Document:

Exhibit 10.2

 

Published Deal CUSIP:         

 

 

`SEVENTH AMENDED AND RESTATED LOAN AGREEMENT

 

Dated as of February 24, 2012

 

among

 

MGM RESORTS INTERNATIONAL, as Borrower

 

and

 

MGM GRAND DETROIT, LLC, as Co-Borrower

 

The Lenders herein named

 

and

 

BANK OF AMERICA, N.A.
 as Administrative Agent

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC, BNP PARIBAS SECURITIES CORP., CITIBANK NORTH AMERICA, INC., COMMERZBANK, DEUTSCHE BANK SECURITIES INC., J.P. MORGAN SECURITIES LLC, MORGAN STANLEY SENIOR FUNDING, INC., RBS SECURITIES, INC., SMBC NIKKO CAPITAL MARKETS LTD., UBS SECURITIES LLC and WELLS FARGO SECURITIES, LLC,

 

as Joint Lead Arrangers

 

BANK OF AMERICA, N.A., BARCLAYS BANK PLC, BNP PARIBAS, CITIBANK, N.A., COMMERZBANK, DEUTSCHE BANK TRUST COMPANY AMERICAS, JPMORGAN CHASE BANK, N.A., MORGAN STANLEY SENIOR FUNDING, INC., THE ROYAL BANK OF SCOTLAND PLC, SUMITOMO MITSUI BANKING CORPORATION, UBS LOAN FINANCE LLC and WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Co-Documentation Agents

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
DEFINITIONS   AND ACCOUNTING TERMS
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.1
    	
Defined   Terms
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.2
    	
Use   of Defined Terms
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.3
    	
Accounting   Terms - Fiscal Periods
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.4
    	
Rounding
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.5
    	
Exhibits   and Schedules
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.6
    	
Miscellaneous   Terms
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.7
    	
Letter   of Credit Amounts
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.8
    	
Exchange   Rates; Currency Equivalents
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.9
    	
Additional   Alternative Currencies
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 1.10
    	
Change   of Currency
    	
35
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
LOANS   AND LETTERS OF CREDIT
    	
35
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.1
    	
Loan   Retranching-General
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.2
    	
The   Class A Funding Requirements
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.3
    	
Generally   Applicable Lending Procedures
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.4
    	
Base   Rate Loans
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.5
    	
LIBOR   Loans
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.6
    	
Letters   of Credit
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.7
    	
Swing   Line
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.8
    	
Co-Borrowers
    	
49
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.9
    	
Reduction   of the Aggregate Class A Funding Requirements
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.10
    	
Optional   Termination of Class A Funding Requirements
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.11
    	
Administrative   Agent’s Right to Assume Funds Available for Advances
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 2.12
    	
Senior   Indebtedness
    	
51
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
PAYMENTS   AND FEES
    	
51
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.1
    	
Principal   and Interest
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.2
    	
[Reserved]
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.3
    	
Unused   Fees
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.4
    	
Letter   of Credit Fees
    	
54
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.5
    	
Agency   Fees
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.6
    	
Increased   Commitment Costs
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.7
    	
LIBOR   Costs and Related Matters
    	
56
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.8
    	
Late   Payments
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.9
    	
Computation   of Interest and Fees
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.10
    	
Non-Business   Days
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.11
    	
Manner   and Treatment of Payments
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.12
    	
Funding   Sources
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.13
    	
Failure   to Charge Not Subsequent Waiver
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.14
    	
Administrative   Agent’s Right to Assume Payments Will be Made
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.15
    	
Fee   Determination Detail
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 3.16
    	
Survivability
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
REPRESENTATIONS   AND WARRANTIES
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.1
    	
Existence   and Qualification; Power; Compliance With Laws
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.2
    	
Authority;   Compliance With Other Agreements and Instruments and Government Regulations
    	
63
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.3
    	
No   Governmental Approvals Required
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.4
    	
Subsidiaries
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.5
    	
Financial   Statements
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.6
    	
No   Other Liabilities; No Material Adverse Changes
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.7
    	
[Reserved]
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.8
    	
Litigation
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.9
    	
Binding   Obligations
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.10
    	
No   Default
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.11
    	
ERISA
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.12
    	
Regulations   T, U and X; Investment Company Act
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.13
    	
Disclosure
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.14
    	
Tax   Liability
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.15
    	
Projections
    	
66
    
					

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.16
    	
Hazardous   Materials
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 4.17
    	
Solvency
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
AFFIRMATIVE   COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.1
    	
Preservation   of Existence
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.2
    	
Maintenance   of Properties
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.3
    	
Maintenance   of Insurance
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.4
    	
Compliance   With Laws
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.5
    	
Inspection   Rights
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.6
    	
Keeping   of Records and Books of Account
    	
67
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.7
    	
Use   of Proceeds
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 5.8
    	
Guarantors
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
NEGATIVE   COVENANTS
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.1
    	
Mergers   and Other Fundamental Changes
    	
68
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.2
    	
Hostile   Acquisitions
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.3
    	
Change   in Nature of Business
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.4
    	
Liens   and Negative Pledges
    	
69
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.5
    	
Minimum   EBITDA
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.6
    	
Capital   Expenditures
    	
70
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.7
    	
Indebtedness
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.8
    	
Investments
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.9
    	
Dispositions
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.10
    	
Restricted   Payments; Equity Issuances
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.11
    	
Prepayments, Etc.   of Indebtedness
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.12
    	
Creation   of Unrestricted Subsidiaries
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 6.13
    	
Loans   to Detroit
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
INFORMATION   AND REPORTING REQUIREMENTS
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 7.1
    	
Financial   and Business Information
    	
76
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 7.2
    	
Compliance   Certificates
    	
78
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 7.3
    	
Collateral   Coverage Certificates; Appraisals
    	
79
    
							

 

iii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
CONDITIONS
    	
80
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 8.1
    	
Any   Increasing Advance
    	
80
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 8.2
    	
Any   Letter of Credit
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
EVENTS   OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 9.1
    	
Events   of Default
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 9.2
    	
Remedies   Upon Event of Default
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
THE   ADMINISTRATIVE AGENT
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.1
    	
Appointment   and Authorization of Administrative Agent
    	
85
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.2
    	
Delegation   of Duties
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.3
    	
Liability   of Administrative Agent
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.4
    	
Reliance   by Administrative Agent
    	
86
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.5
    	
Notice   of Default
    	
87
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.6
    	
Credit   Decision; Disclosure of Information by Administrative Agent
    	
87
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.7
    	
Indemnification   of Administrative Agent
    	
88
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.8
    	
Administrative   Agent in its Individual Capacity
    	
88
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.9
    	
Successor   Administrative Agent
    	
89
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.10
    	
Administrative   Agent May File Proofs of Claim
    	
89
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.11
    	
Other   Agents, Arrangers and Managers
    	
90
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.12
    	
No   Obligations of Borrower and the Co-Borrowers
    	
90
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 10.13
    	
Collateral   Matters
    	
91
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
MISCELLANEOUS
    	
91
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.1
    	
Cumulative   Remedies; No Waiver
    	
91
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.2
    	
Amendments;   Consents
    	
91
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.3
    	
Attorney   Costs, Expenses and Taxes
    	
93
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.4
    	
Nature   of Lenders’ Obligations
    	
93
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.5
    	
Survival   of Representations and Warranties
    	
94
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.6
    	
Notices
    	
94
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.7
    	
Execution   of Loan Documents
    	
95
    
						

 

iv

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.8
    	
Binding   Effect; Assignment
    	
96
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.9
    	
Right   of Setoff
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.10
    	
Sharing   of Setoffs
    	
101
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.11
    	
Indemnification   by Borrower and the Co-Borrowers
    	
102
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.12
    	
Nonliability   of the Lenders; No Advisory or Fiduciary Responsibility
    	
103
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.13
    	
No   Third Parties Benefited
    	
104
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.14
    	
Confidentiality
    	
104
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.15
    	
Further   Assurances
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.16
    	
Integration
    	
105
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.17
    	
Governing   Law; Jurisdiction
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.18
    	
Severability   of Provisions
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.19
    	
Headings
    	
107
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.20
    	
Time   of the Essence
    	
107
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.21
    	
Foreign   Lenders and Participants
    	
107
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.22
    	
Gaming   Boards
    	
109
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.23
    	
Termination
    	
109
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.24
    	
Removal   of a Lender
    	
109
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.25
    	
Joint   and Several
    	
110
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.26
    	
[Reserved]
    	
110
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.27
    	
Payments   Set Aside
    	
110
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.28
    	
Waiver   of Right to Trial by Jury
    	
110
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.29
    	
Purported   Oral Amendments
    	
111
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
SECTION 11.30
    	
USA   PATRIOT Act Notice
    	
111
    

 

v

 

	
Exhibits
    
	
 
    
	
A
    	
—
    	
Assignment   and Assumption Agreement
    
	
B
    	
—
    	
Assumption   Agreement
    
	
C-1
    	
—
    	
Class A-1   Note
    
	
C-2
    	
—
    	
Class A-2   Note
    
	
C-3
    	
—
    	
Class B   Note
    
	
C-4
    	
—
    	
Class C   Note
    
	
C-5
    	
—
    	
Class D   Note
    
	
C-6
    	
—
    	
Class E   Note
    
	
D
    	
—
    	
Collateral   Coverage Certificate
    
	
E
    	
—
    	
Compliance   Certificate
    
	
F
    	
—
    	
Request   for Loan
    
	
G
    	
—
    	
Joint   Borrower Provisions
    
	
H
    	
—
    	
Subordination   Terms
    

 

 

	
Schedules
    
	
 
    
	
1.1(a)
    	
Detroit   Disposition Prepayment Amount
    
	
2.1
    	
The   Class A Funding Requirements and the Loans
    
	
4.0
    	
Disclosure   Schedule
    
	
6.4(i)
    	
Certain   Permitted Liens
    
	
6.7
    	
Existing   Indebtedness
    
	
6.8
    	
Existing   Investments
    
	
11.6
    	
Notice   Addresses
    

 

 

	
Annexes
    
	
A
    	
—
    	
Detroit   Collateral
    
	
B
    	
—
    	
Mandalay   Collateral
    
	
C
    	
—
    	
Goldstrike   Tunica Collateral
    

 

vi

 

SEVENTH AMENDED AND RESTATED LOAN AGREEMENT

 

This Seventh Amended and Restated Loan Agreement (“Agreement”), dated as of February 24, 2012 is entered into by and among MGM RESORTS INTERNATIONAL, a Delaware corporation (“Borrower”), MGM Grand Detroit, LLC, a Delaware limited liability company (“Detroit”), as initial Co-Borrower, the Lenders referred to herein and Bank of America, N.A., as Administrative Agent, with reference to the following facts:

 

A.            Pursuant to the Existing Loan Agreement referred to herein, certain revolving and term credit facilities have been provided to Borrower and Detroit.

 

B.            Pursuant to the Amendment No. 1 and Restatement Agreement, the Administrative Agent has been directed to execute this Agreement on behalf of the Lenders, and to thereby amend and restate the Existing Loan Agreement in its entirety, subject to the conditions precedent set forth in Section 8 of the Amendment No. 1 and Restatement Agreement.

 

C.            Concurrently with the effectiveness of this Agreement, each of the conditions so set forth has been satisfied (including the making of the Required Payments and the payment of the various fees and expense reimbursements required thereunder), and the credit facilities described in the Existing Loan Agreement have been re-tranched into the Classes and Loans described herein.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements herein contained, Borrower, Detroit, each Co-Borrower which hereafter becomes a Party hereto pursuant to Section 2.7, and the Administrative Agent (acting at the direction of the Lenders pursuant to the Amendment No. 1 and Restatement Agreement on behalf of the Creditors), hereby agree as follows:

 

ARTICLE 1
 DEFINITIONS AND ACCOUNTING TERMS

 

SECTION 1.1  Defined Terms.  As used in this Agreement, the following terms shall have the meanings set forth below:

 

“Acquisition” means any transaction, or any series of related transactions, by which Borrower or its Restricted Subsidiaries directly or indirectly (i) acquire any going business or all or any material part of the assets of any Person, or any division thereof, whether through purchase of assets, merger or otherwise, or (ii) acquire (in one transaction or as the most recent transaction in a series of transactions) control of at least a majority in ordinary voting power of the securities of a corporation which have ordinary voting power for the election of directors, or (iii) acquire control of a majority ownership interest in any partnership, joint venture, limited liability company or any other Person.

 

“Act” has the meaning set forth for that term in Section 11.30.

 

“Administrative Agent” means Bank of America, when acting in its capacity as the Administrative Agent under any of the Loan Documents, or any successor Administrative Agent.

 

 

“Administrative Agent’s Office” means the Administrative Agent’s address as set forth on Schedule 11.6, or such other address as the Administrative Agent hereafter may designate by written notice to Borrower and the Lenders.

 

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

 

“Advance” means any advance made or to be made by any Lender to Borrower or any Co-Borrower as provided in Article 2, and includes each Base Rate Advance, LIBOR Advance and Swing Line Advance.

 

“Affiliate” means, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person.  As used in this definition, “control” (and the correlative terms, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise); provided that, in any event, any Person that owns, directly or indirectly, 10% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation that has more than 100 record holders of such securities, or 10% or more of the partnership or other ownership interests of any other Person that has more than 100 record holders of such interests, will be presumed (subject to rebuttal by a preponderance of the evidence) to control such corporation, partnership or other Person.

 

“Agent-Related Persons” means the Administrative Agent, together with its Affiliates (including Bank of America in its capacity as the Administrative Agent), and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

 

“Aggregate Class A Funding Requirements” means the aggregate of the Class A Funding Requirements.

 

“Agreement” means this Seventh Amended and Restated Loan Agreement, either as originally executed, or as it may from time to time be supplemented, modified, amended, restated or extended.

 

“Alternative Currency” means each of Euro, Sterling and Yen, and each other currency (other than Dollars) that is approved in accordance with Section 1.9.

 

“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Administrative Agent or the Issuing Lender, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.

 

“Amended and Restated Completion Guarantee” means Amended and Restated Completion Guaranty (MGM MIRAGE) dated as of April 29, 2009, as heretofore amended and restated by the Second Amended and Restated Sponsor Completion Guarantee, dated as of January 13, 2011, executed by Borrower and Bank of America (in its capacity as Collateral

 

2

 

Agent under the Collateral Agent and Intercreditor Agreement referred to in the CityCenter Credit Agreement) in favor of U.S. Bank, National Association, in its capacity as First Lien Collateral Trustee and Second Lien Collateral Trustee, as at any time hereafter amended or replaced.

 

“Amendment No. 1 and Restatement Agreement” means the Amendment No. 1 and Restatement Agreement, of even date herewith executed by Borrower, Detroit and the Administrative Agent, acting at the direction of the Requisite Lenders.

 

“Applicable Rates” means:

 

(a)           as to the interest rates payable in respect of each Class A-1 Loan, Class B Loan and Class D Loan, (i) a LIBOR Margin of 5.00%, and (ii) a Base Rate Margin of 4.00%;

 

(b)           as to Standby Letter of Credit Fees payable to Class A-1 Lenders, 5.00%;

 

(c)           as to Unused Fees payable to the Class A-1 Lenders  in respect of the unfunded Class A Funding Requirements, 0.30%;

 

(d)           as of each date of determination, and as to the interest rates payable in respect of each Class A-2 Loan, Class C Loan and Class E Loan and Standby Letter of Credit Fees and Unused Fees payable to the Class A-2 Lenders, (i) from the Effective Date to the date that is the later of (x) 45 days after the Effective Date and (y) the first date on which Borrower shall have delivered a Collateral Coverage Certificate to the Administrative Agent pursuant to Section 7.3(a), at the rates set forth below opposite the Extension Collateral Coverage Ratio captioned “Less than or equal to 35%” and (ii) thereafter, at the rates set forth below opposite the Extension Collateral Coverage Ratio then in effect:

 

	
Extension Collateral 
   Coverage Ratio
    	
 
    	
LIBOR Margin and 
   Standby Letter of 
   Credit Fee Rate
    	
 
    	
Base Rate 
   Margin
    	
 
    	
Unused Fee 
   Rate
    	
 
    
	
Less   than or equal to 35%
    	
 
    	
5.00
    	
%
    	
4.00
    	
%
    	
0.300
    	
%
    
	
Greater than 35%, but less than or equal to 50%
    	
 
    	
4.50
    	
%
    	
3.50
    	
%
    	
0.275
    	
%
    
	
Greater than 50%, but less than or equal to 75%
    	
 
    	
4.00
    	
%
    	
3.00
    	
%
    	
0.250
    	
%
    
	
Greater than 75%, but less than or equal to 100%
    	
 
    	
3.25
    	
%
    	
2.25
    	
%
    	
0.225
    	
%
    
	
Greater   than 100%
    	
 
    	
2.50
    	
%
    	
1.50
    	
%
    	
0.200
    	
%
    

 

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“Applicable Time” means, with respect to any borrowings and payments in any Alternative Currency, the local time in the place of settlement for such Alternative Currency as may be determined by the Issuing Lender, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

 

“Approved Fund” means any Fund 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.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an Assignment and Assumption agreement substantially in the form of Exhibit A.

 

“Assumption Agreement” means each Assumption Agreement hereafter executed by a Co-Borrower pursuant to Section 2.7, substantially in the form of Exhibit B either as originally executed or as the same may from time to time be supplemented, modified, amended, renewed, extended or supplanted.

 

“Attorney Costs” means the reasonable fees, expenses and disbursements of any law firm or other external counsel to the Administrative Agent (or, pursuant to subsection (a)(ii) of Section 11.3, of any law firm or other external counsel to any Lender).

 

“Bank of America” means Bank of America, N.A., its successors and assigns.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1⁄2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate”; provided, that the Base Rate in respect of Non-Extended Loans shall in no event be less than 4.00% and the Base Rate in respect of Extended Loans shall in no event be less than 2.00% per annum at any time.  The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such announced rate.  Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“Base Rate Advance” means an Advance made hereunder and specified to be a Base Rate Advance in accordance with Article 2.

 

“Base Rate Loan” means a Loan made hereunder and specified to be a Base Rate Loan in accordance with Article 2.

 

“Base Rate Margin” means the applicable per annum percentage set forth in the definition of “Applicable Rates.”

 

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“Beau Rivage Collateral” means the permanently moored riverboat casino, and related real and personal property comprising the riverboat, hotel and casino in Biloxi, Mississippi commonly known as the Beau Rivage Hotel.

 

“Borgata Property” has the meaning set forth in Section 6.9(h).

 

“Borgata Settlement Agreement” means the Stipulation of Settlement dated as of March 16, 2010, between Borrower and the New Jersey Division of Gaming Enforcement, as amended by an Amendment No. 1 dated as of July 22, 2011, and as at any time further amended or modified.

 

“Borgata Trustee” means trustee of the disposition trust established pursuant to the Borgata Settlement Agreement, including any successor trustees thereunder.

 

“Borrower” means MGM Resorts International, a Delaware corporation, its successors and permitted assigns.

 

“Borrower Group EBITDA” means, for any fiscal period, the EBITDA of Borrower and its Restricted Subsidiaries for that fiscal period plus, without duplication, the aggregate amount of any cash dividends or other distributions received by Borrower and its Restricted Subsidiaries from Persons other than Restricted Subsidiaries.  In determining Borrower Group EBITDA for any period, the results of operations of each Person which is not a Subsidiary of Borrower shall be adjusted to exclude all non-recurring and/or non-cash expenses (other than depreciation and amortization, except with respect to depreciation and amortization related to CityCenter) to the extent deducted in arriving at Net Income for that period.

 

“Borrower Materials” has the meaning specified in Section 7.1.

 

“Borrowing” means a borrowing consisting of simultaneous Advances of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period, made by each of the Lenders pursuant to Section 2.1.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in the State of New York or the state where the Administrative Agent’s Office is located and, if such day relates to any LIBOR Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar Market.

 

“Capital Expenditures” means with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding (a) normal replacements and maintenance which are properly charged to current operations and (b) replacements and maintenance of assets damaged as the result of any casualty or other emergency).

 

“Capital Lease Obligations” means the amount, recorded in accordance with GAAP, of the monetary obligations of a Person under any leasing or similar arrangement that is classified as a capital lease in accordance with GAAP.

 

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“Cash” means, when used in connection with any Person, all monetary and non-monetary items owned by that Person that are treated as cash in accordance with GAAP, consistently applied.

 

“Cash Collateralize” has the meaning specified in Section 2.6(g).

 

“Cash Equivalents” means, when used in connection with any Person, that Person’s Investments in:

 

(a)           Government Securities due within one year after the date of the making of the Investment;

 

(b)           readily marketable direct obligations of any State of the United States of America or any political subdivision of any such State or any public agency or instrumentality thereof given on the date of such Investment a credit rating of at least Aa by Moody’s or AA by S&P in each case due within one year from the making of the Investment;

 

(c)           certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers’ acceptances of, and repurchase agreements covering Government Securities executed by any Bank or by any bank incorporated under the Laws of the United States of America, any State thereof or the District of Columbia and having on the date of such Investment combined capital, surplus and undivided profits of at least $250,000,000, or total assets of at least $5,000,000,000, in each case due within one year after the date of the making of the Investment;

 

(d)           certificates of deposit issued by, bank deposits in, eurodollar deposits through, bankers’ acceptances of, and repurchase agreements covering Government Securities executed by any branch or office located in the United States of America of a bank incorporated under the Laws of any jurisdiction outside the United States of America having on the date of such Investment combined capital, surplus and undivided profits of at least $500,000,000, or total assets of at least $15,000,000,000, in each case due within one year after the date of the making of the Investment;

 

(e)           repurchase agreements covering Government Securities executed by a broker or dealer registered under Section 15(b) of the Securities Exchange Act of 1934, as amended, having on the date of the Investment capital of at least $50,000,000, due within 90 days after the date of the making of the Investment; provided that the maker of the Investment receives written confirmation of the transfer to it of record ownership of the Government Securities on the books of a “primary dealer” in such Government Securities or on the books of such registered broker or dealer, as soon as practicable after the making of the Investment;

 

(f)            readily marketable commercial paper or other debt securities issued by corporations doing business in and incorporated under the Laws of the United States of America or any State thereof or of any corporation that is the holding company for a bank described in clause (c) or (d) above given on the date of such Investment a credit rating of at least P-1 by Moody’s or A-1 by S&P, in each case due within one year after the date of the making of the Investment;

 

6

 

(g)           “money market preferred stock” issued by a corporation incorporated under the Laws of the United States of America or any State thereof (i) given on the date of such Investment a credit rating of at least Aa by Moody’s Investors Service, Inc.  and AA by S&P, in each case having an investment period not exceeding 50 days or (ii) to the extent that investors therein have the benefit of a standby letter of credit issued by a Lender or a bank described in clauses (c) or (d) above;

 

(h)           a readily redeemable “money market mutual fund” sponsored by a bank described in clause (c) or (d) hereof, or a registered broker or dealer described in clause (e) hereof, that has and maintains an investment policy limiting its investments primarily to instruments of the types described in clauses (a) through (g) hereof and given on the date of such Investment a credit rating of at least Aa by Moody’s and AA by S&P; and

 

(i)            corporate notes or bonds having an original term to maturity of not more than one year issued by a corporation incorporated under the Laws of the United States of America or any State thereof, or a participation interest therein; provided that any commercial paper issued by such corporation is given on the date of such Investment a credit rating of at least Aa by Moody’s and AA by S&P.

 

“Change in Control” means (a) any transaction or series of related transactions in which any Unrelated Person or two or more Unrelated Persons acting in concert acquire beneficial ownership (within the meaning of Rule 13d-3(a)(1) under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 35% or more of the outstanding common stock of Borrower or (b) during any period of 24 consecutive months, individuals who at the beginning of such period constituted the board of directors of Borrower (together with any new or replacement directors whose election by the board of directors, or whose nomination for election, was approved by a vote of at least a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for reelection was previously so approved) cease for any reason to constitute a majority of the directors then in office.

 

“CityCenter” means the real estate development of that name owned by CityCenter Holdings and its Subsidiaries in Las Vegas, Nevada.

 

“CityCenter Credit Agreement” means the Amended and Restated Credit Agreement, dated as of January 13, 2011, among CityCenter Holdings, the lenders from time to time party thereto, and Bank of America, N.A. as Administrative Agent, as amended, supplemented, amended and restated or otherwise modified from time to time and in any event including any term or revolving senior credit facility which refinances or replaces such Amended and Restated Credit Agreement (or any further amendment and restatement thereof).

 

“CityCenter Holdings” means CityCenter Holdings, LLC, a Delaware limited liability company, and its successors.

 

7

 

“Class” means, when used in a generic sense, the then outstanding Obligations under the various classes of the Loans and Obligations created under Section 2.1.

 

“Class A Funding Requirement” means, as to each Class A Lender, its obligation to (a) make Class A Loans to Borrower pursuant to Section 2.2(a), (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in each case in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.1 under the caption “Class A Funding Requirement” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“Class A Lender” means each Lender having a Class A Funding Requirement when acting in that capacity.

 

“Class A Loans” means, collectively, the Class A-1 Loans and the Class A-2 Loans.

 

“Class A Percentage” means, as to each Lender, a percentage equal to its Class A Funding Requirement divided by the Aggregate Class A Funding Requirements.

 

“Class A Revolving Obligations” means, collectively the Class A-1 Loans, the Class A-2 Loans, the Letters of Credit and the Swing Line Loans.

 

“Class A-1 Lender” means each Lender that has a Class A Funding Requirement and holds Class A-1 Loans, when acting in that capacity.

 

“Class A-1 Loan” means each Loan made by a Class A-1 Lender pursuant to Section 2.2(a).

 

“Class A-1 Note” means a promissory note made by Borrower and Detroit in favor of a Lender evidencing Class A-1 Loans made by that Lender, substantially in the form of Exhibit C-1.

 

“Class A-1 Obligations” means, as of each date of determination, then outstanding Obligations owed to the Class A-1 Lenders, including the Class A-1 Loans, and the risk participations held by the Class A-1 Lenders in any then outstanding Letters of Credit and Swing Line Loans.

 

“Class A-2 Lender” means each Lender that that has a Class A Funding Requirement and holds Class A-2 Loans, when acting in that capacity.

 

“Class A-2 Loan” means each Loan made by a Class A-2 Lender pursuant to Section 2.2(a).

 

“Class A-2 Note” means a promissory note made by Borrower and Detroit in favor of a Lender evidencing Class A-2 Loans made by that Lender, substantially in the form of Exhibit C-2.

 

8

 

“Class A-2 Obligations” means, as of each date of determination, then outstanding Obligations owed to the Class A-2 Lenders, including the Class A-2 Loans, and the risk participations held by the Class A-2 Lenders in any then outstanding Letters of Credit and Swing Line Loans.

 

“Class B Lender” means each Lender that holds a Class B Loan, when acting in that capacity.

 

“Class B Loan” means the portion of the Old Class A Loans retranched as such pursuant to the Amendment No. 1 and Restatement Agreement, and treated as non-revolving loans hereunder.

 

“Class B Note” means a promissory note made by Borrower in favor of a Class B Lender evidencing Class B Loans made by that Lender, substantially in the form of Exhibit C-3.

 

“Class C Lender” means each Lender that holds a Class C Loan, when acting in that capacity.

 

“Class C Loan” means the portion of the Old Class A Loans retranched as such pursuant to the Amendment No. 1 and Restatement Agreement, and treated as non-revolving loans hereunder.

 

“Class C Note” means a promissory note made by Borrower in favor of a Class C Lender evidencing Class C Loans made by that Lender, substantially in the form of Exhibit C-4.

 

“Class D Lender” means each Lender that holds a Class D Loans, when acting in that capacity.

 

“Class D Loan” means the portion of the Old Class E Loans retranched as such pursuant to the Amendment No. 1 and Restatement Agreement.  The Class D Loans are term loans.

 

“Class D Note” means a promissory note made by Borrower in favor of a Class D Lender evidencing Class D Loans made by that Lender, substantially in the form of Exhibit C-5.

 

“Class E Lender” means each Lender that holds a Class E Loans, when acting in that capacity

 

“Class E Loan” means the portion of the Old Class E Loans retranched as such pursuant to the Amendment No. 1 and Restatement Agreement.  The Class E Loans are term loans.

 

“Class E Note” means a promissory note made by Borrower in favor of a Class E Lender evidencing Class E Loans made by that Lender, substantially in the form of Exhibit C-6.

 

“Co-Borrowers” means, collectively, Detroit and each other Guarantor which is hereafter designated as a Co-Borrower pursuant to Section 2.7.

 

“Code” means the Internal Revenue Code of 1986, as amended or replaced and as in effect from time to time.

 

9

 

“Collateral” means, collectively, the Detroit Collateral, the Mandalay Collateral, the Goldstrike Tunica Collateral and any other property (including the Beau Rivage Collateral) which is hereafter subject to the Liens of the Collateral Documents.

 

“Collateral Coverage Certificate”  means a Collateral Coverage Certificate, substantially in the form of Exhibit D, properly completed and signed by a Senior Officer of Borrower.

 

“Collateral Documents” means, collectively, each deed of trust, trust deed, deed to secured debt, mortgage, leasehold mortgage, leasehold deed of trust, first preferred ship mortgage, security agreement, intellectual property security agreement and other security and pledge agreement delivered to the Administrative Agent pursuant to the Existing Loan Agreement or hereafter delivered in connection with this Agreement, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Lenders or the Extending Lenders, as applicable.

 

“Commercial Letter of Credit” means each Letter of Credit issued to support the purchase of goods by Borrower or any Co-Borrower which is determined to be a commercial letter of credit by the Issuing Lender.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Commitments” means the Revolving Commitment and the Term Commitment.

 

“Compliance Certificate” means a certificate substantially in the form of Exhibit E, properly completed and signed by a Senior Officer of Borrower and each Co-Borrower.

 

“Contractual Obligation” means, as to any Person, any provision of any outstanding security issued by that Person or of any material agreement, instrument or undertaking to which that Person is a party or by which it or any of its Property is bound.

 

“Convertible Debt” means any Permitted Public Indebtedness of Borrower that is convertible into or exchangeable for Equity Interests of Borrower and that may be guaranteed by Borrower’s Restricted Subsidiaries.

 

“Creditors” means, collectively, the Administrative Agent, the Issuing Lender, the Swing Line Lenders, each Lender and, where the context requires, any one or more of them.

 

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, as amended from time to time, and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws from time to time in effect affecting the rights of creditors generally.

 

“Default” means any event that, with the giving of any applicable notice or passage of time specified in Section 9.1, or both, would be an Event of Default.

 

“Default Rate” means the interest rate prescribed in Section 3.8.

 

10

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within three Business Days of the date required to be funded by it hereunder unless (in the case of any such failure to fund any portion of the Loans) such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, (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 three Business Days of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

 

“Deposit Account” means separate accounts located at Bank of America as to Borrower and each Co-Borrower designated by Borrower or such Co-Borrower with the reasonable approval of the Administrative Agent.

 

“Designated Market” means, with respect to any LIBOR Loan, (a) the London Eurodollar Market, (b) if prime banks in the London Eurodollar Market are at the relevant time not accepting deposits of Dollars or if the Administrative Agent determines in good faith that the London Eurodollar Market does not represent at the relevant time the effective pricing to the Lenders for deposits of Dollars in the London Eurodollar Market, the Cayman Islands Eurodollar Market or (c) if prime banks in the Cayman Islands Eurodollar Market are at the relevant time not accepting deposits of Dollars or if the Administrative Agent determines in good faith that the Cayman Islands Eurodollar Market does not represent at the relevant time the effective pricing to the Lenders for deposits of Dollars in the Cayman Islands Eurodollar Market, such other Eurodollar Market as may from time to time be selected by the Administrative Agent with the approval of Borrower, the Co-Borrowers and the Requisite Lenders.  The Administrative Agent will endeavor to provide prompt notice to Borrower and the Co-Borrowers of any change in the location of the Designated Market.

 

“Detroit” means MGM Grand Detroit, LLC, a Delaware limited liability company, its successors and permitted assigns.

 

“Detroit Collateral” means all of Detroit’s right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of Detroit with respect to MGM Grand Detroit Hotel and Casino, including the Collateral described on Annex A.

 

“Detroit Disposition Prepayment Amount” means such amount set forth in Schedule 1.1.

 

11

 

“Detroit Loans” mean any Loans pursuant to which Detroit is obligated as a Co-Borrower.

 

“Detroit Orders” means the Order Approving Debt Transactions of MGM Grand Detroit, LLC, issued by the Michigan Gaming Control Board on October 14, 2003 as their file number MGM-2003-03, as at any time amended.

 

“Disclosure Schedule” means the Disclosure Schedule attached to this Agreement as Schedule 4.0.

 

“Disposition” or “Dispose” means the sale, transfer or other disposition by Borrower or any Restricted Subsidiary, in one transaction or any series of related transactions, of any asset.

 

“Disqualification” means, with respect to any Creditor:

 

(a)           the failure of that Person timely to file pursuant to applicable Gaming Laws (i) any application requested of that Person by any Gaming Board in connection with any licensing required of that Person as a lender to Borrower or a Co-Borrower or (ii) any required application or other papers in connection with determination of the suitability of that Person as a lender to Borrower or a Co-Borrower;

 

(b)           the withdrawal by that Person (except where requested or permitted by the Gaming Board) of any such application or other required papers; or

 

(c)           any final determination by a Gaming Board pursuant to applicable Gaming Laws (i) that such Person is “unsuitable” as a lender to Borrower or a Co-Borrower, (ii) that such Person shall be “disqualified” as a lender to Borrower or a Co-Borrower or (iii) denying the issuance to that Person of any license required under applicable Gaming Laws to be held by all lenders to Borrower or any Co-Borrower.

 

“Distribution” means, with respect to any shares of capital stock or any warrant or option to purchase an equity security or other equity security issued by a Person, (a) the retirement, redemption, purchase or other acquisition for Cash or for Property (other than capital stock, or any warrants or options to purchase an equity security or other security of such Person) by such Person of any such security, (b) the declaration or (without duplication) payment by such Person of any dividend in Cash or in Property (other than capital stock, or any warrants or options to purchase an equity security or other security of such Person) on or with respect to any such security, (c) any Investment by such Person in the holder of 5% or more of any such security if a purpose of such Investment is to avoid characterization of the transaction as a Distribution and (d) any other payment in Cash or Property (other than capital stock, or any warrants or options to purchase an equity security or other security of such Person) by such Person constituting a distribution under applicable Laws with respect to such security.

 

“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative Currency.

 

12

 

“Dollars” or “$” means United States dollars.

 

“EBITDA” means, with respect to any fiscal period and with respect to any Person, the sum of (a) Net Income of such Person for that period, plus (b) any extraordinary loss reflected in such Net Income, and, without duplication, any loss associated with the early retirement of Indebtedness and with any Disposition not in the ordinary course of business, minus (c) any extraordinary gain reflected in such Net Income, and, without duplication, any gains associated with the early retirement of Indebtedness and with any Disposition not in the ordinary course of business, plus (d) Interest Charges of such Person for that period, plus (e) the aggregate amount of federal, state and local taxes on or measured by income of such Person for that period (whether or not payable during that period) plus (f) depreciation, amortization and all non-recurring and/or other non-cash expenses to the extent deducted in arriving at Net Income for that period, plus (g) expenses classified as “pre-opening and start-up expenses” on the applicable financial statements of that Person for that fiscal period, plus (h) minority interest, in each case as determined in accordance with GAAP.

 

“Effective Date” means the date upon which this Agreement becomes effective pursuant to the Amendment No. 1 and Restatement Agreement.

 

“Eligible Assignee” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, (ii) unless an Event of Default has occurred and is continuing, Borrower (each such approval not to be unreasonably withheld or delayed) (provided that notwithstanding the foregoing, each “Eligible Assignee” (A) shall not be Borrower or any of Borrower’s Affiliates or Subsidiaries and (B) shall be exempt from withholding of tax on interest and shall deliver the documents related thereto pursuant to Section 11.21) and (iii) to the extent required under applicable Gaming Laws, shall not be the subject of a Disqualification.

 

“EMU” means the economic and monetary union in accordance with the Treaty of Rome 1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992 and the Amsterdam Treaty of 1998.

 

“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

 

“Enhanced LIBOR Margin” means, for any period, the sum of (i) the LIBOR Margin then in effect plus (ii) such interest rate margin as the Requisite Lenders specify is necessary to adjust LIBOR to a rate which represents the effective pricing to such Lenders for deposits of Dollars in the Designated Market in the relevant amount for the applicable Interest Period and which adequately and fairly reflects the cost to such Lenders of making the applicable LIBOR Advances.

 

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit

 

13

 

interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and any regulations issued pursuant thereto, as amended or replaced and as in effect from time to time.

