent,
approval, exemption, order or authorization of, or a registration or filing
with, any Official Body or any other Person is required by any Law or any
agreement in connection with the execution, delivery and carrying out of this
Agreement and the other Loan Documents.

SECTION 3.05.    Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the Borrower, threatened against
the Borrower or any Subsidiary of the Borrower at law or in equity before any
Official Body which individually or in the aggregate

 

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could reasonably be expected to result in any Material Adverse Change. Neither
the Borrower nor any Subsidiary of the Borrower is in violation of any order,
writ, injunction or any decree of any Official Body which could reasonably be
expected to result in any Material Adverse Change.

SECTION 3.06.    Financial Statements.

(a)    The Borrower has delivered to the Administrative Agent copies of its
consolidated balance sheet and statements of income, stockholders equity and
cash flows for and as of the end of the fiscal year ended December 31, 2017
(including, without limitation, the provisions made therein for Investments and
the valuation thereof, reserves, policy and contract claims and statutory
liabilities) reported on by Ernst & Young LLP, independent accountants. In
addition, the Borrower has delivered to the Administrative Agent copies of its
consolidated balance sheet and statements of income, stockholders equity and
cash flows for the fiscal year to date and as of the end of the fiscal quarter
ended June 30, 2018 certified by its chief financial officer (all such
consolidated balance sheet and statements of income, stockholders equity and
cash flows being collectively referred to as the “Statements”). The Statements
were compiled from the books and records maintained by the Borrower’s
management, fairly represent the consolidated financial condition of the
Borrower and its Subsidiaries as of the respective dates thereof and the results
of operations for the fiscal periods then ended and have been prepared in
accordance with GAAP, consistently applied, subject to normal year-end audit
adjustments.

(b)    Neither the Borrower nor any Subsidiary of the Borrower has any
liabilities, contingent or otherwise, or forward or long-term commitments that
are not disclosed in the Statements or in the notes thereto, and except as
disclosed therein there are no unrealized or anticipated losses from any
commitments of the Borrower or any Subsidiary of the Borrower which could
reasonably be expected to cause a Material Adverse Change. Since December 31,
2017, no Material Adverse Change has occurred.

(c)    The marketable securities and short term Investments reflected in the
Statements are valued at cost, amortized cost or market value, as required by
GAAP.

SECTION 3.07.    Margin Stock. Neither the Borrower nor any Subsidiaries of the
Borrower engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U, T or X as promulgated by the Board). No part of the
proceeds of any Loan has been or will be used, immediately, incidentally or
ultimately, to purchase or carry any margin stock or to extend credit to others
for the purpose of purchasing or carrying any margin stock or which is
inconsistent with the provisions of the regulations of the Board. Neither the
Borrower nor any Subsidiary of the Borrower holds or intends to hold margin
stock in such amounts that more than thirty-five percent (35%) of the reasonable
value of the assets of the Borrower or any Subsidiary of the Borrower are or
will be represented by margin stock.

SECTION 3.08.    Full Disclosure. Neither this Agreement nor any other Loan
Document, nor any certificate, statement, agreement or other documents when
furnished to the Administrative Agent or any Lender in connection herewith or
therewith, contains any untrue

 

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statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which they were made and taken as a whole, not misleading.
There is no fact known to the Borrower which materially adversely affects the
business, property, assets, financial condition, results of operations or
prospects of the Borrower or any Subsidiary of the Borrower which has not been
set forth in this Agreement or in the certificates, statements, agreements or
other documents furnished in writing to the Administrative Agent and the Lenders
prior to or at the date hereof in connection with the transactions contemplated
hereby. As of the Effective Date, the information included in the Beneficial
Ownership Certification delivered on or before the Effective Date is true and
correct in all respects.

SECTION 3.09.    Taxes. Except as set forth on Schedule 3.09, all federal, state
premium, material local and other material tax returns required to have been
filed with respect to the Borrower and each Subsidiary of the Borrower have been
filed, and payment or adequate provision has been made for the payment of all
material taxes, fees, assessments and other governmental charges which have or
may become due pursuant to said returns or to assessments received, except to
the extent that such taxes, fees, assessments and other charges are being
contested in good faith by appropriate proceedings diligently conducted and for
which such reserves or other appropriate provisions, if any, as shall be
required by GAAP, shall have been made.

SECTION 3.10.    Patents, Trademarks, Copyrights, Licenses, Etc. The Borrower
and each Subsidiary of the Borrower owns or possesses all the material patents,
trademarks, service marks, trade names, copyrights, licenses, registrations,
franchises, permits and rights necessary to own and operate its properties and
to carry on its business as presently conducted and planned to be conducted by
the Borrower or Subsidiary, without known possible, alleged or actual conflict
with the rights of others which could reasonably be expected to result in a
Material Adverse Change.

SECTION 3.11.    Liens in the Collateral. The Liens in the Collateral granted to
the Administrative Agent for the benefit of the Lenders pursuant to the Pledge
Agreement constitute and will continue to constitute Prior Security Interests.
All filing fees and other expenses in connection with the perfection of such
Liens have been or will be paid by the Borrower.

SECTION 3.12.    Insurance. The properties of the Borrower and each of its
Subsidiaries are insured pursuant to policies and other bonds which are valid
and in full force and effect and which provide adequate coverage from reputable
and financially sound insurers, including self-insurance to the extent
customary.

SECTION 3.13.    ERISA Compliance.

(a)    Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state Laws. Each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of Borrower, nothing has occurred which would prevent, or cause the

 

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loss of, such qualification. Borrower and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

(b)    No ERISA Event has occurred or is reasonably expected to occur; (a) no
qualified pension plan has any unfunded pension liability (i.e. excess of
benefit liabilities over the current value of that Pension Plan’s assets,
determined in accordance with the assumptions used for funding the Pension Plan
for the applicable plan year); (b) no Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (c) no Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 of ERISA with respect to a
Multiemployer Plan; and (d) no Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Sections 4069 or 4212(c) of ERISA.

SECTION 3.14.    Environmental Matters. The Borrower is and, to the knowledge of
the Borrower and each of its Subsidiaries is and has been in compliance with
applicable Environmental Laws except as disclosed on Schedule 3.14; provided
that such matters so disclosed could not reasonably be expected in the aggregate
to result in a Material Adverse Change.

SECTION 3.15.    Solvency. Before and after giving effect to the initial Loans
hereunder, the Borrower is and will be Solvent.

SECTION 3.16.    Anti-Terrorism Laws. The Borrower represents and warrants that
(a) no Covered Entity is a Sanctioned Person, (b) no Covered Entity, either in
its own right or through any third party, (i) has any of its assets in a
Sanctioned Country or in the possession, custody or control of a Sanctioned
Person in violation of any Anti-Terrorism Law, (ii) does business in or with, or
derives any of its income from investments in or transactions with, any
Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law,
or (iii) engages in any dealings or transactions prohibited by any
Anti-Terrorism Law, (c) the Borrower has implemented and maintains in effect
policies and procedures designed to ensure compliance by the Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Terrorism Laws, and (d) the Borrower, its Subsidiaries and their respective
officers and employees and, to the knowledge of the Borrower, its directors and
agents, are in compliance with Anti-Terrorism Laws in all material respects.

SECTION 3.17.    Updates to Schedules. Should any of the information or
disclosures on any of the following Schedules attached hereto be outdated or
incorrect in any material respect as of the date on which Borrower delivers its
Compliance Certificate for each fiscal quarter end pursuant to Section 5.13(c),
Borrower shall deliver an amended and restated form of such Schedule together
with such Compliance Certificate:

 

Schedule 3.01

  -   

Qualifications to do Business

Schedule 3.02

  -   

Subsidiaries

 

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Schedule 3.14

    -    

Environmental Matters

; provided, however, that Schedule 3.14 shall not be deemed to have been
amended, modified or superseded by any such correction or update, nor shall any
breach of warranty or representation resulting from the inaccuracy or
incompleteness of Schedule 3.14 be deemed to have been cured thereby, unless and
until the Required Lenders, in their sole and absolute discretion, shall accept
in writing such revisions or updates to Schedule 3.14.

