Document:

ex10-1.htm - Generated by SEC Publisher for SEC Filing

 

FIRST AMENDMENT TO
CREDIT AGREEMENT

THIS FIRST
AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of July 25, 2011,
is entered into by and among CARDTRONICS, INC., a Delaware corporation
(the “Borrower”), each of the Guarantors party hereto (the “Guarantors”),
each of the Lenders party hereto (the “Lenders”) and JPMorgan Chase Bank, N.A.,
as Administrative Agent for the Lenders (the “Agent”). 

Preliminary Statement

WHEREAS, the Borrower, the Guarantors, the Lenders and the
Agent entered into that certain Credit Agreement dated as of July 15, 2010 (as
hereby amended and as from time to time further
amended, modified, supplemented, restated or amended and restated, the “Credit
Agreement”), pursuant to which the Lenders agreed to make available to the
Borrower a revolving credit facility; and 

WHEREAS, the Borrower has now asked the Agent and the Lenders
to amend certain provisions of the Credit Agreement, including, without limitation,
an amendment to increase the aggregate amount of the Lenders’ Commitments to
$250,000,000, a portion of which will be used by the Borrower to provide
liquidity for the acquisition of the ATM businesses of EDC Holdings, LLC (“EDC”);
and

WHEREAS, the Agent and Lenders are willing to do so subject
to the terms and conditions set forth herein, provided that the Borrower and
Guarantors ratify and confirm all of their respective obligations under the
Credit Agreement and the Loan Documents; 

NOW, THEREFORE, in consideration of the premises and further
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:  

1.                  
 Defined Terms»

.  Unless
otherwise defined herein, capitalized terms used herein have the meanings
assigned to them in the Credit Agreement.

2.                  
 Amendments to Section 1.01»

.  Section 1.01 of the Credit
Agreement is hereby amended as follows:

(a)                
The pricing grid contained in the
definition of “Applicable Margin” is hereby deleted in its entirety and
replaced with the following:

******

(b)                
The definition of “Change in Law”
is hereby deleted in its entirety and replaced with the following:

“Change in Law”
means (a) the adoption of any Law after July 25, 2011, (b) any change
in any Law or in the interpretation or application thereof by any Governmental
Authority after July 25, 2011 or (c) compliance by any Lender or the
Issuing Lender (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender’s or the Issuing Lender’s holding
company, if any) with any request, guideline or directive (whether or not
having the force of Law) of any Governmental Authority made or issued after July
25, 2011; provided  however, that notwithstanding anything herein
to the contrary, the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in
connection therewith shall be deemed to be a “Change in Law”, regardless of the
date enacted, adopted or issued, and all requests, rules, regulations,
guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Regulations and
Supervisory Practices (or any successor or similar authority) or any Governmental
Authority with respect to the implementation of the Basel III Accord shall be
deemed to be a “Change in Law” regardless of the date enacted, adopted or
issued.

                                                                             -1-

 

 

(c)                
The pricing grid contained in the
definition of “Commitment Fee Rate” is hereby deleted in its entirety and
replaced with the following:

******

(d)                
The definition of “Termination
Date” is hereby deleted in its entirety and replaced with the following:

“Termination Date”
means July 15, 2016.

3.                  
 Amendment to Section 2.01(b)»

.  Section 2.01(b) of the Credit
Agreement is hereby amended to add the following two sentences to the end of
said Section:

“If so requested, only
those Lenders designated on Schedule 2.01 as having Commitments in an
Alternative Currency shall participate in making such Revolving Loans,
notwithstanding that this results in such Lenders having amounts owing by the
Borrower on a non pro rata basis.  Following the advance of a Revolving Loan in
an Alternative Currency, the provisions of Section 2.02(e) shall apply
to subsequent Revolving Loans.

4.                  
 Amendment to Section 2.02»

.  Section 2.02 of the Credit
Agreement is hereby amended to add the following new paragraph (e) at the end
of said Section:

“If a Revolving Loan is
made in an Alternative Currency, subsequent Revolving Loans requested in, or
converted into, Dollars shall be advanced first by Lenders that do not have
Commitments in an Alternative Currency until such time as the amount owing to
each of the Lenders under the Revolving Loans is equal to its Applicable
Percentage of the aggregate Commitments.”

5.                  
 Amendment to Section 2.19(a)»

.  Section 2.19(a) of the Credit
Agreement is hereby amended by restating clause (iii) thereof as follows:

“(iii) the aggregate
amount of the Lenders’ Commitments, after giving effect to any such increase, shall
not exceed $325,000,000.”

6.                  
 Amendment to Section 6.07»

.  Section 6.07 of the Credit
Agreement is amended by restating clause (e) thereof as follows:

“(e)         redemptions
of capital stock of Persons other than employees, directors or officers of the Borrower
on the following conditions: the amount of such redemption shall not be
limited, so long as, if the amount of such redemption, when combined with all
other redemptions made under this clause (e) during the term of this Agreement,
exceeds $10,000,000, the Borrower demonstrates, at the time of such
redemption(s), pro forma compliance with Section 6.18 and a pro forma
Senior Leverage Ratio of not more than 1.75 to 1.0.”

