Exhibit 10.140

 

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First Amended and Restated Pledge Agreement

 

 

THIS FIRST AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of this 28th day of
October, 2011 (the “Pledge Agreement”), is made by ERIE INDEMNITY COMPANY AS
ATTORNEY IN FACT FOR ERIE INSURANCE EXCHANGE (the “Pledgor”), with an address at
100 Erie Insurance Place, Erie, Pennsylvania 16530, in favor of PNC BANK,
NATIONAL ASSOCIATION (“PNC”), as administrative agent for itself and certain
other Lenders (as hereinafter defined) (in such capacity, the “Secured Party”),
with an address at 901 State Street, P.O. Box 8480, Erie, Pennsylvania 16553
(“Pledge Agreement”).

 

1.                                    Pledge.  In order to induce the Secured
Party and the other Lenders to enter into the Credit Agreement (as defined
below), the Pledgor hereby grants a security interest in and pledges to the
Secured Party (as administrative agent for itself and the other Lenders) all of
the Pledgor’s right, title and interest in and to the investment property and
other assets of the Pledgor in the following investment account 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”):  Account No.:  EIRF 1221052; Name:  Erie
Insurance Exchange Collateral Account; Custodian:  The Bank of New York Mellon;
Custodian’s Address:  One Mellon Center, Pittsburgh, Pennsylvania 15258, which
investment account contains as of the Closing Date the investment property and
other assets set forth in Exhibit A attached hereto and made a part hereof.  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.  Reference is hereby
made to that certain First Amended and Restated Credit Agreement, dated as of
even date herewith, by and among the Pledgor, PNC and various other financial
institutions from time to time party thereto (PNC and such other financial
institutions are each, a “Lender” and collectively, the “Lenders”), and the
Secured Party (as further amended, restated, modified or supplemented from time
to time, the “Credit Agreement”; unless otherwise defined herein, terms defined
in the Credit Agreement shall have such defined meaning when used herein).  The
Collateral secures payment of the Obligations in accordance with the terms of
the Obligations and of the Credit Agreement and the full and timely payment and
performance of the obligations of the Pledgor under this Pledge Agreement, and
the Loan Parties under the Credit Agreement and the other Loan Documents
(hereinafter referred to collectively as the “Obligations”).

 

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

 

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3.1                            This Pledge Agreement and the Control Agreement
(as hereinafter defined) have been duly executed and delivered by the Pledgor,
constitute valid and legally binding obligations and are enforceable in
accordance with their respective terms against the Pledgor.

 

3.2                            The execution, delivery and performance of this
Pledge Agreement, the grant of the security interest in the Collateral hereunder
and the consummation of the transactions contemplated hereby will not, with or
without the giving of notice or the lapse of time, (i) violate any law
applicable to the Pledgor; (ii) violate any judgment, writ, injunction or order
of any court or Official Body applicable to the Pledgor; (iii) violate or result
in the breach of any agreement to which the Pledgor is a party or by which any
of its properties, including the Collateral, is bound; nor (iv) violate any
restriction on the transfer of any of the Collateral.

 

3.3                            There are no restrictions on the pledge or
transfer of any of the Collateral.

 

3.4                            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.

 

3.5                            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 3.3
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.

 

3.6                            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.

 

3.7                            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.

 

3.8                            None of the information, documents, or financial
statements that have been furnished by the Pledgor to the Secured Party in
connection with the transactions contemplated by this Pledge Agreement or the
other Loan Documents contains, as of the date furnished, any untrue statement of
material fact or omits any material fact required to be stated hereby or thereby
to make such statements not misleading.

 

3.9                            The Collateral described in Exhibit A is a
complete and accurate list of the securities and other investment property and
assets maintained in the Collateral Account as of the Closing Date.

 

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4.                                    Covenants.

 

4.1                            The Pledgor agrees to maintain Collateral Value
in accordance with Section 7.1.10 of the Credit Agreement.

 

4.2                            The Pledgor agrees that Eligible Collateral
maintained in the Collateral Account shall consist of investment property and
other assets in accordance with Section 7.1.12 of the Credit Agreement.

 

4.3                            The Pledgor agrees that trading and withdrawals
with respect to the assets maintained in the Collateral Account are permitted
provided that no Event of Default has occurred and is continuing, and further
provided that (i) the Pledgor shall maintain Collateral Value in accordance with
Section 7.1.10 of the Credit Agreement, (ii) the Pledgor shall maintain in the
Collateral Account investment property and other assets in accordance with
Section 7.1.12 of the Credit Agreement, (iii) not later than 12:00 noon, eastern
time, on the day in which the Pledgor intends to make any trade or withdrawal,
the Pledgor shall deliver to the Secured Party an executed Notification of
Change in Collateral, substantially in the form attached to and made a part of
this Pledge Agreement as Exhibit B, together with Exhibit A attached thereto,
and (iv) unless the Pledgor is solely trading Collateral in the Collateral
Account and the Custodian will retain the proceeds from the trade of such
Collateral in the Collateral Account, prior to making any trade or withdrawal,
the Pledgor shall have received the Notification of Change in Collateral
executed by the Secured Party indicating its agreement to the terms thereof. 
The Secured Party will use its commercially reasonable efforts to execute and
deliver to the Custodian and Pledgor each approved Notification of Change in
Collateral within one (1) Business Day after receipt from the Pledgor.

