Document:

exhibit4264.htm

Exhibit 4.264

 

DTAG CANADA GUARANTEE

 

TO:           DTGC CAR RENTAL LIMITED PARTNERSHIP (together with its successors and assigns “Rental LP”)

 

WHEREAS Dollar Thrifty Automotive Group Canada Inc. (together with its successors and assigns, the “Guarantor”) and 2240919 Ontario Inc. have entered into a sixth amended and restated limited partnership agreement made as of the date hereof (the “Funding LP Partnership Agreement”) relating to TCL Funding Limited Partnership (together with its successors and assigns, “Funding LP”);

 

AND WHEREAS the Guarantor has, in its capacity as general partner of Funding LP, the Servicer to Rental LP, entered into and will be entering into vehicle lease agreements with franchisees (each a “Franchise Vehicle Lease Agreement”) on behalf of Rental LP as principal;

 

AND WHEREAS the Guarantor has agreed to guarantee all of the obligations of each Franchisee under the relevant Franchise Vehicle Lease Agreement in accordance with the terms hereof;

 

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the payment of $1.00 by Rental LP to the Guarantor and for other consideration (the receipt and sufficiency of which are acknowledged), the Guarantor agrees with Rental LP as follows:

 

	
1.  

	
Definitions

 

	
(a)  

	
In this Guarantee:

 

“Event of Default” shall have the meaning ascribed thereto in section 14;

 

“Guarantee” means this guarantee as amended, supplemented, modified, restated or replaced from time to time in accordance with the terms hereof;

 

“Guarantor’s Obligations” means all, and any part, of the guarantees, indemnities, covenants, obligations and other liabilities of the Guarantor to Rental LP under this Guarantee;

 

“Indemnifiable Tax” means any tax other than a tax that would not be imposed in respect of any payment under this Guarantee but for a present or former connection between the jurisdiction of the government or taxation authority imposing such tax and Rental LP or a person related to Rental LP (including, without limitation, a connection arising from Rental LP or related person being or having been organized, present or engaged in a trade or business in such jurisdiction, but excluding a connection arising solely from Rental LP or related person having executed or delivered documents in respect of, performed its obligations in respect of, or received payment of, or enforced, the Obligations); and

 

“Obligations” means the existing and future indebtedness, obligations and liabilities of any kind of each Franchisee under the relevant Franchise Vehicle Lease Agreement, whether direct or indirect, absolute or contingent, matured or not, including all costs, charges and expenses which Rental LP incurs in respect of any of such indebtedness, obligations and liabilities.

 

  

  

  

 

	
(b)  

	
Unless otherwise defined in subsection 1(a), all capitalized terms used in this Guarantee shall have the same meanings ascribed thereto in, or incorporated by reference in, the Funding LP Partnership Agreement.

 

	
2.  

	
Guarantee

 

Subject to the provisions hereof, the Guarantor unconditionally and irrevocably guarantees in favour of Rental LP the due and punctual payment and performance of all of the Obligations.  The Guarantor also agrees to pay all costs and expenses incurred by Rental LP in enforcing its rights under this Guarantee, including the reasonable fees and disbursements of counsel for Rental LP incurred in connection with such enforcement.

 

	
3.  

	
Guarantee Absolute

 

Subject to the provisions hereof, the liability of the Guarantor hereunder shall be absolute and unconditional irrespective of:

 

	
(a)  

	
any amendment, release, discharge or waiver of, or any consent to departure from or any extension of time, indulgence, compromise or dealing in respect of any Franchise Vehicle Lease Agreement;

 

	
(b)  

	
any change in the control, name, objects, capital, constating documents or by-laws of a Franchisee;

 

	
(c)  

	
the invalidity, unenforceability, irregularity, informality or illegality, in whole or in part, of any Franchise Vehicle Lease Agreement;

 

	
(d)  

	
any defence, counterclaim or right of set-off available to a Franchisee;

 

	
(e)  

	
any amalgamation, merger or reorganization of a Franchisee;

 

	
(f)  

	
the bankruptcy, winding-up, liquidation or dissolution of a Franchisee; or

 

	
(g)  

	
any other circumstance whatsoever, whether similar or not to the foregoing, which might in any manner or to any extent (A) vary the risk of the Guarantor, (B) constitute a legal or equitable release or discharge of the Guarantor, or (C) otherwise diminish the liability of the Guarantor hereunder.