ARTICLE IV

CONDITIONS

SECTION 4.01.    Effective Date. The obligations of the Lenders to make Loans
and of the Issuing Banks to issue Letters of Credit hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):

(a)    The Administrative Agent (or its counsel) shall have received each of the
following in form and substance satisfactory to the Administrative Agent:

(i)    A certificate of the Borrower signed by an Authorized Officer, dated the
Effective Date stating that the Borrower is in compliance with its
representations, warranties, covenants and conditions hereunder and no Default
or Event of Default exists and no Material Adverse Change has occurred since the
date of the last annual Statement of the Borrower filed with the Securities and
Exchange Commission or otherwise delivered to the Administrative Agent;

(ii)    A certificate dated the Effective Date and signed by an Authorized
Officer, certifying as to: (a) the names of the Authorized Officers authorized
to sign the Loan Documents and their true signatures; (b) a copy of the Articles
of Incorporation of the Borrower as in effect on the Effective Date certified by
the Secretary of the Commonwealth of Pennsylvania; (c) a copy of the By-Laws of
the Borrower as in effect on the Effective Date; (d) resolutions adopted by the
board of directors of the Borrower approving this Agreement and the
Transactions; (e) a copy of the current form of Subscriber’s Agreement; and
(f) a copy of the current Attorney-In-Fact Agreement between the Borrower and
Erie Exchange;

(iii)    A good standing certificate for the Borrower dated not more than thirty
(30) days prior to the Effective Date, issued by the Secretary of State or other
appropriate official of the Borrower’s jurisdiction of incorporation;

(iv)    This Agreement and each of the other Loan Documents signed by an
Authorized Officer and all appropriate Statements;

(v)    A duly completed Valuation Statement calculated as of the Effective Date;

 

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(vi)    A written opinion of counsel for the Borrower, dated the Effective Date;

(vii)    A duly completed Compliance Certificate as of the last day of the
fiscal quarter of the Borrower ended June 30, 2018, signed by an Authorized
Officer;

(viii)    A Solvency Certificate dated as of the Effective Date, signed by an
Authorized Officer;

(ix)    Evidence that (A) no litigation, investigation or proceeding before or
by any arbitrator or any Official Body shall be continuing or threatened against
the Borrower or against the officers or directors of the Borrower (1) in
connection with this Agreement, the other Loan Documents or the Transactions and
which, in the reasonable opinion of the Administrative Agent, is deemed material
or (2) which could, in the reasonable opinion of the Administrative Agent,
result in a Material Adverse Change; and (B) no injunction, writ, restraining
order or other order of any nature materially adverse to the Borrower or the
conduct of its business shall have been issued by any Official Body;

(x)    All material consents required to effectuate the Transactions;

(xi)    Evidence acceptable to the Administrative Agent that adequate insurance
required to be maintained under this Agreement is in full force and effect;

(xii)    Lien searches in acceptable scope and with acceptable results;

(xiii)    Evidence that the Borrower has received all authorizations, licenses
and permits necessary for the operation of the Borrower’s business;

(xiv)    The Administrative Agent shall have received, (i) at least five
(5) days prior to the Effective Date, all documentation and other information
regarding the Borrower requested in connection with applicable “know your
customer” and anti-money laundering rules and regulations, including the Act, to
the extent requested in writing of the Borrower at least ten (10) days prior to
the Effective Date, (ii) to the extent the Borrower qualifies as a “legal entity
customer” under the Beneficial Ownership Regulation, at least five (5) days
prior to the Effective Date, a Beneficial Ownership Certification in relation to
the Borrower, and (iii) a properly completed and signed IRS Form W-8 or W-9, as
applicable, for the Borrower; and

(xv)    Such other documents in connection with such transactions as the
Administrative Agent or said counsel may reasonably request.

(b)    The Borrower shall have paid all fees and other amounts due and payable
on or prior to the Effective Date, including, to the extent invoiced at least
two Business Days prior

 

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to the Effective Date, reimbursement or payment of all reasonable out-of-pocket
expenses required to be reimbursed or paid by the Borrower hereunder.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans and of the Issuing
Banks to issue Letters of Credit hereunder shall not become effective unless
each of the foregoing conditions is satisfied (or waived pursuant to
Section 9.02) at or prior to 3:00 p.m., New York City time, on October 30, 2018
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).

SECTION 4.02.    Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Banks to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

(a)    The representations and warranties of the Borrower set forth in this
Agreement shall be true in all respects (in the case of any representation,
warranty or covenant containing a materiality modification) or in all material
respects (in the case of any representation, warranty or covenant not containing
a materiality modification) as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, both immediately before and after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit.

(b)    At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

(c)    The Borrower shall have delivered a duly completed Valuation Statement
calculated as of the most recent Business Day prior to the date of such
Borrowing or Letter of Credit.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.

ARTICLE V

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated, in each case,
without any pending draw, and all LC Disbursements shall have been reimbursed,
the Borrower covenants and agrees with the Lenders that:

SECTION 5.01.    Preservation of Existence, Etc. The Borrower shall maintain its
legal existence as a corporation domiciled in the Commonwealth of Pennsylvania.
The Borrower

 

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shall maintain its license or qualification and good standing in the
Commonwealth of Pennsylvania, and its license or qualification and good standing
in each other jurisdiction in which its ownership or lease of property or the
nature of its business makes such license or qualification necessary and shall
cause each of its Subsidiaries to maintain its legal existence as a corporation,
limited partnership or limited liability company and its license or
qualification and good standing in each jurisdiction in which its ownership or
lease of property or the nature of its business makes such license or
qualification necessary, except as otherwise expressly permitted in
Section 6.06.

SECTION 5.02.    Payment of Liabilities, Including Taxes, Etc. The Borrower
shall, and shall cause each of its Subsidiaries to, duly pay and discharge all
liabilities to which it is subject or which are asserted against it, promptly as
and when the same shall become due and payable, including all material taxes,
assessments and governmental charges upon it or any of its properties, assets,
income or profits, prior to the date on which penalties attach thereto, except
to the extent that such liabilities, including taxes, assessments or charges,
are being contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate provisions,
if any, as shall be required by GAAP, shall have been made.

SECTION 5.03.    Maintenance of Insurance. The Borrower shall, and shall cause
each of its Subsidiaries to, insure its properties and assets against loss or
damage by fire and such other insurable hazards as such assets are commonly
insured in such amounts as similar properties and assets are insured by prudent
companies in similar circumstances carrying on similar businesses, and with
reputable and financially sound insurers, including self-insurance to the extent
customary.

SECTION 5.04.    Maintenance of Properties and Leases. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain in good repair, working order
and condition (ordinary wear and tear excepted) in accordance with the general
practice of other businesses of similar character and size, all of those
properties useful or necessary to its business, and from time to time, the
Borrower will make or cause to be made all appropriate repairs, renewals or
replacements thereof.

SECTION 5.05.    Visitation Rights. The Borrower shall, and shall cause each of
its Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with its
officers, all in such detail and at such times and as often as any of the
Lenders may reasonably request, provided that so long as no Event of Default has
occurred and is continuing, each Lender shall provide the Borrower and the
Administrative Agent with reasonable notice prior to any visit or inspection.

