SC 13D

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DgigMUEAufGPBhMPJuKrtMzPa5ezejxdcwwnlxd4e/GvZvyMWlvt+fYWnqIkdCvt C+P407M0TQMejQlX5qWOVA== 0000950123-08-016023.txt : 20081121 0000950123-08-016023.hdr.sgml : 20081121 20081121165213 ACCESSION NUMBER: 0000950123-08-016023 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20081121 DATE AS OF CHANGE: 20081121 GROUP MEMBERS: HAGEN FAMILY LIMITED PARTNERSHIP FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Hagen Thomas B CENTRAL INDEX KEY: 0001396809 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: (814) 459-7405 MAIL ADDRESS: STREET 1: 100 STATE STREET, SUITE 440 CITY: ERIE STATE: PA ZIP: 16507-1456 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ERIE INDEMNITY CO CENTRAL INDEX KEY: 0000922621 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 250466020 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-44061 FILM NUMBER: 081208130 BUSINESS ADDRESS: STREET 1: 100 ERIE INSURANCE PL CITY: ERIE STATE: PA ZIP: 16530 BUSINESS PHONE: 8148702000 MAIL ADDRESS: STREET 1: 100 ERIE INSURANCE PLACE CITY: ERIE STATE: PA ZIP: 16530 SC 13D 1 y72804sc13d.htm SCHEDULE 13D SC 13D

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. ___)*

Erie Indemnity Company

(Name of Issuer)

Class B Common Stock

(Title of Class of Securities)

29530P-201

(CUSIP Number)

Roger W. Richards, Esq.
Richards & Associates, PC
100 State Street, Suite 440
Erie, PA 16507-1456
Tel. (814)-455-0370

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

Copy to:

Robert S. Reder, Esq.
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY 10005
(212) 530-5680

November 14, 2008

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.:		29530P-201

NAME OF REPORTING PERSON:

Thomas B. Hagen

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) þ

(b) o

SEC USE ONLY

SOURCE OF FUNDS:

PF; SC; BK

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION:

USA

SOLE VOTING POWER:

NUMBER OF

156

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

156

WITH:

SHARED DISPOSITIVE POWER:

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

156

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

6.12%^*

TYPE OF REPORTING PERSON:

* Based on 2,551 shares of Class B Common Stock outstanding as of October 22, 2008, as reported in Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.


CUSIP No.:		29530P-201

NAME OF REPORTING PERSON

Hagen Family Limited Partnership

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) þ

(b) o

SEC USE ONLY

SOURCE OF FUNDS:

AF; SC; BK

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION:

Delaware

SOLE VOTING POWER:

NUMBER OF

153

SHARED VOTING POWER:

BENEFICIALLY

OWNED BY

EACH

SOLE DISPOSITIVE POWER:

REPORTING

PERSON

153

WITH:

SHARED DISPOSITIVE POWER:

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:

153

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):

6.00%^*

TYPE OF REPORTING PERSON:

* Based on 2,551 shares of Class B Common Stock outstanding as of October 22, 2008, as reported in Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

TABLE OF CONTENTS


	Item 1. Security and Issuer
	Item 2. Identity and Background
	Item 3. Source and Amount of Funds or Other Consideration
	Item 4. Purpose of Transaction
	Item 5. Interest in Securities of the Issuer
	Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
	Item 7. Material to be Filed as Exhibits
SIGNATURE
EXHIBIT INDEX
EX-99.1: PURCHASE AGREEMENT
EX-99.2: LETTER AGREEMENT
EX-99.3: AMENDED AND RESTATED COMMITTED NON-REVOLVING LINE OF CREDIT NOTE
EX-99.4: AMENDED AND RESTATED PLEDGE AGREEMENT
EX-99.5: AMENDED AND RESTATED NOTIFICATION AND CONTROL AGREEMENT

Item 1. Security and Issuer.

This Statement relates to the Class B Common Stock, without par value (“Class B Common Stock”), of Erie Indemnity Company, a Pennsylvania corporation (“Issuer”). The address of the principal executive offices of Issuer is 100 Erie Insurance Place, Erie, Pennsylvania 16530.

Item 2. Identity and Background.

This Statement is filed on behalf of Thomas B. Hagen, an individual (“Thomas Hagen”), and the Hagen Family Limited Partnership (the “Hagen FLP”), of which Thomas Hagen is the sole General Partner and a Limited Partner. Each of Thomas Hagen and the Hagen FLP is referred to in this Statement as a “Reporting Person” and collectively as the “Reporting Persons”.

Thomas Hagen is a citizen of the United States. Thomas Hagen’s principal occupation is that he is the Chairman/Owner of Custom Group Industries of Erie, PA, which operates machining and fabrication manufacturing companies. Thomas Hagen is the non-executive Chairman of the Board and a member of the Board of Directors of Issuer. He is also the sole General Partner and a Limited Partner of the Hagen FLP, a limited partnership organized under the laws of Delaware, which acts as an investment vehicle for Thomas Hagen and members of his immediate family. The business address of Thomas Hagen and the Hagen FLP is c/o Custom Group Industries, 2800 McClelland Avenue, Erie, PA 16514-0008.

During the last five years, neither Reporting Person has been (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

Thomas Hagen acquired 4 shares of Class B Common Stock from third parties over twenty years ago. These acquisitions were funded from Thomas Hagen’s personal funds and no borrowed funds were used in connection therewith. Thomas Hagen subsequently contributed 1 share of Class B Common Stock to the Hagen FLP in exchange for Participating Units of the Hagen FLP.

In June 2007, the Hagen FLP acquired 2 shares of Class B Common Stock from a third party in exchange for 6,841 shares of Class A Common Stock of Issuer (the “Class A Common Stock”) owned by the Hagen FLP. At the time of this acquisition, such shares of Class A Common Stock had an aggregate value of $369,619.23, based on the closing price of Class A Common Stock on June 19, 2007 which was $54.03 per share.

On November 20, 2008, the Hagen FLP acquired 150 shares of Class B Common Stock pursuant to a purchase agreement, dated November 14, 2008 (the “Purchase Agreement”), by and among the Hagen FLP, on the one hand, and Abrams Capital Partners I, L.P., Abrams Capital Partners II, L.P., Whitecrest Partners, L.P. and Abrams Capital International, Ltd., on the other hand (collectively, the “Abrams Entities”), for an aggregate purchase price of $19,624,500 (equivalent to a per share purchase price of $130,830). The Purchase Agreement is attached hereto as Exhibit 99.1. To finance this acquisition, the Hagen FLP borrowed $20,000,000 from PNC Bank, National Association (“PNC Bank”) pursuant to a letter agreement, dated November 19, 2008 (the “Letter Agreement”), and an Amended and Restated Committed Non-Revolving Line of Credit Note, dated November 19, 2008 (the “Note”). In connection with this financing, the Hagen FLP and PNC Bank also entered into an Amended and Restated Pledge Agreement (the “Pledge Agreement”) and an Amended and Restated Notification and Control Agreement (the “Control Agreement”) for the pledge by the Hagen FLP of 1,351,350 shares of Class A

Common Stock as collateral for the borrowing under the Letter Agreement. The Letter Agreement, the Note, the Pledge Agreement and the Control Agreement are each attached hereto as Exhibits 99.2, 99.3, 99.4 and 99.5, respectively.

Item 4. Purpose of Transaction.

The Reporting Persons acquired the shares of Class B Common Stock in the ordinary course for investment purposes. None of the Reporting Persons currently has any specific plans or proposals that relate to or would result in any of the matters described in subparagraphs (a) through (j) of Item 4 of Schedule 13D; provided, however, the Reporting Persons may develop or consider such plans or proposals in the future. It should be noted that on September 16, 2008, Issuer filed a Form 15 with the Securities and Exchange Commission to deregister the Class B Common Stock.

Item 5. Interest in Securities of the Issuer.

	(a)		Thomas Hagen (i) directly owns and has power to vote and dispose of 3 shares of Class B Common Stock, which constitute approximately 0.12% of the outstanding Class B Common Stock, and (ii) in his capacity as the sole General Partner of the Hagen FLP, has power to vote and dispose of 153 shares of Class B Common Stock directly owned by the Hagen FLP, which constitute approximately 6.0% of the outstanding Class B Common Stock and, together with the shares of Class B Common Stock directly owned by Thomas Hagen, constitute approximately 6.12% of the outstanding Class B Common Stock. Mr. Hagen disclaims beneficial ownership of the 12 shares of Class B Common Stock owned by Susan Hirt Hagen, his wife. Mr. Hagen also disclaims beneficial ownership of 2,340 shares of Class B Common Stock held by the H.O. Hirt Trusts of which his wife is a beneficiary, contingent beneficiary and one of three trustees. The foregoing percentages are based on 2,551 shares of Class B Common Stock outstanding as of October 22, 2008, as reported in Issuer’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008.

	(b)		Thomas Hagen has sole power to vote and to dispose of 156 shares of Class B Common Stock. Such shares include 3 shares of Class B Common Stock directly owned by Thomas Hagen and 153 shares of Class B Common Stock directly owned by the Hagen FLP, of which Thomas Hagen is the sole General Partner and a Limited Partner.

	(c)		Except as described in Item 3 above, there have been no purchases or sales of Class B Common Stock by the Reporting Persons within the last sixty days.

	(d)		No person other than the Reporting Persons is known to have the right to receive, or the power to direct the receipt of dividends from, or the proceeds from the sale of, shares of Class B Common Stock held by the Reporting Persons.

	(e)		Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

On November 14, 2008, Hagen FLP, on the one hand, and the Abrams Entities, on the other hand, entered into the Purchase Agreement pursuant to which the Hagen FLP agreed to purchase from the Abrams Entities 150 shares of Class B Common Stock for an aggregate purchase price of $19,624,500. On November 14, 2008, the Hagen FLP granted to Issuer the first option to purchase the 150 shares of Class B Common Stock from the Abrams Entities at the same purchase price on or prior to the scheduled November 21, 2008 closing date under the Purchase Agreement. In order to permit the exercise of this

option, the Purchase Agreement permitted the Hagen FLP to, prior to November 21, 2008, assign to Issuer its right to purchase the shares under the Purchase Agreement. However, on November 17, 2008, Issuer notified the Reporting Persons that it declined such offer. Therefore, in accordance with the terms of the Purchase Agreement, the purchase by the Hagen FLP of the 150 shares of Class B Common Stock was consummated on November 20, 2008.

Thomas Hagen is the sole General Partner and a Limited Partner of the Hagen FLP. Pursuant to the limited partnership agreement of the Hagen FLP, Thomas Hagen has sole powers of investment and voting over all of the shares held by the Hagen FLP, which include shares of Class A Common Stock in addition to the shares of Class B Common Stock described in the Schedule 13D.

Except as described herein, neither Reporting Person has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Company, including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees or profits, division of profits or loss, or the giving or withholding of proxies.

Item 7. Material to be Filed as Exhibits.


Exhibit 99.1		Purchase Agreement by and among the Hagen FLP and the Abrams Entities dated November 14, 2008

Exhibit 99.2		Letter Agreement between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

Exhibit 99.3		Amended and Restated Committed Non-Revolving Line of Credit Note entered into between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

Exhibit 99.4		Amended and Restated Pledge Agreement between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

Exhibit 99.5		Amended and Restated Notification and Control Agreement between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

November 21, 2008


		/s/ Thomas B. Hagen Thomas B. Hagen

EXHIBIT INDEX


Exhibit 99.1		Purchase Agreement by and among the Hagen FLP and the Abrams Entities dated November 14, 2008

Exhibit 99.2		Letter Agreement between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

Exhibit 99.3		Amended and Restated Committed Non-Revolving Line of Credit Note entered into between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

Exhibit 99.4		Amended and Restated Pledge Agreement between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

Exhibit 99.5		Amended and Restated Notification and Control Agreement between PNC Bank, National Association and the Hagen FLP dated November 19, 2008

EX-99.1 2 y72804exv99w1.htm EX-99.1: PURCHASE AGREEMENT EX-99.1

Exhibit 99.1

PURCHASE AGREEMENT

This PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of November 14, 2008 by and among Hagen Family Limited Partnership (“Purchaser”), on the one hand, and Abrams Capital Partners I, L.P., Abrams Capital Partners II, L.P., Whitecrest Partners, L.P., and Abrams Capital International, Ltd., on the other hand. Capitalized terms used herein without definition shall have their meanings set forth in Section 6.01.