 

“ERISA Affiliate” means, with respect to any Person, any other Person (or any trade or business, whether or not incorporated) that is under common control with that Person within the meaning of Section 414 of the Code.

 

“Euro” and “EUR” mean the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

 

“Eurodollar Market” means a regular established market located outside the United States of America by and among banks for the solicitation, offer and acceptance of Dollar deposits in such banks.

 

“Event of Default” shall have the meaning provided in Section 9.1.

 

“Existing Letters of Credit” means the letters of credit issued under the Existing Loan Agreement and outstanding as of the Effective Date.

 

“Existing Loan Agreement” means the Sixth Amended and Restated Loan Agreement dated as of March 16, 2010, among Borrower, Detroit, as Co-Borrower, the lenders referred to therein, and the Administrative Agent, as heretofore amended.

 

“Existing Maturity Date” means February 21, 2014.

 

“Existing Secured Notes” means, collectively, the senior secured notes of Borrower existing as of the Effective Date, and identified in Borrower’s public filings with the Commission as of the Effective Date.

 

“Existing Subordinated Obligations” means, collectively the $150,000,000 Senior Subordinated Notes of Mandalay issued pursuant to the Indenture dated July 21, 1993 between Mandalay (under its former name, Circus Circus Enterprises, Inc.) and First Interstate Bank of Nevada, N.A.  (to which Bank of New York Mellon Trust Company, N.A., is now successor in interest), as Trustee.

 

“Extended Loans” means, collectively, the Class A-2 Loans, the Class C Loans and the Class E Loans.

 

“Extended Maturity Date” means February 23, 2015.

 

“Extension Collateral” means any assets of Borrower and the Restricted Subsidiaries (including the Beau Rivage Collateral if and to the extent that Collateral Documents in respect of such Collateral have been executed) which are subject to a Lien acceptable to the Administrative Agent to secure the Extension Obligations.

 

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“Extension Collateral Coverage Ratio” means, as of each date of determination, the ratio of:

 

(a)           the Extension Obligations Collateral Allocation on that date; to

 

(b)           the aggregate amount of the Extension Obligations as of that date, for this purpose treating the Class A Funding Requirements held by the Extending Lenders as fully outstanding.

 

“Extension Obligations” means, collectively, (a) that portion of the Class A Funding Requirements held by Extending Lenders, and (b) the Class C Loans and Class E Loans.

 

“Extension Obligations Collateral Allocation” means, as of each date of determination, the sum of:

 

(a)           The product of (i) the aggregate principal amount of the Indebtedness hereunder which is secured by Liens on the Detroit Collateral, the Goldstrike Tunica Collateral and the Mandalay Collateral as of that date, times (ii) the Extension Ratio as of that date; plus

 

(b)           The aggregate principal amount of the Extension Obligations which are secured by the Extension Collateral as of that date.

 

“Extension Ratio” means, as of each date of determination the ratio of (a) the Extension Obligations, to (b) the  aggregate Obligations, in each cast treating the Class A Funding Requirements as fully outstanding.

 

“Extending Lender” means each Lender that, as of the Effective Date, holds Class A-2 Loans, Class C Loans or Class E Loans under this Agreement, when acting in the related capacity.

 

“FATCA” has the meaning set forth for that term in Section 3.11(d).

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

 

“Fiscal Quarter” means the fiscal quarter of Borrower consisting, subject to Section 1.3, of the three calendar month periods ending on each March 31, June 30, September 30 and December 31.

 

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“Fiscal Year” means the fiscal year of Borrower consisting, subject to Section 1.3, of the twelve-month period ending on each December 31.

 

“Foreign Lender” has the meaning specified in Section 11.21(a)(i).

 

“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means, generally accepted accounting principles in the United States set forth in the Financial Accounting Standards Board’s “Accounting Standards Codification” as may be amended from time to time.  The term “consistently applied,” as used in connection therewith, means that the accounting principles applied are consistent in all material respects with those applied at prior dates or for prior periods.

 

“Gaming Board” means each Governmental Agency (including Governmental Agencies associated with foreign governments) to the extent that such Governmental Agency holds, as of the relevant date, regulatory, licensing or permit authority over gambling, gaming or casino activities conducted by Borrower, any Co-Borrower or any Restricted Subsidiary within its jurisdiction.

 

“Gaming Laws” mean all Laws pursuant to which any Gaming Board possesses regulatory, licensing or permit authority over gambling, gaming or casino activities conducted by Borrower and its Subsidiaries within its jurisdiction, in each case to the extent applicable to Borrower and its Restricted Subsidiaries.

 

“Goldstrike Tunica Collateral” means the real and personal property comprising the hotel and casino in Tunica, Mississippi commonly known as the Gold Strike Resort and Casino described on Annex C.

 

“Government Securities” means readily marketable (a) direct full faith and credit obligations of the United States of America or obligations guaranteed by the full faith and credit of the United States of America and (b) obligations of an agency or instrumentality of, or corporation owned, controlled or sponsored by, the United States of America that are generally considered in the securities industry to be implicit obligations of the United States of America.

 

“Governmental Agency” means (a) any international, foreign, federal, state, county or municipal government, or political subdivision thereof, (b) any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality or public body or (c) any court or administrative tribunal of competent jurisdiction.

 

“Granting Lender” has the meaning set forth in Section 11.8(h).

 

“Guarantors” means, collectively, each Restricted Subsidiary of Borrower that exists as of the Effective Date, other than Detroit, and each other Restricted Subsidiary of Borrower which hereafter becomes a Guarantor pursuant to Section 5.8, provided that any Guarantor which is sold or otherwise transferred in a Disposition may be released from the Guaranty in accordance with this Agreement.

 

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“Guaranty” means each of the continuing guaranties of the Obligations executed and delivered by the Guarantors pursuant to the Existing Loan Agreement, the terms of which have been reaffirmed on the Effective Date.

 

“Guaranty Obligation” means, as to any Person (without duplication), any (a) guarantee by that Person of Indebtedness of, or other obligation performable by, any other Person or (b) assurance given by that Person to an obligee of any other Person with respect to the performance of an obligation by, or the financial condition of, such other Person, whether direct, indirect or contingent, including any purchase or repurchase agreement covering such obligation or any collateral security therefor, any agreement to provide funds (by means of loans, capital contributions or otherwise) to such other Person, any agreement to support the solvency or level of any balance sheet or income statement item of such other Person or any “keep-well” or other arrangement of whatever nature given for the purpose of assuring or holding harmless such obligee against loss with respect to any obligation of such other Person; provided, however, that the term Guaranty Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business.

 

“Harmon Guarantee” means any remaining obligation of Borrower or any of its Restricted Subsidiaries, as contemplated in the Amended and Restated Limited Liability Company Agreement of CityCenter Holdings, LLC, to provide, and fund if necessary, any completion guarantee with respect to the Harmon Component (as defined in the CityCenter Credit Agreement), as such obligation may be subsequently documented under one or more completion guarantees or other similar instruments.

 

“Hazardous Materials” means substances defined as “hazardous substances” pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.  § 9601, et seq., or as “hazardous”, “toxic” or “pollutant” substances or as “solid waste” pursuant to the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.  § 6901, et seq., or as “friable asbestos” pursuant to the Toxic Substances Control Act, 15 U.S.C.  § 2601, et seq., in each case as such Laws are amended from time to time.

 

“Hazardous Materials Laws” mean all Laws governing the treatment, transportation or disposal of Hazardous Materials applicable to any of the Real Property.

 

“Honor Date” has the meaning set forth for that term in Section 2.6(c)(i).

 

“Impacted Lender” means (a) a Defaulting Lender or (b) a Lender as to which (i) the Issuing Lender has a good faith belief that such Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities or (ii) an entity that controls such Lender has been deemed insolvent or become subject to a proceeding under any Debtor Relief Law.

 

“Increasing Lender” means one or more institutional lenders who agree to participate in the Par Assignment (as defined in the Amendment No. 1 and Restatement Agreement).

 

“Indebtedness” means, as to any Person (without duplication), (a) indebtedness of such Person for borrowed money or for the deferred purchase price of Property (excluding trade and other accounts payable in the ordinary course of business in accordance with ordinary trade

 

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terms), including any Guaranty Obligation for any such indebtedness, (b) indebtedness of such Person of the nature described in clause (a) that is non-recourse to the credit of such Person but is secured by assets of such Person, to the extent of the value of such assets, (c) Capital Lease Obligations of such Person, (d) indebtedness of such Person arising under bankers’ acceptance facilities or under facilities for the discount of accounts receivable of such Person, (e) any direct or contingent obligations of such Person under letters of credit issued for the account of such Person, and (f) any net obligations of such Person under Swap Agreements in respect of interest rate hedging arrangements.

 

“Indemnified Liabilities” has the meaning set forth in Section 11.11.

 

“Indemnitees” has the meaning set forth in Section 11.11.

 

“Insurance Subsidiaries” means, collectively, (a) MGMM Insurance Company, a Nevada corporation,, (b) M3 Nevada Insurance Company, a Nevada corporation,  and (c) any other  Subsidiaries of the foregoing formed for the purpose of facilitating and providing insurance coverage and claims services for Borrower, Co-Borrowers and their Subsidiaries.

 

“Interest Charges” means, for any Person, as of the last day of any fiscal period, the sum of (a) all interest, fees, charges and related expenses paid or payable (without duplication) for that fiscal period by that Person to a lender in connection with borrowed money (including any obligations for fees, charges and related expenses payable to the issuer of any letter of credit) or the deferred purchase price of assets that are considered “interest expense” under GAAP, plus (b) the portion of rent paid or payable (without duplication) for that fiscal period by that Person under Capital Lease Obligations that should be treated as interest in accordance with Financial Accounting Standards Board Statement No. 13.

 

“Interest Differential” means, with respect to any prepayment of a LIBOR Loan on a day other than the last day of the applicable Interest Period and with respect to any failure to borrow a LIBOR Loan on the date or in the amount specified in any Request for Loan, (a) LIBOR payable (or, with respect to a failure to borrow, LIBOR which would have been payable) with respect to the LIBOR Loan minus (b) LIBOR on, or as near as practicable to, the date of the prepayment or failure to borrow for a LIBOR Loan with an Interest Period commencing on such date and ending on the last day of the Interest Period of the LIBOR Loan so prepaid or which would have been borrowed on such date.

 

“Interest Period” means, as to each LIBOR Loan, a period of one week, or of 1, 2, 3, 6 or 9 months (or, to the extent not promptly objected to by any Lender following notice thereof by the Administrative Agent, any other period) as designated by Borrower; provided that (a) the first day of each Interest Period must be a Business Day, (b) any Interest Period that would otherwise end on a day that 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 the Interest Period shall end on the next preceding Business Day, (c) no Interest Period may extend beyond the Existing Maturity Date until the Takeout Date, and (d) following the Takeout Date, no Interest Period in respect of the Extended Loans may extend beyond the Extended Maturity Date.

 

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“Interim Maturities” means, (a) as of each date prior to the Takeout Date, (i) any Indebtedness of Borrower and its Restricted Subsidiaries under their public indentures which matures prior to the Existing Maturity Date and (ii) the Non-Extended Loans, and (b) as of each later date, any of the Indebtedness of Borrower and its Restricted Subsidiaries under their public indentures which matures prior to the Extended Maturity Date.

 

“Investment” means, when used in connection with any Person, any investment by or of that Person, whether by means of (a) purchase or other acquisition of stock or other securities of any other Person, (b) a loan, advance creating a debt, capital contribution, guaranty or other debt or equity participation or interest in any other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit, in each case including any partnership and joint venture interests of such Person.  The amount of any Investment shall be the amount actually invested (minus any return of capital with respect to such Investment which has actually been received in Cash or Cash Equivalents or has been converted into Cash or Cash Equivalents), without adjustment for subsequent increases or decreases in the value of such Investment.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application and any other document, agreement or instrument entered into by Borrower (or any Subsidiary), and the Issuing Lender or in favor of the Issuing Lender and relating to any such Letter of Credit.

 

“Issuing Lender” means Bank of America in its capacity as an issuer of Letters of Credit hereunder.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Class A Funding Requirement.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under a Letter of Credit which has not been reimbursed on the date when made or refinanced as a Loan.

 

“L/C Obligations” means, as at any date of determination, the Dollar Equivalent of the aggregate amount available to be drawn under all outstanding Letters of Credit plus the Dollar Equivalent of the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.7.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents.

 

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“Lead Arrangers” means the Persons identified as such on the cover page to this Agreement.

 

“Lender” means each “Lender” (as defined in the Existing Loan Agreement) and each lender which may hereafter become a party to this Agreement pursuant to Section 11.8 (and, to the extent party to a Related Swap Agreement, any Affiliate of a Lender).

 

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify Borrower and the Administrative Agent.

 

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the Issuing Lender.

 

“Letter of Credit Expiration Date” means the day that is seven days prior to the Existing Maturity Date (or, following the Takeout Date, the Extended Maturity Date) or, if any such day is not a Business Day, the next preceding Business Day.

 

“Letter of Credit Usage” means, as of any date of determination, the Dollar Equivalent of the aggregate undrawn face amount of outstanding Letters of Credit plus the Dollar Equivalent of the aggregate amount of all Unreimbursed Amounts, including all L/C Borrowings.

 

“Letters of Credit” means any of the Standby Letters of Credit or Commercial Letters of Credit issued by the Issuing Lender pursuant to Section 2.4, including the Existing Letters of Credit, either as originally issued or as the same may be supplemented, modified, amended, renewed, extended or supplanted.

 

“LIBOR” means, for any Interest Period with respect to a LIBOR Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.  If such rate is not available at such time for any reason, then “LIBOR” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which Dollar deposits for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBOR Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period; provided, that LIBOR in respect of Non-Extended Loans shall in no event be less than 2.00% and LIBOR in respect of Extended Loans shall in no event be less than 1.00% per annum at any time.

 

“LIBOR Advance” means an Advance made hereunder and specified to be a LIBOR Advance in accordance with Article 2.

 

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“LIBOR Lending Office” means, as to each Lender, its office or branch so designated by written notice to Borrower and the Administrative Agent as its LIBOR Lending Office.  If no LIBOR Lending Office is designated by a Lender, its LIBOR Lending Office shall be its office at its address for purposes of notices hereunder.

 

“LIBOR Loan” means a Loan made hereunder and specified to be a LIBOR Loan in accordance with Article 2.

 

“LIBOR Margin” means the applicable per annum percentage set forth in the definition of “Applicable Rates.”

 

“License Revocation” means the revocation, failure to renew or suspension of, or the appointment of a receiver, supervisor or similar official with respect to, any casino, gambling or gaming license issued by any Gaming Board covering any casino or gaming facility.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance or lien of any kind, whether voluntarily incurred or arising by operation of Law or otherwise, affecting any Property, including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature of a security interest, and/or the filing of or agreement to give any financing statement (other  than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the Uniform Commercial Code or comparable Law of any jurisdiction with respect to any Property.

 

“Loan” means the aggregate of the Advances made at any one time by the Lenders pursuant to Article 2.

 

“Loan Documents” means, collectively, this Agreement, the Amendment No. 1 and Restatement Agreement, the Notes, the Swing Line Documents, the Guaranty, the Collateral Documents, each Request for Loan, each Letter of Credit Application, each Compliance Certificate, each Collateral Coverage Certificate, any Related Swap Agreement (it being understood that any such Related Swap Agreement may be amended solely by the parties thereto to the extent that such amendment does not conflict with the terms of this Agreement) and any other agreements of any type or nature hereafter executed and delivered by Borrower or any of its Restricted Subsidiaries to the Administrative Agent or to any Lender in any way relating to or in furtherance of this Agreement, in each case either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplanted.

 

“Loan Parties” means Borrower, Detroit and each Guarantor.

 

“Mandalay” means Mandalay Resort Group, a Nevada corporation, and its successors.

 

“Mandalay Collateral” means the undeveloped land owned by Mandalay or its subsidiaries on Las Vegas Boulevard South in Las Vegas, Nevada described on Annex B.

 

“Margin Stock” means “margin stock” as such term is defined in Regulations U and X of the Federal Reserve Board.

 

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“Material Adverse Effect” means any set of circumstances or events which (a) has or could reasonably be expected to have any material adverse effect whatsoever upon the validity or enforceability of any Loan Document, (b) is or could reasonably be expected to be material and adverse to the condition or prospects (financial or otherwise), assets, business or operations of Borrower and its Restricted Subsidiaries, taken as a whole (except for circumstances or events attributable to general economic conditions), or (c) materially impairs or could reasonably be expected to materially impair the ability of Borrower or Guarantors (taken as a whole) to perform the Obligations.

 

“MGM Grand Detroit II” means MGM Grand Detroit II, LLC, a Delaware limited liability company, and its successors.

 

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

 

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA to which Borrower or any of its ERISA Affiliates contribute or are obligated to contribute.

 

“Negative Pledge” means a Contractual Obligation that contains a covenant binding on Borrower or any of its Restricted Subsidiaries that prohibits Liens on any of its or their Property, other than (a) any such covenant contained in a Contractual Obligation granting a Lien permitted under Section 6.4 which affects only the Property that is the subject of such permitted Lien and (b) any such covenant that does not apply to Liens securing the Obligations or any indebtedness which is used, directly or indirectly, to refinance the Obligations.

 

“Net Cash Proceeds” means:

 

(a)           with respect to any Disposition of assets, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such transaction (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the reasonable and customary out-of-pocket expenses incurred in connection with such transaction and (B) income taxes reasonably estimated to be actually payable within two years of the date of the relevant transaction as a result of any gain recognized in connection therewith; provided that, if the amount of any estimated taxes pursuant to subclause (B) exceeds the amount of taxes actually required to be paid in cash in respect of such Disposition, the aggregate amount of such excess shall constitute Net Cash Proceeds; and

 

(b)           with respect to the sale or issuance of any Equity Interest by Borrower, or the incurrence or issuance of any Indebtedness by Borrower, the excess of (i) the sum of the cash and Cash Equivalents received in connection with such transaction over (ii) the underwriting discounts and commissions, and other reasonable and customary out-of-pocket costs and expenses, incurred by Borrower in connection therewith, including in the case of any issuance of Convertible Debt, the expenses associated with acquiring any derivative securities linked to Equity Interests underlying such Convertible Debt or similar products purchased by Borrower in connection therewith, or of any other similar Investments made in connection therewith in accordance with Section 6.8(l).

 

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“Net Income” means, with respect to any fiscal period and with respect to any Person, the net income of that Person from continuing operations for that period, determined in accordance with GAAP, consistently applied.

 

“Non-Control Subsidiaries” means each Subsidiary of Borrower in respect of which Borrower and its other Subsidiaries do not have the collective right to elect a majority of the board of directors or other equivalent governing body, or otherwise lack the power to direct the management of such Subsidiary which is identified as such by Borrower in a notice to the Administrative Agent.  Each Non-Control Subsidiary existing as of the Effective Date is listed on the Disclosure Schedule as such.

 

“Non-Extended Loans” means the Class A-1 Loans, the Class B Loans and the Class D Loans.

 

“Non-Extending Lender” means each Lender which is not an Extending Lender.

 

“Notes” means, collectively, the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes.

 

“Obligations” means all present and future obligations of every kind or nature of Borrower, the Co-Borrowers or the Guarantors at any time and from time to time owed to the Administrative Agent, the Issuing Lender, the Swing Line Lenders or the Lenders or any one or more of them, under any one or more of the Loan Documents, whether due or to become due, matured or unmatured, liquidated or unliquidated, or contingent or noncontingent, including obligations of performance as well as obligations of payment, and including interest that accrues after the commencement of any proceeding under any Debtor Relief Law by or against Borrower or a Restricted Subsidiary of Borrower, whether or not allowed as a claim in such proceeding.

 

“Old Class A Loans” means the “Class A Loans” referred to in the Existing Loan Agreement.  On the Effective Date, the Old Class A Loans have been re-tranched as Class A-1 Loans, Class A-2 Loans, Class B Loans and Class C Loans hereunder.

 

“Old Class C Loans” means the “Class C Loans” referred to in the Existing Loan Agreement.  On the Effective Date, the Old Class C Loans have been re-tranched as Class B Loans and Class C Loans hereunder.

 

“Old Class E Loans” means the “Class E Loans” referred to in the Existing Loan Agreement.  On the Effective Date, the Old Class E Loans have been re-tranched as Class D Loans and Class E Loans hereunder.

 

“Outstanding Obligations” means, as of each date of determination, and giving effect to the making of any such credit accommodations requested on that date, the sum, without duplication, of (i) the aggregate principal amount of the outstanding Loans, plus (ii) the Swing Line Outstandings, plus (iii) the Letter of Credit Usage.

 

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“Participating Member State” means each state so described in any EMU Legislation.

 

“Party” means any Person other than the Creditors which now or hereafter is a party to any of the Loan Documents.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other  than a Multiemployer Plan, which is subject to Title IV of ERISA and is maintained by Borrower or any of its Subsidiaries or to which Borrower or any of its Subsidiaries contributes or has an obligation to contribute.

 

“Permitted Encumbrances” means:

 

(a)           inchoate Liens incident to construction on or maintenance of Property; or Liens incident to construction on or maintenance of Property now or hereafter filed of record for which adequate reserves have been set aside (or deposits made pursuant to applicable Law) and which are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material risk of loss or forfeiture;

 

(b)           Liens for taxes and assessments on Property which are not yet past due; or Liens for taxes and assessments on Property for which adequate reserves have been set aside and are being contested in good faith by appropriate proceedings and have not proceeded to judgment, provided that, by reason of nonpayment of the obligations secured by such Liens, no such Property is subject to a material risk of loss or forfeiture;

 

(c)           minor defects and irregularities in title to any Property which in the aggregate do not materially impair the fair market value or use of the Property for the purposes for which it is or may reasonably be expected to be held;

 

(d)           easements, exceptions, reservations, or other agreements for the purpose of pipelines, conduits, cables, wire communication lines, power lines and substations, streets, trails, walkways, drainage, irrigation, water, and sewerage purposes, dikes, canals, ditches, the removal of oil, gas, coal, or other minerals, and other like purposes affecting Property, facilities, or equipment which in the aggregate do not materially burden or impair the fair market value or use of such Property for the purposes for which it is or may reasonably be expected to be held;

 

(e)           easements, exceptions, reservations, or other agreements for the purpose of facilitating the joint or common use of Property in or adjacent to a shopping center or similar project affecting Property which in the aggregate do not materially burden or impair the fair market value or use of such Property for the purposes for which it is or may reasonably be expected to be held;

 

(f)            rights reserved to or vested in any Governmental Agency to control or regulate, or obligations or duties to any Governmental Agency with respect to, the use of any Property;

 

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(g)           rights reserved to or vested in any Governmental Agency to control or regulate, or obligations or duties to any Governmental Agency with respect to, any right, power, franchise, grant, license, or permit;

 

(h)           present or future zoning laws and ordinances or other laws and ordinances restricting the occupancy, use, or enjoyment of Property;

 

(i)            statutory Liens, other than those described in clauses (a) or (b) above, arising in the ordinary course of business with respect to obligations which are not delinquent or are being contested in good faith, provided that, if delinquent, adequate reserves have been set aside with respect thereto and, by reason of nonpayment, no Property is subject to a material risk of loss or forfeiture;

 

(j)            covenants, conditions, and restrictions affecting the use of Property which in the aggregate do not materially impair the fair market value or use of the Property for the purposes for which it is or may reasonably be expected to be held;

 

(k)           rights of tenants under leases and rental agreements covering Property entered into in the ordinary course of business of the Person owning such Property;

 

(l)            Liens consisting of pledges or deposits to secure obligations under workers’ compensation laws or similar legislation, including Liens of judgments thereunder which are not currently dischargeable;

 

(m)          Liens consisting of pledges or deposits of Property to secure performance in connection with operating leases made in the ordinary course of business to which Borrower or a Restricted Subsidiary of Borrower is a party as lessee, provided the aggregate value of all such pledges and deposits in connection with any such lease does not at any time exceed 20% of the annual fixed rentals payable under such lease;

 

(n)           Liens consisting of deposits of Property to secure bids made with respect to, or performance of, contracts (other  than contracts creating or evidencing an extension of credit to the depositor);

 

(o)           Liens consisting of any right of offset, or statutory bankers’ lien, on bank deposit accounts maintained in the ordinary course of business so long as such bank deposit accounts are not established or maintained for the purpose of providing such right of offset or bankers’ lien;

 

(p)           Liens consisting of deposits of Property to secure statutory obligations of Borrower or a Restricted Subsidiary of Borrower;

 

(q)           Liens consisting of deposits of Property to secure (or in lieu of) surety, appeal or customs bonds in proceedings to which Borrower or a Restricted Subsidiary of Borrower is a party;

 

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(r)            Liens created by or resulting from any litigation or legal proceeding involving Borrower or a Restricted Subsidiary of Borrower in the ordinary course of its business which is currently being contested in good faith by appropriate proceedings, provided that adequate reserves have been set aside by Borrower or the relevant Restricted Subsidiary and no material Property is subject to a material risk of loss or forfeiture;

 

(s)           non-consensual Liens incurred in the ordinary course of business but not in connection with an extension of credit, which do not in the aggregate, when taken together with all other Liens, materially impair the value or use of the Property of Borrower and the Restricted Subsidiaries of Borrower, taken as a whole; and

 

(t)            Liens arising under applicable Gaming Laws.

 

“Permitted Public Indebtedness” means Indebtedness of Borrower which (i) has a maturity date not earlier than August 23, 2015 (other than such Indebtedness issued pursuant to the indenture governing Borrower’s 4.25% convertible senior notes, dated as of April 10, 2010, among Borrower, the Subsidiary Guarantors named therein and U.S. Bank National Association, as trustee, in which case such Indebtedness shall have a maturity date not earlier than the Extended Maturity Date), (ii) has covenants that are no more restrictive, taken as a whole, than those included in any senior secured public Indebtedness of Borrower or its Subsidiaries outstanding on the Amendment Effective Date and (iii) has no scheduled amortization payments prior to August 23, 2015.

 

“Person” means any individual or entity, including a trustee, corporation, limited liability company, general partnership, limited partnership, joint stock company, trust, estate, unincorporated organization, business association, firm, joint venture, Governmental Agency, or other entity.

 

“Platform” has the meaning specified in Section 7.1.

 

“Prior Loan Agreement” means the Fifth Amended and Restated Loan Agreement dated as of October 3, 2006 among Borrower, Detroit, the lenders referred to therein, and Bank of America, N.A., as Administrative Agent, as amended through the date of the Existing Loan Agreement.

 

“Pro Rata Share” means, with respect to each Lender, the percentage of the relevant Commitment and the Loans (and in the case of the Revolving Commitment, the Letters of Credit and the Swing Line Advances) held by that Lender (or by a SPC for which that Lender is the Granting Lender).  As of the Effective Date, the Pro Rata Shares of the Commitments held by each Lender are set forth on Schedule 2.1 hereto.  The percentage Pro Rata Shares of each Lender in the Commitments is subject to adjustment pursuant to any Assignment Agreement executed in accordance with Section 11.8.

 

“Projections” means the financial projections for Borrower and its Subsidiaries distributed to the Lenders by posting to the Platform on February 2, 2012.

 

“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

 

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“Public Lender” has the meaning specified in Section 7.1.

 

“Quarterly Payment Date” means the last Business Day of each December, March, June and September following the date of this Agreement.

 

“Real Property” means, as of any date of determination, all real Property then or theretofore owned, leased or occupied by Borrower or any of its Restricted Subsidiaries.

 

“Refinancing Indebtedness” has the meaning specified in Section 6.7(l).

 

“Regulations T, U and X” means Regulations T, U and X, as at any time amended, of the Board of Governors of the Federal Reserve System, or any other regulations in substance substituted therefor.

 

“Related Parties” means, 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.

 

“Related Swap Agreement” means any transaction consummated pursuant to a Swap Agreement between (a) Borrower and a Lender or (b) to the extent that such Person is an Affiliate of a Lender on the date of the consummation of the relevant transaction, between Borrower and any Person which is an Affiliate of a Lender.

 

“Request for Loan” means a written request for a Loan substantially in the form of Exhibit F, signed by a Responsible Official of Borrower or a Co-Borrower, on its behalf, and properly completed to provide all information required to be included therein.

 

“Required Payment” has the meaning set forth for that term in the Amendment No. 1 and Restatement Agreement.  The amount of the Required Payment shall be calculated by the Administrative Agent in accordance with the terms of the Amendment No. 1 and Restatement Agreement, which calculation shall be presumed correct in the absence of manifest error.

 

“Requirement of Law” means, as to any Person, the articles or certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any Law, or judgment, award, decree, writ or determination of a Governmental Agency, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

 

“Requisite Extending Lenders” means as of any date of determination Extending Lenders having Extension Obligations which represent, in the aggregate, a majority of the amount of Extension Obligations as in effect on such date; provided that the Extension Obligations held or deemed held by any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Extending Lenders.

 

“Requisite Lenders” means (a) as of any date of determination if the Commitments are then in effect, Lenders having Pro Rata Shares of the Commitments which are, in the aggregate, a majority of the Pro Rata Shares of the Commitments then in effect, and (b) as of any date of determination if the Commitments have then been terminated and there are then any Obligations

 

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outstanding, Lenders or other creditors holding a majority of the Outstanding Obligations; provided that the Pro Rata Shares of the Commitments of, and the portion of the Outstanding Obligations held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Requisite Lenders.

 

“Repricing Transaction” means, except in a transaction or series of related transactions which result in a Change in Control, (A) the repayment or refinancing of all or a portion of the Extended Loans with the proceeds of any Bank Financing (as defined below) having an effective interest cost or weighted average yield (with the comparative determinations to be made by Borrower in good faith consistent with generally accepted financial practices, after giving effect to, among other factors, margin, interest rate floors, upfront or similar fees or original issue discount shared with all providers of such financing, but excluding the effect of any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared with all providers of such financing, and without taking into account any fluctuations in the LIBOR Rate) that is less than the effective interest cost or weighted average yield (as determined by Borrower with the approval of the Administrative Agent on the same basis) of the Extended Loans, or (B) any amendment or modification of this Agreement relating to the interest rate for, or weighted average yield of, the Extended Loans directed at, or the result of which would be, the lowering of the effective interest cost or weighted average yield applicable to the Extended Loans (as determined by Borrower with the approval of the Administrative Agent on the same basis).  For the purpose of this definition, a “Bank Financing” is a financing conducted in the commercial loan marketplace which involves commercial banks, but excludes any financing consisting of the issuance of instruments which issued under an indenture complying with the Trust Indenture Act or are securities under United States securities laws, or which are exchangeable for such securities, including without limitation high-yield notes, convertible debt, and other similar instruments.

 

“Responsible Official” means when used with reference to any Person, any officer or manager of such Person, general partner of such Person, officer of a corporate or limited liability company general partner of such Person, officer of a corporate or limited liability company general partner of a partnership that is a general partner of such Person, or any other responsible official thereof duly acting on behalf thereof.  The Lenders shall be entitled to conclusively rely upon any document or certificate that is signed or executed by a Responsible Official of Borrower, or any of its Restricted Subsidiaries as having been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of Borrower or such Restricted Subsidiary.

 

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment, provided that (i) the exercise by Borrower of rights under derivative securities linked to Equity Interests underlying Convertible Debt or similar products purchased by Borrower in connection with the issuance of such Convertible

 

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Debt and (ii) any termination fees or similar payments in connection with the termination of warrants or other Equity Interests issued in connection with such Convertible Debt shall not be considered to be a “Restricted Payment”.

 

“Restricted Subsidiary” means each Subsidiary of Borrower other  than:

 

(a)           Subsidiaries formed under the Laws of foreign nations whose only tangible assets are located in foreign nations, and pure holding companies for such foreign Subsidiaries owning as their sole asset the stock or other securities and obligations thereof;

 

(b)           MGM Grand Detroit II and the Insurance Subsidiaries;

 

(c)           Non-Control Subsidiaries; and

 

(d)           any Subsidiary of Borrower formed or acquired after the date of this Agreement that is designated as an Unrestricted Subsidiary in writing by Borrower to the Administrative Agent, but only so long as such Subsidiary of Borrower does not, and is not required to, guarantee or otherwise be liable for any of the Senior Indebtedness.

 

“Revaluation Date” means, with respect to any Letter of Credit, each of the following: (i) each date of issuance of a Letter of Credit denominated in an Alternative Currency, (ii) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by the Issuing Lender under any Letter of Credit denominated in an Alternative Currency, and (iv) such additional dates as the Administrative Agent or the Issuing Lender shall determine or the Requisite Lenders shall require.

 

“Revolving Commitment” means the Class A Funding Requirement of each Class A Lender and the Class B Loans and Class C Loans into which revolving loans under the Prior Loan Agreement were retranched.

 

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

 

“Secured Refinancing Indebtedness” has the meaning specified in Section 6.7(h).

 

“Senior Indebtedness” means each issue, item or class of Indebtedness of Borrower or any of its Restricted Subsidiaries which is in the principal amount of $50,000,000 or more and which is not a Subordinated Obligation.

 

“Senior Officer” means the (a) chief executive officer or manager, (b) president, (c) executive vice president, (d) senior vice president, (e) chief financial officer, (f) treasurer, (g) assistant treasurer, (h) secretary or (i) assistant secretary of Borrower or any of its Restricted Subsidiaries.

 

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“Solvent” means, as to any Person, that (a) the sum of the assets of such Person, both at a fair valuation and at a present fair saleable value, exceeds its liabilities, including its probable liability in respect of contingent liabilities, (b) such Person will have sufficient capital with which to conduct its business as presently conducted and as proposed to be conducted and (c) such Person has not incurred debts, and does not intend to incur debts, beyond its ability to pay such debts as they mature.

 

“SPC” means, as to each Lender, one or more special purpose funding vehicles maintained or established by that Lender.

 

“Special Eurodollar Circumstance” means the application or adoption after the Effective Date of any Law or interpretation, or any change therein or thereof, or any change in the interpretation or administration thereof by any Governmental Agency, central bank or comparable authority charged with the interpretation or administration thereof, or compliance by any Lender or its LIBOR Lending Office with any request or directive (whether or not having the force of Law) of any such Governmental Agency, central bank or comparable authority, or the existence or occurrence of circumstances affecting the Designated Market generally that are beyond the reasonable control of the Lenders.

 

“Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m.  on the date two Business Days prior to the date as of which the foreign exchange computation is made; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and provided further that the Issuing Lender may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in an Alternative Currency.

 

“Standby Letter of Credit” means each Letter of Credit that is not a Commercial Letter of Credit.

 

“Standby Letter of Credit Fee” means the applicable per annum percentage set forth in the definition of “Applicable Rates”.

 

“Sterling” and “£” mean the lawful currency of the United Kingdom.

 

“Subordinated Obligations” means, collectively, the Existing Subordinated Obligations and any future class of Indebtedness of Borrower or any of its Subsidiaries which is subject to subordination in right of payment to the Obligations pursuant to subordination provisions which are (a) reasonably consistent with those contained in the Existing Subordinated Obligations, or (b) otherwise reasonably consistent with then prevailing market standards for public issuances of subordinated indebtedness.

 

“Subsidiary” means, as of any date of determination and with respect to any Person, any corporation, limited liability company or partnership (whether or not, in either case, characterized as such or as a “joint venture”), whether now existing or hereafter organized or acquired: (a) in the case of a corporation or limited liability company, of which a majority of the securities having ordinary voting power for the election of directors or other governing body

 

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(other than securities having such power only by reason of the happening of a contingency) are at the time beneficially owned by such Person and/or one or more Subsidiaries of such Person, or (b) in the case of a partnership, of which a majority of the partnership or other ownership interests are at the time beneficially owned by such Person and/or one or more of its Subsidiaries.

 

For the avoidance of doubt, and only by way of example, as of the Effective Date, CityCenter Holdings, LLC is only 50% owned by Borrower and therefore is not a Subsidiary of Borrower.

 

“Supported Subsidiary” means, collectively, (a) each Restricted Subsidiary and (b) each Unrestricted Subsidiary in support of which Borrower and its Restricted Subsidiaries have provided any guarantee, keep-well, make-well or similar creditor assurance in respect of (i) Indebtedness which is in an aggregate principal amount which is in excess of $25,000,000, or (ii) any other obligations which may result in a demand upon Borrower and its Restricted Subsidiaries which is in excess of $25,000,000.

 

“Swap Agreement” means a written agreement between Borrower and one or more financial institutions providing for (a) “swap,” “cap,” “collar” or other interest rate protection with respect to any Indebtedness, or (b) any currency hedging arrangements.

 

“Swing Line” means any revolving lines of credit established by the Swing Line Lenders in favor of Borrower and the Co-Borrowers pursuant to Section 2.7.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.7.

 

“Swing Line Documents” means the promissory note and any other documents executed by Borrower and each Co-Borrower in favor of the relevant Swing Line Lender in connection with the Swing Line.