7.                  
 Amendment to Schedule 2.01»

.  Schedule 2.01 of the Credit
Agreement is hereby deleted in its entirety and replaced with Schedule 2.01
attached hereto.

8.                  
 Conditions Precedent»

.  The effectiveness of this
Amendment is subject to satisfaction of the following conditions precedent:

 

                                                                             -2-

 

 

(a)                
no Default or Event of Default
shall exist;

(b)                
the Agent shall have received counterparts
of this Amendment, duly executed by the Borrower, the Guarantors and the Lenders;

(c)                
each of J.P. Morgan Securities LLC
and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as the Arrangers, the
Lenders and the Agent shall have received all fees required to be paid to it,
and all expenses for which invoices have been presented prior to the date hereof (including the reasonable fees and
expenses of legal counsel to the Agent for which invoices have been presented
at least forty-eight hours prior to the date hereof),
but without prejudice to the later payment of accrued fees and expenses not so
invoiced;

(d)                
the Agent shall have received (i)
an officer’s certificate of the Borrower and each Guarantor, attaching the
certificate of formation (or similar document) of the Borrower or such
Guarantor, as applicable, certified by the relevant authority of its
jurisdiction of organization, a true and correct copy of the resolutions of the
board of directors (or similar governing body) of the Borrower or such
Guarantor authorizing the amendments contemplated hereby and the incumbency and
specimen signatures of each natural person executing this Amendment on behalf
of the Borrower or such Guarantor, and (ii) a good standing certificate for the
Borrower and each Guarantor from its jurisdiction of organization;

(e)                
the acquisition of EDC shall be
consummated contemporaneously with the date hereof and substantially similar to
the terms and conditions of the purchase and sale agreement relating to such
acquisition (the “EDC Acquisition Agreement”), without waiver or
amendment of any material terms thereof not otherwise approved by the Agent;

(f)                 
the Agent shall have received a
duly executed copy of the EDC Acquisition Agreement, which shall be reasonably
acceptable to the Agent;

(g)                
the Agent shall have received a
schedule showing the Borrower’s calculation of EBITDA on a pro forma basis
taking into account the acquisition of EDC and including all adjustments to
EBITDA used in making such calculation; 

(h)                
the Agent shall have received a
pro forma Compliance Certificate as of June 30, 2011; and

(i)                  
the Agent shall have received an
Addendum executed by EDC ATM Subsidiary, LLC (“EDC ATM”) and such other
documents relating to EDC ATM as the Agent shall reasonably request.

9.                  
 Ratification»

.  Each
of the Borrower and Guarantors hereby ratifies all of its Obligations under the
Credit Agreement and each of the Loan Documents to which it is a party, and
agrees and acknowledges that the Credit Agreement and each of the Loan Documents
to which it is a party are and shall continue to be in full force and effect as
amended and modified by this Amendment.  Nothing in this Amendment
extinguishes, novates or releases any right, claim, lien, security interest or
entitlement of any of the Lenders or the Administrative Agent created by or
contained in any of such documents nor are the Borrower nor Guarantors released
from any covenant, warranty or obligation created by or contained herein or
therein.

10.               
 Representations and Warranties»

.  Each
of the Borrower and Guarantors hereby represents and warrants to the Lenders
and the Administrative Agent that (a) this Amendment has been duly
executed and delivered on behalf of each of the Borrower and Guarantors,
(b) this Amendment constitutes a valid and legally binding agreement
enforceable against each of the Borrower and Guarantors in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law, (c) the representations and
warranties contained in the Credit Agreement and the Loan Documents are true
and correct on and as of the date hereof in all material respects as though
made as of the date hereof, except for such representations and warranties as
are by their express terms limited to a specific date, in which case such
representations and warranties were true and correct in all material respects
as of such specific date, (d) no Default or Event
of Default exists under the Credit Agreement or under any Loan Document and
(e) the execution, delivery and performance of this Amendment has been
duly authorized by each of the Borrower and Guarantors.

                                                                             -3-

 

 

11.               
 Release and Indemnity»

.  

(a)                
The Borrower hereby releases and
forever discharges the Agent and each of the Lenders and each affiliate thereof
and each of their respective employees, officers, directors, trustees, agents,
attorneys, successors, assigns or other representatives from any and all
claims, demands, damages, actions, cross-actions, causes of action, costs and
expenses (including legal expenses), of any kind or nature whatsoever, whether
based on law or equity, which any of said parties has held or may now own or
hold, whether known or unknown, for or because of any matter or thing done,
omitted or suffered to be done on or before the actual date upon which this
Amendment is signed by any of such parties (i) arising directly or indirectly
out of the Loan Documents, or any other documents, instruments or any other
transactions relating thereto and/or (ii) relating directly or indirectly to
all transactions by and between the Borrower or its representatives and the
Agent, and each Lender or any of their respective directors, officers, agents,
employees, attorneys or other representatives.  Such release, waiver, acquittal
and discharge shall and does include, without limitation, any claims of usury,
fraud, duress, misrepresentation, lender liability, control, exercise of
remedies and all similar items and claims, which may, or could be, asserted by
the Borrower including any such caused by the actions or negligence of the
indemnified party (other than its gross negligence or willful misconduct). 

