UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 31, 2024
WILLIAM PENN BANCORPORATION
(Exact Name of Registrant as Specified in Its Charter)
| Maryland |
001-40255 |
85-3898797 |
| (State or other jurisdiction of |
(Commission |
(IRS Employer |
| incorporation or organization) |
File Number) |
Identification No.) |
10 Canal Street, Suite 104, Bristol, Pennsylvania 19007
(Address of principal executive offices) (Zip Code)
(267) 540-8500
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
x Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of
the Act:
| Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
| Common Stock, par value $0.01 per share |
WMPN |
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange
Act of 1934 (17 CFR §240.12b-2).
Emerging growth company x
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
| Item 1.01 |
Entry into Material Definitive Agreement. |
On October 31, 2024,
William Penn Bancorporation (“William Penn”) entered into an Agreement and Plan of Merger (the “Merger Agreement”)
with Mid Penn Bancorp, Inc. (“Mid Penn”) pursuant to which William Penn will merge with and into Mid Penn (the “Merger”),
with Mid Penn being the surviving corporation in the Merger. Upon consummation of the Merger, William Penn Bank, a wholly-owned subsidiary
of William Penn, will be merged with and into Mid Penn Bank (the “Bank Merger”), a wholly-owned subsidiary of Mid Penn, with
Mid Penn Bank being the surviving bank in the Bank Merger. The Merger Agreement was unanimously approved by the boards of directors of
Mid Penn and William Penn.
Under the terms of the Merger
Agreement, shareholders of William Penn will have the right to receive, for each share of common stock, par value $0.01 per share, of
William Penn, 0.426 shares of Mid Penn common stock (the “Exchange Ratio”) and cash in lieu of fractional shares, subject
to adjustment and proration as described in the Merger Agreement. It is expected the Merger will be completed in the second quarter of
2025.
Effective as of the effective
time of the Merger, Kenneth J. Stephon, Chairman, President and Chief Executive Officer of William Penn, will be appointed as (i) a
director of Mid Penn and Mid Penn Bank, (ii) Vice Chair of Mid Penn Bank, and (iii) Chief Corporate Development Officer of Mid
Penn and Mid Penn Bank. All of the members of the board of directors of William Penn in office as of the effective time, other than Mr. Stephon,
will be offered the opportunity to serve a paid three-year term on an advisory board of Mid Penn Bank.
At the effective time of the
Merger, each outstanding William Penn restricted stock award will be assumed by Mid Penn and will continue to be subject to the same terms
and conditions as applied to the William Penn restricted stock award immediately prior to the effective time of the Merger. Each assumed
restricted stock award will be for a number of shares of Mid Penn common stock equal to the number of shares of William Penn common stock
subject to the assumed award immediately prior to the effective time of the Merger, multiplied by the Exchange Ratio and rounded down
to the nearest whole share.
At the effective time of the
Merger, each outstanding William Penn stock option will be converted automatically into an option to purchase shares of Mid Penn common
stock and will continue to be subject to the same terms and conditions as applied to the William Penn stock option immediately prior to
the effective time of the Merger. The number of shares of Mid Penn common stock subject to each assumed William Penn stock option will
be equal to the number of shares of William Penn common stock subject to the stock option immediately prior to the effective time of the
Merger, multiplied by the Exchange Ratio and rounded down to the nearest whole share. The per share exercise price of each assumed William
Penn stock option will also be adjusted by dividing the per share exercise price of the stock option by the Exchange Ratio, rounded up
to the nearest cent.
The Merger Agreement contains
customary representations and warranties from both Mid Penn and William Penn that are qualified by the confidential disclosures provided
to the other party in connection with the Merger Agreement, as well as matters included in William Penn’s most recent annual report
on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) and subsequent reports filed
with the SEC, and each party has agreed to customary covenants between execution of the Merger Agreement and the closing of the Merger,
including in the case of both Mid Penn and William Penn a covenant to convene a meeting of shareholders to consider the issuance of shares
of Mid Penn in the Merger and the Merger Agreement, respectively, and, subject to certain exceptions, to recommend that its shareholders
approve and adopt such proposals, and in the case of William Penn, a covenant, subject to certain exceptions, not to solicit alternative
acquisition proposals, provide information to third parties or engage in discussions with third parties relating to an acquisition proposal.
Completion of the Merger is
subject to a number of customary conditions, including, among other things: (i) the approval of the Merger Agreement by the shareholders
of William Penn; (ii) the approval of the issuance of shares of Mid Penn in the Merger by the shareholders of Mid Penn, (iii) the
effectiveness of the registration statement to be filed by Mid Penn with the SEC relating to the Mid Penn common stock to be issued in
the Merger; (iv) approval of the listing on the Nasdaq Stock Market of the shares of Mid Penn common stock to be issued in the Merger;
(v) the absence of any order of other legal restriction prohibiting the closing of the Merger; and (vi) receipt of the required
regulatory approvals without
the imposition of any condition or requirement, excluding standard conditions that are normally imposed by
the regulatory authorities in bank merger transactions, that would, in the good faith reasonable judgment of the board of directors of
either Mid Penn or William Penn, materially reduce the benefits of the Merger to such a degree that either William Penn or Mid Penn would not have entered into the Merger Agreement had
such condition, restriction or requirement been known at the date of the Merger Agreement. Each party’s
obligation to complete the Merger is also subject to certain additional customary conditions, including: (a) subject to certain exceptions,
the accuracy of the representations and warranties of the other party; (b) performance in all material respects by the other party
of its obligations under the Merger Agreement; (c) the absence of any material adverse effect (as such term is defined in the Merger
Agreement) with respect to the other party; and (d) the receipt by each party of an opinion from its counsel to the effect that the
Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Merger Agreement contains
certain termination rights for both William Penn and Mid Penn and further provides that, upon termination of the Merger Agreement under
certain circumstances, William Penn may be obligated to pay a termination fee of $ 4,900,000.
The foregoing summary of the
Merger Agreement is not complete and is qualified in its entirety by reference to the complete text of such document, which is attached
hereto as Exhibit 2.1 and incorporated herein by reference. The representations, warranties, and covenants of each party set
forth in the Merger Agreement have been made only for purposes of, were and are solely for the benefit of the parties to, the Merger Agreement,
may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the
purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts, and
may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly,
the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors
should not rely on them as statements of fact. In addition, such representations and warranties will not survive completion of the Merger,
and were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information
concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in the parties’ public disclosures. Accordingly, the Merger Agreement is included
with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors
with any other factual information regarding Mid Penn or William Penn, their respective affiliates or their respective businesses. The
Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding Mid Penn, William
Penn, and their respective affiliates or their respective businesses, the Merger Agreement and the Merger that will be contained in, or
incorporated by reference into, the Registration Statement on Form S-4 that will include a joint proxy statement of
Mid Penn and William Penn and a prospectus of Mid Penn, as well as in the Forms 10-K, Forms 10-Q and other
filings that Mid Penn and William Penn make with the SEC.
Concurrently with the
execution of the Merger Agreement, each of the directors and executive officers of William Penn and Mid Penn have entered into
separate affiliate letters pursuant to which such individuals have agreed, subject to the terms set forth therein, to vote their
shares of common stock of William Penn or Mid Penn, as applicable, that they are entitled to vote for the Merger (with respect to
William Penn) and the issuance of shares of Mid Penn common stock in the Merger (with respect to Mid Penn) and related matters and
to become subject to certain transfer restrictions with respect to their holdings of William Penn common stock. Such affiliate
letters represent approximately 9.2% and 8.9% of the issued and outstanding shares of William Penn and Mid Penn common stock,
respectively. Each of these affiliate letters terminates in accordance with its terms if the Merger Agreement is terminated,
and in other specified circumstances.
The foregoing summary of the
affiliate letters does not purport to be complete and is qualified in its entirety by the text of such agreements, which are attached
as Exhibits A (Form of William Penn Affiliate Letter) and B (Form of Mid Penn Affiliate Letter) to the Merger Agreement and
are incorporated herein by reference.
| Item 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
In connection with the Merger,
Kenneth J. Stephon has entered into a three-year employment agreement with Mid Penn Bank, Mid Penn, William Penn Bank and William Penn
under which Mr. Stephon will serve as Chief Corporate Development Officer of the combined companies following the completion of the Merger
with an annual base salary of $400,000. Under the agreement, Mr. Stephon will receive a one-time payment of $2,074,776 from William Penn
Bank or William Penn immediately prior to the effective time of the Merger as consideration for the termination of his existing employment
agreement and his continued employment through the effective time. In addition, subject to his continued employment during the three-year
term of the agreement, Mr. Stephon will receive a $900,000 retention bonus payable in three equal annual installments. Mid Penn will also
make an annual $50,000 contribution to a deferred compensation plan to be established for his benefit. During the term of the agreement,
Mr. Stephon will be eligible to receive annual and long-term incentive awards on a discretionary basis. If Mr. Stephon’s employment
is terminated without cause or if Mr. Stephon terminates his employment for good reason (as defined in the agreement), he would be entitled
to receive a lump sum payment equal to the base salary payable over the then remaining term of the agreement and continuation of medical
benefits for the same period. If such termination occurs in connection with a change in control, Mr. Stephon would receive a severance
payment equal to three times base salary if the termination occurs in the first year of employment, two times base salary if the termination
occurs in the second year of employment, and one times base salary if the termination occurs in the third year of employment. In addition,
Mr. Stephon’s benefits would be continued for a period of one to three years depending on the year in which the termination occurs.
On November 1, 2024,
Mid Penn and William Penn issued a joint press release announcing the execution of the Merger Agreement. A copy of the joint press release
is attached as Exhibit 99.1 hereto and is incorporated herein by reference.
Cautionary Note Regarding Forward-Looking Statements
This filing contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited
to, expectations or predictions of future financial or business performance, conditions relating to Mid Penn and William Penn, or other
effects of the proposed Merger of Mid Penn and William Penn. Forward-looking statements are typically identified by words such as “believe,”
“approximately,” “expect,” “anticipate,” “intend,” “target,” “estimate,”
“continue,” “positions,” “prospects” or “potential,” by future conditional verbs such
as “will,” “would,” “should,” “could” or “may,” or by variations of such words
or by similar expressions. These forward-looking statements may include the expectations relating to the anticipated opportunities
and financial and other benefits of the proposed Merger between Mid Penn and William Penn, and the projections of, or guidance on, Mid
Penn’s or the combined company’s future financial performance, asset quality, liquidity, capital levels, expected levels of
future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated
trends in Mid Penn’s business or financial results. Mid Penn and William Penn are subject to numerous assumptions, risks and uncertainties,
which change over time. Forward-looking statements are made only as of the date of this filing, and neither Mid Penn nor William Penn
undertakes any obligation to update any forward-looking statements contained in this presentation to reflect events or conditions after
the date hereof. Actual results may differ materially from those described in any such forward-looking statements.
In addition to factors previously
disclosed in the reports filed by Mid Penn and William Penn with the SEC and those identified elsewhere in this document, the following
factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the
occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the
Merger Agreement entered into between Mid Penn and William Penn; the ability to obtain regulatory approvals and satisfy other closing
conditions to the Merger, including approval by shareholders of Mid Penn and William Penn; the outcome of any legal proceedings that may
be instituted against Mid Penn or William Penn; the possibility that the Merger may be more expensive to complete than anticipated; diversion
of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business
or employee relationships, including those resulting from the announcement or completion of the Merger; changes in Mid Penn’s share
price before the closing of the Merger; risks relating to the potential dilutive effect of shares of Mid Penn company stock to be issued
in the Merger; the timing of closing the Merger; difficulties and delays in integrating the business or fully realizing cost savings and
other benefits; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates
and capital markets; inflation; customer acceptance of products and services; customer borrowing, repayment, investment and deposit practices;
competitive conditions; economic conditions, including downturns in the local, regional or national economies; the impact, extent and
timing of technological changes; changes in accounting policies or practices; changes in laws and regulations; and other actions of the
Federal Reserve Board and other legislative and regulatory actions and reforms; and any other factors that may affect future results of
Mid Penn, William Penn and the combined company.
Important Additional Information About the
Merger and Where to Find It
The proposed Merger transaction
will be submitted to the shareholders of William Penn and Mid Penn for their consideration and approval. In connection with the proposed
Merger transaction, Mid Penn will be filing with the SEC a registration statement on Form S-4, which will include
a joint proxy statement of Mid Penn and William Penn and a prospectus of Mid Penn and other relevant documents concerning the proposed
transaction. INVESTORS AND SHAREHOLDERS OF MID PENN AND WILLIAM PENN ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY
STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL
AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain
a free copy of the joint proxy statement/prospectus, as well as other filings containing information about Mid Penn and William Penn,
free of charge from the SEC’s Internet site (www.sec.gov). Copies of the joint proxy statement/prospectus and the filings
with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, free of charge, by contacting
Mid Penn Bancorp, Inc., 2407 Park Drive, Harrisburg, Pennsylvania, 17110, attention: Investor Relations (telephone (866) 642-7736); or William
Penn Bancorporation, 10 Canal Street, Suite 104, Bristol, Pennsylvania 19007, attention: Kenneth J. Stephon, President and CEO (telephone
(267) 540-8500).
No Offer or Solicitation
This Current Report on Form 8-K is
not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed
Merger and shall not constitute an offer to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities
in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction.
Participants in the Solicitation
Mid Penn, William Penn and
their respective directors, executive officers, and certain other members of management and employees may be deemed to be participants
in the solicitation of proxies from Mid Penn and/or William Penn shareholders in connection with the proposed Merger transaction under
the rules of the SEC. Information regarding the directors and executive officers of Mid Penn and William Penn is available in each
company’s respective most recent definitive proxy statement filed with the SEC and other documents filed by Mid Penn and William
Penn with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed
with the SEC, which may be obtained free of charge as described under the heading “Important Additional Information About the Merger
and Where to Find It.”
| Item 9.01 | Financial Statements and Exhibits. |
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| |
WILLIAM PENN BANCORPORATION |
| |
|
|
| Date: November 1, 2024 |
By: |
/s/ Kenneth J. Stephon |
| |
|
Kenneth J. Stephon |
| |
|
Chairman, President and Chief Executive Officer |
Exhibit 2.1
Execution Version
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
MID PENN BANCORP, INC.
AND
WILLIAM PENN BANCORPORATION
dated as of
October 31, 2024
TABLE OF CONTENTS
Page
| ARTICLE I |
|
| CERTAIN DEFINITIONS |
2 |
| |
|
| 1.1. Certain Definitions |
2 |
| |
|
| ARTICLE II |
|
| THE MERGER |
11 |
| |
|
| 2.1. Merger |
11 |
| |
|
| 2.2. Effective Time;
Closing |
11 |
| |
|
| 2.3. Articles of Incorporation
and Bylaws |
12 |
| |
|
| 2.4. Directors and
Officers |
12 |
| |
|
| 2.5. Effects of the
Merger |
12 |
| |
|
| 2.6. Tax Consequences |
13 |
| |
|
| 2.7. Bank Merger |
13 |
| |
|
| ARTICLE III |
|
| CONSIDERATION; EXCHANGE PROCEDURES |
14 |
| |
|
| 3.1. Merger Consideration;
Effect on Shares |
14 |
| |
|
| 3.2. Procedures for
Exchange of William Penn Common Stock |
17 |
| |
|
| 3.3. Dissenting Shareholders |
19 |
| |
|
| ARTICLE IV |
|
| REPRESENTATIONS AND WARRANTIES OF WILLIAM PENN |
19 |
| |
|
| 4.1. Organization |
20 |
| |
|
| 4.2. Capitalization |
21 |
| |
|
| 4.3. Authority; No
Violation |
22 |
| |
|
| 4.4. Consents |
23 |
| |
|
| 4.5. Financial Statements;
Undisclosed Liabilities |
23 |
| |
|
| 4.6. Taxes |
24 |
| |
|
| 4.7. No Material Adverse
Effect |
26 |
| |
|
| 4.8. Material Contracts;
Leases; Defaults |
26 |
| |
|
| 4.9. Ownership of Property;
Insurance Coverage |
29 |
| |
|
| 4.10. Legal Proceedings |
30 |
| |
|
| 4.11. Compliance With
Applicable Law |
30 |
| 4.12. Employee
Benefit Plans |
32 |
| |
|
| 4.13. Environmental
Matters |
34 |
| |
|
| 4.14. Brokers, Finders
and Financial Advisors |
35 |
| |
|
| 4.15. Loan Matters |
35 |
| |
|
| 4.16. Related Party
Transactions |
36 |
| |
|
| 4.17. Credit Card Accounts
and Merchant Processing |
37 |
| |
|
| 4.18. Required Vote |
37 |
| |
|
| 4.19. Registration
Obligations |
37 |
| |
|
| 4.20. Risk Management
Instruments |
37 |
| |
|
| 4.21. Fairness Opinion |
38 |
| |
|
| 4.22. Fiduciary Accounts |
38 |
| |
|
| 4.23. Intellectual
Property |
38 |
| |
|
| 4.24. Labor Matters |
39 |
| |
|
| 4.25. William Penn
Information Supplied |
39 |
| |
|
| 4.26. Takeover Laws |
39 |
| |
|
| 4.27. Reorganization |
39 |
| |
|
| 4.28. SEC Reports |
39 |
| |
|
| 4.29. Dissenters’
Rights |
40 |
| |
|
| 4.30. Quality of Representations |
40 |
| |
|
| 4.31. No Other Representations
or Warranties |
40 |
| |
|
| ARTICLE V |
|
| REPRESENTATIONS AND WARRANTIES OF MID PENN |
41 |
| |
|
| 5.1. Organization |
41 |
| |
|
| 5.2. Capitalization |
42 |
| |
|
| 5.3. Authority; No
Violation |
43 |
| |
|
| 5.4. Consents |
44 |
| |
|
| 5.5. Financial Statements;
Undisclosed Liabilities |
44 |
| |
|
| 5.6. Taxes |
46 |
| |
|
| 5.7. No Material Adverse
Effect |
47 |
| |
|
| 5.8. No Default under
Material Contracts |
47 |
| |
|
| 5.9. Ownership of Property;
Insurance Coverage |
48 |
| |
|
| 5.10. Legal Proceedings |
49 |
| 5.11. Compliance
With Applicable Law |
49 |
| |
|
| 5.12. Employee Benefit
Plans |
50 |
| |
|
| 5.13. Environmental
Matters |
52 |
| |
|
| 5.14. Brokers, Finders
and Financial Advisors |
52 |
| |
|
| 5.15. Loan Matters |
52 |
| |
|
| 5.16. No William Penn
Capital Stock |
53 |
| |
|
| 5.17. SEC Reports |
53 |
| |
|
| 5.18. Required Vote |
53 |
| |
|
| 5.19. Registration
Obligations |
53 |
| |
|
| 5.20. Risk Management
Instruments |
54 |
| |
|
| 5.21. Fairness Opinion |
54 |
| |
|
| 5.22. Fiduciary Accounts |
54 |
| |
|
| 5.23. Mid Penn Information
Supplied |
54 |
| |
|
| 5.24. Reorganization |
55 |
| |
|
| 5.25. No Financing |
55 |
| |
|
| 5.26. Intellectual
Property |
55 |
| |
|
| 5.27. Labor Matters |
55 |
| |
|
| 5.28. Takeover Laws |
55 |
| |
|
| 5.29. Quality of Representations |
56 |
| |
|
| 5.30. No Other Representations
or Warranties |
56 |
| |
|
| ARTICLE VI |
|
| COVENANTS OF WILLIAM PENN |
56 |
| |
|
| 6.1. Conduct of Business |
56 |
| |
|
| 6.2. Financial and
Other Statements |
61 |
| |
|
| 6.3. Maintenance of
Insurance |
62 |
| |
|
| 6.4. Disclosure Supplements |
62 |
| |
|
| 6.5. Consents and Approvals
of Third Parties |
62 |
| |
|
| 6.6. Commercially Reasonable
Efforts |
62 |
| |
|
| 6.7. Failure to Fulfill
Conditions |
63 |
| |
|
| 6.8. No Other Bids
and Related Matters |
63 |
| |
|
| 6.9. Reserves and Merger-Related
Costs |
66 |
| |
|
| 6.10. Board of Directors
and Committee Meetings |
66 |
| 6.11. Affiliate
Letters |
67 |
| |
|
| 6.12. Proxy Solicitor |
67 |
| |
|
| 6.13. Approval of Bank
Plan of Merger |
67 |
| |
|
| 6.14. Compliance with
Section 409A |
67 |
| |
|
| 6.15. William Penn
ESOP |
68 |
| |
|
| ARTICLE VII |
|
| COVENANTS OF MID PENN |
68 |
| |
|
| 7.1. Conduct of Business |
68 |
| |
|
| 7.2. Maintenance of
Insurance |
69 |
| |
|
| 7.3. Disclosure Supplements |
69 |
| |
|
| 7.4. Consents and Approvals
of Third Parties |
70 |
| |
|
| 7.5. Commercially Reasonable
Efforts |
70 |
| |
|
| 7.6. Failure to Fulfill
Conditions |
70 |
| |
|
| 7.7. Post-Closing Governance |
70 |
| |
|
| 7.8. Employee Matters |
70 |
| |
|
| 7.9. Directors and
Officers Indemnification and Insurance |
73 |
| |
|
| 7.10. Stock Reserve |
74 |
| |
|
| 7.11. Exchange Listing |
74 |
| |
|
| 7.12. Approval of Bank
Plan of Merger |
74 |
| |
|
| 7.13. Mid Penn and
Mid Penn Bank Board |
75 |
| |
|
| 7.14. Advisory Board |
75 |
| |
|
| ARTICLE VIII |
|
| ADDITIONAL AGREEMENTS |
75 |
| |
|
| 8.1. Shareholder Meetings |
75 |
| |
|
| 8.2. Proxy Statement-Prospectus |
76 |
| |
|
| 8.3. Regulatory Approvals |
77 |
| |
|
| 8.4. Current Information |
78 |
| |
|
| 8.5. Dividends |
78 |
| |
|
| 8.6. Exemption from
Liability Under Section 16(b) |
79 |
| |
|
| 8.7. Access; Confidentiality |
79 |
| |
|
| ARTICLE IX |
|
| CLOSING CONDITIONS |
80 |
| |
|
| 9.1. Conditions to
Each Party’s Obligations under this Agreement |
80 |
| 9.2. Conditions
to the Obligations of Mid Penn under this Agreement |
81 |
| |
|
| 9.3. Conditions to
the Obligations of William Penn under this Agreement |
82 |
| |
|
| ARTICLE X |
|
| TERMINATION, AMENDMENT AND WAIVER |
83 |
| |
|
| 10.1. Termination |
83 |
| |
|
| 10.2. Effect of Termination |
85 |
| |
|
| 10.3. Amendment, Extension
and Waiver |
86 |
| |
|
| ARTICLE XI |
|
| MISCELLANEOUS |
87 |
| |
|
| 11.1. Confidentiality |
87 |
| |
|
| 11.2. Public Announcements |
87 |
| |
|
| 11.3. Survival |
87 |
| |
|
| 11.4. Confidential
Supervisory Information |
87 |
| |
|
| 11.5. Expenses |
88 |
| |
|
| 11.6. Notices |
88 |
| |
|
| 11.7. Parties in Interest |
89 |
| |
|
| 11.8. Complete Agreement |
89 |
| |
|
| 11.9. Counterparts |
89 |
| |
|
| 11.10. Severability |
89 |
| |
|
| 11.11. Governing Law |
90 |
| |
|
| 11.12. Interpretation |
90 |
| |
|
| 11.13. Specific Performance;
Jurisdiction |
90 |
| |
|
| 11.14. Waiver of Trial
by Jury |
91 |
| |
|
| 11.15. Delivery by
Facsimile or Electronic Transmission |
91 |
| Exhibit A |
Form of William Penn Affiliate
Letter |
| Exhibit B |
Form of Mid Penn Affiliate Letter |
| Exhibit C |
Form of Bank Plan of Merger |
This AGREEMENT AND PLAN OF
MERGER (this “Agreement”), dated as of October 31, 2024, is made by and between Mid Penn Bancorp, Inc.,
a Pennsylvania corporation (“Mid Penn”), and William Penn Bancorporation, a Maryland corporation (“William
Penn”). Certain capitalized terms have the meanings given to them in Article I.
RECITALS
1. The
Board of Directors of each of Mid Penn and William Penn (i) has determined that this Agreement and the business combination and
related transactions contemplated hereby are in the best interests of their respective companies, shareholders and other constituencies
and (ii) has approved and adopted this Agreement; and
2. In
accordance with the terms of this Agreement, William Penn will merge with and into Mid Penn (the “Merger”), so that
Mid Penn is the surviving corporation (hereinafter sometimes referred to in such capacity as the “Surviving Corporation”)
in the Merger; and
3.
Each of the directors and executive officers of William Penn has executed a letter agreement, in the form attached hereto as Exhibit A,
dated as of the date hereof (the “William Penn Affiliate Letter”), pursuant to which each such director and executive
officer has agreed, among other things, to vote all shares of William Penn Common Stock he or she has the sole power to vote or direct
the voting thereof in favor of the approval of this Agreement and the transactions contemplated hereby;
4. Each
of the directors and executive officers of Mid Penn has executed a letter agreement, in the form attached hereto as Exhibit B,
dated as of the date hereof (the “Mid Penn Affiliate Letter”), pursuant to which each such director and executive officer
has agreed, among other things, to vote all shares of Mid Penn Common Stock he or she has the sole power to vote or direct the voting
thereof in favor of the approval of the issuance of the Mid Penn Common Stock to be issued in the Merger;
5. The
parties intend the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, and this Agreement
is intended to be and is adopted as a plan of reorganization for purposes of Sections 354 and 361 of the Code; and
6. The
parties desire to make certain representations, warranties and agreements in connection with the business transactions described in this
Agreement and to prescribe certain conditions thereto.
AGREEMENT
NOW, THEREFORE, in consideration
of the mutual covenants, representations, warranties and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1.
Certain Definitions.
As used in this Agreement,
the following capitalized terms have the following meanings (unless the context otherwise requires, references to Articles and Sections refer
to Articles and Sections of this Agreement). Accounting terms used in this Agreement without definition shall have the meanings
given to such terms in accordance with GAAP.
“Affiliate” means
any Person who, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control
with, such Person and, without limiting the generality of the foregoing, includes any executive officer or director of such Person and
any Affiliate of such executive officer or director.
“Agreement” means
this agreement, together with the Exhibits, the William Penn Disclosure Schedule and the Mid Penn Disclosure Schedule, and any
amendments hereto.
“Average Micro Cap
Banks Index Value” means the average of the Dow Jones U.S. Micro Cap Banks Index Value for the twenty (20) consecutive full trading
days ending on the trading day prior to the Determination Date.
“Bank Merger”
shall mean the merger of William Penn Bank with and into Mid Penn Bank, with Mid Penn Bank as the surviving institution as contemplated
by Section 2.7.
“Bank Plan of Merger”
shall have the meaning set forth in Section 2.7.
“Bank Regulator”
shall mean any federal or state banking regulator, including but not limited to the FRB, the FDIC and the PDB, that regulates Mid Penn
Bank or William Penn Bank, or any of their respective holding companies or subsidiaries, as the case may be.
“BHCA” shall
mean the Bank Holding Company Act of 1956, as amended.
“Book-Entry Shares”
shall have the meaning set forth in Section 3.2(a)(1).
“Business Day”
shall mean any day other than (a) a Saturday or Sunday, or (b) a day on which banking institutions in the Commonwealth of
Pennsylvania are authorized or obligated by law or executive order to be closed.
“Certificates”
or “William Penn Certificates” shall mean certificates evidencing shares of William Penn Common Stock. Any reference to “Certificates”
or “William Penn Certificates” shall be deemed to include reference to book-entry account statements relating to the ownership
of shares of William Penn Common Stock.
“Claim” shall
have the meaning set forth in Section 7.9(a).
“Closing” shall
have the meaning set forth in Section 2.2(a).
“Closing Date”
shall have the meaning set forth in Section 2.2(a).
“COBRA” shall
mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder.
“Code” shall
mean the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder.
“Confidentiality Agreement”
shall mean the confidentiality agreement referred to in Section 11.1.
“CRA” shall have
the meaning set forth in Section 4.11(a).
“Determination Date”
shall have the meaning set forth in Section 10.1(i).
“Determination Date
Average Closing Price” means the average of the per share closing prices of a share of Mid Penn Common Stock during the twenty
(20) consecutive full trading days ending on the trading day prior to the Determination Date.
“Effective Time”
shall have the meaning set forth in Section 2.2(a).
“Environmental Laws”
means any federal, state or local law, statute, ordinance, rule, regulation, code, license, permit, authorization, approval, consent,
order, judgment, decree, injunction or agreement with any applicable Governmental Entity relating to (i) the protection, preservation
or restoration of the environment (including, without limitation, air, water vapor, surface water, groundwater, drinking water supply,
surface soil, subsurface soil, plant and animal life or any other natural resource), and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production, release or disposal of Materials of Environmental Concern. The
term Environmental Laws includes without limitation (a) the Comprehensive Environmental Response, Compensation and Liability Act,
as amended; the Resource Conservation and Recovery Act, as amended; the Clean Air Act, as amended; the Federal Water Pollution Control
Act, as amended; the Toxic Substances Control Act, as amended; the Emergency Planning and Community Right to Know Act, the Safe Drinking
Water Act; and all comparable state and local laws, and (b) any common law (including without limitation common law that may impose
strict liability) that may impose liability or obligations for injuries or damages due to the presence of or exposure to any Materials
of Environmental Concern.
“ERISA” shall
mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“ERISA Affiliate”
shall have the meaning set forth in Section 4.12(c).
“ESOP Loan Shares”
shall have the meaning set forth in Section 3.1(b).
“ESOP Termination Date”
shall have the meaning set forth in Section 6.15.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.
“Exchange Agent”
shall mean a bank or trust company or other agent mutually agreed upon by Mid Penn and William Penn, which shall act as agent for Mid
Penn in connection with the exchange procedures for exchanging certificates for shares of William Penn Common Stock for certificates
for shares of Mid Penn Common Stock as provided in Article III.
“Exchange Fund”
shall have the meaning set forth in Section 3.2(a)(1).
“Exchange Ratio”
shall have the meaning set forth in Section 3.1(c).
“FDIC” shall
mean the Federal Deposit Insurance Corporation or any successor thereto.
“FHLB” shall
mean the Federal Home Loan Bank of Pittsburgh.
“FRB” shall mean
the Board of Governors of the Federal Reserve System and, where appropriate, the Federal Reserve Bank of Philadelphia.
“GAAP” shall
mean the current accounting principles generally accepted in the United States of America, consistently applied with prior practice.
“Governmental Entity”
shall mean any federal or state court, administrative agency or commission or other governmental authority or instrumentality.
“Indemnified Parties”
shall have the meaning set forth in Section 7.9(a).
“Index Ratio”
means the quotient (multiplied by 100 to express such quotient as a percentage) obtained by dividing the Average Micro Cap Banks Index
Value by the Initial Micro Cap Banks Index Value, calculated to two (2) decimal places.
“Initial Micro Cap
Banks Index Value” means $31,420.39.
“IRS” shall mean
the United States Internal Revenue Service, a bureau of the United States Department of Treasury.
“Knowledge” as
used with respect to a Person (including references to such Person being aware of a particular matter) means actual knowledge of that
Person. Use in this Agreement of “know,” “knows,” or “known” shall in each case mean having “Knowledge.”
“Letter of Transmittal”
shall have the meaning set forth in Section 3.2(a)(2).