 

“Swing Line Lenders” means not more than three willing Lenders as may be designated by Borrower from time to time (and reasonably acceptable to the Administrative Agent) in a writing addressed to and accepted by the Administrative Agent.

 

“Swing Line Loans” and “Swing Line Advances” mean loans made by a Swing Line Lender to Borrower or the Co-Borrowers pursuant to Section 2.7.

 

“Swing Line Outstandings” means, as of any date of determination, the aggregate principal Indebtedness of Borrower and the Co-Borrowers on all Swing Line Loans then outstanding.

 

“Takeout Date” means the date upon which the Non-Extended Loans are repaid in full and all related Class A-1 Funding Requirements are terminated.

 

“Taxes” has the meaning set forth for that term in Section 3.11(d).

 

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“Term Commitment” means the commitment of the Term Lenders (as defined in the Prior Loan Agreement) to make the Term Loans described in the Prior Loan Agreement.  Pursuant to the Existing Loan Agreement, the Term Loans were retranched into the Old Class D Loans and the Old Class E Loans.  The surviving Old Class E Loans have been retranched into the Class D Loans and Class E Loans under this Agreement.

 

“to the best knowledge of” means, when modifying a representation, warranty or other statement of any Person, that the fact or situation described therein is known by the Person (or, in the case of a Person other than a natural Person, known by a Responsible Official of that Person) making the representation, warranty or other statement, or with the exercise of reasonable due diligence under the circumstances (in accordance with the standard of what a reasonable Person in similar circumstances would have done) would have been known by the Person (or, in the case of a Person other than a natural Person, would have been known by a Responsible Official of that Person).

 

“Type”, when used with respect to any Loan or Advance, means the designation of whether such Loan or Advance is a Base Rate Loan or Advance, or a LIBOR Loan or Advance.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.6(c)(i).

 

“Unrelated Person” means any Person other  than (i) an employee stock ownership plan or other employee benefit plan covering the employees of Borrower and its Subsidiaries, (ii) an Affiliate of any Person or group of related Persons which as of the date of this Agreement is the beneficial owner of 20% or more (in the aggregate) of the outstanding common stock of Borrower or (iii) any other Person, where the holders of that Person’s Equity Interests are substantially the same as the holders of Borrower’s Equity Interests immediately prior to the transaction which would otherwise be a Change in Control.

 

“Unrestricted Subsidiary” means each Subsidiary of Borrower which is not a Restricted Subsidiary.

 

“Unused Fee” has the meaning set forth in Section 3.3.

 

“Unused Fee Rate” means the applicable per annum percentage set forth in the definition of “Applicable Rates”.

 

“Yen” and “¥” mean the lawful currency of Japan.

 

SECTION 1.2  Use of Defined Terms.  Any defined term used in the plural shall refer to all members of the relevant class, and any defined term used in the singular shall refer to any one or more of the members of the relevant class.

 

SECTION 1.3  Accounting Terms - Fiscal Periods.  All accounting terms not specifically defined in this Agreement shall be construed in conformity with, and all financial data required to be submitted by this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, except as otherwise specifically prescribed herein.  In the event that GAAP or Borrower’s Fiscal Year or Fiscal Quarters change during the term of this Agreement such that the covenants contained in Sections 6.5 and 6.6 or the limitations on Capital Lease Obligations

 

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as set forth in Section 6.4(e) and Section 6.7(f) would then be calculated for different periods, in a different manner or with different components, (a) Borrower, the Co-Borrowers and the Lenders agree to amend this Agreement in such respects as are necessary to conform those covenants for purposes of determining compliance with such covenants or limitation to substantially the same criteria as were effective prior to such change in Fiscal Year, Fiscal Quarters or in GAAP and (b) Borrower and the Co-Borrowers shall be deemed to be in compliance with the covenants contained in the aforesaid Sections if and to the extent that Borrower and the Co-Borrowers would have been in compliance therewith for the pre-existing fiscal periods and under GAAP as in effect immediately prior to such change, but shall have the obligation to deliver each of the materials described in Article 7 to the Creditors, on the dates therein specified, with financial data presented for its pre-existing fiscal periods and in a manner which conforms with GAAP as in effect immediately prior to such change.  Without limitation of the foregoing, if any joint venture, partnership or limited liability company in which Borrower holds a 50% or smaller interest shall be consolidated with Borrower under GAAP, it shall not be treated as a Subsidiary hereunder unless such venture, partnership or company otherwise meets the definition of “Subsidiary” hereunder.

 

SECTION 1.4  Rounding.  Any financial ratios required to be maintained by Borrower and the Co-Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed in this Agreement and rounding the result up or down to the nearest number (with a round-up if there is no nearest number) to the number of places by which such ratio is expressed in this Agreement.

 

SECTION 1.5  Exhibits and Schedules.  All Exhibits and Schedules to this Agreement, either as originally existing or as the same may from time to time be supplemented, modified or amended, are incorporated herein by this reference.  A matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

 

SECTION 1.6  Miscellaneous Terms.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a)           The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)           The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(c)           Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

 

(d)           The term “including” is by way of example and not limitation.

 

(e)           The term “or” is not exclusive.

 

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(f)            The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(g)           In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

 

SECTION 1.7  Letter of Credit Amounts.  Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

SECTION 1.8  Exchange Rates; Currency Equivalents.

 

(a)           The Administrative Agent or the Issuing Lender, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Letters of Credit and L/C Obligations denominated in Alternative Currencies.  Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur.  Except for purposes of financial statements delivered by Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the Issuing Lender, as applicable.

 

(b)           Wherever in this Agreement in connection with the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or maximum amount, is expressed in Dollars, but such Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the Issuing Lender, as the case may be.

 

SECTION 1.9  Additional Alternative Currencies.

 

(a)           Borrower or any Co-Borrower may from time to time request that Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency;” provided that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars.  In the case of any such request, such request shall be subject to the approval of the Administrative Agent and the Issuing Lender.

 

(b)           Any such request shall be made to the Administrative Agent and the Issuing Lender not later than 11:00 a.m.  Las Vegas time 20 Business Days prior to the date of the

 

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desired issuance of the Letter of Credit (or such other time or date as may be agreed by the Administrative Agent and the Issuing Lender in their sole discretion).  The Issuing Lender shall notify the Administrative Agent, not later than 11:00 a.m.  Las Vegas time 10 Business Days after receipt of such request whether it consents, in its sole discretion, to the issuance of Letters of Credit, as the case may be, in such requested currency.

 

(c)           Any failure by the Issuing Lender to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by such Issuing Lender to permit Letters of Credit to be issued in such requested currency.  If the Administrative Agent and the Issuing Lender consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify Borrower or relevant Co-Borrower and such currency shall thereupon be deemed to be an Alternative Currency hereunder for purposes of any Letter of Credit issuances by such Issuing Lender.  If the Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.9, the Administrative Agent shall promptly so notify Borrower or relevant Co-Borrower.

 

SECTION 1.10  Change of Currency.

 

(a)           Each obligation of Borrower or any Co-Borrower to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation).  If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency.

 

(b)           Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

 

(c)           Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

 

ARTICLE 2
 LOANS AND LETTERS OF CREDIT

 

SECTION 2.1  Loan Retranching-General.  Concurrently with the effectiveness of this Agreement on the Effective Date, the Obligations under the Existing Loan Agreement are retranched in the manner set forth in Section 6 of the Amendment No. 1 and Restatement Agreement.  As of the Effective Date, Schedule 2.1 hereto sets forth:

 

(a)           the outstanding principal amount of the outstanding Class A-1 and Class A-2 Loans of each Lender as of the Effective Date, the amount of the Class A

 

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Funding Requirement of each Lender, and whether the Class A Revolving Obligations of that Lender outstanding on the Effective Date will be treated as Class A-1 Obligations or Class A-2 Obligations;

 

(b)           the outstanding principal amount of the Class B Loans, Class C Loans, Class D Loans and Class E Loans held by each Lender;

 

(c)           the amount of the Required Payment due to the Class C Lenders and Class E Lenders with respect to the Class C Loans and Class E Loans on the Effective Date; and

 

(d)           the amount of the Class A-2 Loans, Class A Funding Requirements, Class C and Class E Loans assumed by the Increasing Lenders.

 

SECTION 2.2  The Class A Funding Requirements.

 

(a)           Prior to the Takeout Date.

 

(i)            Subject to the terms and conditions set forth herein, each Class A Lender shall have a several obligation to make Advances to Borrower or to any Co-Borrower pursuant to its Class A Funding Requirement, as set forth on Schedule 2.1, in Dollars from time to time, on any Business Day prior to the Existing Maturity Date, in an amount such that the aggregate outstanding amount of Class A Loans of any such Class A Lender shall not exceed at any time the amount of such Lender’s Class A Funding Requirement; provided, that:

 

(A)          each Class A Loan shall consist of Advances by the Class A Lenders, ratably in accordance with their respective Class A Percentages;

 

(B)           after giving effect to each Class A Loan, the Class A Revolving Obligations (and after giving effect to any concurrent payment thereof with the proceeds of such Advances) shall not exceed the Aggregate Class A Funding Requirements;

 

(C)           in the case of Advances made to a Co-Borrower, such Advances are directly used to finance the development, construction or operation of hotel/casino properties owned by that Co-Borrower; and

 

(D)          subject to the limitations set forth herein, the Advances by each Class A Lender under its Class A Funding Requirement may be prepaid without premium or penalty.

 

(b)           On and after the Takeout Date.  Each of the Class A-2 Lenders hereby severally and irrevocably agrees, for itself and for each assignee of its Class A-2 Loans, and of its related funding commitments hereunder, that on the Takeout Date:

 

(A)          the Class A Funding Requirements of the Class A-1 Lenders shall be terminated, without the requirement of termination of the Class A Funding Requirements of the Class A-2 Lenders;

 

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(B)           the Class A-2 Lenders shall continue the term of their respective Class A Funding Requirements to the Extended Maturity Date;

 

(C)           each Class A-2 Lender shall continue to have a several obligation to make Advances to Borrower or to any Co-Borrower pursuant to its Class A Funding Requirement, in Dollars from time to time, on any Business Day prior to the Extended Maturity Date, in an amount such that the aggregate outstanding amount of Class A-2 Loans of any such Class A-2 Lender shall not exceed at any time the amount of such Lender’s Class A Funding Requirement; provided, that:

 

(w)          each Class A Loan made on or after the Takeout Date shall consist of Advances by the Class A-2 Lenders, ratably in accordance with their respective Class A Percentages, as adjusted by the termination of the Class A Funding Requirements of the Class A-1 Lenders;

 

(x)            after giving effect to each Class A Loan, the Class A Revolving Obligations (and after giving effect to any concurrent payment thereof with the proceeds of such Advances) shall not exceed the Aggregate Class A Funding Requirements;

 

(y)           in the case of Advances made to a Co-Borrower, such Advances are directly used to finance the development, construction or operation of hotel/casino properties owned by that Co-Borrower; and

 

(z)            subject to the limitations set forth herein, the Advances by each Class A Lender under its Class A Funding Requirement may be prepaid without premium or penalty.

 

(c)           Each of Borrower and Detroit acknowledges that, pursuant to the Amendment No. 1 and Restatement Agreement, it has irrevocably surrendered its right to re-borrow any portion of the Class B Loans or Class C Loans that is repaid or prepaid.

 

(d)           Subject to the provisions of this clause (d) and the limitations set forth in Article 3, the Loans may be prepaid without premium or penalty.  If Borrower or the Co-Borrowers consummate a Repricing Transaction at any time prior to the first anniversary of the Effective Date, Borrower will concurrently pay to the Administrative Agent, for the ratable account of the affected Lenders, a fee equal to 1.00% of the aggregate principal amount of the Extended Loans which are prepaid or refinanced pursuant to that Repricing Transaction.

 

(e)           Unless Borrower or its Restricted Subsidiaries Dispose of the Detroit Collateral pursuant to Sections 3.1(h) and 6.9(g), any unutilized portion of the Aggregate Class A Funding Requirements resulting from Loans repaid by Detroit may be utilized only by Detroit (and not Borrower) for Borrowings or Letters of Credit, unless the Requisite Lenders otherwise agree.

 

SECTION 2.3  Generally Applicable Lending Procedures.

 

(a)           Subject to the next sentence, all Loans (other than Swing Line Loans) shall be made pursuant to a Request for Loan that shall specify the requested (i) date of such Loans,

 

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(ii) Type of Loans, (iii) aggregate amount of such Loans, (iv) Class of Loans and (v) in the case of a LIBOR Loan, the Interest Period for such Loans.  Unless the Administrative Agent, in its sole and absolute discretion, has notified Borrower or the relevant Co-Borrower to the contrary, all Loans may be requested by telephone by a Responsible Official of Borrower or the relevant Co-Borrower, in which case Borrower or the relevant Co-Borrower shall confirm such request by promptly delivering a Request for Loan in person or by telecopier conforming to the preceding sentence to the Administrative Agent.  The Administrative Agent shall incur no liability whatsoever hereunder in acting upon any telephonic request purportedly made by a Responsible Official of Borrower or the relevant Co-Borrower, and Borrower and the Co-Borrowers hereby agree to indemnify each Creditor from any loss, cost, expense or liability as a result of so acting.

 

(b)           Promptly following receipt of each Request for Loan, the Administrative Agent shall notify each relevant Lender by telephone, electronic mail or telecopier (and if by telephone, promptly confirmed by electronic mail or telecopier) of the date and type of the Loans, any applicable Interest Period, and, in the case of Class A Loans, that Class A Lender’s Pro Rata Share of the Class A Loans.

 

(c)           Not later than 11:00 a.m., Las Vegas time, on the date specified for any Class A Loan, which date must be a Business Day, each Lender having a Class A Funding Requirement shall make an Advance ratably in accordance with its respective Class A Percentage available to the Administrative Agent at the Administrative Agent’s Office in immediately available funds.  Upon satisfaction or waiver of the applicable conditions set forth in Article 8, all such Advances shall be credited on that date in immediately available funds to the Deposit Account for Borrower or that Co-Borrower.

 

(d)           Unless the Requisite Lenders otherwise consent, each Class A Loan shall be in an integral multiple of $1,000,000 which is not less than $5,000,000 (or any residual portion of the Class A Funding Requirements).

 

(e)           Upon the request of any Lender made through the Administrative Agent, Borrower and Co-Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note or Notes evidencing the amount of that Lender’s commitment to make Class A-1 Loans or Class A-2 Loans, and/or the outstanding principal amount of its Class B, Class C, Class D or Class E Loans.

 

(f)            A Request for Loan shall be irrevocable upon the Administrative Agent’s first notification thereof.

 

(g)           If no Request for Loan (or telephonic request for Loan referred to in the second sentence of Section 2.3(a), if applicable) has been made within the requisite notice periods set forth in Section 2.2 or 2.3 prior to the end of the Interest Period for any LIBOR Loan, then on the last day of such Interest Period, such LIBOR Loan shall be automatically converted into a Base Rate Loan in the same amount.

 

(h)           If a Class A Loan is to be made on the same date that another Class A Loan is due and payable:

 

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(i)            the Lenders shall make available to the Administrative Agent (or the Administrative Agent shall make available to the Lenders) the net amount of funds giving effect to both such Loans and the effect for purposes of this Agreement shall be the same as if separate transfers of funds had been made with respect to each such Loan; and

 

(ii)           in the case where the same Party is the primary borrower of both such Loans, Borrower or the relevant Co-Borrower shall make available to the Administrative Agent (or the Administrative Agent shall make available to such Party) the net amount of funds giving effect to both such Loans and the effect for purposes of this Agreement shall be the same as if separate transfers of funds had been made with respect to each such Loan.

 

SECTION 2.4  Base Rate Loans.  Each request by Borrower or any Co-Borrower for a Base Rate Loan shall be made pursuant to a Request for Loan (or telephonic request for Loan referred to in the second sentence of Section 2.3(a), if applicable) received by the Administrative Agent, at the Administrative Agent’s Office, not later than 10:00 a.m., Las Vegas time, on the date (which must be a Business Day) of the requested Base Rate Loan.  All Loans shall constitute Base Rate Loans unless properly designated as LIBOR Loans pursuant to Section 2.3.

 

SECTION 2.5  LIBOR Loans.

 

(a)           Each request by Borrower or any Co-Borrower for a LIBOR Loan (including any conversion or continuation thereof) shall be made pursuant to a Request for Loan (or telephonic request for Loan referred to in the second sentence of Section 2.3(a), if applicable) received by the Administrative Agent, at the Administrative Agent’s Office, not later than 10:00 a.m., Las Vegas time, at least three Business Days before the first day of the applicable Interest Period.

 

(b)           On the date which is two Business Days before the first day of the applicable Interest Period, the Administrative Agent shall confirm its determination of the applicable LIBOR (which determination shall be conclusive in the absence of manifest error) and promptly shall give notice of the same to Borrower and any relevant Co-Borrowers and the Lenders by telephone or telecopier (and if by telephone, promptly confirmed by telecopier).

 

(c)           Unless the Administrative Agent and the Requisite Lenders otherwise consent, no more than twenty-five LIBOR Loans shall be outstanding at any one time.

 

(d)           No LIBOR Loan may be requested during the continuation of a Default or Event of Default.

 

(e)           Nothing contained herein shall require any Lender to fund any LIBOR Advance in the Designated Market.

 

SECTION 2.6  Letters of Credit.

 

(a)           Letter of Credit Subfacility.  (i)  Each of the Existing Letters of Credit shall be deemed issued and outstanding hereunder and deemed to have been issued pursuant to the Class A Funding Requirements.  None of the Class B Lenders nor the Class C Lenders shall, in

 

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their capacities as such, have any continuing liability in respect of the Existing Letters of Credit, nor any obligation to participate in Letters of Credit which are hereafter issued.  Each Class A Lender shall, in its capacities as such, continue to be obligated in respect of each Existing Letter of Credit, and shall be deemed to have purchased a ratable participation, in accordance with its Class A Funding Requirement, in each Existing Letter of Credit.

 

(ii)           Subject to the terms and conditions of this Agreement (including Section 8.2), Borrower or any Co-Borrower may request from time to time during the period from the Effective Date through the day prior to the Letter of Credit Expiration Date that the Issuing Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.6, issue Letters of Credit in Dollars or in one or more Alternative Currencies for the account of Borrower or the relevant Co-Borrower, and each Issuing Lender agrees to issue for the account of Borrower or the relevant Co-Borrower one or more Letters of Credit in Dollars or in one or more Alternative Currencies and to amend Letters of Credit previously issued by it in accordance with clause (b) below; provided that:

 

(A)          Borrower or the relevant Co-Borrower shall not request that any Issuing Lender issue any Letter of Credit if, after giving effect to such issuance, the aggregate outstanding principal amount of the Class A Revolving Obligations exceeds the Aggregate Class A Funding Requirements;

 

(B)           in no event shall any Issuing Lender issue any Letter of Credit having an expiration date after the Existing Maturity Date unless and until the Takeout Date has occurred;

 

(C)           Borrower or the relevant Co-Borrower shall not request any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed the lesser of (A) any limit established by Law after the Effective Date on the Issuing Lender’s ability to issue the requested Letter of Credit or (B) $250,000,000; and

 

(D)          prior to the issuance of any Letter of Credit the Issuing Lender shall request confirmation by telephone from the Administrative Agent that such Letter of Credit may be issued and shall have received electronic confirmation from the Administrative Agent to that effect.  Letters of Credit may be denominated in Dollars or in an Alternative Currency as requested by Borrower (the currency shall be deemed to be Dollars unless specifically requested by Borrower); provided that in respect of any Letter of Credit issued in an Alternative Currency, (A) the Administrative Agent shall be entitled to mark to market the exposure associated with such Letters of Credit at such time intervals, and using such methods, as the Administrative Agent may determine in its discretion, and (B) all fees payable in respect of such Letters of Credit shall continue to be payable in Dollars.

 

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Notwithstanding the foregoing, the Issuing Lender shall not be obligated to issue any Letter of Credit if:

 

(E)           on or prior to the Business Day immediately preceding the issuance thereof any Class A Lender has notified the Administrative Agent or the Issuing Lender in writing that the conditions set forth in Section 8.2 have not been satisfied with respect to the issuance of such Letter of Credit;

 

(F)           any order, judgment or decree of any Governmental Agency or arbitrator shall by its terms purport to enjoin or restrain the Issuing Lender from issuing such Letter of Credit, or any Law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Agency with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Lender are not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuing Lender in good faith deems material to it;

 

(G)           the issuance of such Letter of Credit would violate one or more policies of the Issuing Lender;

 

(H)          the Issuing Lender does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;

 

(I)            the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all of the Lenders have approved such expiry date; or

 

(J)            a default of any Lender’s obligations to fund under Section 2.6(c) or any other provision of this Agreement exists or any Lender is at such time an Impacted Lender, unless the applicable Issuing Lender has entered into arrangements satisfactory to such Issuing Lender with Borrower or such Lender to eliminate such Issuing Lender’s risk with respect to such Lender.

 

(b)           Procedures for Issuance and Amendment of Letters of Credit.

 

(i)            Each Letter of Credit shall be issued or amended, as the case may be, upon the request of Borrower or any Co-Borrower delivered to the Issuing Lender (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Official of Borrower or the relevant Co-Borrower.  Each Letter of Credit Application submitted by Borrower (or any Co-Borrower) shall be deemed to be a representation and warranty that the conditions specified in Section 8.2 have been satisfied on and as of the date of the issuance of the Letter of Credit requested thereby.  Such Letter of Credit Application must be received by the Issuing Lender and the Administrative Agent not later than 1:00 p.m., Las Vegas time, at least three Business Days (or such later date and time as the Issuing Lender may

 

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agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Issuing Lender:  (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Issuing Lender may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the Issuing Lender (W) the Letter of Credit to be amended; (X) the proposed date of amendment thereof (which shall be a Business Day); (Y) the nature of the proposed amendment; and (Z) such other matters as the Issuing Lender may require.  Additionally, Borrower (or the applicable Co-Borrower) shall furnish to the Issuing Lender and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the Issuing Lender or the Administrative Agent may reasonably require.

 

(ii)           Promptly after receipt of any Letter of Credit Application, the Issuing Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from Borrower or the relevant Co-Borrower and, if not, the Issuing Lender will provide the Administrative Agent with a copy thereof.  Upon receipt by the Issuing Lender of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the Issuing Lender shall, on the requested date, issue a Letter of Credit for the account of Borrower or the relevant Co-Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the Issuing Lender’s usual and customary business practices.  Immediately upon the issuance of each Letter of Credit, each Class A Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Issuing Lender a risk participation in such Letter of Credit in an amount equal to (a) the amount of such Letter of Credit times (b) that Lender’s Class A Percentage.

 

(iii)          Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising Lender with respect thereto or to the beneficiary thereof, the Issuing Lender will also deliver to Borrower or the relevant Co-Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

(c)           Drawings and Reimbursements; Funding of Participations.

 

(i)            Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Lender shall notify Borrower or the relevant Co-Borrower and the Administrative Agent thereof.  In the case of a Letter of Credit denominated in an Alternative Currency, Borrower or the relevant Co-Borrower shall reimburse the Issuing Lender in such Alternative Currency, unless (A) the Issuing

 

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Lender (at its option) shall have specified in such notice that it will require reimbursement in Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, Borrower or the relevant Co-Borrower shall have notified the Issuing Lender promptly following receipt of the notice of drawing that Borrower or the relevant Co ¬Borrower will reimburse the Issuing Lender in Dollars.  In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in an Alternative Currency, the Issuing Lender shall notify Borrower or the relevant Co-Borrower of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof.  Not later than 11:00 a.m., Las Vegas time, on the date of any payment by the Issuing Lender under a Letter of Credit to be reimbursed in Dollars, or the Applicable Time on the date of any payment by the Issuing Lender under a Letter of Credit to be reimbursed in an Alternative Currency (each such date, an “Honor Date”), Borrower or the relevant Co-Borrower shall reimburse the Issuing Lender through the Administrative Agent in an amount equal to the amount of such drawing and in the applicable currency.  If Borrower or the relevant Co-Borrower fails to so reimburse that Issuing Lender by such time, the Administrative Agent shall promptly notify each Class A Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”), and the amount of such Lender’s Class A Percentage in respect thereof.  In such event, Borrower shall be deemed to have requested a Base Rate Loan under the Class A Funding Requirements to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.1(i) for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Class A Funding Requirements and the conditions set forth in Section 8.1 (other than the delivery of a Request for Loan).  Any notice given by an Issuing Lender or the Administrative Agent pursuant to this Section 2.6(c)(i) may be given by telephone 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.

 

(ii)           Each Class A Lender (including any Class A Lender acting as Issuing Lender) shall upon any notice pursuant to Section 2.6(c)(i) make funds available, in Dollars, to the Administrative Agent for the account of that Issuing Lender at the Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m., Las Vegas time, on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.6(c)(iii), each Class A Lender that so makes funds available shall be deemed to have made a Advance to Borrower or the relevant Co-Borrower in such amount.  The Administrative Agent shall remit the funds so received to that Issuing Lender in Dollars.

 

(iii)          With respect to any Unreimbursed Amount that is not fully refinanced by a Base Rate Loan because the conditions set forth in Section 8.1 cannot be satisfied or for any other reason, Borrower or the relevant Co-Borrower shall be deemed to have incurred from the Issuing Lender an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each

 

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Class A Lender’s payment to the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.6(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Class A Lender in satisfaction of its participation obligation under this Section 2.6.

 

(iv)          Until each Class A Lender funds its Advance or L/C Advance pursuant to this Section 2.6(c) to reimburse the Issuing Lender for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of the Issuing Lender.

 

(v)           Each Class A Lender’s obligation to make Advances or L/C Advances to reimburse the Issuing Lender for amounts drawn under Letters of Credit, as contemplated by this Section 2.6(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Issuing Lender, Borrower, any Co-Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Class A Lender’s obligation to make Advances pursuant to this Section 2.6(c) is subject to the conditions set forth in Section 8.1 (other than delivery by Borrower or any Co-Borrower of a Request for Loan).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of Borrower or the relevant Co-Borrower to reimburse the Issuing Lender for the amount of any payment made by that Issuing Lender under any Letter of Credit, together with interest as provided herein.

 

(vi)          If any Class A Lender fails to make available to the Administrative Agent for the account of an Issuing Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.6(c) by the time specified in Section 2.6(c)(ii), that Issuing Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to that Issuing Lender at a rate per annum equal to the Federal Funds Rate from time to time in effect.  A certificate of the Issuing Lender submitted to any Class A Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

 

(d)           Repayment of Participations.

 

(i)            At any time after any Issuing Lender has made a payment under any Letter of Credit and has received from any Class A Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.6(c), if the Administrative Agent receives for the account of that Issuing Lender any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from Borrower, or the relevant Co-Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Class A Percentage thereof (appropriately adjusted, in the case of interest payments, to

 

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reflect the period of time during which such Lender’s L/C Advance was outstanding) in Dollars and in the same funds as those received by the Administrative Agent.

 

(ii)           If any payment received by the Administrative Agent for the account of the Issuing Lender pursuant to Section 2.6(c)(i) is required to be returned under any of the circumstances described in Section 11.27 (including pursuant to any settlement entered into by that Issuing Lender in its discretion), each Class A Lender shall pay to the Administrative Agent for the account of the Issuing Lender its Class A Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Class A Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Class A Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

 

(e)           Obligations Absolute.  The obligation of Borrower and the Co-Borrowers to reimburse the Issuing Lender for each drawing under Letters of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i)            any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

 

(ii)           the existence of any claim, counterclaim, set-off, defense or other right that Borrower or the relevant Co-Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the Issuing Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)          any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv)          any payment by the Issuing Lender under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the Issuing Lender under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

 

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(v)           any adverse change in the relevant exchange rates or in the availability of the relevant Alternative Currency to Borrower or the relevant Co Borrower or in the relevant currency markets generally; or

 

(vi)          any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, Borrower or the relevant Co Borrower.

 

Borrower or the relevant Co-Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with Borrower’s or the relevant Co-Borrower’s instructions or other irregularity, Borrower or the relevant Co-Borrower will immediately notify the Issuing Lender.  Borrower or the relevant Co-Borrower shall be conclusively deemed to have waived any such claim against the Issuing Lender and its correspondents unless such notice is given as aforesaid.

 

(f)            Role of the Issuing Lender.  Each Lender, Borrower and each of the Co-Borrowers agree that, in paying any drawing under a Letter of Credit, the Issuing Lender shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the Issuing Lender, any Agent-Related Person nor any of the respective correspondents, participants or assignees of the Issuing Lender shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Requisite Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application.  Borrower and the relevant Co-Borrower hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude Borrower’s or the relevant Co-Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the Issuing Lender, any Agent-Related Person, nor any of the respective correspondents, participants or assignees of the Issuing Lender, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.6(e); provided, however, that anything in such clauses to the contrary notwithstanding, Borrower or the relevant Co-Borrower may have a claim against the Issuing Lender, and that Issuing Lender may be liable to Borrower or the relevant Co-Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by Borrower or the relevant Co-Borrower which such Borrower or such Co-Borrower proves were caused by that Issuing Lender’s willful misconduct or gross negligence or that Issuing Lender’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, the Issuing Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the Issuing Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or

 

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proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral.  Upon the request of the Administrative Agent, (i) if the Issuing Lender has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation remains outstanding, or (iii) if, at any time, any Class A Lender is an Impacted Lender (but only to the extent of the unfunded portion of such Impacted Lender’s share of such L/C Obligation), Borrower or the relevant Co-Borrower shall immediately Cash Collateralize the then outstanding amount of the Letter of Credit Usage (in an amount equal to such outstanding amount determined as of the date of such L/C Borrowing or the Letter of Credit Expiration Date, as the case may be).  In addition, the Administrative Agent may, at any time and from time to time after the initial deposit of Cash Collateral, request that additional Cash Collateral be provided in order to protect against the results of exchange rate fluctuations.  For purposes hereof, “Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Issuing Lender and the Class A Lenders, as collateral for the then outstanding amount of the Letter of Credit Usage, Cash or deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Issuing Lender (which documents are hereby consented to by the Class A Lenders).  Derivatives of such term have corresponding meanings.  Borrower and Co-Borrowers hereby grant to the Administrative Agent, for the benefit of the Issuing Lender and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing.  Any Cash Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America.

 

(h)           Applicability of ISP98 and UCP.  Unless otherwise expressly agreed by an Issuing Lender and Borrower or the relevant Co-Borrower when a Letter of Credit is issued, (i) the Rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Standby Letter of Credit, and (ii) the Rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce at the time of issuance shall apply to each Commercial Letter of Credit.

 

(i)            Conflict with Letter of Credit Application.  In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

 

(j)            Fees for Modifications.  The issuance of any supplement, modification, amendment, renewal, or extension to or of any Letter of Credit shall be treated in all respects the same as the issuance of a new Letter of Credit, except that the issuance fees payable to Bank of America as an Issuing Lender shall be payable as set forth in the letter agreement referred to in Section 3.4.

 

SECTION 2.7  Swing Line.  (a) Subject to the terms and conditions set forth herein, from the Effective Date through the day prior to the Existing Maturity Date (and, after the occurrence of the Takeout Date, the day prior to the Extended Maturity Date) any Lenders hereafter designated as Swing Line Lenders pursuant to the terms of this Agreement may, in their sole discretion, elect to make Swing Line Loans to Borrower and each of the Co-Borrowers in such

 

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amounts as they may request which do not result in the Class A Revolving Obligations being in excess of the Aggregate Class A Funding Requirements, provided that:

 

(i)            after giving effect to each Swing Line Loan, the aggregate principal amount of the Swing Line Outstandings shall not exceed $150,000,000;

 

(ii)           no Swing Line Lender shall be obligated to permit the aggregate principal amount of the Swing Line Outstanding owed to that Swing Line Lender to exceed any limit set forth in the Swing Line Documents executed in favor of that Swing Line Lender;

 

(iii)          without the consent of all of the Lenders, no Swing Line Loan may be made during the continuation of an Event of Default;

 

(iv)          prior to the making of the initial Swing Line Loan by the relevant Swing Line Lender, Borrower or the relevant Co-Borrower shall have provided the relevant Swing Line Lender with a note or other Swing Line Documents in form and substance reasonably satisfactory to that Swing Line Lender; and

 

(v)           the relevant Swing Line Lender has not given at least twenty-four hours prior notice to Borrower that availability under the Swing Line is suspended or terminated.  Borrower and the Co-Borrowers may borrow, repay and reborrow under this Section.

 

Unless notified to the contrary by the Administrative Agent, borrowings under the Swing Line may be made in amounts which are integral multiples of $100,000 upon telephonic request by a Responsible Official of Borrower or the relevant Co-Borrower made to the Administrative Agent (and to the relevant Swing Line Lender, if the Swing Line Lender is not Bank of America) not later than 1:00 p.m., Las Vegas time, on the Business Day of the requested borrowing (which telephonic request shall be promptly confirmed in writing by telecopier), provided that if the requested Swing Line Loan is to be credited to an account which is not with the Swing Line Lender, the request must be submitted by 11:30 a.m., Las Vegas time.  Promptly after receipt of such a request for borrowing, the Administrative Agent shall provide telephonic verification to the relevant Swing Line Lender that, after giving effect to such request, the Class A Revolving Obligations will not exceed the then effective Aggregate Class A Funding Requirements (and such verification shall be promptly confirmed in writing by telecopier or by email).  Unless notified to the contrary by the relevant Swing Line Lender, each repayment of a Swing Line Loan shall be in an amount which is an integral multiple of $100,000.  If Borrower or the relevant Co-Borrower instructs a Swing Line Lender to debit its demand deposit account at that Swing Line Lender in the amount of any payment with respect to a Swing Line Loan, or that Swing Line Lender otherwise receives repayment, after 3:00 p.m., Las Vegas time, on a Business Day, such payment shall be deemed received on the next Business Day.  Each Swing Line Lender shall promptly notify the Administrative Agent of the Swing Line Outstandings each time there is a change therein or if it suspends or terminates availability under its Swing Line

 

(b)           Swing Line Loans shall bear interest at a rate per annum agreed to from time to time by Borrower and the relevant Swing Line Lender.  Interest shall be payable on such dates, as may be specified by the relevant Swing Line Lender and in any event on the Existing Maturity

 

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Date (and if the Takeout Date occurs on the Extended Maturity Date).  Each Swing Line Lender shall be responsible for invoicing Borrower or the relevant Co Borrower for such interest on Swing Line Loans made by it.  Interest payable on each Swing Line Loan is solely for the account of the Swing Line Lender making that Swing Line Loan (subject to clause (d) below).

 

(c)           A Swing Line Loan shall be payable within five Business Days after demand made by the relevant Swing Line Lender and in any event on the date when all other Obligations are due.

 

(d)           Upon the making of a Swing Line Loan in accordance with Section 2.7(a), each Class A Lender shall be deemed to have purchased from the relevant Swing Line Lender a participation therein in an amount equal to that Lender’s Class A Percentage of the Aggregate Class A Funding Requirements times the amount of the Swing Line Loan.  Upon demand made by the relevant Swing Line Lender through the Administrative Agent, each Class A Lender shall, according to its Class A Percentage, promptly provide to such Swing Line Lender its purchase price therefor in an amount equal to its participation therein.  The obligation of each Class A Lender to so provide its purchase price to a Swing Line Lender shall be absolute and unconditional (subject only to the making of a demand upon that Class A Lender by such Swing Line Lender) and shall not be affected by the occurrence of a Default or Event of Default; provided that no Class A Lender shall be obligated to purchase (i) Swing Line Loans to the extent that the aggregate Swing Line Outstandings are in excess of $150,000,000 or to the extent that the Class A Revolving Obligations exceed the Aggregate Class A Funding Requirements and (ii) any Swing Line Loan made (absent the consent of all of the Class A Lenders at any time when the applicable conditions set forth in Section 8.1 have not been satisfied).  Each Class A Lender that has provided to a Swing Line Lender the purchase price due for its participation in Swing Line Loans shall thereupon acquire a pro  rata participation, to the extent of payment, in the claim of such Swing Line Lender against Borrower and the Co-Borrowers for principal and interest and shall share, in accordance with that pro  rata participation, in any principal payment made by Borrower or the Co-Borrowers with respect to such claim and in any interest payment made by Borrower or the Co-Borrowers (but only with respect to periods subsequent to the date such Class A Lender paid the Swing Line Lender its purchase price) with respect to such claim.