 

Rental LP shall not be concerned to see or to inquire into the powers of the Guarantor to enter into any Franchise Vehicle Lease Agreement or to perform its obligations thereunder and the Obligations are hereby guaranteed notwithstanding that it shall have been in excess of the powers of the Guarantor to enter into any Franchise Vehicle Lease Agreement or to perform its obligations thereunder or that the Guarantor shall be the subject of any incapacity, disability or lack or limitation of status in respect thereof.  The Obligations are hereby guaranteed notwithstanding any incapacity, disability or lack or limitation of status or power of the Guarantor to enter into any Franchise Vehicle Lease Agreement or to perform its obligations thereunder.

 

  

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4.  

	
Dealings with the Guarantor and Others

 

Rental LP may, without giving notice to or obtaining the consent of the Guarantor:

 

	
(a)  

	
grant extensions of time and other indulgences;

 

	
(b)  

	
take and give up security interests;

 

	
(c)  

	
accept compositions;

 

	
(d)  

	
grant releases and discharges, whether full, partial, conditional or otherwise;

 

	
(e)  

	
perfect, fail to perfect or fail to maintain the perfection of any security interests;

 

	
(f)  

	
release any undertaking, property or assets charged by any security interests to third parties;

 

	
(g)  

	
delay in taking any action or otherwise deal or fail to deal with the Guarantor or others;

 

	
(h)  

	
hold any monies received from the Guarantor or others; or

 

	
(i)  

	
apply such monies against such part of the Obligations and change any such application in whole or in part at any time and from time to time,

 

all as Rental LP may see fit, without prejudice to or in any way discharging or diminishing the Guarantor’s Obligations, and no loss of or in respect of any other guarantees, indemnities or security interests received by Rental LP from any other persons in respect of the Obligations, whether occasioned through the fault of Rental LP or otherwise, shall in any way discharge or diminish the Guarantor’s Obligations.

 

	
5.  

	
Subrogation

 

The Guarantor shall have no right to be subrogated to the rights of Rental LP under any Franchise Vehicle Lease Agreement in respect of the Guarantor’s performance of its payment obligations under this Guarantee in respect of the Obligations until such time as all of the Obligations have been fully performed or satisfied.  In case of the liquidation, dissolution, winding-up, insolvency or bankruptcy of a Franchisee (whether voluntary or involuntary) or in the event that a Franchisee shall make an arrangement or composition with its creditors, Rental LP shall have the right to rank in priority to the Guarantor for Rental LP’s full claims in respect of the Guarantor’s Obligations not then satisfied, and if any amount shall be paid to the Guarantor in such circumstances when all of the Guarantor’s Obligations have not been paid or satisfied in full, such amounts shall be held in trust for the benefit of Rental LP and shall be forthwith paid to Rental LP on account of such unpaid Guarantor’s Obligations.  If the Guarantor shall perform or satisfy any or all of the Obligations and all of the Guarantor’s Obligations shall have been performed or satisfied in full, Rental LP will, at the Guarantor’s request and expense, forthwith execute and deliver to the Guarantor appropriate documents, without recourse and without representation and warranty, necessary to evidence the transfer by subrogation to the Guarantor of any of Rental LP’s rights under the Franchise Vehicle Lease Agreements in respect of the Obligations performed or satisfied by the Guarantor.  If any amount shall be paid to the Guarantor on account of any subrogation rights at any time when all of the Guarantor’s Obligations have not been paid or satisfied in full, such amounts shall be held in trust for the benefit of Rental LP and shall be forthwith paid to Rental LP on account of such unpaid Guarantor’s Obligations.