“Liens” shall
mean any lien, claim, charge, option, encumbrance, mortgage, pledge or security interest or other restriction of any kind.
“MDGCL” shall
mean the Maryland General Corporation Law, as amended.
“Maryland Department”
shall mean the Maryland State Department of Assessments and Taxation.
“Material Adverse Effect”
shall mean, with respect to Mid Penn or William Penn, respectively, any event, circumstance, change, condition, development or occurrence
that either individually or in the aggregate, has had or would reasonably be expected to have an effect that (i) is material and
adverse to the assets, liabilities, financial condition, results of operations, properties or business of Mid Penn and the Mid Penn Subsidiaries
taken as a whole, or William Penn and the William Penn Subsidiaries taken as a whole, respectively, or (ii) does or would materially
impair the ability of either William Penn, on the one hand, or Mid Penn, on the other hand, to perform its obligations under this Agreement
or otherwise materially threaten or materially impede the timely consummation of the transactions contemplated by this Agreement; provided
that, with respect to clause (i) above, “Material Adverse Effect” shall not be deemed to include the impact of the
following on the assets, liabilities, business, properties, financial condition or results of operations of the parties and their respective
subsidiaries: (a) changes in laws and regulations after the date hereof affecting banks or their holding companies generally, or
interpretations thereof by courts or Governmental Entities that do not have a materially disproportionate impact on such party; (b) changes,
after the date hereof, in GAAP or regulatory accounting principles generally applicable to financial institutions and their holding companies
(and, in either case, any authoritative interpretations thereof) that do not have a materially disproportionate impact on such party;
(c) actions and omissions of a party hereto (or any of the William Penn Subsidiaries or Mid Penn Subsidiaries, as applicable) taken
with the prior written consent of the other party in furtherance of the transactions contemplated hereby or which are otherwise required
by the terms hereof; (d) the announcement of this Agreement and the transactions contemplated hereby and the impact thereof on
relationships with customers, vendors or employees, and compliance with this Agreement, including reasonable expenses incurred by the
parties hereto in consummating the transactions contemplated by this Agreement; (e) changes in national or international political
or social conditions, including any outbreak or escalation of major hostilities or any act of terrorism, war (whether or not declared),
national disaster or any national or international calamity affecting the United States, declarations of any national or global epidemic,
pandemic or disease outbreak or the material worsening of such conditions threatened or existing as of the date of this Agreement that
do not have a materially disproportionate impact on such party and its subsidiaries, taken as a whole, as compared to other companies
in the banking and financial services industry; (f) economic, financial market or geographical conditions in general, including
changes in economic and financial markets and regulatory or political conditions whether resulting from acts of terrorism, war or otherwise,
that do not have a materially disproportionate adverse effect on such party and its subsidiaries, taken as a whole, as compared to other
companies in the banking and financial services industry; (g) changes in the trading price or trading volume of either party’s
common stock; (h) any failure, in and of itself, by such party to meet any internal projections, forecasts or revenue or earnings
predictions (it being understood that the facts giving rise or contributing to any such failure may be deemed to constitute, or be taken
into account in determining whether there has been or would reasonably be expected to be, a Material Adverse Effect, unless such facts
are otherwise included in an exception set forth herein); or (i) changes in the banking industry after the date hereof, including
changes in prevailing interest rates, credit availability and liquidity, that do not have a materially disproportionate impact on such
party.
“Materially Burdensome
Regulatory Condition” shall have the meaning set forth in Section 9.1(c).
“Materials of Environmental
Concern” means pollutants, contaminants, wastes, toxic substances, petroleum and petroleum products, and any other hazardous or
toxic materials regulated under Environmental Laws.
“Maximum Amount”
shall have the meaning set forth in Section 7.9(c).
“Merger” shall
have the meaning set forth in the Recitals to this Agreement.
“Merger Consideration”
shall have the meaning set forth in Section 3.1(c).
“Mid Penn” shall
mean Mid Penn Bancorp, Inc., a Pennsylvania corporation, with its principal executive offices located at 2407 Park Drive, Harrisburg,
Pennsylvania 17110. References to Mid Penn shall mean Mid Penn on a consolidated basis unless the context clearly indicates otherwise.
“Mid Penn Affiliate
Letters” shall have the meaning set forth in the Recitals.
“Mid Penn Bank”
shall mean Mid Penn Bank, a Pennsylvania banking institution, with its principal offices located at 349 Union Street, Millersburg, Pennsylvania
17061, which is a wholly owned subsidiary of Mid Penn.
“Mid Penn Benefit Plan”
shall have the meaning set forth in Section 5.12(a).
“Mid Penn Common Stock”
shall mean the common stock, par value $1.00 per share, of Mid Penn.
“Mid Penn Disclosure
Schedule” shall mean a written disclosure schedule delivered by Mid Penn to William Penn specifically referring to the appropriate
sections of this Agreement.
“Mid Penn Excluded
Benefit Plans” shall mean any Mid Penn defined benefit pension plan and those Mid Penn Benefit Plans identified on Mid Penn
Disclosure Schedule 7.8(b).
“Mid Penn Financial
Price Ratio” means the quotient (multiplied by 100 to express such quotient as a percentage) obtained by dividing the Determination
Date Average Closing Price by the Starting Price, calculated to four (4) decimal places.
“Mid Penn Financial
Statements” shall mean (i) the audited consolidated financial statements of Mid Penn as of December 31, 2023, and for
the two (2) years ended December 31, 2023 and December 31, 2022, including the notes thereto, and (ii) the unaudited
interim consolidated financial statements of Mid Penn as of the end of each calendar quarter following December 31, 2023 and for
the periods then ended, including the notes thereto.
“Mid Penn 401(k) Plan”
shall have the meaning set forth in Section 7.8(h).
“Mid Penn Owned Shares”
shall have the meaning set forth in Section 3.1(b).
“Mid Penn Recommendation”
shall have the meaning set forth in Section 8.1(b).
“Mid Penn Regulatory
Agreement” shall have the meaning set forth in Section 5.11(c).
“Mid Penn Regulatory
Reports” means the Call Reports of Mid Penn Bank and accompanying schedules, as filed with the FDIC, for each calendar quarter
beginning with the quarter ended December 31, 2023, through the Closing Date, and all reports filed with the PDB or FRB by Mid
Penn or Mid Penn Bank from December 31, 2023 through the Closing Date.
“Mid Penn SEC Reports”
shall have the meaning set forth in Section 5.17.
“Mid Penn Shareholder
Approval” shall have the meaning set forth in Section 5.3(a).
“Mid Penn Shareholders’
Meeting” shall have the meaning set forth in Section 8.1(b).
“Mid Penn Stock Plans”
shall have the meaning set forth in Section 5.2(a).
“Mid Penn Subsidiary”
means any subsidiary of Mid Penn as defined in Rule 1-02(x) of Regulation S-X promulgated by the SEC or the BHCA.
“Mid Penn Termination
Fee” shall have the meaning set forth in Section 10.2(c).
“Nasdaq” shall
mean The NASDAQ Stock Market, LLC.
“Notice of Superior
Proposal” shall have the meaning set forth in Section 6.8(e).
“OFAC” means
the Office of Foreign Assets Control within the U.S. Department of the Treasury.
“Other Real Estate
Owned” shall mean any real estate acquired through foreclosure or by a deed in lieu of foreclosure, or any real estate classified
as Other Real Estate Owned or Real Estate Owned.
“PBCL” shall
mean the Pennsylvania Business Corporation Law of 1988, as amended.
“PDB” shall mean
the Pennsylvania Department of Banking and Securities.
“PDS” shall mean
the Pennsylvania Department of State.
“Person” shall
mean any individual, corporation, partnership, limited liability company, joint venture, association, company, trust, “group”
(as that term is defined under the Exchange Act), or any other legal entity.
“Piper Sandler”
shall have the meaning set forth in Section 4.14.
“Proxy Statement-Prospectus”
shall have the meaning set forth in Section 8.2(a).
“Registration Statement”
shall mean the Registration Statement on Form S-4, or other applicable form, together with all amendments, filed with the SEC under
the Securities Act for the purpose of registering shares of Mid Penn Common Stock to be offered to holders of William Penn Common Stock
in connection with the Merger.
“Regulatory Approvals”
means the approval of any Bank Regulator that is necessary in connection with the consummation of the Merger, and the related transactions
contemplated by this Agreement.
“Relevant Group”
shall mean any affiliated, consolidated, combined, unitary or similar group.
“Rights” shall
mean warrants, options, rights, convertible securities, stock appreciation rights and other arrangements or commitments which obligate
a Person to issue or dispose of any of its capital stock or other ownership interests or which provide for compensation based on the
equity appreciation of its capital stock.
“SEC” shall mean
the Securities and Exchange Commission.
“Securities Act”
shall mean the Securities Act of 1933, as amended.
“Securities Laws”
shall mean the Securities Act; the Exchange Act; the Investment Company Act of 1940, as amended; the Investment Advisers Act of 1940,
as amended; the Trust Indenture Act of 1939, as amended, and the rules and regulations of the SEC promulgated thereunder.
“Starting Price”
means $30.59.
“Statement of Merger”
shall mean the statement of merger to be executed by Mid Penn and William Penn and filed with the PDS in accordance with the laws of
the Commonwealth of Pennsylvania.
“Superior Proposal”
shall have the meaning set forth in Section 6.8(b).
“Surviving Corporation”
shall have the meaning set forth in the Recitals.
“Tax” or “Taxes”
shall mean all federal, state, local and foreign income, excise, gross receipts, gross income, ad valorem, profits, gains, property,
capital, sales, transfer, use, value-added, stamp, documentation, payroll, employment, severance, withholding, duties, license, intangibles,
franchise, backup withholding, environmental, occupation, alternative or add-on minimum taxes imposed by any Governmental Entity, and
other taxes, charges, levies or like assessments, and including all penalties and additions to tax and interest thereon.
“Tax Return”
means any return, declaration or other report (including elections, declarations, schedules, estimates, information and amended returns)
with respect to any Taxes.
“Taxing Authority”
means any governmental or administrative agency, board, bureau, body, department or authority of any United States federal, state or
local jurisdiction or any foreign jurisdiction having jurisdiction with respect to any Tax.
“Termination Date”
shall mean December 1, 2025.
“Treasury Regulations”
means the regulations issued by the IRS.
“Treasury Stock”
shall have the meaning set forth in Section 3.1(b).
“USA PATRIOT Act”
means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.
“Voting Debt”
shall have the meaning set forth in Section 4.2(a).
“William Penn”
shall mean William Penn Bancorporation, a Maryland corporation, with its principal offices located at 10 Canal Street, Suite 104,
Bristol, Pennsylvania 19007. References to William Penn shall mean William Penn on a consolidated basis unless the context clearly indicates
otherwise.
“William Penn Acquisition
Proposal” shall have the meaning set forth in Section 6.8(a).
“William Penn Acquisition
Transaction” shall have the meaning set forth in Section 6.8(a).
“William Penn Affiliate
Letters” shall have the meaning set forth in the Recitals.
“William Penn Bank”
shall mean William Penn Bank, a Pennsylvania-chartered stock savings bank, with its principal offices located at 10 Canal Street, Suite 104,
Bristol, Pennsylvania 19007, which is a wholly-owned subsidiary of William Penn.
“William Penn Benefit
Plan” shall have the meaning set forth in Section 4.12(a).
“William Penn Common
Stock” shall mean the common stock, $0.01 par value per share, of William Penn.
“William Penn Continuing
Employee” shall have the meaning set forth in Section 7.8(e).
“William Penn Disclosure
Schedule” shall mean a written disclosure schedule delivered by William Penn to Mid Penn specifically referring to the appropriate
section of this Agreement.
“William Penn ESOP”
means the William Penn Bank ESOP.
“William Penn ESOP
Loan” shall have the meaning set forth in Section 6.15.
“William Penn Financial
Statements” shall mean (i) the audited consolidated financial statements of William Penn as of June 30, 2024, and for
the two (2) years ended June 30, 2024 and June 30, 2023, including the notes thereto, and (ii) the unaudited
interim consolidated financial
statements of William Penn as of the end of each calendar quarter following June 30, 2024 and for
the periods then ended, including the notes thereto.
“William Penn 401(k) Plan”
shall have the meaning set forth in Section 7.8(h).
“William Penn Foundation”
shall have the meaning set forth in Section 7.15.
“William Penn Insiders”
shall have the meaning set forth in Section 8.6.
“William Penn Material
Contracts” shall have the meaning set forth in Section 4.8(c).
“William Penn Nominee”
shall have the meaning set forth in Section 7.13(a).
“William Penn Option”
shall have the meaning set forth in Section 3.1(e)(1).
“William Penn Permitted
Liens” shall have the meaning set forth in Section 4.9(a).
“William Penn Recommendation”
shall have the meaning set forth in Section 8.1(a).
“William Penn Regulatory
Agreement” shall have the meaning set forth in Section 4.11(c).
“William Penn Regulatory
Reports” means the Call Reports of William Penn Bank and accompanying schedules, as filed with the FDIC, for each calendar quarter
beginning with the quarter ended June 30, 2024, through the Closing Date, and all reports filed with the PDB or FRB by William
Penn or William Penn Bank from June 30, 2024 through the Closing Date.
“William Penn Representative”
shall have the meaning set forth in Section 6.8(a).
“William Penn Restricted
Stock” shall have the meaning set forth in Section 3.1(f).
“William Penn SEC Reports”
shall have the meaning set forth in Section 4.28.
“William Penn Shareholders’
Meeting” shall have the meaning set forth in Section 8.1(a).
“William Penn Subsequent
Determination” shall have the meaning set forth in Section 6.8(e).
“William Penn Subsidiary”
means any subsidiary of William Penn as defined in Rule 1-02(x) of Regulation S-X promulgated by the SEC or the BHCA.
Other terms used herein are
defined in the Preamble, Recitals and elsewhere in this Agreement.
ARTICLE II
THE MERGER
2.1. Merger.
Subject to the terms and
conditions of this Agreement, at the Effective Time: (i) William Penn shall merge with and into Mid Penn, with Mid Penn as the
Surviving Corporation in accordance with the PBCL and MDGCL; and (ii) the separate existence of William Penn shall cease and all
of the rights, privileges, powers, franchises, properties, assets, liabilities and obligations of William Penn shall be vested in and
assumed by Mid Penn in accordance with the applicable laws of the Commonwealth of Pennsylvania and the State of Maryland. As part of
the Merger, each share of William Penn Common Stock will be converted into the right to receive the Merger Consideration pursuant to
the terms of Article III.
2.2. Effective
Time; Closing.
(a) Closing.
The closing (“Closing”) shall occur no later than the later of: (i) the close of business on the tenth (10th)
calendar day following the satisfaction or (to the extent permitted by applicable law) waiver of the conditions set forth in Article IX
(other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or (to the extent
permitted by applicable law) waiver of those conditions), except that Mid Penn may extend such date for up to an additional ten (10) calendar
days by providing written notice to William Penn confirming that all such conditions have been satisfied (or waived) and stating the
date on which Closing shall occur (subject to the satisfaction of those conditions that by their terms are to be satisfied at the Closing
and absent a material breach of this Agreement by either party prior to such date), or (ii) such other date that may be mutually
agreed to in writing by the parties. The Merger shall be effected by the filing of Statement of Merger with the PDS and Articles of Merger
with the Maryland Department with a stated effective time of the day of the Closing (the “Closing Date”) in accordance
with the PBCL and MDGCL. The “Effective Time” shall mean the time specified in the Statement of Merger for the effectiveness
of the Merger or, if no such time is specified, the time of filing of the Statement of Merger.
(b) Time
and Place of Closing. Subject to the provisions of Article IX and Section 2.2(c) hereof, the Closing
of the transactions contemplated hereby shall take place at the offices of Mid Penn at 2407 Park Drive, Harrisburg, PA 17110, or by the
electronic (PDF) facsimile or overnight courier, exchange of executed documents, at 10:00 a.m., or at such other place or time upon which
Mid Penn and William Penn mutually agree.
(c) Deliveries
at Closing. At or prior to Closing there shall be delivered to Mid Penn and William Penn by electronic delivery the opinions, certificates,
and other documents and instruments required to be delivered pursuant to Article IX hereof. At or prior to the Closing,
Mid Penn shall have delivered the Merger Consideration as set forth in Section 3.1 hereof.
2.3. Articles
of Incorporation and Bylaws.
The articles of incorporation
and bylaws of Mid Penn as in effect immediately prior to the Effective Time shall remain in effect and shall be the articles of incorporation
and bylaws of the Surviving Corporation, until thereafter amended as provided therein and in accordance with applicable law. The articles
of incorporation and the bylaws of Mid Penn Bank as in effect immediately prior to the Effective Time of the Bank Merger shall remain
in effect, until thereafter amended as provided therein and in accordance with applicable law.
2.4. Directors
and Officers.
(a) Subject
to Section 2.4(e), the directors of Mid Penn immediately prior to the Effective Time shall be the directors of Mid Penn,
as the Surviving Corporation, after the Effective Time, each to hold office in accordance with the articles of incorporation and the
bylaws of Mid Penn, until their respective successors are duly elected or appointed (as the case may be) and qualified, or their earlier
death, resignation or removal.
(b) The
officers of Mid Penn immediately prior to the Effective Time shall be the officers of Mid Penn, as the Surviving Corporation, after the
Effective Time, each to hold office in accordance with the articles of incorporation and the bylaws of Mid Penn, until their respective
successors are duly appointed.
(c) Subject
to Section 2.4(e), the directors of Mid Penn Bank immediately prior to the Effective Time shall be the directors of Mid
Penn Bank after the Effective Time, each to hold office in accordance with the articles of incorporation and the bylaws of Mid Penn Bank,
until their respective successors are duly elected or appointed (as the case may be) and qualified, or their earlier death, resignation
or removal.
(d) The
officers of Mid Penn Bank immediately prior to the Effective Time shall be the officers of Mid Penn Bank after the Effective Time, each
to hold office in accordance with the articles of incorporation and the bylaws of Mid Penn Bank, until their respective successors are
duly appointed, and Kenneth J. Stephon shall be appointed as Vice Chairman of Mid Penn Bank.
(e) Subject
to the appointment of the William Penn Nominee in accordance with Section 7.13(a), the directors of Mid Penn and Mid Penn Bank
immediately prior to the Effective Time shall continue to serve and continue in their capacity as directors in accordance with the articles
of incorporation and bylaws of Mid Penn and Mid Penn Bank, respectively. Mid Penn shall offer all directors of William Penn, other than
the William Penn Nominee, a three-year paid advisory board position. Nothing in this Section 2.4(e) shall require
the election or appointment of any individual whose election or appointment is prohibited or advised against in writing by any Bank Regulator.
2.5.
Effects of the Merger.
At and after the Effective
Time, the Merger shall have the effects as set forth in the applicable provisions of the PBCL, the MDGCL and this Agreement.
2.6.
Tax Consequences.
It is intended that the Merger
shall constitute a “reorganization” within the meaning of Section 368(a) of the Code and that this Agreement
shall constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code. From and after the date of
this Agreement and until the Closing, each party hereto shall use commercially reasonable efforts to cause the Merger to qualify, and
will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken which
action or failure to act could prevent the Merger from qualifying as a reorganization under Section 368(a) of the Code. Following
the Closing, neither Mid Penn nor any of their Affiliates shall knowingly take any action, cause any action to be taken, fail to take
any action or cause any action to fail to be taken, which action or failure to act could cause the Merger to fail to qualify as a reorganization
under Section 368(a) of the Code. Mid Penn and William Penn each hereby agrees to deliver certificates substantially in compliance
with IRS published advance ruling guidelines (and including such additional covenants, statements and representations deemed necessary
or appropriate by counsel for Mid Penn and William Penn, respectively), with customary exceptions and modifications thereto, at such
time or times as may reasonably be requested by counsel, including at the time Mid Penn files such opinions with the SEC as part of the
Registration Statement, at any time that Mid Penn exercises its right to change the method of effecting the business combination contemplated
by this Agreement (as more fully described below) and at the Closing Date, to enable counsel to execute such legal opinions to be filed
with the Registration Statement as required by the SEC or deliver the legal opinions contemplated by Section 9.1(e), which
certificates shall be effective as of the date of such opinions. Mid Penn may at any time change the method of effecting the business
combination contemplated by this Agreement if and to the extent that it deems such a change to be desirable; provided, however,
that such change shall be subject to the written consent of William Penn which shall not be unreasonably withheld, and no such change
shall (i) alter or change the amount or kind of consideration to be issued to holders of William Penn Common Stock as Merger Consideration
or the holders of William Penn Options, (ii) materially impede or delay consummation of the Merger (or such alternate form of business
combination), jeopardize or delay receipt of any Regulatory Approvals or other consents and approvals relating to the consummation of
the Merger or cause any condition to Closing set forth in Article IX not to be capable of being fulfilled, (iii) result
in any adverse federal or state income tax or other adverse tax consequences to William Penn shareholders as a result of such modification
or structure or (iv) require submission to or approval of William Penn’s shareholders after this Agreement has been approved
by William Penn’s shareholders. In the event Mid Penn elects to make such a change, the parties agree to execute appropriate documents
to reflect the change.
2.7.
Bank Merger.
Mid Penn and William Penn
shall cause William Penn Bank to merge (the “Bank Merger”) with and into Mid Penn Bank, with Mid Penn Bank surviving
such merger, immediately, or as soon as reasonably practicable, after the Effective Time in accordance with the Bank Plan of Merger,
which will be substantially in the Form of Exhibit C attached hereto (the “Bank Plan of Merger”).
In addition, immediately, or as soon as reasonably practicable, after the execution and delivery of this Agreement, Mid Penn will cause
Mid Penn Bank, and William Penn will cause
William Penn Bank, to execute and deliver the Bank Plan of Merger. Each of Mid Penn and William
Penn shall approve the Bank Plan of Merger and the Bank Merger as the sole stockholder of Mid Penn Bank and William Penn Bank, respectively,
to execute certificates or articles of merger and other documents and certificates as are necessary to make the Bank Merger effective
immediately following the Effective Time. The Bank Merger shall become effective at such time and date as specified in the Bank Plan
of Merger in accordance with applicable law, or at such other time as shall be provided by applicable law.
ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.1.
Merger Consideration; Effect on Shares.
At the Effective Time, by
virtue of the Merger and without any action on the part of Mid Penn, William Penn or the holders of any of the shares of William Penn
Common Stock, the Merger shall be effected in accordance with the following terms:
(a) Each
share of Mid Penn Common Stock that is issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding
following the Effective Time and shall be unchanged by the Merger.
(b) All
shares of William Penn Common Stock held in the treasury of William Penn (“Treasury Stock”), each share of William
Penn Common Stock owned by Mid Penn immediately prior to the Effective Time (if any) (other than shares held in a fiduciary capacity
or in connection with debts previously contracted) (“Mid Penn Owned Shares”) and each share of William Penn Common
Stock that is remitted to William Penn prior to the Effective Time for purposes of repayment of the William Penn ESOP Loan balance as
contemplated by Section 6.15 (the “ESOP Loan Shares”) shall, at the Effective Time, cease to exist, and
the Certificates for such shares shall be cancelled as promptly as practicable thereafter, and no payment or distribution shall be made
in consideration therefor.
(c) Subject
to the provisions of this Agreement, at the Effective Time, automatically by virtue of the Merger and without any action on the part
of any Person, each share of William Penn Common Stock (excluding Treasury Stock, Mid Penn Owned Shares and ESOP Loan Shares) issued
and outstanding immediately prior to the Effective Time shall be converted into the right to receive 0.426 shares of Mid Penn Common
Stock (the “Exchange Ratio”). The shares of Mid Penn Common Stock to be issued to holders of William Penn Common Stock
as set forth in this Article III is referred to as the “Merger Consideration.”
(d) After
the Effective Time, shares of William Penn Common Stock shall be no longer outstanding and shall automatically be cancelled and shall
cease to exist, and shall represent thereafter by operation of this section only the right to receive the Merger Consideration as set
forth in this Article III and, if applicable, any dividends or distributions with respect thereto or any dividends or distributions
with a record date prior to the Effective Time that were declared or made by William Penn on such shares of William Penn Common Stock
in accordance with this Agreement on or prior to the Effective Time.
(e) Stock
Options.
(1) At
the Effective Time, each option granted by William Penn to purchase shares of William Penn Common Stock (“William Penn Option”)
which is outstanding and unexercised immediately prior to the Effective Time, whether or not then vested and exercisable, shall cease
to represent a right to acquire shares of William Penn Common Stock and shall be converted automatically into an option to purchase shares
of Mid Penn Common Stock, and Mid Penn shall assume each William Penn Option, and, thereafter, each such assumed William Penn Option
shall continue to be subject to the terms of the applicable William Penn Benefit Plan or other agreement by which it is evidenced, except
that from and after the Effective Time, (i) Mid Penn and a disinterested committee of the Mid Penn board of directors shall be
substituted for William Penn and the committee of the William Penn board of directors administering such William Penn Benefit Plan, (ii) each
William Penn Option assumed by Mid Penn may be exercised solely for shares of Mid Penn Common Stock, (iii) the number of shares
of Mid Penn Common Stock subject to such William Penn Option shall be equal to the number of shares of William Penn Common Stock subject
to such William Penn Option immediately prior to the Effective Time multiplied by the Exchange Ratio, provided that any fractional shares
of Mid Penn Common Stock resulting from such multiplication shall be rounded down to the nearest share and (iv) the per share exercise
price under each such William Penn Option shall be adjusted by dividing the per share exercise price under each such William Penn Option
by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent. Notwithstanding clauses (iii) and
(iv) of the immediately preceding sentence, each William Penn Option which is an “incentive stock option” shall be
adjusted as required by Sections 409A and 424 of the Code, and the regulations and guidance promulgated thereunder, so as not to constitute
a modification, extension or renewal of the option within the meaning of Sections 409A and 424(h) of the Code. Mid Penn and William
Penn agree to take all necessary steps to effect the foregoing provisions of this Section 3.1(e)(1), including in the case
of Mid Penn taking all corporate action necessary to reserve for issuance a sufficient number of shares of Mid Penn Common Stock for
delivery upon exercise of the options to issue shares of Mid Penn Common Stock issued in accordance herewith.
(2) As
soon as practicable after the Effective Time, Mid Penn shall use its reasonable efforts to file a registration statement on Form S-3
or Form S-8, as the case may be (or any successor or other appropriate forms), with respect to the shares of Mid Penn Common Stock
subject to the options referred to in Section 3.1(e)(1) and shall use its reasonable efforts to maintain the current
status of the prospectus or prospectuses contained therein for so long as such options remain outstanding in the case of a Form S-8
or, in the case of a Form S-3, until the shares subject to such options may be sold without a further holding period under Rule 144
of the Securities Act.
(3) As
soon as practicable after the Effective Time, Mid Penn shall deliver to the holders of William Penn Options at the Effective Time appropriate
notices setting forth the effect of the adjustments described in Section 3.1(e)(1) and advising of the registration
of the shares of Mid Penn Common Stock issuable upon exercise thereof after consummation of the Merger.
(4) With
respect to those individuals who, subsequent to the Merger, will be subject to the reporting requirements under Section 16(a) of
the Exchange Act, where applicable, Mid Penn shall administer the William Penn Benefit Plans in a manner consistent with the exemptions
provided by Rule 16b-3 promulgated under the Exchange Act.
(f) Restricted
Stock. At the Effective Time, each restricted stock award granted by William Penn (“William Penn Restricted Stock”)
which is outstanding immediately prior to the Effective Time and with respect to which the applicable restrictions have not yet lapsed,
shall be assumed by Mid Penn and, thereafter, each such assumed award for William Penn Restricted Stock shall continue to be subject
to the terms of the applicable William Penn Benefit Plan or other agreement by which it is evidenced, except that from and after the
Effective Time, (i) Mid Penn and a disinterested committee of the Mid Penn board of directors shall be substituted for William
Penn and the committee of the William Penn board of directors administering such William Penn Benefit Plan and (ii) the number
of shares of Mid Penn Common Stock subject to each William Penn Restricted Stock award agreement shall be equal to the number of shares
of William Penn Common Stock subject to such award assumed immediately prior to the Effective Time multiplied by the Exchange Ratio,
provided that any fractional shares of Mid Penn Common Stock resulting from such multiplication shall be rounded down to the nearest
share. William Penn Disclosure Schedule 3.1(f) sets forth a listing of all William Penn Restricted Stock Awards outstanding
on the date hereof, the name of the holder, date of issuance, number of shares and vesting schedule.
(g) In
the event Mid Penn changes the number of shares of Mid Penn Common Stock issued and outstanding between the date hereof and the Effective
Time as a result of a stock split, stock dividend, extraordinary dividend, recapitalization, reclassification, split up, combination,
merger, issuer tender offer, exchange of shares, readjustment or similar capitalization change and the record date therefor shall be
prior to the Effective Time, the Merger Consideration shall be proportionately adjusted to give William Penn and the holders of William
Penn Common Stock the same economic effect as contemplated by this Agreement prior to such events. In addition, in the event Mid Penn
enters into an agreement pursuant to which shares of Mid Penn Common Stock would be converted into shares or other securities or obligations
of another corporation, proper provision shall be made in such agreement so that each holder of William Penn Common Stock entitled to
receive shares of Mid Penn Common Stock in the Merger shall be entitled to receive such number of shares or other securities or amount
or obligations of such other corporation as such shareholder would be entitled to receive if the Effective Time had occurred immediately
prior to the happening of such event.
(h) Notwithstanding
anything to the contrary contained herein, no certificates or scrip representing fractional shares of Mid Penn Common Stock shall be
issued upon the surrender for exchange of Certificates, no dividend or distribution with respect to Mid Penn Common Stock shall be payable
on or with respect to any fractional share interest, and such fractional share interests shall not entitle the owner thereof to vote
or to any other rights of a shareholder of Mid Penn. In lieu of the issuance of any such fractional share, Mid Penn shall pay to each
former holder of William Penn Common Stock who otherwise would be entitled to receive a fractional share of Mid Penn Common Stock, an
amount in cash, rounded to the nearest cent and without interest, equal to the product of (i) the fraction of a share (after taking
into account all shares of William Penn Common Stock held by such holder immediately prior to the Effective Time) of Mid
Penn Common
Stock to which such holder would otherwise have been entitled pursuant to this Section 3.1 and (ii) the closing sale
price of Mid Penn Common Stock on the fifth (5th) Business Day prior to the Closing Date. For purposes of determining any
fractional share interest, all shares of William Penn Common Stock owned by a William Penn shareholder shall be combined so as to calculate
the maximum number of whole shares of Mid Penn Common Stock issuable to such William Penn shareholder. The parties acknowledge that the
payment of such cash consideration in lieu of issuing fractional shares is not separately bargained-for consideration, but merely represents
a mechanical rounding off for purposes of avoiding the expense and inconvenience that would otherwise be caused by the issuance of fractional
shares.
3.2.
Procedures for Exchange of William Penn Common Stock.
(a) Exchange
Procedures.
(1) Five
(5) days prior to the Effective Time, or as soon as practical prior to the Effective Time, Mid Penn shall (A) deposit, or
shall cause to be deposited, with the Exchange Agent for the benefit of the holders of William Penn Common Stock, an amount of cash necessary
to make payments of any dividends or distributions with a record date occurring on or after the Effective Time with respect to the Merger
Consideration (without any interest on any such dividends or distributions) and cash for fractional shares pursuant to Section 3.1(h))
and (B) provide the Exchange Agent with the irrevocable authorization to issue such cash and sufficient shares of Mid Penn Common
Stock in book entry form (“Book-Entry Shares”) (such cash and Book-Entry Shares, together with any dividends or distributions
with respect thereto, being hereinafter referred to as the “Exchange Fund”).