 

(e)           Upon any demand for payment of the Swing Line Outstandings by a Swing Line Lender (unless Borrower or the relevant Co-Borrower has made other arrangements acceptable to such Swing Line Lender to reduce the Swing Line Outstandings to $0), Borrower or the relevant Co-Borrower, as applicable, shall request a Class A Loan pursuant to Section 2.3 sufficient to repay all Swing Line Outstandings to that Swing Line Lender.  In each case, the Administrative Agent shall automatically provide the respective Advances made by each Class A Lender to the relevant Swing Line Lender (which such Swing Line Lender shall then apply to the Swing Line Outstandings).  In the event that Borrower and the Co-Borrowers fail to request a Loan within the time specified by Section 2.3 on any such date, the Administrative Agent may, but is not required to, without notice to or the consent of Borrower or the Co-Borrowers, cause Advances to be made by the Class A Lenders under their respective Class A Funding Requirements in amounts which are sufficient to reduce the Swing Line Outstandings as required above.  The conditions precedent set forth in Article 8 shall not apply to Advances to be made by the Class A Lenders pursuant to the three preceding sentences but the Class A Lenders shall not be obligated to make such Advances to the extent that the conditions set forth in

 

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Section 2.7(a)(i), (ii) and (iii) were not satisfied as to any Swing Line Loan which is part of such Swing Line Outstandings.  The proceeds of such Advances shall be paid directly to the Swing Line Lender for application to the Swing Line Outstandings.

 

SECTION 2.8  Co-Borrowers.  Detroit shall continue to have the right to request Loans, Swing Line Loans and Letters of Credit through the Administrative Agent directly from the Lenders, the Swing Line Lenders and the Issuing Lender, subject to the terms and conditions set forth herein.  Upon such prior notice as reasonably requested by Administrative Agent, Borrower may designate one or more Guarantors which are United States domestic Persons to be additional joint and several direct Co-Borrowers hereunder by written request to the Administrative Agent accompanied by (a) an executed Assumption Agreement and appropriate Notes (to the extent requested by any Lender) executed by the designated Guarantor, (b) a certificate of good standing of the designated Guarantor in the jurisdiction of its incorporation or organization, (c) a certified resolution authorizing the execution and delivery of the Assumption Agreement and such Notes, (d) a written consent to the Assumption Agreement executed by each other Guarantor, (e) appropriate written legal opinions with respect to the Co-Borrower and the Assumption Agreement and (f) such documentation and other evidence as is reasonably requested by the Administrative Agent or any Lender in order for the Administrative Agent or such Lender to carry out and be satisfied it has complied with the results of all necessary “know your customer” or other similar checks under the Act and under similar regulations.  The Administrative Agent shall promptly notify the Lenders of such request, together with copies of such of the foregoing as any Lender may request and the designated Guarantor shall become a Co-Borrower hereunder.  Notwithstanding the other provisions of this Section 2.9, (i) each Loan and Letter of Credit made hereunder to Detroit or any other Co-Borrower shall be used solely and directly to finance and/or refinance the development, construction or operation of hotel/casino properties owned by that Co-Borrower, and (ii) the liability of Detroit is limited to the portion of the Obligations which are actually borrowed or received by Detroit and shall reduce from time to time in the manner set forth in the Detroit Orders.

 

SECTION 2.9  Reduction of the Aggregate Class A Funding Requirements.

 

(a)           Borrower and the Co-Borrowers shall have the right, at any time and from time to time, without penalty or charge, upon at least three Business Days’ prior written notice by a Responsible Official of Borrower and the Co-Borrowers to the Administrative Agent, voluntarily to reduce, permanently and irrevocably, in aggregate principal amounts in an integral multiple of $1,000,000 (but in the case of reductions, not less than $5,000,000), or to terminate, all or a portion of the then undisbursed portion of the Aggregate Class A Funding Requirements (ratably as to each Class A Lender); provided that the Aggregate Class A Funding Requirements may not be so reduced to an amount which is less than the then outstanding Class A Revolving Obligations.

 

(b)           Each reduction in the amount of the Aggregate Class A Funding Requirements shall result in a corresponding reduction in the amount of the Revolving Commitment.

 

(c)           The Administrative Agent shall promptly notify the Lenders of any reduction or termination of the Class A Funding Requirements under this Section.

 

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SECTION 2.10  Optional Termination of Commitments.  Following the occurrence of a Change in Control, the Requisite Lenders may in their sole and absolute discretion elect to terminate the Commitments during the sixty day period immediately subsequent to the later of (a) such occurrence or (b) the earlier of (i) receipt of written notice to the Administrative Agent of the Change in Control from Borrower and the Co-Borrowers, or (ii) if no such notice has been received by the Administrative Agent, the date upon which the Administrative Agent has actual knowledge thereof.  In the event that the Lenders elect to so terminate the Commitments, the Commitments shall be terminated (and the Loans shall be due and payable) effective on the date that is sixty days subsequent to written notice from the Administrative Agent to Borrower and the Co-Borrowers thereof.

 

SECTION 2.11  Administrative Agent’s Right to Assume Funds Available for Advances.  Unless the Administrative Agent shall have been notified by any Lender no later than 10:00 a.m., Las Vegas time, on the Business Day of the proposed funding by the Administrative Agent of any Loan that such Lender does not intend to make available to the Administrative Agent such Lender’s portion of the total amount of such Loan, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on the date of the Loan and the Administrative Agent may, in reliance upon such assumption, make available to Borrower or the relevant Co-Borrower a corresponding amount.  If the Administrative Agent has made funds available to Borrower or a Co-Borrower based on such assumption and such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender.  If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent promptly shall notify Borrower or that Co-Borrower who shall pay such corresponding amount to the Administrative Agent.  The Administrative Agent also shall be entitled to recover from such Lender interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to Borrower or the Co-Borrowers to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to the daily Federal Funds Rate.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its share of the Class A Funding Requirements or to prejudice any rights which the Administrative Agent, Borrower or any Co-Borrower may have against any Lender as a result of any default by such Lender hereunder.

 

SECTION 2.12  Senior Indebtedness.  The Obligations shall be and hereby are designated as “Senior Indebtedness” and “Senior Obligations” of Borrower and its Restricted Subsidiaries with respect to all Subordinated Obligations, and Borrower shall promptly provide to the trustee or other representative of the holders of each class of Subordinated Obligations any certificate, designation or other writing which is required by the terms of the indenture or other instrument evidencing any Subordinated Obligations to so designate the Obligations.

 

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ARTICLE 3
 PAYMENTS AND FEES

 

SECTION 3.1  Principal and Interest.

 

(a)           Interest shall be payable on the outstanding daily unpaid principal amount of each Advance from the date thereof until payment in full is made and shall accrue and be payable at the rates set forth or provided for herein before and after Default, before and after maturity, before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law, with interest on overdue principal and interest at the Default Rate to the fullest extent permitted by applicable Laws.

 

(b)           Interest accrued on each Base Rate Loan on each Quarterly Payment Date shall be due and payable on that day.  Except as otherwise provided in Section 3.8, the unpaid principal amount of any Base Rate Loan shall bear interest at a fluctuating rate per annum equal to the Base Rate plus the applicable Base Rate Margin.  Each change in the interest rate under this Section 3.1(b) due to a change in the Base Rate shall take effect simultaneously with the corresponding change in the Base Rate.

 

(c)           Interest accrued on each LIBOR Loan shall be due and payable on the date which is one month after the date such LIBOR Loan was made (and, every month thereafter through the last day of the Interest Period) and on the last day of the related Interest Period.  Except as otherwise provided in Section 3.8, the unpaid principal amount of any LIBOR Loan shall bear interest at a rate per annum equal to LIBOR for that LIBOR Loan plus the applicable LIBOR Margin.

 

(d)           For the avoidance of doubt, the Class A-2 Lenders, Class C Lenders and Class E Lenders shall receive the different interest rate margins and Standby Letter of Credit Fees from the A-1 Lenders, the Class B Lenders and the Class D Lenders, as specified in the definition of “Applicable Rates.”

 

(e)           If not sooner paid, the principal Indebtedness under this Agreement shall be payable as follows:

 

(i)            the amount, if any, by which the Class A Revolving Obligations at any time exceed the Aggregate Class A Funding Requirements shall be payable immediately, and in full on the date on which the Commitments have been terminated pursuant to Section 2.10;

 

(ii)           the Class C Loans and Class E Loans will be ratably repaid in an amount which is equal to 0.25% of the principal amount thereof outstanding on the Effective Date (after giving effect to the Required Payment), commencing on June 30, 2013, and on each subsequent Quarterly Payment Date;

 

(iii)          the Obligations owed to the Class A-1 Lenders in relation to the Class A Funding Requirements, the Class B Loans and the Class D Loans shall be due and payable in their entirety on the Existing Maturity Date; and

 

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(iv)          the Obligations owed to the Class A-2 Lenders in relation to the Class A Funding Requirements, the Class C Loans and the Class E Loans shall be due and payable in full on the Extended Maturity Date).

 

(f)            The Loans and Advances made hereunder may, at any time and from time to time, voluntarily be paid or prepaid in whole or in part without premium or penalty, except that with respect to any voluntary prepayment under this Section 3.1(f), (i) any partial prepayment shall be not less than $5,000,000, or in integral multiples of $1,000,000 which are in excess of $5,000,000, (ii) the Administrative Agent shall have received written notice of any prepayment by 9:00 a.m., Las Vegas time, on the Business Day prior to the date of prepayment (which must be a Business Day) in the case of a Base Rate Loan, and, in the case of a LIBOR Loan, three Business Days before the date of prepayment, which notice shall identify the date and amount of the prepayment and the Loan(s) being prepaid, (iii) each prepayment of principal on any LIBOR Loan shall be accompanied by payment of interest accrued to the date of payment on the amount of principal paid and (iv) any payment or prepayment of all or any part of any LIBOR Loan on a day other than the last day of the applicable Interest Period shall be subject to Section 3.7(e).  Promptly following receipt of a notice of prepayment under clause (ii) above, the Administrative Agent shall notify each Lender by telephone or telecopier (and if by telephone, promptly confirmed by telecopier) of the date and amount thereof.

 

(g)           [Reserved].

 

(h)           If Borrower or any of its Restricted Subsidiaries Disposes of the Detroit Collateral (other than such Dispositions of personal or obsolete property in the ordinary course of business and consistent with historical practice) pursuant to Section 6.9(g), Borrower and Detroit shall, within five days of the receipt of the proceeds of such Disposition, prepay the Loans and permanently reduce the Class A Funding Requirements in an amount of not less than the Detroit Disposition Prepayment Amount (with such prepayments of the Loans and reduction of the Class A Funding Requirements to be applied first to the Detroit Loans and thereafter to the Loans of Borrower).  Any amounts so repaid may be reborrowed only with the prior written consent of Requisite Lenders.

 

(i)            Except as otherwise provided in clause (h) above, Borrower shall, within ten days of the receipt thereof, use 50% of the Net Cash Proceeds of any Disposition pursuant to Section 6.9(h) or (i) and any other Disposition not otherwise permitted under Section 6.9 to prepay the Loans and permanently reduce the Aggregate Class A Funding Requirements, provided that, Net Cash Proceeds shall exclude all sums paid to retire Indebtedness attributable to the asset which is the subject of the Disposition.  The application of the prepayments required by this clause (i) shall be made in the manner contemplated by Section 3.1(i) of the Prior Loan Agreement (i.e., on a pro rata basis to the Term Loans and to the Revolving Commitments under the Prior Loan Agreement), it being understood that (A) the portion of such prepayments allocable to the Term Loans shall be applied ratably to the then outstanding Class D Loans and Class E Loans, and (B) that the portion of such prepayments allocable to the Revolving Commitments shall be applied ratably to reduce the Class A Funding Requirements, the Class B Loans and the Class C Loans.

 

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(j)            Within ten days following the issuance of any Indebtedness pursuant to Section 6.7(i), unless otherwise waived by the Requisite Lenders, Borrower shall use 50% of the Net Cash Proceeds in excess of the first $250,000,000 in aggregate Net Cash Proceeds following the Effective Date to permanently prepay the Loans, applied ratably to the then outstanding Loans by Class (for this purpose, treating the Class A Funding Requirement as being fully outstanding as Class A Loans) and, to the extent applied to the Class A Loans, shall permanently reduce the Aggregate Class A Funding Requirement.

 

(k)           Upon the incurrence of any Indebtedness pursuant to Section 6.7(j) that results in Net Cash Proceeds that are not utilized concurrently (or in any event, that are not utilized within the ten day period set forth in this Section 3.1(k)) to repay, prepay or refinance Interim Maturities, Borrower shall, unless waived by the Requisite Lenders, within ten days of the receipt thereof, use 100% of such unutilized Net Cash Proceeds to prepay any outstanding Class A Loans (but without any reduction of the Class A Funding Requirements); provided  that, any amounts so prepaid after the Effective Date may thereafter be reborrowed by Borrower only:

 

(i)            to repay or prepay outstanding Interim Maturities pursuant to a Request for Loan which further shall identify the Interim Maturities to be repaid or prepaid, or

 

(ii)           to prepay the Loans and permanently reduce the Commitments, applied on a pro rata basis to the Term Loans and to the Revolving Commitments, it being understood that (A) the portion of such prepayments allocable to the Term Loans shall be applied ratably to the then outstanding Class D Loans and Class E Loans, and (B) that the portion of such prepayments allocable to the Revolving Commitments shall be applied ratably to reduce the Class A Funding Requirements, the Class B Loans and the Class C Loans, or

 

(iii)          during any period beginning on the date that is two Business Days before the last Business Day of any Fiscal Quarter and ending on the last Business Day of such Fiscal Quarter, so long as any such reborrowed amount is prepaid by not later than the second Business Day of the following Fiscal Quarter and may not be reborrowed except as set forth in this Section 3.1(k).

 

SECTION 3.2  [Reserved]

 

SECTION 3.3  Unused Fees.  From the Effective Date, Borrower and the Co-Borrowers shall pay to the Administrative Agent, for the ratable accounts of the Class A Lenders according to their respective Class A Funding Requirements, an unused fee equal to the applicable Unused Fee Rate in effect from time to time times the difference between (i) the principal amount of the Aggregate Class A Funding Requirements, and (ii) the aggregate principal amount Class A Revolving Obligations (including the Letters of Credit), other than the Swing Line Outstandings (the “Unused Fee”).  The Unused Fees shall be payable quarterly in arrears on each Quarterly Payment Date, on the Existing Maturity Date, on the Takeout Date, on the Extended Maturity Date and upon the date of any partial reduction or termination of the Class A Funding Requirements pursuant to Sections 2.10, 2.11 or 11.24.

 

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SECTION 3.4  Letter of Credit Fees.  With respect to each Letter of Credit, Borrower and the Co-Borrowers shall pay the following fees:

 

(a)           concurrently with the issuance of each Standby Letter of Credit, any letter of credit issuance fee agreed to between Borrower, the relevant Co-Borrower and the Issuing Lender, which fee shall be for the sole account of that Issuing Lender (in the case of Bank of America, as an Issuing Lender, in the amount set forth in a letter agreement between Borrower and Bank of America);

 

(b)           to the Administrative Agent for the account of the Class A Lenders in accordance with their respective Class A Funding Requirements, in Dollars, a standby letter of credit fee in an amount equal to the applicable Standby Letter of Credit Fee per annum times the Dollar Equivalent of the daily amount available to be drawn under such Standby Letter of Credit (the amount available to be drawn on such Letter of Credit shall be determined in accordance with Section 1.7), which standby letter of credit fee shall be (i) due and payable on each Quarterly Payment Date, commencing with the first such date to occur after the issuance of such Standby Letter of Credit, on the Existing Maturity Date, on the Takeout Date and on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears provided that if there is any change in the Standby Letter of Credit Fee during any quarter, the daily amount available to be drawn under each Standby Letter of Credit shall be computed and multiplied by the Standby Letter of Credit Fee separately for each period during such quarter that such Standby Letter of Credit Fee was in effect; and

 

(c)           concurrently with each issuance, negotiation, drawing or amendment of each Commercial Letter of Credit, to the Issuing Lender for the sole account of that Issuing Lender, issuance, negotiation, drawing and amendment fees in the amounts set forth from time to time as that Issuing Lender’s published scheduled fees for such services.

 

SECTION 3.5  Agency Fees.  On March 16, 2012, and annually thereafter on each March 16, Borrower and the Co-Borrowers shall pay to the Administrative Agent an agency fee in such amounts as heretofore agreed upon by letter agreement between Borrower and Bank of America and Banc of America Securities LLC.  The agency fee is for the services to be performed by the Administrative Agent in acting as Administrative Agent and is fully earned on the date paid.  The agency fee paid to the Administrative Agent is solely for its own account and is nonrefundable.

 

SECTION 3.6  Increased Commitment Costs.  If any Lender shall determine in good faith that the introduction after the Effective Date of any applicable law, rule, regulation or guideline regarding capital adequacy, or any change therein or any change in the interpretation or administration thereof by any central bank or other Governmental Agency charged with the interpretation or administration thereof, or compliance by such Lender (or its LIBOR Lending Office) or any corporation controlling the Lender, with any request, guideline or directive regarding capital adequacy (whether or not having the force of Law) of any such central bank or other authority, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into

 

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consideration such Lender’s or such corporation’s policies with respect to capital adequacy and such Lender’s desired return on capital) determines in good faith that the amount of such capital is increased, or the rate of return on capital is reduced, as a consequence of its obligations under this Agreement, then, within ten Business Days after demand of such Lender, Borrower and the Co-Borrowers shall pay to such Lender, from time to time as specified in good faith by such Lender, additional amounts sufficient to compensate such Lender in light of such circumstances, to the extent reasonably allocable to such obligations under this Agreement, provided that Borrower and the Co-Borrowers shall not be obligated to pay any such amount which arose prior to the date which is ninety days preceding the date of such demand or is attributable to periods prior to the date which is ninety days preceding the date of such demand; provided, further, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to have been enacted, adopted and issued after the Effective Date, regardless of the date actually enacted, adopted or issued.  Each Lender’s determination of such amounts shall be conclusive in the absence of manifest error.  Any request for compensation by a Lender under this Section shall set forth the basis upon which it has been determined that such an amount is due from Borrower and the Co-Borrowers, a calculation of the amount due, and a certification that the corresponding costs or diminished rate of return on capital have been incurred or sustained by the Lender.  If Borrower and the Co-Borrowers become obligated to pay a material amount under this Section to any Lender, that Lender will be subject to removal in accordance with Section 11.24; provided that Borrower and the Co-Borrowers shall have paid such amount to that Lender and that Borrower and the Co-Borrowers, within the thirty day period following the date of such payment, shall have notified that Lender in writing of their intent to so remove the Lender.

 

SECTION 3.7  LIBOR Costs and Related Matters.  (a)  In the event that any Governmental Agency imposes on any Lender any reserve or comparable requirement (including any emergency, supplemental or other reserve) with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “eurocurrency liabilities”) of that Lender, Borrower or the relevant Co-Borrower shall pay that Lender within five Business Days after demand all amounts necessary to compensate such Lender (determined as though such Lender’s LIBOR Lending Office had funded 100% of its LIBOR Advance in the Designated Market) in respect of the imposition of such reserve requirements.  The Lender’s determination of such amount shall be conclusive in the absence of manifest error.

 

(b)           If, after the Effective Date, the existence or occurrence of any Special Eurodollar Circumstance:

 

(i)            shall subject any Lender or its LIBOR Lending Office to any tax, duty or other charge or cost with respect to any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances, or shall change the basis of taxation of payments to any Lender attributable to the principal of or interest on any LIBOR Advance or any other amounts due under this Agreement in respect of any LIBOR Advance, any of its Notes evidencing

 

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LIBOR Advances or its obligation to make LIBOR Advances, excluding (i) taxes imposed on or measured in whole or in part by its overall net income, gross income or gross receipts, (ii) franchise taxes imposed by (A) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or LIBOR Lending Office or (B) any jurisdiction (or political subdivision thereof) in which it is “doing business,” and (iii) any withholding taxes or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrower or the relevant Co- Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then available under applicable Laws;

 

(ii)           shall impose, modify or deem applicable any reserve not applicable or deemed applicable on the Effective Date (including any reserve imposed by the Board of Governors of the Federal Reserve System, special deposit, capital or similar requirements against assets of, deposits with or for the account of, or credit extended by, any Lender or its LIBOR Lending Office); or

 

(iii)          shall impose on any Lender or its LIBOR Lending Office or the Designated Market any other condition affecting any LIBOR Advance, any of its Notes evidencing LIBOR Advances, its obligation to make LIBOR Advances or this Agreement, or shall otherwise affect any of the same;

 

(iv)          and the result of any of the foregoing, as determined in good faith by such Lender, increases the cost to such Lender or its LIBOR Lending Office of making or maintaining any LIBOR Advance or in respect of any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances or reduces the amount of any sum received or receivable by such Lender or its LIBOR Lending Office with respect to any LIBOR Advance, any of its Notes evidencing LIBOR Advances or its obligation to make LIBOR Advances (assuming such Lender’s LIBOR Lending Office had funded 100% of its LIBOR Advance in the Designated Market), then, within five Business Days after demand by such Lender (with a copy to the Administrative Agent), Borrower and the Co-Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction (determined as though such Lender’s LIBOR Lending Office had funded 100% of its LIBOR Advance in the Designated Market).  A statement of any Lender claiming compensation under this clause (b) and setting forth in reasonable detail the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error.

 

(c)           If, after the Effective Date, the existence or occurrence of any Special Eurodollar Circumstance shall, in the good faith opinion of any Lender, make it unlawful or impossible for such Lender or its LIBOR Lending Office to make, maintain or fund its portion of any LIBOR Advance or materially restrict the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the Designated Market, or to determine or charge interest rates based upon LIBOR, and such Lender shall so notify the Administrative Agent, then such Lender’s obligation to make LIBOR Advances shall be suspended for the duration of such illegality or impossibility and the

 

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Administrative Agent forthwith shall give notice thereof to the other Lenders, Borrower and the Co-Borrowers.  Upon receipt of such notice, the outstanding principal amount of such Lender’s LIBOR Advances, together with accrued interest thereon, automatically shall be converted to Base Rate Advances on either (1) the last day of the Interest Period(s) applicable to such LIBOR Advances if such Lender may lawfully continue to maintain and fund such LIBOR Advances to such day(s) or (2) immediately if such Lender may not lawfully continue to fund and maintain such LIBOR Advances to such day(s), provided that in such event the conversion shall not be subject to payment of a prepayment fee under clause (e) of this Section.  Each Lender agrees to endeavor promptly to notify Borrower and the Co-Borrowers of any event occurring after the Effective Date of which it has actual knowledge, which will cause that Lender to notify the Administrative Agent under this Section, and agrees to designate a different LIBOR Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.  In the event that any Lender is unable, for the reasons set forth above, to make, maintain or fund its portion of any LIBOR Loan or Advance, such Lender shall fund such amount as a Base Rate Advance for the same period of time, and such amount shall be treated in all respects as a Base Rate Advance.  Any Lender whose obligation to make LIBOR Advances has been suspended under this Section shall promptly notify the Administrative Agent and Borrower of the cessation of the Special Eurodollar Circumstance which gave rise to such suspension.

 

(d)           If, with respect to any proposed LIBOR Loan:

 

(i)            the Administrative Agent reasonably determines that, by reason of circumstances affecting the Designated Market generally that are beyond the reasonable control of the Lenders, deposits in Dollars (in the applicable amounts) are not being offered to any Lender in the Designated Market for the applicable Interest Period; or

 

(ii)           the Requisite Lenders advise the Administrative Agent that LIBOR as determined by the Administrative Agent (i) does not represent the effective pricing to such Lenders for deposits in Dollars in the Designated Market in the relevant amount for the applicable Interest Period, or (ii) will not adequately and fairly reflect the cost to such Lenders of making the applicable LIBOR Advances;

 

then the Administrative Agent forthwith shall give notice thereof to Borrower or the relevant Co- Borrower and the Lenders, whereupon until the Administrative Agent notifies Borrower or the relevant Co-Borrower that the circumstances giving rise to such suspension no longer exist, the obligation of the Lenders to make any future LIBOR Advances shall be suspended unless (but only if clause (2) above is the basis for such suspension) Borrower and each Co-Borrower notify the Administrative Agent in writing that they elect to pay the Enhanced LIBOR Margin with respect to all LIBOR Loans made during such period.

 

(e)           Upon payment or prepayment of any LIBOR Advance (other  than as the result of a conversion required under clause (c) of this Section) on a day other than the last day in the applicable Interest Period (whether voluntarily, involuntarily, by reason of acceleration, or otherwise), or upon the failure of Borrower or any Co-Borrower (for a reason other than the failure of a Lender to make an Advance) to borrow on the date or in the amount specified for a

 

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LIBOR Advance in any Request for Loan, or upon the failure of Borrower or any Co-Borrower to prepay a LIBOR Loan or Advance on the date specified in a notice of prepayment delivered to the Administrative Agent pursuant to Section 3.1(f), Borrower and the Co-Borrowers shall pay to the appropriate Lender within 10 Business Days after demand a prepayment fee, failure to borrow fee or failure to prepay fee, as the case may be (determined as though 100% of that Lender’s LIBOR Advance had been funded in the Designated Market), equal to the sum  of:

 

(i)            the principal amount of the LIBOR Advance prepaid or not borrowed or prepaid, as the case may be, times (the number of days from and including the date of prepayment or failure to borrow or prepay, as applicable, to but excluding the last day in the applicable Interest Period divided by 360) times the applicable Interest Differential (provided that the product of the foregoing formula must be a positive number); plus

 

(ii)           all out-of-pocket expenses incurred by the Lender reasonably attributable to such payment, prepayment or failure to borrow.

 

Each Lender’s determination of the amount of any prepayment fee, failure to borrow fee or failure to prepay fee payable under this Section shall be conclusive in the absence of manifest error.

 

(f)            Each Lender agrees to endeavor promptly to notify Borrower and the Co-Borrowers of any event of which it has actual knowledge, occurring after the Effective Date, which will entitle such Lender to compensation pursuant to clause (a) or clause (b) of this Section, and agrees to designate a different LIBOR Lending Office if such designation will avoid the need for or reduce the amount of such compensation and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender.  Any request for compensation by a Lender under this Section shall set forth the basis upon which it has been determined that such an amount is due from Borrower and the Co-Borrowers, a calculation of the amount due, and a certification that the corresponding costs have been incurred by the Lender.

 

(g)           If any Lender claims compensation or is excused from making or continuing LIBOR Loans or Advances under this Section:

 

(i)            Borrower and the Co-Borrowers may at any time, upon at least four Business Days’ prior notice to the Administrative Agent and such Lender and upon payment in full of the amounts provided for in this Section through the date of such payment plus any prepayment fee (subject to clause (c) of this Section) required by clause (e) of this Section, pay in full the affected LIBOR Advances of such Lender or request that such LIBOR Advances be converted to Base Rate Advances; and

 

(ii)           In the case where Borrower and the Co-Borrowers become obligated to pay a material amount under this Section to any Lender, that Lender will be subject to removal in accordance with Section 11.24; provided that Borrower and the Co-Borrowers shall have paid such amount to that Lender and that Borrower and the Co-Borrowers, within the thirty day period following the date of such payment, shall have notified that Lender in writing of their intent to so remove the Lender.

 

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SECTION 3.8  Late Payments.  If any installment of principal or interest or any fee or cost or other amount payable under any Loan Document to the Administrative Agent or any Lender is not paid when due, it shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the rate otherwise payable with respect thereto plus 2% per annum (or, in the case of any Obligations which do not bear stated interest, at the rate then otherwise applicable to Base Rate Loans plus 2% per annum), to the fullest extent permitted by applicable Laws.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be compounded monthly, on the last day of each calendar month, to the fullest extent permitted by applicable Laws.

 

SECTION 3.9  Computation of Interest and Fees.  Computation of interest on Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed; computation of interest on LIBOR Loans and all fees under this Agreement shall be calculated on the basis of a year of 360 days and the actual number of days elapsed.  Borrower and the Co-Borrowers acknowledge that such latter calculation method will result in a higher yield to the Lenders than a method based on a year of 365 or 366 days.  Interest shall accrue on each Loan for the day on which the Loan is made; interest shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid.  Any Loan that is repaid on the same day on which it is made shall bear interest for one day.  Notwithstanding anything in this Agreement to the contrary, interest in excess of the maximum amount permitted by applicable Laws shall not accrue or be payable hereunder or under the, Notes, and any amount paid as interest hereunder or under the Notes which would otherwise be in excess of such maximum permitted amount shall instead be treated as a payment of principal.

 

SECTION 3.10  Non-Business Days.  If any payment to be made by Borrower, any of the Co-Borrowers or any other Party under any Loan Document shall come due on a day other than a Business Day, payment shall instead be considered due on the next succeeding Business Day and the extension of time shall be reflected in computing interest and fees.

 

SECTION 3.11  Manner and Treatment of Payments.  (a)  Each payment hereunder (except payments pursuant to Sections 3.6, 3.7, 11.3 and 11.11) or on the Notes or under any other Loan Document shall be made to the Administrative Agent, at the Administrative Agent’s Office, for the account of each of the Lenders or the Administrative Agent, as the case may be, in immediately available funds not later than 12:00 noon, Las Vegas time (other than payments with respect to Swing Line Loans, which must be paid directly to the relevant Swing Line Lender and received by 3:00 p.m., Las Vegas time), on the day of payment (which must be a Business Day).  All payments received after such time, on any Business Day, shall be deemed received on the next succeeding Business Day.  The amount of all payments received by the Administrative Agent for the account of each Lender shall be immediately paid by the Administrative Agent to the applicable Lender in immediately available funds and, if such payment was received by the Administrative Agent by 12:00 noon, Las Vegas time, on a Business Day and not so made available to the account of a Lender on that Business Day, the Administrative Agent shall reimburse that Lender for the cost to such Lender of funding the amount of such payment at the Federal Funds Rate.  All payments shall be made in lawful money of the United States of America.

 

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(b)           Other than the Required Payments and fees payable in connection with the transactions contemplated by the Amendment No. 1 and Restatement Agreement, each payment or prepayment on account of any Loan shall be applied pro  rata according to the outstanding Advances made by the applicable Lender comprising such Loan.

 

(c)           Each Lender shall use its best efforts to keep a record (which may be in tangible or electronic or other intangible form) of Advances made by it and payments received by it with respect to each such Advances and such record shall, as against Borrower and the Co- Borrowers, be presumptive evidence of the amounts owing.  Notwithstanding the foregoing sentence, the failure by any Lender to keep such a record shall not affect Borrower’s and the Co Borrowers’ joint and several obligations to pay the Obligations.

 

(d)           Each payment of any amount payable by Borrower or any other Party under this Agreement or any other Loan Document shall be made free and clear of, and without reduction by reason of, any taxes, assessments or other charges imposed by any Governmental Agency, central bank or comparable authority, excluding (i) taxes imposed on or measured in whole or in part by overall net income, gross income or gross receipts, (ii) income or franchise taxes imposed on any Lender by (A) any jurisdiction (or political subdivision thereof) in which it is organized or maintains its principal office or LIBOR Lending Office or (B) any jurisdiction (or political subdivision thereof) in which it is “doing business,” (iii) any withholding taxes or other taxes based on gross income imposed by the United States of America that are not attributable to any change in any Law or the interpretation or administration of any Law by any Governmental Agency, (iv) any withholding tax or other taxes based on gross income imposed by the United States of America for any period with respect to which it has failed to provide Borrower with the appropriate form or forms required by Section 11.21, to the extent such forms are then available under applicable Laws and (v) any taxes imposed by Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) (such Code provisions collectively, “FATCA”) and any current or future regulations or official interpretations thereof (all such non-excluded taxes, assessments or other charges being hereinafter referred to as “Taxes”).  To the extent that Borrower or any other Party is obligated by applicable Laws to make any deduction or withholding on account of Taxes from any amount payable to any Lender under this Agreement, they shall (i) make such deduction or withholding and pay the same to the relevant Governmental Agency and (ii) pay such additional amount to that Lender as is necessary to result in that Lender’s receiving a net after-Tax amount equal to the amount to which that Lender would have been entitled under this Agreement absent such deduction or withholding.  If and when receipt of such payment results in an excess payment or credit to that Lender on account of such Taxes, that Lender shall promptly refund such excess to Borrower or the relevant Party.  If Borrower or any such Party becomes obligated to pay a material amount under this Section to any Lender, that Lender will be subject to removal in accordance with Section 11.24; provided that Borrower or the relevant Party shall have paid such amount to that Lender and that Borrower and the Co-Borrowers, within the thirty day period following the date of such payment, shall have notified that Lender in writing of their intent to so remove the Lender.

 

(e)           All payments to be made by Borrower or any Co-Borrower shall be made without conditions or deduction for any counterclaim, defense, recoupment or setoff.

 

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SECTION 3.12  Funding Sources.  Nothing in this Agreement shall be deemed to obligate any Lender to obtain the funds for any Loan or Advance in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan or Advance in any particular place or manner, provided that each Lender which is not a bank under the laws of the United States or any state thereof severally represents and warrants that it has obtained the funds for its Advances in compliance with applicable Laws and that the making of its Advances will not constitute “prohibited transactions” as such term is defined in ERISA.

 

SECTION 3.13  Failure to Charge Not Subsequent Waiver.  Any decision by the Administrative Agent or any Lender not to require payment of any interest (including interest at the Default Rate), fee, cost or other amount payable under any Loan Document, or to calculate any amount payable by a particular method, on any occasion shall in no way limit or be deemed a waiver of the Administrative Agent’s or such Lender’s right to require full payment of any interest (including interest at the Default Rate), fee, cost or other amount payable under any Loan Document, or to calculate an amount payable by another method that is not inconsistent with this Agreement, on any other or subsequent occasion.

 

SECTION 3.14  Administrative Agent’s Right to Assume Payments Will be Made.  Unless Borrower, any Co-Borrower or any Lender has notified the Administrative Agent, prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that Borrower, such Co- Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that Borrower, such Co-Borrower or such Lender, as the case may be, has timely made such payment and may (but shall not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto.  If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:

 

(a)           if Borrower or any Co-Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds at the Federal Funds Rate from time to time in effect; and

 

(b)           if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to Borrower or any Co-Borrower to the date such amount is recovered by the Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal Funds Rate from time to time in effect.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Advance included in the applicable Loan.  If such Lender does not pay such amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent may make a demand therefor upon Borrower or the Co- Borrowers, if applicable, and Borrower or the Co-Borrowers, if applicable, shall pay such amount to the

 

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Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Advance.  Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Pro Rata Share of the Class A Funding Requirements or to prejudice any rights which the Administrative Agent, Borrower or any Co- Borrower may have against any Lender as a result of any default by such Lender hereunder.  A notice of the Administrative Agent to any Lender, any Co-Borrower or Borrower with respect to any amount owing under this Section 3.14 shall be conclusive, absent manifest error.

 

SECTION 3.15  Fee Determination Detail.  The Administrative Agent and any Lender shall provide reasonable detail to Borrower and the Co-Borrowers regarding the manner in which the amount of any payment to the Creditors, or that Lender, under Article 3 has been determined, concurrently with demand for such payment.

 

SECTION 3.16  Survivability.  All of Borrower’s and the Co-Borrowers’ obligations under Sections 3.6 and 3.7 shall survive for ninety days following the date on which the Class A Funding Requirements are terminated, all Obligations hereunder are fully paid and all Letters of Credit have expired.

 

ARTICLE 4
 REPRESENTATIONS AND WARRANTIES

 

Borrower and each Co-Borrower represents and warrants to the Lenders on the Effective Date that, except as set forth in the Disclosure Schedule:

 

SECTION 4.1  Existence and Qualification; Power; Compliance With Laws.  Borrower is a corporation duly incorporated, validly existing and in good standing under the Laws of Delaware.  Detroit is a limited liability company duly formed, validly existing and in good standing under the Laws of Delaware.  Borrower and each Co-Borrower are each duly qualified or registered to transact business and are in good standing in each other jurisdiction in which the conduct of their business or the ownership or leasing of their Properties makes such qualification or registration necessary, except where the failure so to qualify or register and to be in good standing would not constitute a Material Adverse Effect.  Borrower and each Co-Borrower have all requisite corporate or other organizational power and authority to conduct their business, to own and lease their Properties and to execute and deliver each Loan Document to which each is a Party and to perform the Obligations, except where the failure to have such power and authority would not constitute a Material Adverse Effect.  All outstanding shares of the capital stock of Borrower are duly authorized, validly issued, fully paid and non-assessable, and no holder thereof has any enforceable right of rescission under any applicable state or federal securities Laws.  All the Equity Interests in each Co-Borrower are duly authorized, validly issued, fully paid and non assessable, and no holder thereof has any enforceable right of rescission under any applicable state or federal securities Laws.  Borrower and each Co-Borrower are in compliance with all Requirements of Law applicable to its business as at present conducted, has obtained all authorizations, consents, approvals, orders, licenses and permits from, and has accomplished all filings, registrations and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business as at present conducted, except where the failure so to comply, file, register, qualify or obtain exemptions would not constitute a Material Adverse Effect.