 

  

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6.  

	
Continuing Guarantee

 

	
(a)  

	
This Guarantee is a continuing guarantee and shall apply to and secure the payment of any and all of the Obligations.  This Guarantee may not be terminated or determined by the Guarantor at any time.

 

	
(b)  

	
This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time Rental LP determines that payment of any of the Obligations must be rescinded, declared voidable, or must otherwise be returned by Rental LP for any reason including the insolvency, bankruptcy, dissolution or reorganization of any Franchisee or upon, or as a result of, the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to a Franchisee or any substantial part of its property, all as though such payment had not been made.  If at any time the payment of monies by a Franchisee under a Franchise Vehicle Lease Agreement is prevented by reason of the pendency against a Franchisee of a case or proceeding under a bankruptcy or insolvency law, the Guarantor shall forthwith pay or cause to be paid the full amount owing by a Franchisee and any other amounts guaranteed hereunder without further notice or demand.

 

	
7.  

	
Performance by the Guarantor

 

In honouring this Guarantee, the Guarantor shall be entitled to perform or satisfy any Obligation on the same terms and conditions and subject to the same rights and limitations as would have been applicable to the carrying out of such obligations by a Franchisee under the relevant Franchise Vehicle Lease Agreement.

 

	
8.  

	
Notice of Default

 

If a Franchisee defaults in the payment or performance of any of the Obligations and such default is continuing, Rental LP is entitled to require the Guarantor to honour this Guarantee by personally paying or performing such Obligations forthwith.  Rental LP shall not be bound or obliged to pursue any remedy or exhaust its recourse against a Franchisee or any other person or any securities in respect of such default before being entitled to require the Guarantor to honour this Guarantee in respect of such Obligation.

 

	
9.  

	
Additional Guarantees

 

This Guarantee is in addition and without prejudice to any guarantees or securities of any kind (including guarantees whether or not in the same form as this Guarantee) now or hereafter held by Rental LP in respect of the Obligations.

 

  

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10.  

	
No Waiver; Remedies

 

Rental LP shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies under this Guarantee and no waiver shall be valid unless it is in writing and signed by Rental LP (and then only to the extent therein set forth), and upon the satisfaction of the Rating Agency Condition in respect of all Series of Notes.  A waiver by Rental LP of any right or remedy under this Guarantee on any one occasion shall not be construed as a bar to any right or remedy which Rental LP would otherwise have on any future occasion.  No failure to exercise nor any delay in exercising on the part of Rental LP any right, power or privilege under this Guarantee, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege under this Guarantee preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies provided under this Guarantee are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by Applicable Law.

 

	
11.  

	
Release and Discharge

 

Once all of the Guarantor’s Obligations have been performed or satisfied, this Guarantee and the rights granted in it shall cease and be null and void, except as provided in subsection 6(b), and Rental LP shall, at the request and at the expense of the Guarantor, execute and deliver to the Guarantor the documents required to release and discharge this Guarantee.

 

	
12.  

	
Representations and Warranties of the Guarantor

 

The Guarantor represents and warrants to Rental LP on the date of any issue of Notes or the date of any increase in the principal amount of Notes that:

 

	
(a)  

	
Organization.  The Guarantor is a corporation validly existing under the laws of the Province of Ontario and has the corporate power to own or lease its property, to carry on its business as now being conducted by it and to enter into this Guarantee and to perform its obligations thereunder;

 

	
(b)  

	
Authorization.  This Guarantee has been duly authorized, executed and delivered by the Guarantor and is a legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor by Rental LP in accordance with its terms, except that enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction; and

 

	
(c)  

	
No Violation.  The execution and delivery of this Guarantee by the Guarantor and the consummation of the transactions herein provided for will not result in the breach or violation of any of the provisions of, or constitute a default under, or conflict with or cause the acceleration of any obligation of the Guarantor under (i) any Contract to which the Guarantor is a party or by which it is or its properties are bound, (ii) any provision of the constating documents or by-laws or resolutions of the board of directors (or any committee thereof) or shareholders of the Guarantor, (iii) any judgment, decree, order or award of any court, governmental body or arbitrator having jurisdiction over the Guarantor, (iv) any licence, permit, approval, consent or authorization held by the Guarantor necessary to the operation of the Guarantor’s business, or (v) any Applicable Law, which breach, violation, default, conflict or acceleration could reasonably be expected to have a material adverse effect on the ability of the Guarantor to carry out its obligations hereunder.