SECTION 5.06.    Keeping of Records and Books of Account. The Borrower shall,
and shall cause each Subsidiary of the Borrower to, maintain and keep proper
books of record and account which enable the Borrower and its Subsidiaries to
issue financial statements in accordance with GAAP and as otherwise required by
applicable Laws of any Official Body having jurisdiction over the Borrower or
any Subsidiary of the Borrower, and in which full, true and correct entries
shall be made in all material respects of all its dealings and business and
financial affairs.

 

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SECTION 5.07.    Compliance with Laws; Use of Proceeds. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable Laws,
including all Environmental Laws, in all respects; provided that it shall not be
deemed to be a violation of this Section 5.07 if any failure to comply with any
Law would not result in fines, penalties, remediation costs, other similar
liabilities or injunctive relief which in the aggregate would constitute a
Material Adverse Change. The Borrower will use the Letters of Credit and the
proceeds of the Loans only in accordance with Section 2.19 and as permitted by
applicable Law. The Borrower will not request any Loan or Letter of Credit, and
the Borrower shall not use, and shall procure that its Subsidiaries and its or
their respective directors, officers, employees and agents shall not use, the
proceeds of any Loan or Letter of Credit (a) in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money, or
anything else of value, to any Person in violation of any Anti-Terrorism Laws,
(b) for the purpose of funding, financing or facilitating any activities,
business or transaction of or with any Sanctioned Person, or in any Sanctioned
Country, except to the extent permitted for a Person required to comply with
Sanctions, or (c) in any manner that would result in the violation of any
Anti-Terrorism Law applicable to any party hereto.

SECTION 5.08.    Further Assurances. The Borrower shall, from time to time, at
its expense, faithfully preserve and protect the Administrative Agent’s Lien on
and Prior Security Interest in the Collateral as a continuing first priority
perfected Lien, subject only to Permitted Liens, and shall do such other acts
and things as the Administrative Agent in its reasonable discretion may deem
necessary or advisable from time to time in order to preserve, perfect and
protect the Liens granted under the Loan Documents and to exercise and enforce
its rights and remedies thereunder, in accordance with the terms thereof, with
respect to the Collateral.

SECTION 5.09.    Anti-Terrorism Laws. The Borrower covenants and agrees that
(a) no Covered Entity will become a Sanctioned Person, (b) no Covered Entity,
either in its own right or through any third party, will (i) have any of its
assets in a Sanctioned Country or in the possession, custody or control of a
Sanctioned Person in violation of any Anti-Terrorism Law, (ii) do business in or
with, or derive any of its income from investments in or transactions with, any
Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law,
(iii) engage in any dealings or transactions prohibited by any Anti-Terrorism
Law or (iv) use the Loans or Letters of Credit to fund any operations in,
finance any investments or activities in, or, make any payments to, a Sanctioned
Country or Sanctioned Person in violation of any Anti-Terrorism Law, (c) the
funds used to repay the Obligations will not be derived from any unlawful
activity, (d) each Covered Entity shall comply with all Anti-Terrorism Laws,
(e) the Borrower shall promptly notify the Agent in writing upon the occurrence
of a Reportable Compliance Event. The Borrower shall provide to the Lenders any
certifications or information that a Lender requests to confirm compliance by
the Borrower with Anti-Terrorism Laws, and (f) the Borrower will maintain in
effect and enforce policies and procedures designed to ensure compliance by the
Borrower, its Subsidiaries and their respective directors, officers, employees
and agents with Anti-Terrorism Laws.

SECTION 5.10.    Collateral Value. The Borrower shall maintain at all times,
subject to the next sentence, Collateral Value of not less than one hundred five
percent (105%) of the Commitments. If at any time the Collateral Value is less
than one hundred five percent (105%) of the Commitments (the amount of such
shortage, the “Collateral Shortfall”), an Event of Default

 

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shall occur unless within three (3) Business Days of the date the Collateral
Shortfall occurred no Collateral Shortfall exists as a result of (i) a change in
the Collateral Value due to market fluctuations, (ii) a deposit of additional
securities in the Collateral Account and/or (iii) a reduction of the Commitments
pursuant to Section 2.07.

SECTION 5.11.    Eligible Collateral Requirements. The Borrower shall cause the
Eligible Collateral to consist of investment property or other assets having an
applicable rating at all times equal to or greater than BBB- or Baa3. For
purposes of this Section 5.11, the rating of any specific investment property or
other assets will be determined as follows: (i) such rating shall be based upon
the higher of (a) the rating of such underlying investment property or other
asset provided by Moody’s and S&P’s or (b) the credit enhanced rating of such
investment property or other asset provided by Moody’s and S&P’s; (ii) if a
difference exists in the ratings of Moody’s and S&P’s and the difference is only
one level, such rating shall be based upon the higher of Moody’s and S&P’s (for
example, if Moody’s rating is Aa3 and S&P’s rating is AA, S&P’s rating would
apply); and (iii) if a difference exists in the ratings of Moody’s & S&P’s and
the difference is two or more levels then the rating will be based upon the
lower of Moody’s and S&P’s (for example, if Moody’s rating is A2 and S&P’s
rating is AA-, Moody’s rating would apply). Notwithstanding anything to the
contrary contained herein, at no time shall more than ten percent (10%) of the
underlying investment property or other assets comprising the Eligible
Collateral have an unenhanced Moody’s or S&P’s rating less than BBB-or Baa3-.

SECTION 5.12.    Collateral Value and Delinquency Proceedings. The Collateral
Value requirements set forth in Section 5.10 must be maintained for so long as
the Borrower may borrow under this Agreement and until payment in full of the
Notes, interest thereon, and all fees and other Obligations of the Borrower and
expiration of all Letters of Credit under this Agreement and the other Loan
Documents including, but not limited to, during any Delinquency Proceeding. In
the event of a Delinquency Proceeding, the parties agree that, for purposes of
Section 221.43 of the Suspension of Business-Involuntary Dissolutions Article of
the Insurance Act, 40 P.S. §221.1 et seq., the value of the Collateral must be
equal to at least one hundred five percent (105%) of the Commitments.

SECTION 5.13.    Reporting Requirements. The Borrower will furnish or cause to
be furnished to the Administrative Agent:

(a)    Quarterly Financial Statements. As soon as available, and in any event,
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of
and for such fiscal quarter and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Authorized Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;

 

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(b)    Annual Financial Statements. As soon as available and in any event,
within 90 days after the end of each fiscal year of the Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all reported
on by Ernst & Young LLP or other independent public accountants of recognized
national standing (without a “going concern” or like qualification, commentary
or exception arising out of the scope of the audit, or without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;

(c)    Certificate of the Borrower. Concurrently with the delivery of the
Statements of the Borrower furnished to the Administrative Agent pursuant to
Section 5.13(a) and Section 5.13(b), a certificate (each, a “Compliance
Certificate”) of the Borrower signed by an Authorized Officer (for purposes of
this Section 5.13(c), such Authorized Officer shall be limited to the Chief
Executive Officer, President or Chief Financial Officer) of the Borrower, in the
form of Exhibit D.

(d)    Valuation Statements. As soon as available and in any event within twenty
(20) days after the end of each month, or more frequently if requested by the
Administrative Agent, in its reasonable discretion, valuation statements from
the custodian of the Collateral, in form and substance reasonably acceptable to
the Administrative Agent or any Lender (each, a “Valuation Statement”);
provided, however, if on any day the Revolving Credit Exposure is greater than
or equal to 2/3 of the Commitments, the Borrower shall provide to the
Administrative Agent, not later than 12:00 p.m., a daily Valuation Statement
calculating the Collateral Value as of the close of business on the preceding
Business Day.

(e)    Certificates; Other Information. Promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Subsidiary, or compliance with the terms of the Loan Documents, as the
Administrative Agent or any Lender may from time to time reasonably request.

(f)    Notices.