WHEREAS, Abrams Capital Partners I, L.P., Abrams Capital Partners II, L.P., Whitecrest Partners, L.P. and Abrams Capital International, Ltd. (collectively, the “Abrams Funds” or “Sellers”) own in aggregate 150 shares of Class B Common Stock (such 150 shares being referred to herein collectively as the “Shares”) of Erie Indemnity Company, a Pennsylvania corporation (the “Company”; and, together with the Erie Insurance Exchange and their respective subsidiary corporations, the “ERIE Group”);

WHEREAS, the Abrams Funds are managed by their investment manager, Pamet Capital Management, L.P. (“Pamet”);

WHEREAS, Thomas B. Hagen, the General Partner of Purchaser, is a member of the Company’s board of directors and serves as its Chairman;

WHEREAS, this Agreement is being made and entered into, and the sale of Shares contemplated hereby will be consummated, during the “window period” designated by the Company during which the Company’s “statutory insiders” are permitted to buy or sell shares of stock of the Company in accordance with the Company’s securities law compliance program; and

WHEREAS, Sellers desire to sell, and Purchaser desires to purchase, the Shares on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

SALE OF SHARES AND CLOSINGS

1.01 Purchase and Sale. Sellers agree, severally and not jointly, to sell to Purchaser, and Purchaser agrees to purchase from Sellers, all of the right, title and interest of Sellers in and to the Shares held by such Sellers at the Closing on the terms and subject to the conditions set forth in this Agreement.

1.02 Purchase Price. The purchase price for each Share shall be $130,830.00 and the aggregate purchase price for all Shares shall be $19,624,500.00 (the “Purchase Price”),

payable in immediately available United States funds at the Closing in the manner provided in Section 1.03.

1.03 Closing. Subject to the satisfaction or waiver of the conditions set forth in Article V, the consummation of the sale and purchase of the Shares provided for in Section 1.01 (the “Closing”) shall take place at the offices of Richards & Associates, P.C., 100 State Street, Suite 440, Erie, PA 16507-1456, by noon (local time) on November 21, 2008 (the “Closing Date”), unless another time, date or place is agreed to in writing by Purchaser and Sellers. At the Closing, Purchaser will pay the Purchase Price by wire transfer of immediately available United States funds pursuant to the wire instructions set forth on Exhibit “A” hereto. Simultaneously, Sellers will assign and transfer to Purchaser all of Sellers’ right, title and interest in and to the Shares by delivering to Purchaser a certificate or certificates representing the Shares, in genuine and unaltered form, duly endorsed in blank or accompanied by duly executed stock powers endorsed in blank, with requisite stock transfer tax stamps, if any, attached.

1.04 Further Assurances. Subject to the terms and conditions of this Agreement, at any time or from time to time after the Closing, as and to the extent applicable, each of the parties hereto shall execute and deliver such other documents and instruments, provide such materials and information and take such other actions as may reasonably be necessary, proper or advisable, to the extent permitted by applicable Law, to fulfill their respective obligations under this Agreement.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLERS

Each Seller, severally and not jointly, hereby represents and warrants to Purchaser, solely with respect to itself and any Shares referred to in this Agreement as being owned by it, as follows:

2.01 Organization of Seller. Seller (i) is an entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of formation and (ii) has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby, including without limitation to own, hold, sell and transfer (pursuant to this Agreement) the Shares.

2.02 Authority. The execution and delivery by Seller of this Agreement, and the performance by Seller of its obligations hereunder, have been duly and validly authorized by the investment manager of Seller, no other action on the part of Seller or its partners or shareholders being necessary. This Agreement has been duly and validly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

2.03 Ownership of Shares. Seller owns the number of Shares designated on Schedule I hereto, beneficially and of record, free and clear of all Liens. The delivery of a certificate or certificates at the Closing representing the Shares in the manner provided in Section 1.03 will transfer to Purchaser good and valid title to the Shares, free and clear of all Liens.

2.04 No Conflicts; Governmental Approvals and Filings.

(a) The execution and delivery by Seller of this Agreement does not, and the performance by Seller of its obligations under this Agreement and the consummation of the Purchase will not, (i) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate or articles of incorporation or by-laws (or other comparable organizational documents) of Seller or (ii) conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Seller or any of its assets and properties.

(b) No consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority on the part of Seller is required in connection with the execution, delivery and performance of this Agreement or the consummation of the Purchase.

2.05 Legal Proceedings. As of the date hereof, there is no pending or, to the knowledge of Seller, threatened, Action or Proceeding against or relating to Seller, nor is there any Order imposed upon Seller by or before any Governmental or Regulatory Authority, that would, individually or in the aggregate, reasonably be expected to impair in any material respect the ability of Seller to perform its obligations hereunder or prevent or materially delay consummation of the Purchase.

2.06 Disclosure. Purchaser has informed Sellers that Purchaser may be in possession of confidential or material, non-public information concerning the ERIE Group (the “Confidential Information”), which, if publicly disclosed, could affect the trading price of the Shares, including information that may be indicative that the value of the Shares is different than the Purchase Price. Seller acknowledges that the General Partner of Purchaser is a member of the Company’s board of directors and serves as its Chairman and that no Confidential Information has been disclosed by Purchaser to Sellers. Notwithstanding any possession of Confidential Information by Purchaser and the absence of disclosure thereof to Sellers, Seller desires to consummate the Purchase for its own business purpose and agrees that Purchaser shall not have any liability to Seller with respect to the non-disclosure of any Confidential Information, whether arising directly, derivatively or indirectly, primarily or secondarily, by contract or operation of Law or otherwise, including, without limitation, as a matter of contribution, indemnification, set-off, rescission or reimbursement. Seller hereby assumes and accepts the risk that the Confidential Information was not known to Seller before entering into this Agreement and may not be known at the time of the Closing and of the impact of the Confidential Information on the value of the Shares.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to each Seller as follows:

3.01 Organization of Purchaser. Purchaser is a limited partnership duly organized, validly existing and in good standing under the Laws of the jurisdiction of its formation and has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby.

3.02 Authority. The execution and delivery by Purchaser of this Agreement, and the performance by Purchaser of its obligations hereunder, have been duly and validly authorized by the general partner of Purchaser, no other action on the part of Purchaser or its partners being necessary. This Agreement has been duly and validly executed and delivered by Purchaser and constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally and by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3.03 No Conflicts; Governmental Approvals and Filings.

(a) The execution and delivery by Purchaser of this Agreement does not, and the performance by Purchaser of its obligations under this Agreement and the consummation of the Purchase will not, (i) conflict with or result in a violation or breach of any of the terms, conditions or provisions of the certificate or articles of incorporation or by-laws (or other comparable organizational documents) of Purchaser or (ii) conflict with or result in a violation or breach of any term or provision of any Law or Order applicable to Purchaser or any of its assets and properties.

(b) Except for the filings referenced in the last sentence of Section 4.02, no consent, approval or action of, filing with or notice to any Governmental or Regulatory Authority on the part of Purchaser is required in connection with the execution, delivery and performance of this Agreement or the consummation of the Purchase.

3.04 Legal Proceedings. As of the date hereof, there is no pending or, to the knowledge of Purchaser, threatened, Action or Proceeding against or relating to Purchaser, nor is there any Order imposed upon Purchaser by or before any Governmental or Regulatory Authority, that would, individually or in the aggregate, reasonably be expected to impair in any material respect the ability of Purchaser to perform its obligations hereunder or prevent or materially delay consummation of the Purchase.

3.05 Purchase for Investment; No Reliance. Purchaser (i) is an “accredited investor” (as that term is defined in Rule 501 of Regulation D of the Securities Act of 1933, as amended) and a sophisticated buyer with respect to the Shares, and has such knowledge, experience and skill in evaluating and investing in securities, based on actual participation in

financial, investment and business matters such that Purchaser is capable of evaluating the merits and risks of the Purchase and negotiating the terms thereof, (ii) has had the opportunity to consult with such advisors as it deems appropriate with respect to the Purchase, (iii) has adequate information concerning the Shares, (iv) has adequate information concerning the business and financial condition of the ERIE Group as it deems necessary to enter into this Agreement and has had an opportunity to discuss such information with its advisors, (v) has conducted, to the extent it deemed necessary, an independent investigation of such matters as, in its judgment, is necessary for it to make an informed investment decision with respect to the Shares and the Purchase, (vi) has not relied upon Sellers or any person affiliated with Sellers for any investigation into, assessment of, or evaluation with respect to the Shares or the Purchase, and (vii) is buying the Shares for investment purposes only, not with a view toward distribution or resale in violation of any applicable securities laws, as principal for its own account and not as a broker or agent for another party.

3.06. Adequate Funds. Purchaser has, and at the Closing will have, sufficient cash resources and/or available credit facilities to pay the aggregate Purchase Price and to make all other necessary payments of fees and expenses in connection with the transactions contemplated by this Agreement. Purchaser acknowledges that Purchaser’s obligation hereunder to purchase the Shares at the Closing is not conditioned on the availability of financing.

ARTICLE IV

COVENANTS

4.01 No Solicitations. Until 5:00 p.m. (local time) on the Closing Date, neither Pamet nor any Seller will, nor will they permit any of their subsidiaries, affiliates or representatives to, take, directly or indirectly, any action to initiate, assist, solicit, receive, negotiate, encourage or accept any offer or inquiry from any person (a) to purchase all or any portion of the Shares or (b) to reach any agreement or understanding (whether or not such agreement or understanding is absolute, revocable, contingent or conditional) for, or otherwise attempt to consummate, any sale of all or any portion of the Shares.

4.02 Confidentiality. Without the prior written consent of all of the parties hereto, each party agrees that it will not, and will cause its respective representatives not to, make any release to the press or other disclosure to any third party (other than by Purchaser or its representatives to the Company and its board of directors, and excluding partners or shareholders of Sellers) with respect to the existence or contents of this Agreement, except for such disclosure as may be necessary, in the opinion of counsel, for the party proposing to make the disclosure not to be in violation of or default under any applicable Law or Order. If any party proposes to make any disclosure based upon such an opinion, that party will deliver the text of the proposed disclosure to the other parties as far in advance of its disclosure as is practicable, and will in good faith consult with and consider the suggestions of the other parties concerning the nature and scope of the information it proposes to disclose. Notwithstanding the foregoing, it is hereby acknowledged that Purchaser will file, or cause to be filed, (i) a Form 4 with the Securities and Exchange Commission relating to the Purchase on or prior to the second business day after the date hereof and (ii) a Schedule 13D with the Securities and Exchange Commission relating to the

Purchase on or prior to the tenth calendar day after the date hereof and Sellers will file or cause to be filed all necessary reports required by State or Federal Law.

4.03 Waiver of Claims.

(a) Each Seller acknowledges that it is not relying on any representations or warranties of Purchaser other than those set forth in this Agreement. Accordingly, Sellers hereby irrevocably waive any and all actions, causes, rights or claims, whether known or unknown, contingent or matured, and whether currently existing or hereafter arising, that they may have or hereafter acquire (“Claims”) against Purchaser and/or its partners, agents and affiliates (collectively, the “Released Persons”) directly or indirectly arising out of, relating to or resulting from Purchaser’s failure to disclose any Confidential Information to Sellers, including, without limitation, Claims under applicable federal and/or state securities laws, and agrees not to institute or maintain any cause of action, suit or complaint or other proceeding against any Released Persons as a result of Purchaser’s or such persons’ failure to disclose the Confidential Information.

(b) Purchaser acknowledges that it is not relying on any representations or warranties of Sellers other than those set forth in the Agreement. Accordingly, Purchaser hereby irrevocably waives any and all actions, causes, rights or claims, whether known or unknown, contingent or matured, and whether currently existing or hereafter arising, that it may have or hereafter acquire (“Potential Purchaser Claims”) against any partner of each Seller and/or the officers, directors, partners, members, employees, agents and affiliates of each Seller or any partner of each Seller (collectively, the “Seller Released Persons”) arising out of, relating to or resulting from the failure by any Seller to disclose any information concerning the ERIE Group and/or the Purchase to Purchaser, including, without limitation, Potential Purchaser Claims under applicable federal and/or state securities laws, and agrees not to institute or maintain any cause of action, suit or complaint or other proceeding against any Seller Released Persons as a result of any Seller’s or such persons’ failure to disclose any such information.