(b)                
The Borrower hereby ratifies the
indemnification provisions contained in the Loan Documents, including, without
limitation, Section 10.03 of the Credit Agreement, and agrees that this Amendment
and losses, claims, damages and expenses related thereto shall be covered by
such indemnities. 

12.               
 New Lenders»

.  

(a)                
By its execution of this
Amendment, each New Lender shall become a party to the Credit Agreement as of
the date first above written and shall have all the rights and obligations,
severally and not jointly, of a “Lender” under the Credit Agreement and the
other Loan Documents as if each were an original signatory thereto, and shall
agree, and does hereby agree, severally and not jointly, to be bound by the
terms and conditions set forth in the Credit Agreement and the other Loan
Documents to which the Lenders are a party, in each case, as if each were an
original signatory thereto.

(b)                
The New Lender hereby (a)
represents and warrants that it is legally authorized to enter into this
Amendment and become a “Lender” under the Credit Agreement; (b) confirms that
it has received a copy of the Credit Agreement, together with the copies of the
most recent financial statements delivered pursuant to Section 5.01 thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Amendment and become a
“Lender” under the Credit Agreement; (c) agrees that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and, based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (d) confirms that it is a New
Lender under the Credit Agreement, as defined therein; (e) appoints and
authorizes the Agent to take such action as an agent on its behalf and to
exercise such powers under the Credit Agreement as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (f) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement are required
to be performed by it as a Lender; and (g) agrees that it will keep
confidential all information with respect to the Borrower furnished to it by
the Borrower or the other Lenders (other than information generally available
to the public or otherwise available to the New Lender on a non-confidential
basis).

13.               
 Counterparts»

.  This Amendment may be signed
in any number of counterparts, which may be delivered in original, facsimile or
electronic form each of which shall be construed as an original, but all of
which together shall constitute one and the same instrument.

14.               
 Governing Law»

.  This Amendment shall be
construed in accordance with and governed by the Law of the State of Texas
without regard to any choice-of-law provisions that would require the
application of the law of another jurisdiction.

 

                                                                             -4-

 

 

15.               
 Final Agreement of the Parties»

.  THIS
AMENDMENT, THE CREDIT AGREEMENT AND THE LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

[Signature pages follow]

 

                                                                             -5-

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized as of the date first above
written.

                                                                                                BORROWER: 

 

                                                                                                CARDTRONICS,
INC., 

a Delaware corporation 

 

 

By:         /s/ Todd Ruden_____________________________ 

Todd Ruden

______ Senior Vice President – Planning & Treasurer

 

 

                                                                                                GUARANTORS:

                                                                                                 

                                                                                                CARDTRONICS
USA, INC., 

a Delaware corporation 

 

 

By:         /s/ Todd Ruden_____________________________ 

                Todd Ruden

                Treasurer

 

 

                                                                                                CARDTRONICS
HOLDINGS, LLC, 

a Delaware limited liability company

 

 

By:         /s/ Todd Ruden_____________________________ 

                Todd Ruden

                Treasurer 

 

 

                                                                                                ATM
NATIONAL, LLC, 

a Delaware limited liability company 

 

 

By:         /s/ Todd Ruden_____________________________ 

                Todd Ruden

                Treasurer

 

 

 

 

 

                                                                                                ADMINISTRATIVE AGENT:

 

                                                                                                JPMORGAN
CHASE BANK, N.A.

 

 

                                                                                                By:         /s/ John Sarvadi____________________________ 

                                                                                                                John
Sarvadi

                                                                                                                Managing
Director

 

                                                                                                 

 

 

 

                                                                                                LENDER: 

 

                                                                                                BANK
OF AMERICA, N.A.

                                                                                                

 

                                                                                                By:         /s/
Gary L. Mingle___________________________ 

                                                                                                Name:    Gary
L. Mingle

                                                                                                Title:       Senior
Vice -President

 

 

 

 

 

                                                                                                LENDER: 

 

                                                                                                WELLS
FARGO BANK, N.A.

 

 

                                                                                                By:         /s/
Geri Landa______________________________ 

                                                                                                Name:    Geri
Landa

                                                                                                Title:       Senior
Vice President

 

 

 

 

 

                                                                                                LENDER: 

 

                                                                                                AMEGY
BANK NATIONAL ASSOCIATION

 

 

                                                                                                By:         /s/
Kelly Nash______________________________ 

                                                                                                Name:    Kelly
Nash

                                                                                                Title:       Corporate
Banking Officer

 

 

 

 

 

                                                                                                LENDER: 

 

                                                                                                COMPASS
BANK

 

 

                                                                                                By:         /s/
Stuart Murray___________________________ 

                                                                                                Name:    Stuart
Murray

                                                                                                Title:       Senior
Vice President

 

 

 

 

                                                                                                LENDER: 

 

                                                                                                SUNTRUST
BANK

 

 

                                                                                                By:         /s/
David A. Bennett_________________________ 

                                                                                                Name:    David
A. Bennett

                                                                                                Title:       Vice
President

 

 

 

 

                                                                                                LENDER: 

 

                                                                                                BRANCH
BANKING AND TRUST COMPANY

 

 

                                                                                                By:         /s/
Matt McCain____________________________  

                                                                                                Name:    Matt
McCain

                                                                                                Title:       Senior
Vice President

 

 

 

 

 

LENDER:

 

                                                                                                CAPITAL
ONE, N.A.