(2) Promptly
after the Effective Time, but in no event later than five (5) Business Days thereafter, Mid Penn shall cause the Exchange Agent
to mail or deliver to each Person who was, immediately prior to the Effective Time, a holder of record of William Penn Common Stock a
notice advising such holders of the effectiveness of the Merger, including a form of letter of transmittal in a form reasonably satisfactory
to Mid Penn and William Penn (“Letter of Transmittal”) containing instructions for use in effecting the surrender
of Certificates in exchange for the Merger Consideration and cash for any fractional shares of Mid Penn Common Stock which shall specify
that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon (i) with respect to shares evidenced
by Certificates, proper delivery to the Exchange Agent of the Certificates and the transmittal materials, duly, completely and validly
executed in accordance with the instructions thereto, and (ii) with respect to book-entry shares, proper delivery of an “agent’s
message” regarding the book-entry transfer of book-entry shares (or such other evidence (if any) of the transfer as the Exchange
Agent may reasonably request). Upon surrender to the Exchange Agent of a Certificate or book-entry shares for cancellation together with
such Letter of Transmittal, duly executed and completed in accordance with the instructions thereto, the holder of such Certificate or
book-entry shares shall promptly be provided in exchange therefor, but in no event later than five (5) Business Days after due
surrender, a certificate, or at the election of Mid Penn, a statement reflecting shares issued in book-entry form, representing the Merger
Consideration to which such holder is entitled pursuant to this Article III, plus a check for any amounts due pursuant to
Section 3.1(h), any dividends or other distributions to which such holder is entitled pursuant to Section 3.2(a)(1) and
the Certificate or book-entry share so
surrendered shall forthwith be cancelled. No interest will accrue or be paid with respect to any
property to be delivered upon surrender of Certificates or book-entry shares.
(b) Rights
of Certificate Holders after the Effective Time. The holder of a Certificate that prior to the Merger represented issued
and outstanding William Penn Common Stock shall have no rights, after the Effective Time, with respect to such William Penn Common Stock
except to surrender the Certificate in exchange for the Merger Consideration as provided in this Agreement. No dividends or other distributions
declared after the Effective Time with respect to Mid Penn Common Stock shall be paid to the holder of any unsurrendered Certificate
until the holder thereof shall surrender such Certificate in accordance with this Section 3.2. After the surrender of a
Certificate in accordance with this Section 3.2, the record holder thereof shall be entitled to receive, without any interest
thereon, any such dividends or other distributions with a record date after the Effective Time, which theretofore had become payable
with respect to shares of Mid Penn Common Stock represented by such Certificate.
(c) Surrender
by Persons Other than Record Holders. If the Person surrendering a Certificate and signing the accompanying Letter of Transmittal
is not the record holder thereof, then it shall be a condition of the payment of the Merger Consideration that: (i) such Certificate
is properly endorsed to such Person or is accompanied by appropriate stock powers, in either case signed exactly as the name of the record
holder appears on such Certificate, and is otherwise in proper form for transfer, or is accompanied by appropriate evidence of the authority
of the Person surrendering such Certificate and signing the Letter of Transmittal to do so on behalf of the record holder; and (ii) the
Person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other taxes required by reason of the payment
to a Person other than the registered holder of the Certificate surrendered, or required for any other reason, or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not payable.
(d) Closing
of Transfer Books. From and after the Effective Time, there shall be no transfers on the stock transfer books of William Penn of
the shares of William Penn Common Stock that were issued and outstanding immediately prior to the Effective Time. If, after the Effective
Time, William Penn Certificates representing such shares are presented for transfer, they shall be cancelled and exchanged for the Merger
Consideration as provided in this Article III.
(e) Withholding.
The Exchange Agent will be entitled to deduct and withhold from the Merger Consideration otherwise payable pursuant to this Agreement
or the transactions contemplated hereby to any holder of William Penn Common Stock such amounts as Mid Penn or the Exchange Agent is
required to deduct and withhold with respect to the making of such payment under the Code, or any applicable provision of U.S. federal,
state, local or non-U.S. tax law. To the extent that such amounts are properly withheld by the Exchange Agent, such withheld amounts
will be treated for all purposes of this Agreement as having been paid to the holder of the William Penn Common Stock in respect of whom
such deduction and withholding were made by the Exchange Agent.
(f) Return
of Exchange Fund. At any time following the twelve (12) month period after the Effective Time, Mid Penn shall be entitled to
require the Exchange Agent to deliver to it any portions of the Exchange Fund that had been made available to the Exchange Agent and
not
disbursed to holders of Certificates (including, without limitation, all interest and other income received by the Exchange Agent
in respect of all funds made available to it), and thereafter such holders shall be entitled to look to Mid Penn (subject to abandoned
property, escheat and other similar laws) with respect to any Merger Consideration that may be payable upon due surrender of the Certificates
held by them. Notwithstanding the foregoing, neither Mid Penn nor the Exchange Agent shall be liable to any holder of a Certificate for
any Merger Consideration delivered in respect of such Certificate to a public official pursuant to applicable abandoned property, escheat
or other similar law.
(g) Lost,
Stolen or Destroyed Certificates. In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by Mid Penn, the posting
by such Person of a bond in such amount as Mid Penn may reasonably direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration deliverable in respect thereof.
(h) Mid
Penn, in the exercise of its reasonable discretion, shall have the right to make all determinations, not inconsistent with the terms
of this Agreement, governing (A) the validity of the Letters of Transmittal and compliance by any William Penn shareholder with
the exchange procedures set forth herein, (B) the issuance and delivery of shares of Mid Penn Common Stock into which shares of
William Penn Common Stock are converted in the Merger and (C) the method of payment of cash in lieu of fractional shares of Mid
Penn Common Stock.
(i) Reservation
of Shares. Mid Penn shall reserve for issuance a sufficient number of shares of Mid Penn Common Stock for the purpose of issuing
shares of Mid Penn Common Stock to the William Penn shareholders in accordance with this Article III.
3.3.
Dissenting Shareholders.
Pursuant to the MDGCL and
William Penn’s articles of incorporation, holders of William Penn Common Stock are not entitled to dissenters’ rights in
the Merger.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF WILLIAM PENN
William Penn represents and
warrants to Mid Penn that the statements contained in this Article IV are correct and complete as of the date of this Agreement,
except (i) as set forth in the William Penn Disclosure Schedules delivered by William Penn to Mid Penn on the date hereof
(it being understood that (i) the mere inclusion of an item in the William Penn Disclosure Schedule as an exception to a representation
or warranty shall not be deemed an admission by William Penn that such item represents a material exception or fact, event or circumstance
or that such item would reasonably be expected to have a Material Adverse Effect) or (ii) disclosed in any report, schedule, form
or other document filed with or furnished to the SEC by William Penn prior to the date hereof and on or after the date on which William
Penn filed with the SEC its Annual Report on Form 10-K for the fiscal year ended June 30, 2024 (but excluding any risk factor
disclosures
contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements”
disclaimer or any other statements that are similarly non-specific or predictive or forward-looking in nature) unless such information
is specifically requested herein to be included in the William Penn Disclosure Schedules. Information and documents commonly known as
“confidential supervisory information” that is prohibited from disclosure shall not be disclosed by William Penn and nothing
in this Agreement shall require such disclosure. William Penn has made a good faith effort to ensure that the disclosure on each schedule
of the William Penn Disclosure Schedule corresponds to the section referenced herein. However, for purposes of the William Penn
Disclosure Schedule, any item disclosed on any schedule therein is deemed to be fully disclosed with respect to all schedules under which
such item may be relevant. References to the Knowledge of William Penn shall mean to the Knowledge of those Persons identified in William
Penn Disclosure Schedule 4.0.
4.1.
Organization.
(a) William
Penn is a corporation duly organized and subsisting under the laws of the State of Maryland, and is duly registered as a bank holding
company under the BHCA. William Penn has the requisite corporate power and authority to carry on its business as now conducted and is
duly licensed or qualified to do business in the State of Maryland and foreign jurisdictions where its ownership or leasing of property
or the conduct of its business requires such license or qualification, except where the failure to be so licensed or qualified would
not, individually or in the aggregate, have a Material Adverse Effect.
(b) William
Penn Bank is a Pennsylvania-chartered stock savings bank duly organized and validly subsisting under the laws of the Commonwealth of
Pennsylvania and is regulated by the PDB and the FDIC. William Penn Bank has the requisite corporate power and authority to carry on
its business as now conducted and is duly licensed or qualified to do business in the Commonwealth of Pennsylvania and foreign jurisdictions
where its ownership or leasing of property or the conduct of its business requires such license or qualification, except where the failure
to be so licensed or qualified would not, individually or in the aggregate, have a Material Adverse Effect. The deposits of William Penn
Bank are insured by the FDIC to the fullest extent permitted by law, and all premiums and assessments required to be paid in connection
therewith have been paid by William Penn Bank when due. William Penn Bank is a member in good standing of the FHLB and owns the requisite
amount of stock therein.
(c) William
Penn Disclosure Schedule 4.1(c) sets forth each William Penn Subsidiary, the state of organization of each William Penn
Subsidiary and the percentage of the outstanding equity securities, membership or other interests of such William Penn Subsidiary owned
by William Penn or William Penn Bank. Each William Penn Subsidiary is a corporation, limited liability company or other entity duly organized,
validly subsisting and in good standing under the laws of its jurisdiction of incorporation or organization. Each William Penn Subsidiary
has the requisite corporate power and authority to carry on its business as now conducted and is duly licensed or qualified to do business
in the Commonwealth of Pennsylvania and foreign jurisdictions where its ownership or leasing of property or the conduct of its business
requires such license or qualification, except where the failure to be so licensed or qualified would not, individually or in the aggregate,
have a Material Adverse Effect.
(d) The
respective minute books of William Penn, William Penn Bank and each William Penn Subsidiary accurately records, in all material respects,
all material corporate actions of their respective shareholders and boards of directors (including all committees thereof).
(e) Prior
to the date of this Agreement, William Penn has made available to Mid Penn true and correct copies of the articles of incorporation and
bylaws of William Penn and similar governing documents of William Penn Bank and each other William Penn Subsidiary, each as in effect
on the date hereof.
4.2.
Capitalization.
(a) The
authorized capital stock of William Penn consists of One Hundred and Fifty Million 150,000,000 shares of William Penn Common Stock, $0.01
par value per share, and Fifty Million 50,000,000 shares of preferred stock, $0.01 par value per share. As of the date of this Agreement,
there are (i) 9,208,217 shares of William Penn Common Stock issued and outstanding, (ii) zero shares of William Penn Preferred
Stock issued and outstanding, (iii) zero shares of William Penn Common Stock held by William Penn as Treasury Stock and (iv) 1,264,000
shares of William Penn Common Stock reserved for issuance upon exercise of outstanding stock options or otherwise. All of the issued
and outstanding shares of William Penn Common Stock have been duly authorized and validly issued, are fully paid, nonassessable and free
of preemptive rights. Except as set forth on William Penn Disclosure Schedule 4.2(a), as of the date of this Agreement, no bonds,
debentures, notes or other indebtedness having the right to vote on any matters on which shareholders may vote (“Voting Debt”)
of William Penn, nor any trust preferred or subordinated debt securities of William Penn, are issued or outstanding. Except as set forth
on William Penn Disclosure Schedule 4.2(a), there are no outstanding subscriptions, options, warrants, puts, calls, rights,
exchangeable or convertible securities or other commitments or agreements of any character relating to the issued or unissued capital
stock or other securities of William Penn, or otherwise obligating William Penn to issue, transfer, sell, purchase, redeem, or otherwise
acquire, to register under the Securities Act and the rules and regulations of the SEC thereunder, or to pay a dividend on any
such securities. Except for the William Penn Affiliate Letters, to William Penn’s Knowledge, there are no voting trusts, shareholder
agreements, proxies or other agreements in effect with respect to the voting or transfer of the William Penn Common Stock or other equity
interests of William Penn.
(b) William
Penn owns all of the capital stock of William Penn Bank, free and clear of any Lien. Except for the William Penn Subsidiaries, William
Penn does not possess, directly or indirectly, any material equity interest in any corporate entity, except for equity interests held
in the investment portfolios of William Penn Subsidiaries, equity interests held by William Penn Subsidiaries in a fiduciary capacity,
and equity interests held in connection with the lending or borrowing activities of William Penn Subsidiaries, including stock in the
FHLB and Atlantic Community Bankers Bank. Either William Penn or William Penn Bank owns all of the outstanding shares of capital stock
or equity interests of each William Penn Subsidiary free and clear of all Liens.
(c) To
William Penn’s Knowledge, except as set forth on William Penn Disclosure Schedule 4.2(c), as of the date of this Agreement
no Person or “group” (as that term is used in
Section 13(d)(3) of the Exchange Act) is the beneficial owner (as
defined in Section 13(d) of the Exchange Act) of five percent (5%) or more of the outstanding shares of William Penn Common
Stock.
(d) All
contractual or other rights or obligations (including preemptive rights) of William Penn to purchase or sell any shares of capital stock,
partnership, membership or joint venture interests, or other equitable interests in any Person are set forth on William Penn Disclosure
Schedule 4.2(d).
4.3.
Authority; No Violation.
(a) William
Penn has full corporate power and authority to execute and deliver this Agreement and, subject to the receipt of the Regulatory Approvals
and the approval of this Agreement by William Penn’s shareholders, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by William Penn and the consummation by William Penn of the transactions contemplated hereby, including
the Merger, have been duly and validly approved by the Board of Directors of William Penn, and no other corporate proceedings on the
part of William Penn, except for the approval of the William Penn shareholders, the execution and delivery of the Bank Plan of Merger
by William Penn Bank and the consent of the sole shareholder of William Penn Bank are necessary to consummate the transactions contemplated
hereby, including the Merger. This Agreement has been duly and validly executed and delivered by William Penn and, subject to (i) approval
by the shareholders of William Penn, (ii) receipt of the Regulatory Approvals, and (iii) due and valid execution and delivery
of this Agreement by Mid Penn, constitutes the valid and binding obligation of William Penn, enforceable against William Penn in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium and similar laws affecting creditors’
rights generally and by general principles of equity.
(b) Subject
to receipt of Regulatory Approvals, approval by the required vote of William Penn’s shareholders and, with respect to the issuance
of Mid Penn Common Stock in the Merger, Mid Penn’s shareholders and William Penn’s and Mid Penn’s compliance with any
conditions contained herein, (i) the execution and delivery of this Agreement by William Penn, (ii) the consummation of the
transactions contemplated hereby, and (iii) compliance by William Penn with any of the terms or provisions hereof will not (A) conflict
with or result in a breach of any provision of the articles of incorporation or bylaws of William Penn, (B) violate any statute,
code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to William Penn or any of its properties or
assets, or (C) except as set forth in William Penn Disclosure Schedule 4.3(b), violate, conflict with, result in a
breach of any provisions of, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default)
under, result in the termination of, accelerate the performance required by, or result in a right of termination or acceleration or the
creation of any Lien upon any of the properties or assets of William Penn under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which William Penn is a party,
or by which William Penn or any of its properties or assets may be bound or affected, except, with respect to (B) and (C), for
any violations, conflicts, breaches, defaults or other occurrences which would not, individually or in the aggregate, constitute a Material
Adverse Effect.
4.4.
Consents.
Except for the Regulatory
Approvals, approval of the shareholders of William Penn, and consents, approvals, filings and registrations from or with the SEC, Nasdaq
and state “blue sky” authorities, and compliance with any conditions contained therein, no consents or approvals or waivers
of, or filings or registrations with, any Governmental Entity are, or will be, necessary, and no consents or approvals of any third parties
are, or will be, necessary, in connection with (a) the execution and delivery of this Agreement by William Penn or the Bank Plan
of Merger by William Penn Bank and (b) the completion by William Penn of the transactions contemplated hereby or by William Penn
Bank of the Bank Merger. As of the date of this Agreement, William Penn (x) has no reason to believe that the consents and approvals
set forth above will not be received or will be received with conditions, limitations or restrictions unacceptable to it or which would
adversely impact the ability of William Penn or William Penn Bank to complete the transactions contemplated by this Agreement and (y) knows
of no reason why all Regulatory Approvals or any other approvals from any Governmental Entity required for the consummation of the transactions
contemplated by this Agreement should not be obtained on a timely basis.
4.5.
Financial Statements; Undisclosed Liabilities.
(a) William
Penn has previously made available, or will make available, to Mid Penn the William Penn Regulatory Reports. The William Penn Regulatory
Reports have been, or will be, prepared in all material respects in accordance with applicable regulatory accounting principles and practices,
including, but not limited to, all applicable rules, regulations and pronouncements of applicable Bank Regulators, throughout the periods
covered by such statements, and fairly present, or will fairly present, in all material respects the financial position, results of operations
and changes in shareholders’ equity of William Penn as of and for the periods ended on the dates thereof, in accordance with applicable
regulatory accounting principles, including, but not limited to, all applicable rules, regulations and pronouncements of applicable Bank
Regulators, applied on a consistent basis.
(b) William
Penn has previously made available, or will make available, to Mid Penn the William Penn Financial Statements. The William Penn Financial
Statements have been, or will be, prepared in accordance with GAAP, and (including the related notes where applicable) fairly present,
or will fairly present, in each case in all material respects the consolidated financial position, results of operations and cash flows
of William Penn and the William Penn Subsidiaries as of and for the respective periods ending on the dates thereof (subject in the case
of the unaudited interim statements to normal year-end adjustments and to any other adjustments described therein), in accordance with
GAAP during the periods involved, except as indicated in the notes thereto and except in the case of unaudited statements to normal recurring
audit adjustments and the absence of certain footnotes.
(c) As
of the date of each balance sheet included in the William Penn Financial Statements, neither William Penn nor William Penn Bank has had,
or will have, any material liabilities, obligations or loss contingencies of any nature (whether absolute, accrued, contingent or otherwise)
of a type required to be reflected in such William Penn Financial Statements or William Penn Regulatory Reports or in the footnotes thereto
which are not fully reflected or
reserved against therein or fully disclosed in a footnote thereto and except in the case of unaudited
statements to normal recurring audit adjustments and the absence of certain footnotes.
(d) The
records, systems, controls, data and information of William Penn and the William Penn Subsidiaries are recorded, stored, maintained and
operated under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive
ownership and direct control of William Penn or any William Penn Subsidiary (including all means of access thereto and therefrom), except
for any non-exclusive ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect. William
Penn (i) has, to the extent required by applicable law or GAAP, implemented and maintains a system of internal control over financial
reporting that is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of its
financial statements for external purposes in accordance with GAAP, (ii) to the extent required by applicable law, has implemented
and maintains disclosure controls and procedures to ensure that material information relating to William Penn, including its consolidated
William Penn Subsidiaries, is made known to the chief executive officer and the chief financial officer of William Penn by others within
those entities, and (iii) has disclosed, based on its most recent evaluation prior to the date hereof, to William Penn’s
outside auditors and the audit committee of William Penn’s Board of Directors (A) any significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect William
Penn’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material,
that involves management or other employees who have a significant role in William Penn’s internal control over financial reporting.
These disclosures (if any) were made in writing by management to William Penn’s auditors and audit committee and a copy has previously
been made available to Mid Penn.
(e) Since
June 30, 2021, (i) neither William Penn nor any of the William Penn Subsidiaries, nor to the Knowledge of William Penn, any
director, officer, employee, auditor, accountant or representative of William Penn or any of the William Penn Subsidiaries, has received
or otherwise had or obtained Knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding
the accounting or auditing practices, procedures, methodologies or methods of William Penn or any of the William Penn Subsidiaries or
their respective internal accounting controls, including any material complaint, allegation, assertion or claim that William Penn or
any of the William Penn Subsidiaries has engaged in illegal accounting or auditing practices, and (ii) no attorney representing
William Penn or any of the William Penn Subsidiaries, whether or not employed by William Penn or any of the William Penn Subsidiaries,
has reported evidence of a material violation of Securities Laws, breach of fiduciary duty or similar violation by William Penn or any
of its officers, directors, employees or agents to the Board of Directors of William Penn or any committee thereof or to any director
or officer of William Penn.
4.6.
Taxes.
(a) All
income and other material or material in the aggregate Tax Returns required to have been filed by William Penn and any of the William
Penn Subsidiaries have been, or will be, duly and timely filed (taking into account extensions of time to file), and each such Tax Return
is,
or will be, true, correct and complete in all material respects. All income and other material Taxes due and payable by William Penn
and any of the William Penn Subsidiaries (whether or not shown on any Tax Return) have been paid.
(b) Except
as set forth on William Penn Disclosure Schedule 4.6(b), there is no action, audit, dispute or claim now pending or proposed or
threatened in writing against William Penn or any of the William Penn Subsidiaries in respect of Taxes. Except as set forth on William
Penn Disclosure Schedule 4.6(b), neither William Penn nor any of the William Penn Subsidiaries is the beneficiary of any extension
of time within which to file any income or other material Tax Return which Tax Return has not been filed. No written claim has been made
by a Taxing Authority in the last five (5) years in a jurisdiction where William Penn or any of the William Penn Subsidiaries did
not file Tax Returns that it is or may be subject to taxation in that jurisdiction. There are no Liens on any of the assets of William
Penn with respect to Taxes other than for Taxes not yet due and payable.
(c) William
Penn and any of the William Penn Subsidiaries has withheld and timely paid all material Taxes required to have been withheld and paid
in connection with amounts paid and has complied with all information reporting and backup withholding requirements in all material respects.
(d) William
Penn Disclosure Schedule 4.6(d) lists all Tax Returns filed by William Penn or the William Penn Subsidiaries for taxable periods
ended on or after June 30, 2016 that have been or are currently the subject of audit. Except as set forth on William Penn Disclosure
Schedule 4.6(d), neither William Penn nor any of the William Penn Subsidiaries has waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency which waiver or extension is still in effect.
(e) No
foreign, federal, state, or local tax audits or administrative or judicial Tax proceedings are being conducted or to the Knowledge of
William Penn are pending with respect to William Penn or any of the William Penn Subsidiaries. Neither William Penn nor any of the William
Penn Subsidiaries has received from any foreign, federal, state, or local Taxing Authority (including jurisdictions where William Penn
has not filed Tax Returns) any (i) notice indicating an intent to open an audit or other review, (ii) request for information
related to Tax matters, or (iii) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed
by any Taxing Authority against William Penn or any of the William Penn Subsidiaries.
(f) William
Penn is not a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code. Neither
William Penn nor any of the William Penn Subsidiaries has been a member of a Relevant Group other than a Relevant Group of which William
Penn is the parent.
(g) Neither
William Penn nor any of the William Penn Subsidiaries has agreed to, or is required to, make any adjustment under Section 481(a) of
the Code. Neither William Penn nor any of the William Penn Subsidiaries has been a “distributing corporation” or a “controlled
corporation” with respect to a transaction described in Section 355 of the Code within the five (5) year period ending
as of the date of this Agreement. Neither William Penn nor any of the William
Penn Subsidiaries is subject to a private ruling from or
agreement with any Taxing Authority. William Penn has disclosed on its federal income Tax Returns all positions taken in those Tax Returns
that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. Except
as set forth on William Penn Disclosure Schedule 4.6(g), neither William Penn nor any of the William Penn Subsidiaries has participated
in any “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4.
(h) Except
as set forth on William Penn Disclosure Schedule 4.6(h), neither William Penn nor any of the William Penn Subsidiaries is a party
to an agreement the principal purpose of which is Tax allocation or sharing. Neither William Penn nor any of the William Penn Subsidiaries
is liable for the Taxes of any Person under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local,
or non-U.S. Tax law), other than as a result of being a member of a Relevant Group of which William Penn is the parent, or as a transferee
or successor, by contract or otherwise.
(i) Neither
William Penn nor any of the William Penn Subsidiaries will be required to include any material item of income in, or exclude any material
item of deduction from, taxable income for any taxable period (or portion of such taxable period) ending after the Closing Date as a
result of (i) any installment sale or open transaction disposition made on or prior to the Closing Date, (ii) prepaid amount
received on or prior to the Closing Date, (iii) intercompany transactions or excess loss accounts described in the Treasury Regulations
under Section 1502 of the Code (or any similar provision of state, local, or non-U.S. Tax law) or (iv) cancellation of indebtedness
arising on or prior to the Closing Date.
4.7.
No Material Adverse Effect.
William Penn has not suffered
any Material Adverse Effect since June 30, 2024, and no event has occurred or circumstance arisen since that date which, in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on William Penn.
4.8.
Material Contracts; Leases; Defaults.
(a) Except
as set forth on William Penn Disclosure Schedule 4.8(a), neither William Penn nor any William Penn Subsidiary is a party
to or subject to: (i) any employment, consulting or severance contract or material arrangement with any past or present officer,
director or employee of William Penn or any William Penn Subsidiary, except for “at will” arrangements; (ii) any plan,
arrangement or contract providing for bonuses, pensions, options, deferred compensation, retirement payments, profit sharing or similar
material arrangements for or with any past or present officers, directors or employees of William Penn or any William Penn Subsidiary;
(iii) any collective bargaining agreement with any labor organization relating to employees of William Penn or any William Penn
Subsidiary; (iv) any agreement which by its terms limits the payment of dividends by William Penn or any William Penn Subsidiary;
(v) any instrument evidencing or related to indebtedness for borrowed money in excess of One Hundred Thousand Dollars ($100,000)
whether directly or indirectly, by way of purchase money obligation, conditional sale, lease purchase, guaranty or otherwise, in respect
of which William Penn or any William Penn Subsidiary is an obligor to any person, which instrument evidences or relates to
indebtedness
other than deposits, repurchase agreements, FHLB advances, FRB Paycheck Protection Program Liquidity Facility borrowings, bankers’
acceptances, and “treasury tax and loan” accounts and transactions in “federal funds” in each case established
in the ordinary course of business consistent with past practice, or which contains financial covenants or other restrictions (other
than those relating to the payment of principal and interest when due) that would be applicable on or after the Closing Date to any Person;
(vi) any other agreement, written or oral, that obligates William Penn or any William Penn Subsidiary for the payment of more than
Fifty Thousand Dollars ($50,000) annually or for the payment of more than One Hundred Thousand Dollars ($100,000) over its remaining
term, which is not terminable without cause on sixty (60) days’ or less notice without penalty or payment (other than agreements
for commercially available “off-the- shelf” software); (vii) any agreement (other than this Agreement), contract,
arrangement, commitment or understanding (whether written or oral) that restricts or limits in any material way the conduct of business
by William Penn or any William Penn Subsidiary (it being understood that any non-compete or similar provision shall be deemed material,
but any limitation on the scope of any license granted under any such agreement shall not be deemed material); (viii) any contract
between or among William Penn or any of its Subsidiaries or Affiliates; (ix) any contract involving Intellectual Property (excluding
generally commercially available “off the shelf” software programs licensed pursuant to “shrink wrap” or “click
and accept” licenses); (x) any contract relating to the provision of data processing, network communications or other technical
services to or by William Penn or any of its Subsidiaries providing for the payment of more than Fifty Thousand Dollars ($50,000) annually
or for the payment of more than One Hundred Thousand Dollars ($100,000) over its remaining term; (xi) any Contract with respect
to the formation, creation, operation, management or control of a joint venture, partnership, limited liability company or other similar
arrangement or agreement; (xii) any contract that provides any rights to investors in William Penn, including registration, preemptive
or anti-dilution rights or rights to designate members of or observers to the William Penn Board of Directors; (xiii) any contract
that provides for potential material indemnification payments by William Penn or any of its Subsidiaries; (xiv) any contract or
understanding with a labor union, in each case whether written or oral; (xv) any contract that grants any right of first refusal,
right first offer or similar right with respect to any material assets, rights or properties of William Penn or its Subsidiaries; (xvi) any
contract which is a merger agreement, asset purchase agreement, stock purchase agreement, deposit assumption agreement, loss sharing
agreement or other commitment to a Governmental Authority in connection with the acquisition of a depository institution, or similar
agreement that has indemnification, earn-out or other obligations that continue in effect after the date of this Agreement; or (xvii) any
other contract or amendment thereto that would be required to be filed as an exhibit to any SEC report (as described in Items 601(b)(4) and
601(b)(10) of Regulation S-K).
(b) William
Penn Disclosure Schedule 4.8(b) identifies each parcel of real estate owned, leased or subleased by William Penn, William
Penn Bank or any William Penn Subsidiary. Each real estate lease that requires the consent of the lessor or its agent resulting from
the Merger by virtue of the terms of any such lease, is listed on William Penn Disclosure Schedule 4.8(b). Subject to any
consents that may be required as a result of the transactions contemplated by this Agreement, neither William Penn nor any William Penn
Subsidiary is in default under any contract, agreement, commitment, arrangement, lease, insurance policy or other instrument to
which
it is a party, by which its assets, business, or operations may be bound or affected, or under which it or its assets, business, or operations
receive benefits, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute
such a default, except where such default, either individually or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
(c) True
and correct copies of agreements, contracts, arrangements and instruments referred to in Section 4.8(a) and 4.8(b) (collectively,
the “William Penn Material Contracts”) have been made available to Mid Penn on or before the date hereof, and
are in full force and effect on the date hereof, and neither William Penn nor any William Penn Subsidiary (nor, to the Knowledge of William
Penn, any other party to any William Penn Material Contract) has materially breached any provision of, or is in default in any respect
under any term of, any William Penn Material Contract. Except as listed on William Penn Disclosure Schedule 4.8(c), no party
to any William Penn Material Contract will have the right to terminate any or all of the provisions of any such William Penn Material
Contract as a result of the execution of, and the consummation of the transactions contemplated by, this Agreement.
(d) Except
as set forth on William Penn Disclosure Schedule 4.8(d), since December 31, 2023, through and including the date of this
Agreement, neither William Penn nor any William Penn Subsidiary has (i) except for normal increases for employees made in the ordinary
course of business consistent with past practice or as required by applicable law, increased the wages, salaries, compensation, pension,
or other fringe benefits or perquisites payable to any executive officer, employee, or director from the amount thereof in effect as
of December 31, 2023 (which amounts have been previously made available to Mid Penn), granted any severance or termination pay,
entered into any contract to make or grant any severance or termination pay (except as required under the terms of agreements or severance
plans listed on William Penn Disclosure Schedule 4.12, as in effect as of the date hereof), or paid any bonus other than
customary bonuses in amounts consistent with past practice, (ii) granted any options or warrants to purchase shares of William
Penn Common Stock, or any Right to any executive officer, director or employee, (iii) increased or established any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards, or restricted stock awards), stock purchase or other employee benefit plan, (iv) made
any material election for federal or state income tax purposes, (v) made any material change in the credit policies or procedures
of William Penn or any of the William Penn Subsidiaries, the effect of which was or is to make any such policy or procedure less restrictive
in any material respect, (vi) made any material acquisition or disposition of any assets or properties, or any contract for any
such acquisition or disposition entered into other than loans and loan commitments except at the direction or request of any Bank Regulator,
(vii) entered into any lease of real or personal property requiring annual payments in excess of Fifty Thousand Dollars ($50,000),
other than in connection with foreclosed property or in the ordinary course of business consistent with past practice, (viii) changed
any accounting methods, principles or practices of William Penn or the William Penn Subsidiaries affecting its assets, liabilities or
businesses, including any reserving, renewal or residual method, practice or policy except in accordance with any changes in GAAP, or
(ix) suffered any strike, work stoppage, slow-down, or other labor disturbance.
