Exhibit 10.3
SWING NOTE

      $25,000,000.00   Pittsburgh, Pennsylvania
September 30, 2009

     FOR VALUE RECEIVED, the undersigned, Erie Insurance Exchange, a reciprocal
or inter-insurance exchange domiciled in the Commonwealth of Pennsylvania,
acting by and through Erie Indemnity Company, a Pennsylvania corporation, its
attorney-in-fact (the “Borrower”), hereby promises to pay to the order of PNC
Bank, National Association (“PNC Bank”) the lesser of (i) the principal sum of
Twenty-Five Million and 00/100 Dollars ($25,000,000.00) or (ii) the aggregate
unpaid principal balance of all Swing Loans made by the Bank to the Borrower
pursuant to Section 2.1.2 [Swing Loan Commitment] of the Credit Agreement dated
of even date herewith (as may be amended, modified, supplemented or restated
from time to time, the “Credit Agreement”), by and among the Borrower, the
Lenders party thereto and PNC Bank, as administrative agent for the Lenders (the
“Administrative Agent”), payable in accordance with the terms of the Credit
Agreement. All capitalized terms used herein shall, unless otherwise defined
herein, have the same meanings given to such terms in the Credit Agreement.
     The Borrower shall pay interest on the unpaid principal balance hereof from
time to time outstanding from the date hereof at the rate per annum specified by
the Borrower pursuant to Section 3.1 [Interest Rate Options] of, or as otherwise
provided in, the Credit Agreement.
     Upon the occurrence of an Event of Default which is continuing, the
Borrower shall pay interest on the entire principal amount of the then
outstanding Swing Loans evidenced by this Swing Note at a rate per annum
specified by Section 3.3 [Interest After Default] of, or as otherwise provided
in, the Credit Agreement. Such interest rate will accrue before and after any
judgment has been entered.
     Subject to the provisions of the Credit Agreement, interest on this Swing
Note will be payable on the dates set forth in Section 4.5 [Interest Payment
Dates] of the Credit Agreement and on the Expiration Date.
     Subject to the provisions of the Credit Agreement, if any payment or action
to be made or taken hereunder shall be stated to be or become due on a day which
is not a Business Day, such payment or action shall be made or taken on the next
following Business Day and such extension of time shall be included in computing
interest or fees, if any, in connection with such payment or action.
     Subject to the provisions of the Credit Agreement, payments of both
principal and interest shall be made without setoff, counterclaim or other
deduction of any nature at the office of the Administrative Agent located at One
PNC Plaza, 249 Fifth Avenue, Pittsburgh, Pennsylvania 15222, in lawful money of
the United States of America in immediately available funds.

 

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     This Swing Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement and the other Loan Documents, including the
representations, warranties, covenants, conditions and Liens contained or
granted therein. The Credit Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayment in certain circumstances, on account of principal
hereof prior to maturity upon the terms and conditions therein specified.
     The Borrower waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Swing Note.
     THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS SWING NOTE (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR PNC BANK TO ACCEPT THIS SWING NOTE AND
MAKE THE SWING LOANS.
     This Swing Note shall bind the Borrower and its successors and assigns, and
the benefits hereof shall inure to the benefit of the Administrative Agent and
the Lenders and their respective successors and assigns. All references herein
to the “Borrower”, the “Administrative Agent” and the “Lenders” shall be deemed
to apply to the Borrower, the Administrative Agent and the Lenders,
respectively, and their respective successors and assigns.
     This Swing Note and any other documents delivered in connection herewith
and the rights and obligations of the parties hereto and thereto shall for all
purposes be governed by, and construed and enforced in accordance with, the
internal Laws of the Commonwealth of Pennsylvania without giving effect to its
conflicts of law principles.
     PNC Bank may at any time pledge all or a portion of its rights under the
Loan Documents including any portion of this Swing Note to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act,
12 U.S.C. § 341. No such pledge or enforcement thereof shall release PNC Bank
from its obligations under any of the Loan Documents.
[INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, and intending to be legally bound, the undersigned has
executed this Swing Note on the day and year first above written, with the
intention that it constitute a sealed instrument.

            BORROWER

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