ARTICLE V

CONDITIONS

5.01 Conditions to Obligations of Purchaser. The obligations of Purchaser hereunder to purchase the Shares are subject to the fulfillment, at or before the Closing, of the condition which may be waived in whole or in part by Purchaser in its sole discretion that each of the representations and warranties made by Sellers in this Agreement shall be true and correct in all material respects on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date.

5.02 Conditions to Obligations of Sellers. The obligations of Sellers hereunder to sell the Shares are subject to the fulfillment, at or before the Closing, of the condition (which may be waived in whole or in part by Sellers in their sole discretion) that each of the representations and warranties made by Purchaser in this Agreement shall be true and correct in

all material respects on and as of the Closing Date as though such representation or warranty was made on and as of the Closing Date.

ARTICLE VI

DEFINITIONS

6.01 Definitions.

(a) Defined Terms. As used in this Agreement, the following defined terms have the meanings indicated below:

“Abrams Funds” has the meaning set forth in the recitals hereto.

“Action or Proceeding” means any action, suit, proceeding, hearing, charge, complaint, grievance, arbitration or Governmental or Regulatory Authority investigation

“Agreement” has the meaning set forth in the preamble hereto.

“Claims” has the meaning set forth in Section 4.03(a).

“Class A Common Stock” means the authorized Class A Common Stock of the Company.

“Class B Common Stock” means the authorized Class B Common Stock of the Company.

“Closing” has the meaning set forth in Section 1.04.

“Closing Date” has the meaning set forth in Section 1.04.

“Closing Sale Price” has the meaning set forth in Section 6.01.

“Company” has the meaning set forth in the recitals hereto.

“Confidential Information” has the meaning set forth in Section 2.06.

“ERIE Group” has the meaning set forth in the recitals hereto.

“Governmental or Regulatory Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of any applicable jurisdiction.

“Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of the United States or any state, county, city or other political subdivision thereof or of any Governmental or Regulatory Authority.

“Liens” means any mortgage, pledge, assessment, security interest, lease, lien,

adverse claim, levy, charge or other encumbrance of any kind, or any conditional sale contract, title retention contract or other contract to give any of the foregoing, or any voting agreement or trust or other restriction on voting or alienation whether memorialized by contract or otherwise.

“Order” means any writ, judgment, decree, injunction or similar order of any Governmental or Regulatory Authority (in each such case whether preliminary or final).

“Pamet” has the meaning set forth in the recitals hereto.

“Potential Purchaser Claims” has the meaning set forth in Section 4.03(a).

“Purchase” means the purchase and sale of the Shares contemplated by this Agreement.

“Purchase Price” has the meaning set forth in Section 1.02.

“Purchaser” has the meaning set forth in the preamble hereto.

“Released Persons” has the meaning set forth in Section 4.03(a).

“Seller Released Persons” has the meaning set forth in Section 4.03(a).

“Sellers” has the meaning set forth in the recitals hereto.

“Shares” has the meaning set forth in the recitals hereto.

(b) Construction of Certain Terms and Phrases. Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; and (iv) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement.

ARTICLE VII

TERMINATION

7.01 Termination. This Agreement may be terminated, and the transactions contemplated hereby may be abandoned, at any time before the Closing:

(a) by mutual written agreement of Sellers and Purchaser;

(b) by Sellers or Purchaser, in the event that any Governmental or Regulatory Authority has issued a final, non-appealable Order enjoining the Purchase or otherwise making the consummation of the transactions contemplated by this Agreement illegal; or

(c) by Sellers or Purchaser, in the event that the Closing shall not have occurred on or prior to November 21, 2008, provided that this Agreement may not be terminated by any party hereto whose breach of its obligations under this Agreement has resulted in the failure of the Closing to occur on or prior to such date.

7.02 Effect of Termination. If this Agreement is validly terminated pursuant to Section 7.01, this Agreement will forthwith become null and void, and there will be no liability or obligation on the part of Sellers or Purchaser (or any of their respective members, partners, officers, employees, agents or other representatives or affiliates), except as provided in the next succeeding sentence and except that the provisions with respect to expenses in Section 8.03 and confidentiality in Section 4.02 will continue to apply following any such termination. Notwithstanding any other provision in this Agreement to the contrary, upon termination of this Agreement pursuant to Section 7.01(b), any Seller will remain liable to Purchaser for any willful breach of this Agreement by such Seller existing at the time of such termination, and Purchaser will remain liable to Sellers for any willful breach of this Agreement by Purchaser existing at the time of such termination, and Sellers or Purchaser may seek such remedies, including damages and fees of attorneys, against the other with respect to any such breach as are provided in this Agreement or as are otherwise available at Law or in equity.

ARTICLE VIII

MISCELLANEOUS

8.01 Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally, by facsimile transmission (with acknowledgement received), by electronic mail (with receipt confirmed), by overnight courier (providing proof of delivery) or mailed (first class postage prepaid) to the parties at the following addresses or facsimile numbers:

If to Purchaser, to:

c/o Richards & Associates, P.C.
100 State Street, Suite 440
Erie, PA 16507-1456
Facsimile No.: (814) 454-4459
E-mail: roger@richardspc.com
Attn: Roger W. Richards, Esq.

If to Pamet or any Seller, to:

c/o Abrams Capital
222 Berkeley Street
22nd Floor
Boston, MA 02116
Facsimile No.: (617) 646-6150
E-mail: bwall@abramscapital.com
Attn: Bill Wall, Esq.

All such notices, requests and other communications will be deemed received on the date of receipt by the recipient thereof. Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto.

8.02 Entire Agreement. This Agreement supersedes all prior discussions and agreements between the parties with respect to the subject matter hereof, including without limitation that certain letter agreement between Purchaser and Pamet, dated October 17, 2008, and contains the sole and entire agreement between the parties hereto with respect to the subject matter hereof.

8.03 Expenses. Whether or not the transactions contemplated hereby are consummated, each party will pay its own costs and expenses incurred in connection with the negotiation, execution and closing of this Agreement and the transactions contemplated hereby.

8.04 Waiver. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party waiving such term or condition. No waiver by any party of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative and not alternative.

8.05 Amendment. This Agreement may be amended, supplemented or modified only by a written instrument duly executed by or on behalf of each party hereto.

8.06 No Third Party Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of each party hereto and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other person, other than a Released Person to the extent provided in Section 4.03(a) and Seller Released Person to the extent provided in
Section 4.03(b).

8.07 No Assignment; Binding Effect. Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party hereto, in whole of in part, by operation of Law or otherwise, without the prior written consent of each other party hereto and any attempt to do so will be void, except that Purchaser may assign all, but not less than all, of its rights, interests and obligations hereunder, including its right to purchase the Shares on the terms but subject to the conditions contained in this Agreement, to the Company by execution of an instrument in form and substance reasonably satisfactory to Pamet; provided, however, that no such assignment shall relieve Purchaser of its obligations hereunder. Any failure by the Company to fulfill its obligations arising hereunder as a result of such assignment shall constitute a termination of such assignment and require Purchaser to fulfill its obligations under this Agreement at such times and in accordance with the terms hereof as if such assignment had not occurred. This Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and their respective successors and permitted assigns.

8.08 Headings. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof.

8.09 Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, and (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom.

8.10 Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware without giving effect to the conflicts of laws principles thereof that would require the application of the Law of another jurisdiction.

8.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.

[remainder of page intentionally blank]

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by or on behalf of each party hereto as of the date first above written.


HAGEN FAMILY LIMITED PARTNERSHIP
By	/s/ Thomas B. Hagen
	Name:	Thomas B. Hagen
	Title:	General Partner


ABRAMS CAPITAL PARTNERS I, L.P.
By:	Pamet Capital Management, L.P., its Investment Manager

By: Pamet Capital Management, LLC

By	/s/ David Abrams
	Name:	David Abrams
	Title:	Managing Member

ABRAMS CAPITAL PARTNERS II, L.P.
By:	Pamet Capital Management, L.P., its Investment Manager

By: Pamet Capital Management, LLC

By	/s/ David Abrams
	Name:	David Abrams
	Title:	Managing Member

WHITECREST PARTNERS, L.P.
By:	Pamet Capital Management, L.P., its Investment Manager

By: Pamet Capital Management, LLC

By	/s/ David Abrams
	Name:	David Abrams
	Title:	Managing Member

ABRAMS CAPITAL INTERNATIONAL, LTD.
By:	Pamet Capital Management, L.P., its Investment Manager

By: Pamet Capital Management, LLC

By	/s/ David Abrams
	Name:	David Abrams
	Title:	Managing Member

Schedule I


Seller	Number of Shares		Purchase Price
Abrams Capital Partners I, L.P.		10		1,308,300
Abrams Capital Partners II, L.P.		110		14,391,300
Whitecrest Partners, L.P.		21		2,747,430
Abrams Capital International, Ltd.		9		1,177,470

TOTAL		150	$	19,624,500

EX-99.2 3 y72804exv99w2.htm EX-99.2: LETTER AGREEMENT EX-99.2

Exhibit 99.2

November 19, 2008

Thomas B. Hagen
Hagen Family Limited Partnership
5727 Grubb Road
Erie, PA 16506

Re: $20,000,000.00 Committed Non-Revolving Line of Credit

Dear Mr. Hagen:

We are pleased to inform you that PNC Bank, National Association (the “Bank”), has re-approved your request, in an increased amount, for a non-revolving line of credit (the “Loan”) to Hagen Family Limited Partnership (the “Borrower”). This letter agreement amends, restates and replaces (but does not constitute a novation of or affect the status of any liens or security interests granted pursuant to) the existing letter agreement dated June 25, 2007, between the Bank and the Borrower (the “Existing Letter Agreement”), and the Borrower’s execution of this agreement constitutes a ratification and confirmation of all liens and security interests granted under or pursuant to the Existing Letter Agreement. We look forward to this opportunity to help you meet the financing needs of your business and for the purpose of purchasing or carrying “margin stock” within the meaning of Regulation U of the Federal Reserve Board. All the details regarding your non-revolving line of credit are outlined in the following sections of this letter.

1. Facility and Use of Proceeds. This is a committed non-revolving line of credit under which the Borrower may request and the Bank, subject to the terms and conditions of this letter, will make advances to the Borrower from time to time until the Expiration Date, in an amount in the aggregate at any time outstanding not to exceed $20,000,000.00 (the “Non-Revolving Line of Credit” or the “Loan”). The “Expiration Date” means November 18, 2013, or such later date as may be designated by the Bank by written notice to the Borrower. Advances under the Non-Revolving Line of Credit will be used for working capital or other general business purposes of the Borrower.

2. Note. The obligation of the Borrower to repay advances under the Non-Revolving Line of Credit shall be evidenced by an amended and restated promissory note (the “Note”) in form and content satisfactory to the Bank.

Form 7A – Multistate Rev. 1/02

Hagen Family Limited Partnership
November 19, 2008
Page 2

This letter (the “Letter Agreement”), the Note and the other agreements and documents executed and/or delivered pursuant hereto, as each may be amended, modified, extended or renewed from time to time, will constitute the “Loan Documents.” Capitalized terms not defined herein shall have the meaning ascribed to them in the Loan Documents.

3. Interest Rate. Interest on the unpaid balance of the Non-Revolving Line of Credit advances will be charged at the rates, and be payable on the dates and times, set forth in the Note.

4. Repayment. Subject to the terms and conditions of this Letter Agreement, the Borrower may borrow but may not repay and reborrow under the Non-Revolving Line of Credit until the Expiration Date, on which date the outstanding principal balance and any accrued but unpaid interest shall be due and payable. Interest will be due and payable as set forth in the Note, and will be computed on the basis of a year of 360 days and paid on the actual number of days that principal is outstanding.