(e) As
of the date of this Agreement, except as set forth on William Penn Disclosure Schedule 4.8(e), none of the deposits of William
Penn is a “brokered deposit” as defined in 12 CFR Section 337.6(a)(2).
4.9.
Ownership of Property; Insurance Coverage.
(a) William
Penn and each William Penn Subsidiary has good and, as to real property and securities, marketable title to all material assets and properties
owned, and as to securities held, by William Penn or any William Penn Subsidiary in the conduct of their businesses, whether such assets
and properties are real or personal, tangible or intangible, including assets and property reflected in the balance sheets contained
in the William Penn Regulatory Reports and in the William Penn Financial Statements or acquired subsequent thereto (except to the extent
that such assets and properties have been disposed of for fair value in the ordinary course of business since the date of such balance
sheets), subject to no material Liens, except (i) those items which secure liabilities for public or statutory obligations or any
discount with, borrowing from or other obligations to FHLB, FRB, inter-bank credit facilities or any transaction by a William Penn Subsidiary
acting in a fiduciary capacity, (ii) statutory Liens for amounts not yet delinquent or that are being contested in good faith,
(iii) non-monetary Liens affecting real property which do not materially adversely affect the value or use of such real property,
and (iv) those described and reflected in the William Penn Financial Statements (together “William Penn Permitted Liens”).
Such securities are valued on the books of William Penn and each of the William Penn Subsidiaries in accordance with GAAP. William Penn
and the William Penn Subsidiaries, as lessee, have the right under valid and existing leases of real and personal properties used by
William Penn and the William Penn Subsidiaries in the conduct of their businesses to occupy or use all such properties as presently occupied
and used by each of them. Neither William Penn nor any William Penn Subsidiary is in default in any material respect under any lease
for any real or personal property to which either William Penn or any William Penn Subsidiary is a party, and there has not occurred
any event that, with lapse of time or the giving of notice or both, would constitute such default, except for such defaults that, either
individually or in the aggregate, will not have a Material Adverse Effect on William Penn.
(b) With
respect to all agreements pursuant to which William Penn or any William Penn Subsidiary has purchased securities subject to an agreement
to resell, if any, William Penn or such William Penn Subsidiary, as the case may be, has a valid, perfected first Lien in the securities
or other collateral securing the repurchase agreement, and the value of such collateral equals or exceeds the amount of the debt secured
thereby. William Penn and each of the William Penn Subsidiaries employs investment, securities risk management and other policies, practices
and procedures that William Penn and each such William Penn Subsidiary believes are prudent and reasonable in the context of such businesses.
(c) William
Penn and each William Penn Subsidiary currently maintains insurance considered by William Penn to be reasonable for their respective
operations in accordance with industry practice. Neither William Penn nor any William Penn Subsidiary has received notice from any insurance
carrier that (i) such insurance will be cancelled or that coverage thereunder will be reduced or eliminated, or (ii) premium
costs (other than with respect to health or disability insurance) with respect to such policies of insurance will be substantially increased.
Except as
provided on William Penn Disclosure Schedule 4.9(c), there are presently no material claims pending under such policies
of insurance and no notices have been given by William Penn or any William Penn Subsidiary under such policies (other than with respect
to health or disability insurance). All such insurance is valid and enforceable and in full force and effect, and within the last three
(3) years William Penn and each William Penn Subsidiary has received each type of insurance coverage for which it has applied and
during such periods has not been denied indemnification for any material claims submitted under any of its insurance policies. William
Penn Disclosure Schedule 4.9(c) identifies all material policies of insurance maintained by William Penn and each William
Penn Subsidiary, as well as the other matters required to be disclosed under this Section 4.9(c).
4.10. Legal Proceedings.
Neither William Penn nor
any William Penn Subsidiary is a party to any, and there are no pending or, to William Penn’s Knowledge, threatened legal, administrative,
arbitration or other proceedings, claims (whether asserted or unasserted), actions or governmental investigations or inquiries of any
material nature (a) against William Penn or any William Penn Subsidiary, (b) to which William Penn’s or any William
Penn Subsidiary’s material assets are or may be subject, (c) challenging the validity or propriety of any of the transactions
contemplated by this Agreement, or (d) that would reasonably be expected to adversely affect the ability of William Penn or William
Penn Bank to perform under this Agreement in any material respect.
4.11. Compliance
With Applicable Law.
(a) Each
of William Penn and each William Penn Subsidiary is in compliance in all material respects with all applicable federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable to it, its properties, assets and
deposits, its business, and its conduct of business and its relationship with its employees, including, without limitation, the USA PATRIOT
Act, the Bank Secrecy Act, OFAC regulations, the Equal Credit Opportunity Act, the Fair Housing Act, the Community Reinvestment Act of
1977 (“CRA”), the Home Mortgage Disclosure Act, the Fair Credit Reporting Act, the Fair Debt Collections Practices
Act, the Truth in Lending Act, and all other applicable fair lending laws and other laws relating to discriminatory business practices,
Title VII of the Civil Rights Act of 1964, as amended, the Americans With Disabilities Act of 1990, as amended, the Rehabilitation
Act of 1973, as amended, the Family and Medical Leave Act of 1993, as amended, the Genetic Information Non-Discrimination Act of 2008,
and all similar federal, state or local laws and/or ordinances, including without limitation, the Pennsylvania Human Relations Act, as
amended, and any other non-discrimination and fair employment practices laws of any state and/or locality in which a William Penn or
any William Penn Subsidiary employee works, worked, resides, or resided, all as amended, ERISA, the Affordable Care Act, as amended,
the Age Discrimination in Employment Act of 1967, as amended, and the Worker Adjustment and Retraining Notification Act, as amended,
and neither William Penn nor any William Penn Subsidiary has received any written notice to the contrary, except where the failure to
comply would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on William Penn. The Board
of Directors of William Penn Bank has adopted, and William Penn Bank has implemented, an anti-money laundering program that contains
adequate and appropriate customer identification
verification procedures that has not been deemed ineffective by any Governmental Entity
and that meets the requirements of Sections 352 and 326 of the USA PATRIOT Act and the regulations thereunder.
(b) Each
of William Penn and each William Penn Subsidiary has all material permits, licenses, authorizations, orders and approvals of, and has
made all filings, applications and registrations with, all Governmental Entities and Bank Regulators that are required in order to permit
it to own or lease its properties and to conduct its business as presently conducted, except where the failure to hold such permits,
licenses, authorizations, orders or approvals, or the failure to make such filings, applications or registrations would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on William Penn; all such permits, licenses, certificates
of authority, orders and approvals are in full force and effect in all material respects, and to William Penn’s Knowledge, no suspension
or cancellation of any such permit, license, certificate, order or approval is threatened or will result from the consummation of the
transactions contemplated by this Agreement, subject to obtaining Regulatory Approvals.
(c) Since
January 1, 2020, neither William Penn nor any William Penn Subsidiary has received any written notification or any other communication
from any Bank Regulator (i) asserting that William Penn or any William Penn Subsidiary is not in material compliance with any of
the statutes, regulations or ordinances which such Bank Regulator enforces; (ii) threatening to revoke any license, franchise,
permit or governmental authorization which is material to William Penn or any William Penn Subsidiary; (iii) requiring, or threatening
to require, William Penn or any William Penn Subsidiary, or indicating that William Penn or any William Penn Subsidiary may be required,
to enter into a cease and desist order, agreement or memorandum of understanding or any other agreement with any Governmental Entity
or Bank Regulator which is charged with the supervision or regulation of banks or engages in the insurance of bank deposits, restricting
or limiting, or purporting to restrict or limit, in any material respect the operations of William Penn or any William Penn Subsidiary,
including without limitation any restriction on the payment of dividends; or (iv) except as disclosed on William Penn Disclosure
Schedule 4.11(c), directing, restricting or limiting, or purporting to direct, restrict or limit, in any manner the operations of
William Penn or any William Penn Subsidiary, including without limitation any restriction on the payment of dividends (any such notice,
communication, memorandum, agreement or order described in this sentence is hereinafter referred to as a “William Penn Regulatory
Agreement”). William Penn has not consented to or entered into any William Penn Regulatory Agreement that is currently in effect
or that was in effect since January 1, 2020. The most recent regulatory rating given to William Penn Bank as to compliance with
the CRA is satisfactory or better.
(d) William
Penn Bank is “well capitalized” within the meaning of the regulations of the FDIC, and neither William Penn nor William Penn
Bank knows of any facts or circumstances that would reflect adversely on the financial and managerial standards to be applied by the
FRB under the BHCA in determining whether to approve the Merger. William Penn Bank knows of no reason why it would not continue to be
“well capitalized” under applicable capital requirements imposed by any Bank Regulator.
4.12. Employee
Benefit Plans.
(a) William
Penn Disclosure Schedule 4.12 contains a true and complete list of each “employee benefit plan” (within the meaning
of Section 3(3) of ERISA), and all other employee benefit plans, agreements, programs, policies or other arrangements, whether
or not subject to ERISA (including any funding mechanism therefor), including, without limitation, supplemental executive retirement
plans, stock purchase plans, stock option plans, restricted stock plans, stock appreciation rights plans, severance arrangements, employment
agreements, consulting agreements, settlement agreements, release agreements, loan arrangements, change-in-control agreements, fringe
benefit plans, bonus plans, incentive plans, director deferred agreements, director retirement agreements, deferred compensation plans
and all other benefit practices, policies and arrangements (including vacation) under which any current or former employee, director
or independent contractor of William Penn or any William Penn Subsidiary has any present or future right to benefits or under which William
Penn or any William Penn Subsidiary has any present or future liability. All such plans, agreements, programs, policies and arrangements
shall be collectively referred to as the “William Penn Benefit Plans.”
(b) With
respect to each William Penn Benefit Plan, William Penn has made available to Mid Penn a current, accurate and complete copy thereof
(or a written summary of the material terms of any unwritten plan) and, to the extent applicable: (i) any related trust agreement
or other funding instrument; (ii) the most recent determination letter issued by the IRS and any current application to the IRS
for such letter, if applicable; (iii) the most recent summary plan description and any subsequent summaries of material modifications
or planned modification; and (iv) annual return/reports on Form 5500 for the last three (3) plan years with respect
to each William Penn Benefit Plan which is required to file such annual return/report.
(c) (i) Each
William Penn Benefit Plan that is subject to ERISA and the Code has been established and administered in all material respects in accordance
with its terms and in compliance with the applicable provisions of ERISA, the Code and other applicable laws, rules and regulations;
(ii) each William Penn Benefit Plan which is intended to be qualified within the meaning of Section 401(a) of the Code
has received a favorable determination letter as to its qualification or, with respect to an IRS-approved prototype or volume submitter
plan, a favorable opinion letter, and with respect to all plan document qualification requirements for which the applicable remedial
amendment period under Section 401(b) of the Code has closed, any amendments required by such determination letter were made
as and when required by such determination letter, and to the Knowledge of William Penn, nothing has occurred, whether by action or failure
to act, that could reasonably be expected to cause the loss of such qualification; (iii) to the Knowledge of William Penn after
reasonable inquiry, no event has occurred and no condition exists that is reasonably likely to subject William Penn or any William Penn
Subsidiary, solely by reason of its affiliation with any past or present “ERISA Affiliate” (defined as any organization
which is a member of a controlled group of organizations within the meaning of Sections 414(b), (c), (m) or (o) of
the Code), to any Tax, fine, Lien, penalty or other liability imposed by ERISA or the Code; (iv) except as set forth in William
Penn Disclosure Schedule 4.12, no William Penn Benefit Plan provides, and William Penn and the William Penn Subsidiaries have
no obligation to provide, any welfare benefits to any employee or service provider (or any
beneficiary thereof) after the employee’s
termination of employment and/or the service provider’s termination of service other than as required by Section 4980B of
the Code and/or other applicable law; (v) all contributions required to be made under the terms of any William Penn Benefit Plan
have been timely made or, if not yet due, have been properly reflected in William Penn’s financial statements in accordance with
GAAP; and (vi) neither William Penn nor any William Penn Subsidiary has engaged in a transaction with respect to any William Penn
Benefit Plan which would subject William Penn or any William Penn Subsidiary to a tax or penalty imposed by either Section 4975
of the Code or Section 502 of ERISA.
(d) Except
as set forth on William Penn Disclosure Schedule 4.12(d), William Penn and the William Penn Subsidiaries do not maintain
a defined benefit plan. None of the William Penn Benefit Plans is a “multiemployer plan” (within the meaning of ERISA Section 3(37))
and none of William Penn, the William Penn Subsidiaries or any ERISA Affiliate has any liability with respect to a multiemployer plan
that remains unsatisfied.
(e) With
respect to any William Penn Benefit Plan, the assets of any trust under such William Penn Benefit Plan, William Penn Benefit Plan sponsor,
William Penn Benefit Plan fiduciary or William Penn Benefit Plan administrator, (i) no actions, suits or claims (other than routine
claims for benefits in the ordinary course) are pending or, to the Knowledge of William Penn, threatened and (ii) to the Knowledge
of William Penn, no facts or circumstances exist that could reasonably be expected to give rise to any such actions, suits or claims.
(f) Other
than as set forth on William Penn Disclosure Schedule 4.12(f), the consummation of the transactions contemplated herein
will not, separately or together with any other event, (i) entitle any employee, officer or director of William Penn or any William
Penn Subsidiary to severance pay, unemployment compensation or any other payment, (ii) accelerate the time of payment or vesting
of, or increase the amount of, compensation due to any such employee, officer or director, or (iii) result in any “parachute
payment” or “excess parachute payment” under Section 280G of the Code, whether or not such payment is considered
reasonable compensation for services rendered. William Penn has made available to Mid Penn true, correct and complete copies of Section 280G
calculations (whether or not final) with respect to any disqualified individual in connection with the transactions contemplated hereby.
(g) All
William Penn Benefit Plans which provide for the deferral of compensation, within the meaning of Section 409A of the Code, have
been administered in good faith compliance with Section 409A of the Code, and, except as set forth on William Penn Disclosure
Schedule 4.12(g), neither William Penn nor any William Penn Subsidiary has any obligation to indemnify, hold harmless or gross-up
any individual with respect to any penalty tax or interest under section 409A of Code. Except as set forth on William Penn Disclosure
Schedule 4.12(g), no outstanding stock options and no shares of restricted stock are subject to Section 409A of the Code.
In addition, William Penn Disclosure Schedule 4.12(g) sets forth the amounts of any deferred compensation payable
to any employee or director of William Penn or any William Penn Subsidiary.
(h) William
Penn has not communicated to any current or former employee thereof any intention or commitment to modify in any material respect any
William Penn Benefit Plan or
contract to establish or implement any other employee or retiree benefit or compensation plan or arrangement.
(i) No
liability under Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by William Penn or any William Penn Subsidiary
with respect to any ongoing, frozen, or terminated William Penn or William Penn Subsidiary Plan.
(j) No
notice of a reportable event within the meaning of Section 4043 of ERISA for which the 30-day reporting requirement has been waived,
has been required to be filed for any William Penn Benefit Plan within the past twelve (12) months.
(k) The
William Penn ESOP grants its participants full voting rights as to all shares of William Penn Common Stock held by the William Penn ESOP
on behalf of such participants and that have been allocated to their accounts.
4.13. Environmental
Matters.
Except as set forth on William
Penn Disclosure Schedule 4.13, with respect to William Penn and each William Penn Subsidiary:
(a) To
the Knowledge of William Penn, neither (i) the conduct nor operation of the business of William Penn or any William Penn Subsidiary
nor (ii) any condition of any property currently or previously owned or operated by William Penn or any William Penn Subsidiary
(including, without limitation, in a fiduciary or agency capacity), results or resulted in a violation of any Environmental Laws that
is reasonably likely to impose a material liability (including a material remediation obligation) upon William Penn or any William Penn
Subsidiary. No condition exists or has existed or event has occurred with respect to any of them or any such property that, with notice
or the passage of time, or both, is reasonably likely to result in any material liability to William Penn or any William Penn Subsidiary
by reason of any Environmental Laws. Neither William Penn nor any William Penn Subsidiary during the past five (5) years has received
any written notice from any Person or Governmental Entity that William Penn or any William Penn Subsidiary or the operation or condition
of any property ever owned, operated, or held as collateral or in a fiduciary capacity by any of them (including any Other Real Estate
Owned or property pledged as collateral for any loan held by William Penn or any William Penn Subsidiary) are currently in violation
of or otherwise are alleged to have liability under any Environmental Laws or relating to Materials of Environmental Concern (including,
but not limited to, responsibility (or potential responsibility) for the cleanup or other remediation of any Materials of Environmental
Concern at, on, beneath, or originating from any such property) for which a material liability is reasonably likely to be imposed upon
William Penn or any William Penn Subsidiary;
(b) There
is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to William Penn’s
Knowledge, threatened, before any court, Governmental Entity or other forum against William Penn or any William Penn Subsidiary (i) for
alleged noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (ii) relating to the presence
of or release into the environment of any
Materials of Environmental Concern (as defined herein), whether or not occurring at or on a
site owned, leased or operated by William Penn or any William Penn Subsidiary; and
(c) There
are no underground storage tanks on, in or under any properties owned or operated by William Penn or any of the William Penn Subsidiaries,
and no underground storage tanks have been closed or removed from any properties owned or operated by William Penn or any of the William
Penn Subsidiaries except in compliance with Environmental Laws in all material respects.
4.14. Brokers,
Finders and Financial Advisors.
Neither William Penn, nor
any of its respective officers, directors, employees or agents, has employed any broker, finder or financial advisor in connection with
the transactions contemplated by this Agreement, or incurred any liability or commitment for any fees or commissions to any such Person
in connection with the transactions contemplated by this Agreement except for the retention of Piper Sandler & Co. (“Piper
Sandler”) by William Penn and the fee payable pursuant thereto. A true and complete copy of the engagement letter, as amended,
between William Penn and Piper Sandler has been delivered to Mid Penn.
4.15. Loan
Matters.
(a) The
allowance for credit losses reflected in William Penn’s audited consolidated balance sheet at June 30, 2024 was, and the
allowance for credit losses shown on William Penn’s balance sheets for periods ending after June 30, 2024 was, or will be,
adequate, as of the date thereof, under GAAP.
(b) William
Penn Disclosure Schedule 4.15(b) sets forth a listing, as of September 30, 2024, by account, of: (i) all
loans (including loan participations) of William Penn Bank or any other William Penn Subsidiary that have been accelerated during the
past twelve (12) months; (ii) all loan commitments or lines of credit of William Penn Bank or any other William Penn Subsidiary
which have been terminated by William Penn Bank or any other William Penn Subsidiary during the past twelve (12) months by reason of
a default or adverse developments in the condition of the borrower or other events or circumstances affecting the credit of the borrower;
(iii) each borrower, customer or other party which has notified William Penn Bank or any other William Penn Subsidiary during the
past twelve (12) months of, or has asserted against William Penn Bank or any other William Penn Subsidiary, in each case in writing,
any “lender liability” or similar claim, and, to the Knowledge of William Penn, each borrower, customer or other party which
has given William Penn Bank or any other William Penn Subsidiary any oral notification of, or orally asserted to or against William Penn
Bank or any other William Penn Subsidiary, any such claim; (iv) all loans (A) that are contractually past due ninety (90) days
or more in the payment of principal and/or interest, (B) that are on non-accrual status, (C) that as of the date of this
Agreement are classified as “Other Loans Specially Mentioned”, “Special Mention”, “Substandard”,
“Doubtful”, “Loss”, “Classified”, “Criticized”, “Watch List” or words of
similar import, together with the principal amount of and accrued and unpaid interest on each such Loan and the identity of the obligor
thereunder, (D) where, during the past three (3) years, the interest rate terms have been reduced and/or the maturity dates
have been extended subsequent to the
agreement under which the loan was originally created due to concerns regarding the borrower’s
ability to pay in accordance with such initial terms, or (E) where a specific reserve allocation exists in connection therewith;
and (v) all assets classified by William Penn Bank or any William Penn Subsidiary as real estate acquired through foreclosure or
in lieu of foreclosure, including in-substance foreclosures, and all other assets currently held that were acquired through foreclosure
or in lieu of foreclosure. Except as set forth on William Penn Disclosure Schedule 4.15(b), all loans of William Penn Bank
have been classified as of September 30, 2024 in accordance with the loan policies and procedures of William Penn Bank.
(c) Except
as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, all loans receivable
(including discounts) and accrued interest entered on the books of William Penn and the William Penn Subsidiaries arose out of bona fide
arm’s-length transactions, were made for good and valuable consideration in the ordinary course of William Penn’s or the
appropriate William Penn Subsidiary’s respective business, and the notes or other evidences of indebtedness with respect to such
loans (including discounts) are true and genuine and are what they purport to be. To the Knowledge of William Penn, the loans, discounts
and the accrued interest reflected on the books of William Penn and the William Penn Subsidiaries are subject to no defenses, set-offs
or counterclaims (including, without limitation, those afforded by usury or truth-in-lending laws), except as may be provided by bankruptcy,
insolvency or similar laws affecting creditors’ rights generally or by general principles of equity. All such loans are owned by
William Penn or the appropriate William Penn Subsidiary free and clear of any Liens.
(d) The
notes and other evidences of indebtedness evidencing the loans described above, and all pledges, mortgages, deeds of trust and other
collateral documents or security instruments relating thereto are, in all material respects, valid, true and genuine, and what they purport
to be.
(e) William
Penn Disclosure Schedule 4.15(e) sets forth, as of the date of this Agreement, a schedule of all executive officers and directors
of William Penn who have outstanding loans from William Penn or any William Penn Subsidiary, and there has been no default on, or forgiveness
or waiver or, in whole or in part, any such loan during the two (2) years immediately preceding the date hereof.
(f) Except
as set forth on William Penn Disclosure Schedule 4.15(f), to the Knowledge of William Penn, no shares of William Penn Common Stock
were purchased with the proceeds of a loan made by William Penn or any William Penn Subsidiary.
4.16. Related Party
Transactions.
Except as set forth on William
Penn Disclosure Schedule 4.16, neither William Penn nor any William Penn Subsidiary is a party to any transaction (including
any loan or other credit accommodation) with any Affiliate of William Penn or any William Penn Subsidiary. All such loans (a) were
made in the ordinary course of business, (b) were made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other Persons, and (c) did not involve substantially more than
the normal risk of
collectability or present other unfavorable features (as such terms are used under Item 404 of SEC Regulation S-K
promulgated under the Securities Act and the Exchange Act). Except as set forth on William Penn Disclosure Schedule 4.16,
no loan or credit accommodation to any Affiliate of William Penn or any William Penn Subsidiary is presently in default or, during the
three (3) year period prior to the date of this Agreement, has been in default or has been restructured, modified or extended.
Neither William Penn nor any William Penn Subsidiary has been notified that principal and interest with respect to any such loan or other
credit accommodation will not be paid when due or that the loan grade classification accorded such loan or credit accommodation by William
Penn is inappropriate. Except as set forth on William Penn Disclosure Schedule 4.16, no shareholder or Affiliate of William
Penn owns any material property or asset used in the conduct of the business of William Penn and the William Penn Subsidiaries.
4.17. Credit
Card Accounts and Merchant Processing.
(a) Credit
Card Accounts. William Penn and the William Penn Subsidiaries only originate, maintain or administer credit card accounts through
a third party originator.
(b) Merchant
Processing. William Penn and the William Penn Subsidiaries only provide merchant credit card processing services to merchants through
a third party provider.
4.18. Required
Vote.
The affirmative vote of the
holders of a majority of the total number of shares outstanding and entitled to vote at the William Penn Shareholders’ Meeting
is required to approve this Agreement and the Merger under William Penn’s articles of incorporation and the MDGCL. This Agreement
and the Merger have been approved unanimously by all of the members of the William Penn Board of Directors.
4.19. Registration
Obligations.
Except as set forth on William
Penn Disclosure Schedule 4.19, neither William Penn nor any William Penn Subsidiary is under any obligation, contingent or otherwise,
that will survive the Effective Time by reason of any agreement to register any transaction involving any of its securities under the
Securities Act.
4.20. Risk Management
Instruments.
All material interest rate
swaps, caps, floors, option agreements, futures and forward contracts and other similar risk management arrangements, whether entered
into for William Penn’s own account, or for the account of one or more of the William Penn Subsidiaries or their customers (all
of which are set forth on William Penn Disclosure Schedule 4.20), were in all material respects entered into in compliance
with all applicable laws, rules, regulations and regulatory policies, and with counterparties believed to be financially responsible
at the time; and each of them constitutes the valid and legally binding obligation of William Penn or the applicable William Penn Subsidiary,
enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer
and similar laws of general applicability relating to or affecting creditors’ rights or by general
equity principles), and is in full force and effect. Neither William Penn nor any William Penn Subsidiary, nor to the Knowledge of William
Penn any other party thereto, is in breach of any of its obligations under any such agreement or arrangement in any material respect.
4.21. Fairness
Opinion.
The board of directors of
William Penn has received an opinion (which, if initially rendered verbally, has been or will be confirmed by a written opinion, dated
the same date) from Piper Sandler to the effect that, as of the date of such opinion, and based upon and subject to the factors, limitations
and assumptions set forth therein, the Merger Consideration is fair, from a financial point of view, to William Penn shareholders, and
a signed copy of the written opinion will be delivered to Mid Penn solely for informational purposes after receipt thereof by William
Penn. Such opinion has not been amended or rescinded as of the date of this Agreement.
4.22. Fiduciary
Accounts.
William Penn and each of
its Subsidiaries have properly administered all common trust funds and collective investment funds and all accounts for which each of
them acts as a fiduciary or agent, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal
representative, guardian, conservator or investment advisor, in accordance in all material respects with the terms of the governing documents
and applicable Law. Neither William Penn nor any of its Subsidiaries, nor, to the Knowledge of William Penn, any of their respective
directors, officers or employees acting on behalf of William Penn or any of its Subsidiaries, has committed any breach of trust with
respect to any such common trust fund or collective investment fund or fiduciary or agency account, and the accountings for each such
common trust fund or collective investment fund or fiduciary or agency account are true and correct in all material respects and accurately
reflect the assets of such common trust fund or collective investment fund or fiduciary or agency account.
4.23. Intellectual
Property.
William Penn and each William
Penn Subsidiary owns or possesses valid and binding licenses and other rights (subject to expirations in accordance with their terms)
to use all patents, copyrights, trade secrets, trade names, service marks and trademarks, which are material to the conduct of their
business as currently conducted, each without payment, except for all license agreements under which license fees or other payments are
due in the ordinary course of William Penn’s or each of the William Penn Subsidiaries’ business, and neither William Penn
nor any William Penn Subsidiary has received any notice of conflict with respect thereto that asserts the rights of others. William Penn
and each William Penn Subsidiary has performed all material obligations required to be performed, and are not in default in any material
respect, under any contract, agreement, arrangement or commitment relating to any of the foregoing. To William Penn’s Knowledge,
the conduct of the business of William Penn and each William Penn Subsidiary as currently conducted or proposed to be conducted does
not, in any material respect, infringe upon, dilute, misappropriate or otherwise violate any intellectual property owned or controlled
by any third party.
4.24. Labor Matters.
There are no labor or collective
bargaining agreements to which William Penn or any William Penn Subsidiary is a party. To the Knowledge of William Penn, there is no
activity involving William Penn or any William Penn Subsidiary seeking to certify a collective bargaining unit involving any of their
employees. There is no labor strike, labor dispute (other than routine employee grievances that are not related to union employees),
work slowdown, stoppage or lockout pending or to the Knowledge of William Penn, threatened against William Penn or any William
Penn Subsidiary. There is no unfair labor practice or labor arbitration proceeding pending or, to the Knowledge of William Penn, threatened
against William Penn or any William Penn Subsidiary (other than routine employee grievances that are not related to union employees).
William Penn and each William Penn Subsidiary is in compliance in all material respects with all applicable laws respecting employment
and employment practices, terms and conditions of employment and wages and hours, and are not engaged in any unfair labor practice.
4.25. William Penn
Information Supplied.
The information relating
to William Penn and any William Penn Subsidiary to be contained in the Proxy Statement – Prospectus and/or Registration Statement,
or in any other document filed with any Bank Regulator or other Governmental Entity in connection herewith (other than the information
provided by Mid Penn specifically for inclusion), will not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading.
4.26. Takeover
Laws.
The adoption and approval
by the board of directors of William Penn of this Agreement, the Merger and the other transactions contemplated in this Agreement represent
all the action necessary to render inapplicable to this Agreement, the Merger and such other transactions, the provisions of any potentially
applicable “anti-takeover”, “control share”, “fair price”, “moratorium”, “interested
shareholder” or similar anti-takeover statutes or regulations applicable to William Penn in connection with the execution, delivery
or performance of this Agreement.
4.27. Reorganization.
William Penn has not taken
any action (or failed to take any action) and is not aware of any fact or circumstance that could reasonably be expected to prevent the
Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
4.28. SEC Reports.
William Penn has timely filed
with or furnished to, as applicable, the SEC all registration statements, prospectuses, reports, schedules, forms, statements and other
documents (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the SEC
since June 30, 2024 (the “William Penn SEC Reports”). As of their respective filing dates (or, if amended or
superseded by a subsequent filing, as of the date of the last such
amendment or superseding filing prior to the date hereof), each of
the William Penn SEC Reports complied as to form in all material respects with the applicable requirements of the Exchange Act, and the
Securities Act to the extent applicable, and the rules and regulations of the SEC thereunder, applicable to such William Penn SEC
Reports. None of the William Penn SEC Reports, including any financial statements, schedules or exhibits included or incorporated by
reference therein at the time they were filed (or, if amended or superseded by a subsequent filing, as of the date of the last such amendment
or superseding filing prior to the date hereof), contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. None of the William Penn Subsidiaries is required to file or furnish any forms, reports or other documents with
the SEC. As of the date of this Agreement, no executive officer of William Penn has failed in any respect to make the certifications
required of him or her under Section 302 or 906 of the Sarbanes-Oxley Act.
4.29. Dissenters’
Rights
Neither the MDGCL nor William Penn’s articles
of incorporation entitle William Penn’s shareholders to dissenters’ rights with respect to the Merger.
4.30. Quality of
Representations.
The representations made
by William Penn in this Agreement are true, correct and complete in all material respects and do not omit statements necessary to make
the representations not misleading under the circumstances.
4.31. No Other
Representations or Warranties.
(a) Except
for the representations and warranties made by William Penn in this Article IV, neither William Penn nor any other Person
makes any express or implied representation or warranty with respect to William Penn, its Subsidiaries, or their respective businesses,
operations, assets, liabilities, conditions (financial or otherwise) or prospects or with respect to any oral or written information
presented to Mid Penn or any of its affiliates or representatives in the course of their due diligence investigation of William Penn,
the negotiation of this Agreement or otherwise in the course of the transaction contemplated hereby, and William Penn hereby disclaims
any such other representations or warranties.
