exv10w1






Exhibit 10.1




$200,000,000.00 REVOLVING CREDIT FACILITY




CREDIT AGREEMENT




by and among




THE BORROWER PARTY HERETO




and




THE LENDERS PARTY HERETO




and




PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent,




and




JPMORGAN CHASE BANK, N.A., as Co-Syndication Agent,




and




BANK OF AMERICA, N.A., as Co-Syndication Agent,




and




PNC CAPITAL MARKETS LLC, as Sole Lead Arranger and Sole Bookrunner




Dated as of September 30, 2009




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	1. CERTAIN DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1 Certain Definitions
	 	 	1	 
	1.2 Construction
	 	 	19	 
	1.3 Accounting Principles
	 	 	19	 
	 
	 	 	 	 
	2. REVOLVING CREDIT AND SWING LOAN FACILITIES
	 	 	20	 
	 
	 	 	 	 
	2.1 Revolving Credit and Swing Loan Commitments
	 	 	20	 
	2.1.1 Revolving Credit Loans
	 	 	20	 
	2.1.2 Swing Loans
	 	 	20	 
	2.2 Nature of Lenders Obligations with Respect to Revolving Credit Loans
	 	 	20	 
	2.3 Commitment Fees
	 	 	21	 
	2.4 Revolving Credit Loan Requests; Swing Loan Requests
	 	 	21	 
	2.4.1 Revolving Credit Loan Requests
	 	 	21	 
	2.4.2 Swing Loan Requests
	 	 	21	 
	2.5 Increase in Revolving Credit Commitments 
	 	 	22	 
	2.6 Making Revolving Credit Loans and Swing Loans; Presumptions by the Administrative Agent; Repayment of Revolving Credit Loans;
Borrowings to Repay Swing Loans
	 	 	23	 
	
2.6.1 Making Revolving Credit Loans
	 	 	23	 
	2.6.2 Making Swing Loans
	 	 	24	 
	2.6.3 Presumptions by the Administrative Agent
	 	 	24	 
	2.6.4 Repayment of Revolving Credit Loans
	 	 	24	 
	2.6.5 Borrowings to Repay Swing Loans
	 	 	24	 
	2.7 Notes
	 	 	25	 
	2.8 Use of Proceeds
	 	 	25	 
	2.9 Letter of Credit Subfacility
	 	 	25	 
	2.9.1 Issuance of Letters of Credit
	 	 	25	 
	2.9.2 Letter of Credit Fees
	 	 	26	 
	2.9.3 Disbursements, Reimbursement
	 	 	26	 
	2.9.4 Repayment of Participation Advances
	 	 	28	 
	2.9.5 Documentation
	 	 	28	 
	2.9.6 Determinations to Honor Drawing Requests
	 	 	28	 
	2.9.7 Nature of Participation and Reimbursement Obligations
	 	 	28	 
	2.9.8 Indemnity
	 	 	30	 
	2.9.9 Liability for Acts and Omissions
	 	 	30	 
	2.9.10 Issuing Lender Reporting Requirements
	 	 	32	 
	2.10 Reduction of Revolving Credit Commitment
	 	 	32	 
	2.11 Mark to Market Collateral Certification
	 	 	32	 
















 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	3. INTEREST RATES
	 	 	32	 
	 
	 	 	 	 
	3.1 Interest Rate Options
	 	 	32	 
	3.1.1 Revolving Credit Interest Rate Options; Swing Line Interest Rate
	 	 	33	 
	3.1.2 Rate Quotations

	 	 	33	 
	3.2 Interest Periods
	 	 	33	 
	3.2.1 Amount of Borrowing Tranche
	 	 	33	 
	3.2.2 Renewals
	 	 	33	 
	3.3 Interest After Default 
	 	 	33	 
	3.3.1 Letter of Credit Fees, Interest Rate
	 	 	33	 
	3.3.2 Other Obligations
	 	 	34	 
	3.3.3 Acknowledgment
	 	 	34	 
	3.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not Available
	 	 	34	 
	3.4.1 Unascertainable
	 	 	34	 
	3.4.2 Illegality; Increased Costs; Deposits Not Available
	 	 	34	 
	3.4.3 Administrative Agent’s and Lender’s Rights
	 	 	34	 
	3.5 Selection of Interest Rate Options
	 	 	35	 
	 
	 	 	 	 
	4. PAYMENTS
	 	 	35	 
	 
	 	 	 	 
	4.1 Payments
	 	 	35	 
	4.2 Pro Rata Treatment of Lenders
	 	 	36	 
	4.3 Sharing of Payments by Lenders
	 	 	36	 
	4 4 Presumptions by Administrative Agent 
	 	 	37	 
	4.5 Interest Payment Dates
	 	 	37	 
	4.6 Voluntary Prepayments
	 	 	38	 
	4.6.1 Right to Prepay

	 	 	38	 
	
4.6.2 Replacement of a Lender
	 	 	39	 
	4.7 Increased Costs
	 	 	39	 
	4.7.1 Increased Costs Generally
	 	 	40	 
	4.7.2 Capital Requirements
	 	 	40	 
	4.7.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing of New Loans
	 	 	41	 
	4.7.4 Delay in Requests
	 	 	41	 
	4.8 Taxes
	 	 	41	 
	4.8.1 Payments Free of Taxes
	 	 	41	 
	4.8.2 Payment of Other Taxes by the Borrower
	 	 	41	 
	4.8.3 Indemnification by the Borrower
	 	 	42	 
	4.8.4 Evidence of Payments
	 	 	42	 
	4.8.5 Status of Lenders
	 	 	42	 
	4.8.6 Treatment of Certain Refunds
	 	 	43	 
	4.9 Indemnity
	 	 	43	 
	4.10 Settlement Date Procedures
	 	 	44	 
	 
	 	 	 	 
	5. REPRESENTATIONS AND WARRANTIES
	 	 	44	 
	 
	 	 	 	 
	5.1 Representations and Warranties
	 	 	44	 






-ii-









 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	5.1.1 Organization and Qualification; Power and Authority; Compliance With Laws;
Title to Properties; Event of Default
	 	 	45	 
	5.1.2 Subsidiaries and Owners; Investment Companies
	 	 	45	 
	5.1.3 Validity and Binding Effect
	 	 	45	 
	5.1.4 No Conflict; Material Agreements; Consents
	 	 	45	 
	5.1.5 Litigation
	 	 	46	 
	5.1.6 Financial Statements
	 	 	46	 
	5.1.7 Margin Stock
	 	 	47	 
	5.1.8 Full Disclosure
	 	 	47	 
	5.1.9 Taxes
	 	 	47	 
	5.1.10 Patents, Trademarks, Copyrights, Licenses, Etc.
	 	 	48	 
	5.1.11 Liens in the Collateral
	 	 	48	 
	5.1.12 Insurance
	 	 	48	 
	5 1 13 ERISA Compliance
	 	 	48	 
	5.1.14 Environmental Matters
	 	 	49	 
	5.1.15 Solvency
	 	 	49	 
	5.1.16 Insurance Licenses
	 	 	49	 
	5.2 Updates to Schedules
	 	 	49	 
	 
	 	 	 	 
	6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
	 	 	49	 
	 
	 	 	 	 
	6 1 First Loans and Letters of Credit 
	 	 	49	 
	6.1.1 Deliveries
	 	 	49	 
	6.1.2 Payment of Fees
	 	 	51	 
	6.2 Each Loan or Letter of Credit 
	 	 	51	 
	 
	 	 	 	 
	7. COVENANTS
	 	 	51	 
	 
	 	 	 	 
	7.1 Affirmative Covenants
	 	 	51	 
	7.1.1 Preservation of Existence, Etc.
	 	 	51	 
	7.1.2 Payment of Liabilities, Including Taxes, Etc.
	 	 	52	 
	7.1.3 Maintenance of Insurance
	 	 	52	 
	7.1.4 Maintenance of Properties and Leases
	 	 	52	 
	7.1.5 Visitation Rights
	 	 	52	 
	7.1.6 Keeping of Records and Books of Account
	 	 	52	 
	7.1.7 Compliance with Laws; Use of Proceeds
	 	 	52	 
	7.1.8 Further Assurances
	 	 	53	 
	7.1.9 Anti-Terrorism Laws
	 	 	53	 
	7.1.10 Collateral Value
	 	 	53	 
	7.1.11 Post-Closing Filings
	 	 	53	 
	7.1.12 Eligible Collateral Requirements
	 	 	53	 
	7.1.13 Collateral Value and Delinquency Proceedings
	 	 	54	 
	7.2 Negative Covenants 
	 	 	54	 
	7.2.1 Indebtedness
	 	 	54	 
	7.2.2 Liens
	 	 	54	 
	7.2.3 Guarantees
	 	 	55	 
	7.2.4 Investments
	 	 	55	 
	7.2.5 Dividends and Related Distributions
	 	 	56	 






-iii-









 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	7.2.6 Liquidations, Mergers, Consolidations, Acquisitions
	 	 	56	 
	7.2.7 Dispositions of Assets or Subsidiaries
	 	 	56	 
	7.2.8 Affiliate Transactions
	 	 	57	 
	7.2.9 Continuation of or Change in Business
	 	 	57	 
	7.2.10 Fiscal Year
	 	 	57	 
	7.2.11 Issuance of Stock or Other Ownership Interests
	 	 	57	 
	7.2.12 Changes in Organizational Documents
	 	 	57	 
	7.2.13 Negative Pledges
	 	 	57	 
	7.2.14 Minimum Statutory Surplus
	 	 	58	 
	7.2.15 Total Adjusted Capital to Authorized Control Level Risk Based Capital
	 	 	58	 
	7.2.16 Management Fee
	 	 	58	 
	7.2.17 Successor Attorney-in-Fact
	 	 	58	 
	7.3 Reporting Requirements
	 	 	58	 
	7.3.1 Quarterly Financial Statements
	 	 	58	 
	7.3.2 Annual Financial Statements
	 	 	58	 
	7.3.3 Certificate of the Borrower
	 	 	59	 
	7.3.4 Department of Insurance Certificate of Compliance
	 	 	59	 
	7.3.5 Valuation Statements
	 	 	59	 
	7.3.6 Certificates; Other Information
	 	 	59	 
	7.3.7 Notices
	 	 	60	 
	7.3.7.1 Default
	 	 	60	 
	7.3.7.2 Litigation
	 	 	60	 
	7.3.7.3 Organizational Documents
	 	 	60	 
	7.3.7.4 Erroneous Financial Information
	 	 	60	 
	7.3.7.5 ERISA Event
	 	 	60	 
	7.3.7.6 Other Reports
	 	 	60	 
	 
	 	 	 	 
	8. DEFAULT
	 	 	60	 
	 
	 	 	 	 
	8.1 Events of Default
	 	 	60	 
	8.1.1 Payments Under Loan Documents
	 	 	60	 
	8.1.2 Breach of Warranty
	 	 	61	 
	8.1.3 Breach of Negative Covenants or Visitation Rights
	 	 	61	 
	8.1.4 Breach of Other Covenants
	 	 	61	 
	8.1.5 Defaults in Other Agreements or Indebtedness
	 	 	61	 
	8.1.6 Final Judgments or Orders
	 	 	61	 
	8.1.7 Loan Document Unenforceable
	 	 	61	 
	8.1.8 Proceedings Against Assets
	 	 	61	 
	8.1.9 Events Relating to Plans and Benefit Arrangements
	 	 	62	 
	8.1.10 Change of Control
	 	 	62	 
	8.1.11 Relief Proceedings
	 	 	62	 
	8.1.12 Revocation of Certificate of Compliance
	 	 	62	 
	8.2 Consequences of Event of Default
	 	 	62	 
	8.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization Proceedings
	 	 	62	 
	8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings
	 	 	63	 






-iv-









 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	8.2.3 Set-off
	 	 	63	 
	8.2.4 Suits, Actions, Proceedings
	 	 	63	 
	8.2.5 Application of Proceeds
	 	 	64	 
	 
	 	 	 	 
	9. THE ADMINISTRATIVE AGENT
	 	 	64	 
	 
	 	 	 	 
	9.1 Appointment and Authority
	 	 	64	 
	9.2 Rights as a Lender
	 	 	64	 
	9.3 Exculpatory Provisions
	 	 	65	 
	9.4 Reliance by Administrative Agent
	 	 	66	 
	9.5 Delegation of Duties
	 	 	66	 
	9.6 Resignation of Administrative Agent
	 	 	66	 
	9.7 Non-Reliance on Administrative Agent and Other Lenders
	 	 	67	 
	9.8 No Other Duties, etc.
	 	 	67	 
	9.9 Administrative Agent’s Fee
	 	 	67	 
	9.10 Authorization to Release Collateral
	 	 	67	 
	9.11 No Reliance on Administrative Agents Customer Identification Program
	 	 	68	 
	 
	 	 	 	 
	10. MISCELLANEOUS
	 	 	68	 
	 
	 	 	 	 
	10.1 Modifications, Amendments or Waivers
	 	 	68	 
	10.1.1 Increase of Commitment
	 	 	68	 
	10.1.2 Extension of Payment; Reduction of Principal Interest or Fees; Modification of Terms of Payment
	 	 	68	 
	10.1.3 Release of Collateral or Borrower
	 	 	68	 
	10.1.4 Miscellaneous
	 	 	68	 
	10.2 No Implied Waivers; Cumulative Remedies
	 	 	69	 
	10.3 Expenses; Indemnity; Damage Waiver
	 	 	69	 
	10.3.1 Costs and Expenses
	 	 	69	 
	10.3.2 Indemnification by the Borrower
	 	 	70	 
	10.3.3 Reimbursement by Lenders
	 	 	70	 
	10.3.4 Waiver of Consequential Damages, Etc.
	 	 	70	 
	10.3.5 Payments
	 	 	71	 
	10.4 Holidays
	 	 	71	 
	10.5 Notices; Effectiveness; Electronic Communication
	 	 	71	 
	10.5.1 Notices Generally
	 	 	71	 
	10.5.2 Electronic Communications
	 	 	71	 
	10.5.3 Change of Address, Etc.
	 	 	72	 
	10.6 Severability
	 	 	72	 
	10.7 Duration; Survival
	 	 	72	 
	10.8 Successors and Assigns
	 	 	72	 
	10.8.1 Successors and Assigns Generally
	 	 	72	 
	10.8.2 Assignments by Lenders
	 	 	73	 
	10.8.3 Register
	 	 	74	 
	10.8.4 Participations
	 	 	74	 
	10.8.5 Limitations upon Participant Rights Successors and Assigns Generally
	 	 	75	 






-v-









 






	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	10.8.6 Certain Pledges; Successors and Assigns Generally
	 	 	75	 
	10.9 Confidentiality
	 	 	75	 
	10.9.1 General
	 	 	75	 
	10.9.2 Sharing Information With Affiliates of the Lenders
	 	 	76	 
	10.10 Counterparts; Integration; Effectiveness
	 	 	76	 
	10.10.1 Counterparts; Integration; Effectiveness
	 	 	76	 
	10.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF JURY TRIAL
	 	 	76	 
	10.11.1 Governing Law
	 	 	76	 
	10.11.2 SUBMISSION TO JURISDICTION
	 	 	77	 
	10.11.3 WAIVER OF VENUE
	 	 	77	 
	10.11.4 SERVICE OF PROCESS
	 	 	77	 
	10.11.5 WAIVER OF JURY TRIAL
	 	 	77	 
	10.12 USA Patriot Act Notice
	 	 	78	 






-vi-









 






LIST OF SCHEDULES AND EXHIBITS




SCHEDULES




	 	 	 	 	 
	SCHEDULE 1.1 (A)

	 	-
	 	PRICING GRID
	SCHEDULE 1.1 (B)

	 	-
	 	COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES
	SCHEDULE 5.1.1

	 	-
	 	QUALIFICATIONS TO DO BUSINESS
	SCHEDULE 5.1.2

	 	-
	 	SUBSIDIARIES
	SCHEDULE 5.1.14

	 	-
	 	ENVIRONMENTAL DISCLOSURES
	SCHEDULE 7.2.1

	 	-
	 	PERMITTED INDEBTEDNESS
	SCHEDULE 7.2.4

	 	-
	 	PERMITTED INVESTMENTS






EXHIBITS




	 	 	 	 	 
	EXHIBIT 1.1 (A)

	 	-
	 	ASSIGNMENT AND ASSUMPTION AGREEMENT
	EXHIBIT 1.1 (C)

	 	-
	 	CONTROL AGREEMENT
	EXHIBIT 1.1 (E)

	 	-
	 	EXISTING LETTERS OF CREDIT
	EXHIBIT 1.1 (N)(l)

	 	-
	 	REVOLVING CREDIT NOTE
	EXHIBIT 1.1 (N)(2)

	 	-
	 	SWING NOTE
	EXHIBIT 1.1 (P)

	 	-
	 	PLEDGE AGREEMENT
	EXHIBIT 2.4.1

	 	-
	 	REVOLVING CREDIT LOAN REQUEST
	EXHIBIT 2.4.2

	 	-
	 	SWING LOAN REQUEST
	EXHIBIT 7.3.3

	 	-
	 	QUARTERLY COMPLIANCE CERTIFICATE







 











 





CREDIT AGREEMENT




     THIS CREDIT AGREEMENT (as hereafter amended, restated, modified or supplemented from time to
time, this “Agreement”) is dated as of September 30, 2009 and is made by and among the
BORROWER (as hereinafter defined), the LENDERS (as hereinafter defined), BANK OF AMERICA, N.A., in
its capacity as co-syndication agent for the Lenders under this Agreement, JPMORGAN CHASE BANK,
N.A., in its capacity as co-syndication agent for the Lenders under this Agreement (each a
“Co-Syndication Agent” and hereinafter collectively referred to in such capacity as the
“Co-Syndication Agents”), and PNC BANK, NATIONAL ASSOCIATION, in its capacity as
administrative agent for the Lenders under this Agreement (hereinafter referred to in such capacity
as the “Administrative Agent”).



     The Borrower has requested the Lenders to provide a revolving credit facility to the Borrower
in an aggregate principal amount not to exceed Two Hundred Million and 00/100 Dollars
($200,000,000.00). 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:



1. CERTAIN DEFINITIONS




     1.1 Certain Definitions. In addition to words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following meanings, respectively, unless
the context hereof clearly requires otherwise:



     Account Bank shall mean 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 Standard & Poor’s rating at all times equal to or greater than “A-”, and
(c) shall be otherwise acceptable to the Administrative Agent in its discretion.



     Administrative Agent shall have the meaning specified in the Preamble hereof and
shall include its successors and assigns.



     Administrative Agent’s Fee shall have the meaning specified in Section 9.9
[Administrative Agent’s Fee].



     Administrative Agent’s Letter shall have the meaning specified in Section 9.9
[Administrative Agent’s Fee].



     Affiliate as to any Person any other Person (i) which directly or indirectly
controls, is controlled by, or is under common control with such Person, (ii) which beneficially
owns or holds ten percent (10%) or more of any class of the voting or other equity interests of
such Person, or (iii) ten percent (10%) or more of any class of voting interests or other equity
interests of which is beneficially owned or held, directly or indirectly, by such Person.



     Agreement shall have the meaning specified in the Preamble hereof and shall include
all schedules and exhibits hereto.



     Alternate Source shall have the meaning specified in the definition of LIBOR Rate.



 









 





     Annual Statement shall mean with respect to any Person, the annual financial
statement of such Person as required to be filed with the Applicable Insurance Regulatory
Authority, together with all exhibits or schedules filed therewith, prepared in conformity with
SAP.



     Anti-Terrorism Laws shall mean any Laws relating to terrorism or money laundering,
including Executive Order No. 13224, the USA Patriot Act, the Laws comprising or implementing the
Bank Secrecy Act, and the Laws administered by the United States Treasury Department’s Office of
Foreign Asset Control (as any of the foregoing Laws may from time to time be amended, renewed,
extended, or replaced).



     Applicable Insurance Regulatory Authority shall mean the Commonwealth of Pennsylvania
Department of Insurance or similar Official Body located in (i) the jurisdiction in which such
Person is domiciled or (ii) such other jurisdiction which, due to such Person’s activities, has
regulatory authority over such Person, and any federal Official Body regulating the insurance
industry.



     Applicable Letter of Credit Fee Rate shall mean the percentage rate per annum based
on the Borrower’s Financial Strength Rating then in effect according to the pricing grid on
Schedule 1.1(A) below the heading “Letter of Credit Fee”.



     Applicable Margin shall mean, as applicable:



     (A) the percentage spread to be added to the Base Rate applicable to Revolving Credit
Loans under the Base Rate Option based on the Borrower’s Financial Strength Rating then in
effect according to the pricing grid on Schedule 1.1(A) below the heading “Revolving
Credit Base Rate Spread”, or



     (B) the percentage spread to be added to the LIBOR Rate applicable to Revolving
Credit Loans under the LIBOR Rate Option based on the Borrower’s Financial Strength Rating
then in effect according to the pricing grid on Schedule 1.1(A) below the heading
“Revolving Credit LIBOR Rate Spread”.