(i)    Default. Promptly after any officer of the Borrower has learned of the
occurrence of an Event of Default or Default, a certificate signed by an
Authorized Officer setting forth the details of such Event of Default or Default
and the action which the Borrower proposes to take with respect thereto.

(ii)    Litigation. Promptly after the commencement thereof, notice of all
actions, suits, proceedings or investigations before or by any Official Body or
any other Person against the Borrower or any Subsidiary of the Borrower which
relate to the Collateral, involve a claim or series of claims in excess of Fifty
Million and 00/100 Dollars ($50,000,000.00) or which if adversely determined
would constitute a Material Adverse Change.

 

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(iii)    Organizational Documents. Within the time limits set forth in
Section 6.12, any amendment to the organizational documents of the Borrower.

(iv)    Erroneous Financial Information. Immediately in the event that the
Borrower or its accountants conclude or advise that any previously issued
financial statement, audit report or interim review should no longer be relied
upon or that disclosure should be made or action should be taken to prevent
future reliance, notice thereof.

(v)    ERISA Events. Immediately upon the occurrence of any ERISA Event, notice
thereof.

(vi)    Other Reports. Promptly upon request, such other reports and information
as the Administrative Agent or any of the Lenders may from time to time
reasonably request.

SECTION 5.14.    Additional Information. The Borrower shall provide to the
Administrative Agent and the Lenders such information and documentation as may
reasonably be requested by the Administrative Agent or any Lender from time to
time for purposes of compliance by the Administrative Agent and such Lender with
applicable laws (including without limitation the Act and other “know your
customer” and anti-money laundering rules and regulations) and the Beneficial
Ownership Regulation, and any policy or procedure implemented by the
Administrative Agent or such Lender to comply therewith.

ARTICLE VI

NEGATIVE COVENANTS

Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated, in each case, without any
pending draw, and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:

SECTION 6.01.    Indebtedness. The Borrower shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

(a)    Indebtedness under the Loan Documents;

(b)    Existing Indebtedness as set forth on Schedule 6.01 (including any
extensions or renewals thereof; provided there is no increase in the amount
thereof or other significant change in the terms thereof unless otherwise
specified on Schedule 6.01);

(c)    Any Lender Provided Interest Rate Hedge; provided, however, the Borrower
and its Subsidiaries shall enter into a Lender Provided Interest Rate Hedge only
for hedging (rather than speculative) purposes;

 

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(d)    Interest Rate Hedges, other than a Lender Provided Interest Rate Hedge;
provided, however, the Borrower and its Subsidiaries shall enter into such an
Interest Rate Hedge only for hedging (rather than speculative) purposes;

(e)    Indebtedness incurred in connection with the acquisition of real property
and/or construction of improvements thereon in an amount not to exceed Two
Hundred Fifty Million and 00/100 Dollars ($250,000,000.00); (it being understood
that such amount shall be inclusive of amounts owing by Erie Insurance Exchange
in respect of such transaction);

(f)    Indebtedness secured by Liens permitted by Section 6.02(i), and
extensions, renewals and refinancings thereof;

(g)    Indebtedness in respect of capitalized leases within the limitations set
forth in Section 6.02(k); provided, however, that the aggregate amount of all
such Indebtedness at any one time outstanding shall not exceed One Hundred
Million and 00/100 Dollars ($100,000,000.00); and

(h)    Any other Indebtedness not exceeding an aggregate principal amount of
Fifty Million and 00/100 Dollars ($50,000,000.00).

SECTION 6.02.    Liens. The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien
on any of its property or assets, tangible or intangible, now owned or hereafter
acquired, or agree or become liable to do so, except the following
(collectively, “Permitted Liens”):

(a)    Liens for taxes, assessments, or similar charges, incurred in the
ordinary course of business, (A) which are not yet due and payable or (B) the
validity or amount of which is being contested in good faith by appropriate
lawful proceedings diligently conducted so long as levy and execution thereon
have been stayed and continue to be stayed, provided that such reserves or other
appropriate provisions, if any, as shall be required by GAAP, shall have been
made and any such Lien does not materially impair the ability of the Borrower to
perform its Obligations hereunder or under the other Loan Documents;

(b)    Pledges or deposits made in the ordinary course of business to secure
payment of worker’s compensation, or to participate in any fund in connection
with worker’s compensation, unemployment insurance, old-age pensions or other
social security programs;

(c)    Liens of mechanics, materialmen, warehousemen, carriers, or other like
Liens, securing obligations incurred in the ordinary course of business that are
not yet due and payable and statutory Liens of landlords securing obligations to
pay lease payments that are not yet due and payable or in default;

(d)    Good-faith pledges or deposits made in the ordinary course of business to
secure performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, not in excess of the aggregate amount due thereunder,
or to secure statutory obligations,

 

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or surety, appeal, indemnity, performance or other similar bonds required in the
ordinary course of business;

(e)    Encumbrances consisting of zoning restrictions, easements or other
restrictions on the use of real property, none of which materially impairs the
use of such property or the value thereof, and none of which is violated in any
material respect by existing or proposed structures or land use;

(f)    Liens, security interests and mortgages in favor of the Administrative
Agent (for its benefit and for the benefit of the Lenders and their Affiliates)
securing the Obligations (including Lender Provided Interest Rate Hedges);

(g)    Judgment Liens which do not constitute an Event of Default;

(h)    Liens securing Indebtedness permitted under Section 6.01(b);

(i)    Liens on any property securing Indebtedness incurred for the purpose of
financing all or any part of such property and attaching only to such property,
including in connection with Indebtedness permitted by clause (e) of
Section 6.01 and Liens on marketable securities (other than the Collateral or
any Subsidiary Equity Interests) to secure Indebtedness permitted by clause
(e) of Section 6.01;

(j)    Liens on assets (other than the Collateral or any Subsidiary Equity
Interests) securing Indebtedness permitted by clause (d) of Section 6.01;

(k)    Liens securing Indebtedness permitted under Section 6.01(g); provided
that (A) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (B) the Indebtedness secured thereby
does not exceed the cost of the property being acquired on the date of
acquisition; and

(l)    Liens on assets (other than the Collateral or any Subsidiary Equity
Interests) not included in clause (j) of this Section 6.02 provided the amount
of outstanding Indebtedness and other obligations secured thereby does not
exceed Thirty-Five Million and 00/100 Dollars ($35,000,000.00) at any time.

SECTION 6.03.    Guarantees. The Borrower shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guarantee, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person in an aggregate
amount in excess of Fifty Million and 00/100 Dollars ($50,000,000.00), except
for a Guarantee (x) of Indebtedness of the Borrower permitted hereunder and
(y) of payments pursuant to capital leases and operating leases for real
property not prohibited by the terms hereof.

SECTION 6.04.    Investments. The Borrower shall not make any Investments,
except:

(a)    Investments disclosed on Schedule 6.04;

 

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(b)    Investments maintained in the Borrower’s investment portfolio in the
ordinary course of business (including Interest Rate Hedges and Investments in
Subsidiaries and Joint Ventures, either directly or by way of purchase of
another Person’s interest in such Subsidiary or Joint Venture, which shall be
deemed to be in the ordinary course of business), and in each case in compliance
with applicable Law;

(c)    Trade accounts receivables;

(d)    Acquisitions of assets or capital stock of any other Person to the extent
permitted by Section 6.06; and

(e)    loans made by the Borrower to its independent agents pursuant to the
Borrower’s financing program for independent agents for the purposes of
perpetuating such independent agents’ insurance agencies, acquiring assets
and/or equity of other independent insurance agencies or making investments to
grow existing independent insurance agencies; provided that such loans made by
the Borrower shall not be made with the proceeds of any Loans.