(b) Notwithstanding
anything contained in this Agreement to the contrary, William Penn acknowledges and agrees that neither Mid Penn nor any other Person
has made or is making any representations or warranties relating to Mid Penn whatsoever, express or implied, beyond those expressly given
by Mid Penn in Article V hereof, including any implied representation or warranty as to the accuracy or completeness of
any information regarding Mid Penn furnished or made available to William Penn or any of its representatives.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MID PENN
Mid Penn represents and warrants
to William Penn that the statements contained in this Article V are correct and complete as of the date of this Agreement,
except (i) as set forth in the Mid Penn Disclosure Schedules delivered by Mid Penn to William Penn on the date hereof (it being
understood that (i) the mere inclusion of an item in the William Penn Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission by William Penn that such item represents a material exception or fact, event or circumstance
or that such item would reasonably be expected to have a Material Adverse Effect), or (ii) disclosed in any report, schedule, form
or other document filed with or furnished to the SEC by Mid Penn prior to the date hereof and on or after the date on which Mid Penn filed
with the SEC its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (but excluding any risk factor disclosures
contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements”
disclaimer or any other statements that are similarly non-specific or predictive or forward-looking in nature) unless such information
is specifically requested herein to be included in the Mid Penn Disclosure Schedules. Information
and documents commonly known as “confidential supervisory information” that is prohibited from disclosure shall not be disclosed
by Mid Penn and nothing in this Agreement shall require such disclosure. Mid Penn has made a good faith effort to ensure that the
disclosure on each schedule of the Mid Penn Disclosure Schedule corresponds to the section referenced herein. However, for purposes
of the Mid Penn Disclosure Schedule, any item disclosed on any schedule therein is deemed to be fully disclosed with respect to all schedules
under which such item may be relevant. References to the Knowledge of Mid Penn shall mean Knowledge of those Persons identified in Mid
Penn Disclosure Schedule 5.0.
5.1. Organization.
(a) Mid
Penn is a corporation duly organized, validly subsisting and in good standing under the laws of the Commonwealth of Pennsylvania, is duly
registered as a bank holding company under the BHCA and has elected to be, and qualifies as, a financial holding company under section
12 of the BHCA. Mid Penn has the requisite corporate power and authority to carry on its business as now conducted and is duly licensed
or qualified to do business in the Commonwealth of Pennsylvania and foreign jurisdictions where its ownership or leasing of property or
the conduct of its business requires such license or qualification except where the failure to be so licensed or qualified would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) Mid
Penn Bank is a Pennsylvania-chartered banking institution duly organized and validly subsisting under the laws of the Commonwealth of
Pennsylvania and is regulated by the PDB and the FDIC. Mid Penn Bank has the requisite corporate power and authority to carry on its business
as now conducted and is duly licensed or qualified to do business in the Commonwealth of Pennsylvania and foreign jurisdictions where
its ownership or leasing of property or the conduct of its business requires such license or qualification except where the failure to
be so licensed or qualified would not, individually or in the aggregate, have a Material Adverse Effect. The deposits of Mid Penn Bank
are insured by the FDIC to the fullest extent permitted by law, and all premiums
and assessments required
to be paid in connection therewith have been paid when due. Mid Penn Bank is a member in good standing of the FHLB and owns the requisite
amount of stock therein.
(c) Mid
Penn Disclosure Schedule 5.1(c) sets forth each Mid Penn Subsidiary, the state of organization of each Mid Penn Subsidiary
and the percentage of the outstanding equity securities, membership or other interests of such Mid Penn Subsidiary owned by Mid Penn or
Mid Penn Bank. Each Mid Penn Subsidiary is a corporation, limited liability company or other entity duly organized, validly subsisting
and in good standing under the laws of its jurisdiction of incorporation or organization. Each Mid Penn Subsidiary has the requisite corporate
power and authority to carry on its business as now conducted and is duly licensed or qualified to do business in the Commonwealth of
Pennsylvania and foreign jurisdictions where its ownership or leasing of property or the conduct of its business requires such license
or qualification except where the failure to be so licensed or qualified would not, individually or in the aggregate, have a Material
Adverse Effect. There are no restrictions on the ability of Mid Penn or any Mid Penn Subsidiary to pay dividends or distributions except,
in the case of Mid Penn or any Mid Penn Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally
applicable to all similarly regulated entities.
(d) The
respective minute books of Mid Penn and each Mid Penn Subsidiary accurately records, in all material respects, all material corporate
actions of their respective shareholders and boards of directors (including all committees thereof).
(e) Prior
to the date of this Agreement, Mid Penn has made available to William Penn true and correct copies of the articles of incorporation and
bylaws of Mid Penn and similar governing documents of Mid Penn Bank, each as in effect on the date hereof.
5.2. Capitalization.
(a) The
authorized capital stock of Mid Penn consists of (a) Forty Million (40,000,000) shares of Mid Penn Common Stock, having a par value
of $1.00 per share, of which, as of the date of this Agreement, 16,620,174 shares were issued and outstanding and (b) Ten Million
(10,000,000) shares of preferred stock, having a par value of $1.00 per share, none of which were issued and outstanding as of the date
of this Agreement. All of the issued and outstanding shares of Mid Penn Common Stock have been duly authorized and validly issued and
are fully paid, nonassessable and free of preemptive rights. As of the date of this Agreement, except as set forth on Mid Penn Disclosure
Schedule 5.2(a), there were no shares of Mid Penn Common Stock reserved for issuance upon exercise of options granted as employment
inducement awards and under Mid Penn’s equity compensation plans (the “Mid Penn Stock Plans”). As of the date
of this Agreement, except pursuant to this Agreement and the Mid Penn Stock Plans, there are no outstanding subscriptions, options, warrants,
puts, calls, rights, exchangeable or convertible securities or other commitments or agreements of any character relating to the issued
or unissued capital stock or other securities of Mid Penn, or otherwise obligating Mid Penn to issue, transfer, sell, purchase, redeem
or otherwise acquire any such securities. As of the date of this Agreement, except as disclosed in the Mid Penn SEC Reports there is no
Voting Debt of Mid Penn, nor any trust preferred or subordinated debt securities of Mid Penn are issued or outstanding. The shares of
Mid Penn Common Stock to be issued pursuant to the Merger will be duly authorized and
validly issued and, at the Effective Time, all such
shares will be fully paid, nonassessable and free of preemptive rights. Except for the Mid Penn Affiliate Letters, to the Knowledge of
Mid Penn, there are no voting trusts, shareholder agreements, proxies or other agreements in effect with regard to the voting or transfer
of the Mid Penn Common Stock or other equity interests of Mid Penn. Mid Penn has, or as of the Effective Time will have, sufficient authorized
and unissued shares of Mid Penn Common Stock to issue the Merger Consideration at the Effective Time. As of the date of this Agreement,
there are no outstanding options or other rights to purchase, or securities convertible or exchangeable into, Mid Penn Common Stock or
Mid Penn Preferred Stock.
(b) Mid
Penn owns all of the capital stock of Mid Penn Bank free and clear of any Lien. Except for the Mid Penn Subsidiaries or as set forth on
Mid Penn Disclosure Schedule 5.2(b), Mid Penn does not possess, directly or indirectly, any material equity interest in any corporate
entity, except for equity interests held in the investment portfolios of Mid Penn Subsidiaries, equity interests held by Mid Penn Subsidiaries
in a fiduciary capacity, and equity interests held in connection with the lending activities of Mid Penn Subsidiaries, including stock
in the FHLB. Mid Penn or Mid Penn Bank owns all of the outstanding shares of capital stock or equity interests of each Mid Penn Subsidiary
free and clear of all Liens.
(c) To
Mid Penn’s Knowledge, except as set forth on Mid Penn Disclosure Schedule 5.2(c) or as disclosed in the Mid Penn
SEC Reports, no Person or “group” (as that term is used in Section 13(d)(3) of the Exchange Act), is the beneficial
owner (as defined in Section 13(d) of the Exchange Act) of five percent (5%) or more of the outstanding shares of Mid Penn Common
Stock.
5.3. Authority; No Violation.
(a) Mid
Penn has full corporate power and authority to execute and deliver this Agreement and, subject (i) to receipt of the Regulatory Approvals
and (ii) the approval by Mid Penn’s shareholders of the issuance of the Mid Penn Common Stock to be issued in the Merger pursuant
to Nasdaq Listing Rules (the “Mid Penn Shareholder Approval”), to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Mid Penn and the consummation by Mid Penn of the transactions contemplated hereby, including
the Merger, have been duly and validly approved by the Board of Directors of Mid Penn, and no other corporate proceedings on the part
of Mid Penn, except for the Mid Penn Shareholder Approval, the execution and delivery of the Bank Plan of Merger by Mid Penn Bank and
the consent of the sole shareholder of Mid Penn Bank, are necessary to consummate the transactions contemplated hereby, including the
Merger. This Agreement has been duly and validly executed and delivered by Mid Penn and, subject to the receipt of the Regulatory Approvals
the Mid Penn Shareholder Approval and due and valid execution and delivery of this Agreement by William Penn, constitutes the valid and
binding obligation of Mid Penn, enforceable against Mid Penn in accordance with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors’ rights generally, and subject, as to enforceability, to general principles of equity.
(b) Subject
to receipt of Regulatory Approvals, the Mid Penn Shareholder Approval and William Penn’s and Mid Penn’s compliance with any
conditions contained herein, (i) the
execution and delivery of this Agreement by Mid Penn, (ii) the consummation of the transactions
contemplated hereby, and (iii) compliance by Mid Penn with any of the terms or provisions hereof will not (A) conflict with
or result in a breach of any provision of the articles of incorporation or bylaws of Mid Penn or any similar governing documents of any
of Mid Penn’s Subsidiaries, including Mid Penn Bank, (B) violate any statute, code, ordinance, rule, regulation, judgment,
order, writ, decree or injunction applicable to Mid Penn or any Mid Penn Subsidiary or any of their respective properties or assets, or
(C) violate, conflict with, result in a breach of any provisions of, constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, result in the termination of, accelerate the performance required by, or result in
a right of termination or acceleration or the creation of any Lien upon any of the properties or assets of Mid Penn or any Mid Penn Subsidiary
under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which any of them is a party, or by which they or any of their respective properties or assets may be bound
or affected, except, with respect to (B) and (C), for any violations, conflicts, breaches, defaults or other occurrences which would
not, individually or in the aggregate, constitute a Material Adverse Effect.
5.4. Consents.
Except for the Regulatory
Approvals, the Mid Penn Shareholder Approval and consents, approvals, filings and registrations from or with the SEC, Nasdaq and state
“blue sky” authorities, and compliance with any conditions contained therein, no consents or approvals or waivers of, or filings
or registrations with, any Governmental Entity are or will be necessary, and no consents or approvals of any third parties are or will
be necessary, in connection with (a) the execution and delivery of this Agreement by Mid Penn or the Bank Plan of Merger by Mid Penn
Bank and (b) the completion by Mid Penn of the transactions contemplated hereby or by Mid Penn Bank of the Bank Merger. Mid Penn
(x) has no reason to believe that the consents and approvals set forth above will not be received or will be received with conditions,
limitations or restrictions unacceptable to it or which would adversely impact the ability of Mid Penn or Mid Penn Bank to complete the
transactions contemplated by this Agreement and (y) knows of no reason why all Regulatory Approvals or any other approvals from any
Governmental Entity required for the consummation of the transactions contemplated by this Agreement should not be obtained on a timely
basis.
5.5. Financial Statements; Undisclosed Liabilities.
(a) Mid
Penn has previously made available, or will make available, to William Penn the Mid Penn Regulatory Reports. The Mid Penn Regulatory Reports
have been, or will be, prepared in all material respects in accordance with applicable regulatory accounting principles and practices,
including, but not limited to, all applicable rules, regulations and pronouncements of applicable Bank Regulators, throughout the periods
covered by such statements, and fairly present or will fairly present in all material respects the financial position, results of operations
and changes in shareholders’ equity of Mid Penn as of and for the periods ended on the dates thereof, in accordance with applicable
regulatory accounting principles, including, but not limited to, all applicable rules, regulations and pronouncements of applicable Bank
Regulators, applied on a consistent basis.
(b) Mid
Penn has previously made available, or will make available, to William Penn the Mid Penn Financial Statements. The Mid Penn Financial
Statements have been or will be prepared in accordance with GAAP, and (including the related notes where applicable) fairly present, or
will fairly present, in each case in all material respects the consolidated financial position, results of operations and cash flows of
Mid Penn and the Mid Penn Subsidiaries on a consolidated basis as of and for the respective periods ending on the dates thereof (subject
in the case of the unaudited interim statements to normal year-end adjustments), in accordance with GAAP during the periods involved,
except as indicated in the notes thereto and except in the case of any unaudited statements to normal recurring audit adjustments.
(c) At
the date of each balance sheet included in the Mid Penn Financial Statements, neither Mid Penn nor Mid Penn Bank has had or will have
any material liabilities, obligations or loss contingencies of any nature (whether absolute, accrued, contingent or otherwise) of a type
required to be reflected in such Mid Penn Financial Statements or Mid Penn Regulatory Reports or in the footnotes thereto that are not
fully reflected or reserved against therein or fully disclosed in a footnote thereto and except in the case of any unaudited statements
to normal, recurring audit adjustments and, in the case of Mid Penn Regulatory Reports, the absence of footnotes.
(d) The
records, systems, controls, data and information of Mid Penn and the Mid Penn Subsidiaries are recorded, stored, maintained and operated
under means (including any electronic, mechanical or photographic process, whether computerized or not) that are under the exclusive ownership
and direct control of Mid Penn or any Mid Penn Subsidiary (including all means of access thereto and therefrom), except for any non-exclusive
ownership and non-direct control that would not reasonably be expected to have a Material Adverse Effect. Mid Penn (i) has implemented
and maintains a system of internal control over financial reporting that is designed to provide reasonable assurances regarding the reliability
of financial reporting and the preparation of its financial statements for external purposes in accordance with GAAP, (ii) has implemented
and maintains disclosure controls and procedures to ensure that material information relating to Mid Penn, including its consolidated
Mid Penn Subsidiaries, is made known to the chief executive officer and the chief financial officer of Mid Penn by others within those
entities, and (iii) has disclosed, based on its most recent evaluation prior to the date hereof, to Mid Penn’s outside auditors
and the audit committee of Mid Penn’s Board of Directors (A) any significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting that are reasonably likely to adversely affect Mid Penn’s ability to record,
process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other
employees who have a significant role in Mid Penn’s internal controls over financial reporting. These disclosures (if any) were
made in writing by management to Mid Penn’s auditors and audit committee and a copy has previously been made available to William
Penn.
(e) Since
December 31, 2021, (i) neither Mid Penn nor any of the Mid Penn Subsidiaries nor, to the Knowledge of Mid Penn, any director,
officer, employee, auditor, accountant or representative of Mid Penn or any Mid Penn Subsidiary has received or otherwise had or obtained
Knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or
methods of Mid Penn or any Mid Penn Subsidiary or their respective internal accounting controls, including
any material complaint, allegation, assertion or claim that Mid Penn or any Mid Penn Subsidiary has engaged in illegal accounting or auditing
practices, and (ii) no attorney representing Mid Penn or any Mid Penn Subsidiary, whether or not employed by Mid Penn or any Mid
Penn Subsidiary, has reported evidence of a material violation of Securities Laws, breach of fiduciary duty or similar violation by Mid
Penn or any of its officers, directors, employees or agents to the Board of Directors of Mid Penn or any committee thereof or to any director
or officer of Mid Penn.
5.6. Taxes.
(a) All
income and other material or material in the aggregate Tax Returns required to have been filed by Mid Penn and any of the Mid Penn Subsidiaries
have been, or will be, duly and timely filed (taking into account extensions of time to file), and each such Tax Return is, or will be,
true, correct and complete in all material respects. All income and other material Taxes due and payable by Mid Penn and any of the Mid
Penn Subsidiaries (whether or not shown on any Tax Return) have been paid.
(b) There
is no action, audit, dispute or claim now pending or proposed or threatened in writing against Mid Penn or any of the Mid Penn Subsidiaries
in respect of Taxes. Except as set forth on Mid Penn Disclosure Schedule 5.6(b), neither Mid Penn nor any of the Mid Penn Subsidiaries
is the beneficiary of any extension of time within which to file any income or other material Tax Return which Tax Return has not been
filed. No written claim has been made by a Taxing Authority in the last five (5) years in a jurisdiction where Mid Penn or any of
the Mid Penn Subsidiaries did not file Tax Returns that it is or may be subject to taxation in that jurisdiction. There are no Liens on
any of the assets of Mid Penn with respect to Taxes other than for Taxes not yet due and payable.
(c) Mid
Penn and any of the Mid Penn Subsidiaries has withheld and timely paid all material Taxes required to have been withheld and paid in connection
with amounts paid and has complied with all information reporting and backup withholding requirements in all material respects.
(d) Mid
Penn Disclosure Schedule 5.6(d) lists all Tax Returns filed by Mid Penn or the Mid Penn Subsidiaries for taxable periods ended
on or after June 30, 2016 that have been or are currently the subject of audit. Except as set forth on Mid Penn Disclosure Schedule
5.6(d), neither Mid Penn nor any of the Mid Penn Subsidiaries has waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to a Tax assessment or deficiency which waiver or extension is still in effect.
(e) No
foreign, federal, state, or local tax audits or administrative or judicial Tax proceedings are being conducted or to the Knowledge of
Mid Penn are pending with respect to Mid Penn or any of the Mid Penn Subsidiaries. Neither Mid Penn nor any of the Mid Penn Subsidiaries
has not received from any foreign, federal, state, or local Taxing Authority (including jurisdictions where Mid Penn has not filed Tax
Returns) any (i) notice indicating an intent to open an audit or other review, (ii) request for information related to Tax matters,
or (iii) notice of
deficiency or proposed adjustment
for any amount of Tax proposed, asserted, or assessed by any Taxing Authority against Mid Penn or any of the Mid Penn Subsidiaries.
(f) Mid
Penn is not a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code. Neither Mid
Penn nor any of the Mid Penn Subsidiaries has been a member of a Relevant Group other than a Relevant Group of which Mid Penn is the parent.
(g) Neither
Mid Penn nor any of the Mid Penn Subsidiaries has agreed to, or is required to, make any adjustment under Section 481(a) of
the Code. Neither Mid Penn nor any of the Mid Penn Subsidiaries has been a “distributing corporation” or a “controlled
corporation” with respect to a transaction described in Section 355 of the Code within the five (5) year period ending
as of the date of this Agreement. Neither Mid Penn nor any of the Mid Penn Subsidiaries is subject to a private ruling from or agreement
with any Taxing Authority. Mid Penn has disclosed on its federal income Tax Returns all positions taken in those Tax Returns that could
give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code. Except as set forth
on Mid Penn Disclosure Schedule 5.6(g), neither Mid Penn nor any of the Mid Penn Subsidiaries has participated in any “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4.
(h) Except
as set forth on Mid Penn Disclosure Schedule 5.6(h), neither Mid Penn nor any of the Mid Penn Subsidiaries is a party to an agreement
the principal purpose of which is Tax allocation or sharing. Neither Mid Penn nor any of the Mid Penn Subsidiaries is liable for the Taxes
of any Person under Section 1.1502-6 of the Treasury Regulations (or any similar provision of state, local or non-U.S. law), other
than as a result of being a member of a Relevant Group of which Mid Penn is the parent, or as a transferee or successor, by contract or
otherwise.
(i) Neither
Mid Penn nor any of the Mid Penn Subsidiaries will be required to include any material item of income in, or exclude any material item
of deduction from, taxable income for any taxable period (or portion of such taxable period) ending after the Closing Date as a result
of (i) any installment sale or open transaction disposition made on or prior to the Closing Date, (ii) prepaid amount received
on or prior to the Closing Date, (iii) intercompany transactions or excess loss accounts described in the Treasury Regulations under
Section 1502 of the Code (or any similar provision of state, local or non-U.S. Tax law) or (iv) cancellation of indebtedness
arising on or prior to the Closing Date.
5.7. No Material Adverse Effect.
Mid Penn has not suffered
any Material Adverse Effect since December 31, 2023, and no event has occurred or circumstance arisen since that date that, in the
aggregate, has had or is reasonably likely to have a Material Adverse Effect on Mid Penn.
5.8. No Default under Material Contracts.
Neither Mid Penn nor any Mid
Penn Subsidiary is in default under any material contract, agreement, commitment, arrangement, lease, insurance policy or other instrument
to which it is a
party, by which its assets, business, or operations may be bound or affected, or under which it or its assets, business,
or operations receive benefits, and there has not occurred any event that, with the lapse of time or the giving of notice or both, would
constitute such a default, except where such default, either individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect.
5.9. Ownership of Property; Insurance Coverage.
(a) Mid
Penn and each Mid Penn Subsidiary has good and, as to real property and securities, marketable title to all material assets and properties
owned, and as to securities held, by Mid Penn or any Mid Penn Subsidiary in the conduct of their businesses, whether such assets and properties
are real or personal, tangible or intangible, including assets and property reflected in the balance sheets contained in the Mid Penn
Regulatory Reports and in the Mid Penn Financial Statements or acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary course of business since the date of such balance sheets), subject to
no material Liens, except (i) those items which secure liabilities for public or statutory obligations or any discount with, borrowing
from or other obligations to FHLB, inter-bank credit facilities, or any transaction by a Mid Penn Subsidiary acting in a fiduciary capacity,
(ii) statutory Liens for amounts not yet delinquent or that are being contested in good faith, (iii) non-monetary Liens affecting
real property which do not materially adversely affect the value or use of such real property, and (iv) those described and reflected
in the Mid Penn Financial Statements. Such securities are valued on the books of Mid Penn and each of the Mid Penn Subsidiaries in accordance
with GAAP. Mid Penn and the Mid Penn Subsidiaries, as lessee, have the right under valid and existing leases of real and personal properties
used by Mid Penn and Mid Penn Subsidiaries in the conduct of their businesses to occupy or use all such properties as presently occupied
and used by each of them. Neither Mid Penn nor any Mid Penn Subsidiary is in default in any material respect under any lease for any real
or personal property to which either Mid Penn or any Mid Penn Subsidiary is a party, and there has not occurred any event that, with lapse
of time or the giving of notice or both, would constitute such default, except for such defaults that, either individually or in the aggregate,
will not have a Material Adverse Effect on Mid Penn.
(b) With
respect to all agreements pursuant to which Mid Penn or any Mid Penn Subsidiary has purchased securities subject to an agreement to resell,
if any, Mid Penn or such Mid Penn Subsidiary, as the case may be, has a valid, perfected first Lien in the securities or other collateral
securing the repurchase agreement, and the value of such collateral equals or exceeds the amount of the debt secured thereby. Mid Penn
and each of the Mid Penn Subsidiaries employs investment, securities risk management and other policies, practices and procedures that
Mid Penn and each such Mid Penn Subsidiary believes are prudent and reasonable in the context of such businesses.
(c) Mid
Penn and each Mid Penn Subsidiary currently maintain insurance considered by Mid Penn to be reasonable for their respective operations
in accordance with industry practice. There are presently no material claims pending under such policies of insurance and no notices have
been given by Mid Penn or any Mid Penn Subsidiary under such policies (other than with respect to health or disability insurance). All
such insurance is valid and enforceable and in full force and effect, and within the last three years Mid Penn and each Mid Penn Subsidiary
has
received each type of insurance coverage for which it has applied and during such periods has not been denied indemnification for
any material claims submitted under any of its insurance policies.
5.10. Legal Proceedings.
Neither Mid Penn nor any Mid
Penn Subsidiary is a party to any, and there are no pending or, to the Knowledge of Mid Penn, threatened legal, administrative, arbitration
or other proceedings, claims (whether asserted or unasserted), actions or governmental investigations or inquiries of any material nature
(a) against Mid Penn or any Mid Penn Subsidiary, (b) to which Mid Penn or any Mid Penn Subsidiary’s material assets are
or may be subject, (c) challenging the validity or propriety of any of the transactions contemplated by this Agreement, or (d) that
would reasonably be expected to adversely affect the ability of Mid Penn or Mid Penn Bank to perform under this Agreement in any material
respect.
5.11. Compliance With Applicable Law.
(a) Each
of Mid Penn and each Mid Penn Subsidiary is in compliance in all material respects with all applicable federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders or decrees applicable to it, its properties, assets and
deposits, its business, and its conduct of business and its relationship with its employees, including, without limitation, the USA
PATRIOT Act, the Bank Secrecy Act, OFAC regulations, the Equal Credit Opportunity Act, the Fair Housing Act, the CRA, the Home
Mortgage Disclosure Act, the Fair Credit Reporting Act, the Fair Debt Collections Practices Act, the Truth in Lending Act, and all
other applicable fair lending laws and other laws relating to discriminatory business practices, Title VII of the Civil Rights
Act of 1964, as amended, the Americans With Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973, as amended, the
Family and Medical Leave Act of 1993, as amended, the Genetic Information Non-Discrimination Act of 2008, and all similar federal,
state or local laws and/or ordinances, including without limitation, the Pennsylvania Human Relations Act, as amended, and any other
non-discrimination and fair employment practices laws of any state and/or locality in which a Mid Penn or Mid Penn Subsidiary
employee works, worked, resides, or resided, all as amended, ERISA, the Affordable Care Act, as amended, the Age Discrimination in
Employment Act of 1967, as amended, and the Worker Adjustment and Retraining Notification Act, as amended, and neither Mid Penn nor
any Mid Penn Subsidiary has received any written notice to the contrary except where the failure to comply would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on Mid Penn. The Board of Directors of Mid Penn Bank
has adopted and Mid Penn Bank has implemented an anti-money laundering program that contains adequate and appropriate customer
identification verification procedures that has not been deemed ineffective by any Governmental Entity and that meets the
requirements of Sections 352 and 326 of the USA PATRIOT Act and the regulations thereunder.
(b) Each
of Mid Penn and each Mid Penn Subsidiary has all material permits, licenses, authorizations, orders and approvals of, and has made all
filings, applications and registrations with, all Governmental Entities and Bank Regulators that are required in order to permit it to
own or lease its properties and to conduct its business as presently conducted except where the failure to hold such permits, licenses,
authorizations, orders or approvals, or the failure to make such filings, applications or registrations would not, individually or in
the aggregate, reasonably be expected to
have a Material Adverse Effect
on Mid Penn; all such permits, licenses, certificates of authority, orders and approvals are in full force and effect in all material
respects, and to the Knowledge of Mid Penn, no suspension or cancellation of any such permit, license, certificate, order or approval
is threatened or will result from the consummation of the transactions contemplated by this Agreement, subject to obtaining the Regulatory
Approvals.
(c) Since
January 1, 2020, neither Mid Penn nor any Mid Penn Subsidiary has received any written notification or any other communication from
any Bank Regulator (i) asserting that Mid Penn or any Mid Penn Subsidiary is not in material compliance with any of the statutes,
regulations or ordinances which such Bank Regulator enforces; (ii) threatening to revoke any license, franchise, permit or governmental
authorization that is material to Mid Penn or any Mid Penn Subsidiary; (iii) requiring or threatening to require Mid Penn or any
Mid Penn Subsidiary, or indicating that Mid Penn or any Mid Penn Subsidiary may be required, to enter into a cease and desist order, agreement
or memorandum of understanding or any other agreement with any Governmental Entity or Bank Regulator that is charged with the supervision
or regulation of banks or engages in the insurance of bank deposits restricting or limiting, or purporting to restrict or limit, in any
material respect the operations of Mid Penn or any Mid Penn Subsidiary, including without limitation any restriction on the payment of
dividends; or (iv) directing, restricting or limiting, or purporting to direct, restrict or limit, in any manner the operations of
Mid Penn or any Mid Penn Subsidiary, including without limitation any restriction on the payment of dividends (any such notice, communication,
memorandum, agreement or order described in this sentence is hereinafter referred to as a “Mid Penn Regulatory Agreement”).
Neither Mid Penn nor any Mid Penn Subsidiary has consented to or entered into any Mid Penn Regulatory Agreement that is currently in effect
or that was in effect since January 1, 2020. The most recent regulatory rating given to Mid Penn Bank as to compliance with the CRA
is satisfactory or better.
(d) Each
of Mid Penn and Mid Penn Bank are “well capitalized” within the meaning of the regulations of the FRB and the FDIC, respectively,
and neither Mid Penn nor Mid Penn Bank knows of any facts or circumstances that would reflect adversely on the financial and managerial
standards to be applied by the FRB under the BHCA in determining whether to approve the Merger. Neither Mid Penn nor Mid Penn Bank knows
of any reason why it would not continue to be “well capitalized” under applicable capital requirements imposed by any Bank
Regulator.
5.12. Employee Benefit Plans.
(a) Except
as would not, individually or in the aggregate, have a Material Adverse Effect, (i) each Mid Penn Benefit Plan that is subject to
the requirements of ERISA and the Code has been established and administered in all respects in accordance with its terms and in compliance
with the applicable provisions of ERISA, the Code and other applicable laws, rules and regulations; (ii) each Mid Penn Benefit
Plan which is intended to be qualified within the meaning of Section 401(a) of the Code has received a favorable determination
letter as to its qualification, and with respect to all plan document qualification requirements for which the applicable remedial amendment
period under Section 401(b) of the Code has closed, any amendments required by such determination letter were made as and when
required by such determination letter, and, to the Knowledge of Mid Penn, nothing has occurred, whether by action or failure to act, that
could reasonably be expected to cause the loss of such qualification; (iii) to
the Knowledge of Mid Penn, no event has occurred and
no condition exists that is reasonably likely to subject Mid Penn or any Mid Penn Subsidiary, solely by reason of its affiliation with
any past or present “ERISA Affiliate”, to any Tax, fine, Lien, penalty or other liability imposed by ERISA or the Code; and
(iv) all contributions required to be made under the terms of any Mid Penn Benefit Plan have been timely made or, if not yet due,
have been properly reflected in Mid Penn Financial Statements in accordance with GAAP. For purposes of this Section 5.12,
Mid Penn Benefit Plan means each “employee benefit plan” (within the meaning of Section 3(3) of ERISA), and all
other employee benefit plans, agreements, programs, policies or other arrangements maintained by Mid Penn or a Mid Penn Subsidiary, whether
or not subject to ERISA (including any funding mechanism therefor, such plans, agreements, programs, policies and arrangements collectively
referred to as “Mid Penn Benefit Plans”).
(b) Mid
Penn and the Mid Penn Subsidiaries currently maintain a defined benefit pension plan within the meaning of ERISA Section 3(2). None
of the Mid Penn Benefit Plans is a “multiemployer plan” (within the meaning of ERISA Section 3(37)) and none of Mid Penn,
the Mid Penn Subsidiaries, or any ERISA Affiliate has any liability with respect to a multiemployer plan that remains unsatisfied.
(c) No
Mid Penn Benefit Plan that is subject to Section 436 of the Code has an adjusted funding target attainment percentage (as such term
is defined in Section 436 of the Code) that is less than, or presumed to be less than, eighty percent (80%). No Mid Penn Benefit
Plan that is subject to Section 430 of the Code is considered at-risk (as such term is defined in Section 430 of the Code).
No accumulated funding deficiency (as such term is defined in Section 412 of the Code) has been incurred with respect to any Mid
Penn Benefit Plan subject to Section 412 of the Code, whether or not waived.
(d) With
respect to any Mid Penn Benefit Plan, the assets of any trust under such Mid Penn Benefit Plan, Mid Penn Benefit Plan sponsor, Mid Penn
Benefit Plan fiduciary or Mid Penn Benefit Plan administrator, (i) no actions, suits or claims (other than routine claims for benefits
in the ordinary course) are pending or, to the Knowledge of Mid Penn, threatened and (ii) to the Knowledge of Mid Penn, no facts
or circumstances exist that could reasonably be expected to give rise to any such actions, suits or claims.
(e) Except
as would not, individually or in the aggregate, have a Material Adverse Effect, all Mid Penn Benefit Plans which provide for the deferral
of compensation, within the meaning of Section 409A of the Code, have been administered in good faith compliance with Section 409A
of the Code. No outstanding stock options and no shares of restricted stock are subject to Section 409A of the Code.
(f) No
liability under Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by Mid Penn or any Mid Penn Subsidiary
with respect to any ongoing, frozen, or terminated Mid Penn Benefit Plan.