 

  

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13.  

	
Covenants of the Guarantor

 

The Guarantor covenants and agrees with Rental LP that:

 

	
(a)  

	
Corporate Existence.  The Guarantor shall maintain its corporate existence in good standing.

 

	
(b)  

	
No Reconstruction, Reorganization. Etc. The Guarantor shall not enter into any transaction (whether by way of reconstruction, reorganization, arrangement, consolidation, amalgamation, merger, transfer, sale, lease or otherwise) whereby all or any material part of the undertaking, property and assets of the Guarantor would become the property of any Person other than the Guarantor or, in the case of any amalgamation involving the Guarantor, of the continuing company resulting therefrom, unless all of the following conditions are met:

 

	
(i)  

	
such other Person or continuing company is a body corporate (herein called the “Successor Corporation”);

 

	
(ii)  

	
the Successor Corporation executes, prior to or contemporaneously with the consummation of such transaction, such agreements supplemental hereto and any other instruments as are satisfactory to the Indenture Trustee, acting reasonably, and, in the opinion of counsel to the Indenture Trustee, necessary or advisable, to evidence the assumption by the Successor Corporation of all obligations and liabilities of the Person entering into such transaction;

 

	
(iii)  

	
immediately after the consummation of such transaction, no condition or event shall exist which constitutes or which would, after the lapse of time or the giving of notice or both, constitute a default hereunder;

 

	
(iv)  

	
such transaction is upon such terms as to preserve substantially and not to impair materially any of the rights or powers of Rental LP hereunder; and

 

	
(v)  

	
each Rating Agency in respect of all outstanding Series of Notes has been provided not less than 10 Business Days prior written notice of the proposed transaction (or such shorter period as may be agreed upon by each Rating Agency).

 

	
(c)  

	
No Defaults.  The Guarantor shall promptly notify each Rating Agency and the Indenture Trustee of any defaults of which it is aware under this Guarantee.

 

  

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14.  

	
Events of Default

 

The occurrence or existence of any one or more of the following events or facts which is continuing (each an “Event of Default”), shall constitute an Event of Default under this Guarantee:

 

	
(a)  

	
the failure of the Guarantor to pay any amount required to be paid by it under this Guarantee;

 

	
(b)  

	
the failure by the Guarantor to perform or observe any other Guarantor Obligation, provided that if such failure is capable of being remedied, such failure shall not constitute an Event of Default unless it remains unremedied for five Business Days after notice from the Indenture Trustee;

 

	
(c)  

	
the Guarantor failing to pay when due any obligation (the “underlying obligation”) for a sum certain in excess of Cdn. two million dollars and such failure continuing for three Business Days after (i) written notice to the Guarantor from the party to whom the underlying obligation is owed if there is no grace period applicable to the underlying obligation or (ii) the expiry of any grace period applicable to the underlying obligation;

 

	
(d)  

	
the Guarantor making a general assignment for the benefit of creditors or being adjudicated a bankrupt or insolvent or seeking the protection of Insolvency Legislation; or

 

	
(e)  

	
the inaccuracy when made of a representation or warranty of the Guarantor hereunder in any material respect, provided that if such inaccuracy is capable of being remedied, then it shall not constitute an Event of Default unless it remains unremedied for five Business Days after notice from the Indenture Trustee.

 

	
15.  