SECTION 6.05.    Dividends and Related Distributions. The Borrower shall not,
and shall not permit any of its Subsidiaries to, make or pay, or agree to become
or remain liable to make or pay, any dividend or other distribution of any
nature (whether in cash, property, securities or otherwise) on account of or in
respect of its ownership interests or on account of the purchase, redemption,
retirement or acquisition of its ownership interests unless prior to and after
giving effect to such dividend or distribution, no Default or Event of Default
shall have occurred. For the avoidance of doubt, neither the payment of
management fees to, nor the retention of premiums by, the Borrower from Erie
Exchange or any other Person shall be prohibited by this Section 6.05.

SECTION 6.06.    Liquidations, Mergers, Consolidations, Acquisitions. The
Borrower shall not dissolve, liquidate or wind-up its affairs. The Borrower
shall not become a party to any merger or consolidation, and shall not, and
shall not permit any of the Borrower’s Subsidiaries to, acquire by purchase,
lease or otherwise all or substantially all of the assets or capital stock of
any other Person unless (i) at the time of such transaction the Borrower is able
to demonstrate pro forma compliance with Section 6.14, (ii) prior to and after
giving effect to such transaction, no Default or Event of Default shall have
occurred and (iii) after giving effect to such transaction, the Borrower shall
be the surviving legal entity if it is a party to such transaction.

SECTION 6.07.    Dispositions of Assets or Subsidiaries. The Borrower shall not,
and shall not permit any of its Subsidiaries to, sell, convey, assign, lease,
abandon or otherwise transfer or dispose of, voluntarily or involuntarily, any
of its properties or assets, tangible or intangible (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper,
equipment or general intangibles with or without recourse or of capital stock,
shares of beneficial interest, partnership interests or limited liability
company interests of a Subsidiary of the Borrower) (each, a “Disposition”),
except:

(a)    Dispositions of obsolete or worn out property or property no longer
useful in the business of the Borrower or any of its Subsidiaries, whether now
owned or hereafter acquired, in the ordinary course of business;

 

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(b)    Dispositions of Collateral to the extent that no such Disposition results
in a Collateral Shortfall at any time;

(c)    Dispositions of Investments held in the Borrower’s investment portfolio
(including Investments in Subsidiaries and Joint Ventures, either held directly
or indirectly by the Borrower, but excluding the Collateral) in the ordinary
course of business;

(d)    Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are promptly
applied to the purchase price of such replacement property;

(e)    Dispositions of property for fair market value;

(f)    Leases, subleases, licenses or sublicenses of property in the ordinary
course of business and which do not materially interfere with the business of
the Borrower and its Subsidiaries;

(g)    Transfers of property subject to casualty events upon receipt of the
insurance payments with respect to such casualty events;

(h)    Sales or discounts without recourse of accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof; and

(i)    Dispositions by any Subsidiary of the Borrower to the Borrower or another
Subsidiary of the Borrower.

SECTION 6.08.    Affiliate Transactions. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into or carry out any transaction with
any Affiliates of such Person (including purchasing property or services from or
selling property or services to any Affiliate of the Borrower or other Person)
unless such transaction is not otherwise prohibited by this Agreement, and is
entered into upon fair and reasonable terms and conditions or terms and
conditions which are fully disclosed to the Administrative Agent and the
Lenders, and is in accordance with all applicable Law.

SECTION 6.09.    Continuation of or Change in Business. The Borrower shall not,
and shall not permit any of its Subsidiaries to, engage in any business other
than the insurance business and services related to the insurance business,
substantially as conducted and operated by the Borrower or Subsidiary during the
present fiscal year, and the Borrower or Subsidiary shall not permit any
material change in such business or services related thereto.

SECTION 6.10.    Fiscal Year. The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, change its fiscal year from the twelve-month
period beginning January 1 and ending December 31.

SECTION 6.11.    Issuance of Stock or Other Ownership Interests. The Borrower
shall not permit any of its Subsidiaries to issue any additional shares of their
capital stock or other

 

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ownership interests or any options, warrants or other rights in respect thereof,
provided that the Borrower’s Subsidiaries may issue shares of capital stock or
other ownership interests to the Borrower or any other Subsidiary or shareholder
in any Joint Venture.

SECTION 6.12.    Changes in Organizational Documents. The Borrower shall not,
and shall not permit any of its Subsidiaries to, amend in any respect its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents without providing at least thirty (30) calendar
days’ prior written notice to the Administrative Agent and the Lenders and, in
the event such change would be adverse to the Lenders as determined by the
Administrative Agent in its sole but reasonable discretion, obtaining the prior
written consent of the Required Lenders.

SECTION 6.13.    Negative Pledges. The Borrower shall not directly or indirectly
enter into or assume or become bound by, or permit any Subsidiary to enter into
or assume or become bound by, any agreement (other than this Agreement and the
other Loan Documents), or any provision of any certificate or article of
incorporation, bylaws, partnership agreement, operating agreement or other
organizational formation or governing document prohibiting the creation or
assumption of any Lien or encumbrance upon Eligible Collateral in the Borrower’s
investment portfolio, whether now owned or hereafter created or acquired, which
prohibits the Borrower’s ability to comply with this Agreement or any of the
other Loan Documents; provided that the foregoing shall not apply to
(i) restrictions and conditions imposed by any Law or by any Loan Document,
(ii) restrictions and conditions imposed by that certain credit agreement, by
and among Erie Exchange, the lenders party thereto, and PNC Bank, National
Association, as administrative agent and the other loan documents executed in
connection therewith, in each case as in effect on the Effective Date,
(iii) restrictions or conditions imposed by any agreement relating to secured
Indebtedness or other obligations permitted by this Agreement but only to the
extent such restriction or condition is limited to the specific assets subject
to a Permitted Lien, or (iv) customary provisions in leases or other agreements
restricting assignment thereof.

SECTION 6.14.    Indebtedness to Total Capitalization. The Borrower shall not
permit the ratio (expressed as a percentage) of (a) the principal amount of
consolidated Indebtedness of the Borrower and its Subsidiaries to (b) the sum of
(i) Net Worth plus (ii) consolidated Indebtedness of the Borrower and its
Subsidiaries (“Indebtedness to Total Capitalization”) to exceed 35%.

SECTION 6.15.     [Reserved]

SECTION 6.16.    Attorney-in-Fact. The Borrower shall not (a) resign as, or
permit any successor, Attorney-in-Fact for Erie Exchange, unless such successor
Attorney-in-Fact is acceptable to the Administrative Agent in its sole but
reasonable discretion, (b) permit the Subscriber’s Agreements to be amended to
reduce the maximum percentage of the direct written premiums permitted to be
retained by the Borrower from Erie Exchange or any other Person to be less than
twenty-five percent (25%), or (c) take any actions, or consent to any action
being taken, to dissolve, liquidate or wind-up the affairs of Erie Exchange, in
each case, without the prior written consent of the Administrative Agent in its
sole but reasonable discretion, provided that the

 

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Borrower shall provide the Administrative Agent with no less than thirty
(30) days prior written notice of its intention with respect to any such
material amendment to the Subscriber’s Agreements.

SECTION 6.17.    Anti-Terrorism Laws. The Borrower shall not, until satisfaction
in full of the Obligations and termination of this Agreement, nor shall it
permit any Subsidiary or agent to:

(a)    Maintain any of its assets in a Sanctioned Country or in the possession,
custody or control of a Sanctioned Person.

(b)    Conduct any business or engage in any transaction or dealing with any
Sanctioned Country or Sanctioned Person in violations of any Law enforced by any
Compliance Authority.

(c)    Use the proceeds of the Loans to fund any operations in, finance any
investments or activities in, or make any payments to, a Sanctioned Country or
Sanctioned Person in violation of any Law enforced by any Compliance Authority.

(d)    Engage in or conspire to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.