     Approved Fund shall mean any fund that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course of 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.



     Assignment and Assumption Agreement shall mean an assignment and assumption agreement
entered into by a Lender and an assignee permitted under Section 10.8 [Successors and Assigns], in
substantially the form of Exhibit 1.1(A).



     Attorney-in-Fact shall mean Erie Indemnity Company, a Pennsylvania corporation, in
its capacity as the attorney-in-fact for the Borrower or such successor attorney-in-fact for the
Borrower approved by the Administrative Agent in accordance with Section 7.1.14 [Successor
Attorney-in-Fact].



     Authorized Control Level Risk Based Capital shall mean, as to the Borrower, the
“authorized control level risk based capital” calculated in accordance with SAP pursuant to the



-2-









 







requirements of the Insurance Department of the Commonwealth of Pennsylvania, as amended,
restated, modified or supplemented from time to time.



     Authorized Officer shall mean, with respect to the Borrower, the Chief Executive
Officer, President, Chief Financial Officer, Treasurer or Assistant Treasurer of the
Attorney-in-Fact 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 individuals from time to time
by giving written notice of such amendment to the Administrative Agent.



     Base Rate shall mean the greatest of (i) the Prime Rate, (ii) the Federal Funds Open
Rate, plus one-half of one percent (0.5%) per annum, and (iii) the Daily LIBOR Rate,
plus one percent (1.0%) per annum. Any change in the Base Rate (or any component thereof)
shall take effect at the opening of business on the day such change occurs.



     Base Rate Option shall mean the option of the Borrower to have Loans bear interest at
the rate and under the terms set forth in Section 3.1.1 (i) [Revolving Credit Base Rate Option].



     Borrower shall mean Erie Insurance Exchange, a reciprocal or inter-insurance exchange
domiciled in the Commonwealth of Pennsylvania, acting by and through the Attorney-in-Fact.



     Borrower Statutory Net Income shall mean, for any period, for the Borrower, the
positive net statutory income of the Borrower for that period, calculated in accordance with SAP.



     Borrower Statutory Surplus shall mean, on any date, the amount (determined in
accordance with SAP) of the Borrower’s surplus as of the last day of any fiscal quarter ending on
or most recently ended prior to such date.



     Borrowing Date shall mean, with respect to any Loan, the date for the making thereof
or the renewal or conversion thereof at or to the same or a different Interest Rate Option, which
shall be a Business Day.



     Borrowing Tranche shall mean specified portions of Loans outstanding as follows: (i)
any Loans to which a LIBOR Rate Option applies which become subject to the same Interest Rate
Option under the same Loan Request by the Borrower and which have the same Interest Period shall
constitute one (1) Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one (1) Borrowing Tranche.



     Business Day shall mean any day other than a Saturday or Sunday or a legal holiday on
which commercial banks are authorized or required to be closed for business in Pittsburgh,
Pennsylvania and if the applicable Business Day relates to any Loan to which the LIBOR Rate Option
applies, such day must also be a day on which dealings are carried on in the London interbank
market.



     Cash means Dollars held in a Collateral Account.




-3-











 





     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.



     Change in Law shall mean the occurrence, after the date of this Agreement, of any of
the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the
administration, interpretation or application thereof by any Official Body or (c) the making or
issuance of any request, guideline or directive (whether or not having the force of Law) by any
Official Body.



     CIP Regulations shall have the meaning specified in Section 9.10 [No Reliance on
Administrative Agent’s Customer Identification Program].



     Closing Date shall mean the Business Day on which the first Loan shall be made, which
shall be September 30, 2009.



     Code shall mean the Internal Revenue Code of 1986, 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.



     Collateral shall mean the collateral under the Pledge Agreement.



     Collateral Account means (a) account no. EIRF 1221052 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 7.1.10 [Collateral
Value].



     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.



     Commercial Letter of Credit shall mean any letter of credit which is a commercial
letter of credit issued in respect of the purchase of goods or services by the Borrower in the
ordinary course of its business.



     Commissioner shall mean the Insurance Commissioner of the Commonwealth of
Pennsylvania.



-4-









 





     Commitment shall mean, as to any Lender, its Revolving Credit Commitment and, in the
case of PNC Bank, its Swing Loan Commitment, and Commitments shall mean the Revolving
Credit Commitments and Swing Loan Commitment of all of the Lenders.



     Commitment Fee shall have the meaning specified in Section 2.3 [Commitment Fees].



     Compliance Certificate shall have the meaning specified in Section 7.3.3 [Certificate
of the Borrower].



     Control Agreement shall mean 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 1.1(C).



     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.



     Co-Syndication Agent shall have the meaning specified in the preamble of this
Agreement.



     Co-Syndication Agents shall have the meaning specified in the preamble of this
Agreement.



     Daily LIBOR Rate shall mean, for any day, the rate per annum determined by the
Administrative Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the
percentage prescribed by the Federal Reserve for determining the maximum reserve requirements with
respect to any eurocurrency funding by banks on such day.



     Defaulting Lender means any Lender that (a) has failed to fund any portion of the
Loans, participations with respect to Letters of Credit, or participations in Swing Loans required
to be funded by it hereunder within one (1) Business Day of the date required to be funded by it
hereunder unless such failure has been cured and all interest accruing as a result of such failure
has been fully paid in accordance with the terms hereof, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be paid by it hereunder
within one (1) Business Day of the date when due, unless the subject of a good faith dispute or
unless such failure has been cured and all interest accruing as a result of such failure has been
fully paid in accordance with the terms hereof, or (c) has since the date of this Agreement been
deemed insolvent by an Official Body or become the subject of a bankruptcy, receivership,
conservatorship or insolvency proceeding.



     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.



     Delinquent Lender shall have the meaning specified in Section 4.3 [Sharing of
Payments by Lenders].



-5-









 





     Dispositions shall have the meaning specified in Section 7.2.7 [Dispositions of Assets
or Subsidiaries].



     Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful money of the United
States of America.



     Drawing Date shall have the meaning specified in Section 2.9.3 [Disbursements,
Reimbursement].



     Eligible Collateral means Cash, Cash Equivalents, Corporate Securities, Federal Agency
Debt, Government Debt and Municipal Securities which (a) are denominated in Dollars, (b) meet the
requirements set forth in the Pledge Agreement, 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.



     Environmental Laws shall mean all 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; employee
safety in the workplace; (iv) 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; (v) the presence of contamination; (vi) the protection of endangered or threatened
species; and (vii) the protection of environmentally sensitive areas.



     Equity Interests shall have the meaning specified in Section 5.1.2 [Subsidiaries and
Owners; Investment Companies].



     Erie Property & Casualty Insurance Group shall mean Erie Insurance Company, Erie
Insurance Property and Casualty Company, Erie Insurance Company of New York, the Borrower and
Flagship City Insurance Company.



     ERISA shall mean 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 shall mean, 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; (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




-6-











 




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 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 shall mean, 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.



     Event of Default shall mean any of the events described in Section 8.1 [Events of
Default] and referred to therein as an “Event of Default.”



     Excluded Taxes shall mean, with respect to the Administrative Agent, any Lender, the
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction
(or any political subdivision thereof) under the Laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the
case of a Foreign Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office)
or is attributable to such Foreign Lender’s failure or inability (other than as a result of a
Change in Law) to comply with Section 4.8.5 [Status of Lenders], except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 4.8.1 [Payments Free of Taxes].



     Executive Order No. 13224 shall mean the Executive Order No. 13224 on Terrorist
Financing, effective September 24, 2001, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.



     Existing Credit Agreement shall mean that certain Amended, Restated and Consolidated
Loan Agreement dated January 30, 2008, by and between the Borrower and PNC Bank.



     Existing Letters of Credit shall mean all letters of credit set forth on Schedule
1.1(E) which were issued by PNC Bank under the Existing Credit Agreement prior to the date
hereof upon the application of the Borrower and are outstanding on the Closing Date.



     Expiration Date shall mean, with respect to the Revolving Credit Commitments,
September 30, 2012.



-7-









 





     Fair Market Value shall mean (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, Standard &
Poor’s/J.J. Kenny or, if Bloomberg, Inc. or Standard & Poor’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).



     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 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; and
(l) 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.



     Federal Funds Effective Rate for any day shall mean the rate per annum (based on a
year of 360 days and actual days elapsed and rounded upward to the nearest 1/100 of 1%) announced
by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted
average of the rates on overnight federal funds transactions arranged by federal funds brokers on
the previous trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank computes and announces
the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce
such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds
Effective Rate for the last day on which such rate was announced.



     Federal Funds Open Rate for any day shall mean the rate per annum (based on a year of
360 days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP
North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day
opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such
rate), or as set forth on such other recognized electronic source used for the purpose of
displaying such rate as selected by the Administrative Agent (a “Federal Funds Open Rate
Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM
(or any substitute screen) or on any Federal Funds Open Rate Alternate Source, or if there shall
at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or
any Federal Funds Open Rate Alternate Source, a comparable replacement rate determined by the
Administrative Agent at such time (which determination shall be



-8-









 







conclusive absent manifest error); provided, however, that if such day is not a Business Day, the
Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding
Business Day. If and when the Federal Funds Open Rate changes, the rate of interest with respect
to any Loan to which the Federal Funds Open Rate applies will change automatically without notice
to the Borrower, effective on the date of any such change.



     Federal Funds Open Rate Alternate Source shall have the meaning specified in the
definition of Federal Funds Open Rate.



     Financial Strength Rating shall mean, as of the date of determination, the Erie
Insurance Exchange Financial Strength Rating by A.M. Best Company, Inc. or its successors.



     Foreign Lender shall mean any Lender that is organized under the Laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of
this definition, the United States of America, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.



     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 shall mean generally accepted accounting principles as are in effect from time
to time, subject to the provisions of Section 1.3 [Accounting Principles], 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.



     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 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




-9-











 




determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a
corresponding meaning.




     Increasing Lender shall have the meaning assigned to that term in Section 2.5
[Increase in Revolving Credit Commitments].



     Indebtedness shall mean, 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, currency swap agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device, (iv) 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 (v) any Guarantee of Indebtedness for
borrowed money.



     Indemnified Taxes shall mean Taxes other than Excluded Taxes.



     Indemnitee shall have the meaning specified in Section 10.3.2 [Indemnification by the
Borrower].



     Information shall mean all information received from the Borrower or any of its
Subsidiaries relating to the Borrower or any of its Subsidiaries or any of their respective
businesses, other than any such information that is available to the Administrative Agent, any
Lender or the Issuing Lender on a non-confidential basis prior to disclosure by the Borrower or
any of its Subsidiaries, provided that, in the case of information received from the
Borrower or any of its Subsidiaries after the date of this Agreement, such information is clearly
identified at the time of delivery as confidential.



     Insolvency Proceeding shall mean, with respect to any Person, (a) a case, action or
proceeding with respect to such Person (i) before any court or any other Official Body under any
bankruptcy, insolvency, reorganization or other similar Law now or hereafter in effect, or (ii)
for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator,
conservator (or similar official) of the Borrower or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment for the benefit of
creditors, composition, marshaling of assets for creditors, or other, similar arrangement in
respect of such Person’s creditors generally or any substantial portion of its creditors;
undertaken under any Law.



     Insurance License means any license, certificate of authority, permit or other
authorization which is required to be obtained from any Official Body in connection with the
operation, ownership or transaction of insurance or reinsurance business.



     Interest Period shall mean the period of time selected by the Borrower in connection
with (and to apply to) any election permitted hereunder by the Borrower to have Revolving Credit



-10-









 







Loans bear interest under the LIBOR Rate Option. Subject to the last sentence of this definition,
such period shall be one (1), two (2), three (3) or six (6) Months. Such Interest Period shall
commence on the effective date of such Interest Rate Option, which shall be (i) the Borrowing Date
if the Borrower is requesting new Loans, or (ii) the date of renewal of or conversion to the LIBOR
Rate Option if the Borrower is renewing or converting to the LIBOR Rate Option applicable to
outstanding Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which would
otherwise end on a date which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (B) the Borrower shall not select, convert
to or renew an Interest Period for any portion of the Loans that would end after the Expiration
Date.



     Interest Rate Hedge shall mean an interest rate exchange, collar, cap, swap,
adjustable strike cap, adjustable strike corridor or similar agreements entered into by the
Borrower or its Subsidiaries in order to provide protection to, or minimize the impact upon, the
Borrower and/or its Subsidiaries of increasing floating rates of interest applicable to
Indebtedness.



     Interest Rate Option shall mean any LIBOR Rate Option or Base Rate Option.



     Interim Statement shall mean, with respect to any Person, any interim statutory
financial statement or financial report (whether quarterly, semiannually or otherwise) of such
Person as required to be filed with the Applicable Insurance Regulatory Authority, together with
all exhibits or schedules filed therewith, prepared in conformity with SAP.



     Investments shall mean, 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 shall mean the Internal Revenue Service.



     ISP98 shall have the meaning specified in Section 10.11.1 [Governing Law].



     Issuing Lender means PNC Bank, in its individual capacity as issuer of Letters of
Credit hereunder.



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



     Law shall mean any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, opinion, release, ruling, order, injunction, writ, decree, bond,
judgment, authorization or approval, lien or award by or settlement agreement with any Official
Body.



-11-









 





     Lender Provided Interest Rate Hedge shall mean 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, (ii)
provides for the method of calculating the reimbursable amount of the provider’s credit exposure
in a reasonable and customary manner, and (iii) is entered into for hedging (rather than
speculative) purposes.



     Lenders shall mean the financial institutions named on Schedule 1.1 (B) and
their respective successors and assigns as permitted hereunder, each of which is referred to
herein as a Lender. For the purpose of any Loan Document which provides for the granting of a
security interest or other Lien to the Lenders or to the Administrative Agent (for its benefit and
for the benefit of the Lenders) as security for the Obligations, “Lenders” shall include any
Affiliate of a Lender to which such Obligation is owed.



     Letter of Credit shall have the meaning specified in Section 2.9.1 [Issuance of
Letters of Credit].



     Letter of Credit Borrowing shall have the meaning specified in Section 2.9.3.3
[Disbursements, Reimbursement].



     Letter of Credit Fee shall have the meaning specified in Section 2.9.2 [Letter of
Credit Fees].



     Letter of Credit Obligation means, as of any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit (if any Letter of Credit
shall increase in amount automatically in the future, such aggregate amount available to be drawn
shall currently give effect to any such future increase) plus the aggregate Reimbursement
Obligations and Letter of Credit Borrowings.



     Letter of Credit Sublimit shall have the meaning specified in Section 2.9 [Letter of
Credit Subfacility].



     LIBOR Rate shall mean, with respect to the Loans comprising any Borrowing Tranche to
which the LIBOR Rate Option applies for any Interest Period, the interest rate per annum
determined by the Administrative Agent by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate which appears on the Bloomberg
Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which U.S. Dollar
deposits are offered by leading banks in the London interbank deposit market), or the rate which
is quoted by another source selected by the Administrative Agent which has been approved by the
British Bankers’ Association as an authorized information vendor for the purpose of displaying
rates at which U.S. Dollar deposits are offered by leading banks in the London interbank deposit
market (an “Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period as the London interbank offered rate for
U.S. Dollars for an amount comparable to such Borrowing Tranche and having a borrowing date and a
maturity comparable to such Interest Period (or if there shall at any time, for any reason, no
longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable
replacement rate determined by the Administrative Agent at




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such time (which determination shall be conclusive absent manifest error)), by (ii) a number equal
to 1.00 minus the LIBOR Rate Reserve Percentage. LIBOR may also be expressed by the following
formula:




	 	 	 	 
	 	 	London interbank offered rate quoted by Bloomberg or
	 
	LIBOR Rate =

	 	appropriate successor as shown on Bloomberg Page BBAM1
	 
	 	 
	 
	 	 
	 
	 	 	1.00 - LIBOR Rate Reserve Percentage
	 






     The LIBOR Rate shall be adjusted with respect to any Loan to which the LIBOR Rate Option
applies that is outstanding on the effective date of any change in the LIBOR Rate Reserve
Percentage as of such effective date. The Administrative Agent shall give prompt notice to the
Borrower of the LIBOR Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.



     LIBOR Rate Option shall mean the option of the Borrower to have Loans bear interest
at the rate and under the terms set forth in Section 3.1.1 (ii) [Revolving Credit LIBOR Rate
Option].



     LIBOR Rate Reserve Percentage shall mean as of any day the maximum percentage in
effect on such day, as prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently referred to as
“Eurocurrency Liabilities”).



     Lien shall mean 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 shall mean this Agreement, the Administrative Agent’s Letter, the
Notes, 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, and Loan
Document shall mean any of the Loan Documents.



     Loan Request shall mean either a Revolving Credit Loan Request or a Swing Loan
Request, as the case may be.



     Loans shall mean collectively and Loan shall mean separately, all Revolving
Credit Loans and Swing Loans or any Revolving Credit Loan or Swing Loan.



     Material Adverse Change shall mean 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



-13-









 




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.




     Month, with respect to an Interest Period under the LIBOR Rate Option, shall mean the
interval between the days in consecutive calendar months numerically corresponding to the first
(1st) day of such Interest Period. If any LIBOR Rate Interest Period begins on a day of
a calendar month for which there is no numerically corresponding day in the month in which such
Interest Period is to end, the final month of such Interest Period shall be deemed to end on the
last Business Day of such final month.



     Moody’s shall mean Moody’s Investors Service, Inc.



     Multiemployer Plan shall mean any employee benefit plan which is a “multiemployer
plan” within the meaning of Section 400l(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.



     NAIC mans the National Association of Insurance Commissioners and any successor
thereto.



     New Lender shall have the meaning specified in Section 2.5 [Increase in Revolving
Credit Commitments].



     Non-Consenting Lender shall have the meaning specified in Section 10.1.4
[Miscellaneous].



     Non-Delinquent Lender shall mean any Lender which is not a Delinquent Lender.



     Notes shall mean, collectively, the Notes in the form of Exhibit l.l(N)(1)
evidencing the Revolving Credit Loans and in the form of Exhibit 1.1(N)(2) evidencing the
Swing Loan, each as amended, restated, modified or supplemented from time to time.



     Obligation shall mean 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 Administrative Agent’s 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.



     Official Body shall mean 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



-14-









 




government (including any supra-national bodies such as the European Union or the European Central
Bank).




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



     Participant has the meaning specified in Section 10.8.4 [Participations].



     Participation Advance shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].



     Payment Date shall mean the first (1st) day of each calendar quarter after
the date hereof and on the Expiration Date or upon acceleration of the Notes.



     Payment In Full shall mean payment in full in cash of the Loans and other Obligations
hereunder, termination of the Commitments and expiration or termination of all Letters of Credit.



     PBGC shall mean 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 7.2.2 [Liens].



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



     Pledge Agreement shall mean the Pledge Agreement in substantially the form of
Exhibit 1.1 (P) executed and delivered by the Borrower to the Administrative Agent for the
benefit of the Lenders.



     PNC Bank shall mean PNC Bank, National Association, its successors and assigns.



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     Post-Closing Filings shall have the meaning assigned to such term in Section 7.1.11
[Post-Closing Filings].



     Potential Default shall mean any event or condition which with notice or passage of
time, or both, would constitute an Event of Default.



     Prime Rate shall mean the interest rate per annum announced from time to time by the
Administrative Agent at its Principal Office as its then prime rate, which rate may not be the
lowest or most favorable rate then being charged commercial borrowers or others by the
Administrative Agent. Any change in the Prime Rate shall take effect at the opening of business on
the day such change is announced.



     Principal Office shall mean the main banking office of the Administrative Agent in
Pittsburgh, Pennsylvania.



     Prior Security Interest shall mean 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.



     Published Rate shall mean the rate of interest published each Business Day in The Wall
Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one
(1) month period (or, if no such rate is published therein for any reason, then the Published Rate
shall be the eurodollar rate for a one (1) month period as published in another publication
selected by the Administrative Agent).



     Ratable Share shall mean the proportion that a Lender’s Commitment (excluding the
Swing Loan Commitment) bears to the Commitments (excluding the Swing Loan Commitment) of all of the
Lenders. If the Commitments have terminated or expired, the Ratable Shares shall be determined
based upon the Commitments (excluding the Swing Loan Commitment) most recently in effect, giving
effect to any assignments.



     Reimbursement Obligation shall have the meaning specified in Section 2.9.3
[Disbursements, Reimbursement].



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



     Relief Proceeding shall mean 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.



     Required Lenders shall mean Lenders (other than any Defaulting Lender) having more
than fifty percent (50%) of the aggregate amount of the Revolving Credit Commitments of the



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Lenders (excluding any Defaulting Lender) or, after the termination of the Revolving Credit
Commitments, the outstanding Revolving Credit Loans and Ratable Share of Letter of Credit
Obligations of the Lenders (excluding any Defaulting Lender).