	
Guarantor to Investigate Financial Condition of Franchisees

 

The Guarantor acknowledges that it has fully informed itself about the financial condition of each Franchisee.  The Guarantor assumes full responsibility for keeping fully informed of the financial condition of each Franchisee and all other circumstances affecting the Guarantor’s ability to pay or perform the Obligations, and agrees that Rental LP has no duty to report to the Guarantor any information which Rental LP has or receives about financial condition or any circumstances bearing on its ability to pay or perform the Obligations.

 

	
16.  

	
Termination

 

This Guarantee and the Guarantor’s Obligations are irrevocable.  The Guarantor may not determine its liability in respect of any of the Obligations, including Obligations incurred in the future.

 

	
17.  

	
Set-Off, Combination of Accounts and Cross-Claims

 

The payment obligations of the Guarantor hereunder will be paid by the Guarantor without regard to any right of set-off, combination of accounts or cross-claim.

 

  

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18.  

	
Tax Indemnity

 

All sums payable by the Guarantor to Rental LP under this Guarantee shall be made free and clear of, and without deduction for, any taxes or duties of whatsoever nature imposed, levied, collected, withheld or assessed by any authority having power to tax, unless the deduction of such taxes or duties is required by Applicable Law.  If the Guarantor is so required to deduct, then it shall promptly notify Rental LP of such requirement and pay to the relevant taxing authority the full amount required to be deducted (including the amount required to be deducted from any additional payment made pursuant to the immediately following clause) and, provided that such taxes or duties are Indemnifiable Taxes, pay such additional amount as will result in the receipt by Rental LP of such amounts as would have been received by it had no such taxes or duties been required to be deducted.  The Guarantor will indemnify and hold harmless Rental LP from and against any and all claims, damages and liabilities to which Rental LP may become subject due to the failure of the Guarantor to deduct such taxes or duties and remit same to any relevant taxing authority.  The obligations under this section 18 shall survive the termination of this Guarantee.

 

	
19.  

	
Notices

 

Any notice, report, demand or other communication required or permitted to be given or made hereunder shall be in writing and shall be sufficiently given or made for all purposes if delivered personally or transmitted by fax to the party or to an officer of the party to whom the same is directed, addressed as follows:

 

if to the Guarantor, addressed to it at:

 

Dollar Thrifty Automotive Group Canada Inc.

6050 Indian Line

Mississauga, Ontario

LV4 1G5

 

Attention:             President, Chief Financial Officer and Treasurer

Fax No.:                 (918) 669-2970

 

with a copy to:

 

Dollar Thrifty Automotive Group, Inc.

5330 E. 31st Street

P.O. Box 35985

Tulsa, OK 74135-0985

 

Attention:             Senior Executive Vice President, Chief Financial Officer and

                               Treasurer

Fax No.:                 (918) 669-2970

 

if to Rental LP, addressed to it at:

 

DTGC Car Rental Limited Partnership

c/o Dollar Thrifty Automotive Group Canada Inc.

 

  

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6050 Indian Line

Mississauga, Ontario

LV4 1G5

 

Attention:              President, Chief Financial Officer and Treasurer

Fax No.:                  (918) 669-2970

 

Any such notice that is given by personal delivery shall be deemed to have been received on the day of actual delivery thereof and any notice given by fax shall be deemed to have been received on the first Business Day after the transmittal thereof.  Rental LP may change its address or fax number by giving written notice of such change to the Guarantor or the Guarantor may change its address or fax number by giving such notice thereof to Rental LP.

 

	
20.  

	
Governing Law; Submission to Jurisdiction; Waiver of Immunities

 

This Guarantee shall be governed by and construed in accordance with the laws of the Province of Ontario and of Canada applicable therein and shall be treated in all respects as an Ontario contract.  The Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of any court sitting in the Province of Ontario in any action or proceeding arising out of or relating to this Guarantee and the Guarantor irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such Ontario court.  The Guarantor hereby irrevocably waives, to the extent permitted by Applicable Law, the forum non conveniens defence to the maintenance of any such action or proceeding.  The Guarantor agrees that a final judgment in any action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law.  Nothing in this section 20 shall affect the right of Rental LP to serve legal process in any other manner permitted by Applicable Law or affect its right to bring any action or proceeding against the Guarantor or its property and assets in the courts of any other jurisdiction.