(g) No
notice of a reportable event within the meaning of Section 4043 of ERISA for which the 30-day reporting requirement has been waived,
has been required to be filed for any Mid Penn Benefit Plan within the past twelve (12) months.
5.13. Environmental Matters.
(a) To
the Knowledge of Mid Penn, neither (i) the conduct nor operation of the business of Mid Penn or any Mid Penn Subsidiary nor (ii) any
condition of any property currently or previously owned or operated by Mid Penn or any Mid Penn Subsidiary (including, without limitation,
in a fiduciary or agency capacity), results or resulted in a violation of any Environmental Laws that is reasonably likely to impose a
material liability (including a material remediation obligation) upon Mid Penn or any Mid Penn Subsidiary. No condition exists or has
existed or event has occurred with respect to any of them or any such property that, with notice or the passage of time, or both, is reasonably
likely to result in any material liability to Mid Penn or any Mid Penn Subsidiary by reason of any Environmental Laws. Neither Mid Penn
nor any Mid Penn Subsidiary during the past five years has received any written notice from any Person or Governmental Entity that Mid
Penn or any Mid Penn Subsidiary or the operation or condition of any property ever owned, operated, or held as collateral or in a fiduciary
capacity by any of them (including any Other Real Estate Owned or property pledged as collateral for any loan held by Mid Penn or any
Mid Penn Subsidiary) are currently in violation of or otherwise are alleged to have liability under any Environmental Laws or relating
to Materials of Environmental Concern (including, but not limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any Materials of Environmental Concern at, on, beneath, or originating from any such property) for which a material
liability is reasonably likely to be imposed upon Mid Penn or any Mid Penn Subsidiary; and
(b) There
is no suit, claim, action, demand, executive or administrative order, directive, investigation or proceeding pending or, to the Mid Penn’s
Knowledge, threatened, before any court, Governmental Entity or other forum against Mid Penn or any Mid Penn Subsidiary (i) for alleged
noncompliance (including by any predecessor) with, or liability under, any Environmental Law or (ii) relating to the presence of
or release into the environment of any Materials of Environmental Concern (as defined herein), whether or not occurring at or on a site
owned, leased or operated by Mid Penn or any Mid Penn Subsidiary.
5.14. Brokers, Finders and Financial Advisors.
Neither Mid Penn nor any Mid
Penn Subsidiary, nor any of their respective officers, directors, employees or agents, has employed any broker, finder or financial advisor
in connection with the transactions contemplated by this Agreement, or incurred any liability or commitment for any fees or commissions
to any such Person in connection with the transactions contemplated by this Agreement except for the retention of Stephens Inc. and Keefe,
Bruyette & Woods, Inc. and the fees payable pursuant thereto.
5.15. Loan Matters.
The allowance for credit losses
reflected in Mid Penn’s audited consolidated balance sheet at December 31, 2023 was, and the allowance for credit losses shown
on Mid Penn’s balance sheets for periods ending after December 31, 2023, was, or will be, adequate, as of the date thereof,
under GAAP.
5.16. No William Penn Capital Stock.
Neither Mid Penn nor any Mid
Penn Subsidiary beneficially owns, directly or indirectly, any shares of William Penn Common Stock, or any options, warrants or other
rights to acquire any William Penn Common Stock, except pursuant to the Merger as contemplated in this Agreement.
5.17. SEC Reports.
Mid Penn has timely filed
with or furnished to, as applicable, the SEC all registration statements, prospectuses, reports, schedules, forms, statements and other
documents (including exhibits and all other information incorporated by reference) required to be filed or furnished by it with the SEC
since December 31, 2023 (the “Mid Penn SEC Reports”). As of their respective filing dates (or, if amended or superseded
by a subsequent filing, as of the date of the last such amendment or superseding filing prior to the date hereof), each of the Mid Penn
SEC Reports complied as to form in all material respects with the applicable requirements of the Exchange Act, and the Securities Act
to the extent applicable, and the rules and regulations of the SEC thereunder, applicable to such Mid Penn SEC Reports. None of the
Mid Penn SEC Reports, including any financial statements, schedules or exhibits included or incorporated by reference therein at the time
they were filed (or, if amended or superseded by a subsequent filing, as of the date of the last such amendment or superseding filing
prior to the date hereof), contained any untrue statement of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
None of Mid Penn Subsidiaries is required to file or furnish any forms, reports or other documents with the SEC. As of the date of this
Agreement, no executive officer of Mid Penn has failed in any respect to make the certifications required of him or her under Section 302
or 906 of the Sarbanes-Oxley Act.
5.18. Required Vote.
Pursuant to Nasdaq Listing
Rules, Mid Penn shareholders must approve the issuance of the shares of Mid Penn Common Stock in connection with the Merger. In accordance
with the PBCL, Mid Penn’s articles of incorporation and bylaws and Nasdaq Listing Rules, the affirmative vote of the holders of
at least a majority of votes cast at the Mid Penn Shareholders’ Meeting is necessary to approve the issuance of the shares of Mid
Penn Common Stock in connection with the Merger. This Agreement and the Merger have been unanimously approved by the members of the Mid
Penn Board of Directors.
5.19. Registration Obligations.
Except for the shares of Mid
Penn Common Stock to be issued under Article III of this Agreement, neither Mid Penn nor any Mid Penn Subsidiary is under
any obligation, contingent or otherwise, that will survive the Effective Time by reason of any agreement to register any transaction involving
any of its securities under the Securities Act.
5.20. Risk Management Instruments.
All material interest rate
swaps, caps, floors, option agreements, futures and forward contracts and other similar risk management arrangements, whether entered
into for Mid Penn’s own account, or for the account of one or more of the Mid Penn Subsidiaries or their customers, were in all
material respects entered into in compliance with all applicable laws, rules, regulations and regulatory policies, and with counterparties
believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of Mid Penn
or any Mid Penn Subsidiary, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’
rights or by general equity principles), and is in full force and effect. Neither Mid Penn nor any Mid Penn Subsidiary, nor to the Knowledge
of Mid Penn any other party thereto, is in breach of any of its obligations under any such agreement or arrangement in any material respect.
5.21. Fairness Opinion.
Prior to the execution of
this Agreement, the board of directors of Mid Penn has received an opinion (which, if initially rendered verbally, has been or will be
confirmed by a written opinion, dated the same date) from Keefe, Bruyette & Woods, Inc. to the effect that, as of the date
of such opinion, and based upon and subject to the factors, limitations and assumptions set forth therein, the Exchange Ratio is fair,
from a financial point of view, to Mid Penn. Such opinion has not been amended or rescinded as of the date of this Agreement.
5.22. Fiduciary Accounts.
Mid Penn Bank and each Mid
Penn Subsidiary has properly administered all accounts for which it acts as a fiduciary in all material respects, including but not limited
to accounts for which it serves as trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in
accordance with the terms of the governing documents and applicable laws and regulators. Neither Mid Penn Bank nor any other Mid Penn
Subsidiary, nor has any of their respective directors, officers or employees, committed any breach of trust with respect to any such fiduciary
account and the records for each such fiduciary account.
5.23. Mid Penn Information Supplied.
The information relating to
Mid Penn and any Mid Penn Subsidiary to be contained in the Proxy Statement - Prospectus and/or Registration Statement, or in any other
document filed with any Bank Regulator or other Governmental Entity in connection herewith (other than the information provided by William
Penn specifically for inclusion), will not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they are made, not misleading.
5.24. Reorganization.
Mid Penn has not taken any
action (or failed to take any action) and is not aware of any fact or circumstance that could reasonably be expected to prevent the Merger
from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.
5.25. No Financing.
Mid Penn has, or will have
available to it prior to the Closing, all funds necessary to satisfy all of its obligations hereunder.
5.26. Intellectual Property.
Mid Penn and each Mid Penn
Subsidiary owns or possesses valid and binding licenses and other rights (subject to expirations in accordance with their terms) to use
all patents, copyrights, trade secrets, trade names, service marks and trademarks, which are material to the conduct of their business
as currently conducted, each without payment, except for all license agreements under which license fees or other payments are due in
the ordinary course of Mid Penn’s or each of the Mid Penn Subsidiaries’ business, and neither Mid Penn nor any Mid Penn Subsidiary
has received any notice of conflict with respect thereto that asserts the rights of others. Mid Penn and each Mid Penn Subsidiary has
performed all material obligations required to be performed, and are not in default in any material respect, under any contract, agreement,
arrangement or commitment relating to any of the foregoing. To Mid Penn’s Knowledge, the conduct of the business of Mid Penn and
each Mid Penn Subsidiary as currently conducted or proposed to be conducted does not, in any material respect, infringe upon, dilute,
misappropriate or otherwise violate any intellectual property owned or controlled by any third party.
5.27. Labor Matters.
There are no labor or collective
bargaining agreements to which Mid Penn or any Mid Penn Subsidiary is a party. To the Knowledge of Mid Penn, there is no activity involving
Mid Penn or any Mid Penn Subsidiary seeking to certify a collective bargaining unit involving any of their employees. There is no labor
strike, labor dispute (other than routine employee grievances that are not related to union employees), work slowdown, stoppage or
lockout pending or threatened against Mid Penn or any Mid Penn Subsidiary. There is no unfair labor practice or labor arbitration proceeding
pending or, to the Knowledge of Mid Penn, threatened against Mid Penn or any Mid Penn Subsidiary (other than routine employee grievances
that are not related to union employees). Mid Penn and each Mid Penn Subsidiary is in compliance in all material respects with all applicable
laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and are not engaged in any
unfair labor practice.
5.28. Takeover Laws.
The adoption and approval
by the board of directors of Mid Penn of this Agreement, the Merger and the other transactions contemplated in this Agreement represent
all the action necessary to render inapplicable to this Agreement, the Merger and such other transactions, the provisions of any potentially
applicable “anti-takeover”, “control share”, “fair price”,
“moratorium”, “interested
shareholder” or similar anti-takeover statutes or regulations applicable to Mid Penn in connection with the execution, delivery
or performance of this Agreement.
5.29. Quality of Representations.
The representations made by
Mid Penn in this Agreement are true, correct and complete in all material respects and do not omit statements necessary to make the representations
not misleading under the circumstances.
5.30. No Other Representations or Warranties.
(a) Except
for the representations and warranties made by Mid Penn in this Article V, neither Mid Penn nor any other Person makes any
express or implied representation or warranty with respect to Mid Penn, its Subsidiaries, or their respective businesses, operations,
assets, liabilities, conditions (financial or otherwise) or prospects or with respect to any oral or written information presented to
William Penn or any of its affiliates or representatives in the course of their due diligence investigation of Mid Penn, the negotiation
of this Agreement or otherwise in the course of the transaction contemplated hereby, and Mid Penn hereby disclaims any such other representations
or warranties.
(b) Notwithstanding
anything contained in this Agreement to the contrary, Mid Penn acknowledges and agrees that neither William Penn nor any other Person
has made or is making any representations or warranties relating to William Penn whatsoever, express or implied, beyond those expressly
given by William Penn in Article IV hereof, including any implied representation or warranty as to the accuracy or completeness
of any information regarding William Penn furnished or made available to Mid Penn or any of its representatives.
ARTICLE VI
COVENANTS OF WILLIAM PENN
6.1. Conduct of Business.
(a) Affirmative
Covenants. From the date of this Agreement to the Effective Time or earlier termination of this Agreement, except with the written
consent of Mid Penn, which consent shall not be unreasonably withheld, conditioned or delayed, or as expressly contemplated by this Agreement
(including as set forth in the William Penn Disclosure Schedules), William Penn will, and will cause each William Penn Subsidiary to,
(i) operate its business only in the usual, regular and ordinary course of business in all material respects, (ii) use commercially
reasonable efforts to preserve intact its business organization and assets and maintain its rights and franchises, and (iii) voluntarily
take no action that would, or would be reasonably likely to, materially adversely affect or delay the ability of the parties to obtain
any Regulatory Approvals or other approvals of Governmental Entities required for the transactions contemplated hereby or materially increase
the period of time necessary to obtain such approvals, or materially adversely affect or delay its ability to perform its covenants and
agreements under this Agreement.
(b) Negative
Covenants. William Penn agrees that from the date of this Agreement to the Effective Time or earlier termination of this Agreement,
except as (i) otherwise specifically
permitted or required by this Agreement, (ii) set forth on William Penn Disclosure Schedule 6.1(b) (it
being understood that any disclosures made with respect to a subsection of this Section 6.1(b) shall be deemed to qualify
(a) any other subsection of this Section 6.1(b) specifically referenced or cross-referenced, and (b) any other
subsection of this Section 6.1(b) to the extent it is reasonably apparent on its face (notwithstanding the absence of
a specific cross reference) from a reading of the disclosure that such disclosure applies to such other subsections)), (iii) consented
to by Mid Penn in writing in advance, and, except with respect to paragraphs (1), (2), (7), (8) and (13) of this Section 6.1(b),
which consent shall not be unreasonably withheld, conditioned or delayed, or (iv) required by law or by any Bank Regulator, William
Penn will not, and it will cause each of the William Penn Subsidiaries not to:
(1) change
or waive any provision of its articles of incorporation, charter or bylaws, except as required by law, or appoint any new directors to
its board of directors, except to fill any vacancy in accordance with its bylaws;
(2) change
the number of authorized or issued shares of its capital stock, issue any shares of William Penn capital stock, including any shares that
are held as Treasury Stock as of the date of this Agreement, or issue or grant any right or agreement of any character relating to its
authorized or issued capital stock or any securities convertible into shares of such stock, make any grant or award under any option or
benefit plan, or split, combine or reclassify any shares of capital stock, or declare, set aside or pay any dividend or other distribution
in respect of capital stock, or redeem or otherwise acquire any shares of capital stock, except that William Penn may (A) issue shares
of William Penn Common Stock upon the exercise of stock options outstanding prior to the date of this Agreement and listed on William
Penn Disclosure Schedule 6.1(b)(2) and (B) declare and pay quarterly cash dividends of no more than $0.03 per share of William
Penn Common Stock;
(3) enter
into, amend in any material respect or terminate any William Penn Material Contract (including without limitation any settlement agreement
with respect to litigation), except in the ordinary course of business or as required by law;
(4) make
application for the opening or closing of any, or open, close or sell any, branch, automated banking facility or administrative office;
(5) grant
or agree to pay any bonus, severance or termination payment to, or enter into, renew or amend any employment agreement, severance agreement
and/or supplemental executive agreement with, or increase in any manner the compensation or fringe benefits of, any of its directors,
officers or employees, except (i) as may be required pursuant to commitments existing on the date hereof or as required under applicable
law, the terms of this Agreement or the terms of any William Penn Benefit Plan in effect on the date hereof, or as agreed to by the parties
and set forth on William Penn Disclosure Schedule 4.8(a), William Penn Disclosure Schedule 4.8(d), and/or William
Penn Disclosure Schedule 4.12, (ii) for pay increases in the ordinary course of business consistent with past practice to
employees, and (iii) as required by statute, regulations or regulatory guidance. William Penn shall not hire or promote any employee
to a rank having a title of senior vice president or other more senior rank or hire any new employee at an annual rate of compensation
in excess of One Hundred Thousand Dollars ($100,000) except as set forth on
William Penn Disclosure Schedule 6.1(b)(5), provided
that, in any event, William Penn shall not enter into, renew or amend any employment agreement, severance agreement and/or supplemental
executive agreement in connection with any such hiring or promotion, and provided, further, that William Penn may hire at-will, non-officer
employees to fill vacancies that may from time to time arise in the ordinary course of business;
(6) terminate
any employee having a title of vice president or above without providing Mid Penn forty-eight (48) hours notice following such termination;
(7) except
as otherwise expressly permitted or required under this Agreement, enter into or, except as may be required by law, materially modify
any pension, retirement, stock option, stock purchase, stock appreciation right, stock grant, savings, profit sharing, deferred compensation,
supplemental retirement, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement,
or any trust agreement related thereto, in respect of any of its directors, officers or employees; or make any contributions to any defined
contribution plan not in the ordinary course of business consistent with past practice; or take any action the effect of which is to accelerate
the vesting or lapse of restrictions on any William Penn Options or William Penn Restricted Stock;
(8) merge
or consolidate William Penn or any William Penn Subsidiary with any other corporation; sell or lease all or any substantial portion of
the assets or business of William Penn or any William Penn Subsidiary; make any acquisition of all or any substantial portion of the business
or assets of any other Person other than in connection with foreclosures, settlements in lieu of foreclosure, troubled loan or debt restructuring,
or the collection of any loan or credit arrangement between William Penn, or any William Penn Subsidiary and any other Person; enter into
a purchase and assumption transaction with respect to deposits and liabilities; or voluntarily revoke or surrender by any William Penn
Subsidiary of its certificate of authority to maintain, or file an application for the relocation of, any existing branch office, or file
an application for a certificate of authority to establish a new branch office;
(9) sell
or otherwise dispose of the capital stock of William Penn or any William Penn Subsidiary or sell or otherwise dispose of any asset of
William Penn or of any William Penn Subsidiary other than in the ordinary course of business consistent with past practice, except for
transactions with the FHLB and Atlantic Community Bankers Bank; subject any asset of William Penn or any William Penn Subsidiary to a
Lien (other than in connection with deposits, repurchase agreements, bankers acceptances, “treasury tax and loan” accounts
established in the ordinary course of business and transactions in “federal funds” and the satisfaction of legal requirements
in the exercise of trust powers), unless such Lien is subject to a stay or appeal proceeding, other than in the ordinary course of business
consistent with past practice; or incur any indebtedness for borrowed money (or guarantee any indebtedness for borrowed money), except
in the ordinary course of business consistent with past practice;
(10) voluntarily
take any action that would result in any of the representations and warranties of William Penn or William Penn Bank set forth in this
Agreement becoming untrue in any material respect as of any date after the date hereof or any of the conditions set forth
in Article IX
hereof not being satisfied, except in each case as may be required by applicable law or any Bank Regulator;
(11) change
any method, practice or principle of accounting, except as may be required from time to time by GAAP (without regard to any optional early
adoption date) any Bank Regulator responsible for regulating William Penn or William Penn Bank, or William Penn’s independent accounting
firm;
(12) waive,
release, grant or transfer any material rights of value or modify or change in any material respect any existing material agreement or
indebtedness with an annual value of One Million Dollars ($1,000,000) or greater to which William Penn or any William Penn Subsidiary
is a party;
(13) purchase
any securities, including equity or debt securities, except in accordance with past practice pursuant to its investment securities portfolio
policies approved by the William Penn Board of Directors and in effect on the date hereof; provided that any such individual purchase
shall not exceed One Million Five Hundred Thousand Dollars ($1,500,000) per trade, provided, further, that all such purchases shall
not exceed Two Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate and, provided, further, that no individual security
purchased shall have a maturity date greater than two (2) years;
(14) except
for the issuance of shares of William Penn Common Stock upon the exercise of stock options outstanding prior to the date of this Agreement
and listed on William Penn Disclosure Schedule 6.1(b)(2), issue or sell any equity or debt securities of William Penn or any William
Penn Subsidiary;
(15) make
or acquire any loan or other credit facility commitment (including, without limitation, lines of credit and letters of credit) or issue
a commitment (including a letter of credit) or renew or extend an existing commitment for any loan other credit facility commitment,
or amend or modify in any material respect any loan or other credit facility commitment (including in any manner that would result in
any additional extension of credit, principal forgiveness, or effect any uncompensated release of collateral, i.e., at a value
below the fair market value thereof as determined by William Penn), except (i) in accordance with past practice pursuant to policies
approved by the William Penn Board of Directors and in effect on the date hereof, and (ii) with respect to each such loan or other
commitment for any new borrower, the aggregate borrowings from William Penn of such relationship does not exceed Five Hundred Thousand
Dollars ($500,000.00) and for any existing borrower such aggregate amount of the increase does not exceed One Million Dollars ($1,000,000.00).
For any proposed extension of credit for which William Penn shall seek the prior consent of Mid Penn, William Penn shall send the credit
write-up for the proposed credit to Mid Penn’s Chief Financial Officer at justin.webb@midpennbank.com and if Mid Penn does
not (i) object in writing to the proposed credit or (ii) request reasonable additional information on the proposed credit,
within three (3) Business Days of receipt of the credit write-up, Mid Penn shall be deemed to have consented to the origination
of such credit. If William Penn sends additional information on the proposed credit to Mid Penn, and Mid Penn does not (i) request
any further additional information on the proposed credit or (ii) object in writing to the proposed credit, within three (3) Business
Days of receipt of
the initial additional information, Mid Penn shall be deemed to have consented to the origination of such credit;
(16) enter
into, renew, extend or modify any other transaction (other than a deposit transaction) with any Affiliate;
(17) enter
into any futures contract, option, interest rate caps, interest rate floors, interest rate exchange agreement or other agreement or take
any other action for purposes of hedging the exposure of its interest-earning assets and interest-bearing liabilities to changes in market
rates of interest other than in the ordinary course of business consistent with past practice;
(18) except
for the execution of this Agreement, and actions taken or that will be taken in accordance with this Agreement and performance thereunder,
take any action that would give rise to a right of payment to any individual under any employment agreement other than wages and bonuses
accrued in the ordinary course of business;
(19) enter
into any new line of business;
(20) make
any material change in policies in existence on the date of this Agreement with regard to (i) underwriting, the extension of credit,
or the establishment of reserves with respect to the possible loss thereon or the charge off of losses incurred thereon, (ii) investments,
(iii) asset/liability management, (iv) deposit pricing or gathering, or (v) other material banking policies except as may
be required by changes in applicable law or regulations, GAAP or by a Bank Regulator;
(21) except
for the execution of this Agreement, and the transactions contemplated herein, take any action that would give rise to an acceleration
of the right to payment to any individual under any William Penn Benefit Plan;
(22) except
as set forth on William Penn Disclosure Schedule 6.1(b)(22), make any capital expenditures in excess of Twenty-Five Thousand Dollars
($25,000) individually or One Hundred Thousand Dollars ($100,000) in the aggregate, other than pursuant to binding commitments existing
on the date hereof or other than expenditures necessary to maintain existing assets in good repair;
(23) purchase
or otherwise acquire any assets or incur any liabilities other than in the ordinary course of business consistent with past practices
and policies;
(24) undertake,
renew, extend or enter into any lease, contract or other commitment for its account, other than in the normal course of providing credit
to customers as part of its banking business involving (i) a payment by William Penn or William Penn Bank of more than Twenty-Five
Thousand Dollars ($25,000) annually, (ii) containing any financial commitment extending beyond twenty-four (24) months from
the date hereof, or (iii) any Affiliate of William Penn or William Penn Bank; provided that the aggregate payments under clauses (i) and
(ii) shall not exceed Fifty Thousand Dollars ($50,000);
(25) pay,
discharge, settle or compromise any claim, action, litigation, arbitration or proceeding, other than any such payment, discharge, settlement
or compromise in the ordinary course of business consistent with past practice that involves solely money damages in the amount not in
excess of Twenty-Five Thousand Dollars ($25,000) individually or Fifty Thousand Dollars ($50,000) in the aggregate, and that does not
create negative precedent for other pending or potential claims, actions, litigation, arbitration or proceedings, provided that William
Penn may not charge-off through settlement, compromise or discharge more than Fifty Thousand Dollars ($50,000) of the outstanding principal
balance of any loan that is ninety (90) or more days contractually past due without first discussing the decision with Mid Penn;
(26) foreclose
upon or take a deed or title to any commercial real estate (which, for clarification, shall not include any real property used for residential
purposes which secures a commercial loan) without first conducting a Phase I environmental assessment of the property or foreclose upon
any commercial real estate if such environmental assessment indicates the presence of Materials of Environmental Concern;
(27) purchase
or sell any mortgage loan servicing rights other than in the ordinary course of business consistent with past practice;
(28) issue
any broadly distributed communication to employees (including general communications relating to benefits and compensation) relating to
post-Closing employment, benefit or compensation information without the prior consent of Mid Penn (which shall not be unreasonably withheld,
conditioned or delayed) or issue any broadly distributed communication of a general nature to customers regarding the Merger without the
prior approval of Mid Penn (which shall not be unreasonably withheld, conditioned or delayed), except as required by law or for communications
in the ordinary course of business consistent with past practice that do not relate to the Merger or other transactions contemplated hereby;
or
(29) agree
to do any of the foregoing.
6.2. Financial and Other Statements.
(a) Promptly
upon receipt thereof, William Penn will furnish to Mid Penn copies of each annual, interim or special audit of the books of William Penn
and the William Penn Subsidiaries made by its independent auditors and copies of all internal control reports submitted to William Penn
by such auditors in connection with each annual, interim or special audit of the books of William Penn and the William Penn Subsidiaries
made by such auditors.
(b) William
Penn will furnish to Mid Penn copies of all documents, statements and reports as it or any William Penn Subsidiary shall send to its shareholders,
any Bank Regulator or any Governmental Entity, except as legally prohibited thereby. Promptly after approval thereof by its board of directors,
but in no event later than thirty (30) days after the end of each month, William Penn will deliver to Mid Penn a consolidated balance
sheet and a consolidated statement of income, without related notes, for such month prepared in accordance with current financial reporting
practices.
(c) William
Penn will advise Mid Penn promptly of the receipt of any written examination report of any Bank Regulator with respect to the condition
or activities of William Penn or any of the William Penn Subsidiaries, but nothing provided for herein shall require William Penn to disclose
confidential supervisory information or to provide copies of such reports to Mid Penn to the extent such disclosure is legally prohibited.
(d) With
reasonable promptness, William Penn will furnish to Mid Penn such additional financial data that William Penn possesses and as Mid Penn
may reasonably request, including without limitation, detailed monthly financial statements, loan reports and William Penn Regulatory
Reports.
6.3. Maintenance of Insurance.
William Penn shall maintain,
and cause each William Penn Subsidiary to maintain, insurance in such amounts as are reasonable to cover such risks as are customary in
relation to the character and location of their properties and the nature of their business, consistent with past practice.
6.4. Disclosure Supplements.
From time to time prior to
the Effective Time, William Penn will promptly supplement or amend the William Penn Disclosure Schedule delivered in connection herewith
with respect to any matter hereafter arising that, if existing, occurring or known at the date of this Agreement, would have been required
to be set forth or described in such William Penn Disclosure Schedule or that is necessary to correct any information in such William
Penn Disclosure Schedule that has been rendered materially inaccurate thereby. No supplement or amendment to such William Penn Disclosure
Schedule shall have any effect for the purpose of determining satisfaction of the conditions set forth in Article IX.
6.5. Consents and Approvals of Third Parties.
William Penn shall use commercially
reasonable efforts to obtain as soon as practicable all consents and approvals necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
6.6. Commercially Reasonable Efforts.
Subject to the terms and conditions
herein provided, William Penn agrees to use commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions
contemplated by this Agreement; provided, however, such efforts do not significantly decrease the benefits of the transaction to
William Penn.
6.7. Failure to Fulfill Conditions.
In the event that William
Penn determines that a condition to its obligation to complete the Merger cannot be fulfilled and that it will not waive that condition,
it will promptly notify Mid Penn.
6.8. No Other Bids and Related Matters.
(a) From
and after the date hereof until the termination of this Agreement, except as otherwise expressly permitted in this Agreement, William
Penn shall not, and shall not authorize, permit or cause any William Penn Subsidiary, and shall use its reasonable best efforts to cause
its and their respective officers, directors, employees, investment bankers, financial advisors, attorneys, accountants, consultants,
Affiliates and other agents (collectively, the “William Penn Representatives”) not to, directly or indirectly, (i) initiate,
solicit, induce or encourage, or take any action to facilitate the making of, any inquiry, offer or proposal which constitutes or could
reasonably be expected to lead to a William Penn Acquisition Proposal; (ii) respond to any inquiry relating to a William Penn Acquisition
Proposal or a William Penn Acquisition Transaction (except to notify a Person that has made a William Penn Acquisition Proposal of the
existence of the provisions of this Section 6.8); (iii) recommend or endorse a William Penn Acquisition Transaction;
(iv) participate in any discussions or negotiations regarding any William Penn Acquisition Proposal or furnish, or otherwise afford
access, to any Person (other than Mid Penn) any confidential or nonpublic information or data with respect to William Penn or any William
Penn Subsidiary or otherwise relating to a William Penn Acquisition Proposal; (v) release any Person from, waive any provisions of,
or fail to enforce any confidentiality agreement or standstill agreement to which William Penn is a party; or (vi) enter into any
agreement, agreement in principle or letter of intent with respect to any William Penn Acquisition Proposal or approve or resolve to approve
any William Penn Acquisition Proposal or any agreement, agreement in principle or letter of intent relating to a William Penn Acquisition
Proposal. Any violation of the foregoing restrictions by William Penn or any William Penn Representative, whether or not such William
Penn Representative is so authorized and whether or not such William Penn Representative is purporting to act on behalf of William Penn
or otherwise, shall be deemed to be a breach of this Agreement by William Penn. William Penn and each William Penn Subsidiary shall, and
shall cause each of the William Penn Representatives to, immediately cease and cause to be terminated any and all existing discussions,
negotiations, and communications with any Persons with respect to any existing or potential William Penn Acquisition Proposal. William
Penn shall notify Mid Penn immediately if any such discussion or negotiations are sought to be initiated with William Penn by any Person
other than Mid Penn or if any such requests for information, inquiries, proposals or communications are received from any Person other
than Mid Penn.
For purposes of this Agreement,
“William Penn Acquisition Proposal” shall mean any inquiry, offer or proposal (other than an inquiry, offer or proposal
from Mid Penn), whether or not in writing, contemplating, relating to, or that could reasonably be expected to lead to, a William Penn
Acquisition Transaction. For purposes of this Agreement, “William Penn Acquisition Transaction” shall mean (A) any
transaction or series of transactions involving any merger, consolidation, recapitalization, share exchange, liquidation, dissolution
or similar transaction
involving William Penn or any William Penn Subsidiary; (B) any transaction pursuant to which any third party
or group acquires or would acquire (whether through sale, lease or other disposition), directly or indirectly, any assets of William Penn
or any William Penn Subsidiary representing, in the aggregate, twenty-five percent (25%) or more of the assets of William Penn and each
William Penn Subsidiary on a consolidated basis; (C) any issuance, sale or other disposition of (including by way of merger, consolidation,
share exchange or any similar transaction) securities (or options, rights or warrants to purchase or securities convertible into, such
securities) representing twenty-five percent (25%) or more of the votes attached to the outstanding securities of William Penn or any
William Penn Subsidiary; (D) any tender offer or exchange offer that, if consummated, would result in any third party or group beneficially
owning twenty-five percent (25%) or more of any class of equity securities of William Penn or any William Penn Subsidiary; or (E) any
transaction which is similar in form, substance or purpose to any of the foregoing transactions, or any combination of the foregoing.
(b) Notwithstanding
Section 6.8(a), the William Penn Board of Directors shall be permitted to engage in discussions or negotiations with any Person
that makes an Acquisition Proposal if, but only if, (i) William Penn has received a bona fide unsolicited written William Penn Acquisition
Proposal that did not result from a breach of this Section 6.8; (ii) the William Penn Board of Directors determines in
good faith, after consultation with and having considered the advice of its outside legal counsel and its independent financial advisor,
that such William Penn Acquisition Proposal constitutes or is reasonably likely to lead to a Superior Proposal (as defined below); (iii)
at least two (2) Business Days prior to furnishing any non-public information to, or entering into discussions with, such Person,
William Penn gives Mid Penn written notice of the identity of such Person and of William Penn’s intention to furnish nonpublic information
to, or enter into discussions with, such Person and (iv) prior to furnishing or affording access to any confidential or nonpublic
information or data with respect to William Penn or any of the William Penn Subsidiaries or otherwise relating to a William Penn Acquisition
Proposal, William Penn receives from such Person a confidentiality agreement with terms no less favorable to Mid Penn than those contained
in the Confidentiality Agreement (other than the public knowledge of the proposed terms of the Merger) and provides a copy of the same
to Mid Penn. William Penn shall promptly provide to Mid Penn any non-public information regarding William Penn or any William Penn Subsidiary
provided to any other Person that was not previously provided to Mid Penn, such additional information to be provided no later than the
date of provision of such information to such other party.