     Required Share shall have the meaning specified in Section 4.10 [Settlement Date
Procedures].



     Revolving Credit Commitment shall mean, as to any Lender at any time, the amount
initially set forth opposite its name on Schedule 1.1(B) in the column labeled “Amount of
Commitment for Revolving Credit Loans”, as such Commitment is thereafter increased pursuant to
Section 2.5 [Increase in Revolving Credit Commitments] or decreased pursuant to Section 2.10
[Reduction of Revolving Credit Commitments], as applicable, and Revolving Credit
Commitments shall mean the aggregate Revolving Credit Commitments of all of the Lenders.



     Revolving Credit Loans shall mean collectively, and Revolving Credit Loan
shall mean separately, all Revolving Credit Loans or any Revolving Credit Loan made by the Lender
or one (1) of the Lenders to the Borrower pursuant to Section 2.1.1 [Revolving Credit Loans] or
Section 2.9.3 [Disbursements, Reimbursement].



     Revolving Credit Loan Request shall have the meaning specified in Section 2.4.1
[Revolving Credit Loan Requests].



     Revolving Facility Usage shall mean at any time the sum of the outstanding Revolving
Credit Loans and the Letter of Credit Obligations (for purposes of this computation, PNC Bank’s
Swing Loans shall be deemed to be borrowed amounts under its Revolving Credit Commitment).



     SAP means, as to any Person, the accounting practices prescribed or permitted by
NAIC, if then applicable to such Person, or the Applicable Insurance Regulatory Authority of the
jurisdiction of domicile of such Person for the preparation of Annual Statements, Interim
Statements and other financial reports by insurance companies of the same type as such Person.



     Securities Intermediary shall mean 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.



     Settlement Dates shall mean any Business Day on which the Administrative Agent elects
to effect settlement pursuant to Section 4.10 [Settlement Date Procedures].



     Solvent shall mean, with respect to any Person on a particular date, 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



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business or a transaction, and is not about to engage in business or a 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.




     Standard & Poor’s shall mean Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc.



     Standby Letter of Credit shall mean a Letter of Credit issued to support obligations
of the Borrower, contingent or otherwise, which finance the working capital and business needs of
the Borrower incurred in the ordinary course of business.



     Statements shall have the meaning specified in Section 5.1.6 [Financial Statements].



     Subscriber’s Agreement shall mean 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.



     Subsidiary Equity Interests shall have the meaning specified in Section 5.1.2
[Subsidiaries and Owners; Investment Companies].



     Swing Loan Commitment shall have the meaning specified in Section 2.1.2 [Swing Loan
Commitment].



     Swing Loan Request shall have the meaning specified in Section 2.4.2 [Swing Loan
Requests].



     Swing Loans shall mean PNC Bank’s commitment to make Swing Loans to the Borrower
pursuant to Section 2.1.2 [Swing Loan Commitment] hereof in an aggregate principal amount up to
Twenty-Five Million and 00/100 Dollars ($25,000,000.00).



     Taxes shall mean 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.



     Total Adjusted Capital shall mean, as to the Borrower, the “total adjusted capital”
calculated in accordance with SAP pursuant to the requirements of the Insurance Department of




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the Commonwealth of Pennsylvania, as amended, restated, modified or supplemented from time to
time.




     UCC shall mean the Uniform Commercial Code as in effect in each applicable
jurisdiction.



     UCP shall have the meaning specified in Section 10.11.1 [Governing Law].



     USA Patriot Act shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as
the same has been, or shall hereafter be, renewed, extended, amended or replaced.



     Valuation Statement shall have the meaning specified in Section 7.3.5 [Valuation
Statements].



     1.2 Construction. Unless the context of this Agreement otherwise clearly
requires, the following rules of construction shall apply to this Agreement and each of the other
Loan Documents: (i) references to the plural include the singular, the plural, the part and the
whole and the words “include”, “includes” and “including” shall be deemed to be followed by the
phrase“without limitation”; (ii) the words “hereof, “herein”, “hereunder”, “hereto” and similar
terms in this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document as a whole; (iii) article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be, unless otherwise
specified; (iv) reference to any Person includes such Person’s successors and assigns; (v) reference
to any agreement, including this Agreement and any other Loan Document together with the
schedules and exhibits hereto or thereto, document or instrument means such agreement, document
or instrument as amended, modified, replaced, substituted for, superseded or restated; (vi)
relative to the determination of any period of time, “from” means “from and including”, “to” means
“to but excluding”, and “through” means “through and including”; (vii) 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, (viii) section headings herein and in each other Loan Document are included
for convenience and shall not affect the interpretation of this Agreement or such Loan Document,and
(ix) unless otherwise specified, all references herein to times of day shall be references
to Eastern Time.



     1.3 Accounting Principles. Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made and prepared in
accordance with GAAP or SAP, as applicable (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms
by GAAP or SAP, as applicable; provided, however, that all accounting terms used in Section 7.2
[Negative Covenants] (and all defined terms used in the definition of any accounting term used
in Section 7.2 [Negative Covenants] shall have the
meaning given to such terms (and defined terms)
under GAAP or SAP, as applicable, as in effect on the date hereof
applied on a basis consistent with
those used in preparing Statements referred to in
Section 5.1.6(i) [Financial Statements]. In the
event of any change after the date hereof in GAAP or SAP, as applicable,



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and if such change would result in the inability to determine compliance with the financial
covenants set forth in Section 7.2 [Negative Covenants], then the parties hereto agree to
endeavor, in good faith, to agree upon an amendment to this Agreement that would adjust such
financial covenants in a manner that would preserve the original intent thereof, but would allow
compliance therewith to be determined in accordance with the Borrower’s financial statements at
that time, provided that, until so amended such financial covenants shall continue to be computed
in accordance with GAAP or SAP, as applicable, prior to such change therein.




          2. REVOLVING CREDIT AND SWING LOAN FACILITIES




     2.1 Revolving Credit and Swing Loan Commitments.



          2.1.1
Revolving Credit Loans. Subject to the terms and conditions hereof and relying
upon the representations and warranties herein set forth, each Lender
severally agrees to make
Revolving Credit Loans to the Borrower at any time or from time to
time on or after the date hereof
to, but not including, the Expiration Date; provided that after
giving effect to such Loan (i) the
aggregate amount of Loans from such Lender shall not exceed such
Lender’s Revolving Credit
Commitment minus such Lender’s Ratable Share of the Letter of
Credit Obligations and (ii) the
Revolving Facility Usage shall not exceed the Revolving Credit Commitments. Within such limits of
time and amount and subject to the other provisions of this Agreement, the Borrower may borrow,
repay and reborrow pursuant to this Section 2.1.1 [Revolving Credit Loans].




          2.1.2
Swing Loans. Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, and in order to facilitate loans and
repayments between Settlement Dates, PNC Bank may, at its option, cancelable at any time for any
reason whatsoever, make swing loans (the “Swing Loans”) to the Borrower at any time or from
time to time after the date hereof to, but not including, the Expiration Date, in an aggregate
principal amount up to, but not in excess of Twenty-Five Million and 00/100 Dollars
($25,000,000.00)(the “Swing Loan Commitment”), provided that the aggregate principal amount
of PNC Bank’s Swing Loans and the Revolving Credit Loans of all Lenders and the Letter of Credit
Obligations at any one time outstanding shall not exceed the Revolving Credit Commitments of all
the Lenders. Within such limits of time and amount and subject to the other provisions of
this Agreement, the Borrower may borrow, repay and reborrow pursuant to this Section 2.1.2
[Swing Loans].




     2.2
Nature of Lenders Obligations with Respect to Revolving Credit Loans. Each Lender
shall be obligated to participate in each request for Revolving
Credit Loans pursuant to Section
2.4.1 [Revolving Credit Loan Requests] in accordance with
its Ratable Share. The aggregate of
each Lender’s Revolving Credit Loans outstanding hereunder to the Borrower at anytime shall never
exceed its Revolving Credit Commitment minus its Ratable Share of the
Letter of Credit Obligations.
The obligations of each Lender hereunder are several. The failure of
any Lender to perform its
obligations hereunder shall not affect the Obligations of the
Borrower to any other party nor shall
any other party be liable for the failure of such Lender to perform
its obligations hereunder. The
Lenders shall have no obligation to make Revolving Credit Loans hereunder on or after the Expiration
Date.



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     2.3
Commitment Fees. Accruing from the date hereof until the Expiration Date,
the Borrower agrees to pay to the Administrative Agent for the account of each Lender,
as consideration for such Lender’s Revolving Credit Commitment hereunder, a nonrefundable commitment
fee (the “Commitment Fee”) equal to one-quarter of one percent (0.25%) per annum (computed on the
basis of a year of three hundred sixty (360) days and actual days elapsed) times the average daily
difference between the amount of (i) such Lender’s Revolving Credit Commitment as the same may
be constituted from time to time and (ii) the Revolving Facility Usage; provided, however, that any
Commitment Fee accrued with respect to the Revolving Credit 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 Commitment Fee shall otherwise have been due and payable by the Borrower prior to
such time; and provided further that no Commitment Fee shall accrue with respect to the Revolving
Credit Commitment of a Defaulting Lender so long as such Lender shall be a Defaulting Lender.
Subject to the proviso in the directly preceding sentence, all Commitment Fees shall be payable in
arrears on each Payment Date.



     2.4 Revolving Credit Loan Requests; Swing Loan Requests.



          2.4.1 Revolving Credit Loan Requests. Except as otherwise provided herein, the
Borrower may from time to time prior to the Expiration Date request the Lenders to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to existing Revolving Credit
Loans pursuant to Section 3.2 [Interest Periods], by delivering to the Administrative Agent, not
later than 10:00 a.m., (i) three (3) Business Days prior to the proposed Borrowing Date with respect
to the making of Revolving Credit Loans to which the LIBOR Rate Option applies or the conversion to
or the renewal of the LIBOR Rate Option for any Loans; and(ii) on the proposed Borrowing Date with
respect to the making of a Revolving Credit Loan to which the Base Rate Option applies or the last
day of the preceding Interest Period with respect to the conversion to the Base Rate Option for any
Loan, of a duly completed request therefor substantially in the form of Exhibit 2.4.1 or a
request by telephone immediately confirmed in writing by letter, facsimile or telex in such form
(each, a “Revolving Credit Loan Request”), it being understood that the Administrative Agent
may rely on the authority of any individual making such a telephonic request without the necessity
of receipt of such written confirmation. Each Revolving Credit Loan Request shall be irrevocable and
shall specify the aggregate amount of the proposed Loans comprising each Borrowing Tranche, and, if
applicable, the Interest Period, which amounts shall be in integral multiples of Five Hundred
Thousand and 00/100 Dollars ($500,000.00) and not less than Two Million and 00/100 Dollars
($2,000,000.00) for each Borrowing Tranche under the LIBOR Rate Option and not less than the lesser
of Two Million and 00/100 Dollars ($2,000,000.00) or the maximum amount available for
Borrowing Tranches under the Base Rate Option.




          2.4.2 Swing Loan Requests. Except as otherwise provided herein, the Borrower may from
time to time prior to the Expiration Date request PNC Bank to make Swing Loans by delivery to PNC
Bank not later than 1:00 p.m. on the proposed Borrowing Date of a duly completed request therefor
substantially in the form of Exhibit 2.4.2 hereto or a request by telephone immediately
confirmed in writing by letter, facsimile or telex, in such form (each, a“Swing Loan
Request”), it being understood that the Administrative Agent may rely on the






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authority of any individual making such a telephonic request without the necessity of receipt of
such written confirmation. Each Swing Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date and (ii) the principal amount of such Swing Loan, which shall be in
integral multiples of One Hundred Thousand and 00/100 Dollars ($100,000.00) and not less than One
Hundred Thousand and 00/100 Dollars ($100,000.00).




     2.5 Increase in Revolving Credit Commitments.



               (i) Increasing Lenders and New Lenders. The Borrower may, one time prior to the
second anniversary of the Closing Date, request that (1) the current Lenders increase their
Revolving Credit Commitments (any current Lender which elects to increase its Revolving Credit
Commitment shall be referred to as an “Increasing Lender”) or (2) one or more new lenders
(each a “New Lender”) join this Agreement and provide a Revolving Credit Commitment
hereunder, subject to the following terms and conditions:



                    a. No Obligation to Increase. No current Lender shall be
obligated to increase its Revolving Credit Commitment and any increase in the Revolving Credit
Commitment by any current Lender shall be in the sole discretion of such current Lender.



                    b. Defaults.
There shall exist no Events of Default or Potential Default on the
effective date of such increase after giving effect to such increase.



                    c. Aggregate Revolving Credit Commitments. After giving
effect to such increase, the total Revolving Credit Commitments shall not exceed Two Hundred Fifty
Million and 00/100 Dollars ($250,000,000.00).



                    d. Minimum Revolving Credit Commitments. After giving
effect to such increase, the amount of the Revolving Credit Commitments provided by each of the New
Lenders and each of the Increasing Lenders shall be at least Twenty-Five Million and 00/100 Dollars
($25,000,000.00).



                    e. Resolutions; Opinion. The Borrower shall deliver to the
Administrative Agent on or before the effective date of such increase the following documents in a
form acceptable to the Administrative Agent: (1) certifications of an Authorized Officer with
attached resolutions of the Attorney-in-Fact certifying that the increase in the Revolving Credit
Commitment has been approved by the Borrower, and (2) an opinion of counsel addressed to the
Administrative Agent and the Lenders addressing the authorization of the Borrower and the
Attorney-in-Fact and execution of the Loan Documents by the Attorney-in-Fact, and
enforceability of the Loan Documents against, the Borrower.



                    f. Notes. The Borrower shall execute and deliver (1) to each
Increasing Lender a replacement revolving credit Note reflecting the new amount of such Increasing
Lender’s Revolving Credit Commitment after giving effect to the increase (and the prior Note issued
to such Increasing Lender shall be deemed to be terminated) and (2) to each New Lender a revolving
credit Note reflecting the amount of such New Lender’s Revolving Credit Commitment.



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                    g. Approval of New Lenders. Any New Lender shall be
subject to the approval of the Administrative Agent, which approval shall not be unreasonably
withheld.



                    h. Increasing Lenders. Each Increasing Lender shall confirm
its agreement to increase its Revolving Credit Commitment pursuant to an acknowledgement in a form
reasonably acceptable to the Administrative Agent, signed by it and the Borrower and delivered to
the Administrative Agent at least five (5) days before the effective date of such increase.



                    i. New
Lenders—Joinder. Each New Lender shall execute a
lender joinder in form and substance reasonably satisfactory to the Administrative Agent pursuant
to which such New Lender shall join and become a party to this Agreement and the other Loan
Documents with a Revolving Credit Commitment in the amount set forth in such lender joinder.



               (ii) Treatment of Outstanding Loans and Letters of Credit.



                    (a) Repayment of Outstanding Loans; Borrowing of New
Loans. On the effective date of any increase in Revolving Credit Commitments as provided
in the preceding clause (i), the Borrower shall repay all Loans then outstanding, subject to the
Borrower’s indemnity obligations under Section 4.9 [Indemnity]; provided that it may borrow
new Loans with a Borrowing Date on such date. Each of the Lenders shall participate in any new
Loans made on or after such date in accordance with their respective Ratable Shares after giving
effect to the increase in Revolving Credit Commitments contemplated by this Section 2.5 [Increase
in Revolving Credit Commitments].



                    (b) Outstanding Letters of Credit. Repayment of Outstanding
Loans; Borrowing of New Loans. On the effective date of such increase, each Increasing
Lender and each New Lender (i) will be deemed to have purchased a participation in each then
outstanding Letter of Credit equal to its Ratable Share of such Letter of Credit and the
participation of each other Lender in such Letter of Credit shall be adjusted accordingly and (ii)
will acquire, (and will pay to the Administrative Agent, for the account of each Lender, in
immediately available funds, an amount equal to) its Ratable Share of all outstanding
Participation Advances.



     2.6 Making Revolving Credit Loans and Swing Loans; Presumptions by the
Administrative Agent; Repayment of Revolving Credit Loans; Borrowings to Repay Swing
Loans.



          2.6.1 Making Revolving Credit Loans. The Administrative Agent shall, promptly after
receipt by it of a Revolving Credit Loan Request pursuant to Section 2.4.1 [Revolving Credit Loan
Requests], notify the Lenders of its receipt of such Loan Request specifying the information
provided by the Borrower and the apportionment among the Lenders of the requested Revolving Credit
Loans as determined by the Administrative Agent in accordance with Section 2.2 [Nature of Lenders
Obligations with Respect to Revolving Credit Loans]. Each Lender shall remit the principal
amount of each Revolving Credit Loan to the






-23-









 







Administrative Agent such that the Administrative Agent is able to, and the Administrative Agent
shall, to the extent the Lenders have made funds available to it for such purpose and subject to
Section 6.2 [Each Loan or Letter of Credit], fund such Revolving Credit Loans to the Borrower in
U.S. Dollars and immediately available funds at the Principal Office prior to 2:00 p.m., on the
applicable Borrowing Date; provided that if any Lender fails to remit such funds to the
Administrative Agent in a timely manner, the Administrative Agent may elect in its sole discretion
to fund with its own funds the Revolving Credit Loans of such Lender on such Borrowing Date, and
such Lender shall be subject to the repayment obligation in Section 2.6.3 [Presumptions by the
Administrative Agent].





          2.6.2 Making Swing Loans.
So long as PNC Bank elects to make Swing Loans, PNC Bank
shall, after receipt by it of a Swing Loan Request pursuant to
Section 2.4.2 [Swing Loan Requests],
fund such Swing Loan to the Borrower in U.S. Dollars and immediately available funds at the
Principal Office prior to 2:00 p.m. on the Borrowing Date.




          2.6.3
Presumptions by the Administrative Agent. Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any
Loan that such Lender will not
make available to the Administrative Agent such Lender’s share of such Loan, the Administrative
Agent may assume that such Lender has made such share available on
such date in accordance with
Section 2.6.1 [Making Revolving Credit Loans] 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 Loan 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 a payment to be made by 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 and(ii) in the case of a payment to be made by the
Borrower, the interest rate applicable to Loans under the Base Rate Option. If such Lender pays
its share of the applicable Loan to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan. 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.




          2.6.4
Repayment of Revolving Credit Loans. The Borrower shall repay the Revolving
Credit Loans together with all outstanding interest thereon on the Expiration Date.




          2.6.5
Borrowings to Repay Swing Loans. PNC Bank may, at its option, exercisable at
any time for any reason whatsoever, demand repayment of the Swing
Loans, and each Lender shall make
a Revolving Credit Loan in an amount equal to such Lender’s
Ratable Share of the aggregate principal
amount of the outstanding Swing Loans, plus, if PNC Bank so requests, accrued interest thereon,
provided that no Lender shall be obligated in any event to make Revolving Credit Loans in excess of
its Revolving Credit Commitment less its Ratable Share of the Letter of Credit Obligations.
Revolving Credit Loans made pursuant to the preceding sentence shall bear interest at the Base Rate
Option and shall be deemed to have been properly requested in accordance with Section 2.4.1
[Revolving Credit Loan Requests] without regard to any of the requirements of that provision. PNC
Bank shall provide notice to the





-24-











 




Lenders (which may be telephonic, written, or facsimile notice) that such Revolving Credit Loans
are to be made under this Section 2.6.5 [Borrowings to Repay Swing Loans] and of the apportionment
among the Lenders, and the Lenders shall be unconditionally obligated to fund such Revolving
Credit Loans (whether or not the conditions specified in Section 2.4.1 [Revolving Credit Loan
Requests] are then satisfied) by the time PNC Bank so requests, which shall not be earlier than
2:00 p.m. on the next Business Day after the date the Lenders receive such notice from PNC Bank.




     2.7 Notes. The Obligation of the Borrower to repay the aggregate unpaid principal
amount of the Revolving Credit Loans made to it by each Lender, together with interest thereon,
shall be evidenced by a revolving credit Note, dated the Closing Date payable to the order of
such Lender in a face amount equal to the Revolving Credit Commitment. The Obligation of the
Borrower to repay the aggregate unpaid principal amount of the Swing Loans made to it by PNC
Bank, together with interest thereon, shall be evidenced by a swing Note, dated the Closing
Date
payable to the order of PNC Bank in a face amount equal to the Swing Loan Commitment.



     2.8 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 Indebtedness owed by the Borrower to PNC Bank. 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.