The Borrower shall deliver to Administrative Agent any certification or other
evidence reasonably requested from time to time by the Administrative Agent or
any Lender in its sole discretion, confirming the Borrower’s compliance with
this Section 6.17.

ARTICLE VII

EVENTS OF DEFAULT

SECTION 7.01.    Events of Default. An Event of Default shall mean the
occurrence or existence of any one or more of the following events or conditions
(whatever the reason therefor and whether voluntary, involuntary or effected by
operation of Law):

(a)    Payments Under Loan Documents.

(i)    The Borrower shall fail to pay any principal of any Loan (including
scheduled installments, mandatory prepayments or the payment due at maturity),
reimbursement obligation in respect of any LC Disbursement or any interest on
any Loan, reimbursement obligation in respect of any LC Disbursement or any
other amount owing hereunder or under the other Loan Documents on the date on
which such principal, interest or other amount becomes due in accordance with
the terms hereof;

 

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(ii)    The Borrower shall fail to pay any other Obligation within five (5) days
of the date on which such other Obligation becomes due in accordance with the
terms hereof;

(b)    Breach of Warranty. Any representation or warranty made at any time by
the Borrower herein or by the Borrower in any other Loan Document, or in any
certificate, other instrument or statement furnished pursuant to the provisions
hereof or thereof, shall prove to have been false or misleading in any material
respect as of the time it was made or furnished;

(c)    Breach of Negative Covenants, Anti-Terrorism Laws or Visitation Rights.
The Borrower shall default in the observance or performance of any covenant
contained in Section 5.01, Section 5.05, Section 5.07, Section 5.09,
Section 5.10 or Article VI;

(d)    Breach of Other Covenants. The Borrower shall default in the observance
or performance of any other covenant, condition or provision hereof or of any
other Loan Document and such default shall continue unremedied for a period of
twenty (20) Business Days;

(e)    Defaults in Other Agreements or Indebtedness. A default or event of
default shall occur at any time under the terms of any other agreement involving
borrowed money or the extension of credit or any other Indebtedness under which
the Borrower or any Subsidiary of the Borrower may be obligated as a borrower or
guarantor in excess of Twenty-Five Million and 00/100 Dollars ($25,000,000.00)
in the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any Indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any Indebtedness (whether or not such right to accelerate shall
have been waived) or the termination of any commitment to lend;

(f)    Final Judgments or Orders. Any final judgments or orders for the payment
of money in excess of Fifty Million and 00/100 Dollars ($50,000,000.00) in the
aggregate shall be entered against the Borrower by a court having jurisdiction
in the premises, which judgment is not discharged, vacated, bonded or stayed
pending appeal within a period of thirty (30) days from the date of entry;

(g)    Loan Document Unenforceable. Any of the Loan Documents shall cease to be
legal, valid and binding agreements enforceable against the party executing the
same or such party’s successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in any way
be terminated (except in accordance with its terms) or become or be declared
ineffective or inoperative or shall in any way be challenged or contested or
cease to give or provide the respective Liens, security interests, rights,
titles, interests, remedies, powers or privileges intended to be created
thereby;

(h)    Proceedings Against Assets. Any assets (other than the Collateral) valued
in excess of Ten Million and 00/100 Dollars ($10,000,000.00) or the Collateral
of the Borrower or any of its Subsidiaries are attached, seized, levied upon or
subjected to a writ or distress warrant;

 

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or such come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors and the same is not cured within thirty
(30) days thereafter;

(i)    Events Relating to Plans and Benefit Arrangements. An ERISA Event occurs
with respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Borrower under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of Ten Million and 00/100 Dollars ($10,000,000.00), or the Borrower or
any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate
amount in excess of Ten Million and 00/100 Dollars ($10,000,000.00);

(j)    Change of Control. Within a period of twelve (12) consecutive calendar
months, individuals who were directors of the Borrower on the first day of such
period, or directors approved by them, shall cease to constitute a majority of
the board of directors of the Borrower;

(k)    Attorney-in-Fact. The Borrower shall without the prior written consent of
the Administrative Agent cease to be the Attorney-in-Fact for Erie Exchange;

(l)    Relief Proceedings. (i) A Relief Proceeding shall have been instituted
against the Borrower or any Subsidiary of the Borrower and such Relief
Proceeding shall remain undismissed or unstayed and in effect for a period of
thirty (30) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such Relief Proceeding, (ii) the Borrower
or any Subsidiary of the Borrower institutes, or takes any action in furtherance
of, a Relief Proceeding, or (iii) the Borrower or any Subsidiary of the Borrower
ceases to be solvent or admits in writing its inability to pay its debts as they
mature or ceases operation of its present business; and

(m)    Anti-Money Laundering/International Trade Law Compliance. Any
representation or warranty contained in Section 3.16 is or becomes false or
misleading at any time.

SECTION 7.02.    Consequences of Event of Default. In every such event (other
than an event with respect to the Borrower described in clause (l) of
Section 7.01), and at any time thereafter during the continuance of such event,
the Administrative Agent may, and at the request of the Required Lenders shall,
by notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in clause (l) of Section 7.01, (i) the
Commitments shall automatically terminate, and (ii) the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
obligations of the

 

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Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

ARTICLE VIII

THE ADMINISTRATIVE AGENT

Each of the Lenders and each Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document

 

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or other writing believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon. The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Banks and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with approval from the
Borrower (so long as no Event of Default has occurred and is continuing), to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Banks, appoint a successor Administrative Agent. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.

 

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ARTICLE IX

MISCELLANEOUS

SECTION 9.01.    Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy or facsimile (or
e-mail with a PDF copy attached), as follows:

(i)    if to the Borrower, to it at 100 Erie Insurance Place, Erie,
Pennsylvania, 16530, Attention of Robert McNutt (Telephone No. 814.870.2286)
(Facsimile No. 814.870.2095) (Email: robert.mcnutt@erieinsurance.com);

(ii)    if to the Administrative Agent for purposes of loan administration
information, to JPMorgan Chase Bank, 10 South Dearborn, Floor 07, Chicago,
Illinois 60603-2300, Attention of April Yebd (Telephone No. 312.732.2628)
(Facsimile No. 888.292.9533) (Email: april.yebd@jpmorgan.com);

(iii)    if to the Administrative Agent for purposes of covenant
compliance/financial information, to JPMorgan Chase Bank, 10 South Dearborn,
Floor 7, Chicago, Illinois 60603-2300, Attention of Danielle Babine (Telephone
No. 312.325.3261) (Facsimile No. 312.386.7632)
(Email: danielle.d.babine@jpmorgan.com);

(iv)    if to JPMorgan Chase Bank, N.A, in its capacity as an Issuing Bank, to
it at JPMorgan Chase Bank, 10 South Dearborn, Floor 7, Chicago, Illinois
60603-2300, Attention of Thomas Kiepura (Telephone No. 312.325.3195) (Facsimile
No. 312.794.7684) (Email: thomas.a.kiepura@jpmorgan.com);

(v)    if to PNC Bank, National Association, in its capacity as an Issuing Bank,
to it at 500 First Avenue, Fourth Floor, Pittsburgh, Pennsylvania, 15219,
Attention of James F. Stevenson (Telephone No. 814.871.9383) (Facsimile
No. 814.871.9432) (Email: james.stevenson@pnc.com); and

(vi)    if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.

(b)    Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.