 

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SECTION 4.2  Authority; Compliance With Other Agreements and Instruments and Government Regulations.  The execution, delivery and performance by Borrower, each Co-Borrower and each Guarantor of the Loan Documents to which it is a Party have been duly authorized by all necessary corporate or other organizational action, and do not and will not:

 

(a)           Require any consent or approval not heretofore obtained of any member, partner, director, stockholder, security holder or creditor of such party;

 

(b)           Violate or conflict with any provision of such party’s charter, articles of incorporation, operating agreement or bylaws, as applicable, any provision of the Indentures governing the public Indebtedness of Borrower and its Restricted Subsidiaries;

 

(c)           Result in or require the creation or imposition of any Lien upon or with respect to any Property of Borrower and its Restricted Subsidiaries, other than Liens permitted by Section 6.4; or

 

(d)           Violate any Requirement of Law applicable to such Party, subject to obtaining the authorizations from, or filings with, the Governmental Agencies described in the Disclosure Schedule;

 

and neither Borrower, the Co-Borrowers nor any Guarantor is in violation of, or default under, any Requirement of Law or Contractual Obligation, or any indenture, loan or credit agreement, in any respect that constitutes a Material Adverse Effect.  The execution and delivery of the Amendment No. 1 and Restatement Agreement does not violate or conflict with any provision of the Existing Loan Agreement.

 

SECTION 4.3  No Governmental Approvals Required.  Except as obtained or made on or prior to the Effective Date, no authorization, consent, approval, order, license or permit from, or filing, registration or qualification with, any Governmental Agency is or will be required to authorize or permit under applicable Laws the execution, delivery and performance by Borrower and its Restricted Subsidiaries of the Loan Documents to which it is a Party.

 

SECTION 4.4  Subsidiaries.  (a)  As of the Effective Date, the Disclosure Schedule correctly sets forth the names, form of legal entity, ownership and jurisdictions of organization of all Restricted Subsidiaries of Borrower.  Except as described in the Disclosure Schedule, Borrower does not own any capital stock, equity interest or debt security which is convertible, or exchangeable, for capital stock or equity interests in any Person as of the Effective Date.

 

(b)           As of the Effective Date, each Restricted Subsidiary of Borrower is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization, is duly qualified or registered to transact business and is in good standing as such in each jurisdiction in which the conduct of its business or the ownership or leasing of its Properties makes such qualification or registration necessary, and has all requisite corporate or other organizational power and authority to conduct its business and to own and lease its Properties, except where the failure to qualify or register, to be in good standing or to have such power and authority would not constitute a Material Adverse Effect.

 

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(c)           As of the Effective Date, each Restricted Subsidiary of Borrower is in compliance with all Requirements of Law applicable to its business as at present conducted, has obtained all authorizations, consents, approvals, orders, licenses, and permits from, and has accomplished all filings, registrations, and qualifications with, or obtained exemptions from any of the foregoing from, any Governmental Agency that are necessary for the transaction of its business as at present conducted, except where the failure to so comply, file, register, qualify or obtain exemptions would not constitute a Material Adverse Effect.

 

SECTION 4.5  Financial Statements.  Each of the most recently quarterly, and audited annual, financial statements filed by Borrower with the Commission fairly present in all material respects the financial condition, results of operations and changes in financial position of Borrower and its Subsidiaries as of their respective dates and for the covered periods in conformity with GAAP, consistently applied (except, in the case of quarterly financial statements, for the absence of certain footnotes and other informational disclosures customarily omitted from interim financial statements).

 

SECTION 4.6  No Other Liabilities; No Material Adverse Changes.  Borrower and its Subsidiaries do not have any material liability or material contingent liability required under GAAP to be reflected or disclosed and not reflected or disclosed in the most recent financial statements filed by Borrower with the Commission, other than liabilities and contingent liabilities arising in the ordinary course of business since the date of such financial statements.

 

SECTION 4.7  [Reserved].

 

SECTION 4.8  Litigation.  There are no actions, suits, proceedings or investigations pending as to which Borrower or any of its Subsidiaries have been served or have received notice or, to the best knowledge of Borrower and the Co-Borrowers, threatened against or affecting Borrower or any of its Restricted Subsidiaries or any Property of any of them before any Governmental Agency which (a) could reasonably be expected to have a Material Adverse Effect, or (b) could reasonably be expected to impair the validity or enforceability of the Loan Documents in a manner which is materially adverse to the interests of the Lenders.

 

SECTION 4.9  Binding Obligations.  Each of the Loan Documents to which Borrower or any of its Restricted Subsidiaries is a Party will, when executed and delivered by such Party, constitute the legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as enforcement may be limited by Debtor Relief Laws, Gaming Laws or equitable principles relating to the granting of specific performance and other equitable remedies as a matter of judicial discretion.

 

SECTION 4.10  No Default.  No event has occurred and is continuing that is a Default or Event of Default.

 

SECTION 4.11  ERISA.  (a) With respect to each Pension Plan:

 

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(i)            such Pension Plan complies in all material respects with ERISA and any other applicable Laws to the extent that noncompliance could reasonably be expected to have a Material Adverse Effect;

 

(ii)           such Pension Plan has not incurred any “accumulated funding deficiency” (as defined in Section 302 of ERISA) that could reasonably be expected to have a Material Adverse Effect;

 

(iii)          no “reportable event” (as defined in Section 4043 of ERISA) has occurred that could reasonably be expected to have a Material Adverse Effect; and

 

(iv)          neither Borrower nor any of its Subsidiaries has engaged in any non-exempt “prohibited transaction” (as defined in Section 4975 of the Code) that could reasonably be expected to have a Material Adverse Effect.

 

(b)           Neither Borrower nor any of its Subsidiaries has incurred or expects to incur any withdrawal liability to any Multiemployer Plan that could reasonably be expected to have a Material Adverse Effect.

 

SECTION 4.12  Regulations T, U and X; Investment Company Act.  Borrower is not engaged and will not engage in, principally or as one of its important activities, in the business of purchasing or carrying any Margin Stock in violation of Regulations T, U and X.  Neither Borrower nor any of its Subsidiaries is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

 

SECTION 4.13  Disclosure.  All written statements made by a Senior Officer of Borrower, any Co-Borrower or any Guarantor to the Administrative Agent or any Lender in connection with this Agreement, or in connection with any Loan, as of the date thereof, taken as a whole, do not contain any untrue statement of a material fact or omit a material fact necessary to make the statements made not misleading in light of all the circumstances existing at the date any statement was made; provided that, with respect to the Projections, Borrower only makes the representations set forth in Section 4.15.

 

SECTION 4.14  Tax Liability.  Borrower and its Subsidiaries have filed all material tax returns which are required to be filed, and have paid, or made provision for the payment of, all material taxes with respect to the periods, Property or transactions covered by said returns, or pursuant to any assessment received by Borrower or its Subsidiaries, except such taxes, if any, as are being contested in good faith by appropriate proceedings and as to which adequate reserves have been established and maintained, and so long as no material Property of Borrower or any of its Subsidiaries is in jeopardy of being seized, levied upon or forfeited.

 

SECTION 4.15  Projections.  As of the date of the preparation of the Projections, to the best knowledge of Borrower and the Co-Borrowers, the assumptions set forth in the Projections were reasonable and consistent with each other and with all facts known to Borrower and its Subsidiaries as of that date, and the Projections were reasonably based on such assumptions.  As of the Effective Date, no fact or circumstance has come to the attention of Borrower since the preparation of the Projections that is in material conflict with the assumptions set forth in the Projections.  Nothing in this Section shall be construed as a representation or covenant that the Projections in fact will be achieved.  The Creditors acknowledge that the Projections are forward-looking statements and that actual financial results for Borrower and its Subsidiaries could differ materially from those set forth in the Projections.

 

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SECTION 4.16  Hazardous Materials.  To the best knowledge of Borrower and the Co-Borrowers, no condition exists that violates any Hazardous Material Law affecting any Real Property except for such violations that would not individually or in the aggregate have a Material Adverse Effect.

 

SECTION 4.17  Solvency.  Giving effect to the incurrence of the Obligations and the Guaranty, on the Effective Date, Borrower and its Restricted Subsidiaries, considered as a single integrated financial enterprise, are Solvent.

 

ARTICLE 5
 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND
 REPORTING REQUIREMENTS)

 

So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid, or any portion of either Commitment remains in force, Borrower shall, and shall cause each of its Restricted Subsidiaries to, and each Co-Borrower shall, unless the Administrative Agent (with the written approval of the Requisite Lenders) otherwise consents:

 

SECTION 5.1  Preservation of Existence.  Preserve and maintain their respective existences in the jurisdiction of their formation and all material authorizations, rights, franchises, privileges, consents, approvals, orders, licenses, permits, or registrations from any Governmental Agency that are necessary for the transaction of their respective business except (a) where the failure to so preserve and maintain the existence of any Restricted Subsidiary of Borrower and such authorizations, rights, franchises, privileges, consents, approvals, orders, licenses, permits, or registrations would not constitute a Material Adverse Effect, and (b) that a merger permitted by Section 6.1 or a Disposition shall not constitute a violation of this covenant; and qualify and remain qualified to transact business in each jurisdiction in which such qualification is necessary in view of their respective business or the ownership or leasing of their respective Properties except where the failure to so qualify or remain qualified would not constitute a Material Adverse Effect.

 

SECTION 5.2  Maintenance of Properties.  Maintain, preserve and protect all of their respective material Properties in good order and condition, subject to wear and tear in the ordinary course of business, and not permit any waste of their respective Properties, except that the failure to maintain, preserve and protect a particular item of Property that is not of significant value, either intrinsically or to the operations of Borrower and its Restricted Subsidiaries, taken as a whole, shall not constitute a violation of this covenant.

 

SECTION 5.3  Maintenance of Insurance.  Maintain liability, casualty and other insurance (subject to customary deductibles and retentions) with responsible insurance companies in such amounts and against such risks as is carried by responsible companies engaged in similar businesses and owning similar assets in the general areas in which Borrower and its Restricted Subsidiaries operate.

 

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SECTION 5.4  Compliance With Laws.  Comply, within the time period, if any, given for such compliance by the relevant Governmental Agency with enforcement authority, with all Requirements of Law (including Hazardous Materials Laws, ERISA, federal tax laws and Gaming Laws) to the extent non-compliance with such Requirements of Law constitutes a Material Adverse Effect, except that Borrower and its Restricted Subsidiaries need not comply with a Requirement of Law then being contested by any of them in good faith by appropriate proceedings.

 

SECTION 5.5  Inspection Rights.  Upon reasonable notice, at any time during regular business hours and as often as reasonably requested (but not so as to materially interfere with the business of Borrower or any of its Subsidiaries) permit the Administrative Agent or any Lender, or any authorized employee, agent or representative thereof, to examine, audit and make copies and abstracts from the records and books of account of, and to visit and inspect the Properties of, Borrower and its Subsidiaries and to discuss the affairs, finances and accounts of Borrower and its Subsidiaries with any of their officers, managers, key employees or accountants and, upon request, furnish promptly to the Administrative Agent, any Lender or any advisor of the Administrative Agent or any Lender true copies of all financial information made available to the board of directors or audit committee of the board of directors of Borrower.

 

SECTION 5.6  Keeping of Records and Books of Account.  Keep adequate records and books of account reflecting all financial transactions in conformity with GAAP, consistently applied, and in material conformity with all applicable requirements of any Governmental Agency having regulatory jurisdiction over Borrower or any of its Subsidiaries.

 

SECTION 5.7  Use of Proceeds.  Use the proceeds of Loans (a) to finance capital expenditures, (b) to finance design, development and construction expenses associated with Acquisitions and Investments not prohibited under Article 6 hereof, and (c) for other general corporate purposes.

 

SECTION 5.8  Guarantors.  Cause each Person which hereafter becomes a Restricted Subsidiary of Borrower to promptly (a) execute and deliver a Guaranty to the Administrative Agent and (b) deliver to the Administrative Agent (i) such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officials of such Person as the Administrative Agent may require evidencing the identity, authority and capacity of each Responsible Official thereof authorized to act as a Responsible Official in connection with the Guaranty and the other Loan Documents to which such Person is or may become a party, (ii) such documents and certifications as the Administrative Agent may reasonably require to evidence that such Person is duly organized or formed, validly existing, in good standing and qualified to engage in business in the jurisdiction of organization or formation of such Person and (iii) favorable opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (ii)), all in form, content and scope reasonably satisfactory to the Administrative Agent.

 

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ARTICLE 6
 NEGATIVE COVENANTS

 

So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid, or any portion of either Commitment remains in force, Borrower shall not, and shall not permit any of its Restricted Subsidiaries to, and each Co-Borrower shall not, in each case unless the Administrative Agent (acting at the direction of the Requisite Lenders or, if required by Section 11.2, of all of the Lenders) otherwise consents:

 

SECTION 6.1  Mergers and Other Fundamental Changes.  Merge, dissolve, liquidate, or consolidate with or into another Person, except that, subject to Section 6.2 and so long as no Default exists or would result therefrom:

 

(a)           any Restricted Subsidiary may merge with (i) Borrower, provided that Borrower shall be the continuing or surviving Person, or (ii) any one or more other Restricted Subsidiaries;

 

(b)           mergers and consolidations solely to effect a mere change in the state or form of organization of Borrower or any Restricted Subsidiary;

 

(c)           dissolutions and liquidations of Restricted Subsidiaries so long as (i) the aggregate fair market value of assets held by such Restricted Subsidiaries that are not retained by Borrower or another Restricted Subsidiary does not exceed $50,000,000 and (ii) such dissolution or liquidation is determined by Borrower to be in the best interests of Borrower, as evidenced by a certificate of a Responsible Official of Borrower; and

 

(d)           Borrower or any Restricted Subsidiary may merge with any Person, provided that (i) Borrower or a Restricted Subsidiary is the surviving Person, (ii) such merger is otherwise permitted as an Investment under Section 6.8 hereof, (iii) no Default shall have occurred and be continuing or result therefrom, (iv) the financial condition of Borrower and its Subsidiaries is determined by Borrower to not be adversely affected thereby, as evidenced by a certificate of a Responsible Official of Borrower and (v) Borrower and its Restricted Subsidiaries execute such amendments to the Loan Documents as may be requested by the Administrative Agent to assure the continued effectiveness of any guarantees issued by the relevant Persons and the continued priority and perfection of any Liens granted in favor of the Administrative Agent by such Persons.

 

SECTION 6.2  Hostile Acquisitions.  Use the proceeds of any Loan in connection with the acquisition of part or all of a voting interest of five percent or more in any corporation or other business entity if such acquisition is opposed by the board of directors or other equivalent governing body of such corporation or business entity.

 

SECTION 6.3  Change in Nature of Business.  Make any material change in the nature of the business of Borrower and its Subsidiaries, taken as a whole.

 

SECTION 6.4  Liens and Negative Pledges.  Create, incur, assume or suffer to exist any Lien or Negative Pledge of any nature upon or with respect to any of its Properties, or engage in any sale and leaseback transaction with respect to any of its Properties, whether now owned or hereafter acquired, except:

 

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(a)           Permitted Encumbrances;

 

(b)           Liens and Negative Pledges in favor of the Administrative Agent securing the Obligations under the Loan Documents;

 

(c)           Liens and Negative Pledges existing on the Effective Date and disclosed in the Disclosure Schedule and, in each case, any renewals/extensions or amendments thereof, provided that the obligations secured or benefited thereby are not increased;

 

(d)           Liens on Property acquired by Borrower or any of its Restricted Subsidiaries after the Effective Date that are in existence at the time of such acquisition and are not created in contemplation of such acquisition, and Negative Pledges relating to the Property so acquired;

 

(e)           purchase money Liens securing Indebtedness and Capital Lease Obligations permitted under Section 6.7(f);

 

(f)            any Lien or Negative Pledge created by an agreement or instrument entered into by Borrower or a Restricted Subsidiary of Borrower in the ordinary course of its business which consists of a restriction on the assignability, transfer or hypothecation of such agreement or instrument;

 

(g)           Liens granted on the stock, partnership or other equity interests in a Person which is not a Restricted Subsidiary owned by Borrower or any if its Restricted Subsidiaries, which are granted solely to secure Indebtedness of that Person;

 

(h)           Liens securing any Senior Indebtedness provided that the Obligations are secured equally, ratably and on a pari passu basis with such Senior Indebtedness, and Negative Pledges in favor of any Senior Indebtedness provided such Negative Pledges do not prohibit the granting of Liens to secure the Obligations (but which may require the granting of concurrent equal, ratable and pari passu Liens in favor of such Senior Indebtedness);

 

(i)            Liens on certain assets and properties of Restricted Subsidiaries of Borrower located in Las Vegas, Nevada and more particularly described on Schedule 6.4(i), securing Guaranty Obligations permitted by Section 6.7(g)(i);

 

(j)            Liens and Negative Pledges securing the Existing Secured Notes and any Secured Refinancing Indebtedness and Guaranty Obligations issued with respect thereto, provided that the Liens securing any Secured Refinancing Indebtedness shall cover no more collateral than the collateral covered by the Liens existing on the Effective Date to secure the Indebtedness which is being refinanced (but which may require the granting of concurrent equal, ratable and pari passu Liens on such collateral in favor of the holders of Borrower’s 13% Existing Secured Notes issued pursuant to the Indenture dated as of November 14, 2008);

 

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(k)           Liens and Negative Pledges granted to secure Indebtedness for Related Swap Agreements (which may be secured by cash collateral in an amount not to exceed $15,000,000); and

 

(l)            Liens on cash collateral deposited by Borrower to secure Indebtedness permitted under Section 6.7(k) in an aggregate amount not to exceed 105% of the aggregate amount of Indebtedness outstanding under such Section 6.7(k) at any time;

 

provided that this Section shall not be effective to prohibit the Liens or Negative Pledges with respect to securities issued by any gaming licensee to the extent that appropriate approvals of this covenant have not been obtained under applicable Gaming Laws.

 

SECTION 6.5  Minimum EBITDA.  Borrower shall not permit Borrower Group EBITDA as of the last day of any Fiscal Quarter and for the period of four consecutive Fiscal Quarters ending on such date, to be less than the amount set forth below opposite such date:

 

	
Fiscal Quarters Ending
    	
 
    	
Minimum
   EBITDA (in
   millions)
    	
 
    
	
March 31, 2012 through December 31, 2012
    	
 
    	
$
    	
1,200
    	
 
    
	
March 31, 2013
    	
 
    	
$
    	
1,250
    	
 
    
	
June 30, 2013 through December 31, 2013
    	
 
    	
$
    	
1,300
    	
 
    
	
Subsequent Fiscal Quarters
    	
 
    	
$
    	
1,400
    	
 
    

 

SECTION 6.6 Capital Expenditures. Borrower shall not, and shall not permit its Restricted Subsidiaries to, make or become legally obligated to make any Capital Expenditure, except for Capital Expenditures in the ordinary course of business not exceeding, in the aggregate for Borrower and its Restricted Subsidiaries during each Fiscal Year set forth below, the amount set forth opposite such Fiscal Year:

 

	
Fiscal Year
    	
 
    	
Amount
   (in millions)
    	
 
    
	
2012
    	
 
    	
$
    	
500
    	
 
    
	
2013 and each subsequent Fiscal Year
    	
 
    	
$
    	
600
    	
 
    

 

SECTION 6.7  Indebtedness.  Create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)           obligations (contingent or otherwise) existing or arising under any Swap Agreement, provided that (i) such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates or foreign exchange rates and (ii) such Swap Agreement does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

 

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(b)           Indebtedness of Borrower or a Restricted Subsidiary owed to Borrower or a Restricted Subsidiary which Indebtedness is subject to subordination terms substantially in the form of Exhibit H;

 

(c)           Indebtedness under the Loan Documents;

 

(d)           Indebtedness outstanding on the Effective Date and:

 

(i)            to the extent any such item of Indebtedness is in excess of $25,000,000, listed on Schedule 6.7; and

 

(ii)           to the extent any such item of Indebtedness is in an amount less than $25,000,000, including renewals, extensions, refinancing and refunding thereof in a principal amount not to exceed the outstanding principal amount of the Indebtedness being renewed, extended, refinanced or refunded plus any accrued interest and associated fees and transaction expenses;

 

(e)           Guaranty Obligations of Borrower or any Subsidiary in respect of Indebtedness otherwise permitted hereunder of Borrower or such Subsidiary;

 

(f)            Capital Lease Obligations and Indebtedness secured by purchase money Liens in an aggregate outstanding principal amount not to exceed $100,000,000 at any time;

 

(g)           Guaranty Obligations of Borrower pursuant to (i) the Amended and Restated Sponsor Completion Guarantee and (ii) the Harmon Guarantee;

 

(h)           so long as no Default shall have occurred and be continuing on the date of the incurrence thereof, or would result therefrom, Indebtedness (which may be Convertible Debt) issued or incurred in exchange for or to otherwise refinance all or a portion of the Existing Secured Notes (“Secured Refinancing Indebtedness”); provided that any such Secured Refinancing Indebtedness shall be Permitted Public Indebtedness (i) in a principal amount not to exceed the outstanding principal amount of the Indebtedness being refinanced plus any accrued interest and associated fees, premiums and transaction expenses, (ii) having a maturity date not earlier than February 23, 2016 and (iii) having no scheduled amortization payments prior to February 23, 2016;

 

(i)            so long as no Default shall have occurred and be continuing on the date of the incurrence thereof, or would result therefrom, unsecured Permitted Public Indebtedness (which may be Convertible Debt) in an amount not to exceed $1,000,000,000 in the aggregate from and after the Effective Date;

 

(j)            so long as no Default shall have occurred and be continuing on the date of the incurrence thereof, or would result therefrom, unsecured Indebtedness (which may be Convertible Debt) incurred or issued in exchange for or to otherwise refinance all or a

 

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portion of any outstanding unsecured Indebtedness or Indebtedness under this Agreement (“Refinancing Indebtedness”); provided that such Refinancing Indebtedness shall: (i) be Permitted Public Indebtedness, (ii) except in the case of Indebtedness refinancing the Existing Subordinated Obligations (in which case the Refinancing Indebtedness may be senior to the Indebtedness being refinanced), be pari passu with, or junior to, the Indebtedness being refinanced and (iii) be in a principal amount not to exceed the sum of (x) 125% of the outstanding principal amount of the Indebtedness being refinanced plus (y) all accrued interest on such Indebtedness and the amount of all expenses and premiums incurred in connection therewith;

 

(k)           so long as no Default shall have occurred and be continuing on the date of the incurrence thereof, or would result therefrom, letters of credit for the account of Borrower (i) issued prior to the Takeout Date, (ii) in an aggregate amount not to exceed $50,000,000 at any time, (iii) having an expiration date not later than one year after the issuance date and (iv) which would not be permitted to be issued as Letters of Credit under this Agreement; and

 

(l)            so long as no Default shall have occurred and be continuing on the date of the incurrence thereof, or would result therefrom, Indebtedness assumed in connection with any permitted Investment which was not incurred to finance that Investment or created, incurred or assumed in contemplation of that Investment;

 

provided that Borrower shall, within 10 days of any incurrence or issuance of any Indebtedness pursuant to Sections 6.7(h), (i) or (j), provide a certificate of a Responsible Official of Borrower to the Administrative Agent, identifying under which such Section the Indebtedness was incurred and (except in the case of Section 6.7(i)) the specific Indebtedness being refinanced).

 

SECTION 6.8  Investments.  Make or hold any Investments, except:

 

(a)           Investments held by Borrower and its Subsidiaries in the form of Cash Equivalents;

 

(b)           advances to officers, directors and employees of Borrower and Subsidiaries in the ordinary course of business for travel, entertainment, relocation and analogous ordinary business purposes;

 

(c)           (i) Investments by Borrower and its Subsidiaries in their respective Subsidiaries outstanding on the Effective Date; (ii) additional Investments by Borrower and its Subsidiaries in Loan Parties; and (iii) Investments in Indebtedness permitted by Section 6.7(b); provided, that Investments in the Insurance Subsidiaries pursuant to this clause (c) following the Effective Date shall not exceed $100,000,000 in the aggregate;

 

(d)           Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

 

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(e)           Guaranty Obligations permitted by Section 6.7;

 

(f)            Investments existing on the Effective Date (other than those referred to in Section 6.8(c)(i)) and set forth on Schedule 6.8;

 

(g)           Investments by Borrower in Swap Agreements permitted under Section 6.7(a);

 

(h)           Investments required pursuant to the Amended and Restated Completion Guarantee and the Harmon Guarantee;

 

(i)            indemnification obligations of Borrower with respect to construction Liens in favor of title insurance companies issuing title insurance policies to purchasers of residential condominium units in connection with the purchase thereof;

 

(j)            Investments in CityCenter Holdings (in addition to those permitted by Section 6.8(i)) in an amount not to exceed $50,000,000 following the Effective Date;

 

(k)           other Investments by Borrower and its Restricted Subsidiaries not otherwise permitted under this Section 6.8 (including investments in CityCenter not otherwise permitted by subsections (h), (i) or (j) hereof) in an aggregate amount not to exceed $225,000,000 following the Effective Date; provided that, with respect to each Investment made pursuant to this Section 6.8(k): (i) such Investment shall not include or result in any contingent liabilities that could reasonably be expected to be material to the business, financial condition, operations or prospects of Borrower and its Restricted Subsidiaries, taken as a whole (as determined in good faith by the board of directors (or persons performing similar functions) of Borrower or such Restricted Subsidiary if the board of directors is otherwise approving such transactions and, in each other case, by a Responsible Official); and (ii) such Investment shall be in property that is part of, or in lines of business that are, substantially the same as, reasonably related to or ancillary to one or more of the principal businesses of Borrower and its Restricted Subsidiaries in the ordinary course; and

 

(l)            Investments made substantially contemporaneously with the issuance by Borrower of any Convertible Debt in derivative securities or similar products purchased by Borrower in connection therewith linked to Equity Interests underlying such Convertible Debt.

 

SECTION 6.9  Dispositions.  Make any Disposition or enter into any agreement to make any Disposition, except:

 

(a)           Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

 

(b)           Dispositions of inventory in the ordinary course of business;

 

(c)           Dispositions of equipment 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 applied to the purchase price of such replacement property, in each case within 180 days of receiving the proceeds of such Disposition;

 

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(d)           Dispositions of property by any Restricted Subsidiary to Borrower or to a Restricted Subsidiary;

 

(e)           Dispositions permitted pursuant to Section 6.1;

 

(f)            Dispositions (i) in the ordinary course of business by Borrower and its Restricted Subsidiaries of airplanes and various other non-core assets (which are not Collateral), and (ii) of other Property not constituting land, improvements or related personal property associated with any casino resort of Borrower or its Restricted Subsidiaries which, during the most recent Fiscal Year, contributed to EBITDA in an amount which is in excess of $25,000,000 or the equity securities of the Persons directly or indirectly owning such Persons; provided, that the aggregate proceeds from Dispositions made pursuant to this clause (f) following the Effective Date shall not exceed $200,000,000; provided, however, that any Disposition (or series of related Dispositions) pursuant to clauses (c), (e) and (f) of this Section 6.9 for which the aggregate proceeds therefrom shall be in an amount in excess of $50,000,000 shall be, in the good faith view of the board of directors of Borrower or the governing body of the Restricted Subsidiary effectuating such Disposition (or series of related Dispositions), for fair market value;

 

(g)           Dispositions of the Detroit Collateral so long as (i) concurrently therewith, the Loans are prepaid as provided in Section 3.1(h) or (ii) such Disposition is of personal or obsolete property in the ordinary course of business and consistent with historical practice; and

 

(h)           the Disposition by the Borgata Trustee of any of the Property subject to the Borgata Trust to a purchaser which is not an Affiliate of Borrower (it being acknowledged that distributions for the payment of interest, taxes and other similar amounts pursuant to the terms of the trust agreement in respect of the Borgata Trust (as now in effect) shall not be deemed to constitute a Disposition of trust assets); provided, for this purpose, the making of any distributions by the Borgata Trustee to Borrower and its Subsidiaries shall require the resulting prepayments under Section 3.1(i) (as if such distributions were the Net Cash Proceeds of a Disposition by Borrower); provided  further, however, that funds received from the liquidation of the Borgata Trust which represent income derived from the Borgata Property that is distributed to the Borgata Trust and retained thereby in the ordinary course of business shall not be construed as Net Cash Proceeds; and

 

(i)            Dispositions of any of Borrower’s direct or indirect ownership interests in any undeveloped land in Atlantic City, New Jersey; provided, however, that not less than 75% of the aggregate consideration received therefrom shall be paid in cash and the Net Cash Proceeds thereof shall be applied as set forth in Section 3.1(i).

 

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SECTION 6.10  Restricted Payments; Equity Issuances.  Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or issue Equity Interests in any Restricted Subsidiary to any Person which is not Borrower or another Restricted Subsidiary, except that, so long as no Default shall have occurred and be continuing at the time of any action described below or would result therefrom:

 

(a)           each Subsidiary may make Restricted Payments to Borrower, any of Borrower’s Subsidiaries that are Guarantors and any other Person that owns a direct Equity Interest in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

 

(b)           Borrower and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common Equity Interests of such Person;

 

(c)           the Subsidiaries of Borrower may declare and pay cash dividends to Borrower;

 

(d)           a Restricted Subsidiary may issue Equity Interests in a Restricted Subsidiary which is otherwise a Disposition permitted by Section 6.9(f); and

 

(e)           a Restricted Subsidiary may issue Equity Interests in additional, newly formed Restricted Subsidiaries so long as such newly formed Restricted Subsidiary abides by the provisions of this Agreement respecting its becoming a Guarantor hereunder.

 

SECTION 6.11  Prepayments, Etc. of Indebtedness.  Prepay, redeem, purchase (including at a discount), defease, refinance, exchange or otherwise satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of any subordination terms of, any Indebtedness, except:

 

(a)           the prepayment of the Loans and Advances in accordance with the terms of this agreement;

 

(b)           regularly scheduled or required repayments or redemptions of Indebtedness;

 

(c)           refinancings and refundings of Indebtedness otherwise permitted under Sections 6.7(d)(ii), (f), (g), (h), (j) or (l) (provided that (i) refinancings and refundings of Indebtedness issued pursuant to Section 6.7(h) shall meet the requirements of the proviso to such Section 6.7(h) and (ii) refinancings and refundings of Indebtedness issued pursuant to Section 6.7 (j) or (l) shall meet the requirements of the proviso to Section 6.7(j));

 

(d)           so long as no Default shall have occurred and be continuing or result therefrom, Borrower may (i) prepay, repurchase or redeem and retire any Interim Maturities and (ii) utilize up to an aggregate of $500,000,000 following the Effective Date to prepay, repurchase or redeem and retire any public Indebtedness of Borrower or any Restricted Subsidiary scheduled to mature on or after the Extended Maturity Date; and

 

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(e)           Borrower may exchange its Indebtedness for Equity Interests so long as, after giving effect thereto, no Change in Control shall have occurred.

 

SECTION 6.12  Creation of Unrestricted Subsidiaries.  Create or designate any new Unrestricted Subsidiaries, other than Subsidiaries of existing Unrestricted Subsidiaries.

 

SECTION 6.13  Loans to Detroit.  In no case may any Obligation of Detroit under the Detroit Loans be permitted to be transferred to any other Loan Party; provided, that Detroit shall be permitted to prepay the Detroit Loans pursuant to Section 3.1(h) at any time.

 

ARTICLE 7
 INFORMATION AND REPORTING REQUIREMENTS

 

SECTION 7.1  Financial and Business Information.  So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid, or any portion of either Commitment remains in force, Borrower and each Co-Borrower shall, unless the Administrative Agent (with the written approval of the Requisite Lenders) otherwise consents, at Borrower’s and the Co- Borrowers’ sole expense, deliver to the Administrative Agent for distribution by it to the Lenders:

 

(a)           As soon as practicable, and in any event within 60 days after the end of each Fiscal Quarter (other  than the fourth Fiscal Quarter in any Fiscal Year), the consolidated balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal Quarter and the consolidated statement of operations for such Fiscal Quarter, and its statement of cash flows for the portion of the Fiscal Year ended with such Fiscal Quarter, all in reasonable detail;

 

(b)           As soon as practicable, and in any event within 105 days after the end of each Fiscal Year, (i) the consolidated balance sheet of Borrower and its Subsidiaries as at the end of such Fiscal Year and the consolidated statements of operations, shareholders’ equity and cash flows, in each case of Borrower and its Subsidiaries for such Fiscal Year, in each case as at the end of and for the Fiscal Year, all in reasonable detail.  Such financial statements shall be prepared in accordance with GAAP, consistently applied, and such consolidated balance sheet and consolidated statements shall be accompanied by a report of one of the four largest public accounting firms in the United States of America or other independent public accountants of recognized standing selected by Borrower and reasonably satisfactory to the Requisite Lenders, which report shall be prepared in accordance with generally accepted auditing standards as at such date, and shall not be subject to any qualifications or exceptions as to the scope of the audit nor to any other qualification or exception determined by the Requisite Lenders in their good faith business judgment to be adverse to the interests of the Lenders.  Such accountants’ report shall be accompanied by a certificate stating that, in making the examination pursuant to generally accepted auditing standards necessary for the certification of such financial statements and such report, such accountants have obtained no knowledge of

 

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any Default or, if, in the opinion of such accountants, any such Default shall exist, stating the nature and status of such Default, and stating that such accountants have reviewed Borrower’s financial calculations as at the end of such Fiscal Year (which shall accompany such certificate) under Sections 6.5 and 6.6, have read such Sections (including the definitions of all defined terms used therein) and that nothing has come to the attention of such accountants in the course of such examination that would cause them to believe that the same were not calculated by Borrower in the manner prescribed by this Agreement;

 

(c)           As soon as practicable, and in any event within 90 days after the commencement of each Fiscal Year, a budget and projection by Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next two succeeding Fiscal Years, including for the first such Fiscal Year, projected consolidated balance sheets, statements of operations and statements of cash flow and, for the second and third such Fiscal Years, projected consolidated condensed balance sheets and statements of operations and cash flows, of Borrower and its Subsidiaries, all in reasonable detail;

 

(d)           Promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of Borrower, and copies of all annual, regular, periodic and special reports and registration statements which Borrower may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, and not otherwise required to be delivered to the Lenders pursuant to other provisions of this Section;

 

(e)           Promptly after request by the Administrative Agent or any Lender, copies of the Nevada “Regulation 6.090 Report”;

 

(f)            Promptly after request by the Administrative Agent or any Lender, copies of any other report or other document that was filed by Borrower or any of its Subsidiaries with any Governmental Agency;

 

(g)           As soon as practicable, and in any event within five Business Days after a Senior Officer of Borrower becomes aware of the existence of any condition or event which constitutes a Default or Event of Default, telephonic notice specifying the nature and period of existence thereof, and, no more than three Business Days after such telephonic notice, written notice again specifying the nature and period of existence thereof and specifying what action Borrower or its Subsidiaries are taking or propose to take with respect thereto;

 

(h)           Promptly upon a Senior Officer of Borrower or any Co-Borrower becoming aware of any litigation, governmental investigation or proceeding (including any litigation, governmental investigation or proceeding by or subject to decision by any Gaming Board) that is pending (i) against Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect, (ii) in respect of any material Indebtedness of Borrower or any of its Subsidiaries, or (iii) with respect to the Loan Documents, notice of the same;

 

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(i)            As soon as practicable, and in any event within 30 days after the end of each calendar month that is not a Fiscal Quarter ending month and 45 days after the end of each calendar month that is a Fiscal Quarter ending month, the consolidated and consolidating balance sheet of Borrower and its Subsidiaries as at the end of such month and the consolidated and consolidating statement of operations for such month and its consolidated statement of cash flows for the portion of the Fiscal Year ended with such month, all in a form and substance consistent with past practices; and

 

(j)            Such other data and information as from time to time may be reasonably requested by the Administrative Agent, any Lender (through the Administrative Agent) or the Requisite Lenders.

 

Borrower and each Co-Borrower hereby acknowledge that (a) the Administrative Agent will make available to the Lenders and the Issuing Lender materials and/or information provided by or on behalf of Borrower hereunder (collectively, “Borrower Materials”) by posting Borrower Materials on IntraLinks or another similar electronic system (the “Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to Borrower or its securities) (each, a “Public Lender”).  Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” Borrower shall be deemed to have authorized the Administrative Agent, the Issuing Lender and the Lenders to treat such Borrower Materials as either publicly available information or not material information (although it may be sensitive and proprietary) with respect to Borrower or its securities for purposes of United States Federal and state securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Investor;” and (z) the Administrative Agent shall treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Investor.”

 

SECTION 7.2  Compliance Certificates.  So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid or unperformed, or any portion of the Class A Funding Requirements remains effective, Borrower and the Co-Borrowers shall, at their sole expense, deliver to the Administrative Agent for distribution to the Lenders concurrently with the financial statements required pursuant to Sections 7.1(a) and 7.1(b), Compliance Certificates signed by a Senior Officer of Borrower and each Co-Borrower.

 

SECTION 7.3  Collateral Coverage Certificates; Appraisals.