     2.9 Letter of Credit Subfacility.



          2.9.1 Issuance of Letters of Credit. Borrower may at any time prior to the Expiration
Date request the issuance of letters of credit (each, a “Letter of Credit”) on behalf of
itself, or the amendment or extension of an existing Letter of Credit, by delivering to the Issuing
Lender (with a copy to the Administrative Agent) a completed application and agreement for letters
of credit, or request for such amendment or extension, as applicable, in such form as the Issuing
Lender may specify from time to time by no later than 10:00 a.m. at least five (5) Business Days,
or such shorter period as may be agreed to by the Issuing Lender, in advance of the proposed date
of issuance. Each Letter of Credit shall be a Standby Letter of Credit (and may not be a Commercial
Letter of Credit). Promptly after receipt of any Letter of Credit application, the Issuing Lender
shall confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit application and if not, such Issuing Lender will
provide Administrative Agent with a copy thereof. Unless the Issuing Lender has received notice
from any Lender, the Administrative Agent or the Borrower, at least one (1) day prior to the
requested date of issuance, amendment or extension of the applicable Letter of Credit, that one or
more applicable conditions in Section 6 [Conditions of Lending and Issuance of Letters of Credit]
is not satisfied, then, subject to the terms and conditions hereof and in reliance on the
agreements of the other Lenders set forth in this Section 2.9 [Letter of Credit Subfacility], the
Issuing Lender or any of the Issuing Lender’s Affiliates will issue a Letter of Credit or agree to
such amendment or extension, provided that each Letter of Credit shall (A) have a maximum maturity
of twelve (12) months from the date of issuance, and (B) in no event expire later than the
Expiration Date and provided further that in no event shall (i) the Letter of Credit Obligations
exceed, at any one time, Twenty-Five Million and 00/100 Dollars ($25,000,000.00) (the “Letter
of Credit Sublimit”) or (ii) the Revolving Facility




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Usage exceed, at any one time, the Revolving Credit Commitments. Each request by the Borrower for
the issuance, amendment or extension of a Letter of Credit shall be deemed to be a representation
by the Borrower that it shall be in compliance with the preceding sentence and with Section 6
[Conditions of Lending and Issuance of Letters of Credit] after giving effect to the requested
issuance, amendment or extension of such Letter of Credit. Promptly after its delivery of any
Letter of Credit or any amendment to a Letter of Credit to the beneficiary thereof, the Issuing
Lender will also deliver to the Borrower and Administrative Agent a true and complete copy of such
Letter of Credit or amendment. Notwithstanding any other provision hereof, no Issuing Lender shall
be required to issue any Letter of Credit, if any Lender is at such time a Defaulting Lender
hereunder, unless such Issuing Lender has entered into satisfactory arrangements with the Borrower
or such Defaulting Lender to eliminate the Issuing Lender’s risk with respect to such Defaulting
Lender (it being understood that the Issuing Lender would consider the Borrower providing cash
collateral to the Administrative Agent, for the benefit of the Issuing Lender, to secure the
Defaulting Lender’s Ratable Share of the Letter of Credit to be a satisfactory arrangement. Each of
the Existing Letters of Credit shall be deemed to have been issued hereunder on the Closing Date by
PNC Bank as the Issuing Lender. Each of the Existing Letters of Credit shall be deemed to be a
Letter of Credit for all purposes of this Agreement.




          2.9.2 Letter of Credit Fees. The Borrower shall pay (i) to the Administrative
Agent for the ratable account of the Lenders a fee (the “Letter of Credit Fee”) equal
to the
Applicable Letter of Credit Fee Rate, and (ii) to the Issuing Lender for its own account a
fronting
fee equal to one hundred twenty-five thousandths of one percent (0.125%) per annum (in each
case computed on the basis of a year of 360 days and actual days elapsed), which fees shall be
computed on the daily average Letter of Credit Obligations and shall be payable quarterly in
arrears on each Payment Date following issuance of each Letter of Credit. The Borrower shall
also pay to the Issuing Lender for the Issuing Lender’s sole account the Issuing Lenders then
in effect customary fees and administrative expenses payable with respect to the Letters of
Credit as
the Issuing Lender may generally charge or incur from time to time in connection with the
issuance, maintenance, amendment (if any), assignment or transfer (if any), negotiation, and
administration of Letters of Credit.




          2.9.3 Disbursements, Reimbursement. Immediately upon the issuance of each
Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Issuing Lender a participation in such Letter of Credit and each
drawing thereunder in an amount equal to such Lender’s Ratable Share of the maximum amount
available to be drawn under such Letter of Credit and the amount of such drawing,
respectively.




               2.9.3.1 In the event of any request for a drawing under a Letter of Credit by the beneficiary
or transferee thereof, the Issuing Lender will promptly notify the Borrower and the Administrative
Agent thereof. Provided that it shall have received such notice, the Borrower shall reimburse (such
obligation to reimburse the Issuing Lender shall sometimes be referred to as a “Reimbursement
Obligation”) the Issuing Lender prior to 12:00 noon, Pittsburgh time on each date that an
amount is paid by the Issuing Lender under any Letter of Credit (each such date, a “Drawing
Date”) by paying to the Administrative Agent for the account of the Issuing Lender an amount
equal to the amount so paid by the Issuing Lender. In the event the Borrower fails to reimburse the
Issuing Lender (through the Administrative Agent) for the full amount of any drawing under any
Letter of Credit by 12:00 noon, Pittsburgh time, on the



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Drawing Date, the Administrative Agent will promptly notify each Lender thereof, and the Borrower
shall be deemed to have requested that Revolving Credit Loans be made by the Lenders under the Base
Rate Option to be disbursed on the Drawing Date under such Letter of Credit, subject to the amount
of the unutilized portion of the Revolving Credit Commitment and subject to the conditions set
forth in Section 6.2 [Each Loan or Letter of Credit] other than any notice requirements. Any notice
given by the Administrative Agent or Issuing Lender pursuant to this Section 2.9.3.1
[Disbursements; Reimbursement] may be oral if immediately confirmed in writing; provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.




               2.9.3.2 Each Lender shall upon any notice pursuant to this Section 2.9.3
[Disbursements; Reimbursement] make available to the Administrative Agent for the account of
the Issuing Lender an amount in immediately available funds equal to its Ratable Share of the
amount of the drawing, whereupon the participating Lenders shall (subject to this Section
2.9.3
[Disbursements; Reimbursement]) each be deemed to have made a Revolving Credit Loan under
the Base Rate Option to the Borrower in that amount. If any Lender so notified fails to make
available to the Administrative Agent for the account of the Issuing Lender the amount of such
Lender’s Ratable Share of such amount by no later than 2:00 p.m., Pittsburgh time on the
Drawing Date, then interest shall accrue on such Lender’s obligation to make such payment,
from the Drawing Date to the date on which such Lender makes such payment (i) at a rate per
annum equal to the Federal Funds Effective Rate during the first three (3) days following the
Drawing Date and (ii) at a rate per annum equal to the rate applicable to Loans under the
Revolving Credit Base Rate Option on and after the fourth day following the Drawing Date. The
Administrative Agent and the Issuing Lender will promptly give notice (as described in this
Section 2.9.3 [Disbursements; Reimbursement] above) of the occurrence of the Drawing Date,
but failure of the Administrative Agent or the Issuing Lender to give any such notice on the
Drawing Date or in sufficient time to enable any Lender to effect such payment on such date
shall not relieve such Lender from its obligation under this Section 2.9.3 [Disbursements;
Reimbursement].



               2.9.3.3 With respect to any unreimbursed drawing that is not converted
into Revolving Credit Loans under the Base Rate Option to the Borrower in whole or in part as
contemplated by this Section 2.9.3 [Disbursements; Reimbursement], because of the Borrower’s
failure to satisfy the conditions set forth in Section 6.2 [Each Loan or Letter of Credit]
other than
any notice requirements, or for any other reason, the Borrower shall be deemed to have
incurred
from the Issuing Lender a borrowing (each, a “Letter of Credit Borrowing”) in the
amount of
such drawing. Such Letter of Credit Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the rate per annum applicable to the Revolving
Credit
Loans under the Base Rate Option. Each Lender’s payment to the Administrative Agent for the

account of the Issuing Lender pursuant to this Section 2.9.3 [Disbursements, Reimbursement]
shall be deemed to be a payment in respect of its participation in such Letter of Credit
Borrowing
(each, a “Participation Advance”) from such Lender in satisfaction of its
participation obligation
under this Section 2.9.3 [Disbursements; Reimbursement].



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          2.9.4 Repayment of Participation Advances.




               2.9.4.1 Upon (and only upon) receipt by the Administrative Agent for
the account of the Issuing Lender of immediately available funds from the Borrower (i) in
reimbursement of any payment made by the Issuing Lender under any Letter of Credit with
respect to which any Lender has made a Participation Advance to the Administrative Agent, or
(ii) in payment of interest on such a payment made by the Issuing Lender under such a Letter
of Credit, the Administrative Agent on behalf of the Issuing Lender will pay to each Lender, in
the
same funds as those received by the Administrative Agent, the amount of such Lender’s Ratable
Share of such funds, except the Administrative Agent shall retain for the account of the
Issuing
Lender the amount of the Ratable Share of such funds of any Lender that did not make a
Participation Advance in respect of such payment by the Issuing Lender.



               2.9.4.2 If the Administrative Agent is required at any time to return to
the Borrower, or to a trustee, receiver, liquidator, custodian, or any official in any
Insolvency
Proceeding, any portion of any payment made by the Borrower to the Administrative Agent for
the account of the Issuing Lender pursuant to this Section 2.9.4 [Repayment of Participation
Advances] in reimbursement of a payment made under the Letter of Credit or interest or fee
thereon, each Lender shall, on demand of the Administrative Agent, forthwith return to the
Administrative Agent for the account of the Issuing Lender the amount of its Ratable Share of
any amounts so returned by the Administrative Agent plus interest thereon from the date such
demand is made to the date such amounts are returned by such Lender to the Administrative
Agent, at a rate per annum equal to the Federal Funds Effective Rate in effect from time to
time.



          2.9.5 Documentation. The Borrower agrees to be bound by the terms of the
Issuing Lender’s application and agreement for letters of credit and the Issuing Lender’s
written
regulations and customary practices relating to letters of credit. In the event of a
conflict
between such application or agreement and this Agreement, this Agreement shall govern. It is
understood and agreed that, except in the case of gross negligence or willful misconduct, the
Issuing Lender shall not be liable for any error, negligence and/or mistakes, whether of
omission
or commission, in following the Borrower’s instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.




          2.9.6 Determinations to Honor Drawing Requests. In determining whether to
honor any request for drawing under any Letter of Credit by the beneficiary thereof, the
Issuing
Lender shall be responsible only to determine that the documents and certificates required to
be
delivered under such Letter of Credit have been delivered and that they comply on their face
with
the requirements of such Letter of Credit.




          2.9.7 Nature of Participation and Reimbursement Obligations. Each Lender’s
obligation in accordance with this Agreement to make the Revolving Credit Loans or
Participation Advances, as contemplated by Section 2.9.3 [Disbursements, Reimbursement], as a
result of a drawing under a Letter of Credit, and the Obligations of the Borrower to reimburse
the
Issuing Lender upon a draw under a Letter of Credit, shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of this Section 2.9
[Letter of Credit Subfacility] under all circumstances, including the following circumstances:





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               (i) any set-off, counterclaim, recoupment, defense or other right which such Lender may have
against the Issuing Lender or any of its Affiliates, the Borrower or any other Person for any
reason whatsoever, or which the Borrower may have against the Issuing Lender or any of its
Affiliates, any Lender or any other Person for any reason whatsoever;



               (ii) the failure of the Borrower or any other Person to comply, in connection with a Letter
of Credit Borrowing, with the conditions set forth in Section 2.1 [Revolving Credit Loans],
Section 2.4.1 [Revolving Credit Loan Requests], Section 2.6.1 [Making Revolving Credit Loans] or
Section 6.2 [Each Loan or Letter of Credit] or as otherwise set forth in this Agreement for the
making of a Revolving Credit Loan, it being acknowledged that such conditions are not required for
the making of a Letter of Credit Borrowing and the obligation of the Lenders to make Participation
Advances under Section 2.9.3 [Disbursements, Reimbursement];



               (iii) any lack of validity or enforceability of any Letter of Credit;



               (iv) any claim of breach of warranty that might be made by the Borrower or any Lender against
any beneficiary of a Letter of Credit, or the existence of any claim, set-off, recoupment,
counterclaim, crossclaim, defense or other right which the Borrower or any Lender may have at any
time against a beneficiary, successor beneficiary any transferee or assignee of any Letter of
Credit or the proceeds thereof (or any Persons for whom any such transferee may be acting), the
Issuing Lender or its Affiliates or any Lender or any other Person, whether in connection with
this Agreement, the transactions contemplated herein or any unrelated transaction (including any
underlying transaction between the Borrower or any Subsidiaries of the Borrower and the
beneficiary for which any Letter of Credit was procured);



               (v) the lack of power or authority of any signer of (or any defect in or forgery of any
signature or endorsement on) or the form of or lack of validity, sufficiency, accuracy,
enforceability or genuineness of any draft, demand, instrument, certificate or other document
presented under or in connection with any Letter of Credit, or any fraud or alleged fraud in
connection with any Letter of Credit, or the transport of any property or provision of services
relating to a Letter of Credit, in each case even if the Issuing Lender or any of its Affiliates
has been notified thereof;



               (vi) payment by the Issuing Lender or any of its Affiliates under any Letter of Credit
against presentation of a demand, draft or certificate or other document which does not comply
with the terms of such Letter of Credit;



               (vii) the solvency of, or any acts or omissions by, any beneficiary of any Letter of Credit,
or any other Person having a role in any transaction or obligation relating to a Letter of Credit,
or the existence, nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;



               (viii) any failure by the Issuing Lender or any of its Affiliates to issue any Letter of
Credit in the form requested by the Borrower, unless the Issuing Lender has received written
notice from the Borrower of such failure within three (3) Business Days after the Issuing Lender
or any of its Affiliates shall have furnished the Borrower and the



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Administrative Agent a copy of such Letter of Credit and such error is material and no drawing has
been made thereon prior to receipt of such notice;




               (ix) any adverse change in the business, operations, properties, assets, condition (financial
or otherwise) or prospects of the Borrower or any Subsidiaries of the Borrower;



               (x) any breach of this Agreement or any other Loan Document by any party thereto;



               (xi) the occurrence or continuance of an Insolvency Proceeding with respect to the Borrower;



               (xii) the fact that an Event of Default or a Potential Default shall have occurred and be
continuing;



               (xiii) the fact that the Expiration Date shall have passed or this Agreement or the
Commitments hereunder shall have been terminated; and



               (xiv) any other circumstance or happening whatsoever, whether or not similar to any of the
foregoing.



          2.9.8 Indemnity. The Borrower hereby agrees to protect, indemnify, pay and
save harmless the Issuing Lender and any of its Affiliates that has issued a Letter of Credit
from
and against any and all claims, demands, liabilities, damages, taxes, penalties,
interest,
judgments, losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which the Issuing Lender or
any of its Affiliates may incur or be subject to as a consequence, direct or indirect, of the
issuance of any Letter of Credit, other than as a result of (A) the gross negligence or
willful
misconduct of the Issuing Lender as determined by a final non-appealable judgment of a court
of
competent jurisdiction or (B) the wrongful dishonor by the Issuing Lender or any of Issuing
Lender’s Affiliates of a proper demand for payment made under any Letter of Credit, except if
such dishonor resulted from any act or omission, whether rightful or wrongful, of any present
or
future de jure or de facto government or governmental authority.




          2.9.9 Liability for Acts and Omissions. As between the Borrower and the
Issuing Lender, or the Issuing Lender’s Affiliates, the Borrower assumes all risks of the acts
and
omissions of, or misuse of the Letters of Credit by, the respective beneficiaries of such
Letters of
Credit. In furtherance and not in limitation of the foregoing, the Issuing Lender shall not
be
responsible for any of the following, including any losses or damages to the Borrower or other
Person or property relating therefrom: (i) the form, validity, sufficiency, accuracy,
genuineness
or legal effect of any document submitted by any party in connection with the application for
an
issuance of any such Letter of Credit, even if it should in fact prove to be in any or all
respects
invalid, insufficient, inaccurate, fraudulent or forged (even if the Issuing Lender or its
Affiliates
shall have been notified thereof); (ii) the validity or sufficiency of any instrument
transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the rights or
benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective
for any reason; (iii) the failure of the beneficiary of any such Letter of Credit, or any
other party




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to which such Letter of Credit may be transferred, to comply fully with any conditions required in
order to draw upon such Letter of Credit or any other claim of the Borrower against any beneficiary
of such Letter of Credit, or any such transferee, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any such transferee; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the misapplication
by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; or (viii) any consequences arising from causes beyond the control of the Issuing Lender or
its Affiliates, as applicable, including any act or omission of any governmental authority, and
none of the above shall affect or impair, or prevent the vesting of, any of the Issuing Lender’s or
its Affiliates’ rights or powers hereunder. Nothing in the preceding sentence shall relieve the
Issuing Lender from liability for the Issuing Lender’s gross negligence or willful misconduct in
connection with actions or omissions described in such clauses (i) through (viii) of such sentence.
In no event shall the Issuing Lender or its Affiliates be liable to the Borrower for any indirect,
consequential, incidental, punitive, exemplary or special damages or expenses (including without
limitation attorneys fees), or for any damages resulting from any change in the value of any
property relating to a Letter of Credit.




               Without limiting the generality of the foregoing, the Issuing Lender and each of its
Affiliates (i) may rely on any oral or other communication believed in good faith by the Issuing
Lender or such Affiliate to have been authorized or given by or on behalf of the applicant for a
Letter of Credit, (ii) may honor any presentation if the documents presented appear on their face
substantially to comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under a Letter of Credit, whether such dishonor was
pursuant to a court order, to settle or compromise any claim of wrongful dishonor, or otherwise,
and shall be entitled to reimbursement to the same extent as if such presentation had initially
been honored, together with any interest paid by the Issuing Lender or its Affiliates; (iv) may
honor any drawing that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a draft or other
document is being delivered separately), and shall not be liable for any failure of any such draft
or other document to arrive, or to conform in any way with the relevant Letter of Credit; (v) may
pay any paying or negotiating bank claiming that it rightfully honored under the Laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim or demand made on
the Issuing Lender or its Affiliates in any way related to any order issued at the applicant’s
request to an air carrier, a letter of guarantee or of indemnity issued to a carrier or any
similar document (each, an “Order”) and honor any drawing in connection with any Letter of
Credit that is the subject of such Order, notwithstanding that any drafts or other documents
presented in connection with such Letter of Credit fail to conform in any way with such Letter of
Credit.



               In furtherance and extension and not in limitation of the specific provisions set forth
above, any action taken or omitted by the Issuing Lender or its Affiliates under or in connection
with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if
taken or omitted in good faith, shall not put the Issuing Lender or its Affiliates under any
resulting liability to the Borrower or any Lender.



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          2.9.10 Issuing Lender Reporting Requirements. Each Issuing Lender shall, on the first
(1st) Business Day of each month, provide to the Administrative Agent and Borrower a
schedule of the Letters of Credit issued by it, in form and substance satisfactory to
Administrative Agent, showing the date of issuance of each Letter of Credit, the account party,
the original face amount (if any), and the expiration date of any Letter of Credit outstanding at
any time during the preceding month, and any other information relating to such Letter of Credit
that the Administrative Agent may request.




     2.10 Reduction of Revolving Credit Commitment. The Borrower shall have the right
at any time after the Closing Date upon five (5) days’ prior written notice to the
Administrative
Agent to permanently reduce (ratably among the Lenders in proportion to their Ratable Shares)
the Revolving Credit Commitments, in a minimum amount of Five Million and 00/100 Dollars
($5,000,000.00), and whole multiples of One Million and 00/100 Dollars ($1,000,000.00), or to
terminate completely the Revolving Credit Commitments, without penalty or premium except as
hereinafter set forth; provided that any such reduction or termination shall be
accompanied by
prepayment of the Notes, together with outstanding Commitment Fees, and the full amount of
interest accrued on the principal sum to be prepaid (and all amounts referred to in Section
4.9
[Indemnity] hereof) to the extent necessary to cause the aggregate Revolving Facility Usage
after
giving effect to such prepayments to be equal to or less than the Revolving Credit Commitments
as so reduced or terminated. Any notice to reduce the Revolving Credit Commitments under this
Section 2.10 [Reduction of Revolving Credit Commitment] shall be irrevocable.



     2.11 Mark to Market Collateral Certification. Prior to any Revolving Credit Loan
Request, Swing Loan Request or request for a Letter of Credit that would cause the Revolving
Facility Usage to be greater than One Hundred Twenty-Five Million and 00/100 Dollars
($125,000,000.00), the Borrower must deliver to the Administrative Agent a certification that
the
Borrower has marked to market the Collateral as of the date of such request and a Valuation
Statement calculated as of the most recent Business Day prior to the date of such request.