5. Security. The Borrower must cause or has previously caused the following to be executed and delivered to the Bank in form and content satisfactory to the Bank as security for the Loan:

(a) an amended and restated pledge agreement granting the Bank a first priority perfected lien on pledged collateral of the Borrower consisting of marketable securities acceptable to the Bank and properly margined as set forth in the amended and restated pledge agreement. An amended and restated notification and control agreement, in form and content satisfactory to the Bank, with the custodian of the securities account in which the collateral is held will also be required.

The Loan will be cross-collateralized and cross-defaulted with all other present and future Obligations (as defined in the Loan Documents) of the Borrower to the Bank.

6. Covenants. Unless compliance is waived in writing by the Bank, until payment in full of the Loan and termination of the commitment for the Non-Revolving Line of Credit:

(a) The Borrower will promptly submit to the Bank such information as the Bank may reasonably request relating to the Borrower’s affairs (including but not limited to annual financial statements and tax returns for the Borrower) and/or any security for the Loan.

(b) The Borrower will not make or permit any change in its form of organization, the nature of its business as carried on as of the date of this Letter Agreement or in its senior management or equity ownership.

(c) The Borrower will notify the Bank in writing of the occurrence of any Event of Default or an act or condition which, with the passage of time, the giving of notice or both might become an Event of Default.

(d) The Borrower will comply with the financial and other covenants included in Exhibit “A” hereto.

Form 7A — Multistate Rev. 1/02

Hagen Family Limited Partnership
November 19, 2008
Page 3

7. Representations and Warranties. To induce the Bank to extend the Loan and upon the making of each advance to the Borrower under the Non-Revolving Line of Credit, the Borrower represents and warrants as follows:

(a) The Borrower’s latest financial statements provided to the Bank are true, complete and accurate in all material respects and fairly present the financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise, and the results of the Borrower’s operations for the period specified therein. The Borrower’s financial statements have been prepared in accordance with generally accepted accounting principles consistently applied from period to period subject, in the case of interim statements, to normal year-end adjustments. Since the date of the latest financial statements provided to the Bank, the Borrower has not suffered any damage, destruction or loss which has materially adversely affected its business, assets, operations, financial condition or results of operations.

(b) There are no actions, suits, proceedings or governmental investigations pending or, to the knowledge of the Borrower, threatened against the Borrower which could result in a material adverse change in its business, assets, operations, financial condition or results of operations and there is no basis known to the Borrower or its officers, directors or shareholders for any such action, suit, proceedings or investigation.

(c) The Borrower has filed all returns and reports that are required to be filed by it in connection with any federal, state or local tax, duty or charge levied, assessed or imposed upon the Borrower or its property, including unemployment, social security and similar taxes and all of such taxes have been either paid or adequate reserve or other provision has been made therefor.

(d) If not a natural person, the Borrower is duly organized, validly existing and in good standing under the laws of the state of its incorporation or organization and has the power and authority to own and operate its assets and to conduct its business as now or proposed to be carried on, and is duly qualified, licensed and in good standing to do business in all jurisdictions where its ownership of property or the nature of its business requires such qualification or licensing.

(e) The Borrower has full power and authority to enter into the transactions provided for in this Letter Agreement and has been duly authorized to do so by all necessary and appropriate action and when executed and delivered by the Borrower, this Letter Agreement and the other Loan Documents will constitute the legal, valid and binding obligations of the Borrower, enforceable against the Borrower in accordance with their terms.

(f) There does not exist any default or violation by the Borrower of or under any of the terms, conditions or obligations of: (i) its organizational documents; (ii) any indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to which it is a party or by which it is bound; or (iii) any law, regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed upon the Borrower by any law or by any governmental authority, court or agency.

Form 7A — Multistate Rev. 1/02

Hagen Family Limited Partnership
November 19, 2008
Page 4

8. Fees. On the date of the Note, the Borrower shall pay to the Bank a fee of $25,000.00.

9. Expenses. The Borrower will reimburse the Bank for the Bank’s out-of-pocket expenses incurred or to be incurred at any time in conducting UCC, title and other public record searches, and in filing and recording documents in the public records to perfect the Bank’s liens and security interests. The Borrower shall also reimburse the Bank for the Bank’s expenses (including the reasonable fees and expenses of the Bank’s outside and in-house counsel) in documenting and closing this transaction, in connection with any amendments, modifications or renewals of the Loan, and in connection with the collection of all of the Borrower’s Obligations to the Bank, including but not limited to enforcement actions relating to the Loan.

10. Additional Provisions. Before the first advance under the Loan, the Borrower shall execute and deliver to the Bank the Note and the other required Loan Documents and such other instruments and documents as the Bank may reasonably request, such as certified resolutions, incumbency certificates or other evidence of authority. The Bank will not be obligated to make any advance under the Non-Revolving Line of Credit if any Event of Default or event which with the passage of time, provision of notice or both would constitute an Event of Default shall have occurred and be continuing.

Prior to execution of the final Loan Documents, the Bank may terminate this Letter Agreement if a material adverse change occurs with respect to the Borrower, the Guarantor, any collateral for the Loan or any other person or entity connected in any way with the Loan, or if the Borrower fails to comply with any of the terms and conditions of this Letter Agreement, or if the Bank reasonably determines that any of the conditions cannot be met.

This Letter Agreement is governed by the laws of Pennsylvania. No modification, amendment or waiver of any of the terms of this Letter Agreement, nor any consent to any departure by the Borrower therefrom, will be effective unless made in a writing signed by the party to be charged, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. When accepted, this Letter Agreement and the other Loan Documents will constitute the entire agreement between the Bank and the Borrower concerning the Loan, and shall replace all prior understandings, statements, negotiations and written materials relating to the Loan, including but not limited to the Existing Letter Agreement.

The Bank will not be responsible for any damages, consequential, incidental, special, punitive or otherwise, that may be incurred or alleged by any person or entity, including the Borrower, as a result of this Letter Agreement, the other Loan Documents, the transactions contemplated hereby or thereby, or the use of proceeds of the Loan.

Form 7A — Multistate Rev. 1/02

Hagen Family Limited Partnership
November 19, 2008
Page 5

THE BORROWER AND THE BANK IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE ARISING OUT OF THIS LETTER AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED IN ANY OF SUCH DOCUMENTS AND ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

If and when a loan closing occurs, this Letter Agreement (as the same may be amended from time to time) shall survive the closing and will serve as our loan agreement throughout the term of the Loan.

To accept these terms, please sign this Letter Agreement as set forth below and the Loan Documents and return them to the Bank within fifteen (15) days from the date of this Letter Agreement, or this Letter Agreement may be terminated at the Bank’s option without liability or further obligation of the Bank.

Thank you for giving PNC Bank this opportunity to work with your business. We look forward to other ways in which we may be of service to your business or to you personally.

Very truly yours,

PNC BANK, NATIONAL ASSOCIATION


By:
		Thomas A. Forish
		Vice President

ACCEPTANCE

With the intent to be legally bound hereby, the above terms and conditions are hereby agreed to and accepted as of this 19^th day of
November, 2008.


BORROWER:

HAGEN FAMILY LIMITED PARTNERSHIP

By:

	Thomas B. Hagen	(SEAL)
	General Partner

Form 7A — Multistate Rev. 1/02

Hagen Family Limited Partnership
November 19, 2008
Page 6

EXHIBIT A
TO LETTER AGREEMENT
DATED NOVEMBER 19, 2008

A. FINANCIAL REPORTING COVENANTS:

(1) The Borrower will deliver to the Bank:

(a) Federal income tax return for each fiscal year, within thirty (30) days of filing and in any event by October 31 of each year.

B. NEGATIVE COVENANTS:

(1) The Borrower will not create, assume, incur or suffer to exist any mortgage, pledge, encumbrance, security interest, lien or charge of any kind upon any of its property, now owned or hereafter acquired, or acquire or agree to acquire any kind of property under conditional sales or other title retention agreements; provided, however, that the foregoing restrictions shall not prevent the Borrower from:

(a) incurring liens for taxes, assessments or governmental charges or levies which shall not at the time be due and payable or can thereafter be paid without penalty or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which it has created adequate reserves;

(b) making pledges or deposits to secure obligations under workers’ compensation laws or similar legislation; or

(2) The Borrower will not create, incur, guarantee, endorse (except endorsements in the course of collection), assume or suffer to exist any indebtedness, except:

(a) indebtedness to the Bank; or

(b) open account trade debt incurred in the ordinary course of business and not past due.

(3) The Borrower will not liquidate, or dissolve, or merge or consolidate with any person, firm, corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any substantial part of its property or assets, whether now owned or hereafter acquired.

(4) The Borrower will not make acquisitions of all or substantially all of the property or assets of any person, firm, corporation or other entity.

Form 7A — Multistate Rev. 1/02

Hagen Family Limited Partnership
November 19, 2008
Page 7

(5) The Borrower will not make or have outstanding any loans or advances to or otherwise extend credit to any person, firm, corporation or other entity, except in the ordinary course of business.

Form 7A — Multistate Rev. 1/02

EX-99.3 4 y72804exv99w3.htm EX-99.3: AMENDED AND RESTATED COMMITTED NON-REVOLVING LINE OF CREDIT NOTE EX-99.3

Exhibit 99.3


Amended and Restated Committed
Non-Revolving Line of Credit Note

$20,000,000.00		November 19, 2008

FOR VALUE RECEIVED, HAGEN FAMILY LIMITED PARTNERSHIP (the “Borrower”), with an address at 5727 Grubb Road, Erie, PA 16506, promises to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the “Bank”), at 901 State Street, Erie, PA 16501, or at such other location as the Bank may designate from time to time, the principal sum of TWENTY MILLION AND 00/100 DOLLARS ($20,000,000.00) or so much thereof as may be disbursed to or for the account of the Borrower, with interest from the date of disbursement on the unpaid balance until payment in full, as provided below:

1. Rate of Interest. The principal amount outstanding under this Note will bear interest at a rate per annum (calculated on the basis of the actual number of days that principal is outstanding over a year of 360 days) equal to the sum of (A) LIBOR plus (B) one hundred (100) basis points (1.00%) (the “Applicable LIBOR”). The Applicable LIBOR shall remain in effect until adjusted by the Bank effective on the first day of each month, without notice to the Borrower. For the purpose hereof, the following terms shall have the following meanings:

“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 Erie, PA.

“LIBOR” shall mean, for all advances outstanding at any time during any month, the interest rate per annum determined by the Bank by dividing (i) the Published Rate by (ii) a number equal to 1.00 minus the LIBOR Reserve Percentage. As used herein, “Published Rate” shall mean the rate of interest published on the first Business Day of each month in The Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then such rate published therein on the most recent Business Day prior to the first day of such month; provided, that if no such rate of interest is published therein for longer than 30 consecutive days, then the Published Rate shall be the eurodollar rate for a one month period, as published in another publication determined by the Bank).

“LIBOR Reserve Percentage” shall mean the maximum effective 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, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency liabilities”).

LIBOR shall be adjusted on the effective date of any change in the LIBOR Reserve Percentage as of such effective date. The Bank shall give prompt notice to the Borrower of LIBOR as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

If the Bank determines (which determination shall be final and conclusive) that, by reason of circumstances affecting the eurodollar market generally, deposits in dollars (in the applicable amounts) are not being offered to banks in the eurodollar market for the selected term, or adequate means do not exist for ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower. Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (a) the availability of the Applicable LIBOR shall be suspended, and (b) the interest rate for all advances then bearing interest under the Applicable LIBOR shall be converted on the first Business Day of the next calendar month to a rate of interest per annum (calculated on the

Form 20O — Multistate Rev. 1/02

basis of actual number of days that principal is outstanding over a year of 360 days) equal to the highest prime rate as published in the Money Rates section of The Wall Street Journal from time to time (the “Applicable Base Rate”), or if such index or publication is no longer published, or available, a comparable index selected by the Bank. If and when the aforementioned prime rate changes, the Applicable Base Rate will change automatically without notice to the Borrower, effective on the date of such change.