 

(a)           So long as any Advance remains unpaid, or any Letter of Credit remains outstanding or any other Obligation remains unpaid or unperformed, or any portion of the Class A Funding Requirements remains effective, Borrower shall deliver to the Administrative Agent for distribution to the Lenders, within five Business Days following any event or circumstance which results in a change in the Extension Collateral Coverage Ratio, a Collateral Coverage Certificate setting forth the new Extension Collateral Coverage Ratio.  Each Collateral Coverage Certificate which evidences a change that either (x) increases the amount of the

 

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Indebtedness hereunder which is secured by any Collateral or (y) adds any additional Collateral shall be accompanied by:

 

(i)            except in the case of the Collateral Coverage Certificate which evidences the initial pledge and delivery of the Beau Rivage Collateral, an appraisal of such Collateral consisting of real estate which shall comply with the requirements of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989, and the amount of the Obligations proposed to be secured by any Collateral shall not exceed 80% of the appraised value thereof pursuant to such appraisal (and in the case of the Beau Rivage Collateral, the Obligations secured thereby shall not exceed [$283,000,000] unless an appraisal of such Collateral is delivered, in which case the amount of the Obligations to be secured thereby shall not exceed 80% of the appraised value of the Beau Rivage Collateral);

 

(ii)           in the case of clause (y) only, such deeds of trust, trust deeds, deeds to secured debt, mortgages, leasehold mortgages, leasehold deeds of trust, first preferred ship mortgages, security agreements, intellectual property security agreements and other security and pledge agreements as the Administrative Agent shall reasonably request to create Liens on the Extension Collateral in favor of the Administrative Agent for the benefit of the Extending Lenders, each in form and substance reasonably satisfactory to the Administrative Agent;

 

(iii)          evidence reasonably satisfactory to the Administrative Agent that the Loan Parties have taken such customary actions (including the recording of mortgages, the filing of Uniform Commercial Code financing statements, the giving of notices and the endorsement of notices on title documents) to vest in the Administrative Agent (or in any representative of the Administrative Agent designated by it) valid and subsisting Liens on the Extension Collateral; and

 

(iv)          in the case of any such Collateral constituting an addition of real property pursuant to clause (y), 2006 ALTA lender’s policies of title insurance with respect thereto and customary opinions of counsel with respect thereto, title reports, surveys and environmental assessment reports in connection with such Extension Collateral, each in scope, form and substance reasonably satisfactory to the Administrative Agent; provided, that in respect of surveys, the foregoing shall only require existing surveys of the applicable property together with affidavits of no change, or new surveys, but only to the extent that the title insurance company is unable to issue a title insurance policy deleting the standard survey exception and providing survey-related endorsements based on the existing survey and affidavit of no-change.

 

The Administrative Agent shall review each Collateral Coverage Certificate (and, if required, any accompanying appraisal) and, subject to its reasonable approval, each change in the Extension Collateral Coverage Ratio will be effective as of the date of the event or circumstance giving rise to the change in the Extension Collateral Coverage Ratio, and the Collateral Coverage Certificate will be given retroactive effect to such date upon its delivery.  The Administrative Agent shall be entitled to conclusively rely upon the accuracy of each Collateral Coverage Certificate.

 

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(b)           Upon the reasonable request of the Administrative Agent or Extending Lenders holding a majority of the Extension Obligations, but no more frequently than once in any eighteen month period with respect to any item of Extension Collateral, Borrower shall as soon as practicable deliver to the Administrative Agent an appraisal of such Extension Collateral which shall comply with the requirements of the Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 and, if applicable, a Collateral Coverage Certificate pursuant to clause (a) above.

 

(c)           Borrower agrees to use commercially reasonable efforts to deliver to the Administrative Agent a mortgage and first preferred ship mortgage encumbering the Beau Rivage Collateral, together with such other documents as required pursuant to clause (a) above, by not later than 90 days after the Effective Date.

 

ARTICLE 8
 CONDITIONS

 

SECTION 8.1  Any Increasing Advance.  The obligation of each Lender to make any Advance, and the obligation of the Issuing Lender to issue Letters of Credit, which would result in an increase in the outstanding principal amount of the Outstanding Obligations owed to that Lender, is subject to the following conditions precedent (unless the Requisite Lenders, in their sole and absolute discretion, shall agree otherwise):

 

(a)           except (i) for representations and warranties which expressly speak as of a particular date or are no longer true and correct as a result of a change which is permitted by this Agreement or (ii) as disclosed by Borrower and the Co-Borrowers and approved in writing by the Requisite Lenders, the representations and warranties contained in Article 4 (other  than Sections 4.4(a), 4.6 and 4.16) shall be true and correct on and as of the date of the Advance as though made on that date;

 

(b)           the Administrative Agent shall have timely received a Request for Loan in compliance with Article 2 (or telephonic or other request for Loan referred to in the second sentence of Section 2.1(c) of the Existing Loan Agreement, if applicable) or the Issuing Lender shall have received a Letter of Credit Application, as the case may be, in compliance with Article 2;

 

(c)           the Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent, such other assurances, certificates, documents or consents related to the foregoing as the Administrative Agent or Requisite Lenders reasonably may require; and

 

(d)           the amounts paid pursuant to the provisions of Section 3.1(h) hereof shall not result in the reduction of any Lender’s Commitment, but nonetheless shall not be available for re-borrowing through subsequent Advances or otherwise, absent the written consent of Requisite Lenders.

 

SECTION 8.2  Any Letter of Credit.  The obligation of the Issuing Lender to issue any Letter of Credit, and the obligation of the other Lenders to participate therein, are subject to the conditions precedent that (a) the conditions set forth in Section 8.1 have been satisfied, and

 

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(b) Borrower shall have certified that, giving effect to the issuance of the requested Letter of Credit, the Letter of Credit Usage shall not exceed any limitations set forth in this Agreement.

 

ARTICLE 9
 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

 

SECTION 9.1  Events of Default.  The existence or occurrence of any one or more of the following events, whatever the reason therefor and under any circumstances whatsoever, shall constitute an “Event of Default” so long as such event is continuous and has not been waived in accordance with Section 11.2:

 

(a)           Borrower or the Co-Borrowers fail to pay any principal on any of the Advances made hereunder or any L/C Borrowing or any portion thereof, on the date when due; or

 

(b)           Borrower or the Co-Borrowers fail to pay any interest on any of the Advances made hereunder, or any fees under Sections 3.3, 3.4 or 3.5, or any portion thereof, within five Business Days after the date when due; or fail to pay any other fee or amount payable to the Lenders under any Loan Document, or any portion thereof, within five Business Days after demand therefor; or

 

(c)           Borrower or the Co-Borrowers fail to comply with any of the covenants contained in Article 6, other  than the covenant contained in Section 6.3; or

 

(d)           Borrower, any of its Restricted Subsidiaries or any other Party fails to perform or observe any other covenant or agreement (not specified in clause (a), (b) or (c) above) contained in any Loan Document on its part to be performed or observed within (i) ten Business Days after the giving of notice by the Administrative Agent on behalf of the Requisite Lenders of such Default or (ii) if the nature of the covenant or agreement is such that the violation can be cured, thirty Business Days after the giving of such notice so long as Borrower and the Co-Borrowers diligently pursue in good faith the cure or correction of such violation continuously during such period; or

 

(e)           Any representation or warranty of Borrower or any of its Restricted Subsidiaries or any other Party made in any Loan Document, or in any certificate or other writing delivered by Borrower or such Restricted Subsidiary or Party pursuant to any Loan Document, proves to have been incorrect when made or reaffirmed in any respect that is materially adverse to the interests of the Lenders; or

 

(f)            Borrower or any of its Supported Subsidiaries (i) fails to pay the principal, or any principal installment, of any present or future Indebtedness of $250,000,000 or more, or any guaranty of present or future Indebtedness of $250,000,000 or more, on its part to be paid, when due (or within any stated grace period), whether at the stated maturity, upon acceleration, by failure to make any required prepayment or otherwise or (ii) fails to perform or observe any other term, covenant or agreement on its part to be performed or observed, or suffers any event of default to occur, in connection with any present or future Indebtedness of $250,000,000 or more, or of any guaranty of present or future Indebtedness of $250,000,000 or more, if as a result of such failure or sufferance

 

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any holder or holders thereof (or an agent or trustee on its or their behalf) has the right to declare such Indebtedness due before the date on which it otherwise would become due or the right to require Borrower or any of its Supported Subsidiaries to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness; or

 

(g)           Any Loan Document, at any time after its execution and delivery and for any reason other than (i) as expressly permitted hereunder, (ii) the agreement or action (or omission to act) of the Administrative Agent or any of the Lenders, or (iii) satisfaction in full of all the Obligations, ceases to be in full force and effect and, in the reasonable judgment of the Requisite Lenders, such circumstance is materially adverse to the interests of the Lenders; or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect which, in any such event in the reasonable opinion of the Requisite Lenders, is materially adverse to the interests of the Lenders; or Borrower or any of its Restricted Subsidiaries denies in writing that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

 

(h)           A final judgment against Borrower or any of its Supported Subsidiaries is entered for the payment of money in excess of $100,000,000 and, absent procurement of a stay of execution, such judgment remains unsatisfied for thirty calendar days after the date of entry of judgment, or in any event later than five days prior to the date of any proposed sale thereunder; or any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the Property of any such Person and is not released, vacated or fully bonded within thirty calendar days after its issue or levy; or

 

(i)            Borrower or any of its Supported Subsidiaries institutes or consents to the institution of any proceeding under a Debtor Relief Law relating to it or to all or any material part of its Property, or is unable or admits in writing its inability to pay its debts as they mature, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its Property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of that Person and the appointment continues undischarged or unstayed for ninety calendar days; or any proceeding under a Debtor Relief Law relating to any such Person or to all or any part of its Property is instituted without the consent of that Person and continues undismissed or unstayed for ninety calendar days; or

 

(j)            The occurrence of an Event of Default (as such term is or may hereafter be specifically defined in any other Loan Document) under any other Loan Document; or

 

(k)           Any Pension Plan maintained by Borrower or any of its Restricted Subsidiaries is determined to have a material “accumulated funding deficiency” as that term is defined in Section 302 of ERISA and the result is a Material Adverse Effect; or

 

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(l)            The occurrence of a License Revocation that continues for fifteen consecutive calendar days with respect to gaming operations at any gaming facility accounting for ten percent or more of the consolidated total assets or consolidated gross revenues of Borrower and its Restricted Subsidiaries; or

 

(m)          Any Collateral Document after delivery thereof shall for any reason (other than pursuant to the terms thereof ) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 6.4 or any other Liens reasonably acceptable to the Administrative Agent, or pursuant to the terms of such Collateral Document) on the Collateral purported to be covered thereby.

 

SECTION 9.2  Remedies Upon Event of Default.  Without limiting any other rights or remedies of the Creditors provided for elsewhere in this Agreement, or the other Loan Documents, or by applicable Law, or in equity, or otherwise:

 

(a)           Upon the occurrence, and during the continuance, of any Event of Default other than an Event of Default described in Section 9.1(i):

 

(i)            the Class A Funding Requirements, the obligation of the Issuing Lender to issue Letters of Credit, the obligation of any Swing Line Lender to make Swing Line Loans and all other obligations of the Creditors and all rights of Borrower, the Co-Borrowers and any other Parties under the Loan Documents shall be suspended without notice to or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers, except that all of the Lenders or the Requisite Lenders (as the case may be, in accordance with Section 11.2) may waive an Event of Default or, without waiving, determine, upon terms and conditions satisfactory to the Lenders or Requisite Lenders, as the case may be, to reinstate the Class A Funding Requirements and such other obligations and rights and make further Advances, and cause the Issuing Lender to issue further Letters of Credit which waiver or determination shall apply equally to, and shall be binding upon, all the Lenders;

 

(ii)           the Issuing Lender may, with the approval of the Administrative Agent on behalf of the Requisite Lenders, demand immediate payment by Borrower and the Co-Borrowers of an amount equal to the aggregate amount of all outstanding Letters of Credit to be held by the Issuing Lender in an interest-bearing cash collateral account as collateral for the Letters of Credit; and

 

(iii)          the Requisite Lenders may request the Administrative Agent to, and the Administrative Agent thereupon shall, terminate the Class A Funding Requirements and/or declare all or any part of the unpaid principal of all Advances made hereunder, all interest accrued and unpaid thereon and all other amounts payable under the Loan Documents to be forthwith due and payable, whereupon the same shall become and be forthwith due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by Borrower and each Co-Borrower.

 

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(b)           Upon the occurrence, and during the continuance, of any Event of Default described in Section 9.1(i):

 

(i)            the Class A Funding Requirements, the obligation of the Issuing Lender to issue Letters of Credit, the obligation of any Swing Line Lender to make Swing Line Loans and all other obligations of the Creditors and all rights of Borrower, the Co-Borrowers and any other Parties under the Loan Documents shall terminate without notice to or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers, except that all of the Lenders may waive the Event of Default or, without waiving, determine, upon terms and conditions satisfactory to all the Lenders, to reinstate the Class A Funding Requirements and such other obligations and rights and make further Advances and to cause the Issuing Lender to issue further Letters of Credit, which determination shall apply equally to, and shall be binding upon, all the Lenders;

 

(ii)           an amount equal to the aggregate amount of all outstanding Letters of Credit shall be immediately due and payable to the Issuing Lender without notice to or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers, to be held by the Issuing Lender in an interest-bearing account as collateral for the Letters of Credit; and

 

(iii)          the unpaid principal of all Advances made hereunder, all interest accrued and unpaid thereon and all other amounts payable under the Loan Documents shall be forthwith due and payable, without protest, presentment, notice of dishonor, demand or further notice of any kind, all of which are expressly waived by Borrower and the Co-Borrowers.

 

(c)           Upon the occurrence, and during the continuance, of any Event of Default, the Creditors, or any of them, without notice to (except as expressly provided for in any Loan Document) or demand upon Borrower or any Co-Borrower, which are expressly waived by Borrower and the Co-Borrowers (except as to notices expressly provided for in any Loan Document), may proceed (but only with the consent of the Requisite Lenders) to protect, exercise and enforce their rights and remedies under the Loan Documents against Borrower, the Co- Borrowers and any other Party and such other rights and remedies as are provided by Law or equity.

 

(d)           The order and manner in which the Creditors’ rights and remedies are to be exercised shall be determined by the Requisite Lenders in their sole discretion, and all payments received by the Creditors, or any of them, shall be applied first to the costs and expenses (including Attorney Costs) of the Creditors, and thereafter paid pro  rata to the Lenders in the same proportions that the aggregate Obligations owed to each Lender under the Loan Documents bear to the aggregate Obligations owed under the Loan Documents to all the Lenders, without priority or preference among the Lenders (except in respect of amounts realized from the exercise of Liens on the Collateral, as is otherwise provided in the Loan Documents granting Liens on Collateral).  Regardless of how each Lender may treat payments for the purpose of its own accounting, for the purpose of computing the Obligations hereunder and under the Notes, payments shall be

 

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applied first, to the costs and expenses of the Creditors, as set forth above, second, to the payment of accrued and unpaid interest due under any Loan Documents to and including the date of such application (ratably, and without duplication, according to the accrued and unpaid interest due under each of the Loan Documents), third, to the payment of all other amounts (including principal and fees) then owing to the Creditors under the Loan Documents, and fourth to Cash Collateralize the portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit.  Amounts due to a Lender under a Related Swap Agreement shall be considered a principal amount for purposes of the preceding sentence.  Amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Obligations, if any, in the order set forth above.  No application of payments will cure any Event of Default, or prevent acceleration, or continued acceleration, of amounts payable under the Loan Documents, or prevent the exercise, or continued exercise, of rights or remedies of the Lenders hereunder or thereunder or at Law or in equity.

 

ARTICLE 10
 THE ADMINISTRATIVE AGENT

 

SECTION 10.1  Appointment and Authorization of Administrative Agent.  (a) Each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Loan Documents with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

(b)           Each of the Issuing Lender shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each Issuing Lender shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article 10 with respect to any acts taken or omissions suffered by that Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and the applications and agreements for letters of credit pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in this Article 10 and in the definition of “Agent-Related

 

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Person” includes the Issuing Lender with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the Issuing Lender.

 

(c)           The Administrative Agent shall also act as the “collateral agent” under the Loan Documents, and each of the Lenders and the Issuing Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and Issuing Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 10.2 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article 10 and Article 11 (including Section 10.7, as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

 

SECTION 10.2  Delegation of Duties.  The Administrative Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects.

 

SECTION 10.3  Liability of Administrative Agent.  No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Party or any other party to any Loan Document to perform its obligations hereunder or thereunder.  No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Party or any Affiliate thereof.

 

SECTION 10.4  Reliance by Administrative Agent.  (a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Party), independent accountants and other experts selected by the Administrative Agent.  The Administrative Agent shall be fully justified in failing or refusing to take any action under

 

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any Loan Document unless it shall first receive such advice or concurrence of the Requisite Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Requisite Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

 

(b)           For purposes of determining compliance with the conditions specified in Article 12, unless the Administrative Agent shall have received notice from the Requisite Lenders prior to the proposed Effective Date (or Takeout Date, as applicable) specifying its objection to the manner in which any condition precedent is proposed to be satisfied, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required under Article 12.

 

SECTION 10.5  Notice of Default.  The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or Borrower referring to this Agreement, describing such Default and stating that such notice is a “notice of default.”  The Administrative Agent will notify the Lenders of its receipt of any such notice.  The Administrative Agent shall take such action with respect to such Default as may be directed by the Requisite Lenders in accordance with Article 9; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the best interest of the Lenders.

 

SECTION 10.6  Credit Decision; Disclosure of Information by Administrative Agent.  Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession.  Each Lender represents to the Administrative Agent that it has, independently and without reliance upon any Agent- Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower, Co-Borrower and the other Parties hereunder.  Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of Borrower and the other Parties.

 

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Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person.

 

SECTION 10.7  Indemnification of Administrative Agent.  Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Party and without limiting the obligation of any Party to do so), pro  rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent determined in a final, nonappealable judgment by a court of competent jurisdiction to have resulted from such Agent-Related Person’s own gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Requisite Lenders (or, if required by Section 11.2, all of the Lenders) shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section.  Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of Borrower.  The undertaking in this Section shall survive termination of the Class A Funding Requirements, the payment of all other Obligations and the resignation of the Administrative Agent.

 

SECTION 10.8  Administrative Agent in its Individual Capacity.  Bank of America and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Parties and their respective Affiliates as though Bank of America were not the Administrative Agent or the Issuing Lender hereunder and without notice to or consent of the Lenders.  The Lenders acknowledge that, pursuant to such activities, Bank of America or its Affiliates may receive information regarding any Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Party or such Affiliate) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them.  With respect to its Loans, Bank of America shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent or the Issuing Lender, and the terms “Lender” and “Lenders” include Bank of America in its individual capacity.

 

SECTION 10.9  Successor Administrative Agent.  The Administrative Agent may resign as Administrative Agent upon 30 days’ notice to the Lenders; provided that any such resignation by Bank of America shall also constitute its resignation as an Issuing Lender and, if applicable, as a Swing Line Lender.  The Administrative Agent shall, in connection with any such

 

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resignation, make appropriate arrangements to ensure that, to the extent that it then holds any capital stock or other equity securities of any Person which is a gaming licensee as collateral for the Obligations, that any transfer of possession of such pledged securities to any successor is in full compliance with the requirements of all relevant Gaming Boards.  If the Administrative Agent resigns under this Agreement, the Requisite Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders, which successor administrative agent shall be consented to by Borrower at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed).  If no successor administrative agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and Borrower, a successor administrative agent from among the Lenders.  Upon the acceptance of its appointment as successor administrative agent hereunder, the Person acting as such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent, Issuing Lender and, if applicable, Swing Line Lender and the respective terms “Administrative Agent” and “Issuing Lender” (and, if applicable, “Swing Line Lender”) shall mean or include such successor administrative agent, Letter of Credit issuer or Swing Line Lender, and the retiring Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated and the retiring Issuing Lender’s (and, if applicable, Swing Line Lender’s) rights, powers and duties as such shall be terminated, without any other or further act or deed on the part of such retiring Issuing Lender or Swing Line Lender or any other Lender, other than the obligation of the successor Issuing Lender to issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or to make other arrangements satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.  After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Article 10 and Sections 11.3 and 11.11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.  If no successor administrative agent has accepted appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Requisite Lenders appoint a successor agent as provided for above.

 

SECTION 10.10  Administrative Agent May File Proofs of Claim.  In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise.

 

(a)           to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Article 3 and Section 11.3) allowed in such judicial proceeding; and

 

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(b)           to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Article 3 and Section 11.3.  Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.

 

SECTION 10.11  Other Agents, Arrangers and Managers.  None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a “syndication agent,” “documentation agent,” “co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger”, “co-arranger”, “senior managing agent” or “managing agent” shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than, in the case of such Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders or other Persons so identified shall have or be deemed to have any fiduciary relationship with any Lender.  Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders or other Persons so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.

 

SECTION 10.12  No Obligations of Borrower and the Co-Borrowers.  Nothing contained in this Article 10 shall be deemed to impose upon Borrower or any Co-Borrower any obligation in respect of the due and punctual performance by the Administrative Agent of its obligations to the Lenders under any provision of this Agreement, and Borrower and the Co-Borrowers shall have no liability to the Administrative Agent or any of the Lenders in respect of any failure by the Administrative Agent or any Lender to perform any of its obligations to the Creditors under this Agreement.  Without limiting the generality of the foregoing, where any provision of this Agreement relating to the payment of any amounts due and owing under the Loan Documents provides that such payments shall be made by Borrower or the Co-Borrowers to the Administrative Agent for the account of the Lenders, Borrower’s and the Co-Borrowers’ obligations to the Lenders in respect of such payments shall be deemed to be satisfied upon the making of such payments to the Administrative Agent in the manner provided by this Agreement.

 

SECTION 10.13  Collateral Matters.  The Lenders and the Issuing Lender irrevocably authorize the Administrative Agent, at its option and in its discretion,

 

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(a)           to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon termination or expiration of the Class A Funding Requirements and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (or the cash collateralization thereof or other arrangements satisfactory to the applicable Issuing Lender), (ii) that is sold or to be sold as part of or in connection with any sale permitted hereunder or under any other Loan Document, (iii) with respect to the Detroit Collateral, in connection with any Disposition of the Detroit Collateral made pursuant to Section 6.9(g) or (iv) with the authorization of the Requisite Lenders; and

 

(b)           to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.4(e).

 

Upon request by the Administrative Agent at any time, the Requisite Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property pursuant to this Section 10.13.  In each case as specified in this Section 10.13, the Administrative Agent will, at Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, in each case in accordance with the terms of the Loan Documents and this Section 10.13.

 

ARTICLE 11
 MISCELLANEOUS

 

SECTION 11.1  Cumulative Remedies; No Waiver.  The rights, powers, privileges and remedies of the Creditors provided herein or in any Note or other Loan Document are cumulative and not exclusive of any right, power, privilege or remedy provided by Law or equity.  No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power, privilege or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power, privilege or remedy preclude any other or further exercise of the same or any other right, power, privilege or remedy.  The terms and conditions of Article 8 hereof are inserted for the sole benefit of the Creditors; the same may be waived in whole or in part, with or without terms or conditions, in respect of any Loan or Letter of Credit without prejudicing the Administrative Agent’s or the Lenders’ rights to assert them in whole or in part in respect of any other Loan.

 

SECTION 11.2  Amendments; Consents.  Each amendment, modification, supplement, extension, termination, waiver, approval and consent under this Agreement and the other Loan Documents shall be subject to the terms of all applicable Laws, including Gaming Laws.  No amendment, modification, supplement, extension, termination or waiver of any provision of this Agreement or any other Loan Document, no approval or consent thereunder, and no consent to any departure by Borrower, the Co-Borrowers or any other Party therefrom, may in any event be effective unless in writing signed by the Administrative Agent with the approval of Requisite Lenders (and, in the case of any amendment, modification or supplement of or to any Loan Document to which Borrower or any of its Subsidiaries is a Party, signed by each such Party,

 

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and, in the case of any amendment, modification or supplement to Article 10, signed by the Administrative Agent), and then only in the specific instance and for the specific purpose given; and, without the approval in writing of all the Lenders (or such of the Lenders as are required pursuant to the following clauses of this Section), no amendment, modification, supplement, termination, waiver or consent may be effective:

 

(a)           Without the consent of each affected Lender, (i) to reduce the principal of, or the amount of principal, principal prepayments or the rate of interest payable on, any Advance, or (ii) to increase the amount of the Commitments or the Pro Rata Share of any Lender or (iii) to reduce the amount of any Unused Fee, or any other fee or amount payable to any Lender under the Loan Documents or (iv) to waive an Event of Default consisting of the failure of Borrower or the Co-Borrowers to pay when due principal, interest or any Unused Fee or other fee;

 

(b)           To postpone any date fixed for any payment of principal of, prepayment of principal of or any installment of interest on, any Advance or any installment of any Unused Fee, or to extend the term of either of the Commitments;

 

(c)           To permit the term of any Letter of Credit to exceed one year (provided that this shall not be construed to prohibit the provision of automatic renewal clauses in Letters of Credit issued hereunder) or extend beyond the Existing Maturity Date (or, if the Takeout Date has occurred, the Extended Maturity Date);

 

(d)           To release any Subsidiary from its obligations in respect of its Guaranty, provided that if no Default or Event of Default exists, the Administrative Agent may without the consent of any Lender (and shall at the request of Borrower) release any Subsidiary from its guaranty of the Obligations concurrently with the Disposition of such Subsidiary or the liquidation of such Subsidiary;

 

(e)           To amend the provisions of the definitions of “Requisite Lenders” or “Existing Maturity Date”;

 

(f)            To amend or waive Article 8, Section 6.2 or this Section; or

 

(g)           To amend any provision of this Agreement that expressly requires the consent or approval of all the Lenders;

 

provided, further, that no amendment, modification, supplement, termination, waiver or consent may be effective to amend or waive the provisions of the definitions of “Collateral Coverage Certificate”, “Extended Loans”, “Extension Collateral”, “Extension Collateral Coverage Ratio”, “Extension Obligations”, “Extension Obligations Collateral Allocation”, “Extension Ratio” or “Extending Lender”, Section 7.3 or Exhibit D without the consent of Extending Lenders constituting Requisite Extending Lenders.

 

Any amendment, modification, supplement, termination, waiver or consent pursuant to this Section shall apply equally to, and shall be binding upon, all of the Creditors.  Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Pro Rata Share of the Commitments of such Lender may not be increased or extended without the consent of such Lender.

 

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SECTION 11.3  Attorney Costs, Expenses and Taxes.  (a)  Borrower and the Co-Borrowers agree (i) to pay or reimburse the Administrative Agent for all costs and expenses incurred in connection with the development, preparation, negotiation and execution of this Agreement and the other Loan Documents and any amendment, waiver, consent or other modification of the provisions hereof and thereof (whether or not the transactions contemplated hereby or thereby are consummated), and the consummation and administration of the transactions contemplated hereby and thereby, including all Attorney Costs, and (ii) to pay or reimburse the Administrative Agent and each Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any “workout” or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs and the reasonable costs of any advisor (including financial advisor) or consultant to the Administrative Agent.  The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and the cost of independent public accountants and other outside experts retained by the Administrative Agent or any Lender, but shall exclude any Taxes imposed on the income, however measured, of the Administrative Agent or any Lender.  All amounts due under this Section 11.3 shall be payable within five Business Days after demand therefor.  The agreements in this Section shall survive the termination of the Class A Funding Requirements and repayment of all other Obligations.

 

(b)           Without duplication of the provisions of Section 3.11(d), Borrower and the Co-Borrowers shall pay any and all documentary and other taxes, and all costs, expenses, fees and charges payable or determined to be payable in connection with the filing or recording of this Agreement, any other Loan Document or any other instrument or writing to be delivered hereunder or thereunder, or in connection with any transaction pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify on the terms set forth in Section 11.11 the Creditors from and against any and all loss, liability or legal or other expense with respect to or resulting from any delay in paying or failure to pay any such tax, cost, expense, fee or charge or that any of them may suffer or incur by reason of the failure of any Party to perform any of its Obligations, provided, however, this Section 11.3(b) shall not apply to any Taxes described in clauses (i) through (v) of Section 3.11(d).  Any amount payable to the Administrative Agent or any Lender under this Section shall bear interest from the second Business Day following the date of demand for payment at the Default Rate.

 

SECTION 11.4  Nature of Lenders’ Obligations.  The obligations of the Lenders hereunder to make Loans and to fund participations in Letters of Credit and Swing Line Loans are several and not joint.  The failure of any Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.  Nothing contained in this Agreement or any other Loan Document and no action taken by the Creditors or any of them pursuant hereto or thereto may, or may be deemed to, make the Lenders a partnership, an

 

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association, a joint venture or other entity, either among themselves or with Borrower, the Co-Borrowers or any Subsidiary of Borrower.  Each Lender’s obligation to make any Advance pursuant hereto is several and not joint or joint and several, and in the case of the initial Advance only is conditioned upon the performance by all other Lenders of their obligations to make initial Advances.  A default by any Lender will not increase the Pro Rata Share of any other Lender.  Any Lender not in default may, if it desires, assume in such proportion as the non-Defaulting Lenders agree the obligations of any Lender in default, but is not obligated to do so.  The Administrative Agent agrees that it will use its best efforts either to induce the other Lenders to assume the obligations of a Lender in default or to obtain another Lender, reasonably satisfactory to Borrower and the Co-Borrowers, to replace such a Lender in default.

 

SECTION 11.5  Survival of Representations and Warranties.  All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.  Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Letter of Credit, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

SECTION 11.6  Notices.  (a)  General.  Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission).  All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number or (subject to clause (c) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)            if to Borrower, the Administrative Agent or the Issuing Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person on Schedule 11.6 or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

 

(ii)           if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to Borrower, the Administrative Agent, the Issuing Lender and any Swing Line Lenders.

 

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of clause (c) below), when delivered;

 

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provided, however, that notices and other communications to the Administrative Agent, the Issuing Lender and any Swing Line Lender pursuant to Article 2 shall not be effective until actually received by such Person.  In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder.

 

(b)           Effectiveness of Facsimile Documents and Signatures.  Loan Documents may be transmitted or signed by facsimile.  The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Parties, the Administrative Agent and the Lenders.  The Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

 

(c)           Limited Use of Electronic Mail.  Electronic mail and Internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information as provided in Section 7.1, and to distribute Loan Documents for execution by the parties thereto, and may not be used for any other notices hereunder unless otherwise provided.

 

(d)           Reliance by Administrative Agent and Lenders.  The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic requests for Loans) that, in the reasonable judgment of the Administrative Agent and the Lenders, are purportedly given by or on behalf of Borrower or any Co-Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  Borrower and the Co-Borrowers shall jointly and severally indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice that, in the reasonable judgment of such Agent-Related Person, is purportedly given by or on behalf of Borrower or any Co-Borrower.  All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

 

(e)           Notice to Borrower is Notice to Co-Borrowers.  Borrower and the Co-Borrower expressly agree that the credit facilities provided hereunder are being provided for the joint convenience of Borrower and its Restricted Subsidiaries, including the Co-Borrowers, and that it is expected that Borrower shall administer the Advances and Letters of Credit on behalf of itself and the Co-Borrowers.  Accordingly, Borrower and the Co-Borrowers agree that any notice provided to Borrower hereunder shall be deemed to constitute the same notice to the Co- Borrowers, without the requirement that separate notices be provided to the Co-Borrowers.

 

SECTION 11.7  Execution of Loan Documents.  Unless the Administrative Agent otherwise specifies with respect to any Loan Document, (a) this Agreement and any other Loan Document may be executed in any number of counterparts and any party hereto or thereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which counterparts of this Agreement or any other Loan Document, as the case may be, when taken together will be deemed to be but one and the same instrument and

 

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(b) execution of any such counterpart may be evidenced by a telecopier transmission of the signature of such party followed by prompt transmission of an original signature.  The execution of this Agreement or any other Loan Document by any party hereto or thereto will not become effective until counterparts hereof or thereof, as the case may be, have been executed by all the parties hereto or thereto.

 

SECTION 11.8  Binding Effect; Assignment.  (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrower nor any other Party may 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 for the following (any other attempted assignment or transfer by any party hereto shall be null and void):

 

(i)            to an Eligible Assignee in accordance with the provisions of clause (b) of this Section;

 

(ii)           by way of participation in accordance with the provisions of clause (d) of this Section;

 

(iii)          by way of pledge or assignment of a security interest subject to the restrictions of clause (f) of this Section; or

 

(iv)          to an SPC in accordance with the provisions of clause (h) of this Section.

 

Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Lender and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.  Each Lender represents that it is not acquiring its Notes with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (subject to any requirement that disposition of its Notes must be within the control of such Lender).

 

(b)           Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (and, to the extent it assigns its Class A Loans, a corresponding portion of its Class A Funding Requirement) and the Loans (including for purposes of this clause (b), participations in L/C Obligations) at the time owing to it; provided that any such assignment shall be subject to the following conditions:

 

(i)            in the case of an assignment of the entire remaining amount of the assigning Lender’s Class A Funding Requirement or all of the assigning Lender’s other 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;

 

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(ii)           in any case not described in subsection (b)(i) of this Section, the amount of the Class A Funding Requirement (which for this purpose includes any Class A Loans outstanding thereunder) or other Loans or, if the Class A Funding Requirements are 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 with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than, with respect to (A) the Class A Funding Requirements or Class A Loans, $5,000,000 and (B) the other Loans, $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided, however, that concurrent assignments to members of an Assignee Group and concurrent assignments from members of an Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and members of its Assignee Group) will be treated as a single assignment for purposes of determining whether such minimum amount has been met;

 

(iii)          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 Loans (and, in the case of the Class A Loans, that Lender’s Class A Funding Requirement) assigned, except that this clause (iii) shall not (A) apply to the Swing Line Lender’s rights and obligations in respect of Swing Line Loans or (B) prohibit any Lender from assigning all or a portion of its rights and obligations among separate Commitments on a non-pro  rata basis;

 

(iv)          the consent of the Administrative Agent, the Issuing Lender and any Swing Line Lender (such consent not to be unreasonably withheld) shall be required for assignments of any portion of the Class A Loans and Class A Funding Requirements if such assignment is to a Person that is not a Class A Lender, an Affiliate of such Class A Lender or an Approved Fund with respect to such Class A Lender;

 

(v)           the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment, and the Eligible Assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire;

 

(vi)          each assignment of Class A-1 Loans by a Class A-1 Lender must be accompanied by a proportionate assignment to, and assumption by the assignee Lender of, its Class A Funding Requirement, and each assignment of Class A-2 Loans and related Class A Revolving Obligations by a Class A-2 Lender must be accompanied by a proportionate assignment to, and assumption by the assignee Lender of, its Class A Funding Requirement, and the corresponding Class A

 

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Loans and Class A Revolving Obligations thereafter made by the assignee Lender shall be treated as under the same sub-Class (i.e., Class A-1 or Class A-2);

 

(vii)         no such assignment shall be made to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (vii); and

 

(viii)        in connection with any assignment of rights and obligations in respect of any Class A Funding Requirement of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of Borrower and the Administrative Agent, the applicable pro rata share of Class A Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lender or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Class A Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant to clause (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.6, 3.7 and 11.11 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Upon request, Borrower and each Co-Borrower (at their sole expense) shall execute and deliver a Note under the relevant Commitment to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause 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 clause (d) of this Section.

 

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(c)           The Administrative Agent, acting solely for this purpose as an agent of Borrower and the Co-Borrowers, shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Class A Funding Requirements of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and Borrower, the Co-Borrowers, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by each of Borrower, each Co-Borrower and the Issuing Lender at any reasonable time and from time to time upon reasonable prior notice.  In addition, at any time that a request for a consent for a material or substantive change to the Loan Documents is pending, any Lender wishing to consult with other Lenders in connection therewith may request and receive from the Administrative Agent a copy of the Register.

 

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

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in Section 11.2 requiring the consent of that Lender and which also affects such Participant.  Subject to clause (e) of this Section, Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.6 and 3.7 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section.

 

(e)           A Participant shall not be entitled to receive any greater payment under Section 3.6 or 3.7 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 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 3.11(d) unless Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of Borrower, to comply with Section 11.21 as though it were a Lender.

 

(f)            Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations

 

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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.