3. INTEREST RATES




     3.1 Interest Rate Options. The Borrower shall pay interest in respect of the
outstanding unpaid principal amount of the Loans as selected by it from the Base Rate Option or
LIBOR Rate Option set forth below applicable to the Loans, it being understood that, subject to
the provisions of this Agreement, the Borrower may select different Interest Rate Options and
different Interest Periods to apply simultaneously to the Loans comprising different Borrowing
Tranches and may convert to or renew one or more Interest Rate Options with respect to all or any
portion of the Loans comprising any Borrowing Tranche; provided that there shall not be at any one
time outstanding more than six (6) Borrowing Tranches in the aggregate among all of the Loans; and
provided further that if an Event of Default exists and is continuing, the Borrower may not
request, convert to, or renew the LIBOR Rate Option for any Loans and the Required Lenders may
demand that all existing Borrowing Tranches bearing interest under the LIBOR Rate Option shall be
converted at the end of the applicable Interest Period. If at any time the designated rate
applicable to any Loan made by any Lender exceeds such Lender’s highest lawful rate, the rate of
interest on such Lender’s Loan shall be limited to such Lender’s highest lawful rate.



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          3.1.1 Revolving Credit Interest Rate Options; Swing Line Interest Rate. The
Borrower shall have the right to select from the following Interest Rate Options applicable to
the
Revolving Credit Loans (subject to the provisions above regarding Swing Loans):




               (i) Revolving Credit Base Rate Option: A fluctuating rate per annum (computed on the
basis of a year of 360 days and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective as of the effective
date of each change in the Base Rate; or



               (ii) Revolving Credit LIBOR Rate Option: A rate per annum (computed on the basis of a
year of 360 days and actual days elapsed) equal to the LIBOR Rate plus the Applicable Margin.




Subject to Section 3.3 [Interest After Default], only the Base Rate Option shall apply to the Swing
Loans.



          3.1.2 Rate Quotations. The Borrower may call the Administrative Agent on or
before the date on which a Loan Request is to be delivered to receive an indication of the
rates
then in effect, but it is acknowledged that such projection shall not be binding on the
Administrative Agent or the Lenders nor affect the rate of interest which thereafter is
actually in
effect when the election is made.




     3.2 Interest Periods. At any time when the Borrower shall select, convert to or renew
a LIBOR Rate Option, the Borrower shall notify the Administrative Agent thereof at least three
(3) Business Days prior to the effective date of such LIBOR Rate Option by delivering a Loan
Request. The notice shall specify an Interest Period during which such Interest Rate Option
shall
apply. Notwithstanding the preceding sentence, the following provisions shall apply to any
selection of, renewal of, or conversion to a LIBOR Rate Option:



          3.2.1 Amount of Borrowing Tranche. Each Borrowing Tranche of Loans under
the LIBOR Rate Option shall be in integral multiples of Five Hundred Thousand and 00/100
Dollars ($500,000.00) and not less than Two Million and 00/100 Dollars ($2,000,000.00); and




          3.2.2 Renewals. In the case of the renewal of a LIBOR Rate Option at the end
of an Interest Period, the first day of the new Interest Period shall be the last day of the
preceding
Interest Period, without duplication in payment of interest for such day.




     3.3 Interest After Default. To the extent permitted by Law, 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:



          3.3.1 Letter of Credit Fees, Interest Rate. The Letter of Credit Fees and the rate of
interest for each Loan otherwise applicable pursuant to Section 2.9.2 [Letter of Credit Fees] or
Section 3.1 [Interest Rate Options], respectively, shall be increased by two percent (2.0%) per
annum;





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          3.3.2 Other Obligations. Each other Obligation hereunder if not paid when due
shall bear interest at a rate per annum equal to the sum of the rate of interest applicable
under the
Revolving Credit Base Rate Option plus an additional two percent (2%)
per annum from the time such Obligation becomes due and payable and until it is paid in full; and




          3.3.3 Acknowledgment. The Borrower acknowledges that the increase in rates
referred to in this Section 3.3 [Interest After Default] reflects, among other things, the
fact that
such Loans or other amounts have become a substantially greater risk given their default
status
and that the Lenders are entitled to additional compensation for such risk; and all such
interest
shall be payable by Borrower upon demand by Administrative Agent.




     3.4 LIBOR Rate Unascertainable; Illegality; Increased Costs; Deposits Not
Available.



          3.4.1 Unascertainable. If on any date on which a LIBOR Rate would otherwise
be determined, the Administrative Agent shall have determined that:




               (i) adequate and reasonable means do not exist for ascertaining such LIBOR Rate, or



               (ii) a contingency has occurred which materially and adversely affects the London interbank
eurodollar market relating to the LIBOR Rate,


the Administrative Agent shall have the rights specified in Section 3.4.3 [Administrative Agent’s
and Lender’s Rights].




          3.4.2 Illegality; Increased Costs; Deposits Not Available. If at any time any
Lender shall have determined that:




               (i) the making, maintenance or funding of any Loan to which a LIBOR Rate Option applies has
been made impracticable or unlawful by compliance by such Lender in good faith with any Law or any
interpretation or application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or



               (ii) such LIBOR Rate Option will not adequately and fairly reflect the cost to such Lender of
the establishment or maintenance of any such Loan, or



               (iii) after making all reasonable efforts, deposits of the relevant amount in Dollars for the
relevant Interest Period for a Loan, or to banks generally, to which a LIBOR Rate Option applies,
respectively, are not available to such Lender with respect to such Loan, or to banks generally, in
the interbank eurodollar market,


then the Administrative Agent shall have the rights specified in Section 3.4.3 [Administrative
Agents and Lenders Rights].




          3.4.3 Administrative Agent’s and Lender’s Rights. In the case of any event
specified in Section 3.4.1 [Unascertainable] above, the Administrative Agent shall promptly so
notify the Lenders and the Borrower thereof, and in the case of an event specified in





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Section 3.4.2 [Illegality; Increased Costs; Deposits Not Available] above, such Lender shall
promptly so notify the Administrative Agent and endorse a certificate to such notice as to the
specific circumstances of such notice, and the Administrative Agent shall promptly send copies of
such notice and certificate to the other Lenders and the Borrower. Upon such date as shall be
specified in such notice (which shall not be earlier than the date such notice is given), the
obligation of (A) the Lenders, in the case of such notice given by the Administrative Agent, or (B)
such Lender, in the case of such notice given by such Lender, to allow the Borrower to select,
convert to or renew a LIBOR Rate Option shall be suspended until the Administrative Agent shall
have later notified the Borrower, or such Lender shall have later notified the Administrative
Agent, of the Administrative Agent’s or such Lender’s, as the case may be, determination that the
circumstances giving rise to such previous determination no longer exist, which notice shall be
given promptly following the termination of the circumstance which gave rise to such determination.
If at any time the Administrative Agent makes a determination under Section 3.4.1 [Unascertainable]
and the Borrower has previously notified the Administrative Agent of its selection of, conversion
to or renewal of a LIBOR Rate Option and such Interest Rate Option has not yet gone into effect,
such notification shall be deemed to provide for selection of, conversion to or renewal of the Base
Rate Option otherwise available with respect to such Loans. If any Lender notifies the
Administrative Agent of a determination under Section 3.4.2 [Illegality; Increased Costs; Deposits
Not Available], the Borrower shall, subject to the Borrower’s indemnification Obligations under
Section 4.9 [Indemnity], as to any Loan of the Lender to which a LIBOR Rate Option applies, on the
date specified in such notice either convert such Loan to the Base Rate Option otherwise available
with respect to such Loan or prepay such Loan in accordance with Section 4.6 [Voluntary
Prepayments]. Absent due notice from the Borrower of conversion or prepayment, such Loan shall
automatically be converted to the Base Rate Option otherwise available with respect to such Loan
upon such specified date.




     3.5 Selection of Interest Rate Options. If the Borrower fails to select a new
Interest Period to apply to any Borrowing Tranche of Loans under the LIBOR Rate Option at the
expiration of an existing Interest Period applicable to such Borrowing Tranche in accordance with
the provisions of Section 3.2 [Interest Periods], the Borrower shall be deemed to have converted
such Borrowing Tranche to the Revolving Credit Base Rate Option, commencing upon the last day of
the existing Interest Period.



4. PAYMENTS




     4.1 Payments. All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Administrative Agent’s Fee or other fees or
amounts due from the Borrower hereunder shall be payable prior to 12:00 noon on the date when due
without presentment, demand, protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, and without set-off, counterclaim or other deduction of any nature. Such
payments shall be made to the Administrative Agent at the Principal Office for the account of PNC
Bank with respect to the Swing Loans and for the ratable accounts of the Lenders with respect to
the Loans in U.S. Dollars and in immediately available funds, and the Administrative Agent shall
promptly distribute such amounts to the Lenders in immediately available funds; provided that in
the event payments are received by 12:00 noon by the Administrative Agent with respect to the
Loans and such payments are not distributed to the Lenders on the same day received by the
Administrative Agent, the Administrative Agent shall



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pay the Lenders the Federal Funds Effective Rate with respect to the amount of such payments for
each day held by the Administrative Agent and not distributed to the Lenders. The Administrative
Agent’s and each Lender’s statement of account, ledger or other relevant record shall, in the
absence of manifest error, be conclusive as the statement of the amount of principal of and
interest on the Loans and other amounts owing under this Agreement and shall be deemed an “account
stated.”




     4.2 Pro Rata Treatment of Lenders. Each borrowing shall be allocated to each Lender
according to its Ratable Share, and each selection of, conversion to or renewal of any
Interest
Rate Option and each payment or prepayment by the Borrower with respect to principal,
interest,
Commitment Fees, Letter of Credit Fees, or other fees (except for the Administrative Agent’s
Fee
and the Issuing Lender’s fronting fee) or amounts due from the Borrower hereunder to the
Lenders with respect to the Loans, shall (except as otherwise may be provided with respect to
a
Defaulting Lender or a Delinquent Lender and except as provided in
Section 3.4.3
[Administrative Agent’s and Lender’s Rights] in the case of an event specified in Section 3.4
[LIBOR Rate Unascertainable; Etc.], Section 4.6.2 [Replacement of a Lender] or Section 4.7
[Increased Costs]) be made in proportion to the applicable Loans outstanding from each Lender
and, if no such Loans are then outstanding, in proportion to the Ratable Share of each Lender.
Notwithstanding any of the foregoing, each borrowing or payment or pre-payment by the
Borrower of principal, interest, fees or other amounts from the Borrower with respect to Swing
Loans shall be made by or to PNC Bank according to Article 2 [Revolving Credit and Swing
Loan Facilities].



     4.3
Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff, counterclaim or banker’s lien, by receipt of voluntary payment, by realization upon
security, or by any other non-pro rata source, obtain payment in respect of any principal of
or
interest on any of its Loans or other obligations hereunder resulting
in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or
other such obligations greater than its Ratable Share thereof as provided herein, then the
Lender
receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and
(b) purchase (for cash at face value) participations in the Loans and such other obligations
of the
other Lenders, or make such other adjustments as shall be equitable, so that the benefit of
all
such payments shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and other amounts owing them,
provided that:



               (i) if any such participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase price restored to the
extent of such recovery, together with interest or other amounts, if any, required by Law
(including court order) to be paid by the Lender or the holder making such purchase; and



               (ii) the provisions of this Section 4.3 [Sharing of Payments by Lenders] shall not be
construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the
express terms of the Loan Documents or (y) any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or Participation Advances to any
assignee or participant, other than to the Borrower or any




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Subsidiary of the Borrower (as to which the provisions of this Section 4.3 [Sharing of Payments by
Lenders] 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 setoff 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.



Notwithstanding anything to the contrary contained in this Agreement or any of the other Loan
Documents, any Lender that fails at any time to comply with the provisions of this Section 4.3
[Sharing of Payments by Lenders] with respect to purchasing participations from the other Lenders
whereby such Lender’s share of any payment received, whether by setoff or otherwise, is in excess
of its Ratable Share of such payments due and payable to all of the Lenders, when and to the full
extent required by the provisions of this Agreement, shall be deemed delinquent (a “Delinquent
Lender”) and shall be deemed to be a Delinquent Lender until such time as each such delinquency
and all of its obligations hereunder are satisfied. A Delinquent Lender shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of or relating to
outstanding Loans, Letters of Credit, interest, fees or otherwise, to the remaining Non-Delinquent
Lenders for application to, and reduction of, their respective Ratable Shares of all outstanding
Loans and other unpaid Obligations of the Borrower. The Delinquent Lender hereby authorizes the
Administrative Agent to distribute such payments to the Non-Delinquent Lenders in proportion to
their respective Ratable Share of all outstanding Loans and other unpaid Obligations of the
Borrower. A Delinquent Lender shall be deemed to have satisfied in full a delinquency when and if,
as a result of application of the assigned payments to all outstanding Loans and other unpaid
Obligations of the Borrower to the Non-Delinquent Lenders, the Lenders’ respective Ratable Share of
all outstanding Loans and unpaid Obligations have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such delinquency.




     4.4 Presumptions by Administrative Agent. Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Lender hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that the Borrower
has made such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the Issuing Lender, as the case may be, the amount due.
In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Lender, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or the Issuing Lender, 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.



     4.5 Interest Payment Dates. Interest on Loans to which the Base Rate Option applies
shall be due and payable in arrears on each Payment Date. Interest on Loans to which the
LIBOR Rate Option applies shall be due and payable on the last day of each Interest Period for





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those Loans and, if such Interest Period is longer than three (3) Months, also on the 90th day of
such Interest Period. Interest on the principal amount of each Loan or other monetary Obligation
shall be due and payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated Expiration Date, upon acceleration or otherwise).




     4.6 Voluntary Prepayments.



          4.6.1 Right to Prepay. The Borrower shall have the right at its option from time to
time to prepay the Loans in whole or part without premium or penalty (except as provided in
Section 4.6.2 [Replacement of a Lender] below, or in Section 4.7 [Increased Costs]):




               (i) at any time with respect to any Loan to which the Base Rate Option applies,



               (ii) on the last day of the applicable Interest Period with respect to Loans to which a LIBOR
Rate Option applies or any other day subject to compliance with the provisions of Section 4.9
[Indemnity], or



               (iii) on the date specified in a notice by any Lender pursuant to Section 3.4 [LIBOR Rate
Unascertainable, Etc.] with respect to any Loan to which a LIBOR Rate Option applies.



               Whenever the Borrower desires to prepay any part of the Loans, it shall provide a prepayment
notice to the Administrative Agent by (a) 1:00 p.m. at least one (1) Business Day prior to the
date of prepayment of the Revolving Credit Loans and (b) 11:00 a.m. on the date of prepayment of
Swing Loans, setting forth the following information:



                    (x) the date, which shall be a Business Day, on which the proposed prepayment is to be
made;



                    (y) a statement indicating the application of the prepayment between the Revolving
Credit Loans and Swing Loans; and



                    (z) the total principal amount of such prepayment, which shall
not be less than the lesser of (i) the Facility Usage or (ii) One Hundred Thousand and 00/100
Dollars ($100,000.00) for any Swing Loan or Two Million and 00/100 Dollars ($2,000,000.00) for any
Revolving Credit Loan.



               All prepayment notices shall be irrevocable. The principal amount of the Loans for which a
prepayment notice is given, together with interest on such principal amount except with respect to
Loans to which the Base Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made. Except as provided in
Section 3.4.3 [Administrative Agent’s and Lender’s Rights], if the Borrower prepays a Loan but
fails to specify the applicable Borrowing Tranche which the Borrower is prepaying, the prepayment
shall be applied (i) first to Swing Loans then to Revolving Credit Loans; and (ii) after giving
effect to the allocations in clause (i) above and in the preceding sentence, first to Loans to
which the Base Rate Option applies, then to Loans to



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which the LIBOR Rate Option applies. Any prepayment hereunder shall be subject to the Borrower’s
Obligation to indemnify the Lenders under Section 4.9 [Indemnity].




          4.6.2 Replacement of a Lender. In the event any Lender (i) gives notice under Section
3.4 [LIBOR Rate Unascertainable; Etc.], (ii) requests compensation under Section 4.7 [Increased
Costs], or requires the Borrower to pay any additional amount to any Lender or any Official Body
for the account of any Lender pursuant to Section 4.8 [Taxes], (iii) is a Defaulting Lender, (iv)
becomes subject to the control of an Official Body (other than normal and customary supervision),
or (v) is a Non-Consenting Lender referred to in Section 10.1 [Modifications, Amendments or
Waivers], then in any such event the Borrower may, at its sole expense, upon notice to such Lender
and the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents required by, Section
10.8 [Successors and Assigns]), all of its interests, rights and obligations under this Agreement
and the related Loan Documents to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment), provided that:




               (i) the Borrower shall have paid to the Administrative Agent the assignment fee
specified in Section 10.8 [Successors and Assigns];



               (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and Participation Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan
Documents (including any amounts under Section 4.9 [Indemnity]) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other
amounts);



               (iii) in the case of any such assignment resulting from a claim
for compensation under Section 4.7.1 [Increased Costs Generally] or payments required to be made
pursuant to Section 4.8 [Taxes], such assignment will result in a reduction in such compensation
or payments thereafter; and



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


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



     4.7 Increased Costs.



          4.7.1 Increased Costs Generally. If any Change in Law shall:




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




-39-












 





               (ii) subject any Lender or the Issuing Lender to any tax of any
kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter
of Credit or any Loan under the LIBOR Rate Option made by it, or change the basis of taxation of
payments to such Lender or the Issuing Lender in respect thereof (except for Indemnified Taxes or
Other Taxes covered by Section 4.8 [Taxes] and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or the Issuing Lender); or



               (iii) impose on any Lender, the Issuing Lender or the London
interbank market any other condition, cost or expense affecting this Agreement or Loan under the
LIBOR Rate Option made by such Lender or any Letter of Credit or participation therein;


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



The obligations of the Borrower pursuant to this Section 4.7.1 [Increased Costs Generally] 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 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).




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



The obligations of the Borrower pursuant to this Section 4.7.2 [Capital Requirements] are subject
to the following: no Lender shall enforce these provisions solely against the Borrower or against




-40-









 




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 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).




          4.7.3 Certificates for Reimbursement; Repayment of Outstanding Loans; Borrowing
of New Loans. A certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its holding company, as the
case may be, as specified in Sections 4.7.1 [Increased Costs Generally] or 4.7.2 [Capital
Requirements] (including the calculation thereof in reasonable detail) delivered to the Borrower
shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing
Lender, as the case may be, the amount shown as due on any such certificate within ten (10)
Business Days after receipt thereof.




          4.7.4 Delay in Requests. Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section 4.7.4 [Delay in Requests] shall not
constitute a waiver of such Lender’s or the Issuing Lender’s right to demand such compensation,
provided that the Borrower shall not be required to compensate a Lender or the Issuing Lender
pursuant to this Section 4.7.4 [Delay in Requests] for any increased costs incurred or reductions
suffered more than six (6) months prior to the date that such Lender or the Issuing Lender, as the
case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the six (6) month period referred to above shall be extended to include the
period of retroactive effect thereof).




     4.8 Taxes.



          4.8.1 Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Borrower hereunder or under any other Loan Document shall be made free and clear of and
without reduction or withholding for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required by applicable Law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuing Lender, as the case may be, receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the
relevant Official Body in accordance with applicable Law.




          4.8.2 Payment of Other Taxes by the Borrower. Without limiting the provisions of
Section 4.8.1 [Payments Free of Taxes] above, the Borrower shall timely pay any Other Taxes to the
relevant Official Body in accordance with applicable Law.




-41-









 








          4.8.3 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Lender, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 4.8
[Taxes]) paid by the Administrative Agent, such Lender or the Issuing Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Official Body. A certificate as to the amount of such payment or liability
delivered to the Borrower by a Lender or the Issuing Lender (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Lender, shall be conclusive absent manifest error.




          4.8.4 Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Official Body, 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.




          4.8.5 Status of Lenders. Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Law of the jurisdiction in which the Borrower is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall deliver to the Borrower (with a duplicate original
to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by applicable Law as will permit such payments to be made without
withholding or at a reduced rate of withholding. Notwithstanding the submission of a such
documentation claiming a reduced rate of or exemption from U.S. withholding tax, the Administrative
Agent shall be entitled to withhold United States federal income taxes at the full thirty percent
(30%) withholding rate if in its reasonable judgment it is required to do so under the due
diligence requirements imposed upon a withholding agent under § 1.1441-7(b) of the United States
Income Tax Regulations. Further, the Administrative Agent is indemnified under § 1.1461-1 (e) of
the United States Income Tax Regulations against any claims and demands of any Lender or assignee
or participant of a Lender for the amount of any tax it deducts and withholds in accordance with
regulations under § 1441 of the Internal Revenue Code. In addition, any Lender, if requested by
the Borrower or the Administrative Agent, shall deliver such other original documentation
prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as
will enable the Borrower or the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.