For purposes of this Agreement,
“Superior Proposal” means any bona fide written proposal (on its most recently amended or modified terms, if amended
or modified) made by a third party to enter into a William Penn Acquisition Transaction on terms that the William Penn Board of Directors
determines in its good faith judgment, after consultation with and having considered the advice of its outside legal counsel and, with
respect to financial matters, its financial advisor (i) would, if consummated, result in the acquisition of greater than fifty percent
(50%), of the issued and outstanding shares of William Penn Common Stock or all, or substantially all, of the assets of William Penn and
the William Penn Subsidiaries on a consolidated basis; (ii) would result in a transaction that involves consideration to the holders
of the shares of William Penn Common Stock that is more favorable, from a financial point of view, than the consideration to be
paid to
William Penn’s shareholders pursuant to this Agreement (taking into account all factors relating to such proposed transaction deemed
relevant by William Penn’s Board of Directors, including without limitation, the amount and form of consideration, the timing of
payment, the risk of consummation of the transaction, the financing thereof and all other conditions thereto (including any adjustments
to the terms and conditions of such transactions proposed by Mid Penn in response to such Acquisition Proposal); and (iii) is reasonably
likely to be completed on the terms proposed, in each case taking into account all legal, financial, regulatory and other aspects of the
proposal.
(c) William
Penn shall promptly (and in any event within two (2) calendar days) notify Mid Penn in writing of receipt of any Acquisition Proposal,
any request for non-public information that could reasonably be expected to lead to an Acquisition Proposal, or any inquiry with respect
to or that could reasonably be expected to lead to an Acquisition Proposal, and such notice shall indicate the name of the Person initiating
such discussions or negotiations or making such proposal, offer or information request and the material terms and conditions of any proposals
or offers (and, in the case of written materials relating to such proposal, offer, information request, negotiations or discussion, providing
copies of such materials (including e-mails or other electronic communications) unless (i) such materials constitute confidential
information of the party making such offer or proposal under an effective confidentiality agreement, (ii) disclosure of such materials
jeopardizes the attorney-client privilege, or (iii) disclosure of such materials contravenes any law, rule, regulation, order, judgment
or decree). William Penn agrees that it shall keep Mid Penn informed, on a current basis, of the status and terms of any such Acquisition
Proposal, offer, information request, negotiations or discussions (including any amendments or modifications to such proposal, offer or
request).
(d) Subject
to Section 6.8(e), neither the William Penn Board of Directors nor any committee thereof shall (i) withdraw, qualify
or modify, or propose to withdraw, qualify or modify, in a manner adverse to Mid Penn in connection with the transactions contemplated
by this Agreement (including the Merger), the William Penn Recommendation, or make any statement, filing or release, in connection with
the William Penn Shareholders’ Meeting or otherwise, inconsistent with the William Penn Recommendation (it being understood that
taking a neutral position or no position with respect to a William Penn Acquisition Proposal shall be considered an adverse modification
of the William Penn Recommendation); (ii) approve or recommend, or publicly propose to approve or recommend, any William Penn Acquisition
Proposal; or (iii) enter into (or cause William Penn or any William Penn Subsidiary to enter into) any letter of intent, agreement
in principle, acquisition agreement or other agreement (A) related to any William Penn Acquisition Transaction (other than a confidentiality
agreement entered into in accordance with the provisions of Section 6.8(b)) or (B) requiring William Penn to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated by this Agreement.
(e) Notwithstanding
Section 6.8(d) above, prior to the William Penn Shareholders’ Meeting, the William Penn Board of Directors may
approve or recommend to the shareholders of William Penn a Superior Proposal and withdraw, qualify or modify the William Penn Recommendation
in connection therewith or take any of the other actions otherwise prohibited by Section 6.8(d) (a “William
Penn Subsequent Determination”) after the fifth (5th) Business Day
following the receipt by Mid Penn of a notice
(the “Notice of Superior Proposal”) from William Penn advising Mid Penn that the William Penn Board of Directors has
decided that a bona fide unsolicited written William Penn Acquisition Proposal that it received (that did not result from a breach of
this Section 6.8) constitutes a Superior Proposal (it being understood that William Penn shall be required to deliver a new
Notice of Superior Proposal in respect of any revised Superior Proposal from such third party or its affiliates that William Penn proposes
to accept and the subsequent notice period shall be two (2) Business Days) if, but only if, (i) the William Penn Board of Directors
has reasonably determined in good faith, after consultation with and having considered the advice of outside legal counsel and, with respect
to financial matters, its financial advisor, that the failure to take such actions would be inconsistent with its fiduciary duties to
William Penn’s shareholders under applicable law and (ii) at the end of such five (5) Business Day period (or two (2) Business
Day period for a revised Superior Proposal), after taking into account any such adjusted, modified or amended terms as may have been committed
to in writing by Mid Penn since its receipt of such Notice of Superior Proposal (provided, however, that Mid Penn shall not have any obligation
to propose any adjustments, modifications or amendments to the terms and conditions of this Agreement), the William Penn Board of Directors
has again in good faith made the determination (A) in clause (i) of this Section 6.8(e) and (B) that
such William Penn Acquisition Proposal constitutes a Superior Proposal.
(f) Nothing
contained in this Section 6.8 or elsewhere in this Agreement shall prohibit William Penn or the William Penn Board of Directors
from complying with William Penn’s obligations under Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act, or Item
1012(a) of Regulation M-A with respect to an Acquisition Proposal or from making any legally required disclosure to the shareholders
of William Penn; provided, that such rules will in no way eliminate or modify the effect that any action pursuant to such rules would
otherwise have under this Agreement.
6.9. Reserves and Merger-Related Costs.
William Penn agrees to consult
with Mid Penn with respect to its loan, litigation and real estate valuation policies and practices (including loan classifications and
levels of reserves). Mid Penn and William Penn shall also consult with respect to the character, amount and timing of restructuring charges
to be taken by each of them in connection with the transactions contemplated hereby and shall take such charges as Mid Penn shall reasonably
request and which are consistent with GAAP and regulatory accounting principles, provided that no such actions need be effected until
immediately prior to the Effective Time and Mid Penn shall have irrevocably certified to William Penn that all conditions set forth in
Article IX to the obligation of Mid Penn to consummate the transactions contemplated hereby have been satisfied or, where
legally permissible, waived.
6.10. Board of Directors and Committee Meetings.
William Penn shall provide
or make available to Mid Penn (a) any William Penn or William Penn Subsidiary board or board committee package, including the agenda
and any draft minutes (other than minutes that discuss any of the transactions contemplated by this Agreement or other subject matter
William Penn reasonably determines should be kept confidential),
promptly following the time at which it makes a copy of such package
available to the board of directors of William Penn or such William Penn Subsidiary or any committee thereof, and (b) the
minutes (including supporting documentation and schedules, but other than minutes that discuss any of the transactions contemplated by
this Agreement or other subject matter William Penn reasonably believes should be kept confidential) of any meeting of the board of directors
or any Subsidiary, or any committee thereof, or any senior management committee (including, but not limited to, the loan committee of
William Penn Bank) and (c) following the receipt of all required Regulatory Approvals to consummate the transactions described herein,
permit Mid Penn’s President and Chief Executive Officer to attend in person or telephonically (to the extent practicable), solely
as an observer, any meeting of the board of directors of William Penn or any William Penn Subsidiary or the executive or loan committees
thereof, except, in each case, to the extent exclusion (x) may be required for the board of directors to exercise its fiduciary duties
under Maryland law or applicable law, (y) may be required by applicable Bank Regulators, or (z) may be required to protect attorney-client
privilege. Minutes of meetings deliverable to Mid Penn pursuant to this Section 6.10 shall be delivered within fifteen (15)
days after the meeting of such board or committee to which such minutes relate, except that with respect to any meeting held within fifteen
(15) days of the Effective Time, such minutes shall be provided prior to the Effective Time.
6.11. Affiliate Letters.
Concurrently with the execution
of this Agreement, (i) William Penn shall deliver to Mid Penn the William Penn Affiliate Letters and (ii) Mid Penn shall deliver
to William Penn the Mid Penn Affiliate Letters.
6.12. Proxy Solicitor.
William Penn shall, if requested
in writing by Mid Penn, retain a proxy solicitor in connection with the solicitation of William Penn shareholder approval of this Agreement.
6.13. Approval of Bank Plan of Merger.
William
Penn shall take all action necessary and appropriate to approve the Bank Plan of Merger as sole shareholder of William Penn Bank and obtain
the approval of, and cause the execution and delivery of, the Bank Plan of Merger by William Penn Bank in accordance with applicable laws
and regulations and no later than after completion of the Merger on the Effective Time.
6.14. Compliance with Section 409A.
Prior
to the Effective Time, and to the extent any such William Penn Benefit Plans are eligible for correction or amendment, William Penn or
a William Penn Subsidiary shall take any and all actions necessary, pursuant to the IRS guidance under Notice 2008-113, Notice 2010-6,
Notice 2010-80 or similar pronouncements, to ensure that each William Penn Benefit Plan that is deemed to constitute a nonqualified deferred
compensation plan subject to Section 409A of the Code is in operational and documentary compliance with Section 409A of the
Code as of the
Effective Time. To the extent that William Penn or a William Penn Subsidiary has identified any potential failure of a
nonqualified deferred compensation plan to comply with Section 409A of the Code, William Penn will provide to Mid Penn: (a) notice
regarding any such potential failure, (b) documentation regarding any such required correction prior to such correction, and (c) evidence
such correction has been completed, including evidence that William Penn or the William Penn Subsidiary and any affected individual has
satisfied or will satisfy the reporting requirements, as applicable.
6.15. William Penn ESOP.
The William Penn ESOP shall
be terminated immediately prior to the Effective Time (the “ESOP Termination Date”). On the ESOP Termination Date,
William Penn shall direct the William Penn ESOP trustee(s) to remit to William Penn a sufficient number of shares of William Penn
Common Stock held by the ESOP’s unallocated suspense account to William Penn to repay the full outstanding balance of the loan between
the William Penn ESOP and William Penn (the “William Penn ESOP Loan”) (and with such William Penn Common Stock valued
on the ESOP Termination Date) and, if after remitting such shares there remains any unpaid amount under the William Penn ESOP Loan, such
unpaid amount, including any unpaid but accrued interest, shall be forgiven by William Penn at the Effective Time. All remaining shares
of William Penn Common Stock held by the William Penn ESOP as of the Effective Time shall be converted into the right to receive the Merger
Consideration. Within thirty (30) days following the date of this Agreement, William Penn shall file or cause to be filed all necessary
documents with the IRS for a determination letter for termination of the William Penn ESOP. As soon as practicable following the receipt
of a favorable determination letter from the IRS regarding the qualified status of the William Penn ESOP upon its termination, the account
balances in the William Penn ESOP shall either be distributed to participants and beneficiaries or transferred to an eligible tax-qualified
retirement plan or individual retirement account as a participant or beneficiary may direct. William Penn shall adopt the necessary amendment(s) and
board resolution(s) to effect the provisions of this Section 6.15.
ARTICLE VII
COVENANTS OF MID PENN
7.1. Conduct of Business.
(a) Affirmative
Covenants. From the date of this Agreement to the Effective Time or earlier termination of this Agreement, except with the written
consent of William Penn (which shall not be unreasonably withheld, conditioned or delayed) Mid Penn will, and it will cause each Mid Penn
Subsidiary to, (i) operate its business only in the usual, regular and ordinary course of business, (ii) use commercially reasonable
efforts to preserve intact its business organization and assets and maintain its rights and franchises and (iii) voluntarily take
no action that would, or would be reasonably likely to, materially adversely affect or delay the ability of the parties to obtain any
Regulatory Approvals or other approvals of Governmental Entities required for the transactions contemplated hereby or materially increase
the period of time necessary to obtain such approvals, or materially adversely affect or delay its ability to perform its covenants and
agreements under this Agreement.
(b) Negative
Covenants. Mid Penn agrees that from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except
as (i) otherwise specifically permitted or required by this Agreement, (ii) set forth in Mid Penn Disclosure Schedule 7.1(b),
(iii) consented to by William Penn in writing in advance, or (iv) required by law or by any Bank Regulator, Mid Penn will not,
and it will cause each Mid Penn Subsidiary not to:
(1) amend
its articles of incorporation or bylaws or similar governing documents of any of the Mid Penn Subsidiaries in a manner that would materially
and adversely affect the economic benefits of the Merger to the holders of William Penn Common Stock or that would materially impede Mid
Penn’s ability to consummate the transactions contemplated by this Agreement;
(2) take
any action that is intended to, would or would be reasonably likely to result in any of the conditions set forth in Article IX
not being satisfied or prevent or materially delay the consummation of the transactions contemplated hereby, except, in every case, as
may be required by applicable law;
(3) prior
to the receipt of (i) all Regulatory Approvals and (ii) the approval of the transactions contemplated by this Agreement by the
shareholders of Mid Penn and William Penn at the respective Mid Penn Shareholders’ Meeting and the William Penn Shareholders’
Meeting, publicly announce or discuss with any Bank Regulator any transaction involving the acquisition of all or any substantial portion
of the equity interests, business or assets of any other Person, other than (x) acquisitions of the equity interests or assets of
a nonbank entity or (y) acquisitions in connection with foreclosures, settlements in lieu of foreclosure, troubled loan or debt restructuring,
or the collection of any loan or credit arrangement between Mid Penn, or any Mid Penn Subsidiary and any other Person.
(4) take
any action, or knowingly fail to take any action, which action or failure to act prevents or impedes, or could reasonably be expected
to prevent or impede, the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the
Code; or
(5) agree
to any of the foregoing.
7.2. Maintenance of Insurance.
Mid Penn shall maintain, and
cause each Mid Penn Subsidiary to maintain, insurance in such amounts as are reasonable to cover such risks as are customary in relation
to the character and location of their properties and the nature of their business, consistent with past practice.
7.3. Disclosure Supplements.
From time to time prior to
the Effective Time, Mid Penn will promptly supplement or amend the Mid Penn Disclosure Schedule delivered in connection herewith
with respect to any matter hereafter arising that, if existing, occurring or known at the date of this Agreement, would have been required
to be set forth or described in such Mid Penn Disclosure Schedule or that is necessary to correct any information in such Mid Penn
Disclosure Schedule that has been rendered
materially inaccurate thereby. No supplement or amendment to such Mid Penn Disclosure
Schedule shall have any effect for the purpose of determining satisfaction of the conditions set forth in Article IX.
7.4. Consents and Approvals of Third Parties.
Mid Penn shall use commercially
reasonable efforts to obtain as soon as practicable all consents and approvals necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
7.5. Commercially Reasonable Efforts.
Subject to the terms and conditions
herein provided, Mid Penn agrees to use commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions
contemplated by this Agreement; provided, however, such efforts do not significantly decrease the benefits of the transaction to
Mid Penn.
7.6. Failure to Fulfill Conditions.
In the event that Mid Penn
determines that a condition to its obligation to complete the Merger cannot be fulfilled and that it will not waive that condition, it
will promptly notify William Penn.
7.7. Post-Closing Governance.
On
or prior to the Effective Time, Mid Penn shall take such actions as are necessary to cause the William Penn Nominee to be appointed to
the board of directors of each of Mid Penn and Mid Penn Bank.
7.8. Employee Matters.
(a) After
the Closing Date, the William Penn Benefit Plans may, at Mid Penn’s election and subject to the requirements of the Code and ERISA
and the terms of the William Penn Benefit Plans, continue to be maintained separately, consolidated, merged, frozen or terminated.
(b) Employees
of William Penn or any William Penn Subsidiary who become participants in a Mid Penn Benefit Plan shall, except with respect to any Mid
Penn Excluded Benefit Plan, be given credit for service as an employee of William Penn or William Penn Bank or any predecessor thereto
prior to the Effective Time for purposes of determining eligibility to participate in such plans, vesting purposes under such plans and
benefit levels (but not benefit accrual) under such plans. Notwithstanding the foregoing, employees of William Penn or any William Penn
Subsidiary who become eligible to participate in a Mid Penn Excluded Benefit Plan within the meaning of ERISA Section 3(2) shall
be treated as new employees (without any credit for service prior to the Closing Date) for all purposes under any such Mid Penn Excluded
Benefit Plan.
(c) This
Agreement shall not be construed to limit the ability of Mid Penn or Mid Penn Bank to terminate the employment of any employee or to review
employee benefits programs from time to time and to make such changes (including terminating any benefit plan or program) as it deems
appropriate.
(d) In
the event of any termination of any William Penn health plan or consolidation of any William Penn health plan with any Mid Penn health
plan, Mid Penn shall make available to employees of William Penn or any William Penn Subsidiary and their dependents health coverage on
the same basis as it provides such coverage to Mid Penn employees. Unless an employee of William Penn or any William Penn Subsidiary affirmatively
terminates coverage under a William Penn health plan prior to the time that such employee becomes eligible to participate in the Mid Penn
health plan, no coverage of any of the employees of William Penn or any William Penn Subsidiary or their dependents shall terminate under
any of the William Penn health plans prior to the time such employees and their dependents become eligible to participate in the health
plans, programs and benefits common to all employees of Mid Penn and their dependents. In the event of a termination or consolidation
of any William Penn health plan, terminated William Penn and William Penn Subsidiary employees and qualified beneficiaries will have the
right, if applicable, to continuation coverage under group health plans of Mid Penn in accordance with COBRA and/or other applicable law.
With respect to any employee of William Penn or any William Penn Subsidiary, any coverage limitation under the Mid Penn health plan due
to any pre-existing condition shall be waived by the Mid Penn health plan to the degree that such condition was covered by the William
Penn health plan and such condition would otherwise have been covered by the Mid Penn health plan in the absence of such coverage limitation.
Mid Penn shall cause the applicable Mid Penn Benefit Plan to recognize any medical or other health expense incurred by an employee of
William Penn or any William Penn Subsidiary in the plan year that includes the Closing Date for purposes of determining any applicable
deductible and annual out of pocket expense thereunder.
(e) In
the event (i) Mid Penn terminates the employment (other than for circumstances reasonably constituting cause) of any active employees
of William Penn or William Penn Bank (other than employees of William Penn or William Penn Bank who are subject to employment, change
of control or similar contracts) who were employees as of the date of this Agreement and immediately prior to the Effective Time (each
such employee, a “William Penn Continuing Employee”), or (ii) such William Penn Continuing Employee is not offered
or retained in substantially comparable employment, with respect to job description, responsibilities, work location (it being understood
that any work location that is located within thirty-five (35) miles of the William Penn Continuing Employee’s work location as
of the Closing Date shall be deemed “substantially comparable” for purposes of this Section 7.8 (e)) and pay,
with Mid Penn or Mid Penn Bank, as applicable, then Mid Penn shall pay severance benefits to such employees as follows: (A) in the
event employment is terminated on or prior to the date which is twelve (12) months after the Closing Date, two (2) weeks’
salary for each full year of continuous service with William Penn, with a minimum severance benefit of four (4) weeks and a
maximum severance benefit of twenty-six (26) weeks; (B) in the event employment is terminated thereafter, in accordance with
the then existing severance policy of Mid Penn or its successor; or (C) as otherwise agreed between William Penn and Mid Penn; provided,
however, that Mid Penn’s
obligation to pay severance to any William Penn Continuing Employee pursuant to the foregoing shall
be expressly conditioned on the receipt by Mid Penn of a release in such form and substance as deemed acceptable by Mid Penn in its sole
and absolute discretion. From and after the Effective Time, Mid Penn shall permit all William Penn
Continuing Employees whose employment is terminated as of the Effective Time to participate in Mid Penn’s outplacement services
plan for employees of Mid Penn and Mid Penn Subsidiaries, which outplacement services shall be provided for a period of not less than
six months following the termination of employment by an outplacement agency selected by Mid Penn.
(f) To
the extent permitted by applicable law, William Penn shall take, or shall cause its Subsidiaries to take, all actions that may be requested
by Mid Penn to cause the termination, amendment or freezing of any William Penn Benefit Plan prior to the Effective Time. To the extent
that Mid Penn has not requested William Penn or its Subsidiaries to terminate, amend or freeze any William Penn Benefit Plan, Mid Penn
agrees to honor, or cause one of the Mid Penn Subsidiaries to honor, in accordance with their terms, all such William Penn Benefit Plans,
subject to any limitations imposed under applicable law or by any Regulatory Authority (other than tax laws); provided, however, that
the foregoing shall not prevent Mid Penn or any of the Mid Penn Subsidiaries from amending or terminating any such William Penn Benefit
Plans in accordance with its terms and applicable law. Notwithstanding the provisions of this Section 7.8(f), as of the Effective
Time, Mid Penn shall assume and honor or cause one of its Subsidiaries to assume and honor, the William Penn Bank Deferred Compensation
Plan for Directors and Advisory Directors, in accordance with its terms and the distribution election of each participant until such time
as no further benefits are payable under the plan.
(g) As
soon as reasonably practicable following the date of this Agreement, William Penn and Mid Penn shall cooperate and use their commercially
reasonable efforts to establish an aggregate retention bonus amount and identify key employees of William Penn or Mid Penn who will be
offered a retention bonus pool prior to the Effective Time upon such terms and conditions as the Chief Executive Officers of William Penn
and Mid Penn shall mutually agree.
(h) If
requested by Mid Penn in writing at least thirty (30) days prior to the Effective Time, William Penn shall cause any 401(k) plan
sponsored or maintained by William Penn or any William Penn Subsidiary (each, a “William Penn 401(k) Plan”) to
be terminated effective as of the day immediately prior to the Effective Time and contingent upon the occurrence of the Closing. If Mid
Penn requests that the William Penn 401(k) Plan be terminated, the William Penn Continuing Employees shall be eligible to participate
effective as of the Effective Time, in a 401(k) plan sponsored or maintained by Mid Penn or one of its Subsidiaries (each, a “Mid
Penn 401(k) Plan”). William Penn and Mid Penn shall take any and all actions as may be required, including amendments to any
William Penn 401(k) Plan and/or Mid Penn 401(k) Plan, to permit the William Penn Continuing Employees who are then actively
employed to make eligible rollover contributions to the Mid Penn 401(k) Plan in the form of cash, in-kind benefits (if permitted
by the Mid Penn 401(k) Plan), outstanding participant loans or a combination thereof.
(i) Concurrently
with the execution of this Agreement, Mid Penn and/or Mid Penn Bank is entering into an employment agreement with Kenneth J. Stephon,
in the form attached hereto as Mid Penn Disclosure Schedule 7.8(i), to be effective as of the Effective Time.
(j) The
provisions of this Section 7.8 are solely for the benefit of the parties to this Agreement, and no current or former director,
officer, employee, other service provider or independent contractor or any other person shall be a third-party beneficiary of this Agreement,
and nothing herein shall be construed as an amendment to any William Penn or Mid Penn Benefit Plan or other compensation or benefit plan
or arrangement for any purpose.
7.9. Directors and Officers Indemnification and
Insurance.
(a) Following
the Effective Time, Mid Penn shall indemnify, defend and hold harmless each person who is now, or who has been at any time before the
date hereof or who becomes before the Effective Time, an officer, director or employee of William Penn or William Penn Bank (the “Indemnified
Parties”) against all losses, claims, damages, fines, costs, expenses (including attorney’s fees), liabilities or judgments
or amounts that are paid in settlement (which settlement shall require the prior written consent of Mid Penn, which consent shall not
be unreasonably withheld, conditioned or delayed) of or in connection with, arising out of or pertaining to any claim, action, suit, proceeding
or investigation, whether civil, criminal, or administrative (each a “Claim”), in which an Indemnified Party is, or
is threatened to be made, a party or witness in whole or in part or arising in whole or in part out of the fact that such person is or
was a director, officer or employee of William Penn or a William Penn Subsidiary if such Claim pertains to acts, omissions, or any matter
of fact arising, existing or occurring at or before the Effective Time (including, without limitation, the approval of this Agreement
and the transactions contemplated hereby), regardless of whether such Claim is asserted or claimed before, or after, the Effective Time,
to the fullest extent as would have been permitted by William Penn under the MDGCL and under William Penn’s articles of incorporation
and bylaws. Mid Penn shall pay expenses in advance of the final disposition of any such action or proceeding to each Indemnified Party
to the fullest extent as would have been permitted by William Penn under the MDGCL and under William Penn’s articles of incorporation
and bylaws, upon receipt of an undertaking to repay such advance payments if such Indemnified Party shall be adjudicated or determined
to be not entitled to indemnification. Any Indemnified Party wishing to claim indemnification under this subsection upon learning of any
Claim, shall notify Mid Penn (but the failure so to notify Mid Penn shall not relieve it from any liability that it may have under this
subsection, except to the extent such failure materially prejudices Mid Penn) and shall deliver to Mid Penn the undertaking referred to
in the previous sentence. Following the Effective Time, Mid Penn shall reasonably cooperate with the Indemnified Parties, and the Indemnified
Parties shall reasonably cooperate with Mid Penn, in the defense of any such claim, action, suit, proceeding or investigation.
(b) In
the event that either Mid Penn or any of its successors or assigns (i) consolidates with or merges into any other person and shall
not be the continuing or surviving bank or entity of such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of
Mid Penn shall assume the obligations set forth in this Section 7.10.
(c) Mid
Penn shall maintain, or shall cause Mid Penn Bank to maintain, in effect for six (6) years
following the Effective Time, the current directors’ and officers’ liability insurance policies covering
the officers and directors of William Penn (provided, that Mid Penn may substitute therefor policies of at least the same coverage containing
terms and conditions which are
not materially less favorable) with respect to matters occurring at or prior to the Effective Time (including
the approval of this Agreement and the transactions contemplated hereby); provided, however, that
in no event shall Mid Penn be required to expend pursuant to this subsection more than two hundred percent (200%) of the annual cost currently
expended by William Penn with respect to such insurance (the “Maximum Amount”); provided, further, that
if the amount of the annual premium necessary to maintain or procure such insurance coverage exceeds the Maximum Amount, Mid Penn shall
maintain the most advantageous policies of directors’ and officers’ insurance obtainable for a premium equal to the Maximum
Amount. In lieu of the foregoing, Mid Penn or William Penn, in consultation with, but only upon the consent of Mid Penn, may (and at the
request of Mid Penn, William Penn shall use its reasonable best efforts to) obtain at or prior to the Effective Time a six (6)-year “tail”
policy under William Penn’s existing directors’ and officers’ insurance policy providing equivalent coverage to that
described in the preceding sentence if and to the extent that the same may be obtained for an amount that does not exceed the Maximum
Amount.
(d) The
obligations of the Surviving Corporation, Mid Penn or William Penn under this Section 7.9 shall not be terminated or modified
after the Effective Time in a manner so as to adversely affect any Indemnified Party or any other person entitled to the benefit of this
Section 7.9 without the prior written consent of the affected Indemnified Party or affected person.
(e) The
obligations of Mid Penn provided under this Section 7.9 shall survive the Effective Time and are intended to be enforceable
against Mid Penn directly by the Indemnified Parties and shall be binding on all respective successors and permitted assigns of Mid Penn.
7.10. Stock Reserve.
Mid Penn agrees at all times
from the date of this Agreement until the Merger Consideration has been paid in full to reserve a sufficient number of shares of its common
stock and to maintain sufficient liquid accounts or borrowing capacity to fulfill its obligations under this Agreement.
7.11. Exchange Listing.
Prior to the Closing Date,
Mid Penn will take all steps necessary to list on the Nasdaq (or such other national securities exchange on which the shares of Mid Penn
Common Stock shall be listed as of the date of consummation of the Merger), subject to official notice of issuance, the shares of Mid
Penn Common Stock to be issued in the Merger.
7.12. Approval of Bank Plan of Merger.
Mid
Penn shall take all action necessary and appropriate to approve the Bank Plan of Merger as sole shareholder of Mid Penn Bank and obtain
the approval of, and cause the execution and delivery of, the Bank Plan of Merger by Mid Penn Bank in accordance with applicable laws
and regulations and no later than after completion of the Merger on the Effective Time.
7.13. Mid Penn and Mid Penn Bank Board
(a) Mid
Penn Board. On the Closing Date, Kenneth J. Stephon (the “William Penn Nominee”) shall be appointed as a Class C
director of Mid Penn, effective as of immediately following the Effective Time, to hold office until his successor is elected and qualified
or otherwise in accordance with applicable law and Mid Penn’s articles of incorporation and bylaws; provided, however, that
if the Closing Date occurs before the date of Mid Penn’s 2025 annual meeting of shareholders, then Mid Penn shall take such action
as necessary or appropriate to cause the William Penn Nominee to serve through the date of Mid Penn’s 2028 annual meeting of shareholders.
If the William Penn Nominee initially named shall not be eligible to serve in accordance with this Section 7.13(a), chooses
not to serve or is unable to serve, then William Penn and Mid Penn shall mutually agree upon another Person to be the William Penn Nominee
and the provisions of this Section 7.13(a) and Section 7.13(b) below shall apply to such successor William
Penn Nominee in all respects.
(b) Mid
Penn Bank Board. On the Closing Date, the William Penn Nominee, shall be appointed as a Class C director of Mid Penn Bank, effective
as of immediately following the Effective Time, to hold office until his successor is elected and qualified or otherwise in accordance
with applicable law and Mid Penn Bank’s articles of incorporation and bylaws; provided, however, that if the Closing Date
occurs before the date of Mid Penn Bank’s 2025 annual meeting of shareholders, then Mid Penn Bank shall take such action as necessary
or appropriate to cause the William Penn Nominee to serve through the date of Mid Penn Bank’s 2028 annual meeting of shareholders.
7.14. Advisory Board.
All members of the board of
directors of William Penn in office as of the Effective Time, other than the William Penn Nominee, will be offered the opportunity to
serve a paid three-year term, subject to such compensation as set forth on Mid Penn Disclosure Schedule Section 7.14 and such
policies established by Mid Penn Bank from time to time.
7.15 William
Penn Bank Community Foundation
William Penn agrees to recommend
to the Board of Directors of the William Penn Bank Community Foundation (the “William Penn Foundation”) that, as of
the Effective Time, the Board of Directors of the William Penn Foundation consist of (i) the current President of the William Penn
Foundation and (ii) such other individuals as shall be designated by Mid Penn Bank.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1. Shareholder Meetings.
(a) Subject
to Section 10.1(h) of this Agreement, William Penn will (i) as promptly as practicable after the Registration Statement
is declared effective by the SEC, take all steps necessary to duly call, give notice of, convene and hold a meeting of its shareholders
(the “William
Penn Shareholders’ Meeting”), for the purpose of considering this Agreement and the Merger, and
for such other purposes as may be, in William Penn’s reasonable judgment, necessary or desirable, and (ii), except as otherwise
permitted by Section 6.8(e), have its Board of Directors unanimously recommend approval of this Agreement to the William
Penn shareholders (the “William Penn Recommendation”) and otherwise support the Merger.