 

 

                                                                                                By:         /s/
Yasmin Elkhatib_________________________ 

                                                                                                Name:    Yasmin
Elkhatib

                                                                                                Title:       Vice
President

 

 

 

 

SCHEDULE 2.01

 

COMMITMENTS

 

	
  Lenders

  	
  Commitment

  
	
  JPMorgan Chase Bank, N.A.

  	
  $41,000,000

  
	
  Bank of America, N.A.

  	
  $41,000,000

  
	
  Wells Fargo Bank, N.A.

  	
  $38,000,000

  
	
  Amegy Bank National Association

  	
  $30,000,000

  
	
  Compass Bank

  	
  $30,000,000

  
	
  SunTrust Bank

  	
  $30,000,000

  
	
  Branch Banking and Trust Company

  	
  $20,000,000

  
	
  Capital One, N.A.

  	
  $20,000,000

  
	
  TOTAL

  	
  $250,000,000EX-10.1

Exhibit 10.1

EXECUTIVE RETENTION AGREEMENT

This EXECUTIVE RETENTION AGREEMENT (the “Agreement”), made and entered into on the
3rd day of August 2011 (the “Effective Date”), is by and between ERIE INDEMNITY COMPANY,
a Pennsylvania corporation with its principal place of business at 100 Erie Insurance Place, Erie,
Pennsylvania 16530-0001 (the “Company”) and JAMES J. TANOUS, Executive Vice President, Secretary
and General Counsel of the Company residing in Erie, Pennsylvania (the “Executive”).

RECITALS:

WHEREAS, the Executive is a key employee of the Company and currently holds the position of
Executive Vice President, Secretary and General Counsel; and

WHEREAS, the Company and the Executive were parties to an employment agreement made effective
as of April 30, 2007 (the “Employment Agreement”); and

WHEREAS, the Employment Agreement expired on April 29, 2010, and the Company and the Executive
each agrees that it is in their respective best interest to provide for Executive’s continued
employment with the Company through January 31, 2013.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby,
the parties hereto agree as follows:

1. Effective Date.

This Agreement shall become effective and enforceable upon the Effective Date as set forth
above.

2. Retention Agreement.

(a)  The Executive agrees to remain a full-time employee of the Company in his current
position of Executive Vice President, Secretary and General Counsel throughout the “Retention
Period,” which shall begin on the Effective Date of this Agreement and end on the earliest of:

(i) The date of involuntary termination of Executive’s employment by the Company other than
for “Cause,” as that term is defined in Section 2(e) below,

(ii) The separation from service by the Executive for “Good Reason” as that term is defined in
Section 2(f) below, or

(iii) January 31, 2013, at which time the Executive shall resign as an officer and employee of
the Company and each of its subsidiaries and affiliated companies and as a director of each
subsidiary of the Company and each of its affiliated companies on whose Board of Directors he then
serves, and Executive shall then be deemed a retired employee of the Company.

(b)  The Company retains the right to terminate the employment of the Executive with or
without Cause.

(c)  If the Executive remains a full-time employee throughout the Retention Period, executes
the Waiver and Release as provided in Section 4, and has complied with the Section 7
Confidentiality and Restrictive Period provisions and Section 10 Ongoing Cooperation provisions to
date, the Executive shall be entitled at the end of the Retention Period to the payment set forth
in Section 3(a) of this Agreement in accordance with any terms and conditions set forth in
Section 3.

(d)  If, prior to the end of the Retention Period, the Executive’s employment terminates for
any reason other than the reasons set forth under Sections 2(a)(i) through (iii) above, he shall
not be entitled to the payment set forth in Section 3(a) of this Agreement.

(e) For purposes of this Agreement, “Cause” shall mean any of the following conduct by the
Executive:

(i) The deliberate and intentional breach of any material provision of this Agreement, which
breach Executive shall have failed to cure within thirty (30) days after Executive’s receipt of
written notice from the Company specifying the specific nature of the Executive’s breach;

(ii) The deliberate and intentional engaging by Executive in gross misconduct that is
materially and demonstrably inimical to the best interests, monetary or otherwise, of the Company;
or

(iii) Conviction of a felony or conviction of any crime involving moral turpitude, fraud or
deceit.

For purposes of this definition, no act, or failure to act, on the Executive’s part shall be
considered “deliberate and intentional” unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that such action or omission was in the best interest of
the Company.