 

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(c)    Any party hereto may change its address or facsimile number for notices
and other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

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

(b)    Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.16(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (v) change any of the provisions of this
Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent or any Issuing Bank hereunder without the prior written
consent of the Administrative Agent or such Issuing Bank, as the case may be;
provided, further that, if in connection with any proposed waiver, amendment or
modification referred to in this Section 9.02, the consent of the Required
Lenders is obtained but the consent of one (1) or more of such other Lenders
whose consent is required is not obtained (each, a “Non-Consenting Lender”),
then the Borrower shall have the right to replace any such Non-Consenting Lender
with one (1) or more replacement Lenders pursuant to Section 2.17(b).
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its

 

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terms requires the consent of all Lenders or each affected Lender may be
effected with the consent of the applicable Lenders other than Defaulting
Lenders), except that (x) the Commitment of any Defaulting Lender may not be
increased or extended without the consent of such Lender, and (y) any waiver,
amendment or modification requiring the consent of all Lenders or each affected
Lender that by its terms affects any Defaulting Lender disproportionately
adversely relative to other affected Lenders shall require the consent of such
Defaulting Lender.

SECTION 9.03.    Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay
(i) all reasonable and documented out-of-pocket expenses incurred by the
Administrative Agent, the Arrangers and their respective Affiliates (but limited
in the case of the reasonable and documented out-of-pocket expenses of counsel
for the Administrative Agent, the Arrangers and their respective Affiliates to
the reasonable and documented out-of-pocket fees, charges and disbursements of
one counsel for the Administrative Agent, the Arrangers and their respective
Affiliates and one firm of local or specialty counsel in each relevant
jurisdiction or specialty for the Administrative Agent, the Arrangers and their
respective Affiliates), in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provisions hereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable and documented out-of-pocket expenses incurred
by any Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Arrangers, any Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, any Issuing Bank or
any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

(b)    The Borrower shall indemnify the Administrative Agent, the Arrangers, the
Syndication Agent, each Issuing Bank and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, (but limited in the case of the
expenses of counsel for the Indemnitees to the reasonable and documented
out-of-pocket fees, charges and disbursements of one counsel for the Indemnitees
taken as a whole and one firm of local or specialty counsel in each relevant
jurisdiction or specialty for the Indemnitees taken as a whole, and, in the case
of an actual or perceived conflict of interest, one other firm of counsel for
each such affected Indemnitee), incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement or any agreement or instrument contemplated hereby,
the performance by the parties hereto of their respective obligations hereunder
or the consummation of the Transactions or any other transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by an Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries,

 

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or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to (i) have arisen or resulted from (A) the willful misconduct, bad
faith or gross negligence of such Indemnitee or (B) a breach in bad faith of a
material obligation of such Indemnitee under this Agreement or any other Loan
Document or (ii) have not resulted from an act or omission by the Borrower or
any of its Affiliates and have been brought by an Indemnitee against any other
Indemnitee (other than any against the Administrative Agent or an Arranger in
their capacities or in fulfilling their roles as an arranger or agent or any
similar role hereunder). This Section 9.03(b) shall not apply with respect to
Taxes other than any Taxes that represent losses or damages arising from any
non-Tax claim.

(c)    To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent or any Issuing Bank under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or such Issuing Bank, as the case may be, such Lender’s
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or such Issuing Bank in its capacity as such.

(d)    To the extent permitted by applicable Law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.

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

SECTION 9.04.    Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
an Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of an Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated

 

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hereby, the Related Parties of each of the Administrative Agent, the Issuing
Banks and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

(b)    (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more Persons (other than an Ineligible Institution)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it) with
the prior written consent (such consent not to be unreasonably withheld) of:

(A)    the Borrower, provided that, the Borrower shall be deemed to have
consented to an assignment unless it shall have objected thereto by written
notice to the Administrative Agent within ten (10) Business Days after having
received notice thereof; provided further that no consent of the Borrower shall
be required for an assignment to a Lender, an Affiliate of a Lender, an Approved
Fund or, if an Event of Default has occurred and is continuing, any other
assignee;

(B)    the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Commitment to an assignee that
is a Lender with a Commitment immediately prior to giving effect to such
assignment; and

(C)    each Issuing Bank.

As used herein, “Ineligible Institution” means a (a) natural person or
(b) holding company, investment vehicle or trust for, or owned and operated for
the primary benefit of, a natural person or relative(s) thereof; provided that,
such holding company, investment vehicle or trust shall not constitute an
Ineligible Institution if it (x) has not been established for the primary
purpose of acquiring any Loans or Commitments, (y) is managed by a professional
advisor, who is not such natural person or a relative thereof, having
significant experience in the business of making or purchasing commercial loans,
and (z) has assets greater than $25,000,000 and a significant part of its
activities consist of making or purchasing commercial loans and similar
extensions of credit in the ordinary course of its business; provided that upon
the occurrence of an Event of Default, any Person (other than a Lender) shall be
an Ineligible Institution if after giving effect any proposed assignment to such
Person, such Person would hold more than 25% of the then outstanding Revolving
Credit Exposure or Commitments, as the case may be.

(ii)    Assignments shall be subject to the following additional conditions:

(A)    except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent

 

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otherwise consent, provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;

(B)    each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(C)    the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; and

(D)    the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower and its
related parties or its securities) will be made available and who may receive
such information in accordance with the assignee’s compliance procedures and
applicable laws, including Federal and state securities laws.

(iii)    Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date specified
in each Assignment and Assumption the assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (c) of this Section.

(iv)    The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount (and
stated interest) of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent,
the Issuing Banks and the Lenders shall treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for

 

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inspection by the Borrower, any Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

(v)    Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register; provided that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to Section 2.04(d), 2.04(e), 2.05(b),
2.16(d) or 9.03(c), the Administrative Agent shall have no obligation to accept
such Assignment and Assumption and record the information therein in the
Register unless and until such payment shall have been made in full, together
with all accrued interest thereon. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.

(c)    Any Lender may, without the consent of the Borrower, the Administrative
Agent or any Issuing Bank, sell participations to one or more banks or other
entities (a “Participant”), other than an Ineligible Institution, in all or a
portion of such Lender’s rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans owing to it); provided that
(A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (C) the Borrower, the Administrative
Agent, the Issuing Banks and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
The Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 (subject to the requirements and limitations
therein, including the requirements under Section 2.15(f) (it being understood
that the documentation required under Section 2.15(f) shall be delivered to the
participating Lender)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.16 and 2.17 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Sections 2.13, 2.14 or 2.15, with respect to any participation, than its
participating Lender would have been entitled to receive, unless the sale of the
participation to such Participant is made with the Borrower’s prior written
consent. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.16(c) as though it were a Lender.
Each Lender that sells a participation shall, acting solely for this purpose as
an agent of the Borrower, maintain a

 

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register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under this Agreement (the “Participant Register”);
provided that no Lender shall have any obligation to disclose all or any portion
of the Participant Register to any Person (including the identity of any
Participant or any information relating to a Participant’s interest in any
Commitments, Loans, Letters of Credit or its other obligations under any Loan
Document) except to the extent that such disclosure is necessary to establish
that such Commitment, Loan, Letter of Credit or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.

(d)    Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05.    Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, any Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Sections 2.13, 2.14, 2.15 and 9.03 and Article
VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.

SECTION 9.06.    Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an

 

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executed counterpart of a signature page of this Agreement by telecopy or any
other electronic means that reproduces an image of the actual executed signature
page shall be effective as delivery of a manually executed counterpart of this
Agreement.

SECTION 9.07.    Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

SECTION 9.08.    Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

SECTION 9.09.    Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of Pennsylvania.

(b)    The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the non-exclusive jurisdiction of the Courts of the
Commonwealth of Pennsylvania sitting in Allegheny County and of the United
States District Court for the Southern District of Pennsylvania, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such Commonwealth of Pennsylvania or, to the extent permitted by
law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement against the Borrower or its
properties in the courts of any jurisdiction.