In addition, if, after the date of this Note, the Bank shall determine (which determination shall be final and conclusive) that any enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank with any guideline, request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for the Bank to make or maintain or fund loans bearing interest based on the Applicable LIBOR, the Bank shall notify the Borrower. Upon receipt of such notice, until the Bank notifies the Borrower that the circumstances giving rise to such determination no longer apply, (a) the availability of the Applicable LIBOR shall be suspended, and (b) the interest rate on all advances then bearing interest under the Applicable LIBOR shall be converted to the Applicable Base Rate either (i) on the first Business Day of the next calendar month, if the Bank may lawfully continue to maintain advances at the Applicable LIBOR to such day, or (ii) immediately if the Bank may not lawfully continue to maintain advances under the Applicable LIBOR.

In no event will the rate of interest hereunder exceed the maximum rate allowed by law.

2. Advances. The Borrower may borrow but may not repay and reborrow hereunder until the Expiration Date, subject to the terms and conditions of this Note and the Loan Documents (as defined herein). The “Expiration Date” shall mean November 18, 2013, or such later date as may be designated by the Bank by written notice from the Bank to the Borrower. The Borrower acknowledges and agrees that in no event will the Bank be under any obligation to extend or renew this Note beyond the Expiration Date. In no event shall the aggregate unpaid principal amount of advances under this Note exceed the face amount of this Note.

3. Advance Procedures. A request for advance made by telephone must be promptly confirmed in writing by such method as the Bank may require. The Borrower authorizes the Bank to accept telephonic requests for advances, and the Bank shall be entitled to rely upon the authority of any person providing such instructions. The Borrower hereby indemnifies and holds the Bank harmless from and against any and all damages, losses, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) which may arise or be created by the acceptance of such telephone requests or making such advances. The Bank will enter on its books and records, which entry when made will be presumed correct, the date and amount of each advance, as well as the date and amount of each payment made by the Borrower.

4. Payment Terms. Interest shall be payable monthly in arrears on the first day of each month. The outstanding principal balance and any accrued but unpaid interest shall be due and payable on the Expiration Date. The Borrower hereby authorizes the Bank to charge the Borrower’s deposit account at the Bank for any payment when due hereunder. Payments received will be applied to charges, fees and expenses (including attorneys’ fees), accrued interest and principal in any order the Bank may choose, in its sole discretion.

5. Late Payments; Default Rate. If the Borrower fails to make any payment of principal, interest or other amount coming due pursuant to the provisions of this Note within fifteen (15) calendar days of the date due and payable, the Borrower also shall pay to the Bank a late charge equal to the lesser of five percent (5%) of the amount of such payment or $100.00 (the “Late Charge”). Such fifteen (15) day period shall not be construed in any way to extend the due date of any such payment. Upon maturity, whether by acceleration, demand or otherwise, and at the Bank’s option upon the occurrence of any Event of Default (as hereinafter defined) and during the continuance thereof, amounts outstanding under this Note shall bear interest at a rate per annum (based on the actual number of days that principal is outstanding over a year of 360 days) which shall be three percentage

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points (3%) in excess of the interest rate in effect from time to time under this Note but not more than the maximum rate allowed by law (the “Default Rate”). The Default Rate shall continue to apply whether or not judgment shall be entered on this Note. Both the Late Charge and the Default Rate are imposed as liquidated damages for the purpose of defraying the Bank’s expenses incident to the handling of delinquent payments, but are in addition to, and not in lieu of, the Bank’s exercise of any rights and remedies hereunder, under the other Loan Documents or under applicable law, and any fees and expenses of any agents or attorneys which the Bank may employ. In addition, the Default Rate reflects the increased credit risk to the Bank of carrying a loan that is in default. The Borrower agrees that the Late Charge and Default Rate are reasonable forecasts of just compensation for anticipated and actual harm incurred by the Bank, and that the actual harm incurred by the Bank cannot be estimated with certainty and without difficulty.

6. Prepayment. The indebtedness evidenced by this Note may be prepaid in whole or in part at any time without penalty.

7. Other Loan Documents. This Note is issued in connection with a letter agreement between the Borrower and the Bank, dated on or before the date hereof, and the other agreements and documents executed and/or delivered in connection therewith or referred to therein, the terms of which are incorporated herein by reference (as amended, modified or renewed from time to time, collectively the “Loan Documents”), and is secured by the property (if any) described in the Loan Documents and by such other collateral as previously may have been or may in the future be granted to the Bank to secure this Note.

8. Events of Default. The occurrence of any of the following events will be deemed to be an “Event of Default” under this Note: (i) the nonpayment of any principal, interest or other indebtedness under this Note when due; (ii) the occurrence of any event of default or any default and the lapse of any notice or cure period, or any Obligor’s failure to observe or perform any covenant or other agreement, under or contained in any Loan Document or any other document now or in the future evidencing or securing any debt, liability or obligation of any Obligor to the Bank; (iii) the filing by or against any Obligor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or similar proceeding (and, in the case of any such proceeding instituted against any Obligor, such proceeding is not dismissed or stayed within 30 days of the commencement thereof, provided that the Bank shall not be obligated to advance additional funds hereunder during such period); (iv) any assignment by any Obligor for the benefit of creditors, or any levy, garnishment, attachment or similar proceeding is instituted against any property of any Obligor held by or deposited with the Bank; (v) a default with respect to any other indebtedness of any Obligor for borrowed money, if the effect of such default is to cause or permit the acceleration of such debt; (vi) the commencement of any foreclosure or forfeiture proceeding, execution or attachment against any collateral securing the obligations of any Obligor to the Bank; (vii) the entry of a final judgment against any Obligor and the failure of such Obligor to discharge the judgment within ten (10) days of the entry thereof; (viii) any material adverse change in any Obligor’s business, assets, operations, financial condition or results of operations; (ix) any Obligor ceases doing business as a going concern; (x) any representation or warranty made by any Obligor to the Bank in any Loan Document or any other documents now or in the future evidencing or securing the obligations of any Obligor to the Bank, is false, erroneous or misleading in any material respect; (xi) if this Note or any guarantee executed by any Obligor is secured, the failure of any Obligor to provide the Bank with additional collateral if in the Bank’s opinion at any time or times, the market value of any of the collateral securing this Note or any guarantee has depreciated below that required pursuant to the Loan Documents or, if no specific value is so required, then in an amount deemed material by the Bank; (xii) the revocation or attempted revocation, in whole or in part, of any guarantee by any Obligor; or (xiii) the death, incarceration, indictment or legal incompetency of any individual Obligor or, if any Obligor is a partnership or limited liability company, the death, incarceration, indictment or legal incompetency of any individual general partner or member. As used herein, the term “Obligor” means any Borrower and any guarantor of, or any pledgor, mortgagor or other person or entity providing collateral support for, the Borrower’s obligations to the Bank existing on the date of this Note or arising in the future.

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Upon the occurrence of an Event of Default: (a) the Bank shall be under no further obligation to make advances hereunder; (b) if an Event of Default specified in clause (iii) or (iv) above shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder shall be immediately due and payable without demand or notice of any kind; (c) if any other Event of Default shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder, at the Bank’s option and without demand or notice of any kind, may be accelerated and become immediately due and payable; (d) at the Bank’s option, this Note will bear interest at the Default Rate from the date of the occurrence of the Event of Default; and (e) the Bank may exercise from time to time any of the rights and remedies available under the Loan Documents or under applicable law.

9. Power to Confess Judgment. The Borrower hereby empowers any attorney of any court of record, after the occurrence of any Event of Default hereunder, to appear for the Borrower and, with or without complaint filed, confess judgment, or a series of judgments, against the Borrower in favor of the Bank or any holder hereof for the entire principal balance of this Note, all accrued interest and all other amounts due hereunder, together with costs of suit and an attorney’s commission of the greater of 10% of such principal and interest or $1,000 added as a reasonable attorney’s fee, and for doing so, this Note or a copy verified by affidavit shall be a sufficient warrant. The Borrower hereby forever waives and releases all errors in said proceedings and all rights of appeal and all relief from any and all appraisement, stay or exemption laws of any state now in force or hereafter enacted. Interest on any such judgment shall accrue at the Default Rate.

No single exercise of the foregoing power to confess judgment, or a series of judgments, shall be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable, or void, but the power shall continue undiminished and it may be exercised from time to time as often as the Bank shall elect until such time as the Bank shall have received payment in full of the debt, interest and costs. Notwithstanding the attorney’s commission provided for in the preceding paragraph (which is included in the warrant for purposes of establishing a sum certain), the amount of attorneys’ fees that the Bank may recover from the Borrower shall not exceed the actual attorneys’ fees incurred by the Bank.

10. Right of Setoff. In addition to all liens upon and rights of setoff against the Borrower’s money, securities or other property given to the Bank by law, the Bank shall have, with respect to the Borrower’s obligations to the Bank under this Note and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and the Borrower hereby grants the Bank a security interest in, and hereby assigns, conveys, delivers, pledges and transfers to the Bank, all of the Borrower’s right, title and interest in and to, all of the Borrower’s deposits, moneys, securities and other property now or hereafter in the possession of or on deposit with, or in transit to, the Bank or any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to the Borrower. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a later time.

11. Indemnity. The Borrower agrees to indemnify each of the Bank, each legal entity, if any, who controls, is controlled by or is under common control with the Bank, and each of their respective directors, officers and employees (the “Indemnified Parties”), and to hold each Indemnified Party harmless from and against any and all claims, damages, losses, liabilities and expenses (including all fees and charges of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation and preparation therefor) which any Indemnified Party may incur or which may be asserted against any Indemnified Party by any person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the Borrower), in connection with or arising out of or relating to the matters referred to in this Note or in the other Loan Documents or the use of any advance hereunder, whether (a) arising from or incurred in connection with any breach of a

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representation, warranty or covenant by the Borrower, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation, pending or threatened, whether based on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental authority; provided, however, that the foregoing indemnity agreement shall not apply to any claims, damages, losses, liabilities and expenses solely attributable to an Indemnified Party’s gross negligence or willful misconduct. The indemnity agreement contained in this Section shall survive the termination of this Note, payment of any advance hereunder and the assignment of any rights hereunder. The Borrower may participate at its expense in the defense of any such action or claim.

12. Miscellaneous. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing (except as may be agreed otherwise above with respect to borrowing requests) and will be effective upon receipt. Notices may be given in any manner to which the parties may separately agree, including electronic mail. Without limiting the foregoing, first-class mail, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices. Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth above or to such other address as any party may give to the other for such purpose in accordance with this paragraph. No delay or omission on the Bank’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank’s action or inaction impair any such right or power. The Bank’s rights and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Bank may have under other agreements, at law or in equity. No modification, amendment or waiver of, or consent to any departure by the Borrower from, any provision of this Note will be effective unless made in a writing signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. The Borrower agrees to pay on demand, to the extent permitted by law, all costs and expenses incurred by the Bank in the enforcement of its rights in this Note and in any security therefor, including without limitation reasonable fees and expenses of the Bank’s counsel. If any provision of this Note is found to be invalid, illegal or unenforceable in any respect by a court, all the other provisions of this Note will remain in full force and effect. The Borrower and all other makers and indorsers of this Note hereby forever waive presentment, protest, notice of dishonor and notice of non-payment. The Borrower also waives all defenses based on suretyship or impairment of collateral. If this Note is executed by more than one Borrower, the obligations of such persons or entities hereunder will be joint and several. This Note shall bind the Borrower and its heirs, executors, administrators, successors and assigns, and the benefits hereof shall inure to the benefit of the Bank and its successors and assigns; provided, however, that the Borrower may not assign this Note in whole or in part without the Bank’s written consent and the Bank at any time may assign this Note in whole or in part.

This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank’s office indicated above is located. This Note will be interpreted and the rights and liabilities of the Bank and the Borrower determined in accordance with the laws of the State where the Bank’s office indicated above is located, excluding its conflict of laws rules. The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank’s office indicated above is located; provided that nothing contained in this Note will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Borrower. The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note.