               Without limiting the generality of the foregoing, in the event that the Borrower is resident
for tax purposes in the United States of America, any Foreign Lender shall deliver to the Borrower
and the Administrative Agent (in such number of originals 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 request of the Borrower or the Administrative Agent, but
only if such Foreign Lender is legally entitled to do so), whichever of the following is
applicable:




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               (i) duly completed originals of IRS Form W-8BEN claiming eligibility for benefits of an
income tax treaty to which the United States of America is a party,



               (ii) duly completed originals of IRS Form W-8ECI,



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



               (iv) any other original form prescribed by applicable Law as a
basis for claiming exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by applicable Law to
permit the Borrower to determine the withholding or deduction required to be made. To the extent
that any Lender is not a Foreign Lender, such Lender shall submit to the Administrative Agent two
(2) originals of a W-9 or any other form prescribed by applicable Law demonstrating that such
Lender is not a Foreign Lender.



          4.8.6 Treatment of Certain Refunds. If the Administrative Agent, a Lender or the
Issuing Lender determines, in its sole discretion, that it has received a refund of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to the Borrower an
amount equal to such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section with respect to the Taxes or Other Taxes giving
rise to such refund); net of all out-of-pocket expenses of the Administrative Agent, such Lender
or the Issuing Lender, as the case may be, and without interest (other than any interest paid by
the relevant Official Body with respect to such refund), provided that the Borrower, upon the
request of the Administrative Agent, such Lender or the Issuing Lender, agrees to repay the amount
paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant
Official Body) to the Administrative Agent, such Lender or the Issuing Lender in the event the
Administrative Agent, such Lender or the Issuing Lender is required to repay such refund to such
Official Body. This Section shall not be construed to require the Administrative Agent, any Lender
or the Issuing Lender to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Borrower or any other Person.




     4.9 Indemnity. In addition to the compensation or payments required by Section 4.7
[Increased Costs] or Section 4.8 [Taxes], the Borrower shall indemnify each Lender against all
liabilities, losses or expenses (including loss of margin, any loss or expense incurred in
liquidating or employing deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Lender to fund or maintain Loans subject to a LIBOR Rate
Option) which such Lender sustains or incurs as a consequence of any



               (i) payment, prepayment, conversion or renewal of any Loan to which a LIBOR Rate Option
applies on a day other than the last day of the corresponding Interest



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Period (whether or not such payment or prepayment is mandatory, voluntary or automatic and whether
or not such payment or prepayment is then due),




               (ii) attempt by the Borrower to revoke (expressly, by later inconsistent notices or
otherwise) in whole or part any Loan Requests under Section 2.4 [Revolving Credit Loan Requests;
Swing Loan Requests] or Section 3.2 [Interest Periods] or notice relating to prepayments under
Section 4.6 [Voluntary Prepayments], or



               (iii) default by the Borrower in the performance or observance of any covenant or condition
contained in this Agreement or any other Loan Document, including any failure of the Borrower to
pay when due (by acceleration or otherwise) any principal, interest, Commitment Fee or any other
amount due hereunder.



          If any Lender sustains or incurs any such loss or expense, it shall from time to time notify
the Borrower of the amount determined in good faith by such Lender (which determination may
include such assumptions, allocations of costs and expenses and averaging or attribution methods
as such Lender shall deem reasonable) to be necessary to indemnify such Lender for such loss or
expense. Such notice shall set forth in reasonable detail the basis for such determination. Such
amount shall be due and payable by the Borrower to such Lender ten (10) Business Days after such
notice is given.




     4.10 Settlement Date Procedures. In order to minimize the transfer of funds between
the Lenders and the Administrative Agent, the Borrower may borrow, repay and reborrow Swing Loans
and PNC Bank may make Swing Loans as provided in Section 2.1.2 [Swing Loans] hereof during the
period between Settlement Dates. Not later than 10:00 a.m. on each Settlement Date, the
Administrative Agent shall notify each Lender of its Ratable Share of the total of the Revolving
Credit Loans (each, a “Required Share”). Prior to 2:00 p.m. on such Settlement Date, each
Lender shall pay to the Administrative Agent the amount equal to the difference between its
Required Share and its Revolving Credit Loans, and the Administrative Agent shall pay to each
Lender its Ratable Share of all payments made by the Borrower to the Administrative Agent with
respect to the Revolving Credit Loans. The Administrative Agent shall also effect settlement in
accordance with the foregoing sentence on the proposed Borrowing Dates for Revolving Credit Loans
and may at its option effect settlement on any other Business Day. These settlement procedures are
established solely as a matter of administrative convenience, and nothing contained in this Section
4.10 [Settlement Date Procedures] shall relieve the Lenders of their obligations to fund Revolving
Credit Loans on dates other than a Settlement Date pursuant to Section 2.1.1 [Revolving Credit
Loans]. The Administrative Agent may at any time at its option for any reason whatsoever require
each Lender to pay immediately to the Administrative Agent such Lender’s Ratable Share of the
outstanding Revolving Credit Loans and each Lender may at any time require the Administrative Agent
to pay immediately to such Lender its Ratable Share of all payments made by the Borrower to the
Administrative Agent with respect to the Revolving Credit Loans.



5. REPRESENTATIONS AND WARRANTIES




     5.1 Representations and Warranties. The Borrower represents and warrants to the
Administrative Agent and each of the Lenders as follows:



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          5.1.1 Organization and Qualification; Power and Authority; Compliance With Laws; Title to
Properties; Event of Default, (i) The Borrower is a reciprocal insurance exchange duly
organized, validly existing and in good standing under the laws of its jurisdiction of
organization, (ii) the Attorney-in-Fact is a corporation, limited partnership or limited liability
company 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 Closing Date in each jurisdiction listed on Schedule 5.1.1
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) each of the
Borrower and the Attorney-in-Fact has full power to enter into, execute, deliver and carry out this
Agreement and the other Loan Documents to which it is a party, (vi) the Borrower has full power to
incur the Indebtedness contemplated by the Loan Documents and to perform its Obligations under the
Loan Documents to which it is a party, and all such actions have been duly authorized by all
necessary proceedings on its part or the part of the Attorney-in- Fact, (vii) the Borrower is in
compliance in all material respects with all applicable Laws (other than Environmental Laws which
are specifically addressed in Section 5.1.14 [Environmental Matters]) in all jurisdictions in which
the Borrower and any Subsidiary of the Borrower is presently or will be doing business 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 Event of Default
or Potential Default exists or is continuing.




          5.1.2 Subsidiaries and Owners; Investment Companies. Schedule 5.1.2 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 Subsidiary
Equity Interests it purports to own, free and clear in each case of any Lien and all such
Subsidiary 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”.




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




          5.1.4 No Conflict; Material Agreements; Consents. Neither the execution and delivery
of this Agreement or the other Loan Documents by the Borrower or the Attorney-in- Fact, 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





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default under or result in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of
formation, limited liability company agreement, certificate of authority to transact insurance,
Subscriber’s Agreements or other organizational documents of the Borrower or the Attorney-in-Fact
or (ii) any Law or any material agreement or instrument or order, writ, judgment, injunction or
decree to which the Borrower or the Attorney-in-Fact or any of their respective Subsidiaries is a
party or by which the Borrower or the Attorney-in-Fact or any of their respective Subsidiaries is
bound or to which the Borrower or the Attorney-in-Fact 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 the Attorney-in-Fact or any of their respective Subsidiaries (other
than Liens granted under the Loan Documents). There is no default under 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 organization 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
Applicable Insurance Regulatory Authority or any other 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.




          5.1.5 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
could reasonably be expected to result in any Material Adverse Change. Neither the Borrower nor
any Subsidiaries 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.




          5.1.6 Financial Statements.




               (i) The Borrower has delivered to the Administrative Agent copies of its Annual Statement for
and as of the end of the fiscal year ended December 31, 2008 (including, without limitation, the
provisions made therein for Investments and the valuation thereof, reserves, policy and contract
claims and statutory liabilities) as filed with the Applicable Insurance Regulatory Authority. In
addition, the Borrower has delivered to the Administrative Agent copies of its Interim Statements
for the fiscal year to date and as of the end of the fiscal quarter ended June 30, 2009 as filed
with the Applicable Insurance Regulatory Authority (all such Annual Statements and Interim
Statements being collectively referred to as the “Statements”). The Statements were
compiled from the books and records maintained by the Borrower’s management, are correct and
complete as required by SAP and 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 SAP, consistently applied,
subject (in the case of the Interim Statements) to normal year-end audit adjustments.



               (ii) 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



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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, 2008, no
Material Adverse Change has occurred.




               (iii) The Investments of the Borrower reflected in the Statements comply in all material
respects with all applicable requirements of the Pennsylvania Department of Insurance as well as
those of any other Applicable Insurance Regulatory Authority relating to Investments in respect of
which the Borrower may invest its funds.



               (iv) The provisions made by the Borrower in the Statements for reserves, policy and contract
claims and statutory liabilities are in compliance in all material respects with the requirements
of the Applicable Insurance Regulatory Authority, and have been computed in accordance with SAP.



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



          5.1.7 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 of
Governors of the Federal Reserve System). 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 of Governors of the Federal
Reserve System. 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.




          5.1.8 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
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.




          5.1.9 Taxes. 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
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,




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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 SAP, shall have been made.




          5.1.10 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.




          5.1.11 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 first priority perfected Liens. All filing fees and other expenses in
connection with the perfection of such Liens have been or will be paid by the Borrower.




          5.1.12 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.




          5.1.13 ERISA Compliance.




               (i) 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 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.



               (ii) 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 or 4243 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.




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          5.1.14 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 5.1.14; provided that such matters so
disclosed could not reasonably be expected in the aggregate to result in a Material Adverse
Change.




          5.1.15 Solvency. The Borrower is Solvent. After giving effect to the
transactions contemplated by this Agreement and the other Loan Documents, including all
Indebtedness incurred thereby, the Liens granted by the Borrower in connection therewith and
the payment of all fees related thereto, the Borrower will be Solvent.




          5.1.16 Insurance Licenses. (a) The Borrower has all Insurance Licenses
necessary to conduct its business, (b) no Insurance License of the Borrower is the subject of
a proceeding for suspension or revocation or any similar proceedings, (c) there is no
sustainable basis for such a suspension or revocation, and (d) no such suspension or revocation is
threatened by any Applicable Insurance Regulatory Authority.




     5.2 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 7.3.3 [Certificate of the Borrower], Borrower shall deliver an amended and restated form
of such Schedule together with such Compliance Certificate:




	 	 	 	Schedule 5.1.1    —  Qualifications to do Business 

Schedule 5.1.2    —  Subsidiaries

Schedule 5.1.14  —  Environmental Matters




provided, however, that Schedule 5.1.14 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 5.1.14 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 5.1.14.




     6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT



     The obligation of each Lender to make Loans and of the Issuing Lender to issue Letters of
Credit hereunder is subject to the performance by the Borrower of its Obligations to be performed
hereunder at or prior to the making of any such Loans or issuance of such Letters of Credit and to
the satisfaction of the following further conditions:



     6.1 First Loans and Letters of Credit.



          6.1.1 Deliveries. On the Closing Date, the Administrative Agent 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 Closing Date stating that the Borrower is in compliance with its
representations, warranties, covenants and conditions hereunder and no Event of Default or



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Potential Default exists and no Material Adverse Change has occurred since the date of the last
Annual Statement of the Borrower delivered to the Administrative Agent.



               (ii) A certificate dated the Closing Date and signed by an
Authorized Officer, certifying as to: (a) all action taken by the Attorney-in-Fact in connection
with this Agreement and the other Loan Documents; (b) the names of the Authorized Officers
authorized to sign the Loan Documents and their true signatures; (c) copies of the organizational
documents of the Borrower and the Attorney-in-Fact as in effect on the Closing Date certified by
the appropriate state official where such documents are filed in a state office including, in the
case of the Borrower, a copy of the Subscriber’s Agreements; (d) the exact legal name of the
Borrower; and (e) the tax identification number of the Borrower.



               (iii) A good standing certificate for the Attorney-in-Fact dated
not more than sixty (60) days prior to the Closing Date, issued by the Secretary of State or other
appropriate official of the Attorney-in-Fact’s jurisdiction of formation and a Certificate of
Authority to Transact Insurance of the Borrower from the Commonwealth of Pennsylvania Department of
Insurance.



               (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 Closing Date.



               (vi) A written opinion of counsel for the Borrower and the Attorney-in-Fact, dated the
Closing Date.



               (vii) A duly completed Compliance Certificate as of the last day
of the fiscal quarter of the Borrower most recently ended prior to the Closing Date, signed by an
Authorized Officer.



               (viii) Evidence that (a) no litigation, investigation or proceeding
before or by any arbitrator or any Applicable Insurance Regulatory Authority or other Official
Body shall be continuing or threatened against the Borrower or the Attorney-in-Fact or against the
officers or directors of the Borrower or the Attorney-in-Fact (1) in connection with this
Agreement, the other Loan Documents or any of the transactions contemplated hereby or thereby 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 Attorney-in-Fact or the conduct of its business shall have been issued by any
Official Body.



               (ix) All material consents required to effectuate the transactions contemplated hereby.



               (x) Evidence that the Amended, Restated and Consolidated
Loan Agreement dated January 30, 2008 among Borrower and PNC Bank and the other documents executed
in connection therewith (together with all amendments, restatements,



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modifications and supplements thereto) have been terminated, and all outstanding obligations
thereunder have been paid and all Liens securing such obligations have been released.



               (xi) (a) UCC Lien Searches with respect to the Borrower (at
the state level only) in the Commonwealth of Pennsylvania and (b) judgment and tax lien searches
with respect to the Borrower (at the state and county level) in Erie County, Pennsylvania and the
Commonwealth of Pennsylvania with acceptable results.



               (xii) Fully executed copies of the UCC-3 amendments and any
other releases that may be necessary to satisfy any and all existing Liens on the assets of the
Borrower that are not permitted hereunder (including payoff letters, if applicable).



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



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



          6.1.2 Payment of Fees. The Borrower shall have paid all fees payable on or before the
Closing Date.




     6.2 Each Loan or Letter of Credit. At the time of making any Loans or issuing any
Letters of Credit and after giving effect to the proposed extensions of credit: the
representations, warranties and covenants of the Borrower shall then 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) and no Event of Default or Potential Default shall have occurred and be
continuing; the making of the Loans or issuance of such Letter of Credit shall not contravene any
Law applicable to the Borrower or any Subsidiary of the Borrower or any of the Lenders; and the
Borrower shall have delivered to the Administrative Agent a duly executed and completed Loan
Request or to the Issuing Lender an application for a Letter of Credit, as the case may be.



7. COVENANTS




     The Borrower covenants and agrees that until Payment in Full, the Borrower shall comply at
all times with the following covenants:



     7.1 Affirmative Covenants.



          7.1.1 Preservation of Existence, Etc. The Borrower shall maintain its legal existence
as a reciprocal insurance exchange domiciled in the Commonwealth of Pennsylvania. The
Attorney-in-Fact shall maintain its legal existence as a corporation, limited partnership or
limited liability company, as applicable in its state or organization. Each of the Borrower and the
Attorney-in-Fact shall maintain its respective Insurance Licenses and its license or qualification
and good standing in the Commonwealth of Pennsylvania, and the Borrower shall maintain its
Insurance Licenses 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





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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 7.2.6 [Liquidations, Mergers, Etc.].




          7.1.2 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 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 SAP, shall have been made.




          7.1.3 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.




          7.1.4 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.




          7.1.5 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.




          7.1.6 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 SAP 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.




          7.1.7 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




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Laws, in all respects; provided that it shall not be deemed to be a violation of this Section 7.1.7
[Compliance with Laws; Use of Proceeds] 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 2.8 [Use of Proceeds] and as
permitted by applicable Law.




          7.1.8 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.




          7.1.9 Anti-Terrorism Laws. The Borrower is not and shall not be (i) a Person
with whom any Lender is restricted from doing business under Executive Order No. 13224 or
any other Anti-Terrorism Law, (ii) engaged in any business involved in making or receiving any
contribution of funds, goods or services to or for the benefit of such a Person or in any
transaction that evades or avoids, or has the purpose of evading or avoiding, the prohibitions
set forth in any Anti-Terrorism Law, or (iii) otherwise in violation of any Anti-Terrorism Law.
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.




          7.1.10 Collateral Value. The Borrower shall maintain at all times, subject to the
next sentence, Collateral Value of not less than one hundred twenty-five percent (125%) of the
Revolving Credit Commitments. If at any time the Collateral Value is less than one hundred
twenty-five percent (125%) of the Revolving Credit Commitments (the amount of such shortage,
the “Collateral Shortfall”), an Event of Default 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 Revolving Credit Commitments pursuant
to Section 2.10 [Reduction of Credit Commitments].




          7.1.11 Post-Closing Filings. The Borrower shall make all post-closing filings
that may be required by any Applicable Insurance Regulatory Authority (“Post-Closing
Filings”).




          7.1.12 Eligible Collateral Requirements. The Borrower shall cause the Eligible
Collateral to consist of (i) at least fifty percent (50%) of investment property or other
assets having an applicable rating at all times equal to or greater than Aaa or AAA, (ii) not more
than fifteen percent (15%) of investment property or other assets having an applicable rating at
any time less than Aa2 or AA but greater than or equal to A2 or A, and (iii) the balance of
investment property or other assets having an applicable rating at all times equal to or greater than Aa2
or AA. For purposes of this Section 7.1.12, 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 Standard
& Poor’s or (b) the credit enhanced rating of such investment property or other asset provided by




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Moody’s and Standard & Poor’s; (ii) if a difference exists in the ratings of Moody’s and Standard &
Poor’s and the difference is only one level, such rating shall be based upon the higher of Moody’s
and Standard & Poor’s (for example if Moody’s rating is Aa3 and Standard & Poor’s rating is AA,
Standard & Poor’s rating would apply); and (iii) if a difference exists in the ratings of Moody’s &
Standard & Poor’s and the difference is two or more levels then the rating will be based upon the
lower of Moody’s and Standard & Poor’s (for example if Moody’s rating is A2 and Standard & Poor’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 Standard & Poor’s rating
less than A3 or A-.




          7.1.13 Collateral Value and Delinquency Proceedings. The Collateral Value
requirements set forth in Section 7.1.10 [Collateral Value] 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
twenty-five percent (125%) of the Revolving Credit Commitments.




     7.2 Negative Covenants.



          7.2.1 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:




               (i) Indebtedness under the Loan Documents;



               (ii) Existing Indebtedness as set forth on Schedule 7.2.1 (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 7.2.1);



               (iii) Any Lender Provided Interest Rate Hedge; and



               (iv) Any other Indebtedness not exceeding an aggregate principal amount of Five Hundred
Million and 00/100 Dollars ($500,000,000.00).



          7.2.2 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”):




               (i) Liens for taxes, assessments, or similar charges, incurred in the ordinary course of
business and which are not yet due and payable;



               (ii) 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




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worker’s compensation, unemployment insurance, old-age pensions or other social security programs;




               (iii) 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 Liens
of landlords securing obligations to pay lease payments that are not yet due and payable or in
default;



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



               (v) 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;



               (vi) 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);



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



               (viii) Liens on assets (other than the Collateral or any Subsidiary Equity Interests)
provided the amount of outstanding Indebtedness and other obligations secured thereby does not
exceed One Hundred Fifty Million and 00/100 Dollars ($150,000,000.00) at any time.



          7.2.3 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 One Hundred Million and 00/100 Dollars
($100,000,000.00), except for a Guarantee of Indebtedness of the Borrower permitted hereunder.




          7.2.4 Investments. The Borrower shall not make any Investments, except:




               (a) Investments disclosed on Schedule 7.2.4;



               (b) Investments maintained in the Borrower’s investment portfolio in
the ordinary course of business (including 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; and



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               (d) Acquisitions of assets or capital stock of any other Person to the extent permitted
by Section 7.2.6 [Liquidations, Mergers, Consolidations, Acquisitions].



          7.2.5 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 Event of Default or Potential Default shall have
occurred.




          7.2.6 Liquidations, Mergers, Consolidations, Acquisitions. The Borrower shall
not dissolve, liquidate or wind-up its affairs. The Borrower shall not fail to have at all
times an Attorney-in-Fact duly authorized to act on its behalf in accordance with applicable Law. 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 7.2.14
[Minimum Statutory Surplus] and Section 7.2.15 [Total Adjusted Capital to Authorized Control
Level Risk Based Capital], (ii) prior to and after giving effect to such transaction, no Event
of Default or Potential 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.




          7.2.7 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;



               (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;



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               (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.



          7.2.8 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.




          7.2.9 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.




          7.2.10 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.




          7.2.11 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
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.




          7.2.12 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.




          7.2.13 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





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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 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 (iii)
customary provisions in leases or other agreements restricting assignment thereof.




          7.2.14 Minimum Statutory Surplus. As of September 30, 2009 and the end of
each fiscal quarter thereafter, the Borrower shall not permit the Borrower Statutory Surplus
to be less than an amount equal to the sum of (i) seventy percent (70%) of $3,915,000,000.00, plus
(ii) fifty percent (50%) of Borrower Statutory Net Income on a cumulative basis for the fiscal
quarter ended September 30, 2009 and for each succeeding fiscal quarter thereafter.