(f) For purposes of this Agreement, “Good Reason” shall mean any of the following conduct of
the Company, unless the Executive shall have consented to the conduct in writing:

(i) The Company’s material diminution of the Executive’s base compensation;

(ii) The Company’s material diminution of the Executive’s authority, duties or
responsibilities; or

(iii) The Company’s material change (defined as changing Executive’s principal place of
employment by more than 35 miles) in the geographic location at which Executive must perform
services.

However, Good Reason shall not exist with respect to conduct described above unless:

(A) Within thirty (30) days after such conduct occurs, the Executive gives the Board of
Directors written notice specifying how the conduct constitutes Good Reason;

(B) The Company does not correct or remedy the conduct within thirty (30) days of receipt of
notice from the Executive; and

(C) Within 30 days following such failure to correct or remedy the conduct, the Executive
gives the Board of Directors written notice of his termination of employment.

3. Retention Payment.

(a)  In consideration of the execution and performance of this Agreement by the Executive, and
subject to Section 3(b) below, if the Executive is employed throughout the Retention Period,
executes the Waiver and Release as provided in Section 4, and has complied with the Section 7
Confidentiality and Restrictive Period provisions and Section 10 Ongoing Cooperation provisions to
date, the Executive will receive from the Company a lump-sum payment on August 1, 2013, of seven
hundred and fifty thousand dollars ($750,000).

(b)  The payment under Section 3(a) shall be subject to applicable deductions. For the
purposes of this Agreement, “applicable deductions” shall include, but shall not be limited to, any
federal, state, or local taxes determined by the Company to be required to be withheld from amounts
paid to the Executive pursuant to this Agreement or otherwise due from the Company, and any other
amounts that the Company may be legally required to deduct.

4. Executive’s Waiver and Release.

(a) Prior to payment of the amount set forth in Section 3(a) above, the Executive shall
execute a Waiver and Release that is substantially in the same form as shown in Exhibit 1 attached
to this Agreement (the “Release”). Not later than thirty (30) days following the end of the
Retention Period, the Company shall deliver the Release to the Executive for his signature. If the
Executive fails to sign the Release within the thirty (30) day period following its delivery to
him, the Executive shall forfeit all rights to payment under Section 3(a). Notwithstanding any
provision of this Agreement to the contrary, if the time period set forth in this Section 4(a)
begins in one taxable year of the Executive and ends in a subsequent taxable year, any payment
scheduled to be made under this Agreement will commence in such subsequent taxable year of the
Executive.

(b) The Executive will be eligible for payment for unused vacation time, unused sick time,
incentive compensation and employee benefits as provided for in accordance with the respective
plans’ documents and the Company’s policies.

5. Payment on Death. 

In the event of the death of the Executive after his retirement pursuant to Section 2(a)(iii)
but before payment of the amount provided for in Section 3(a), the Company shall pay the amount
provided for in Section 3(a) to the Executive’s surviving spouse. If the Executive is not survived
by his spouse then such payment shall be made to the last beneficiary designated by the Executive
under the Company’s group life insurance policy maintained by the Company on Executive’s life or
such other written designation expressly provided to the Company by the Executive for the purposes
hereof, or failing such designations, to any Trustees designated under the Executive’s Last Will
and Testament to receive such funds or if no such designation is made then to the Executive’s
estate.

6. Non-Disparagement. The Executive shall not disparage the Company or its officers,
directors, or employees in any way orally or in writing, and the directors and executive and senior
officers of the Company shall likewise not disparage the Executive.

7. Covenants as to Confidential Information and Competitive Conduct. The Executive
hereby acknowledges and agrees as follows: this Section 7 is necessary for the protection of the
legitimate business interests of the Company; the restrictions contained in this Section 7 with
regard to geographical scope, length of term, and types of restricted activities are reasonable;
the Executive has received adequate and valuable consideration for entering into this Agreement;
and the Executive’s expertise and capabilities are such that his obligations hereunder and the
enforcement hereof by injunction or otherwise will not adversely affect the Executive’s ability to
earn a livelihood.

(a)  Confidentiality of Information and Nondisclosure. The Executive agrees that the
Executive will not, directly or indirectly, without the express written approval of the Company,
unless directed by applicable legal authority (including any court of competent jurisdiction,
governmental agency having supervisory authority over the business of the Company, or its
subsidiaries, or any legislative or administrative body having supervisory authority over the
business of the Company or its subsidiaries) having jurisdiction over the Executive, disclose to or
use, or knowingly permit to be so disclosed or used, for the benefit of himself, any person,
corporation, or other entity other than the Company: (i) any nonpublic information concerning any
financial, accounting, and tax matters, customer relationships, competitive status, supplier
matters, internal organizational matters, current or future plans, or other business affairs of or
relating to the Company, its subsidiaries or affiliated or related parties, (ii) any proprietary
management, operational, trade, technical, or other secrets or any other proprietary information or
other data of the Company, its subsidiaries or affiliated or related parties, or (iii) any other
information related to the Company, its subsidiaries or affiliated or related parties, or which the
Executive should reasonably believe will be damaging to the Company, its subsidiaries or affiliated
or related parties, which has not been published and is not generally known outside of the Company.
The Executive acknowledges that all of the foregoing constitutes confidential and proprietary
information, which is the exclusive property of the Company.