 

(g)           The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

 

(h)           Notwithstanding anything to the contrary contained herein, any Lender (a “Granting Lender”) may grant to an SPC the option to provide all or any part of any Loan that such Granting Lender would otherwise be obligated to make pursuant to this Agreement; provided  that (i) nothing herein shall constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC elects not to exercise such option or otherwise fails to make all or any part of such Loan, the Granting Lender shall be obligated to make such Loan pursuant to the terms hereof or, if it fails to do so, to make such payment to the Administrative Agent as is required under Section 2.10.  Each party hereto hereby agrees that (i) neither the grant to any SPC nor the exercise by any SPC of such option shall increase the costs or expenses or otherwise increase or change the obligations of Borrower under this Agreement (including its obligations under Sections 3.6 and 3.7), (ii) no SPC shall be liable for any indemnity or similar payment obligation under this Agreement for which a Lender would be liable, and (iii) the Granting Lender shall for all purposes, including the approval of any amendment, waiver or other modification of any provision of any Loan Document, remain the lender of record hereunder.  The making of a Loan by an SPC hereunder shall utilize the Pro Rata Share of the relevant Commitment of the Granting Lender to the same extent, and as if, such Loan were made by such Granting Lender.  In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior debt of any SPC, it will not institute against, or join any other Person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary contained herein, any SPC may (i) with notice to, but without prior consent of Borrower and the Administrative Agent and with the payment of a processing fee of $3,500 (which processing fee may be waived by the Administrative Agent in its sole discretion), assign all or any portion of its right to receive payment with respect to any Loan to the Granting Lender and (ii) disclose on a confidential basis any non-public information relating to its funding of Loans to any rating agency, commercial paper dealer or provider of any surety or contingent obligation or credit or liquidity enhancement to such SPC.

 

(i)            Resignation as Issuing Lender or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary contained herein, if at any time Bank of America (or any Swing Line Lender) assigns all of its Pro Rata Shares of the Commitments and Loans

 

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pursuant to clause (b) above, Bank of America (or such Swing Line Lender) may, upon 30 days’ notice to Borrower and the Lenders, concurrently resign as an Issuing Lender or as Swing Line Lender, as applicable.  In the event of any such resignation as Issuing Lender or Swing Line Lender, Borrower shall be entitled to appoint from among the Lenders a replacement Issuing Lender or Swing Line Lender hereunder, as applicable; provided, however, that no failure by Borrower to appoint any such successor shall affect the resignation of Bank of America as Issuing Lender or such Swing Line Lender as Swing Line Lender.  If Bank of America resigns as an Issuing Lender, it shall retain all the rights and obligations of an Issuing Lender hereunder with respect to all Letters of Credit issued by it and outstanding as of the effective date of its resignation as Issuing Lender and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.6(c)).  If any Swing Line Lender resigns from such capacity as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.7(e).

 

(j)            Notwithstanding anything in this Section to the contrary, the rights of the Lenders to make assignments of, and grant participations in, their Pro Rata Shares of the Commitments shall be subject to the approval of any Gaming Board, to the extent required by applicable Gaming Laws, and to compliance with applicable securities laws, if any.

 

SECTION 11.9  Right of Setoff.  If an Event of Default has occurred and is continuing, the Administrative Agent or any Lender (but in each case only with the consent of the Requisite Lenders) may exercise its rights under Article 9 of the Uniform Commercial Code and other applicable Laws and, to the extent permitted by applicable Laws, apply any funds in any deposit account maintained with it by Borrower, the Co-Borrowers and/or any of their Property in its possession against the Obligations; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.14 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lender and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.

 

SECTION 11.10  Sharing of Setoffs.  Each Lender severally agrees that if it, through the exercise of any right of setoff, banker’s lien or counterclaim against Borrower, any Co-Borrower, or otherwise, receives payment of the Obligations held by it that is ratably more than any other Lender, through any means, receives in payment of the Obligations held by that Lender, then, subject to applicable Laws:

 

(a)           the Lender exercising the right of setoff, banker’s lien or counterclaim or otherwise receiving such payment shall purchase, and shall be deemed to have simultaneously purchased, from the other Lender a participation in the Obligations held by the other Lender and shall pay to the other Lender a purchase price in an amount so that the share of the Obligations held by each Lender after the exercise of the right of

 

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setoff, banker’s lien or counterclaim or receipt of payment shall be in the same proportion that existed prior to the exercise of the right of setoff, banker’s lien or counterclaim or receipt of payment; and

 

(b)           such other adjustments and purchases of participations shall be made from time to time as shall be equitable to ensure that all of the Lenders share any payment obtained in respect of the Obligations ratably in accordance with each Lender’s share of the Obligations immediately prior to, and without taking into account, the payment; provided that, if all or any portion of a disproportionate payment obtained as a result of the exercise of the right of setoff, banker’s lien, counterclaim or otherwise is thereafter recovered from the purchasing Lender by Borrower, any Co-Borrower or any Person claiming through or succeeding to the rights of Borrower or a Co-Borrower, the purchase of a participation shall be rescinded and the purchase price thereof shall be restored to the extent of the recovery, but without interest.  Each Lender that purchases a participation in the Obligations pursuant to this Section shall from and after the purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the Obligations purchased to the same extent as though the purchasing Lender were the original owner of the Obligations purchased.  Borrower and each Co-Borrower expressly consents to the foregoing arrangements and agrees that any Lender holding a participation in an Obligation so purchased may exercise any and all rights of setoff, banker’s lien or counterclaim with respect to the participation as fully as if the Lender were the original owner of the Obligation purchased.

 

SECTION 11.11  Indemnification by Borrower and the Co-Borrowers.  Whether or not the transactions contemplated hereby are consummated, Borrower and each Co-Borrower jointly and severally shall indemnify and hold harmless each Agent-Related Person, each Lender and their respective Affiliates, directors, officers, employees, counsel, agents and attorneys-in-fact (collectively the “Indemnitees”) from and against any and all liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, settlements, costs, expenses and disbursements (including Attorney Costs) of any kind or nature whatsoever which may at any time be imposed on, incurred by or asserted against any such Indemnitee in any way relating to or arising out of or in connection with (a) the execution, delivery, enforcement, performance or administration of any Loan Document or any other agreement, letter or instrument delivered in connection with the transactions contemplated thereby or the consummation of the transactions contemplated thereby, (b) any Commitment, Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any 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) or (c) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory (including any investigation of, preparation for, or defense of any pending or threatened claim, investigation, litigation or proceeding) and regardless of whether any Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified Liabilities”), provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits cost, expenses or disbursements are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of

 

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such Indemnitee.  No Indemnitee shall be liable for any damages arising from the use by others of any information or other materials obtained through IntraLinks or other similar information transmission systems in connection with this Agreement, nor shall any Indemnitee have any liability for any indirect, consequential, special or punitive damages relating to this Agreement or any other Loan Document or arising out of its activities in connection herewith or therewith (whether before or after the Effective Date).  All amounts due under this Section 11.11 shall be payable within 10 Business Days after demand therefor.  The agreements in this Section shall survive the resignation of the Administrative Agent, the replacement of any Lender, the termination of the Class A Funding Requirements and the repayment, satisfaction or discharge of all the other Obligations.

 

SECTION 11.12  Nonliability of the Lenders; No Advisory or Fiduciary Responsibility.  Borrower and each Co-Borrower acknowledges and agrees that:

 

(a)           Any inspections of any Property of Borrower and its Subsidiaries made by or through the Creditors are for purposes of administration of the Loans and Letters of Credit only and Borrower and its Affiliates are not entitled to rely upon the same (whether or not such inspections are at the expense of Borrower or its Subsidiaries); neither the Administrative Agent nor the Lenders undertake or assume any responsibility or duty to Borrower or its Affiliates to select, review, inspect, supervise, pass judgment upon or inform Borrower or its Affiliates of any matter in connection with their Property or the operations of Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely upon their own judgment with respect to such matters; and any review, inspection, supervision, exercise of judgment or supply of information undertaken or assumed by the Creditors in connection with such matters is solely for the protection of the Creditors and neither Borrower, the Co-Borrowers nor any other Person is entitled to rely thereon;

 

(b)           By accepting or approving anything required to be observed, performed, fulfilled or given to the Creditors pursuant to the Loan Documents, neither the Administrative Agent nor the Lenders shall be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by the Creditors;

 

(c)           (i) the credit facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between Borrower, Co-Borrowers and their respective Affiliates, on the one hand, and the Administrative Agent and the Lead Arrangers, on the other hand, and each of Borrower and Co-Borrowers is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof); (ii) in connection with the process leading to such transaction, the Administrative Agent, the Lead Arrangers and the Lenders each is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for Borrower, Co-Borrowers or any of their respective Affiliates,

 

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stockholders, creditors or employees or any other Person; (iii) none of the Administrative Agent, any Lead Arranger or any Lender has assumed or will assume an advisory, agency or fiduciary responsibility in favor of Borrower or any Co-Borrower with respect to any of the transactions contemplated hereby or the process leading thereto, including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether the Administrative Agent, any Lead Arranger or any Lender has advised or is currently advising Borrower, Co-Borrowers or any of their respective Affiliates on other matters) and none of the Administrative Agent, any Lead Arranger or any Lender has any obligation to Borrower, Co-Borrowers or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; (iv) the relationship between Borrower and the Co-Borrowers and the Creditors is, and shall at all times remain, solely that of borrowers and lenders; neither the Administrative Agent, the Lead Arrangers nor the Lenders shall under any circumstance be construed to be partners or joint venturers of Borrower or its Affiliates; neither the Administrative Agent, the Lead Arrangers nor the Lenders shall under any circumstance be deemed to be in a relationship of confidence or trust or a fiduciary or other “special” relationship with Borrower or its Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates; (v) the Administrative Agent and its Affiliates and the Lead Arrangers and their Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrower, Co-Borrowers and their respective Affiliates, and neither the Administrative Agent nor any Lead Arranger has no obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship; and (vi) the Administrative Agent has not (and the Lead Arrangers have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and each of Borrower and Co-Borrowers has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate.  Each of Borrower and Co-Borrowers hereby waives and releases, to the fullest extent permitted by law, any claims that it may have against the Administrative Agent and the Lead Arrangers with respect to any breach or alleged breach of agency or fiduciary duty; and

 

(d)           The Creditors shall not be responsible or liable to any Person for any loss, damage, liability or claim of any kind relating to injury or death to Persons or damage to Property caused by the actions, inaction or negligence of Borrower and/or its Affiliates and Borrower and the Co-Borrowers hereby indemnify and hold the Creditors harmless on the terms set forth in Section 11.11 from any such loss, damage, liability or claim.

 

SECTION 11.13  No Third Parties Benefited.  This Agreement is made for the purpose of defining and setting forth certain obligations, rights and duties of Borrower, the Co-Borrowers and the Creditors in connection with the Loans, and is made for the sole benefit of Borrower, the Co-Borrowers, the Creditors, and the Creditors’ successors and assigns.  Except as provided in Sections 11.8, 11.11, and 11.26 no other Person shall have any rights of any nature hereunder or by reason hereof.

 

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SECTION 11.14  Confidentiality.  Each Lender agrees to hold any confidential information that it may receive from Borrower and the Co-Borrowers pursuant to this Agreement in confidence, except for disclosure:  (a) to other Creditors (or, subject to appropriate confidentiality restrictions, Affiliates of any Creditor); (b) to legal counsel and accountants for Borrower and the Co-Borrowers or any Lender; (c) to other professional advisors to Borrower and the Co-Borrowers or any Lender, provided that the recipient has accepted such information subject to a confidentiality agreement substantially similar to this Section; (d) to regulatory officials having jurisdiction over that Lender; (e) to any Gaming Board having regulatory jurisdiction over Borrower or its Subsidiaries, provided that each Lender agrees to use its best efforts to notify Borrower and the Co-Borrowers of any such disclosure unless prohibited by applicable Laws; (f) as required by Law or legal process or in connection with any legal proceeding to which that Lender and Borrower or any of its Subsidiaries are adverse parties; and (g) to another financial institution in connection with a disposition or proposed disposition to that financial institution of all or part of that Lender’s interests hereunder or a participation interest in its Notes, provided that the recipient has accepted such information subject to a confidentiality agreement substantially similar to this Section.  For purposes of the foregoing, “confidential information” shall mean any information respecting Borrower or its Subsidiaries reasonably considered by Borrower to be confidential, other  than (i) information previously filed with any Governmental Agency and available to the public, (ii) information previously published in any public medium from a source other than, directly or indirectly, that Lender, and (iii) information previously disclosed by Borrower or its Subsidiaries to any Person not associated with Borrower without a confidentiality agreement or obligation substantially similar to this Section.  Notwithstanding anything herein to the contrary, “confidential information” shall not include, and the Administrative Agent and each Lender may disclose without limitation of any kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Administrative Agent or such Lender relating to such tax treatment and tax structure; provided that with respect to any document or similar item that in either case contains information concerning the tax treatment or tax structure of the transaction as well as other information, this sentence shall only apply to such portions of the document or similar item that relate to the tax treatment or tax structure of the Loans, Letters of Credit and transactions contemplated hereby.  Nothing in this Section shall be construed to create or give rise to any fiduciary duty on the part of the Creditors to Borrower or any other Party.

 

SECTION 11.15  Further Assurances.  Borrower and its Subsidiaries shall, at their expense and without expense to the Lenders or the Administrative Agent, do, execute and deliver such further acts and documents as the Requisite Lenders or the Administrative Agent from time to time reasonably require for the assuring and confirming unto the Lenders or the Administrative Agent of the rights hereby created or intended now or hereafter so to be, or for carrying out the intention or facilitating the performance of the terms of any Loan Document.

 

SECTION 11.16  Integration.  This Agreement, the other Loan Documents and the letter agreements referred to in Sections 3.4 and 3.5, comprise the complete and integrated agreements of the parties on the subject matter hereof and supersedes all prior agreements, written or oral, on the subject matter hereof.  In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control and

 

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govern; provided that the inclusion of supplemental rights or remedies in favor of the Creditors in any other Loan Document shall not be deemed a conflict with this Agreement.  Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

 

SECTION 11.17  Governing Law; Jurisdiction.

 

(a)           Governing Law.  Each Loan Document shall be governed by, and construed and enforced in accordance with, the Law of the State of New York.

 

(b)           SUBMISSION TO JURISDICTION.  EACH OF BORROWER, DETROIT, THE ADMINISTRATIVE AGENT, THE LENDERS AND EACH OTHER PARTY TO THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE ISSUING LENDER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS  AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK 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, LITIGATION 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 BORROWER OR DETROIT OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

SECTION 11.18  Severability of Provisions.  Any provision in any Loan Document that is held to be inoperative, unenforceable or invalid as to any party or in any jurisdiction shall, as to that party or jurisdiction, be inoperative, unenforceable or invalid without affecting the remaining provisions or the operation, enforceability or validity of that provision as to any other party or in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable.  Without limiting the foregoing provisions of this Section 11.18, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, then such provisions shall be deemed to be in effect only to the extent not so limited.

 

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SECTION 11.19  Headings.  Article and Section headings in this Agreement and the other Loan Documents are included for convenience of reference only and are not part of this Agreement or the other Loan Documents for any other purpose.

 

SECTION 11.20  Time of the Essence.  Time is of the essence of the Loan Documents.

 

SECTION 11.21  Foreign Lenders and Participants.

 

(a)           Tax Forms.

 

(i)            Each Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (a “Foreign Lender”) shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or upon accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement) or such other evidence satisfactory to Borrower and the Administrative Agent that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax, including any exemption pursuant to Section 881(c) of the Code.  Thereafter and from time to time, each such Foreign Lender shall (A) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Foreign Lender by Borrower pursuant to this Agreement, (B) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (C) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that Borrower make any deduction or withholding for taxes from amounts payable to such Foreign Lender.

 

(ii)           Each Foreign Lender, to the extent it does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender), shall deliver to the Administrative Agent on the date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at such other times as may be necessary in the determination of the Administrative Agent (in the reasonable exercise of its discretion), (A) two duly signed completed copies of the forms or

 

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statements required to be provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account that is not subject to U.S.  withholding tax, and (B) two duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with any information such Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Code, to establish that such Lender is not acting for its own account with respect to a portion of any such sums payable to such Lender.

 

(iii)          Borrower shall not be required to pay any additional amount to any Foreign Lender under Section 3.11(d) (A) with respect to any taxes required to be deducted or withheld on the basis of the information, certificates or statements of exemption such Lender transmits with an IRS Form W-81MY pursuant to this Section 11.21(a) or (B) if such Lender shall have failed to satisfy the foregoing provisions of this Section 11.21(a); provided that if such Lender shall have satisfied the requirement of this Section 11.21(a) on the date such Lender became a Lender or ceased to act for its own account with respect to any payment under any of the Loan Documents, nothing in this Section 11.21(a) shall relieve Borrower of its obligation to pay any amounts pursuant to Section 3.11(d) in the event that, as a result of any change in any applicable law, treaty or governmental rule, regulation or order, or any change in the interpretation, administration or application thereof, such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a subsequent date establishing the fact that such Lender or other Person for the account of which such Lender receives any sums payable under any of the Loan Documents is not subject to withholding or is subject to withholding at a reduced rate.

 

(iv)          The Administrative Agent may, without reduction, withhold any Taxes required to be deducted and withheld from any payment under any of the Loan Documents with respect to which Borrower is not required to pay additional amounts under this Section 11.21(a).

 

(b)           Form W-9.  Upon the request of the Administrative Agent, each Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Administrative Agent two duly signed completed copies of IRS Form W-9.  If such Lender fails to deliver such forms, then the Administrative Agent may withhold from any interest payment to such Lender an amount equivalent to the applicable back-up withholding tax imposed by the Code, without reduction.

 

(c)           Withholding.  If any Governmental Agency asserts that the Administrative Agent did not properly withhold or backup withhold, as the case may be, any tax or other amount from payments made to or for the account of any Lender, such Lender shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Administrative Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent.  The obligation of the Lenders under this Section shall survive the termination of the Class A Funding Requirements, repayment of all other Obligations hereunder and the resignation of the Administrative Agent.

 

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

 

SECTION 11.22  Gaming Boards.  The Administrative Agent and each of the Lenders agree to cooperate with all Gaming Boards in connection with the administration of their regulatory jurisdiction over Borrower and its Subsidiaries, including the provision of such documents or other information as may be requested by any such Gaming Board relating to Borrower or any of its Subsidiaries or to the Loan Documents.

 

SECTION 11.23  Termination.  Upon (a) the expiration or termination of the Class A Funding Requirements, (b) the full and final payment in Cash of the Loans, all interest and fees with respect thereto, (c) the reimbursement of all draws under Letters of Credit and the payment of all fees with respect thereto, (d) the expiration of all Letters of Credit or the deposit of Cash collateral with the Issuing Lender in the effective face amount thereof, (e) the payment of all amounts then demanded by any Lender or indemnitee under Sections 3.6, 3.7 and 11.11 and (f) the payment of all other amounts then due under the Loan Documents, the Administrative Agent is hereby authorized by the Lenders to, and the Administrative Agent shall, upon the request of Borrower and the Co-Borrowers, execute and deliver to Borrower and the Co-Borrowers discharges from further compliance with the covenants contained in Articles  5, 6, and 7.

 

SECTION 11.24  Removal of a Lender.  Borrower and the Co-Borrowers shall have the right to remove a Lender as a party to this Agreement in accordance with this Section (a) under the circumstances set forth in Sections 3.6, 3.7(g) and 3.11(d), (b) if such Lender is the subject of a Disqualification and (c) if such Lender is a Defaulting Lender.  If Borrower and the Co-Borrowers are entitled to remove a Lender pursuant to this Section either:

 

(x)            Upon notice from Borrower and the Co-Borrowers, the Lender being removed shall execute and deliver a Assignment Agreement covering that Lender’s Pro Rata Share in favor of one or more Eligible Assignees designated by Borrower and the Co-Borrowers (and acceptable to the Administrative Agent, which acceptance shall not be unreasonably delayed or withheld), subject to (i) payment of a purchase price by such Eligible Assignee equal to all principal and accrued interest, fees and other amounts

 

110

 

payable to such Lender under this Agreement through the date of assignment and (ii) the written release of the Issuing Lender of such Lender’s obligations under Sections 2.4(c) and 2.6(d) or delivery by such Eligible Assignee of such appropriate assurances and indemnities (which may include letters of credit) as such Lender may reasonably require with respect to its participation interest in any Letters of Credit then outstanding or any Swing Line Outstandings; or

 

(y)           Borrower and the Co-Borrowers may reduce the Class A Funding Requirements pursuant to Section 2.9 (and, for this purpose, the numerical requirements of such Section shall not apply) by an amount equal to that Lender’s Pro Rata Share, pay and provide to such Lender the amounts, assurances and indemnities described in subclauses (i) and (ii) of clause (x) above and release such Lender from its Pro Rata Share.

 

SECTION 11.25  Joint and Several.  Borrower and each of the Co-Borrowers shall be obligated for all of the Obligations on a joint and several basis, notwithstanding which of them may have directly received the proceeds of any particular Loan or Advance or the benefit of a particular Letter of Credit, provided that, anything to the contrary herein notwithstanding (including Exhibit G), the liability of Detroit, including, without limitation, Detroit’s liability with respect to Indemnified Liabilities pursuant to Section 11.11, shall be limited to the portion of the Obligations which are actually borrowed or received by Detroit.  Borrower and each of the Co-Borrowers acknowledge and agree that, for purposes of the Loan Documents, Borrower, the Co-Borrowers and the Guarantors constitute a single integrated financial enterprise and that each receives a benefit from the availability of credit under this Agreement.  Borrower and the Co-Borrowers each waive all defenses arising under the Laws of suretyship, to the extent such Laws are applicable, in connection with their joint and several obligations under this Agreement.  Without limiting the foregoing, Borrower and each of the Co-Borrowers agree to the Joint Borrower Provisions set forth in Exhibit G, incorporated by this reference.

 

SECTION 11.26  [Reserved].

 

SECTION 11.27   Payments Set Aside.  To the extent that any payment by or on behalf of Borrower or any Co-Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred, and (b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.

 

SECTION 11.28  Waiver of Right to Trial by Jury.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

 

111

 

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 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.

 

SECTION 11.29  Purported Oral Amendments.  BORROWER AND EACH CO-BORROWER EXPRESSLY ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.  BORROWER AND EACH CO-BORROWER AGREE THAT THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

 

SECTION 11.30  USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower and each Co-Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies Borrower and each Co-Borrower, which information includes the name and address of Borrower and each Co-Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify Borrower and each Co-Borrower in accordance with the Act.

 

[SIGNATURE PAGE FOLLOWS]

 

112

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
 
    	
MGM   RESORTS INTERNATIONAL,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
and
    
	
 
    	
 
    
	
 
    	
MGM   GRAND DETROIT, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   John M. McManus
    
	
 
    	
Name:
    	
John   M. McManus
    
	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BANK   OF AMERICA, N.A.,
    
	
 
    	
as   Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Maurice Washington
    
	
 
    	
Name:
    	
Maurice   Washington
    
	
 
    	
Title:
    	
Vice   President
    

 

 

MGM RESORTS INTERNATIONAL SEVENTH AMENDED AND RESTATED
 LOAN AGREEMENT SIGNATURE PAGEExhibit 10.139

 

$300,000,000.00  REVOLVING CREDIT FACILITY

 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

by and among

 

ERIE INSURANCE EXCHANGE, as Borrower,

 

and

 

THE LENDERS PARTY HERETO

 

and

 

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent,

 

and

 

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

 

and

 

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

 

and

 

J.P. MORGAN SECURITIES LLC, as Joint Lead Arranger and Joint Bookrunner

 

 

Dated as of October 28, 2011

 

 

CUSIP # 29530RAA6

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
CERTAIN DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
1.1
    	
CERTAIN DEFINITIONS
    	
1
    
	
 
    	
 
    	
1.2
    	
CONSTRUCTION
    	
20
    
	
 
    	
 
    	
1.3
    	
ACCOUNTING PRINCIPLES;   CHANGES IN GAAP OR SAP
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
REVOLVING CREDIT AND   SWING LOAN FACILITIES
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
2.1
    	
REVOLVING CREDIT AND   SWING LOAN COMMITMENTS
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
2.1.1
    	
Revolving Credit Loans
    	
21
    
	
 
    	
 
    	
 
    	
 
    	
2.1.2
    	
Swing Loans
    	
22
    
	
 
    	
 
    	
2.2
    	
NATURE   OF LENDERS OBLIGATIONS WITH RESPECT TO REVOLVING CREDIT LOANS
    	
22
    
	
 
    	
 
    	
2.3
    	
COMMITMENT FEES
    	
22
    
	
 
    	
 
    	
2.4
    	
REVOLVING CREDIT LOAN   REQUESTS; SWING LOAN REQUESTS
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
2.4.1
    	
Revolving Credit Loan Requests
    	
23
    
	
 
    	
 
    	
 
    	
 
    	
2.4.2
    	
Swing Loan Requests
    	
23
    
	
 
    	
 
    	
2.5
    	
INCREASE IN REVOLVING   CREDIT COMMITMENTS
    	
23
    
	
 
    	
 
    	
2.6
    	
MAKING   REVOLVING CREDIT LOANS AND SWING LOANS; PRESUMPTIONS BY THE ADMINISTRATIVE   AGENT; REPAYMENT OF REVOLVING CREDIT LOANS; BORROWINGS TO REPAY SWING LOANS
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
2.6.1
    	
Making Revolving Credit Loans
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
2.6.2
    	
Making Swing Loans
    	
25
    
	
 
    	
 
    	
 
    	
 
    	
2.6.3
    	
Presumptions by the   Administrative Agent
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
2.6.4
    	
Repayment of Revolving Credit   Loans
    	
26
    
	
 
    	
 
    	
 
    	
 
    	
2.6.5
    	
Borrowings to Repay Swing Loans
    	
26
    
	
 
    	
 
    	
2.7
    	
NOTES
    	
26
    
	
 
    	
 
    	
2.8
    	
USE OF PROCEEDS
    	
27
    
	
 
    	
 
    	
2.9
    	
LETTER OF CREDIT   SUBFACILITY
    	
27
    
	
 
    	
 
    	
 
    	
 
    	
2.9.1
    	
Issuance of Letters of Credit
    	
27
    
	
 
    	
 
    	
 
    	
 
    	
2.9.2
    	
Letter of Credit Fees
    	
27
    
	
 
    	
 
    	
 
    	
 
    	
2.9.3
    	
Disbursements, Reimbursement
    	
28
    
	
 
    	
 
    	
 
    	
 
    	
2.9.4
    	
Repayment of Participation   Advances
    	
29
    
	
 
    	
 
    	
 
    	
 
    	
2.9.5
    	
Documentation
    	
30
    
	
 
    	
 
    	
 
    	
 
    	
2.9.6
    	
Determinations to Honor Drawing   Requests
    	
30
    
	
 
    	
 
    	
 
    	
 
    	
2.9.7
    	
Nature of Participation and   Reimbursement Obligations
    	
30
    
	
 
    	
 
    	
 
    	
 
    	
2.9.8
    	
Indemnity
    	
31
    
	
 
    	
 
    	
 
    	
 
    	
2.9.9
    	
Liability for Acts and   Omissions
    	
32
    
	
 
    	
 
    	
 
    	
 
    	
2.9.10
    	
Issuing Lender Reporting   Requirements
    	
33
    
	
 
    	
 
    	
2.10
    	
REDUCTION OF REVOLVING   CREDIT COMMITMENT
    	
33
    
	
 
    	
 
    	
2.11
    	
VALUATION STATEMENT
    	
34
    
	
 
    	
 
    	
2.12
    	
DEFAULTING LENDERS
    	
34
    

 

 

	
3.
    	
INTEREST RATES
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
3.1
    	
INTEREST RATE OPTIONS
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
3.1.1
    	
Revolving Credit Interest Rate   Options; Swing Line Interest Rate
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
3.1.2
    	
Rate Quotations
    	
36
    
	
 
    	
 
    	
3.2
    	
INTEREST PERIODS
    	
36
    
	
 
    	
 
    	
 
    	
 
    	
3.2.1
    	
Amount of Borrowing Tranche
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.2.2
    	
Renewals
    	
37
    
	
 
    	
 
    	
3.3
    	
INTEREST AFTER DEFAULT
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.3.1
    	
Letter of Credit   Fees, Interest Rate
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.3.2
    	
Other Obligations
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.3.3
    	
Acknowledgment
    	
37
    
	
 
    	
 
    	
3.4
    	
LIBOR   RATE UNASCERTAINABLE; ILLEGALITY; INCREASED COSTS; DEPOSITS NOT AVAILABLE
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.4.1
    	
Unascertainable
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.4.2
    	
Illegality; Increased Costs;   Deposits Not Available
    	
37
    
	
 
    	
 
    	
 
    	
 
    	
3.4.3
    	
Administrative Agent’s and   Lender’s Rights
    	
38
    
	
 
    	
 
    	
3.5
    	
SELECTION OF INTEREST   RATE OPTIONS
    	
38
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
PAYMENTS
    	
39
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
4.1
    	
PAYMENTS
    	
39
    
	
 
    	
 
    	
4.2
    	
PRO RATA TREATMENT OF   LENDERS
    	
39
    
	
 
    	
 
    	
4.3
    	
SHARING OF PAYMENTS BY   LENDERS
    	
39
    
	
 
    	
 
    	
4.4
    	
PRESUMPTIONS BY ADMINISTRATIVE   AGENT
    	
40
    
	
 
    	
 
    	
4.5
    	
INTEREST PAYMENT DATES
    	
40
    
	
 
    	
 
    	
4.6
    	
VOLUNTARY PREPAYMENTS
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
4.6.1
    	
Right to Prepay
    	
41
    
	
 
    	
 
    	
 
    	
 
    	
4.6.2
    	
Replacement of a Lender
    	
42
    
	
 
    	
 
    	
4.7
    	
INCREASED COSTS
    	
42
    
	
 
    	
 
    	
 
    	
 
    	
4.7.1
    	
Increased Costs Generally
    	
42
    
	
 
    	
 
    	
 
    	
 
    	
4.7.2
    	
Capital Requirements
    	
43
    
	
 
    	
 
    	
 
    	
 
    	
4.7.3
    	
Certificates for Reimbursement; Repayment of   Outstanding Loans; Borrowing of New Loans
    	
44
    
	
 
    	
 
    	
 
    	
 
    	
4.7.4
    	
Delay in Requests
    	
44
    
	
 
    	
 
    	
4.8
    	
TAXES
    	
44
    
	
 
    	
 
    	
 
    	
 
    	
4.8.1
    	
Payments Free of Taxes
    	
44
    
	
 
    	
 
    	
 
    	
 
    	
4.8.2
    	
Payment of Other Taxes by the   Borrower
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
4.8.3
    	
Indemnification by the Borrower
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
4.8.4
    	
Indemnification by the Lenders
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
4.8.5
    	
Evidence of Payments
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
4.8.6
    	
Status of Lenders
    	
45
    
	
 
    	
 
    	
 
    	
 
    	
4.8.7
    	
Treatment of Certain Refunds
    	
47
    
	
 
    	
 
    	
4.9
    	
INDEMNITY
    	
47
    
	
 
    	
 
    	
4.10
    	
SETTLEMENT DATE   PROCEDURES
    	
48
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
REPRESENTATIONS AND   WARRANTIES
    	
48
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
5.1
    	
REPRESENTATIONS AND   WARRANTIES
    	
48
    

 

- ii -

 

	
 
    	
 
    	
 
    	
 
    	
5.1.1
    	
Organization and Qualification; Power and   Authority; Compliance With Laws; Title to Properties; Event of Default
    	
48
    
	
 
    	
 
    	
 
    	
 
    	
5.1.2
    	
Subsidiaries and Owners;   Investment Companies
    	
49
    
	
 
    	
 
    	
 
    	
 
    	
5.1.3
    	
Validity and Binding Effect
    	
49
    
	
 
    	
 
    	
 
    	
 
    	
5.1.4
    	
No Conflict; Material   Agreements; Consents
    	
49
    
	
 
    	
 
    	
 
    	
 
    	
5.1.5
    	
Litigation
    	
50
    
	
 
    	
 
    	
 
    	
 
    	
5.1.6
    	
Financial Statements
    	
50
    
	
 
    	
 
    	
 
    	
 
    	
5.1.7
    	
Margin Stock
    	
51
    
	
 
    	
 
    	
 
    	
 
    	
5.1.8
    	
Full Disclosure
    	
51
    
	
 
    	
 
    	
 
    	
 
    	
5.1.9
    	
Taxes
    	
51
    
	
 
    	
 
    	
 
    	
 
    	
5.1.10
    	
Patents, Trademarks,   Copyrights, Licenses, Etc.
    	
52
    
	
 
    	
 
    	
 
    	
 
    	
5.1.11
    	
Liens in the Collateral
    	
52
    
	
 
    	
 
    	
 
    	
 
    	
5.1.12
    	
Insurance
    	
52
    
	
 
    	
 
    	
 
    	
 
    	
5.1.13
    	
ERISA Compliance
    	
52
    
	
 
    	
 
    	
 
    	
 
    	
5.1.14
    	
Environmental Matters
    	
52
    
	
 
    	
 
    	
 
    	
 
    	
5.1.15
    	
Solvency
    	
53
    
	
 
    	
 
    	
 
    	
 
    	
5.1.16
    	
Insurance Licenses
    	
53
    
	
 
    	
 
    	
5.2
    	
UPDATES TO SCHEDULES
    	
53
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
CONDITIONS OF LENDING   AND ISSUANCE OF LETTERS OF CREDIT
    	
53
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
6.1
    	
FIRST LOANS AND LETTERS   OF CREDIT
    	
53
    
	
 
    	
 
    	
 
    	
 
    	
6.1.1
    	
Deliveries
    	
53
    
	
 
    	
 
    	
 
    	
 
    	
6.1.2
    	
Payment of Fees
    	
55
    
	
 
    	
 
    	
6.2
    	
EACH LOAN OR LETTER OF   CREDIT
    	
55
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
COVENANTS
    	
55
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
7.1
    	
AFFIRMATIVE COVENANTS
    	
55
    
	
 
    	
 
    	
 
    	
 
    	
7.1.1
    	
Preservation of   Existence, Etc.
    	
55
    
	
 
    	
 
    	
 
    	
 
    	
7.1.2
    	
Payment of   Liabilities, Including Taxes, Etc.
    	