13. Amendment and Restatement. This Note amends and restates, and is in substitution for, that certain Committed Line of Credit Note in the original principal amount of $10,000,000.00 payable to the order of the Bank and dated June 25, 2007 (the “Existing Note”). However, without duplication, this Note shall in no way extinguish, cancel or satisfy Borrower’s unconditional obligation to repay all indebtedness evidenced by the Existing Note or constitute a novation of the Existing Note. Nothing herein is intended to extinguish, cancel or

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impair the lien priority or effect of any security agreement, pledge agreement or mortgage with respect to any Obligor’s obligations hereunder and under any other document relating hereto.

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14. WAIVER OF JURY TRIAL. The Borrower irrevocably waives any and all rights the Borrower may have to a trial by jury in any action, proceeding or claim of any nature relating to this Note, any documents executed in connection with this Note or any transaction contemplated in any of such documents. The Borrower acknowledges that the foregoing waiver is knowing and voluntary.

The Borrower acknowledges that it has read and understood all the provisions of this Note, including the confession of judgment and waiver of jury trial, and has been advised by counsel as necessary or appropriate.

WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.

WITNESS / ATTEST:

HAGEN FAMILY LIMITED PARTNERSHIP

By:

Thomas B. Hagen

(SEAL)

Print Name:

General Partner

Title:

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Disclosure for Confession of Judgment


Undersigned:		Hagen Family Limited Partnership
		5727 Grubb Road
		Erie, PA 16506

Lender:		PNC Bank, National Association
		901 State Street
		Erie, PA 16501

The undersigned has executed, and/or is executing, on or about the date hereof, an Amended and Restated Committed Non-Revolving Line of Credit Note in the principal amount of $20,000,000.00, under which the undersigned is obligated to repay monies to Lender.

A. The undersigned acknowledges and agrees that the above documents contain provisions under which Lender may enter judgment by confession against the undersigned. Being fully aware of its rights to prior notice and a hearing on the validity of any judgment or other claims that may be asserted against it by Lender thereunder before judgment is entered, the undersigned hereby freely, knowingly and intelligently waives these rights and expressly agrees and consents to Lender’s entering judgment against it by confession pursuant to the terms thereof.

B. The undersigned also acknowledges and agrees that the above documents contain provisions under which Lender may, after entry of judgment and without either notice or a hearing, foreclose upon, attach, levy, take possession of or otherwise seize property of the undersigned in full or partial payment of the judgment. Being fully aware of its rights after judgment is entered (including the right to move to open or strike the judgment), the undersigned hereby freely, knowingly and intelligently waives its rights to notice and a hearing and expressly agrees and consents to Lender’s taking such actions as may be permitted under applicable state and federal law without prior notice to the undersigned.

C. The undersigned certifies that a representative of Lender specifically called the confession of judgment provisions in the above documents to the attention of the undersigned, and/or that the undersigned was represented by legal counsel in connection with the above documents.

D. The undersigned hereby certifies: that its annual income exceeds $10,000; that all references to “the undersigned” above refer to all persons and entities signing below; and that the undersigned received a copy hereof at the time of signing.


Dated: November 19, 2008	HAGEN FAMILY LIMITED PARTNERSHIP

	By:

		Thomas B. Hagen	(SEAL)
		General Partner

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EX-99.4 5 y72804exv99w4.htm EX-99.4: AMENDED AND RESTATED PLEDGE AGREEMENT EX-99.4

Exhibit 99.4


Amended and Restated Pledge Agreement
(Stocks, Bonds and Commercial Paper)

THIS AMENDED AND RESTATED PLEDGE AGREEMENT (“Pledge Agreement”), dated as of this 19^th day of November, 2008, is made by HAGEN FAMILY LIMITED PARTNERSHIP (the “Pledgor”), with an address at 5727 Grubb Road, Erie, PA 16506, in favor of PNC BANK, NATIONAL ASSOCIATION (the “Secured Party”), with an address at 901 State Street, Erie, PA 16501, and amends and restates in its entirety that certain Pledge Agreement dated as of June 25, 2007 (the “Existing Pledge Agreement”). This Amended and Restated Pledge Agreement amends and restates and continues the liens and security interests created under the Existing Pledge Agreement, and the execution and delivery of this Amended and Restated Pledge Agreement shall not affect the perfection or priority of the liens and security interests created under the Existing Pledge Agreement.

1. Pledge. In order to induce the Secured Party to extend the Obligations (as defined below), the Pledgor hereby grants a security interest in and pledges to the Secured Party, and to all other direct or indirect subsidiaries of The PNC Financial Services Group, Inc., all of the Pledgor’s right, title and interest in and to the investment property and other assets described in Exhibit A attached hereto and made a part hereof, and all security entitlements of the Pledgor with respect thereto, whether now owned or hereafter acquired, together with all additions, substitutions, replacements and proceeds thereof and all income, interest, dividends and other distributions thereon (collectively, the “Collateral”). If the Collateral includes certificated securities, documents or instruments, such certificates are herewith delivered to the Secured Party accompanied by duly executed blank stock or bond powers or assignments as applicable. The Pledgor hereby authorizes the transfer of possession of all certificates, instruments, documents and other evidence of the Collateral to the Secured Party.

2. Obligations Secured. The Collateral secures payment of all loans, advances, debts, liabilities, obligations, covenants and duties owing from the Pledgor (the “Borrower”) to the Secured Party or to any other direct or indirect subsidiary of The PNC Financial Services Group, Inc., of any kind or nature, present or future (including any interest accruing thereon after maturity, or after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding relating to the Pledgor or the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, whether or not (i) evidenced by any note, guaranty or other instrument, (ii) arising under any agreement, instrument or document, (iii) for the payment of money, (iv) arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, (v) under any interest or currency swap, future, option or other interest rate protection or similar agreement, (vi) under or by reason of any foreign currency transaction, forward, option or other similar transaction providing for the purchase of one currency in exchange for the sale of another currency, or in any other manner, or (vii) arising out of overdrafts on deposit or other accounts or out of electronic funds transfers (whether by wire transfer or through automated clearing houses or otherwise) or out of the return unpaid of, or other failure of the Secured Party to receive final payment for, any check, item, instrument, payment order or other deposit or credit to a deposit or other account, or out of the Secured Party’s non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository or other similar arrangements; and any amendments, extensions, renewals and increases of or to any of the foregoing, and all costs and expenses of the Secured Party incurred in the documentation, negotiation, modification, enforcement, collection and otherwise in connection with any of the foregoing, including reasonable attorneys’ fees and expenses (hereinafter referred to collectively as the “Obligations”).

3. Representations and Warranties. The Pledgor represents and warrants to the Secured Party as follows:

Form 11A – Multistate Rev. 01/02

3.1 There are no restrictions on the pledge or transfer of any of the Collateral, other than restrictions referenced on the face of any certificates evidencing the Collateral.

3.2 The Pledgor is the legal owner of the Collateral, which is registered in the name of the Pledgor, the Custodian (as hereinafter defined) or a nominee.

3.3 The Collateral is free and clear of any security interests, pledges, liens, encumbrances, charges, agreements, claims or other arrangements or restrictions of any kind, except as referenced in Section 3.1 above; and the Pledgor will not incur, create, assume or permit to exist any pledge, security interest, lien, charge or other encumbrance of any nature whatsoever on any of the Collateral or assign, pledge or otherwise encumber any right to receive income from the Collateral, other than in favor of the Secured Party.

3.4 The Pledgor has the right to transfer the Collateral free of any encumbrances and the Pledgor will defend the Pledgor’s title to the Collateral against the claims of all persons, and any registration with, or consent or approval of, or other action by, any federal, state or other governmental authority or regulatory body which was or is necessary for the validity of the pledge of and grant of the security interest in the Collateral has been obtained.

3.5 The pledge of and grant of the security interest in the Collateral is effective to vest in the Secured Party a valid and perfected first priority security interest, superior to the rights of any other person, in and to the Collateral as set forth herein.

4. Covenants.

4.1 Unless otherwise agreed in writing between the Pledgor and the Secured Party, the Pledgor agrees to maintain at all times Collateral (of the type listed in Exhibit B attached hereto) having a minimum Margin Value equal to at least the outstanding amount of the Obligations and to provide additional Collateral (of the type listed in Exhibit B attached hereto) to the Secured Party immediately upon the Secured Party’s request if the minimum Margin Value is not maintained. “Margin Value” shall be calculated by multiplying the market value of the Collateral times the Secured Party’s margin percentage requirements for the type of Collateral in effect from time to time, or as otherwise agreed in writing. The margin requirements currently in effect are set forth on Exhibit B, and the Secured Party will endeavor to promptly notify the Pledgor of any change in the margin requirements.

4.2 If all or part of the Collateral constitutes “margin stock” within the meaning of Regulation U of the Federal Reserve Board, the Pledgor agrees, or if the Pledgor is not the Borrower, it shall cause the Borrower, to execute and deliver Form U-1 to the Secured Party and, unless otherwise agreed in writing between the Borrower and the Secured Party, no part of the proceeds of the Obligations may be used to purchase or carry margin stock.

4.3 Pledgor agrees not to invoke, and hereby waives its rights under, any statute under any state or federal law which permits the recharacterization of any portion of the Collateral to be interest or income.

5. Default.

5.1 If any of the following occur (each an “Event of Default”): (i) any Event of Default (as defined in any of the Obligations), (ii) any default under any of the Obligations that does not have a defined set of “Events of Default” and the lapse of any notice or cure period provided in such Obligations with respect to such default, (iii) demand by the Secured Party under any of the Obligations that have a demand feature, (iv) the failure by the Pledgor to perform any of its obligations hereunder, (v) the falsity, inaccuracy or material breach by the Pledgor of any written warranty, representation or statement made or furnished to the Secured Party by or on behalf of the Pledgor, (vi) the failure of the Secured Party to have a perfected first priority security interest in the Collateral, (vii) any restriction is imposed on the pledge or transfer of any of the Collateral after the date of this

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Agreement without the Secured Party’s prior written consent, or (viii) the breach of the Control Agreement (referred to in Section 8 below), or receipt of notice of termination of the Control Agreement if no successor custodian acceptable to the Secured Party has executed a Control Agreement in form and substance acceptable to the Secured Party on or before 10 days prior to the effective date of the termination, then the Secured Party is authorized in its discretion to declare any or all of the Obligations to be immediately due and payable without demand or notice, which are expressly waived, and may exercise any one or more of the rights and remedies granted pursuant to this Pledge Agreement or given to a secured party under the Uniform Commercial Code of the applicable state, as it may be amended from time to time, or otherwise at law or in equity, including without limitation the right to issue a Notice of Exclusive Control (as defined in the Control Agreement) to the Custodian, and/or to sell or otherwise dispose of any or all of the Collateral at public or private sale, with or without advertisement thereof, upon such terms and conditions as it may deem advisable and at such prices as it may deem best.

5.2 (a) At any bona fide public sale, and to the extent permitted by law, at any private sale, the Secured Party shall be free to purchase all or any part of the Collateral, free of any right or equity of redemption in the Pledgor or Borrower, which right or equity is hereby waived and released. Any such sale may be on cash or credit. The Secured Party shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to persons who will represent and agree that they are purchasing the Collateral for their own account in compliance with Regulation D of the Securities Act of 1933 (the “Act”) or any other applicable exemption available under such Act. The Secured Party will not be obligated to make any sale if it determines not to do so, regardless of the fact that notice of the sale may have been given. The Secured Party may adjourn any sale and sell at the time and place to which the sale is adjourned. If the Collateral is customarily sold on a recognized market or threatens to decline speedily in value, the Secured Party may sell such Collateral at any time without giving prior notice to the Pledgor. Whenever notice is otherwise required by law to be sent by the Secured Party to the Pledgor of any sale or other disposition of the Collateral, ten (10) days written notice sent to the Pledgor at its address specified above will be reasonable.

(b) The Pledgor recognizes that the Secured Party may be unable to effect or cause to be effected a public sale of the Collateral by reason of certain prohibitions contained in the Act, so that the Secured Party may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obligated to agree, among other things, to acquire the Collateral for their own account, for investment and without a view to the distribution or resale thereof. The Pledgor understands that private sales so made may be at prices and on other terms less favorable to the seller than if the Collateral were sold at public sales, and agrees that the Secured Party has no obligation to delay or agree to delay the sale of any of the Collateral for the period of time necessary to permit the issuer of the securities which are part of the Collateral (even if the issuer would agree), to register such securities for sale under the Act. The Pledgor agrees that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner.