(b) Restrictive Covenant. For a period of six months beginning on the date of the
Executive’s termination of employment (the “Restrictive Period”), the Executive shall not render,
directly or indirectly, services to any person, firm, corporation, association, or other entity
which conducts the same or similar business as the Company or its subsidiaries or affiliated or
related parties at the date of the Executive’s termination of employment hereunder within the
states and territory in which the Company or its subsidiaries or affiliated or related parties is
or are then licensed and doing business at the date of the Executive’s termination of employment
hereunder without the prior written consent of the Company’s President/CEO, which may not be
unreasonably withheld. In the event the Executive violates any of the provisions contained in this
Section 7, the Restrictive Period shall be increased by the period of time from the commencement by
the Executive of any violation until such violation has been cured to the satisfaction of the
Company. The Executive further agrees that at no time during the Restrictive Period will the
Executive attempt to directly or indirectly solicit or hire employees of the Company or its
subsidiaries or affiliated or related parties or induce any of them to terminate their employment
with the Company or its subsidiaries or affiliated or related parties.

(c)  Company Remedies. The Executive acknowledges and agrees that any breach of this
Section 7 will result in immediate and irreparable harm to the Company, and that the Company cannot
be reasonably or adequately compensated by damages in an action at law. In the event of a breach by
the Executive of the provisions of this Section 7, the Company shall be entitled, to the extent
permitted by law, immediately to cease to pay or provide the Executive or the Executive’s
dependents any compensation or benefit being or to be paid or provided to the Executive pursuant to
this Agreement, and also to obtain immediate injunctive relief restraining the Executive from
conduct in breach of the covenants contained in this Section 7. Nothing herein shall be construed
as prohibiting the Company from pursuing any other remedies available to it for such breach,
including the recovery of damages from the Executive.

8. Breach of Agreement. The Executive agrees that if he violates any of the terms of
this Agreement, the Company may pursue whatever rights it has under this Agreement, whether in law
or in equity, without affecting the validity and enforceability of the Release contemplated by
Section 4 of this Agreement. If the Executive is required to bring any action to enforce rights or
to collect moneys due under this Agreement, and Executive is successful, in whole or in part, on
the merits or otherwise (including by way of a settlement involving the payment of money by the
Company to the Executive), in such action, the Company shall pay reasonable fees and expenses
incurred by the Executive in bringing and pursuing such action. Payment is contingent upon
Executive providing reasonable substantiating documentation within thirty (30) days of the success
on the matter, e.g., date of a court order or date of execution of a settlement agreement. The
Company shall make such payments within thirty (30) days after receipt of reasonable substantiating
documentation from the Executive.

9. Company Property, Records, Files, and Equipment. The Executive agrees he will
return all Company property, records, files, or any other Company-owned equipment in his possession
within ten (10) days after the date of Executive’s termination of employment with the Company.

10. Ongoing Cooperation. During the period from the date of the Executive’s
termination of employment through the end of the sixth (6th) month after the Executive’s
termination of employment, the Executive agrees to use his best efforts to assist, advise, and
cooperate with the Company if the Company so requests on issues that arose or were in any way
developing during his employment with the Company, subject to Executive’s availability given his
employment obligations, if any, and personal obligations at that time. The Executive shall furnish
such assistance, advice, or cooperation to the Company as the Company shall reasonably request and
as is within the Executive’s reasonable capability. Such assistance, advice, and cooperation may
include, but shall not be limited to, the preparation for, or the conduct of, any litigation,
investigation, or proceeding involving matters or events which occurred during the Executive’s
employment by the Company as to which the Executive’s knowledge or testimony may be important to
the Company. In connection with the preparation for, or the conduct of such litigation,
investigation, or proceeding as described in the preceding sentence, the Executive shall promptly
provide the Company with any records or other materials in his possession that the Company shall
request in connection with the defense or prosecution of such litigation, investigation or
proceeding. If and to the extent that the Company requests that the Executive attend a meeting,
deposition, or trial at any time prior to the end of the sixth (6th) month after the
date of the Executive’s termination of employment, the Company shall pay or reimburse the Executive
for his travel expenses reasonably incurred in the course of providing such cooperation. The
Company shall make such payment or reimbursement within thirty (30) days of receipt of reasonable
substantiating documentation from the Executive but in no event later than the end of the calendar
year following the year in which such expenses were incurred. The level of services the Executive
will perform under this Section 10 shall be no more than 20 percent of the average level of
services he performed during the thirty six (36) month period before termination of his employment,
and the Company anticipates a level of services significantly below that 20 percent limit.

11. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania applicable to contracts executed in and to be
performed in that Commonwealth without regard to its conflicts of laws provisions. Each of the
parties hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of
the courts of the Commonwealth of Pennsylvania located in the County of Erie, Pennsylvania, and of
the United States for the Western District of Pennsylvania for any litigation arising out of or
relating to this Agreement or the transactions contemplated hereby. Any legal action relating to
this Agreement shall be brought in the courts of the Commonwealth of Pennsylvania located in the
County of Erie, Pennsylvania, and of the United States for the Western District of Pennsylvania,
and the parties irrevocably and unconditionally waive and will not plead or claim in any such court
that venue is improper or that such litigation has been brought in an inconvenient forum.

12. Waiver. The waiver by a party hereto of any breach by the other party hereto of
any provision of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach by a party hereto.

13. Assignment. This Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company, and the Company shall be obligated to require any successor
to expressly acknowledge and assume its obligations hereunder. This Agreement shall inure to the
benefit of and be enforceable by the Executive or the Executive’s legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. The Executive may not
delegate any of the Executive’s duties, responsibilities, obligations, or positions hereunder to
any person and any such purported delegation shall be void and of no force and effect.

14. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

15. Notices. Any notices required or permitted to be given under this Agreement shall
be sufficient if in writing, and if personally delivered or when sent by first-class, certified, or
registered mail, postage prepaid, return receipt requested—in the case of the Executive, to his
principal residence address, and in the case of the Company, to the address of its principal place
of business as set forth above, to the attention of the President/CEO of the Company.

16. Entire Agreement. This Agreement constitutes the entire agreement of the parties
relating to the subject matter hereof, and supersedes any obligations of the Company and the other
Releasees, as such term is defined in the Release, under any previous agreements or arrangements
(including the Employment Agreement), except as otherwise provided in this Agreement or in the
Release. The provisions of this Agreement may not be amended, modified, repealed, waived, extended,
or discharged except by an agreement in writing signed by the party against whom enforcement of any
amendment, modification, repeal, waiver, extension, or discharge is sought. This Agreement may be
executed in one or more counterparts (including by facsimile signature), all of which shall be
considered one and the same instrument, and shall be fully executed when one or more counterparts
have been signed by and delivered to each party.

17. Code Section 409A. It is intended that this Agreement shall comply with the
provisions of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury
regulations relating thereto (“Code Section 409A”), or an exemption to Code Section 409A.
Payments, rights and benefits may only be made, satisfied or provided under this Agreement upon an
event and in a manner permitted by Code Section 409A, to the extent applicable, so as not to
subject the Executive to the payment of taxes and interest under Code Section 409A. In furtherance
of this intent, this Agreement shall be interpreted, operated and administered in a manner
consistent with these intentions, and to the extent that any regulations or other guidance issued
under Code Section 409A would result in the Executive being subject to payment of additional income
taxes or interest under Code Section 409A, the parties agree, to the extent possible, to amend this
Agreement to maintain to the maximum extent practicable the original intent of this Agreement while
avoiding the application of such taxes or interest under Code Section 409A. All payments to be
made upon a termination of employment under this Agreement may only be made upon a “separation from
service” as defined under Code Section 409A. Notwithstanding any provision of this Agreement to
the contrary, if, as of the date of the Executive’s separation from service, the Executive is a
“specified employee” as defined under Code Section 409A, then, except to the extent that this
Agreement does not provide for a “deferral of compensation” within the meaning of Code Section 409A
of the Code, no payments shall be made and no benefits shall be provided to the Executive during
the period beginning on the date of the Executive’s separation from service and ending on the last
day of the sixth month after such date. In no event may the Executive, directly or indirectly,
designate the calendar year of any payment under this Agreement.

18. Headings. The descriptive headings used herein are used for convenience of
reference only and shall not constitute a part of this Agreement.

THE EXECUTIVE HEREBY EXPRESSLY WARRANTS AND REPRESENTS THAT, BEFORE ENTERING INTO THIS
AGREEMENT, HE HAS RECEIVED A REASONABLE PERIOD OF TIME WITHIN WHICH TO CONSIDER ALL OF THE
PROVISIONS CONTAINED IN THIS AGREEMENT, THAT HE HAS FULLY READ, INFORMED HIMSELF OF, AND
UNDERSTANDS ALL THE TERMS, CONTENTS, CONDITIONS, AND EFFECTS OF ALL PROVISIONS OF THIS AGREEMENT,
AND THAT HE CONSIDERS ALL SUCH PROVISIONS TO BE SATISFACTORY.

THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT NO PROMISE OR REPRESENTATION OF
ANY KIND HAS BEEN MADE, EXCEPT THOSE EXPRESSLY STATED IN THIS AGREEMENT.

THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT HE ENTERS INTO THIS AGREEMENT
KNOWINGLY AND VOLUNTARILY.

IN WITNESS WHEREOF, the Executive and the Company, by its duly authorized representative, have
signed this Agreement as of the date set forth above.