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

 

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

SECTION 9.10.    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11.    Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

SECTION 9.12.    Confidentiality. (a) Each of the Administrative Agent, the
Issuing Banks and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (i) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (ii) to the extent requested by any regulatory authority,
(iii) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (iv) to any other party to this Agreement,
(v) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (vi) subject to an agreement containing provisions substantially the
same as those of this Section, to (A) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (B) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (vii) with the consent of the Borrower or (viii) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this Section or (B) becomes available to the Administrative Agent, any Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Borrower. For the purposes of this Section, “Information” means all information
received from the Borrower relating to the Borrower or its business, other than
any such information that is available to the Administrative Agent, any Issuing
Bank or any Lender on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the

 

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confidentiality of such Information as such Person would accord to its own
confidential information.

(b)    EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12(a)
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES OR THEIR RESPECTIVE
SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING
THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW,
INCLUDING FEDERAL AND STATE SECURITIES LAWS.

(c)    ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED
BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS RELATED
PARTIES OR ITS SECURITIES. ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER
AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE
QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN
MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW.

SECTION 9.13.    Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable Law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

SECTION 9.14.    USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”) hereby notifies the Borrower that pursuant to
the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender to
identify the Borrower in accordance with the Act.

 

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SECTION 9.15.    No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby, the Borrower acknowledges and
agrees that: (i) the credit facility provided for hereunder and any related
arranging or other services in connection therewith (including in connection
with any amendment, waiver or other modification hereof or of any other Loan
Document) are an arm’s-length commercial transaction between the Borrower, on
the one hand, and the Administrative Agent and the Arrangers, on the other hand,
and the Borrower is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents (including any amendment, waiver or other
modification hereof or thereof); (ii) in connection with the process leading to
such transaction, the Administrative Agent and the Arrangers each is and has
been acting solely as a principal and is not the financial advisor, agent or
fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or
employees or any other Person; (iii) neither the Administrative Agent nor any
Arranger has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Administrative Agent or any Arranger has advised or
is currently advising the Borrower or its Affiliates on other matters) and
neither the Administrative Agent nor any Arranger has any obligation to the
Borrower or its Affiliates with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; (iv) the Administrative Agent and each Arranger and its respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Borrower and its Affiliates, and neither
the Administrative Agent nor any Arranger has any obligation to disclose any of
such interests by virtue of any advisory, agency or fiduciary relationship; and
(v) neither the Administrative Agent nor any Arranger has provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty.

SECTION 9.16.    Certain ERISA Matters.

(a)    Each Lender (x) represents and warrants, as of the date such Person
became a Lender party hereto, to, and (y) covenants, from the date such Person
became a Lender party hereto to the date such Person ceases being a Lender party
hereto, for the benefit of, the Administrative Agent, and each Arranger and
their respective Affiliates, and not, for the avoidance of doubt, to or for the
benefit of the Borrower, that at least one of the following is and will be true:

(i)    such Lender is not using “plan assets” (within the meaning of the Plan
Asset Regulations) of one or more Benefit Plans in connection with the Loans,
the Letters of Credit or the Commitments,

(ii)     the transaction exemption set forth in one or more PTEs, such as PTE
84-14 (a class exemption for certain transactions determined by independent
qualified

 

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professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement, and the conditions for exemptive relief thereunder are and will
continue to be satisfied in connection therewith,

(iii)    (A) such Lender is an investment fund managed by a “Qualified
Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B)
such Qualified Professional Asset Manager made the investment decision on behalf
of such Lender to enter into, participate in, administer and perform the Loans,
the Letters of Credit, the Commitments and this Agreement, (C) the entrance
into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement satisfies the requirements
of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best
knowledge of such Lender, the requirements of subsection (a) of Part I of PTE
84-14 are satisfied with respect to such Lender’s entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement, or

(iv)    such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender.

(b)    In addition, unless sub-clause (i) in the immediately preceding clause
(a) is true with respect to a Lender or such Lender has not provided another
representation, warranty and covenant as provided in sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent, and each Arranger and their respective Affiliates, and
not, for the avoidance of doubt, to or for the benefit of the Borrower or any
other Loan Party, that:

(i)    none of the Administrative Agent or any Arranger or any of their
respective Affiliates is a fiduciary with respect to the assets of such Lender
(including in connection with the reservation or exercise of any rights by the
Administrative Agent under this Agreement, any Loan Document or any documents
related to hereto or thereto),

(ii)    the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended
from time to

 

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time) and is a bank, an insurance carrier, an investment adviser, a
broker-dealer or other person that holds, or has under management or control,
total assets of at least $50,000,000, in each case as described in 29 CFR §
2510.3-21(c)(1)(i)(A)-(E),

(iii)    the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is capable of evaluating investment risks independently, both in
general and with regard to particular transactions and investment strategies
(including in respect of the Obligations),

(iv)    the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is a fiduciary under ERISA or the Code, or both, with respect to the
Loans, the Letters of Credit, the Commitments and this Agreement and is
responsible for exercising independent judgment in evaluating the transactions
hereunder, and

(v)    no fee or other compensation is being paid directly to the Administrative
Agent or any Arranger or any their respective Affiliates for investment advice
(as opposed to other services) in connection with the Loans, the Letters of
Credit, the Commitments or this Agreement.

The Administrative Agent and each Arranger hereby informs the Lenders that each
such Person is not undertaking to provide impartial investment advice, or to
give advice in a fiduciary capacity, in connection with the transactions
contemplated hereby, and that such Person has a financial interest in the
transactions contemplated hereby in that such Person or an Affiliate thereof
(i) may receive interest or other payments with respect to the Loans, the
Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain
if it extended the Loans, the Letters of Credit or the Commitments for an amount
less than the amount being paid for an interest in the Loans, the Letters of
Credit or the Commitments by such Lender or (iii) may receive fees or other
payments in connection with the transactions contemplated hereby, the Loan
Documents or otherwise, including structuring fees, commitment fees, arrangement
fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees,
administrative agent or collateral agent fees, utilization fees, minimum usage
fees, letter of credit fees, fronting fees, deal-away or alternate transaction
fees, amendment fees, processing fees, term out premiums, banker’s acceptance
fees, breakage or other early termination fees or fees similar to the foregoing.

SECTION 9.17.    Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document may be subject to the Write-Down and
Conversion Powers of an EEA Resolution Authority and agrees and consents to, and
acknowledges and agrees to be bound by:

 

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(a)    the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if
applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
entity, or a bridge institution that may be issued to it or otherwise conferred
on it, and that such shares or other instruments of ownership will be accepted
by it in lieu of any rights with respect to any such liability under this
Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

SECTION 9.18.    Amendment and Restatement.

This Agreement amends and restates in its entirety the Existing Credit
Agreement. All references to the “Agreement” contained in the Loan Documents
delivered in connection with the Existing Credit Agreement or this Agreement
shall, and shall be deemed to, refer to this Agreement. Notwithstanding the
amendment and restatement of the Existing Credit Agreement by this Agreement,
the Obligations of the Borrower outstanding under the Existing Credit Agreement
and the Loan Documents as of the Effective Date shall remain outstanding and
shall constitute continuing Obligations without novation and shall continue as
such to be secured by the Collateral. Such Obligations shall in all respects be
continuing and this Agreement shall not be deemed to evidence or result in a
novation or repayment and reborrowing of such Obligations. The Liens securing
payment of the Obligations under the Existing Credit Agreement, as amended and
restated in the form of this Agreement, shall in all respects be continuing,
securing the payment of all Obligations.

 

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

 

ERIE INDEMNITY COMPANY By:  

/s/ Robert W. McNutt

Name:   Robert W. McNutt Title:   Vice President and Corporate Treasurer
JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent By:  

/s/ Danielle D. Babine

Name:   Danielle D. Babine Title:   Vice President PNC BANK, NATIONAL
ASSOCIATION By:  

/s/ James F. Stevenson

Name:   James F. Stevenson Title:   Senior Vice President

Amended and Restated Credit Agreement