5.3 The net proceeds arising from the disposition of the Collateral after deducting expenses incurred by the Secured Party will be applied to the Obligations in the order determined by the Secured Party. If any excess remains after the discharge of all of the Obligations, the same will be paid to the Pledgor. If after exhausting all of the Collateral there is a deficiency, the Pledgor or, if the Pledgor is not borrowing from the Secured Party or providing a guaranty of the Borrower’s obligations, the Borrower will be liable therefor to the Secured Party; provided, however, that nothing contained herein will obligate the Secured Party to proceed against the Pledgor, the Borrower or any other party obligated under the Obligations or against any other collateral for the Obligations prior to proceeding against the Collateral.

5.4 If any demand is made at any time upon the Secured Party for the repayment or recovery of any amount received by it in payment or on account of any of the Obligations and if the Secured Party repays all or any part of such amount by reason of any judgment, decree or order of any court or administrative body or by reason of any settlement or compromise of any such demand, the Pledgor will be and remain liable for the amounts so repaid or recovered to the same extent as if such amount had never been originally received by the Secured Party. The provisions of this section will be and remain effective notwithstanding the release of any of

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the Collateral by the Secured Party in reliance upon such payment (in which case the Pledgor’s liability will be limited to an amount equal to the fair market value of the Collateral determined as of the date such Collateral was released) and any such release will be without prejudice to the Secured Party’s rights hereunder and will be deemed to have been conditioned upon such payment having become final and irrevocable. This Section shall survive the termination of this Pledge Agreement.

6. Voting Rights and Transfer. Prior to the occurrence of an Event of Default, the Pledgor will have the right to exercise all voting rights with respect to the Collateral. At any time after the occurrence of an Event of Default, the Secured Party may transfer any or all of the Collateral into its name or that of its nominee and may exercise all voting rights with respect to the Collateral, but no such transfer shall constitute a taking of such Collateral in satisfaction of any or all of the Obligations unless the Secured Party expressly so indicates by written notice to the Pledgor.

7. Dividends, Interest and Premiums. The Pledgor will have the right to receive all cash dividends, interest and premiums declared and paid on the Collateral prior to the occurrence of any Event of Default. In the event any additional shares are issued to the Pledgor as a stock dividend or in lieu of interest on any of the Collateral, as a result of any split of any of the Collateral, by reclassification or otherwise, any certificates evidencing any such additional shares will be immediately delivered to the Secured Party and such shares will be subject to this Pledge Agreement and a part of the Collateral to the same extent as the original Collateral. At any time after the occurrence of an Event of Default, the Secured Party shall be entitled to receive all cash or stock dividends, interest and premiums declared or paid on the Collateral, all of which shall be subject to the Secured Party’s rights under Section 5 above.

8. Securities Account. If the Collateral includes securities or any other financial or other asset maintained in a securities account, then the Pledgor agrees to cause the securities intermediary on whose books and records the ownership interest of the Pledgor in the Collateral appears (the “Custodian”) to execute and deliver, contemporaneously herewith, a notification and control agreement or other agreement (the “Control Agreement”) satisfactory to the Secured Party in order to perfect and protect the Secured Party’s security interest in the Collateral.

9. Further Assurances. By its signature hereon, the Pledgor hereby irrevocably authorizes the Secured Party, at any time and from time to time, to execute (on behalf of the Pledgor), file and record against the Pledgor any notice, financing statement, continuation statement, amendment statement, instrument, document or agreement under the Uniform Commercial Code that the Secured Party may consider necessary or desirable to create, preserve, continue, perfect or validate any security interest granted hereunder or to enable the Secured Party to exercise or enforce its rights hereunder with respect to such security interest. Without limiting the generality of the foregoing, the Pledgor hereby irrevocably appoints the Secured Party as the Pledgor’s attorney-in-fact to do all acts and things in the Pledgor’s name that the Secured Party may deem necessary or desirable. This power of attorney is coupled with an interest with full power of substitution and is irrevocable. The Pledgor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof.

10. Notices. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing and will be effective upon receipt. Notices may be given in any manner to which the parties may separately agree, including electronic mail. Without limiting the foregoing, first-class mail, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices. Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth above or to such other address as either the Pledgor or the Secured Party may give to the other for such purpose in accordance with this section.

11. Preservation of Rights. No delay or omission on the Secured Party’s part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Secured Party’s action or inaction impair any such right or power. The Secured Party’s rights

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and remedies hereunder are cumulative and not exclusive of any other rights or remedies which the Secured Party may have under other agreements, at law or in equity.

12. Illegality. In case any one or more of the provisions contained in this Pledge Agreement should be invalid, illegal or unenforceable in any respect, it shall not affect or impair the validity, legality and enforceability of the remaining provisions in this Pledge Agreement.

13. Changes in Writing. No modification, amendment or waiver of, or consent to any departure by the Pledgor from, any provision of this Pledge Agreement will be effective unless made in a writing signed by the Secured Party, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Pledgor in any case will entitle the Pledgor to any other or further notice or demand in the same, similar or other circumstance.

14. Entire Agreement. This Pledge Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the Pledgor and the Secured Party with respect to the subject matter hereof.

15. Successors and Assigns. This Pledge Agreement will be binding upon and inure to the benefit of the Pledgor and the Secured Party and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Pledgor may not assign this Pledge Agreement in whole or in part without the Secured Party’s prior written consent and the Secured Party at any time may assign this Pledge Agreement in whole or in part.

16. Interpretation. In this Pledge Agreement, unless the Secured Party and the Pledgor otherwise agree in writing, the singular includes the plural and the plural the singular; references to statutes are to be construed as including all statutory provisions consolidating, amending or replacing the statute referred to; the word “or” shall be deemed to include “and/or”, the words “including”, “includes” and “include” shall be deemed to be followed by the words “without limitation”; and references to agreements and other contractual instruments shall be deemed to include all subsequent amendments and other modifications to such instruments, but only to the extent such amendments and other modifications are not prohibited by the terms of this Pledge Agreement. Section headings in this Pledge Agreement are included for convenience of reference only and shall not constitute a part of this Pledge Agreement for any other purpose. If this Pledge Agreement is executed by more than one party as Pledgor, the obligations of such persons or entities will be joint and several.

17. Indemnity. The Pledgor agrees to indemnify each of the Secured Party, each legal entity, if any, who controls, is controlled by or is under common control with the Secured Party, and each of their respective directors, officers and employees (the “Indemnified Parties”), and to hold each Indemnified Party harmless from and against, any and all claims, damages, losses, liabilities and expenses (including all fees and charges of internal or external counsel with whom any Indemnified Party may consult and all expenses of litigation or preparation therefor) which any Indemnified Party may incur, or which may be asserted against any Indemnified Party by any person, entity or governmental authority (including any person or entity claiming derivatively on behalf of the Pledgor), in connection with or arising out of or relating to the matters referred to in this Pledge Agreement or under any Control Agreement, whether (a) arising from or incurred in connection with any breach of a representation, warranty or covenant by the Pledgor, or (b) arising out of or resulting from any suit, action, claim, proceeding or governmental investigation, pending or threatened, whether based on statute, regulation or order, or tort, or contract or otherwise, before any court or governmental authority; provided, however, that the foregoing indemnity agreement shall not apply to claims, damages, losses, liabilities and expenses solely attributable to an Indemnified Party’s gross negligence or willful misconduct. The indemnity agreement contained in this Section shall survive the termination of this Pledge Agreement. The Pledgor may participate at its expense in the defense of any such action or claim.

18. Governing Law and Jurisdiction. This Pledge Agreement has been delivered to and accepted by the Secured Party and will be deemed to be made in the State where the Secured Party’s office indicated above

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is located. This Pledge Agreement will be interpreted and the rights and liabilities of the Pledgor and the Secured Party determined in accordance with the laws of the State where the Secured Party’s office indicated above is located, excluding its conflict of laws rules. The Pledgor hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Secured Party’s office indicated above is located; provided that nothing contained in this Pledge Agreement will prevent the Secured Party from bringing any action, enforcing any award or judgment or exercising any rights against the Pledgor individually, against any security or against any property of the Pledgor within any other county, state or other foreign or domestic jurisdiction. The Pledgor acknowledges and agrees that the venue provided above is the most convenient forum for both the Secured Party and the Pledgor. The Pledgor waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Pledge Agreement.

19. Authorization to Obtain Credit Reports. By signing below, each Pledgor who is an individual provides written authorization to the Secured Party or its designee (and any assignee or potential assignee hereof) to obtain the Pledgor’s personal credit profile from one or more national credit bureaus. Such authorization shall extend to obtaining a credit profile in considering this Pledge Agreement and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account.

20. WAIVER OF JURY TRIAL. THE PLEDGOR IRREVOCABLY WAIVES ANY AND ALL RIGHT THE PLEDGOR MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS PLEDGE AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE PLEDGOR ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

The Pledgor acknowledges that it has read and understood all the provisions of this Pledge Agreement, including the waiver of jury trial, and has been advised by counsel as necessary or appropriate.

WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.

WITNESS / ATTEST:

HAGEN FAMILY LIMITED PARTNERSHIP

By:

Thomas B. Hagen

(SEAL)

Print Name:

General Partner

Title:

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EXHIBIT A TO PLEDGE AGREEMENT
(UNCERTIFICATED SECURITIES)

With respect to the following account:


		Title of the Securities Account:		Hagen Family Limited Partnership
		Securities Account No.:		55-55-101-4260900
		Custodian:		PNC Bank, National Association

The specific assets listed below, which are in the securities account referred to above, are being pledged as collateral and are restricted from trading and withdrawals:


Quantity		Description of Securities
1,351,350 shares		Erie Indemnity Company Class A

The Secured Party’s written approval is required prior to any trading or withdrawal of such assets. Notwithstanding the foregoing, so long as the Pledgor is not in default of this Pledge Agreement or any Obligation, upon the request of Pledgor, on or about November 30, 2009, and each 30^th day of November thereafter, Secured Party shall release from this Pledge Agreement all Collateral in excess of the amount having a market value 2.5 times the outstanding Obligations.

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A-1

EXHIBIT B TO PLEDGE AGREEMENT
Margin Percentage Requirements
(Check all categories that apply)


	Certificates of Deposit, with waiver of set-off rights		95	%
	Money Market Funds rated “AA” or better with properly executed control agreement with PNC (such as Provident Institutional Funds)		95	%
	All other Money Market Funds with a properly executed control agreement with PNC		90	%
	Treasury bills / Short Term Funds		90	%
	Commercial Paper / Banker's Acceptances		90	%
	Federal Agency Discount Notes		90	%
	US Government Bonds/Notes with remaining maturity > 1 year		80	%
	US Federal Agency Bonds (e.g., GNMAs, FNLMCs, FNMAs)		80	%
	Quasi-Government Bonds (e.g., FHLB)		80	%
	Municipal Bonds of Investment Grade Rating (BBB Rated)		80	%
	Corporate Bonds (Convertible, Asset-Backed, Variable Rate, etc.) of Investment Grade Rating (BBB Rating)		80	%
	Mortgage-Backed Securities		80	%
	Treasury Inflation Securities		80	%
	Collateralized Mortgage Obligations (CMOs) — PACs and TACs only		75	%
	Preferred Stock / Convertible Preferred Stock		75	%
	Corporate Equities (listed securities valued at $5.00 or more per share)		75	%
	Margin stock subject to Regulation “U” (if any of the Obligations are “purpose credit”)		50	%
	Publicly Traded Mutual Funds	Various, maximum of 85%*
X	Other: Erie Indemnity Company Stock having a value of more than $5.00 per share		50	%
	All of the foregoing


*		If, as evidenced by its prospectus, a Mutual Fund consists of at least 90% of a single category listed above (for example, a “bond” fund), then the applicable margin for that category may be used, minus 5% (that is, the bond fund would have a maximum margin of 75%); otherwise, the maximum margin is 80%.