          7.2.15 Total Adjusted Capital to Authorized Control Level Risk Based Capital.
As of September 30, 2009 and the end of each fiscal quarter thereafter, the Borrower shall not
permit the ratio (expressed as a percentage) of Total Adjusted Capital to Authorized Control
Level Risk Based Capital to be less than four hundred fifty percent (450%).




          7.2.16 Management Fee. The Borrower shall not pay management fees to the
Attorney-in-Fact or any other Person in excess of twenty-five percent (25%) of the direct
written premiums of the Erie Property & Casualty Insurance Group.




          7.2.17 Successor Attorney-in-Fact. The Borrower shall not make any change in
its Attorney-in-Fact unless not less than thirty (30) days prior written notice of its
intention to appoint a successor Attorney-in-Fact is given to the Administrative Agent, which successor
Attorney-in-Fact must be acceptable to the Administrative Agent in its sole but reasonable
discretion.




     7.3 Reporting Requirements. The Borrower will furnish or cause to be furnished
to the Administrative Agent;



          7.3.1 Quarterly Financial Statements. As soon as available and in any event
within forty-five (45) calendar days after the end of each of the first three fiscal quarters
in each fiscal year, Interim Statements of the Borrower, as filed with the Applicable Insurance
Regulatory Authority as of the end of such fiscal quarter for the fiscal quarter then ended
and the fiscal year through that date, all in reasonable detail and certified (subject to normal
year-end audit adjustments) by an Authorized Officer of the Borrower as having been prepared in
accordance with SAP, consistently applied, and setting forth in comparative form the
respective Interim Statements for the corresponding date and period in the previous fiscal year.




          7.3.2 Annual Financial Statements. As soon as available and in any event
within ninety (90) days after the end of each fiscal year of the Borrower, Annual Statements
of the Borrower consisting of a consolidated and consolidating balance sheet as of the end of
such





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fiscal year, all in reasonable detail and setting forth in comparative form the Annual Statements
as of the end of and for the preceding fiscal year accompanied by or including the opinion or
statement of the Borrower’s actuary as required to be filed with such Annual Statements, in form
and substance reasonably acceptable to the Administrative Agent.




          7.3.3 Certificate of the Borrower. Concurrently with the delivery of the
Statements of the Borrower furnished to the Administrative Agent pursuant to Section 7.3.1
[Quarterly Financial Statements] and Section 7.3.2 [Annual Financial Statements], a
certificate (each, a “Compliance Certificate”) of the Borrower signed by an Authorized Officer
(for purposes of this Section 7.3.3, such Authorized Officer shall be limited to the Chief
Executive Officer, President or Chief Financial Officer) of the Borrower, in the form of Exhibit
7.3.3.




          7.3.4 Department of Insurance Certificate of Compliance. Concurrently with
the delivery of the Annual Statements of the Borrower furnished to the Administrative Agent
pursuant to Section 7.3.2 [Annual Financial Statements], the Borrower’s
certificate of compliance procured annually from the Commissioner.




          7.3.5 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 (each, a
“Valuation Statement”).




          7.3.6 Certificates; Other Information.




               (a) within fifteen (15) days after receipt by the Borrower, any final
Report on Examination issued by the Applicable Insurance Regulatory Authority or the NAIC
that results in material adjustments to the Statements;



               (b) within fifteen (15) days after receipt by the Borrower, a copy of
any “Statement of Actuarial Opinion” and “Management Discussion and Analysis” for the
Borrower which is required to be provided to the Applicable Insurance Regulatory Authority as
to the adequacy of loss reserves of the Borrower;



               (c) within fifteen (15) days of receipt, a copy of any financial
examination reports by any Applicable Insurance Regulatory Authority with respect to the
Borrower relating to the insurance business of the Borrower (when, and if, prepared);



               (d) within five (5) Business Days of such notice, notice of actual
suspension, termination or revocation of any material Insurance License of the Borrower by any
Applicable Insurance Regulatory Authority;



               (e) promptly upon notice thereof, any change in the A.M. Best Rating
financial strength rating of the Borrower;



               (f) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary, or compliance with the terms of



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the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably
request; and



               (g) promptly after filing, a copy of the Post-Closing Filings, if any.



          7.3.7 Notices.




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



               7.3.7.2 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.



               7.3.7.3 Organizational Documents. Within the time limits set forth in
Section 7.2.12 [Changes in Organizational Documents], any amendment to the organizational
documents of the Borrower.



               7.3.7.4 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.



               7.3.7.5 ERISA Event. Immediately upon the occurrence of any ERISA
Event, notice thereof.



               7.3.7.6 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.



8. DEFAULT




     8.1 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):



          8.1.1 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 or
any interest on any Loan, Reimbursement Obligation 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;



          8.1.2 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;




          8.1.3 Breach of Negative Covenants or Visitation Rights. The Borrower shall
default in the observance or performance of any covenant contained in Section 7.1.1
[Preservation of Existence, Etc.], Section 7.1.5 [Visitation Rights], Section 7.1.7
[Compliance
with Laws; Use of Proceeds], Section 7.1.10 [Collateral Value] or Section 7.2 [Negative
Covenants];




          8.1.4 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;




          8.1.5 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 Fifty
Million and 00/100 Dollars ($50,000,000.00) 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 shall have been waived) or the termination of any
commitment to lend;




          8.1.6 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;




          8.1.7 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;




          8.1.8 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





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or any of its Subsidiaries are attached, seized, levied upon or subjected to a writ or distress
warrant; or such come within the possession of the Commissioner (except as set forth in Section
8.2.2 [Bankruptcy, Insolvency or Reorganization Proceedings]) or any other receiver, trustee,
custodian or assignee for the benefit of creditors and the same is not cured within thirty (30)
days thereafter;




          8.1.9 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 (ii) 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);




          8.1.10 Change of Control. Within a period of twelve (12) consecutive calendar
months, individuals who were directors of the Attorney-in-Fact 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
Attorney-in-Fact;




          8.1.11 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



          8.1.12 Revocation of Certificate of Compliance. The Borrower’s certificate of
compliance shall have been revoked by the Commissioner.




     8.2 Consequences of Event of Default.



          8.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings. If an Event of Default specified under Sections 8.1.1 [Payments Under Loan
Documents] through 8.1.10 [Change of Control] and 8.1.12 [Revocation of Certificate of Compliance]
shall occur and be continuing, the Lenders and the Administrative Agent shall be under no further
obligation to make Loans and the Issuing Lender shall be under no obligation to issue Letters of
Credit and the Administrative Agent may, and upon the request of the Required Lenders, shall (i) by
written notice to the Borrower, declare the unpaid principal amount of the Notes then outstanding
and all interest accrued thereon, any unpaid fees and all other Indebtedness of the Borrower to the
Lenders hereunder and thereunder to be forthwith due and payable, and the same shall thereupon
become and be immediately due and payable to the Administrative Agent for the benefit of each
Lender without presentment, demand, protest or any





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other notice of any kind, all of which are hereby expressly waived, and (ii) require the Borrower
to, and the Borrower shall thereupon, deposit in a non-interest-bearing account with the
Administrative Agent, as cash collateral for its Obligations under the Loan Documents, an amount
equal to the maximum amount currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit, and the Borrower hereby pledges to the Administrative Agent and the
Lenders, and grants to the Administrative Agent and the Lenders a security interest in, all such
cash as security for such Obligations; and




          8.2.2 Bankruptcy, Insolvency or Reorganization Proceedings. If an Event of
Default specified under Section 8.1.12 [Relief Proceedings] shall occur, the Lenders shall be
under no further obligations to make Loans hereunder and the Issuing Lender shall be under no
obligation to issue Letters of Credit and the unpaid principal amount of the Loans then
outstanding and all interest accrued thereon, any unpaid fees and all other Indebtedness of
the
Borrower to the Lenders hereunder and thereunder shall be immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are hereby expressly
waived; and




          8.2.3 Set-off. If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Lender, and each of their respective Affiliates and any participant
of
such Lender or Affiliate which has agreed in writing to be bound by the provisions of Section
4.3
[Sharing of Payments by Lenders] is hereby authorized at any time and from time to time, to
the
fullest extent permitted by applicable Law, to set off and apply any and all deposits (general
or
special, time or demand, provisional or final, in whatever currency) at any time held and
other
obligations (in whatever currency) at any time owing by such Lender, the Issuing Lender or any
such Affiliate or participant to or for the credit or the account of the Borrower against any
and all
of the Obligations of the Borrower now or hereafter existing under this Agreement or any other
Loan Document to such Lender, the Issuing Lender, Affiliate or participant, irrespective of
whether or not such Lender, Issuing Lender, Affiliate or participant shall have made any
demand
under this Agreement or any other Loan Document and although such Obligations of the
Borrower or the Borrower may be contingent or unmatured or are owed to a branch or office of
such Lender or the Issuing Lender different from the branch or office holding such deposit or
obligated on such Indebtedness. The rights of each Lender, the Issuing Lender and their
respective Affiliates and participants under this Section 8.2.3 [Set-Off] are in addition to
other
rights and remedies (including other rights of setoff) that such Lender, the Issuing Lender or
their
respective Affiliates and participants may have. Each Lender and the Issuing Lender agrees to
notify the Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the validity of
such
setoff and application; and




          8.2.4 Suits, Actions, Proceedings. If an Event of Default shall occur and be
continuing, and whether or not the Administrative Agent shall have accelerated the maturity of
the Loans pursuant to any of the foregoing provisions of this Section 8.2 [Consequences of an
Event of Default], the Administrative Agent or any Lender, if owed any amount with respect to
the Loans, may proceed to protect and enforce its rights by suit in equity, action at law
and/or
other appropriate proceeding, whether for the specific performance of any covenant or
agreement
contained in this Agreement or the other Loan Documents, including as permitted by applicable
Law the obtaining of the ex parte appointment of a receiver, and, if such amount shall have





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become due, by declaration or otherwise, proceed to enforce the payment thereof or any other legal
or equitable right of the Administrative Agent or such Lender; and




          8.2.5 Application of Proceeds. From and after the date on which the Administrative
Agent has taken any action pursuant to this Section 8.2 [Consequences of an Event of Default] and
until all Obligations of the Borrower have been paid in full, any and all proceeds received by the
Administrative Agent from any sale or other disposition of the Collateral, or any part thereof, or
the exercise of any other remedy by the Administrative Agent, shall be applied as follows:




               (i) first, to reimburse the Administrative Agent and the
Lenders for out-of-pocket costs, expenses and disbursements, including reasonable attorneys and
paralegals fees and legal expenses, incurred by the Administrative Agent or the Lenders in
connection with realizing on the Collateral or collection of any Obligations of the Borrower under
any of the Loan Documents, including advances made by the Lenders or any one of them or the
Administrative Agent for the reasonable maintenance, preservation, protection or enforcement of,
or realization upon, the Collateral, including advances for taxes, insurance, repairs and the like
and reasonable expenses incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;



               (ii) second, to the repayment of all Obligations then due and
unpaid of the Borrower to the Lenders or their Affiliates incurred under this Agreement or any of
the other Loan Documents, whether of principal, interest, fees, expenses or otherwise and to cash
collateralize the Letter of Credit Obligations, in such manner as the Administrative Agent may
determine in its discretion;



               (iii) third, to repayment of all Obligations then due and unpaid
of the Borrower to the Lender or their Affiliates incurred under any agreements evidencing any
Lender Provided Interest Rate Hedge, whether of fees, expenses or otherwise; and



               (iv) the balance, if any, as required by
Law.



9. THE ADMINISTRATIVE AGENT




     9.1 Appointment and Authority. Each of the Lenders and the Issuing Lender hereby
irrevocably appoints PNC Bank to act on its behalf as the Administrative Agent hereunder and
under the other Loan Documents and authorizes the Administrative Agent to take such actions on
its behalf and to exercise such powers as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.
The provisions of this Section 9 [The Administrative Agent] are solely for the benefit of the
Administrative Agent, the Lenders and the Issuing Lender, and the Borrower shall not have
rights as a third party beneficiary of any of such provisions.



     9.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.



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Such Person and its Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind of business with
the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the Lenders.




     9.3 Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, the Administrative Agent:



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



               (b) shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated hereby
or by the other Loan Documents that the Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other Loan Documents); provided that the
Administrative Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan
Document or applicable Law; and



               (c) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.



          The Administrative Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be
necessary, under the circumstances as provided in Sections 10.1 [Modifications, Amendments or
Waivers] and 8.2 [Consequences of Event of Default]) or (ii) in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge
of any Potential Default or Event of Default unless and until notice describing such Potential
Default or Event of Default is given to the Administrative Agent by the Borrower, a Lender or the
Issuing Lender.




          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 or any other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Potential Default or Event of Default, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document
or any other agreement, instrument or document or (v) the satisfaction of any condition set forth
in Article 6 [Conditions of Lending and Issuance of Letters of Credit] or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the Administrative Agent.




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     9.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed by it to have
been made by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Loan, or the issuance
of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or
the Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to
such Lender or the Issuing Lender unless the Administrative Agent shall have received notice to the
contrary from such Lender or the Issuing Lender prior to the making of such Loan or the
issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent 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.



     9.5 Delegation of Duties. The Administrative Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory provisions of this
Section 9 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.



     9.6 Resignation of Administrative Agent. The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Issuing Lender and the Borrower. Upon
receipt
of any such notice of 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, such approval not to be unreasonably withheld or delayed. If no such successor
shall
have been so appointed by the Required Lenders and shall have accepted such appointment
within thirty (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 Lender, appoint
a successor Administrative Agent meeting the qualifications set forth above; provided that if
the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents (except that in the
case
of any collateral security held by the Administrative Agent on behalf of the Lenders or the
Issuing Lender under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor Administrative Agent
is appointed) and (ii) all payments, communications and determinations provided to be made by, to
or through the Administrative Agent shall instead be made by or to each Lender and the Issuing
Lender directly, until such time as the Required Lenders appoint a successor Administrative
Agent as provided for above in this Section 9.6 [Resignation of Administrative Agent]. Upon



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the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder or under the other Loan Documents (if
not already discharged therefrom as provided above in this Section 9 [The Administrative Agent]).
The fees payable by the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such successor. After
the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the
provisions of this Section 9 [The Administrative Agent] and Section 10.3 [Expenses; Indemnity;
Damage Waiver] shall continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.




          If PNC Bank resigns as Administrative Agent under this Section 9.6 [Resignation of
Administrative Agent], PNC Bank shall also resign as an Issuing Lender. Upon the appointment of a
successor Administrative Agent hereunder, such successor shall (i) succeed to all of the rights,
powers, privileges and duties of PNC Bank as the retiring Issuing Lender and Administrative Agent
and PNC Bank shall be discharged from all of its respective duties and obligations as Issuing
Lender and Administrative Agent under the Loan Documents, and (ii) issue letters of credit in
substitution for the Letters of Credit issued by PNC Bank, if any, outstanding at the time of such
succession or make other arrangement satisfactory to PNC Bank to effectively assume the
obligations of PNC Bank with respect to such Letters of Credit.




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



     9.8 No Other Duties, etc. Anything herein to the contrary notwithstanding, none of
the co-syndication agents or lead arranger listed on the cover page hereof shall have any
powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in
its capacity, as applicable, as the Administrative Agent, a Lender or the Issuing Lender
hereunder.



     9.9 Administrative Agent’s Fee. The Borrower shall pay to the Administrative Agent
a nonrefundable fee (the “Administrative Agent’s Fee”) under the terms of a letter
(the “Administrative Agent’s Letter”) between the Borrower and Administrative Agent, as
amended from time to time.



     9.10 Authorization to Release Collateral. The Lenders and Issuing Lenders authorize
the Administrative Agent to release any Collateral consisting of assets or equity interests
sold or




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otherwise disposed of in a sale or other disposition or transfer permitted under Section 7.2.7
[Disposition of Assets or Subsidiaries].




     9.11 No Reliance on Administrative Agents Customer Identification Program. Each Lender
acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or
assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s,
participant’s or assignee’s customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP
Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with the Borrower, its Affiliates or its agents, the
Loan Documents or the transactions hereunder or contemplated hereby: (i) any identity verification
procedures, (ii) any recordkeeping, (iii) comparisons with government lists, (iv) customer notices
or (v) other procedures required under the CIP Regulations or such other Laws.



10. MISCELLANEOUS




     10.1 Modifications, Amendments or Waivers. With the written consent of the Required
Lenders, the Administrative Agent, acting on behalf of all the Lenders, and the Borrower, on
behalf of the Borrower, may from time to time enter into written agreements amending or changing
any provision of this Agreement or any other Loan Document or the rights of the Lenders or the
Borrower hereunder or thereunder, or may grant written waivers or consents hereunder or
thereunder. Any such agreement, waiver or consent made with such written consent shall be
effective to bind all the Lenders and the Borrower; provided, that no such agreement, waiver or
consent may be made which will:



          10.1.1 Increase of Commitment. Increase the amount of the Revolving Credit
Commitment of any Lender hereunder without the consent of such Lender;




          10.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment. Whether or not any Loans are outstanding, extend
the
Expiration Date or the time for payment of principal or interest of any Loan (excluding the
due
date of any mandatory prepayment of a Loan), the Commitment Fee or any other fee payable to
any Lender, or reduce the principal amount of or the rate of interest borne by any Loan or
reduce
the Commitment Fee or any other fee payable to any Lender, without the consent of each Lender
directly affected thereby;




          10.1.3 Release of Collateral or Borrower. Release (i) any Collateral that would
result in a Collateral Shortfall, (ii) the Borrower from its Obligations under this Agreement
without the consent of all of the Lenders (other than Defaulting Lenders) or (iii) any Person
who may Guarantee the Obligations without the consent of all of the Lenders (other than the
Defaulting Lenders); or




          10.1.4 Miscellaneous. Amend Section 4.2 [Pro Rata Treatment of Lenders],
Section 7.1.10 [Collateral Value], Section 8.2.5 [Application of Proceeds],
Section 9.3 [Exculpatory Provisions, Etc.], Section 4.3 [Sharing of Payments by Lenders] or
this






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Section 10.1 [Modifications, Amendments or Waivers], alter the definition of Eligible Collateral,
alter any provision regarding the pro rata treatment of the Lenders or requiring all Lenders to
authorize the taking of any action or reduce any percentage specified in the definition of Required
Lenders, or consent to a subordinate Lien with respect to the Collateral, in each case without the
consent of all of the Lenders (other than Defaulting Lenders);



provided that no agreement, waiver or consent which would modify the interests, rights or
obligations of the Administrative Agent or the Issuing Lender without the written consent of such
Administrative Agent or Issuing Lender, as applicable, and provided, further that, if in
connection with any proposed waiver, amendment or modification referred to in Sections 10.1.1
[Increase of Commitment] through 10.1.4 [Miscellaneous] above, the consent of the Required Lenders
is obtained but the consent of one (1) or more of such other Lenders (other than Defaulting
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 4.6.2 [Replacement of a Lender].




     10.2 No Implied Waivers; Cumulative Remedies. No course of dealing and no delay
or failure of the Administrative Agent or any Lender in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall affect any other or future
exercise thereof or operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any further exercise thereof or of any other right, power, remedy or privilege. The
rights and remedies of the Administrative Agent and the Lenders under this Agreement and any
other Loan Documents are cumulative and not exclusive of any rights or remedies which they
would otherwise have.



     10.3 Expenses; Indemnity; Damage Waiver.



          10.3.1 Costs and Expenses. The Borrower shall pay (i) all reasonable and documented
out-of-pocket expenses incurred by the Administrative Agent or PNC Capital Markets LLC (including
the reasonable fees, charges and disbursements of counsel for the Administrative Agent and PNC
Capital Markets LLC), and shall pay all reasonable and documented fees and time charges and
disbursements for attorneys who may be employees of the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and
documented out-of-pocket expenses incurred by the Issuing Lender in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and
(iii) all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent,
any Lender or the Issuing Lender (including the fees, charges and disbursements of any counsel for
the Administrative Agent, any Lender or the Issuing Lender), and shall pay all reasonable and
documented fees and time charges for attorneys who may be employees of the Administrative Agent,
any Lender or the Issuing Lender, in connection with the enforcement or protection of its rights
(A) in connection with this Agreement and the other Loan Documents, including its rights under
this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder,
including all such





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reasonable and documented out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.




          10.3.2 Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing 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 (including the fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all fees and time
charges and disbursements for attorneys who may be employees of any Indemnitee, incurred by
any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower
arising
out of, in connection with, or as a result of (i) the execution or delivery of this Agreement,
any
other Loan Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or thereunder or
the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any refusal by the
Issuing
Lender 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) breach of representations, warranties or covenants of the Borrower under the Loan
Documents, or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, including any such items or losses relating to or arising
under
Environmental Laws or pertaining to environmental matters, whether based on contract, tort or
any other theory, whether brought by a third party or by the Borrower, and regardless of
whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or related expenses
(x) are
determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from
a
claim brought by the Borrower against an Indemnitee for breach in bad faith of such
Indemnitees
obligations hereunder or under any other Loan Document, if the Borrower has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court of competent
jurisdiction.