	 	 	 	 	 
	 
	 	 
	 	 

	WITNESS:
	 	 
	 	THE EXECUTIVE:

	 	 	 	 	/s/ James J. Tanous

	 	 	 	 	 

	/s/ Sheila M. Hirsch
	 	 
	 	JAMES J. TANOUS

	 
	 	

	 	

	 
	 	 
	 	THE COMPANY:

	ATTEST:
	 	 
	 	ERIE INDEMNITY COMPANY

	/s/ Brian W. Bolash

Assistant Secretary
	 	 
	 	By: /s/ T. W. Cavanaugh

—

Terrence W. Cavanaugh, the President/CEO of the

Company

1

 EXHIBIT 1

Executive’s Waiver and General Release

Effective as of the date hereof, JAMES J. TANOUS (“Executive”), for himself, his heirs,
successors and assigns, and in consideration of the payment to be made by Erie Indemnity Company
(the “Company”) pursuant to Section 3(a) of the Agreement between the Company and Executive dated
as of August 3, 2011 (the “Agreement”), does hereby forever discharge and release the Company, and
its shareholders, subsidiaries, affiliated companies, companies with common management, ownership
or control, successors, assigns, insurers and reinsurers, attorneys, and agents, and all of their
officers, directors, shareholders, employees, agents and representatives, in their official and
individual capacities (collectively referred to as “Releasees”), from any and all claims, demands,
causes of action, damages, charges, complaints, grievances, expenses, compensation and remedies
which the Executive now has or may in the future have on account of, or arising out of, any matter
or thing which has happened, developed or occurred prior to Executive’s retirement (collectively
“Claims”) including, but not limited to, all Claims arising from the Executive’s employment with
the Company or any of its affiliated companies, the termination of such employment, any and all
relationships or dealings between the Executive and the Company or any of the other Releasees, the
termination of any such relationships and dealings, and any and all other Claims the Executive may
have against the Company or any of the other Releasees. The Executive hereby waives any and all
such Claims including, but not limited to, all charges or complaints that were or could have been
filed with any court, tribunal or governmental agency, and any and all Claims not previously
alleged including, but not limited to, any Claims under the following: (i) Title VII of the Civil
Rights Act of 1964, as amended; (ii) the Equal Pay Act of 1963; (iii) the Age Discrimination in
Employment Act (ADEA), as amended; (iv) the Federal Employee Retirement Income Security Act of 1974
(ERISA), as amended; (v) the Americans With Disabilities Act (ADA), as amended; (vi) Section 806 of
the Sarbanes-Oxley Act of 2002, as amended; (vii) any other federal statutes, rules, regulations,
executive orders or guidelines of any description; (viii) any and all state statutes, rules,
regulations, executive orders or guidelines of any description under Pennsylvania law, or the law
of any other state, including, but not limited to, the Pennsylvania Human Relations Act, as
amended; the Pennsylvania Equal Pay Law; the Pennsylvania Wage Payment and Collection Law; (ix) any
and all local laws, rules, regulations, executive orders or guidelines of any description
including, but not limited to, the Erie County Human Relations Ordinance; and (x) any rule or
principle of equity or common law including, but not limited to, any Claim of defamation,
conversion, interference with a contract or business relationship, any other intentional or
unintentional tort, any Claim of loss of consortium, any Claim of harassment or retaliation, any
claim for breach of contract or implied contract, any claim for breach of covenant of good faith
and fair dealing, and any whistle-blower Claim. This release, discharge and waiver shall be
hereinafter referred to as the “Release.”

2

The Executive specifically understands and agrees that the termination of his employment does
not violate or disregard any oral or written promise or agreement of any nature whatsoever, express
or implied. Excepting the Agreement, if any contract or agreement exists concerning the employment
of the Executive by the Company or the terms and conditions of such employment or the termination
of such employment, whether oral or written, express or implied, that contract or agreement is
hereby terminated and is null and void; provided, however, that nothing in this Release is intended
to release any of the Executive’s vested retirement benefits or other vested compensation and
benefits arising out of programs in which the Executive participated prior to termination of
employment.

The Executive agrees that this Release may be enforced in federal, state or local court and
before any federal, state or local administrative agency or body.

The Executive represents and warrants that the Company has encouraged and advised the
Executive, prior to signing this Release, to consult with an attorney of the Executive’s choosing
concerning all of the terms of this Release.

This Release may be revoked by the Executive within seven (7) days after the date this Release
is signed by the Executive, by giving written notice of revocation to the President / CEO of the
Company. This Release shall not become effective or enforceable until the revocation period has
expired, and the consideration provided in Section 3(a) of the Agreement shall not be made until
after the revocation period has expired with no revocation.

The Executive represents and warrants that the Company has given the Executive a reasonable
period of time, of at least twenty-one (21) days, for the Executive to consider all the terms of
this Release and for the purpose of consulting with an attorney if the Executive so chooses. If
this Release has been executed by the Executive prior to the end of the twenty-one (21) day period,
the Executive represents that he has freely and willingly elected to do so.

The Executive acknowledges that the Agreement provides him with sums and benefits to which he
is not otherwise entitled as an employee of the Company.

In Witness Whereof, the Executive has signed this Release as of the        day of        2013.

EXECUTIVE

      

JAMES J. TANOUS

Witnessed:       

3

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