 

	
21.  

	
Further Assurances

 

The Guarantor shall at all times do, execute, acknowledge and deliver or cause to be done, executed, acknowledged or delivered all such further acts, deeds, transfers, assignments and assurances as Rental LP may reasonably require in order to give effect to the provisions of this Guarantee.

 

	
22.  

	
Amendment in Writing

 

This Guarantee may only be amended or supplemented by a written agreement signed by both the Guarantor and Rental LP and subject to satisfaction of the Rating Agency Condition in respect of all Series of Notes.

 

	
23.  

	
Benefit and Binding Nature; Assignment

 

Neither Rental LP nor the Guarantor may assign any of its rights or obligations under this Guarantee without the prior written consent of the other.  This Guarantee shall bind the Guarantor, its successors and permitted assigns and enure to the benefit of and be enforceable by Rental LP and its respective successors and permitted assigns.

 

  

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Rental LP has, with the consent of DTAG Canada, assigned its rights under this Guarantee as security to the Indenture Trustee on behalf of the Noteholders and upon the enforcement of such security either the Indenture Trustee or the Noteholders, as applicable, may exercise Rental LP’s rights under this Guarantee.

 

	
24.  

	
Entire Agreement

 

This Guarantee constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether written or oral.  There are no representations, warranties, conditions, other agreements or acknowledgements, whether direct or collateral, express or implied, that form part of or affect this Guarantee except as specifically set forth herein.  The execution of this Guarantee has not been induced by, nor does the Guarantor rely upon or regard as material, any representations, warranties, conditions, other agreements or acknowledgements expressly made in this Guarantee, or the agreements and other documents to be delivered pursuant hereto.

 

	
25.  

	
Waiver of Notice of Acceptance

 

The Guarantor waives notice of acceptance of this instrument.

 

[Signature Page Follows]

 

 

  

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IN WITNESS WHEREOF the Guarantor has executed this Guarantee this 9th day of March, 2012.

 

	  	  	
DOLLAR THRIFTY AUTOMOTIVE 

GROUP CANADA INC.

 

	
By:

	  
	  	
Name:

	  	
Title:

	  	  
	
By:

	  
	  	
Name:

	  	
Title:ex10-21.htm

EXHIBIT 10.21

PEOPLES NEIGHBORHOOD BANKDIRECTOR LIFE INSURANCE PLAN

 

INTRODUCTION

 

Peoples Neighborhood Bank (the “Bank”) wishes to attract and retain highly-qualified directors. To further this objective, the Bank is willing to divide the death proceeds of certain life insurance policies which are owned by the Bank on the lives of certain participating directors with their designated beneficiaries.

 

Article 1

 

Definitions

 

Whenever used in this Plan, the following terms shall have the meanings specified:

 

“Board of Directors” means the Board of Directors of the Bank.

 

“Director” means a member of the Board of Directors.

 

“Insured” means the individual whose life is insured.

 

“Insurer” means the insurance company issuing the life insurance policy on the life of the Insured.

 

“Participant” means a Director of the Bank who is designated as a Participant in Appendix A to the Plan (as the same may be amended from time to time) and elects in writing to participate in the Plan, and signs a split dollar endorsement for the Policy under which he or she is the Insured.

 

“Policy” or “Policies” means the individual insurance policy or policies acquired by the Bank for purposes of insuring a Participant’s life under this Plan.

 

“Plan” means this Peoples Neighborhood Bank Director Life Insurance Plan.

 

Article 2

 

Participation

 

2.1  Participation. A Participant may commence participation in this Plan by executing an election to participate and a split dollar endorsement for each Policy. The split dollar endorsement shall bind the Participant and his or her beneficiaries, assigns and transferees to the terms and conditions of this Plan.