          10.3.3 Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under Section 10.3.1 [Costs and Expenses]
or Section 10.3.2 [Indemnification by the Borrower] to be paid by it to the Administrative
Agent
(or any sub-agent thereof), the Issuing Lender or any Related Party of any of the foregoing,
each
Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the
Issuing
Lender or such Related Party, as the case may be, such Lender’s Ratable Share (determined as
of
the time that the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount, provided that the unreimbursed expense or indemnified loss, claim,
damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) or the Issuing Lender in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative Agent (or any
such sub-agent) or Issuing Lender in connection with such capacity.




          10.3.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable Law, the Borrower shall not assert, and hereby waives, any claim against any





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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, any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. No Indemnitee referred to in Section 10.3.2 [Indemnification by the Borrower]
shall be liable for any damages arising from the use by unintended recipients of any information or
other materials distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.




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




     10.4 Holidays. Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next Business Day
(except as provided in Section 3.2 [Interest Periods]) and such extension of time shall be
included in computing interest and fees, except that the Loans shall be due on the Business
Day
preceding the Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the Loans) shall be
stated to be due on a day which is not a Business Day, such payment or action shall be made or
taken on the next following Business Day, and such extension of time shall not be included in
computing interest or fees, if any, in connection with such payment or action.



     10.5 Notices; Effectiveness; Electronic Communication.



          10.5.1 Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as provided in
Section 10.5.2 [Electronic Communications]), 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 telecopier (i) if to a Lender, to it at its address
set forth in
its administrative questionnaire, or (ii) if to any other Person, to it at its address set
forth on
Schedule 1.1 (B).




               Notices sent by hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier shall be deemed to
have been given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the next Business Day
for the recipient). Notices delivered through electronic communications to the extent provided in
Section 10.5.2 [Electronic Communications], shall be effective as provided in such Section 10.5
[Notices; Effectiveness; Electronic Communication].



          10.5.2 Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not apply to notices
to
any Lender or the Issuing Lender if such Lender or the Issuing Lender, as applicable, has
notified
the Administrative Agent that it is incapable of receiving notices under such Article by
electronic




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communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be limited to particular
notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the sender’s receipt
of an acknowledgement from the intended recipient (such as by the “return receipt requested”
function, as available, return e-mail or other written acknowledgement); provided that if such
notice or other communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business on the next
Business Day for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.




          10.5.3 Change of Address, Etc. Any party hereto may change its address or telecopier
number for notices and other communications hereunder by notice to the other parties hereto.




     10.6 Severability. The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole or in part in
any
jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of
such
invalidity or unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.



     10.7 Duration; Survival. All representations and warranties of the Borrower contained
herein or made in connection herewith shall survive the execution and delivery of this
Agreement, the completion of the transactions hereunder and Payment In Full. All covenants
and agreements of the Borrower contained herein relating to the payment of principal,
interest,
premiums, additional compensation or expenses and indemnification, including those set forth
in
the Notes, Section 4 [Payments] and Section 10.3 [Expenses; Indemnity; Damage Waiver], shall
survive Payment in Full. All other covenants and agreements of the Borrower shall continue in
full force and effect from and after the date hereof and until Payment in Full.



     10.8 Successors and Assigns.



          10.8.1 Successors and Assigns Generally. 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, except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the Administrative Agent and
each Lender and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an assignee in accordance with the provisions of Section 10.8.2
[Assignments by Lenders], (ii) by way of participation in accordance with the provisions of Section
10.8.4 [Participations], or (iii) by way of pledge or assignment of a security interest subject to
the restrictions of Section 10.8.6 [Certain Pledges; Successors and Assigns Generally] (and any
other attempted assignment or transfer by any party hereto shall be null and void). 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,







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Participants to the extent provided in Section 10.8.4 [Participations] and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.




          10.8.2 Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that any such
assignment shall be subject to the following conditions:




               (i) Minimum Amounts.



                    (A) in the case of an assignment of the entire remaining
amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of
an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be
assigned; and



                    (B) in any case not described in clause (i)(A) of this
Section 10.8.2 [Assignments by Lenders], the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in
effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption Agreement with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the
Assignment and Assumption Agreement, as of the Trade Date) shall not be less than Five Million and
00/100 Dollars ($5,000,000.00), in the case of any assignment in respect of the Revolving Credit
Commitment of the assigning Lender, unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise consents.



               (ii) Proportionate Amounts. Each partial assignment shall be
made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations
under this Agreement with respect to the Loan or the Commitment assigned.



               (iii) Required Consents. No consent shall be required for any
assignment except for the consent of the Administrative Agent (which shall not be unreasonably
withheld or delayed) and:



                    (A) the consent of the Borrower (such consent not to be
unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and
is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of
a Lender or an Approved Fund;



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



               (iv) Assignment and Assumption Agreement. The parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and



-73-









 




Assumption Agreement, together with a processing and recordation fee of Three Thousand Five
Hundred and 00/100 Dollars ($3,500.00), and the assignee, if it is not a Lender, shall deliver to
the Administrative Agent an administrative questionnaire provided by the Administrative Agent.




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



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


Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 10.8.3
[Register], from and after the effective date specified in each Assignment and Assumption
Agreement, the assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption Agreement, 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 Agreement, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption Agreement 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 Section 3.4 [LIBOR Rate
Unascertainable; Illegality; Increased Costs; Deposits Not Available], Section 4.7 [Increased
Costs], and Section 10.3 [Expenses, Indemnity; Damage Waiver] with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply with this Section
10.8.2 [Assignments by Lenders] 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 Section 10.8.4
[Participations].




          10.8.3 Register. The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain a record of the names and addresses of the Lenders, and
the Commitments of, and principal amounts of the Loans owing to, each Lender pursuant to the
terms hereof from time to time. Such register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is in such register
pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for inspection by
the
Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior
notice.




          10.8.4 Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower or the Administrative Agent, sell participations to any Person (other
than
a natural person or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lenders rights and/or obligations under
this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance of such
obligations
and (iii) the Borrower, the Administrative Agent, the Lenders and the Issuing Lender shall
continue to deal solely and directly with such Lender in connection with such Lender’s rights
and
obligations under this Agreement.






-74-









 








               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 with respect to Section 10.1.1
[Increase of Commitment, Etc.], Section 10.1.2 [Extension of Payment, Etc.], or Section 10.1.3
[Release of Collateral or Borrower]). Subject to Section 10.8.5 [Limitations upon Participant
Rights Successors and Assigns Generally], the Borrower agrees that each Participant shall be
entitled to the benefits of Section 3.4 [LIBOR Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available] and Section 4.7 [Increased Costs] to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 10.8.2 [Assignments by
Lenders]. To the extent permitted by Law, each Participant also shall be entitled to the benefits
of Section 8.2.3 [Setoff] as though it were a Lender; provided such Participant agrees to
be subject to Section 4.3 [Sharing of Payments by Lenders] as though it were a Lender.



          10.8.5 Limitations upon Participant Rights Successors and Assigns Generally. A
Participant shall not be entitled to receive any greater payment under Section 4.7 [Increased
Costs], Section 4.8 [Taxes] or Section 10.3 [Expenses; Indemnity; Damage Waiver] than the
applicable Lender would have been entitled to receive with respect to the participation sold
to
such Participant, unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 4.8 [Taxes] unless the Borrower is
notified
of the participation sold to such Participant and such Participant agrees, for the benefit of
the
Borrower, to comply with Section 4.8.5 [Status of Lenders] as though it were a Lender.




          10.8.6 Certain Pledges; Successors and Assigns Generally. 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; provided that no such pledge or assignment shall
release
such Lender from any of its obligations hereunder or substitute any such pledgee or assignee
for
such Lender as a party hereto.




     10.9 Confidentiality.



          10.9.1 General. Each of the Administrative Agent, the Lenders and the Issuing Lender
agrees to maintain the confidentiality of the Information, except that Information may be disclosed
(i) to its Affiliates and to its and its Affiliates’ respective partners, directors, officers,
employees, agents, advisors and other representatives (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (ii) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory authority, such as
the National Association of Insurance Commissioners), (iii) to the extent required by applicable
Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto,
(v) in connection with the exercise of any remedies hereunder or under any other Loan Document or
any action or proceeding relating to this Agreement or any other Loan Document or the enforcement
of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially
the same as those of this Section 10.9.1 [General],





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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 10.9.1 [General] or (B)
becomes available to the Administrative Agent, any Lender, the Issuing Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the Borrower. Any Person
required to maintain the confidentiality of Information as provided in this Section 10.9.1
[General] shall be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.




          10.9.2 Sharing Information With Affiliates of the Lenders. The Borrower acknowledges
that from time to time financial advisory, investment banking and other services may be offered or
provided to the Borrower or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and the
Borrower hereby authorizes each Lender to share any information delivered to such Lender by the
Borrower and its Subsidiaries pursuant to this Agreement to any such Subsidiary or Affiliate
subject to the provisions of Section 10.9.1 [General].




     10.10 Counterparts; Integration; Effectiveness.



          10.10.1 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different counterparts), each of which
shall constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement and the other Loan Documents, and any separate letter agreements with
respect to fees payable to the Administrative Agent, constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof including any prior
confidentiality agreements and commitments. Except as provided in Section 6 [Conditions of Lending
and Issuance of Letters of Credit], 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 that, when taken together, bear the signatures of each of the other parties
hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement.




     10.11 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS; WAIVER OF JURY TRIAL.



          10.11.1 Governing Law. This Agreement shall be deemed to be a contract
under the Laws of the Commonwealth of Pennsylvania without regard to its conflict of laws
principles. Each Standby Letter of Credit issued under this Agreement shall be subject either to
the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published
by the International Chamber of Commerce (the “ICC”) at the time of issuance
(“UCP”) or the rules of the International Standby Practices (ICC Publication Number 590)
(“ISP98”), as determined by the Issuing Lender, to the extent not inconsistent therewith, the Laws
of the Commonwealth of Pennsylvania without regard to is conflict of laws principles.







-76-









 








          10.11.2 SUBMISSION TO JURISDICTION. THE BORROWER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF PENNSYLVANIA SITTING IN ALLEGHENY COUNTY AND OF
THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF
PENNSYLVANIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF
ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH
PENNSYLVANIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL
BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN
THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.




          10.11.3 WAIVER OF VENUE. THE BORROWER IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
COURT REFERRED TO IN THIS SECTION 10.11 [CHOICE OF LAW, ETC.]. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT
AND AGREES NOT ASSERT ANY SUCH DEFENSE.




          10.11.4 SERVICE OF PROCESS. EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 10.5 [NOTICES; EFFECTIVENESS;
ELECTRONIC
COMMUNICATION]. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF
ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.




          10.11.5 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO







-77-









 







REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.




     10.12 USA Patriot Act Notice. Each Lender that is subject to the USA Patriot Act and
the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower that
pursuant to the requirements of the USA Patriot Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of
Borrower and other information that will allow such Lender or Administrative Agent, as applicable,
to identify the Borrower in accordance with the USA Patriot Act.



[INTENTIONALLY LEFT BLANK]





-78-












 





     IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have
executed this Agreement as of the day and year first above written as a document under seal.



	 	 	 	 	 	 
	 	 	BORROWER:
 	 
	WITNESS: 	 	 Erie Insurance Exchange
 	 
	/s/ Brian W. Bolash
 	 	By:  	Erie Indemnity Company,  	 
	 	 	 	a Pennsylvania corporation, its Attomey-in-Fact 	 
	 	 	 	 
	 	 	By:  	/s/ Douglas F. Zeigler
 	 (SEAL)
	 	 	 	Name:  	Douglas F. Zeigler 	 
	 	 	 	Title:  	Senior Vice President Treasurer and
Chief Investment Officer 	 



 









 







	 	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT AND LENDERS:
 	 
	WITNESS: 	 	 PNC BANK, NATIONAL ASSOCIATION,

as a Lender and as Administrative Agent

 	 
	 	 	By:  	/s/ James F. Stevenson 	 
	 	 	 	Name:  	James F. Stevenson 	 
	 	 	 	Title:  	Senior Vice President 	 



 









 





	 	 	 	 	 	 
	WITNESS: 	 	 JPMORGAN CHASE BANK, N.A, 
as a Lender

 	 
	 	 	By:  	/s/ Eugene M. Kennedy 	 
	 	 	 	Name:  	Eugene M. Kennedy 	 
	 	 	 	Title:  	Vice President 	 




 









 








	 	 	 	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,
 as a Lender

 	 
	 	By:  	/s/ David Bendel
 	 
	 	 	Name:  	David Bendel 	 
	 	 	Title:  	Vice President 	 
	 




 









 





	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as a Lender

 	 
	 	By:  	/s/ James H. Harper
 	 
	 	 	Name:  	James H. Harper 	 
	 	 	Title:  	Vice President 	 
	 





 









 








	 	 	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender

 	 
	 	By:  	/s/ Ginger So
 	 
	 	 	Name:  	Ginger So 	 
	 	 	Title:  	Vice President 	 
	 




 









 





	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON, as a Leader

 	 
	 	By:  	/s/ Heather Lindstrom
 	 
	 	 	Name:  	Heather Lindstrom 	 
	 	 	Title:  	Managing Director 	 
	 




 











 





SCHEDULE l.l(A)




PRICING GRID —

VARIABLE PRICING AND FEES BASED ON

BORROWER FINANCIAL STRENGTH RATING

(pricing expressed in basis points)




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Revolving Credit
	 	 	Financial Strength	 	Letter of	 	Revolving Credit	 	LIBOR Rate
	Level	 	Rating	 	Credit Fee	 	Base Rate Spread	 	Spread
	I
	 	A+ or above
	 	150
	 	  50
	 	150
	II
	 	A
	 	175
	 	  75
	 	175
	III
	 	Lower than A
	 	200
	 	100
	 	200






     For purposes of determining the Applicable Margin and the Applicable Letter of Credit Fee
Rate:



     (a) As of the Closing Date, the Applicable Margin and the Applicable Letter of Credit

Fee Rate shall be calculated based upon Level I pricing as set forth above.



     (b) The Applicable Margin and the Applicable Letter of Credit Fee Rate shall be
based on the Borrower’s Financial Strength Rating, which will be recomputed
as of
December 31, 2009, and the end of each fiscal quarter ending thereafter based on the
Borrower’s
Financial Strength as of such quarter end. Any increase or decrease in the Applicable Margin
or the Applicable Letter of Credit Fee Rate computed as of a quarter end shall be effective on
the first day of the immediately succeeding fiscal quarter.





SCHEDULE 1.1(A)-1



 









 





SCHEDULE l.l(B) 




COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES




(Page 1 of 4)




Part 1-Commitments of Lenders and Addresses for Notices to Lenders




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	 	 	 	 	 
	 	 	Commitment	 	 	 	 	 	 	 
	 	 	for Revolving	 	 	 	 	 	 	 
	Lender	 	Credit Loans	 	 	Commitment	 	 	Ratable Share	 
	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	PNC Bank, National Association
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 	 	 
	PNC Bank, National Association
	 	 	 	 	 	 	 	 	 	 	 	 
	901 State Street
	 	 	 	 	 	 	 	 	 	 	 	 
	4th Floor, Corporate Banking
	 	 	 	 	 	 	 	 	 	 	 	 
	Erie, PA 16501
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 	 	 	 	 
	James F. Stevenson, Senior Vice
	 	 	 	 	 	 	 	 	 	 	 	 
	President
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:
	 	 	 	 	 	 	 	 	 	 	 	 
	814-871-9383
	 	 	 	 	 	 	 	 	 	 	 	 
	Telecopy:
	 	 	 	 	 	 	 	 	 	 	 	 
	814-871-9432
	 	$	55,000,000.00	 	 	$	55,000,000.00	 	 	 	27.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	JP Morgan Chase Bank, N.A.
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 	 	 
	JP Morgan Chase Bank, N.A.
	 	 	 	 	 	 	 	 	 	 	 	 
	270 Park Avenue - 41st Fl.
	 	 	 	 	 	 	 	 	 	 	 	 
	New York, NY 10017
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 	 	 	 	 
	Gene M. Kennedy III
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:
	 	 	 	 	 	 	 	 	 	 	 	 
	212-270-1903
	 	 	 	 	 	 	 	 	 	 	 	 
	Telecopy:
	 	 	 	 	 	 	 	 	 	 	 	 
	646-534-2239
	 	$	35,000,000.00	 	 	$	35,000,000.00	 	 	 	17.50	%






SCHEDULE l.l(B)-1



 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	 	 	 	 	 
	 	 	Commitment	 	 	 	 	 	 	 
	 	 	for Revolving	 	 	 	 	 	 	 
	Lender	 	Credit Loans	 	 	Commitment	 	 	Ratable Share	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo Bank, National Association
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 	 	 
	Wells Fargo Bank, National
	 	 	 	 	 	 	 	 	 	 	 	 
	Association
	 	 	 	 	 	 	 	 	 	 	 	 
	230 W. Monroe Street
	 	 	 	 	 	 	 	 	 	 	 	 
	Chicago, IL 60606
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 	 	 	 	 
	Thomas Doddridge
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:
	 	 	 	 	 	 	 	 	 	 	 	 
	312-781-0722
	 	 	 	 	 	 	 	 	 	 	 	 
	
Telecopy:
	 	 	 	 	 	 	 	 	 	 	 	 
	312-845-8606
	 	$	25,000,000.00	 	 	$	25,000,000.00	 	 	 	12.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	Bank of America, N.A.
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 	 	 
	901 Main Street - 64th Floor
	 	 	 	 	 	 	 	 	 	 	 	 
	Dallas, TX 75202
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 	 	 	 	 
	James H. Harper
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:
	 	 	 	 	 	 	 	 	 	 	 	 
	214-209-9048
	 	 	 	 	 	 	 	 	 	 	 	 
	Telecopy:
	 	 	 	 	 	 	 	 	 	 	 	 
	214-209-3742
	 	$	35,000,000.00	 	 	$	35,000,000.00	 	 	 	17.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	U.S. Bank National Association
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 	 	 
	461 Fifth Avenue
	 	 	 	 	 	 	 	 	 	 	 	 
	New York, NY 10017
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 	 	 	 	 
	David Albanesi
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:
	 	 	 	 	 	 	 	 	 	 	 	 
	646-935-4585
	 	 	 	 	 	 	 	 	 	 	 	 
	Telecopy:
	 	 	 	 	 	 	 	 	 	 	 	 
	646 935 4533
	 	$	25,000,000.00	 	 	$	25,000,000.00	 	 	 	12.50	%




[01044074]




SCHEDULE l.l(B) - 2




 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	 	 	 	 	 
	 	 	Commitment	 	 	 	 	 	 	 
	 	 	for Revolving	 	 	 	 	 	 	 
	Lender	 	Credit Loans	 	 	Commitment	 	 	Ratable Share	 
	Name:
	 	 	 	 	 	 	 	 	 	 	 	 
	Bank of New York Mellon
	 	 	 	 	 	 	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 	 	 	 	 	 	 
	Bank of New York Mellon
	 	 	 	 	 	 	 	 	 	 	 	 
	One Wall Street
	 	 	 	 	 	 	 	 	 	 	 	 
	New York, NY 10286
	 	 	 	 	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 	 	 	 	 
	Brian K. Brown
	 	 	 	 	 	 	 	 	 	 	 	 
	Telephone:
	 	 	 	 	 	 	 	 	 	 	 	 
	315-765-4503
	 	 	 	 	 	 	 	 	 	 	 	 
	Telecopy:
	 	 	 	 	 	 	 	 	 	 	 	 
	315-765-4783
	 	$	25,000,000.00	 	 	$	25,000,000.00	 	 	 	12.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	$	200,000,000.00	 	 	$	200,000,000.00	 	 	 	100.00	%
	 
	 	 	 	 	 	 	 	 	 





SCHEDULE 1.1(B) - 3




 









 





SCHEDULE l.l(B) 




COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES




(Page 4 of 4)




Part 2 - Addresses for Notices to the Administrative Agent and the Borrower:




ADMINISTRATIVE AGENT:




	 
	Name:

	PNC Bank, National Association

	Address:

	Firstside Center

	500 First Avenue, 4th Floor

	Pittsburgh, Pennsylvania 15219

	Attention:

	Rini Davis, Assistant Vice President

	Telephone:

	412-762-7638

	Telecopy:

	412-705-2006

	 

	BORROWER:

	 

	Name:

	Erie Insurance Exchange

	Address:

	100 Erie Insurance Place

	Erie, Pennsylvania 16530

	Attention:

	Brian W. Bolash

	Telephone:

	814-870-4747

	Telecopy:

	814-870-2010







[01044074]




SCHEDULE 1.1(B) - 4