55
    
	
 
    	
 
    	
 
    	
 
    	
7.1.3
    	
Maintenance of Insurance
    	
56
    
	
 
    	
 
    	
 
    	
 
    	
7.1.4
    	
Maintenance of Properties and   Leases
    	
56
    
	
 
    	
 
    	
 
    	
 
    	
7.1.5
    	
Visitation Rights
    	
56
    
	
 
    	
 
    	
 
    	
 
    	
7.1.6
    	
Keeping of Records and Books of   Account
    	
56
    
	
 
    	
 
    	
 
    	
 
    	
7.1.7
    	
Compliance with Laws; Use of   Proceeds
    	
56
    
	
 
    	
 
    	
 
    	
 
    	
7.1.8
    	
Further Assurances
    	
56
    
	
 
    	
 
    	
 
    	
 
    	
7.1.9
    	
Anti-Terrorism Laws
    	
57
    
	
 
    	
 
    	
 
    	
 
    	
7.1.10
    	
Collateral Value
    	
57
    
	
 
    	
 
    	
 
    	
 
    	
7.1.11
    	
Post-Closing Filings
    	
57
    
	
 
    	
 
    	
 
    	
 
    	
7.1.12
    	
Eligible Collateral   Requirements
    	
57
    
	
 
    	
 
    	
 
    	
 
    	
7.1.13
    	
Collateral Value and   Delinquency Proceedings
    	
58
    
	
 
    	
 
    	
7.2
    	
NEGATIVE COVENANTS
    	
58
    
	
 
    	
 
    	
 
    	
 
    	
7.2.1
    	
Indebtedness
    	
58
    
	
 
    	
 
    	
 
    	
 
    	
7.2.2
    	
Liens
    	
58
    
	
 
    	
 
    	
 
    	
 
    	
7.2.3
    	
Guarantees
    	
59
    
	
 
    	
 
    	
 
    	
 
    	
7.2.4
    	
Investments
    	
59
    
	
 
    	
 
    	
 
    	
 
    	
7.2.5
    	
Dividends and Related   Distributions
    	
59
    

 

- iii -

 

	
 
    	
 
    	
 
    	
 
    	
7.2.6
    	
Liquidations, Mergers,   Consolidations, Acquisitions
    	
60
    
	
 
    	
 
    	
 
    	
 
    	
7.2.7
    	
Dispositions of Assets or Subsidiaries
    	
60
    
	
 
    	
 
    	
 
    	
 
    	
7.2.8
    	
Affiliate Transactions
    	
61
    
	
 
    	
 
    	
 
    	
 
    	
7.2.9
    	
Continuation of or Change in   Business
    	
61
    
	
 
    	
 
    	
 
    	
 
    	
7.2.10
    	
Fiscal Year
    	
61
    
	
 
    	
 
    	
 
    	
 
    	
7.2.11
    	
Issuance of Stock or Other   Ownership Interests
    	
61
    
	
 
    	
 
    	
 
    	
 
    	
7.2.12
    	
Changes in Organizational   Documents
    	
61
    
	
 
    	
 
    	
 
    	
 
    	
7.2.13
    	
Negative Pledges
    	
61
    
	
 
    	
 
    	
 
    	
 
    	
7.2.14
    	
Minimum Statutory Surplus
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.2.15
    	
Total Adjusted Capital to   Authorized Control Level Risk Based Capital
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.2.16
    	
Management Fee
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.2.17
    	
Successor Attorney-in-Fact
    	
62
    
	
 
    	
 
    	
7.3
    	
REPORTING REQUIREMENTS
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.3.1
    	
Quarterly Financial Statements
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.3.2
    	
Annual Financial Statements
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.3.3
    	
Certificate of the Borrower
    	
62
    
	
 
    	
 
    	
 
    	
 
    	
7.3.4
    	
Department of Insurance   Certificate of Compliance
    	
63
    
	
 
    	
 
    	
 
    	
 
    	
7.3.5
    	
Valuation Statements
    	
63
    
	
 
    	
 
    	
 
    	
 
    	
7.3.6
    	
Certificates; Other Information
    	
63
    
	
 
    	
 
    	
 
    	
 
    	
7.3.7
    	
Notices
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
7.3.7.1 Default
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
7.3.7.2 Litigation
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
7.3.7.3 Organizational   Documents
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
7.3.7.4 Erroneous   Financial Information
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
7.3.7.5
    	
ERISA Event
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
7.3.7.6 Other Reports
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
DEFAULT
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
8.1
    	
EVENTS OF DEFAULT
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
8.1.1
    	
Payments Under Loan Documents
    	
64
    
	
 
    	
 
    	
 
    	
 
    	
8.1.2
    	
Breach of Warranty
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.3
    	
Breach of Negative Covenants or   Visitation Rights
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.4
    	
Breach of Other Covenants
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.5
    	
Defaults in Other Agreements or   Indebtedness
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.6
    	
Final Judgments or Orders
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.7
    	
Loan Document Unenforceable
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.8
    	
Proceedings Against Assets
    	
65
    
	
 
    	
 
    	
 
    	
 
    	
8.1.9
    	
Events Relating to Plans and   Benefit Arrangements
    	
66
    
	
 
    	
 
    	
 
    	
 
    	
8.1.10
    	
Change of Control
    	
66
    
	
 
    	
 
    	
 
    	
 
    	
8.1.11
    	
Relief Proceedings
    	
66
    
	
 
    	
 
    	
 
    	
 
    	
8.1.12
    	
Revocation of Certificate of   Compliance
    	
66
    
	
 
    	
 
    	
8.2
    	
CONSEQUENCES OF EVENT   OF DEFAULT
    	
66
    
	
 
    	
 
    	
 
    	
 
    	
8.2.1
    	
Events of Default Other Than   Bankruptcy, Insolvency or Reorganization Proceedings
    	
66
    
	
 
    	
 
    	
 
    	
 
    	
8.2.2
    	
Bankruptcy, Insolvency or   Reorganization Proceedings
    	
67
    

 

- iv -

 

	
 
    	
 
    	
 
    	
 
    	
8.2.3
    	
Set-off
    	
67
    
	
 
    	
 
    	
 
    	
 
    	
8.2.4
    	
Suits, Actions, Proceedings
    	
67
    
	
 
    	
 
    	
 
    	
 
    	
8.2.5
    	
Application of Proceeds
    	
68
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
THE ADMINISTRATIVE   AGENT
    	
68
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
9.1
    	
APPOINTMENT AND AUTHORITY
    	
68
    
	
 
    	
 
    	
9.2
    	
RIGHTS AS A LENDER
    	
68
    
	
 
    	
 
    	
9.3
    	
EXCULPATORY PROVISIONS
    	
69
    
	
 
    	
 
    	
9.4
    	
RELIANCE BY   ADMINISTRATIVE AGENT
    	
70
    
	
 
    	
 
    	
9.5
    	
DELEGATION OF DUTIES
    	
70
    
	
 
    	
 
    	
9.6
    	
RESIGNATION OF   ADMINISTRATIVE AGENT
    	
70
    
	
 
    	
 
    	
9.7
    	
NON-RELIANCE ON   ADMINISTRATIVE AGENT AND OTHER LENDERS
    	
71
    
	
 
    	
 
    	
9.8
    	
NO OTHER DUTIES, NO   ADVISORY OR FIDUCIARY RESPONSIBILITY, ETC.
    	
71
    
	
 
    	
 
    	
9.9
    	
ADMINISTRATIVE AGENT’S   FEE
    	
72
    
	
 
    	
 
    	
9.10
    	
AUTHORIZATION TO   RELEASE COLLATERAL
    	
72
    
	
 
    	
 
    	
9.11
    	
NO   RELIANCE ON ADMINISTRATIVE AGENTS CUSTOMER IDENTIFICATION PROGRAM
    	
72
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
MISCELLANEOUS
    	
73
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
10.1
    	
MODIFICATIONS,   AMENDMENTS OR WAIVERS
    	
73
    
	
 
    	
 
    	
 
    	
 
    	
10.1.1
    	
Increase of Commitment
    	
73
    
	
 
    	
 
    	
 
    	
 
    	
10.1.2
    	
Extension of Payment; Reduction of Principal   Interest or Fees; Modification of Terms of Payment
    	
73
    
	
 
    	
 
    	
 
    	
 
    	
10.1.3
    	
Release of Collateral or Borrower
    	
73
    
	
 
    	
 
    	
 
    	
 
    	
10.1.4
    	
Miscellaneous
    	
73
    
	
 
    	
 
    	
10.2
    	
NO IMPLIED WAIVERS;   CUMULATIVE REMEDIES
    	
74
    
	
 
    	
 
    	
10.3
    	
EXPENSES; INDEMNITY;   DAMAGE WAIVER
    	
74
    
	
 
    	
 
    	
 
    	
 
    	
10.3.1
    	
Costs and Expenses
    	
74
    
	
 
    	
 
    	
 
    	
 
    	
10.3.2
    	
Indemnification by the Borrower
    	
74
    
	
 
    	
 
    	
 
    	
 
    	
10.3.3
    	
Reimbursement by Lenders
    	
75
    
	
 
    	
 
    	
 
    	
 
    	
10.3.4
    	
Waiver of Consequential   Damages, Etc.
    	
75
    
	
 
    	
 
    	
 
    	
 
    	
10.3.5
    	
Payments
    	
76
    
	
 
    	
 
    	
10.4
    	
HOLIDAYS
    	
76
    
	
 
    	
 
    	
10.5
    	
NOTICES; EFFECTIVENESS;   ELECTRONIC COMMUNICATION
    	
76
    
	
 
    	
 
    	
 
    	
 
    	
10.5.1
    	
Notices Generally
    	
76
    
	
 
    	
 
    	
 
    	
 
    	
10.5.2
    	
Electronic Communications
    	
76
    
	
 
    	
 
    	
 
    	
 
    	
10.5.3
    	
Change of Address, Etc.
    	
77
    
	
 
    	
 
    	
10.6
    	
SEVERABILITY
    	
77
    
	
 
    	
 
    	
10.7
    	
DURATION; SURVIVAL
    	
77
    
	
 
    	
 
    	
10.8
    	
SUCCESSORS AND ASSIGNS
    	
77
    
	
 
    	
 
    	
 
    	
 
    	
10.8.1
    	
Successors and Assigns   Generally
    	
77
    
	
 
    	
 
    	
 
    	
 
    	
10.8.2
    	
Assignments by Lenders
    	
77
    
	
 
    	
 
    	
 
    	
 
    	
10.8.3
    	
Register
    	
79
    
	
 
    	
 
    	
 
    	
 
    	
10.8.4
    	
Participations
    	
79
    
	
 
    	
 
    	
 
    	
 
    	
10.8.5
    	
Limitations upon Participant   Rights Successors and Assigns Generally
    	
80
    

 

- v -

 

	
 
    	
 
    	
 
    	
 
    	
10.8.6
    	
Certain Pledges; Successors and   Assigns Generally
    	
80
    
	
 
    	
 
    	
10.9
    	
CONFIDENTIALITY
    	
80
    
	
 
    	
 
    	
 
    	
 
    	
10.9.1
    	
General
    	
80
    
	
 
    	
 
    	
 
    	
 
    	
10.9.2
    	
Sharing Information With   Affiliates of the Lenders
    	
81
    
	
 
    	
 
    	
10.10
    	
COUNTERPARTS;   INTEGRATION; EFFECTIVENESS
    	
81
    
	
 
    	
 
    	
 
    	
 
    	
10.10.1
    	
Counterparts; Integration;   Effectiveness
    	
81
    
	
 
    	
 
    	
10.11
    	
CHOICE   OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF VENUE; SERVICE OF PROCESS;   WAIVER OF JURY TRIAL
    	
81
    
	
 
    	
 
    	
 
    	
 
    	
10.11.1
    	
Governing Law
    	
81
    
	
 
    	
 
    	
 
    	
 
    	
10.11.2
    	
SUBMISSION TO JURISDICTION
    	
81
    
	
 
    	
 
    	
 
    	
 
    	
10.11.3
    	
WAIVER OF VENUE
    	
82
    
	
 
    	
 
    	
 
    	
 
    	
10.11.4
    	
SERVICE OF PROCESS
    	
82
    
	
 
    	
 
    	
 
    	
 
    	
10.11.5
    	
WAIVER OF JURY TRIAL
    	
82
    
	
 
    	
 
    	
10.12
    	
USA PATRIOT ACT NOTICE
    	
83
    
	
 
    	
 
    	
10.14
    	
AMENDMENT AND RESTATEMENT
    	
83
    

 

- 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 5.1.9
    	
-
    	
TAXES
    
	
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)(1)
    	
-
    	
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
    

 

 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT (as hereafter amended, restated, modified or supplemented from time to time, this “Agreement”) is dated as of October 28, 2011 and is made by and among ERIE INSURANCE EXCHANGE, a reciprocal or inter-insurance exchange domiciled in the Commonwealth of Pennsylvania, acting by and through the Attorney-in-Fact (as hereinafter defined) (the “Borrower”), the LENDERS (as hereinafter defined), JPMORGAN CHASE BANK, N.A., in its capacity as syndication agent for the Lenders under this Agreement (each a “Syndication Agent”), 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, PNC Bank, National Association and the other financial institutions party thereto (PNC Bank, National Association and such other financial institutions are collectively, the “Existing Lenders”), and PNC Bank, National Association, as administrative agent for the Existing Lenders (in such capacity, the “Existing Agent”) entered into that certain Credit Agreement, dated September 30, 2009 (the “Existing Credit Agreement”).

 

The Existing Lenders and the Existing Agent will permit the amendment and restatement of the Existing Credit Agreement, pursuant to the terms and conditions set forth herein, to provide a revolving credit facility to the Borrower in an aggregate principal amount not to exceed Three Hundred Million and 00/100 Dollars ($300,000,000.00).  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 Commitment Fee Rate shall mean the percentage rate per annum based on the Financial Strength Rating then in effect according to the pricing grid on Schedule 1.1(A) below the heading “Commitment Fee.”

 

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

 

- 2 -

 

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 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, for any day, a fluctuating per annum rate of interest equal to the highest 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 have the meaning specified in the Preamble.

 

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

 

- 3 -

 

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.

 

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, implementation or application thereof by any Official Body or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of Law) by any Official Body; provided, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of Law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.

 

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

 

Closing Date shall mean October 28, 2011.

 

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

 

- 4 -

 

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.l0 [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.

 

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.

 

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 shall mean any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swing Loans or (iii) pay over to the Administrative Agent, the applicable Issuing Lender, PNC Bank (as the Swing Loan Lender) or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result

 

- 5 -

 

of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or the Administrative Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within (2) two Business Days after request by the Administrative Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swing Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Administrative Agent’s receipt of such certification in form and substance satisfactory to the Administrative Agent, (d) has become the subject of a Bankruptcy Event or (e) has failed at any time to comply with the provisions of Section 5.3 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.

 

As used in this definition and in Section 2.12 [Defaulting Lenders], the term “Bankruptcy Event” means, with respect to any Person, such Person or such Person’s direct or indirect parent company becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by an Official Body or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Official Body or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

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

 

Dispositions shall have the meaning specified in Section 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].

 

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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 and Section 7.1.12 [Eligible Collateral Requirements], 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; (iv) employee safety in the workplace; (v) the presence, use, management, generation, manufacture, processing, extraction, treatment, recycling, refining, reclamation, labeling, packaging, sale, transport, storage, collection, distribution, disposal or release or threat of release of regulated substances; (vi) the presence of contamination; (vii) the protection of endangered or threatened species; and (viii) the protection of environmentally sensitive areas.

 

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 & 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 shall mean (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 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

 

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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 applicable 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, 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 with which it has any other connection for tax purposes (other than a connection that would not have arisen but for entering into the Loan Documents, receiving any payments under or with respect to the Loan Documents, or enforcing any rights and remedies under the Loan Documents) 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, (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 4.8.6 [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], (d) any backup withholding taxes imposed on the Administrative Agent, any Lender, the applicable Issuing Lender or any other recipient of any payment hereunder and (e) any U.S. federal withholding Taxes which are imposed on any “withholdable payment” as a result of the failure of the recipient of such payment to satisfy the applicable requirements under FATCA.

 

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 Agent shall have the meaning specified in the Recitals hereof.

 

Existing Credit Agreement shall have the meaning specified in the Recitals hereof.

 

Existing Lenders shall have the meaning specified in the Recitals hereof.

 

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.

 

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Expiration Date shall mean, with respect to the Revolving Credit Commitments, October 28, 2016.

 

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).

 

FATCA means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantially comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

 

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

 

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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 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

 

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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 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 applicable 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.

 

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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 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 or any of its Affiliates, or, in its discretion, JPMorgan Chase Bank, N.A., or any of its Affiliates, each in its individual capacity as an issuer of Letters of Credit hereunder, or any other Lender that Borrower, Administrative Agent and such other Lender may agree may from time to time issue Letters of Credit hereunder.

 

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

 

Law 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.

 

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, and (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner.

 

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

 

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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 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:

 

	
 

 

LIBOR Rate =
    	
 
    	
London interbank   offered rates quoted by Bloomberg or
   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.

 

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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 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 4001(a)(3) of ERISA and to which the Borrower or any member of the ERISA Group is then making or accruing an obligation to make contributions or, within the preceding five (5) Plan years, has made or had an obligation to make such contributions.

 

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

 

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].

 

Notes shall mean, collectively, the promissory notes in the form of Exhibit 1.1(N)(1) evidencing the Revolving Credit Loans, and in the form of Exhibit 1.1(N)(2) evidencing the Swing Loans, 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.

 

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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 government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing.

 

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

 

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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 First Amended and Restated 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.

 

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 rate at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market 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; provided that in the case of Section 2.12 [Defaulting Lenders] when a Defaulting Lender shall exist, “Ratable Share” shall mean the percentage of the aggregate Commitments (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment.  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].

 

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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 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

 

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

 

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

 

Swing Loan Lender shall mean PNC Bank as the Lender with respect to the Swing Loans.

 

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

 

Swing Loans shall mean collectively, and Swing Loan, shall mean separately, all Swing Loans or any Swing Loan made by the Swing Loan Lender 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 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

 

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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; Changes in GAAP or SAP.  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 the Statements referred to in Section 5.1.6(i) [Financial Statements].  Notwithstanding the foregoing, if the Borrower notifies the Administrative Agent in writing that the Borrower wishes to amend any financial covenant in Section 7.2 of this Agreement, any related definition for purposes of interest, Letter of Credit Fee and Commitment Fee determinations to eliminate the effect of any change in GAAP or SAP occurring after the Closing Date on the operation of such financial covenants and/or interest, Letter of Credit Fee or Commitment Fee determinations (or if the Administrative Agent notifies the Borrower in writing that the Required Lenders wish to amend any financial covenant in Section 7.2, any related definition for purposes of interest, Letter of Credit Fee and Commitment Fee determinations to eliminate the effect of any such change in GAAP or SAP), then the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratios or requirements to preserve the original intent thereof in light of such change in GAAP or SAP (subject to the approval of the Required Lenders); provided that, until so amended, the Borrower’s compliance with such covenants for purposes of interest, Letter of Credit Fee and Commitment Fee determinations shall be determined on the basis of GAAP or SAP in effect immediately before the relevant change in GAAP or SAP became effective, until either such notice is withdrawn or such covenants or definitions are amended in a manner satisfactory to the Borrower and the Required Lenders, and the Borrower shall provide to the Administrative Agent, when it delivers its financial statements pursuant to Section 7.3.1 [Quarterly Financial Statements] and Section 7.3.2 [Annual Financial Statements] of this Agreement, such reconciliation statements as shall be reasonably requested by the Administrative Agent.

 

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

 

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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 any time shall never exceed its Revolving Credit Commitment minus its Ratable Share of the outstanding Swing Loans and 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.

 

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”) at a rate per annum equal to the Applicable Commitment Fee Rate (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) the Revolving Credit Commitments (for purposes of this computation, the Swing Loans shall be deemed to be borrowed amounts under PNC Bank’s Revolving Credit Commitment) 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.

 

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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 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 fourth 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:

 

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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 Four Hundred Million and 00/100 Dollars ($400,000,000.00).

 

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.

 

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.

 

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(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 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.

 

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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 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 3:00 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.

 

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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 the Existing Lenders pursuant to the Existing Credit Agreement and other loan documents executed in connection therewith.  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 an 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 such Issuing Lender may specify from time to time by no later than 10:00 a.m. at least three (3) Business Days, or such shorter period as may be agreed to by such 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 applicable 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 applicable 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], such Issuing Lender 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 seven (7) days prior to 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 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 applicable Issuing Lender will also deliver to the Borrower and Administrative Agent a true and complete copy of such Letter of Credit or amendment.  The Existing Letters of Credit remain outstanding and, on the Closing Date, will constitute all outstanding Letters of Credit under this Agreement as of such date.

 

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 applicable Issuing Lender for its own account a fronting fee equal to one hundred twenty-five thousandths of one percent (0.125%) per

 

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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 applicable Issuing Lender for such Issuing Lender’s sole account such Issuing Lender’s then in effect customary fees and administrative expenses payable with respect to the Letters of Credit as such 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 applicable 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 applicable 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 applicable Issuing Lender shall sometimes be referred to as a “Reimbursement Obligation”) such Issuing Lender prior to 12:00 noon on each date that an amount is paid by such Issuing Lender under any Letter of Credit (each such date, a “Drawing Date”) by paying to the Administrative Agent for the account of such Issuing Lender an amount equal to the amount so paid by such Issuing Lender.  In the event the Borrower fails to reimburse the applicable Issuing Lender (through the Administrative Agent) for the full amount of any drawing under any Letter of Credit by 12:00 noon on the 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 applicable 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 applicable 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 applicable Issuing Lender the amount of such Lender’s Ratable Share of such amount by no later than 2:00 p.m. 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

 

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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 applicable 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 such 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 applicable 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 applicable 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].

 

2.9.4                Repayment of Participation Advances.

 

2.9.4.1                       Upon (and only upon) receipt by the Administrative Agent for the account of an Issuing Lender of immediately available funds from the Borrower (i) in reimbursement of any payment made by such 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 such Issuing Lender under such a Letter of Credit, the Administrative Agent on behalf of such 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 applicable 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 such 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 an 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 such 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.

 

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2.9.5                Documentation.  The Borrower agrees to be bound by the terms of each Issuing Lender’s application and agreement for letters of credit and each 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, no Issuing Lender shall 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, each 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 applicable 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:

 

(i)                                   any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the applicable 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 applicable 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 applicable Issuing Lender or its Affiliates or any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein

 

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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 applicable Issuing Lender or any of its Affiliates has been notified thereof;

 

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

 

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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 such 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 such Issuing Lender as determined by a final non-appealable judgment of a court of competent jurisdiction or (B) the wrongful dishonor by such Issuing Lender or any of such 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 Official Body.

 

2.9.9                Liability for Acts and Omissions.  As between the Borrower and each Issuing Lender, or an 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 applicable 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 applicable 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 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 applicable Issuing Lender or its Affiliates, as applicable, including any act or omission of any Official Body, and none of the above shall affect or impair, or prevent the vesting of, any of the applicable Issuing Lender’s or its Affiliates’ rights or powers hereunder.  Nothing in the preceding sentence shall relieve the applicable Issuing Lender from liability for the applicable 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 applicable 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, each Issuing Lender and each of its Affiliates (i) may rely on any oral or other communication believed in good faith by

 

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the applicable 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 applicable 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 applicable 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 applicable 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 applicable Issuing Lender or its Affiliates under any resulting liability to the Borrower or any Lender.

 

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.

 

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2.11                    Valuation Statement.  Unless the Borrower is delivering daily Valuation Statements at such time pursuant to Section 7.3.5 [Valuation Statements], prior to any Revolving Credit Loan Request (excluding, however, the renewal or conversion of the Interest Rate Option applicable to any existing Revolving Credit Loans), Swing Loan Request or request for a Letter of Credit (excluding, however, the renewal of any outstanding Letter of Credit), the Borrower must deliver to the Administrative Agent a Valuation Statement calculated as of the most recent Business Day prior to the date of such request.

 

2.12                    Defaulting Lenders.

 

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

 

(i)                                   fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.3 [Commitment Fees];

 

(ii)                                the Commitment and outstanding Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 10.1 [Modifications, Amendments or Waivers]); provided, that this clause (ii) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

 

(iii)                             if any Swing Loans are outstanding or any Letter of Credit Obligations exist at the time such Lender becomes a Defaulting Lender, then:

 

(a)                               all or any part of the outstanding Swing Loans and Letter of Credit Obligations of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Ratable Shares but only to the extent that (x) the Revolving Facility Usage does not exceed the total of all non-Defaulting Lenders’ Revolving Credit Commitments, and (y) no Potential Default or Event of Default has occurred and is continuing at such time;

 

(b)                              if the reallocation described in clause (a) above cannot, or can only partially, be effected, the Borrower shall within one Business Day following notice by the Administrative Agent (x) first, prepay such outstanding Swing Loans, and (y) second, cash collateralize for the benefit of the applicable Issuing Lender the Borrower’s obligations corresponding to such Defaulting Lender’s Letter of Credit Obligations (after giving effect to any partial reallocation pursuant to clause (a) above) in a deposit account held at the Administrative Agent for so long as such Letter of Credit Obligations are outstanding;

 

(c)                               if the Borrower cash collateralizes any portion of such Defaulting Lender’s Letter of Credit Obligations pursuant to clause (b) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.9.2 [Letter of Credit Fees] with respect to such Defaulting Lender’s Letter of Credit Obligations during the period such Defaulting Lender’s Letter of Credit Obligations are cash collateralized;

 

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(d)                              if the Letter of Credit Obligations of the non-Defaulting Lenders are reallocated pursuant to clause (a) above, then the fees payable to the Lenders pursuant to Section 2.9.2 [Letter of Credit Fees] shall be adjusted in accordance with such non-Defaulting Lenders’ Ratable Share; and

 

(e)                               if all or any portion of such Defaulting Lender’s Letter of Credit Obligations are neither reallocated nor cash collateralized pursuant to clause (a) or (b) above, then, without prejudice to any rights or remedies of the applicable Issuing Lender or any other Lender hereunder, all Letter of Credit Fees payable under Section 2.9.2 [Letter of Credit Fees] with respect to such Defaulting Lender’s Letter of Credit Obligations shall be payable to the applicable Issuing Lender (and not to such Defaulting Lender) until and to the extent that such Letter of Credit Obligations are reallocated and/or cash collateralized; and

 

(iv)                            so long as such Lender is a Defaulting Lender, PNC Bank shall not be required to fund any Swing Loans and the applicable Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless such Issuing Lender is satisfied that the related exposure and the Defaulting Lender’s then outstanding Letter of Credit Obligations will be 100% covered by the Revolving Credit Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.12(iii), and participating interests in any newly made Swing Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.12(iii)(a) (and such Defaulting Lender shall not participate therein).

 

If (i) a Bankruptcy Event with respect to a parent company of any Lender shall occur following the date hereof and for so long as such event shall continue, or (ii) PNC Bank or the applicable Issuing Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit (unless such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied), PNC Bank shall not be required to fund any Swing Loan and the applicable Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless PNC Bank and the Issuing Lenders, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to PNC Bank or such Issuing Lender, as the case may be, to defease any risk to it in respect of such Lender hereunder.

 

In the event that the Administrative Agent, the Borrower, PNC Bank and the Issuing Lenders agree in writing that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Administrative Agent will so notify the parties hereto, and the Ratable Share of the Swing Loans and Letter of Credit Obligations of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment, and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swing Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Ratable Share.

 

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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.

 

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:

 

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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%) per annum;

 

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

 

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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 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

 

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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 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 and Letter of Credit Fees (but excluding the Administrative Agent’s Fee and the applicable Issuing Lender’s fronting fee) shall (except as otherwise may be provided with respect to a Defaulting 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 payable ratably among the Lenders entitled to such payment in accordance with the amount of principal, interest, Commitment Fees, Facility Fees and Letter of Credit Fees, as set forth in this Agreement.  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 Section 2.6.5 [Borrowings to Repay Swing Loans].

 

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 the pro-rata share of the amount such Lender is entitled thereto, then the Lender receiving such greater proportion shall (a) notify the Administrative

 

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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 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.

 

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 applicable 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 applicable 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 applicable 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 applicable 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 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

 

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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:

 

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

 

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

 

(y)                               a statement indicating the application of the prepayment between Loans to which the Base Rate Option applies and Loans to which the LIBOR Rate Option applies; 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 applicable Issuing Lender;

 

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(ii)                                subject any Lender or the applicable 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 applicable 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 applicable Issuing Lender); or

 

(iii)                             impose on any Lender, the applicable Issuing Lender or the London interbank market any other condition, cost or expense affecting this Agreement or any 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, converting to, continuing 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 applicable 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 applicable Issuing Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the applicable Issuing Lender, the Borrower will pay to such Lender or the applicable Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or the applicable 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 applicable Issuing Lender determines that any Change in Law affecting such Lender or the applicable Issuing Lender or any lending office of such Lender or such Lender’s or the applicable 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 applicable Issuing Lender’s capital or on the capital of such Lender’s or the applicable 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 or Swing Loans held by, such Lender, or the Letters of Credit issued by the applicable Issuing Lender, to a level below that which such Lender or the applicable Issuing Lender or such Lender’s or the applicable Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the applicable Issuing Lender’s policies and the policies of such Lender’s or the applicable Issuing Lender’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the applicable Issuing Lender, as the case may be, such additional amount or amounts as will

 

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compensate such Lender or the applicable Issuing Lender or such Lender’s or the applicable 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 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 applicable Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or the applicable 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 applicable 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 applicable 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 applicable Issuing Lender’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the applicable 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 applicable 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 applicable 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.

 

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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.

 

4.8.3                Indemnification by the Borrower.  The Borrower shall indemnify the Administrative Agent, each Lender and the applicable 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 applicable 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 applicable 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 applicable Issuing Lender, shall be conclusive as to amount absent manifest error.

 

4.8.4                Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that the Borrower have not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Official Body.  The indemnity under this Section 4.8.4 shall be paid within ten (10) days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent.  Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

 

4.8.5                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.

 

4.8.6                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 copy 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

 

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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 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 copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the 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:

 

(i)                                   two (2) duly completed valid 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)                                two (2) duly completed valid 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,

 

(iv)                            any other 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; or

 

(v)                               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.

 

Without limiting the generality of the first paragraph of this Section 4.8.6 and in addition to any requirements described in the second paragraph of this Section 4.8.6, if a payment made to a Foreign Lender hereunder or under any other Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Foreign Lender, as the case may be, were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable, or

 

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in any agreement or request entered into or issued pursuant to such sections), such Foreign Lender shall deliver to the Borrower and to the Administrative Agent, at the time or times prescribed by Law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation, certifications or other information prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation, certifications or other information reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower or the Administrative Agent to comply with its obligations under FATCA, to determine that such Foreign Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

4.8.7                Treatment of Certain Refunds.  If the Administrative Agent, a Lender or the applicable Issuing Lender determines, in its sole discretion, that it has received a refund (or credit in lieu of 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 or credit (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 or credit); net of all out-of-pocket expenses of the Administrative Agent, such Lender or the applicable 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 or credit), provided that the Borrower, upon the request of the Administrative Agent, such Lender or the applicable 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 applicable Issuing Lender in the event the Administrative Agent, such Lender or the applicable 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 applicable 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 anticipated profits, any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan, from fees payable to terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract) 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 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

 

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(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 including the assumption that each Lender shall be deemed to have funded each Loan made by it to which a LIBOR Rate Option applies by a matching deposit or other borrowing in the London offshore interbank market for a comparable amount and for a comparable period, whether or not such Loan was in fact so funded) 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:

 

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

 

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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 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-

 

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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 any such material agreement of the Borrower (referred to above) and neither the Borrower nor any of its Subsidiaries is bound by any contractual obligation, or subject to any restriction in any organizational document, or any requirement of Law which could reasonably be expected to result in a Material Adverse Change.  No consent, approval, exemption, order or authorization of, or a registration or filing with, any 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, 2010  (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, 2011 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 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, 2010, no Material Adverse Change has occurred.

 

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(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.  Except as set forth on Schedule 5.1.9, 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, 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.

 

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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 Prior Security Interests.  All filing fees and other expenses in connection with the perfection of such Liens have been or will be paid by the Borrower.

 

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.

 

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.

 

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5.1.15        Solvency.  Before and after giving effect to the initial Loans hereunder, the Borrower is and 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 applicable 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 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) no changes to the organizational documents of the Borrower and the Attorney-in-Fact as in effect on September 30,

 

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2009 other than the Articles of Incorporation of the Attorney-in-Fact, including, in the case of the Borrower, a copy of the Subscriber’s Agreements; and (d) in the case of the Attorney-in-Fact, a copy of the Articles of Incorporation as in effect on the Closing Date certified by the Secretary of the Commonwealth of Pennsylvania.

 

(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)                               (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.

 

(xi)                            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).

 

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(xii)                         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.

 

(xiii)                      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 as required by this Agreement, the Administrative Agent’s Letter or any other Loan Document.

 

6.2                            Each Loan or Letter of Credit.  At the time of making any Loans or issuing, extending or increasing 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, extension or increase 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 applicable 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 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,

 

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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 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

 

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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 five percent (105%) of the Revolving Credit Commitments.  If at any time the Collateral Value is less than one hundred five percent (105%) 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 Aa2 or AA, and (iii) the balance of investment property or other assets having an applicable rating at all times equal to or greater than A2 or A.  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 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-.

 

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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 five percent (105%) 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; provided, however, the Borrower and its Subsidiaries shall enter into a Lender Provided Interest Rate Hedge only for hedging (rather than speculative) purposes; 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, (A) which are not yet due and payable or (B) the validity or amount of which is being contested in good faith by appropriate lawful proceedings diligently conducted so long as levy and execution thereon have been stayed and continue to be stayed, provided that such reserves or other appropriate provisions, if any, as shall be required by SAP, shall have been made and any such Lien does not materially impair the ability of the Borrower to perform its Obligations hereunder or under the other Loan Documents;

 

(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 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

 

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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

 

(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

 

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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;

 

(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;

 

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(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 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

 

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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, 2011 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 $4,910,958,827.00, plus (ii) fifty percent (50%) of Borrower Statutory Net Income on a cumulative basis for the fiscal quarter ended December 31, 2011 and for each succeeding fiscal quarter thereafter.

 

7.2.15        Total Adjusted Capital to Authorized Control Level Risk Based Capital.  As of September 30, 2011 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 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 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

 

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[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 or any Lender (each, a “Valuation Statement”); provided, however, if on any day the Revolving Credit Facility Usage is greater than or equal to 2/3 of the Revolving Credit Commitments, the Borrower shall provide to the Administrative Agent, not later than 12:00 p.m., a daily Valuation Statement calculating the Collateral Value as of the close of business on the preceding Business Day.

 

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 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.

 

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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;

 

(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;

 

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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 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,

 

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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 applicable 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 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

 

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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 applicable 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 applicable 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 applicable 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 applicable Issuing Lender, Affiliate or participant, irrespective of whether or not such Lender, applicable 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 applicable Issuing Lender different from the branch or office holding such deposit or obligated on such Indebtedness.  The rights of each Lender, the applicable 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 applicable Issuing Lender or their respective Affiliates and participants may have.  Each Lender and the applicable 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 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

 

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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 each 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 Lenders, 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.  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

 

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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 applicable 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 applicable Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or the applicable Issuing Lender unless the Administrative Agent shall have received notice to the contrary from such Lender or the applicable 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 applicable 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 applicable 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 applicable 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 applicable Issuing Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this

 

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Section 9.6 [Resignation of Administrative Agent].  Upon 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 a 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 each 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 each 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, No Advisory or Fiduciary Responsibility, etc.  Anything herein to the contrary notwithstanding, neither the syndication agent nor any joint 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 an Issuing Lender hereunder.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the parties identified on the cover page as Joint Lead Arrangers and the Issuing Lenders (collectively, the “Applicable Parties”), are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Applicable Parties,

 

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on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each Applicable Party is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) none of the Applicable Parties has any obligation to the Borrower or any of its  Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Applicable Parties and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and none of the Applicable Parties has any obligation to disclose any of such interests to the Borrower or any of its  Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against the Applicable Parties with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

 

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 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 Agent’s 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.

 

Each Issuing Lender shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and each Issuing Lender shall have all of the benefits and immunities (A) provided to the Administrative Agent in Sections 9.3, 9,4, 9,5 and 9.11 with respect to any acts taken or omissions suffered by such Issuing Lender in connection with Letters of Credit issued by it or proposed to be issued by it and documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in this

 

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Sections 9.3, 9.4, 9.5 and 9.11 included the Issuing Lenders with respect to such acts or omissions, and (B) as additionally provided herein with respect to the Issuing Lenders.

 

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 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 applicable Issuing Lender may be made without the written consent of such Administrative Agent or applicable 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 whose consent is required is not obtained (each, a “Non-

 

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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 applicable 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 any Issuing Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or any 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 any 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 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 each 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

 

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hereby or thereby, the performance or nonperformance 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 applicable 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 applicable Issuing Lenders 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 applicable 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 Lenders in their 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 Lenders 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 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.

 

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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 applicable 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 applicable Issuing Lender if such Lender or the applicable Issuing Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic 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

 

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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, 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:

 

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(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; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; and

 

(B)                            the consent of each 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 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.

 

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(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 and subject to the obligations 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 Lender’s 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 applicable Issuing Lender shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any  provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver with respect to Section 10.1.1 [Increase of Commitment, Etc.], Section 10.1.2 [Extension of Payment, Etc.], or

 

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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 4.8.6 [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 applicable 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], 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 applicable Issuing Lender or

 

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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 applicable Issuing Lender,  to the extent not inconsistent therewith, the Laws of the Commonwealth of Pennsylvania without regard to is conflict of laws principles.

 

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

 

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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 APPLICABLE 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 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

 

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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.

 

10.13            Amendment and Restatement.

 

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

 

[INTENTIONALLY LEFT BLANK]

 

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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/ Robert W. McNutt
    	
 
    	
By:
    	
Erie Indemnity Company,   a Pennsylvania corporation, its Attorney-in-Fact
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/ Douglas F. Ziegler
    	
 (SEAL)
    
	
 
    	
 
    	
 
    	
Name:
    	
Douglas F. Ziegler
    	
 
    
	
 
    	
 
    	
 
    	
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
    

 

 

	
 
    	
JPMORGAN CHASE BANK, N.A.,   as a
    
	
 
    	
Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas A. Kiepura
    	
 
    
	
 
    	
Name: Thomas A. Kiepura
    
	
 
    	
Title: Vice President
    

 

 

	
 
    	
WELLS FARGO BANK, NATIONAL
   ASSOCIATION, as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Bendel
    	
 
    
	
 
    	
Name:
    	
 
    	
 David   Bendel
    	
 
    
	
 
    	
Title:
    	
 
    	
Director
    	
 
    
						

 

 

	
 
    	
BANK OF AMERICA, N.A.,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Debra Basler
    	
 
    
	
 
    	
Name:
    	
 
    	
Debra Basler
    	
 
    
	
 
    	
Title:
    	
 
    	
Managing Director
    	
 
    
						

 

 

	
 
    	
U.S. BANK NATIONAL ASSOCIATION,
   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Inna Kotsubey
    	
 
    
	
 
    	
Name:
    	
 
    	
Inna Kotsubey
    	
 
    
	
 
    	
Title:
    	
 
    	
Vice President
    	
 
    
						

 

 

	
 
    	
THE BANK OF NEW YORK MELLON,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Adim Offurum
    	
 
    
	
 
    	
Name:
    	
 
    	
Addim Offurum
    	
 
    
	
 
    	
Title:
    	
 
    	
Vice President

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