 

2.2  Termination of Participation. A Participant’s rights under this Plan shall cease and his or her participation in this Plan shall terminate if and when the Participant’s directorship terminates for any reason (other than the Participant’s death while actively serving). In the event that the Bank decides to maintain the Policy after the Participant’s

Termination of participation in the Plan, the Bank shall be the direct beneficiary of the entire death proceeds of the Policy.

2.3 Maintaining the Policy and Endorsement Until Death. While the Participant is actively serving as a Director of the Bank, the Bank shall maintain the Policy in full force and effect and, in no event shall the Bank amend, terminate or otherwise abrogate the Participant’s interest in the Policy without the Participant’s consent, which consent shall not be unreasonably withheld. The Bank may replace the Policy with a comparable insurance policy to cover the benefit provided under this Plan if the Bank and the Participant execute a new split dollar endorsement for the comparable benefit.

  

1

  

Article 3

Policy Ownership/Interest

 

3.1 Participant’s Interest. The Participant or the Participant’s assignee shall have the right to designate the beneficiary of death benefit equal to $50,000; provided that the Participant was a director of the Bank as of the date of his or her death.

 

3.2 Bank’s Interest. Except to the extent provided in Section 2.3 of the Plan, the Bank shall own the Policies and shall have the right to exercise all incidents of ownership except that the Bank shall not sell, surrender or transfer ownership of a Policy so long as a Participant has an interest in the Policy. With respect to each Policy, the Bank shall be the direct beneficiary of the remaining death proceeds of the Policy after the Participant’s interest is determined according to Section 3.1 of the Plan.

 

Article 4

 

Premiums

 

4.1 Premium Payment. The Bank shall pay all premiums due on all Policies.

 

4.2 Imputed Income. The Bank shall annually impute income to each Participant in the minimum amount required under applicable federal tax law based on the net death benefit payable to the Participant’s beneficiary during the calendar year.

 

Article 5

 

Assignment

 

Any Participant may assign without consideration all interests in the Policy and in this Plan to any person, entity or trust. In the event a Participant shall transfer all of his or her interest in the Policy, all of the Participant’s interest in the Policy and in the Plan shall be vested in the transferee, who shall be substituted as a party hereunder, and the Participant shall have no further interest in the Policy or in this Plan.

 

Article 6

Insurer

 

The Insurer shall be bound only by the terms of the corresponding Policy. Any payments the Insurer makes or actions it takes in accordance with a Policy shall fully discharge it from all claims, suits and demands of all persons relating to that Policy. The Insurer shall not be bound by the provisions of this Plan. The Insurer shall have the right to rely on the Bank’s representations with regard to any definitions, interpretations, or Policy interests as specified under this Plan.

  

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Article 7

Administration and Claim

 

7.1 Administration.

 

The administration of the Plan, the exclusive power to interpret it, and the responsibility for carrying out its provisions are vested in the Board of Directors of the Bank, which may, at any time, by resolution of the Board of Directors, delegate such functions to a committee of the Board of Directors. The Board of Directors shall have the authority to resolve any question under the Plan. The determination of the Board of Directors as to the interpretation of the Plan or any disputed question shall be conclusive and final to the extent permitted by applicable law.

 

7.2 Claims Procedures.

 

(a) Claims for benefits under the Plan shall be submitted in writing to the Chairman of the Board of Directors.

 

(b) If any claim for benefits is wholly or partially denied, the claimant shall be given written notice within a reasonable period following the date on which the claim is filed, which notice shall set forth:

 

	
(i)  

	
the specific reason or reasons for the denial;

 

	
(ii)  

	
specific reference to pertinent Plan provisions on which the denial is based;

 

	
(iii)  

	
a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

 

	
(iv)  

	
an explanation of the Plan’s claim review procedure.