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EX-99.5 6 y72804exv99w5.htm EX-99.5: AMENDED AND RESTATED NOTIFICATION AND CONTROL AGREEMENT EX-9.5

Exhibit 99.5



Amended and Restated
Notification and Control Agreement
(Trust, Custody or Brokerage Accounts)

THIS AMENDED AND RESTATED NOTIFICATION AND CONTROL AGREEMENT (the “Agreement”) is made this 19^th day of November, 2008, by and among HAGEN FAMILY LIMITED PARTNERSHIP (the “Pledgor”), PNC BANK, NATIONAL ASSOCIATION, in its capacity as custodian (the “Custodian”) and PNC BANK, NATIONAL ASSOCIATION, with an office at 901 State Street, Erie, PA 16501, in its capacity as secured party (the “Secured Party”). This Agreement amends and restates and replaces the existing Notification and Control Agreement dated June 25, 2007 among the parties hereto.

The Pledgor has granted to the Secured Party a security interest in 1,351,350 shares of Erie Indemnity Company Class A Stock held in its securities account No. 55-55-101-4260900 maintained with the Custodian (the “Account”), and all additions, substitutions, replacements, proceeds, income, dividends and distributions thereon (collectively, the “Collateral”), pursuant to, and more particularly described in, an Amended and Restated Pledge Agreement dated on or about the date hereof (as amended, restated or otherwise modified from time to time, the “Pledge Agreement”) from the Pledgor to the Secured Party. The Custodian is in possession of the Collateral pursuant to a certain Investment Advisory Agreement dated December 28, 1989 (the “Custodian Agreement”). Pursuant to the Pledge Agreement, the Secured Party has required the execution and delivery of this Agreement.

NOW, THEREFORE, for valuable consideration and intending to be legally bound, the parties hereto agree and acknowledge as follows:

1. Possession of Collateral. The Custodian acknowledges that: (a) the Collateral is in its possession or in possession of a subcustodian or clearing corporation, and (b) the Pledgor’s interest in the Collateral appears on the Custodian’s books and records. The Custodian will treat all of the Collateral as financial assets under Article 8 of the Uniform Commercial Code (as adopted and enacted and in effect from time to time in the State where the Secured Party’s office indicated above is located) (“UCC”).

2. Notice of Security Interest. The Custodian acknowledges that this Agreement constitutes written notification to the Custodian, pursuant to Articles 8 and 9 of the UCC and applicable federal regulations for the Federal Reserve Book Entry System, of the Secured Party’s security interest in the Collateral. The Pledgor, Secured Party and Custodian are also entering into this Agreement to provide for the Secured Party’s control of the Collateral and to perfect, and confirm the priority of, the Secured Party’s security interest in the Collateral. The Custodian agrees to promptly make all necessary entries or notations in its books and records to reflect the Secured Party’s security interest in the Collateral.

3. Control. The Custodian, without further consent from the Pledgor, hereby agrees to comply with all entitlement orders, instructions, and directions of any kind originated by Secured Party concerning the Collateral, to liquidate the Collateral as and to the extent directed by the Secured Party and to pay over to the Secured Party all proceeds therefrom to the extent necessary to satisfy the Pledgor’s obligations, without any setoff or deduction.

4. Trading and Withdrawals. The Custodian agrees that Secured Party is hereby exercising exclusive control over the Collateral and that Custodian will not comply with any entitlement orders or other directions (including trades or withdrawals) concerning the Collateral originated by the Pledgor. Notwithstanding the foregoing, unless directed otherwise by the Secured Party, the Pledgor may receive for its own account all cash dividends and interest on the Collateral.

Form 11F — Multistate Rev. 01/02

5. Custodian Agreement. The Custodian shall simultaneously send to the Secured Party copies of all notices given and statements and, if requested, confirmations rendered pursuant to the Custodian Agreement and shall notify the Secured Party of the termination of the Custodian Agreement. Notwithstanding anything contained in the Custodian Agreement, so long as the Pledge Agreement remains in effect, neither the Pledgor nor the Custodian shall terminate the Custodian Agreement without thirty (30) days’ prior written notice to the other party and the Secured Party. In the event of any conflict between the provisions of this Agreement and the Custodian Agreement, the provisions hereof shall control. Regardless of any provision in the Custodian Agreement, the State where the Secured Party’s office indicated above is located shall be deemed to be the Custodian’s jurisdiction for the purposes of this Agreement and the perfection and priority of the Secured Party’s security interest in the Collateral. In the event the Custodian no longer serves as custodian for the Collateral, the Collateral shall be transferred (i) to a successor custodian satisfactory to the Secured Party, provided that prior to such transfer, such successor custodian executes an agreement that is in all material respects the same as this Agreement, or (ii) if no satisfactory successor has been designated, then as directed by the Secured Party.

6. Indemnity.

(a) The Pledgor shall indemnify and hold the Custodian harmless from any and all losses, claims, damages, liabilities, expenses and fees, including reasonable attorneys’ fees, resulting from the execution of or performance under this Agreement and the delivery by the Custodian of all or any part of the Collateral to the Secured Party pursuant to this Agreement, unless such losses, claims, damages, liabilities, expenses or fees are primarily attributable to the Custodian’s gross negligence or willful misconduct. This indemnification shall survive the termination of this Agreement.

(b) The Secured Party shall indemnify and hold the Custodian harmless from and against any and all losses, claims, damages, liabilities, expenses and fees (including reasonable attorneys’ fees) arising out of the Custodian’s compliance with any instructions from the Secured Party with respect to the Collateral unless such losses, claims, damages, liabilities, expenses or fees are primarily attributable to the Custodian’s gross negligence or willful misconduct. This indemnification shall survive the termination of this Agreement.

7. Protection of Custodian. Except as required by Paragraph 4 hereof, the Custodian shall have no duty to require any cash or securities to be delivered to it or to determine that the amount and form of assets constituting Collateral comply with any applicable requirements. The Custodian may hold the securities in bearer, nominee, federal reserve book entry, or other form and in any securities depository or UCC clearing corporation, with or without indicating that the securities are subject to a security interest; provided, however, that all Collateral shall be identified on the Custodian’s books and records as subject to the Secured Party’s security interests and shall be in a form that permits transfer to the Secured Party without additional authorization or consent of the Pledgor. The Custodian may rely and shall be protected in acting upon any notice, instruction, or other communication which it reasonably believes to be genuine and authorized. As between the Pledgor and the Custodian, the terms of the Custodian Agreement shall apply with respect to any losses or liabilities or fees, costs or expenses of such parties arising out of matters covered by this Agreement. The Pledgor agrees that the Custodian will not be liable to the Pledgor for complying with entitlement orders originated by the Secured Party, unless the Custodian (i) takes the action after it is served with an injunction or other legal process enjoining it from doing so issued by a court of competent jurisdiction and has had a reasonable opportunity to act on the injunction or other legal process, or (ii) acts in collusion with the Secured Party in violating the Pledgor’s rights. The Custodian shall have no liability to any party for any incidental, punitive or consequential damages resulting from any breach by the Custodian of its obligations hereunder.

The Custodian will be excused from failing to act or delay in acting, and no such failure or delay shall constitute a breach of this Agreement or otherwise give rise to any liability of the Custodian, if (i) such failure or delay is caused by circumstances beyond the Custodian’s reasonable control, including but not limited to legal constraint, emergency conditions, action or inaction of governmental, civil or military authority, fire, strike, lockout or other labor dispute, war, riot, theft, flood, earthquake or other natural disaster, breakdown of public or private or common carrier communications or transmission facilities or equipment failure, or (ii) such failure or

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delay resulted from the Custodian’s reasonable belief that the action would have violated any guideline, rule or regulation of any governmental authority.

8. Termination/Release of Collateral. This Agreement shall terminate automatically upon receipt by the Custodian of written notice executed by two officers of the Secured Party holding titles of Vice President or higher that (a) all of the obligations secured by Collateral have been satisfied, or (b) all of the Collateral may be released, whichever is sooner, and the Custodian shall thereafter be relieved of all duties and obligations hereunder. In addition, any notice from the Secured Party relating to release of all or any portion of the Collateral not permitted by this Agreement without the consent of the Secured Party shall be effective only if executed by two officers of the Secured Party holding titles of Vice President or higher.

9. Waiver and Subordination of Rights. The Custodian hereby waives its right to setoff any obligations of the Pledgor to the Custodian against any or all cash, securities, financial assets and other investment property held by the Custodian as Collateral, and hereby subordinates in favor of the Secured Party any and all liens, encumbrances, claims or security interests which the Custodian may have against the Collateral, either now or in the future, except that the Custodian will retain its prior lien on the property held as Collateral only to secure payment for property purchased for Collateral and normal commissions and fees relating to the property held as Collateral. The Custodian will not agree with any third party that the Custodian will comply (and the Custodian will not comply) with any entitlement orders, instructions or directions of any kind concerning the Collateral originated by such third party without the Secured Party’s prior written consent. Except for the claims and interests of the Secured Party and the Pledgor in the Collateral, the Custodian does not know of any claim to or interest in the Collateral. The Custodian will use reasonable efforts to promptly notify the Secured Party and the Pledgor if any other person claims that it has a property interest in any of the Collateral.

10. Expenses. The Pledgor shall pay all fees, costs and expenses (including reasonable fees and expenses of internal or external counsel) of enforcing any of the Secured Party’s rights and remedies upon any breach (by the Custodian or the Pledgor) of any of the provisions of this Agreement.

11. Notices. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder (“Notices”) must be in writing and will be effective upon receipt. Notices may be given in any manner to which the parties may separately agree, including electronic mail. Without limiting the foregoing, first-class mail, facsimile transmission and commercial courier service are hereby agreed to as acceptable methods for giving Notices. Regardless of the manner in which provided, Notices may be sent to a party’s address as set forth below, or to such other address as any party may give to the others for such purpose in accordance with this section.

12. Changes in Writing. No modification, amendment or waiver of, or consent to any departure by any party from, any provision of this Agreement will be effective unless made in a writing signed by the parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Pledgor in any case will entitle the Pledgor to any other or further notice or demand in the same, similar or other circumstance.

13. Entire Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

14. Counterparts. This Agreement may be signed in any number of counterpart copies and by the parties hereto on separate counterparts, but all such copies shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart. Any party so executing this Agreement by facsimile transmission shall promptly deliver a manually executed counterpart, provided that any failure to do so shall not affect the validity of the counterpart executed by facsimile transmission.

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15. Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and assigns; provided, however, that the Pledgor may not assign this Agreement in whole or in part without the Secured Party’s prior written consent and the Secured Party at any time may assign this Agreement in whole or in part.

16. Governing Law and Jurisdiction. This Agreement has been delivered to and accepted by the Secured Party and will be deemed to be made in the State where the Secured Party’s office indicated above is located. This Agreement will be interpreted and the rights and liabilities of the parties hereto determined in accordance with the laws of the State where the Secured Party’s office indicated above is located, excluding its conflict of laws rules. Each of the parties hereby irrevocably consents to the exclusive jurisdiction and venue of any state or federal court located within the county where the Secured Party’s office indicated above is located.

17. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH PARTY HERETO ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

WITNESS the due execution hereof as a document under seal, as of the date first written above.


Pledgor’s Address for Notices:	PLEDGOR:

Thomas B. Hagen	HAGEN FAMILY LIMITED PARTNERSHIP
Hagen Family Limited Partnership
5727 Grubb Road
Erie, PA 16506	By:
		Thomas B. Hagen
Facsimile Number (814) 899-4189		General Partner

Secured Party’s Address for Notices:	SECURED PARTY:

PNC Bank, National Association	PNC BANK, NATIONAL ASSOCIATION
901 State Street
Erie, PA 16501
Attention: Thomas A. Forish	By:
Facsimile Number (814) 871-9509		Thomas A. Forish
		Vice President

Custodian’s Address for Notices:	CUSTODIAN:

PNC Bank, National Association	PNC BANK, NATIONAL ASSOCIATION
901 State Street
Erie, PA 16501
Attention: Jeffrey J. Szumigale	By:
Facsimile Number (814) 871-9314		Jeffrey J. Szumigale
		Senior Vice President

Form 11F — Multistate Rev. 01/02

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HAGEN FAMILY LIMITED PARTNERSHIP

/s/ Thomas B. Hagen

Thomas B. Hagen

General Partner