 

4.4                            If all or part of the Collateral constitutes
“margin stock” within the meaning of Regulation U of the Federal Reserve Board,
the Pledgor agrees to execute and deliver Form U-1 to the Secured Party and,
unless otherwise agreed in writing between the Pledgor and the Secured Party, no
part of the proceeds of the Obligations may be used to purchase or carry margin
stock.

 

4.5                            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 and are continuing
(each an “Event of Default”):  (i) any Event of Default (as defined in the
Credit Agreement), (ii) the failure of the Secured Party to have a perfected
first priority security interest in the Collateral, (iii) any restriction is
imposed on the pledge or transfer of any of the Collateral after the date of
this Pledge Agreement without the Secured Party’s prior written consent, or
(iv) 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 ten (10) days
prior to the effective date of the termination, then the Secured Party is
authorized in its

 

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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, 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 will be liable therefor to the Secured Party; provided,
however, that nothing contained herein will obligate the Secured Party to
proceed against the Pledgor or any other party obligated under the Obligations
or against any other collateral for the Obligations prior to proceeding against
the Collateral.

 

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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 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 which is continuing, 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 which is continuing, 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 to the
exclusion of the Pledgor, 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 which is continuing.  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
which is continuing, 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.  The Pledgor and the
securities intermediary on whose books and records the ownership interest of the
Pledgor in the Collateral appears (the “Custodian”) have entered into that
certain Notification and Control Agreement, dated September 30, 2009 (as
amended, modified or supplemented from time to time, the “Control Agreement”),
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 UCC that the
Secured Party may consider necessary or advisable 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

 

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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 advisable 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.  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.                            Release of
Collateral.                                              Subject to any sale or
other disposition by the Secured Party of the Collateral in accordance with the
terms hereof, upon payment in full and the satisfaction of all of the
Obligations and the termination of the Credit Agreement, this Pledge Agreement
shall terminate, the Pledgor and its assigns are authorized to file or the
Secured Party, upon request from the Pledgor, shall file, if applicable, UCC-3
financing statements to evidence the release of the Liens granted hereunder and
the Collateral shall within thirty (30) days following payment in full and the
satisfaction of all of the Obligations and the termination of the Credit
Agreement be returned to the Pledgor.

 

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 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.

 

12.                            Preservation of Rights.  (a)   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 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.

 

(b)                              The Secured Party may, at any time and from
time to time, without notice to or the consent of the Pledgor unless otherwise
expressly required pursuant to the terms of the Obligations, and without
impairing or releasing, discharging or modifying the Pledgor’s liabilities
hereunder, (i) change the manner, place, time or terms of payment or performance
of or interest rates on, or other terms relating to, any of the Obligations;
(ii) renew, substitute, modify, amend or alter, or grant consents or waivers
relating to any of the Obligations, any other pledge or security agreements, or
any security for any Obligations; (iii) apply any and all payments by whomever
paid or however realized including any proceeds of any collateral, to any
Obligations of the Pledgor in such order, manner and amount as the Secured Party
may determine in its sole discretion; (iv) deal with any other Person with
respect to any Obligations in such manner as the Secured Party deems appropriate
in its sole discretion; (v) substitute, exchange or release any security or
guaranty; or (vi) take such actions and exercise such remedies hereunder as
provided herein.  The Pledgor hereby waives (a) presentment, demand, protest,
notice of dishonor and

 

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notice of non-payment and all other notices to which the Pledgor might otherwise
be entitled, and (b) all defenses based on suretyship or impairment of
collateral.

 

13.                            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.

 

14.                            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.

 

15.                            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.

 

16.                            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.

 

17.                            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.

 

18.                            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 reasonable 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

 

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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.

 

19.                            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 Commonwealth of Pennsylvania.  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 COMMONWEALTH OF
PENNSYLVANIA, EXCLUDING ITS CONFLICT OF LAWS RULES.  The Pledgor hereby
irrevocably consents to the exclusive jurisdiction of the courts of the
Commonwealth of Pennsylvania sitting in Allegheny County and of the United
States District Court for the Western District of Pennsylvania, and any
appellate court from any thereof; 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.

 

20.                            Amendment and Restatement.  This Pledge Agreement
amends and restates that certain Pledge Agreement, dated September 30, 2009,
made by the Pledgor for the benefit of the Secured Party (the “Existing Pledge
Agreement”).  This Pledge Agreement is issued in substitution for the Existing
Pledge Agreement and is not a novation thereof.

 

21.                            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.

 

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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:

 

Erie Insurance Exchange

 

 

 

 

 

 

 

 

By: Erie Indemnity Company, a Pennsylvania corporation, its Attorney-in-Fact

 

 

 

/s/ Robert W. McNutt

 

By:

/s/ Douglas F. Ziegler

 (SEAL)

 

 

Print Name:

Douglas F. Ziegler

 

 

Title:

Senior Vice President, Treasurer and

 

 

 

Chief  Investment Officer

 

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