 

If the claim has not been granted and written notice of the denial of the claim is not furnished in a timely manner following the date on which the claim is filed, the claim shall be deemed denied for the purpose of proceeding to the following claim review procedure:

 

(c) The claimant or his or her authorized representative shall have thirty (30) days after receipt of written notification of denial of a claim to request a review of the denial by making written request to the Chairman of the Board of Directors, and may review pertinent documents and submit issues and comments in writing within such 30-day period.

 

(d) After receipt of the request for review, the Board of Directors shall, in a timely manner, render and furnish to the claimant a written decision, which shall include specific reasons for the decision and shall make specific references to pertinent Plan provisions on which it is based. The decision by the Board of Directors shall not be subject to further review. If a decision on review is not furnished to a claimant, the claim shall be deemed to have been denied on review.

 

(e) No claimant shall institute any action or proceeding in any state or federal court of law or equity or before any administrative tribunal or arbitrator for a claim for benefits under the Plan until the claimant has first exhausted the provisions set forth in this section.

  

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Article 8

Amendments and Termination

 

8.1 Amendment or Termination of Plan. Except as otherwise provided in Section 2.3 of the Plan, the Bank may amend or terminate the Plan at any time.

Article 9

Miscellaneous

 

9.1 Binding Effect. This Plan, in conjunction with each split dollar endorsement, shall bind each Participant and the Bank, their beneficiaries, survivors, executors, administrators and transferees and any Policy beneficiary.

 

9.2 Source of Payment The proceeds of the Policies purchased on behalf of Plan Participants shall be the sole source for the payment of benefits from the Plan; no other assets of the Bank shall be used for such payments and the Bank shall have no additional liability for the payment of benefits under the Plan.

 

9.3 No Guarantee of Employment. This Plan is not an employment policy or contract. It does not give a Participant the right to remain a director of the Bank, nor does it interfere with the Bank’s right to discharge a Participant from directorship. It also does not require a Participant to remain a director nor interfere with a Participant’s right to terminate directorship at any time.

 

9.4 Applicable Law. The Plan and all rights hereunder shall be governed by and construed according to the laws of the Commonwealth of Pennsylvania, except to the extent preempted by federal law.

 

9.5 Notice. Any notice, consent or demand required or permitted to be given under the provisions of this Plan by one party to another shall be in writing, shall be signed by the party giving or making the same, and may be given either by delivering the same to such other party personally, or by mailing the same, by United States certified mail, postage prepaid, to such party, addressed to his/her last known address as shown in the records of the Bank. The date of the mailing shall be deemed the date of such mailed notice, consent or demand.

 

9.6 Entire Agreement. This Plan constitutes the entire agreement between the Bank and the Participant as to the subject matter hereof. No rights are granted to the Participants by virtue of this Plan other than those specifically set forth herein.

 

9.7 Severability. If, for any reason, any provision of this Plan is held invalid the invalidity shall not affect any other provision of this Plan not held so invalid, and each such other provision shall, to the full extent consistent with the law, continue in full force and effect. If any provision of this Plan shall be held invalid in part, such invalidity shall in no way affect the rest of the provision, not held so invalid, and the rest of such provision, together with all other provisions of this Plan shall, to the full extent consistent with the law, continue in full force and effect.

 

9.8 Headings. The headings of sections herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any provision of this Plan.

 

9.9 Effective Date. The effective date of the Plan is January 1, 2011.

 

  

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I, Alan W. Dakey, President & CEO, of Peoples Neighborhood Bank hereby certify that this Plan was adopted at a duly held meeting of the Board of Directors of the Bank.

 

Peoples Neighborhood Bank

 

Date 

Alan W. Dakey

  

5

  

APPENDIX A

Participants

ELECTION TO PARTICIPATE

 

I, ___________________________, hereby elect to become a Participant in the Peoples Neighborhood Bank Director Life Insurance Plan (the “Plan”) in accordance with Section 2.1 of the Plan. Additionally, I acknowledge that I have read the Plan document and agree to be bound by its terms.

 

Executed this ___ day of , 2011.

 

 

Participant

 

Accepted by Peoples Neighborhood Bank:

 

By:

 

  

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