(b) Mid
Penn will (i) as promptly as practicable after the Registration Statement is declared effective by the SEC, take all steps necessary
to duly call, give notice of, convene and hold a meeting of its shareholders (the “Mid Penn Shareholders’ Meeting”),
for the purpose of approving the issuance of the shares of Mid Penn Common Stock to be issued in the Merger, and for such other purposes
as may be, in Mid Penn’s reasonable judgment, necessary or desirable, and (ii) have its Board of Directors unanimously recommend
approval of such proposal (the “Mid Penn Recommendation”) and otherwise support the Merger.
8.2. Proxy Statement-Prospectus.
(a) For
the purposes of (i) registering Mid Penn Common Stock to be offered to holders of William Penn Common Stock in connection with the
Merger with the SEC under the Securities Act and (ii) holding the William Penn Shareholders’ Meeting and the Mid Penn Shareholders’
Meeting, Mid Penn shall draft and prepare, and William Penn shall cooperate in the preparation of, the Registration Statement, including
a joint proxy statement and prospectus, satisfying all applicable requirements of applicable state securities and banking laws, and of
the Securities Act and the Exchange Act, and the rules and regulations thereunder (such proxy statement-prospectus in the form mailed
to the William Penn shareholders and the Mid Penn shareholders, together with any and all amendments or supplements thereto, being herein
referred to as the “Proxy Statement-Prospectus”). Mid Penn shall, as soon as practicable after the execution of this
Agreement, file the Registration Statement, including the Proxy Statement-Prospectus, with the SEC under the Securities Act in connection
with the transactions contemplated by this Agreement. Each of Mid Penn and William Penn shall use commercially reasonable efforts to have
the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing, and each of William
Penn and Mid Penn shall thereafter promptly mail the Proxy Statement-Prospectus to the William Penn shareholders and the Mid Penn shareholders.
Mid Penn shall also use commercially reasonable efforts to obtain all necessary state securities law or “blue sky” permits
and approvals required to carry out the transactions contemplated by this Agreement, and William Penn shall furnish all information concerning
William Penn and the holders of William Penn Common Stock as may be reasonably requested in connection with any such action.
(b) William
Penn shall provide Mid Penn with any information concerning itself that Mid Penn may reasonably request in connection with the drafting
and preparation of the Proxy Statement-Prospectus, and Mid Penn shall notify William Penn promptly of the receipt of any comments of the
SEC with respect to the Proxy Statement-Prospectus and of any requests by the SEC for any amendment or supplement thereto or for additional
information and shall provide to William Penn promptly copies of all correspondence between Mid Penn or any of its representatives and
the SEC. Mid Penn shall give William Penn and its counsel the opportunity to review and comment on the Proxy Statement-Prospectus prior
to its being filed with the SEC and
shall give William Penn and its counsel the opportunity to review and comment on all amendments and
supplements to the Proxy Statement-Prospectus and all responses to requests for additional information and replies to comments prior to
their being filed with, or sent to, the SEC. Each of Mid Penn and William Penn agrees to use commercially reasonable efforts, after consultation
with the other party hereto, to respond promptly to all such comments of and requests by the SEC and to cause the Proxy Statement-Prospectus
and all required amendments and supplements thereto to be mailed to the holders of William Penn Common Stock entitled to vote at the William
Penn Shareholders’ Meeting and to the holders of the Mid Penn Common Stock entitled to vote at the Mid Penn Shareholders’
Meeting at the earliest practicable time.
(c) William
Penn and Mid Penn shall promptly notify the other party if at any time it becomes aware that the Proxy Statement-Prospectus or the Registration
Statement contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances under which they were made, not misleading. In such event, William
Penn shall cooperate with Mid Penn in the preparation of a supplement or amendment to such Proxy Statement-Prospectus that corrects such
misstatement or omission, and Mid Penn shall file an amended Registration Statement with the SEC, and William Penn, in its sole determination,
shall mail an amended Proxy Statement-Prospectus to the William Penn shareholders and Mid Penn shall, in its sole determination, mail
an amended Proxy Statement-Prospectus to the Mid Penn shareholders.
8.3. Regulatory Approvals.
Each of William Penn and Mid
Penn will cooperate with the other and use commercially reasonable efforts to promptly prepare and as soon as practicable following the
date hereof file all necessary documentation to obtain all necessary permits, consents, waivers, approvals and authorizations of the SEC,
the Bank Regulators and any other third parties or Governmental Entities, necessary to consummate the transactions contemplated by this
Agreement. William Penn and Mid Penn shall furnish each other and each other’s counsel with all information concerning themselves,
their subsidiaries, directors, officers and shareholders and such other matters as may be necessary or advisable in connection with any
application, petition or any other statement or application made by or on behalf of William Penn or Mid Penn to any Bank Regulator or
Governmental Entity in connection with the Merger, and the other transactions contemplated by this Agreement. William Penn shall have
the right to review and approve in advance all characterizations of the information relating to William Penn and any William Penn Subsidiary
which appear in any filing made in connection with the transactions contemplated by this Agreement with any Governmental Entity. Mid Penn
shall give William Penn and its counsel the opportunity to review and comment on each filing prior to its being filed with a Bank Regulator
and shall give William Penn and its counsel the opportunity to review and comment on all regulatory filings, amendments and supplements
to such filings and all responses to requests for additional information and replies to comments prior to their being filed with, or sent
to, a Bank Regulator. Mid Penn shall notify William Penn promptly of the receipt of any comments of any Bank Regulator with respect to
such filings. Each of William Penn and Mid Penn will cooperate with each other and use their reasonable best efforts to address any conditions
in any regulatory approval to allow for the consummation of the transactions contemplated by this Agreement.
8.4. Current Information.
(a) During
the period from the date of this Agreement to the Effective Time, each party will cause one or more of its representatives to confer with
representatives of the other party and report the general status of its ongoing operations at such times as the other party may reasonably
request. Each party will promptly notify the other party of any material change in the normal course of its business or in the operation
of the properties of such party or the Mid Penn Subsidiaries or William Penn Subsidiaries, as applicable, and, to the extent permitted
by applicable law, of any governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated),
or the institution or the threat of material litigation involving such party or any Mid Penn Subsidiary or William Penn Subsidiary, as
applicable. Without limiting the foregoing, executive officers of Mid Penn and William Penn shall confer at the reasonable request of
the other, and shall meet on a reasonably regular basis, to review the financial and operational affairs of William Penn and the William
Penn Subsidiaries and of Mid Penn and the Mid Penn Subsidiaries, in accordance with applicable law, and William Penn shall give due consideration
to Mid Penn’s input on such matters, with the understanding that, notwithstanding any other provision contained in this Agreement,
neither Mid Penn nor any Mid Penn Subsidiary shall, under any circumstance, be permitted to exercise control of William Penn or any William
Penn Subsidiary prior to the Effective Time; provided, however, neither Mid Penn nor William Penn shall be required to take any action
that would provide access to or disclose information where such access or disclosure would, in such disclosing party’s reasonable
judgment, violate or prejudice the rights, business interests, or confidences of any customer or other person or would result in the waiver
by such disclosing party of the privilege protecting communications between such disclosing party and any of its legal counsel.
(b) William
Penn Bank shall provide Mid Penn Bank, within fifteen (15) Business Days after the end of each calendar month, a written list of Nonperforming
Assets, its asset quality report and a written list of its investment security purchases during the calendar month then ended. On a monthly
basis, William Penn Bank shall provide Mid Penn Bank with a schedule of all loan approvals, which schedule shall indicate the loan amount,
loan type and other material features of the loan.
(c) Each
of Mid Penn and William Penn shall promptly inform the other upon receiving notice of any legal, administrative, arbitration or other
proceedings, demands, notices, audits or investigations (by any federal, state or local commission, agency or board) relating to the alleged
liability of such party or any William Penn Subsidiary or any Mid Penn Subsidiary, as applicable, under any labor or employment law.
8.5. Dividends.
Each of Mid Penn and William
Penn shall coordinate with the other the declaration of any dividends in respect of Mid Penn Common Stock and William Penn Common Stock
and the record dates and payment dates relating thereto, it being the intention of the parties hereto that holders of William Penn Common
Stock shall not receive two (2) dividends, or fail to receive one (1) dividend, in any quarter with respect to their William
Penn Common Stock and any shares of Mid Penn Common Stock any such holder receives in exchange therefor in the Merger.
8.6.
Exemption from Liability Under Section 16(b).
William Penn and Mid Penn
agree that, in order to most effectively compensate and retain William Penn Insiders (as defined below), both prior to and after the
Effective Time, it is desirable that William Penn Insiders not be subject to a risk of liability under Section 16(b) of the
Exchange Act to the fullest extent permitted by applicable law in connection with the conversion of shares of William Penn Common Stock
into shares of Mid Penn Common Stock in the Merger and the conversion of any William Penn Options or William Penn Restricted Stock into
corresponding stock options or shares of restricted stock of Mid Penn in the Merger, and for that compensatory and retentive purposes
agree to the provisions of this Section 8.6. William Penn shall deliver to Mid Penn in a reasonably timely fashion prior
to the Effective Time accurate information regarding those officers and directors of William Penn subject to the reporting requirements
of Section 16(a) of the Exchange Act (the “William Penn Insiders”), and the Board of Directors of William Penn
and Mid Penn, or a committee of non-employee directors thereof (as such term is defined for purposes of Rule 16b-3(d) under
the Exchange Act), shall reasonably promptly thereafter, and in any event prior to the Effective Time, take all such steps as may be
required to cause (in the case of William Penn) any dispositions of William Penn Common Stock, William Penn Options or William Penn Restricted
Stock by the William Penn Insiders, and (in the case of Mid Penn) any acquisitions of Mid Penn Common Stock or stock options or shares
of restricted stock of Mid Penn by any William Penn Insiders who, immediately following the Merger, will be officers or directors of
the Surviving Corporation subject to the reporting requirements of Section 16(a) of the Exchange Act, in each case pursuant
to the transactions contemplated by this Agreement, to be exempt from liability pursuant to Rule 16b-3 under the Exchange Act to
the fullest extent permitted by applicable law.
8.7. Access; Confidentiality.
(a) From
the date of this Agreement through the Effective Time, William Penn shall, and shall cause each William Penn Subsidiary to, afford to
Mid Penn and its authorized agents and representatives, commercially reasonable access to its properties, assets, books and records and
personnel, during normal business hours and after reasonable notice; and the officers of William Penn and each William Penn Subsidiary
will use commercially reasonable efforts to furnish Mid Penn and its representatives with such financial and operating data and other
information with respect to its businesses, properties, assets, books and records and personnel as Mid Penn or its representatives shall
from time to time reasonably request except, in each case, to the extent exclusion (x) may
be required for the board of directors to exercise its fiduciary duties under Maryland law or applicable law, (y) may be required
by applicable Bank Regulators, or (z) may be required to protect attorney-client privilege.
(b) Mid
Penn agrees to conduct such investigation and discussions hereunder in a manner so as not to interfere unreasonably with normal operations
and customer and employee relationships of William Penn and the William Penn Subsidiaries.
(c) In
addition, William Penn shall provide Mid Penn (i) a weekly loan pipeline report; and (ii) appropriate information, as requested,
regarding matters relating to problem loans, loan restructurings and loan workouts of William Penn and any William Penn Subsidiary where
the
outstanding balance, including principal and interest, is equal to or in excess of One Hundred Thousand Dollars ($100,000), provided
that nothing contained in this subparagraph shall be construed to grant Mid Penn or any Mid Penn employee any final decision-making authority
with respect to such matters.
(d) Prior
to the Effective Time, Mid Penn shall hold in confidence all confidential information of William Penn on the terms and subject to the
conditions of the Confidentiality Agreement in accordance with Section 11.1. If the transactions contemplated by this Agreement
shall not be completed, Mid Penn will continue to comply with the terms of such Confidentiality Agreement.
ARTICLE IX
CLOSING CONDITIONS
9.1. Conditions to Each Party’s Obligations
under this Agreement.
The respective obligations
of each party under this Agreement shall be subject to the fulfillment at or prior to the Closing Date of the following conditions, none
of which may be waived:
(a) Shareholder
Approval. This Agreement and the transactions contemplated hereby shall have been approved by the requisite vote of the shareholders
of William Penn and, with respect to the issuance of Mid Penn Common Stock to be issued in the Merger, by the requisite vote of the shareholders
of Mid Penn.
(b) Injunctions.
None of the parties hereto shall be subject to any order, decree or injunction of a court or agency of competent jurisdiction that enjoins
or prohibits the consummation of the transactions contemplated by this Agreement and no statute, rule or regulation shall have been
enacted, entered, promulgated, interpreted, applied or enforced by any Governmental Entity or Bank Regulator, that enjoins or prohibits
the consummation of the transactions contemplated by this Agreement.
(c) Regulatory
Approvals. All Regulatory Approvals, and other necessary approvals, authorizations and consents of any Governmental Entities required
to consummate the transactions contemplated by this Agreement, the failure of which to obtain would reasonably be expected to have a
Material Adverse Effect, shall have been obtained and shall remain in full force and effect and all waiting periods relating to such
approvals, authorizations or consents shall have expired; and no such approval, authorization or consent shall include any condition
or requirement, excluding standard conditions that are normally imposed by the regulatory authorities in bank merger transactions, that
would, in the good faith reasonable judgment of the Board of Directors of either William Penn or Mid Penn, materially reduce the benefits
of the Merger to such a degree that either William Penn or Mid Penn would not have entered into this Agreement had such condition, restriction
or requirement been known at the date hereof (a “Materially Burdensome Regulatory Condition”).
(d) Effectiveness
of Registration Statement. The Registration Statement shall have become effective under the Securities Act and no stop order suspending
the effectiveness of the Registration Statement shall have been issued, and no proceedings for that purpose shall have been initiated
or threatened by the SEC and, if the offer and sale of Mid Penn Common Stock in the Merger is subject to the blue sky laws of any state,
shall not be subject to a stop order of any state securities commissioner.
(e) Tax
Opinions. On the basis of facts, representations and assumptions which shall be consistent with the state of facts existing at the
Closing Date, Mid Penn shall have received an opinion of Pillar Aught LLC (or, if Pillar Aught LLC is unwilling or unable to issue the
opinion, an opinion of another nationally recognized law firm), and William Penn shall have received an opinion of Kilpatrick Townsend &
Stockton LLP (or, if Kilpatrick Townsend & Stockton LLP is unwilling or unable to issue the opinion, an opinion of another nationally
recognized law firm), each reasonably acceptable in form and substance to Mid Penn and William Penn, dated as of the Closing Date, substantially
to the effect that for federal income tax purposes, the Merger will qualify as a reorganization within the meaning of Section 368(a) of
the Code. In rendering the legal opinions described in this Section 9.1(e), the law firms may require and rely upon customary
representations contained in certificates of officers of Mid Penn and William Penn and their respective subsidiaries. The receipt of
such legal opinions may not be waived by either party to this Agreement unless the Proxy Statement-Prospectus is re-circulated to the
William Penn shareholders and the Mid Penn shareholders for solicitation of their approval of the consummation of the Merger without
fulfillment of the condition described in this Section 9.1(e).
(f) Listing
of Mid Penn Common Stock. The shares of Mid Penn Common Stock issuable pursuant to the Merger shall have been approved for listing
on Nasdaq.
9.2. Conditions to the Obligations of Mid Penn
under this Agreement.
The obligations of Mid Penn
under this Agreement shall be further subject to the satisfaction of the following conditions at or prior to the Closing Date:
(a) Representations
and Warranties. (i) Each of the representations and warranties of William Penn (other than in Sections 4.1(a), 4.1(b) (1st
two sentences only), 4.1(c), 4.1(d), 4.2, 4.3 and 4.7) set forth in this Agreement or in any
certificate or agreement delivered by William Penn pursuant to the provisions hereof shall be true and correct, in all respects (without
giving effect to any limitation indicated by the words “Material Adverse Effect,” “in all material respects,”
“in any material respect,” “material,” “materially” or words of similar import) as of the date of
this Agreement and immediately prior to the Effective Time with the same effect as though all such representations and warranties had
been made at and as of such time (except to the extent such representations and warranties speak as of a particular date, which shall
be true and correct in all respects as of that date), except where the failure of such representations and warranties to be so true and
correct would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on William Penn, (ii) each
of the representations and warranties of William Penn set forth in Section 4.2 shall be true and correct (other than de
minimus inaccuracies) as of the date of this Agreement and immediately prior to the Effective Time with the same effect as though
all such representations and warranties had been made at and
as of such time (except
to the extent such representations and warranties speak as of a particular date, which shall be true and correct in all material respects
as of that date), and (iii) each of the representations and warranties of William Penn set forth in Sections 4.1(a),
4.1(b) (1st two sentences only), 4.1(c), 4.1(d), 4.3 and 4.7 shall be true and
correct in all respects as of the date of this Agreement and immediately prior to the Effective Time with the same effect as though all
such representations and warranties had been made at and as of such time (except to the extent such representations and warranties speak
as of a particular date, which shall be true and correct in all respects as of that date).
(b) Agreements
and Covenants. William Penn shall have performed in all material respects all obligations and complied in all material respects with
all agreements or covenants to be performed or complied with by it at or prior to the Effective Time.
(c) Permits,
Authorizations, Etc. William Penn shall have obtained any and all material permits, authorizations, consents, waivers, clearances
or approvals required for the lawful consummation of the Merger.
(d) No
Change Resulting in Material Adverse Effect. From the date hereof through the Closing Date, there shall not have occurred, on a consolidated
basis, any change that individually or in the aggregate has a Material Adverse Effect with respect to William Penn.
(e) Officer’s
Certificate. William Penn shall have delivered to Mid Penn a certificate and such other documents, dated the Closing Date and signed,
without personal liability, by its chief executive officer and chief financial officer, to the effect that the conditions set forth in
subsections (a) through (d) of this Section 9.2 have been satisfied.
9.3. Conditions to the Obligations of William
Penn under this Agreement.
The obligations of William
Penn under this Agreement shall be further subject to the satisfaction of the following conditions at or prior to the Closing Date:
(a) Representations
and Warranties. (i) Each of the representations and warranties of Mid Penn (other than in Sections 5.1(a), 5.1(b) (1st two
sentences only), 5.1(c), 5.1(d), 5.2, 5.3 and 5.7) set forth in this Agreement or in any certificate or agreement
delivered by Mid Penn pursuant to the provisions hereof shall be true and correct, in all respects (without giving effect to any limitation
indicated by the words “Material Adverse Effect,” “in all material respects,” “in any material respect,”
“material,” “materially” or words of similar import) as of the date of this Agreement and immediately prior to
the Effective Time with the same effect as though all such representations and warranties had been made at and as of such time (except
to the extent such representations and warranties speak as of a particular date, which shall be true and correct in all respects as of
that date), except where the failure of such representations and warranties to be so true and correct would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on Mid Penn, (ii) each of the representations and warranties
of Mid Penn set forth in Section 5.2 shall be true and correct (other than de minimus inaccuracies) as of
the date of this Agreement and immediately prior to the Effective Time with the same effect as though all such representations and warranties
had been made at and as of such time (except to the extent
such representations and warranties
speak as of a particular date, which shall be true and correct in all material respects as of that date), and (iii) each of the
representations and warranties of Mid Penn set forth in Sections 5.1(a), 5.1(b) (1st two sentences
only), 5.1(c), 5.1(d), 5.3 and 5.7 shall be true and correct in all respects as of the date of this Agreement and
immediately prior to the Effective Time with the same effect as though all such representations and warranties had been made at and as
of such time (except to the extent such representations and warranties speak as of a particular date, which shall be true and correct
in all respects as of that date).
(b) Agreements
and Covenants. Mid Penn shall have performed in all material respects all obligations and complied in all material respects with
all agreements or covenants to be performed or complied with by it at or prior to the Effective Time.
(c) Permits,
Authorizations, Etc. Mid Penn shall have obtained any and all material permits, authorizations, consents, waivers, clearances or
approvals required for the lawful consummation of the Merger.
(d) No
Change Resulting in Material Adverse Effect. From the date hereof through the Closing Date, there shall not have occurred, on a consolidated
basis, any change that individually or in the aggregate has a Material Adverse Effect with respect to Mid Penn or Mid Penn Bank.
(e) Payment
of Merger Consideration. Mid Penn shall have delivered the Exchange Fund to the Exchange Agent no later than one (1) business
day before the Closing Date and the Exchange Agent shall provide William Penn with a certificate evidencing such delivery.
(f) Officer’s
Certificate. Mid Penn shall have delivered to William Penn a certificate and such other documents, dated the Closing Date and signed,
without personal liability, by its chief executive officer and chief financial officer, to the effect that the conditions set forth in
subsections (a) through (e) of this Section 9.3 have been satisfied.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1.
Termination.
This Agreement may be terminated
at any time prior to the Closing Date, whether before or after approval of the Merger by the shareholders of William Penn and Mid Penn:
(a) at
any time by the mutual written agreement of Mid Penn and William Penn;
(b) by
either party (provided, that the terminating party is not then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material breach of any of the representations or warranties set forth in this
Agreement on the part of the other party, which breach by its nature cannot be cured prior to the Termination Date or shall not have
been cured within thirty (30) days after written notice of such breach by the terminating party to the other party; provided,
however, that neither party shall have the right to terminate this Agreement pursuant to this Section 10.1(b) unless
the breach of representation or
warranty, together with all other such breaches, would entitle the terminating party not to consummate
the transactions contemplated hereby under Section 9.2(a) (in the case of a breach of a representation or warranty by
William Penn) or Section 9.3(a) (in the case of a breach of a representation or warranty by Mid Penn);
(c) by
either party (provided, that the terminating party is not then in material breach of any representation, warranty, covenant or other
agreement contained herein) if there shall have been a material failure to perform or comply with any of the covenants or agreements
set forth in this Agreement on the part of the other party, which failure by its nature cannot be cured prior to the Termination Date
or shall not have been cured within thirty (30) days after written notice of such failure by the terminating party to the other
party; provided, however, that neither party shall have the right to terminate this Agreement pursuant to this Section 10.1(c) unless
the breach of such covenant or agreement, together with all other such breaches, would entitle the terminating party not to consummate
the transactions contemplated hereby under Section 9.2(b) (in the case of a breach of a covenant or agreement by William
Penn) or Section 9.3(b) (in the case of a breach of a covenant or agreement by Mid Penn);
(d) by
either party if the Closing shall not have occurred by the Termination Date, or such later date as shall have been agreed to in writing
by Mid Penn and William Penn; provided, that no party may terminate this Agreement pursuant to this Section 10.1(d) if
the failure of the Closing to have occurred on or before said date was due to such party’s material breach of any representation,
warranty, covenant or other agreement contained in this Agreement;
(e) by
either party if (i) the shareholders of William Penn fail to approve the transactions contemplated by this Agreement at the William
Penn Shareholders’ Meeting called for that purpose (including any adjournment thereof); or (ii) the shareholders of Mid Penn
fail to approve the issuance of the shares of Mid Penn Common Stock to be issued in the Merger at the Mid Penn Shareholders’ Meeting
called for that purpose (including any adjournment thereof);
(f) by
either party if (i) final action has been taken by a Bank Regulator whose approval is required in connection with this Agreement
and the transactions contemplated hereby, which final action (A) has become nonappealable and (B) does not approve this Agreement
or the transactions contemplated hereby, or (C) such approval shall have resulted in a Materially Burdensome Regulatory Condition,
or (ii) any court of competent jurisdiction or other Governmental Entity shall have issued an order, decree, ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Merger and such order, decree, ruling or other action shall have become
final and nonappealable;
(g) by
the Board of Directors of Mid Penn if William Penn has received a Superior Proposal, and in accordance with Section 6.8 of
this Agreement, the William Penn Board of Directors has entered into any letter of intent, agreement in principle or acquisition agreement
with respect to the Superior Proposal, withdrawn its recommendation of this Agreement or failed to make such recommendation at any time
a recommendation is required to be made under this Agreement or modified or qualified such recommendation in a manner adverse to Mid
Penn, or has otherwise made a determination to accept such Superior Proposal;
(h) by
the Board of Directors of William Penn if William Penn has received a Superior Proposal, and in accordance with Section 6.8
of this Agreement, the William Penn Board of Directors has made a determination to accept such Superior Proposal; or
(i)
by the Board of Directors of William Penn, by written notice to Mid Penn at any
time on or after the fifth (5th) Business Day immediately prior to the Closing Date (the “Determination
Date”) if the Mid Penn Financial Price Ratio is both (x) less than 0.80 and (y) less than the Index Ratio by
more than twenty percent (20%). If William Penn elects to terminate pursuant to this Section 10.1(i), and provides
written notice to Mid Penn, then within two (2) Business Days following Mid Penn’s receipt of such notice, Mid Penn may
elect by written notice to William Penn to reinstate the Merger and the other transactions contemplated by this Agreement by
adjusting the Exchange Ratio (calculated to the nearest one thousandth) to equal the lesser of (x) a number (rounded to the
nearest one thousandth) obtained by dividing (A) the product of the Starting Price, 0.80 and the Exchange Ratio (as then in
effect) by (B) the Determination Date Average Closing Price or (u) a number (rounded to the nearest one thousandth)
obtained by dividing (A) the product of the Index Ratio and the Exchange Ratio (as then in effect) by (B) the Mid Penn
Financial Price Ratio. If Mid Penn makes such election to reinstate the Merger and other transactions contemplated by this
Agreement, no termination will occur pursuant to this Section 10.1(i) and this Agreement will remain in effect
according to its terms (except as the Merger Consideration has been adjusted).
10.2. Effect of Termination.
(a) In
the event of termination of this Agreement pursuant to any provision of Section 10.1, this Agreement shall forthwith become
void and have no further force, except that the provisions of Sections 10.2, 11.1, 11.4, 11.5, 11.7,
11.10, 11.11, 11.12 (related to jurisdiction) and any other Section which, by its terms, relates to post-termination
rights or obligations, shall survive such termination of this Agreement and remain in full force and effect.
(b) If
this Agreement is terminated, expenses and damages of the parties hereto shall be determined as follows:
(1) Except
as provided below, whether or not the Merger is consummated, all costs and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring such expenses.
(2) In
the event of a termination of this Agreement because of a willful and material breach of any representation, warranty, covenant or agreement
contained in this Agreement, the breaching party shall remain liable for any and all damages, costs and expenses, including all reasonable
attorneys’ fees, sustained or incurred by the non-breaching party as a result thereof or in connection therewith or with respect
to the enforcement of its rights hereunder (including the loss to the shareholders of William Penn or Mid Penn, as applicable, of the
benefits of the transactions contemplated by this Agreement, including, in the case of William Penn, the loss of the premium (if any)
to which the shareholders of William Penn would have been entitled). "Willful and material breach" shall mean a material breach
of, or material failure to perform any of the covenants or other agreements contained in, this Agreement that is a consequence of an
act or
failure to act by the breaching or non-performing party with actual knowledge that such party's act or failure to act would, or
would reasonably be expected to, result in or constitute such breach of or such failure of performance under this Agreement.
(3) In
the event that this Agreement is terminated by Mid Penn pursuant to Section 10.1(g), or by William Penn pursuant to Section 10.1(h),
William Penn shall pay to Mid Penn the Mid Penn Termination Fee within five (5) Business Days after Mid Penn makes written demand
therefor. Such payments shall be made by wire transfer of immediately available funds to an account designated by Mid Penn.
(4) In
the event that William Penn enters into a definitive agreement relating to a William Penn Acquisition Proposal or consummates a William
Penn Acquisition Proposal within twelve (12) months after the termination of this Agreement (i) by Mid Penn pursuant to Sections 10.1(b) or
10.1(c) because of a willful and material breach by William Penn; or (ii) by Mid Penn or William Penn pursuant to Section 10.1(e) following
failure of the shareholders of William Penn to approve the transactions contemplated by this Agreement and, in the case of (ii): (y) William
Penn has breached the provisions of Section 6.8, or (z) a third party has publicly proposed or announced an Acquisition
Proposal prior to the William Penn Shareholders’ Meeting, William Penn shall pay to Mid Penn the Mid Penn Termination Fee within
two (2) Business Days after Mid Penn makes written demand therefor. Such payments shall be made by wire transfer of immediately
available funds to an account designated by Mid Penn.
(c) For
purposes of this Agreement, the “Mid Penn Termination Fee” shall mean $4,900,000.
(d) The
right to receive payment of the Mid Penn Termination Fee under Sections 10.2(b)(3) and 10.2(b)(4) constitutes the
sole and exclusive remedy of either party against the other and their respective officers and directors with respect to a termination
under these Sections, and shall constitute liquidated damages and not a penalty.
10.3. Amendment, Extension and Waiver.
Subject to applicable law,
and except as provided in this Agreement, at any time prior to the Effective Time (whether before or after approval thereof by the shareholders
of William Penn and Mid Penn), the parties hereto by action of their respective Boards of Directors, may (a) amend this Agreement,
(b) extend the time for the performance of any of the obligations or other acts of any other party hereto, (c) waive any inaccuracies
in the representations and warranties contained herein or in any document delivered pursuant hereto, or (d) waive compliance with
any of the agreements or conditions contained herein; provided, however, that after any approval of this Agreement and the transactions
contemplated hereby by the shareholders of William Penn and Mid Penn, there may not be, without further approval of such shareholders,
any amendment of this Agreement which reduces the amount or value or changes the form of consideration to be delivered to William Penn’s
shareholders pursuant to this Agreement. This Agreement may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto. Any agreement on the part of a party hereto to any extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party, but such waiver or failure to insist on strict
compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.
ARTICLE XI
MISCELLANEOUS
11.1. Confidentiality.
Except as specifically set
forth herein, Mid Penn and William Penn mutually agree to be bound by the terms of the confidentiality agreement dated July 31,
2024 (the “Confidentiality Agreement”) previously executed by the parties hereto, which Confidentiality Agreement
is hereby incorporated herein by reference. The parties hereto agree that such Confidentiality Agreement shall continue in accordance
with its terms, notwithstanding the termination of this Agreement.
11.2. Public Announcements.
William Penn and Mid Penn
shall cooperate with each other in the development and distribution of all news releases and other public disclosures with respect to
this Agreement, and except as may be otherwise required by law, neither William Penn nor Mid Penn shall issue any news release, or other
public announcement or communication with respect to this Agreement unless such news release, public announcement or communication has
been mutually agreed upon by the parties hereto, provided, however, that nothing in this Section 11.2 shall be deemed to
prohibit any party from making any disclosure (i) which it deems necessary in order to satisfy such party’s disclosure obligations
imposed by law, (ii) with respect to any Acquisition Proposal (in accordance with the terms of this Agreement) or (iii) for
statements that are reasonably necessary in connection with a party enforcing its rights under this Agreement in any litigation between
the parties relating to this Agreement.
11.3. Survival.
All representations, warranties
and covenants in this Agreement or in any instrument delivered pursuant hereto or thereto shall expire on and be terminated and extinguished
at the Effective Time, except for those covenants and agreements contained herein which by their terms apply in whole or in part after
the Effective Time, including Section 2.4(e), Article III, Section 7.8, Section 7.9,
Section 7.10, Section 7.11, and Section 7.15.
11.4. Confidential Supervisory Information.
Notwithstanding any other
provision of this Agreement, no party shall be required to make any disclosure or furnish access to any information (whether pursuant
to a representation or warranty or otherwise) that would involve the disclosure of confidential supervisory information (as defined in
12 C.F.R. § 309.5(g)(8)) of a Governmental Entity by any party to this Agreement to the extent prohibited by applicable law. To
the extent legally permissible, appropriate substitute disclosures or actions shall be made or taken under circumstances in which the
limitations of the preceding sentence apply. Notwithstanding the foregoing, no failure to disclosure pursuant to this
Section 11.4
will operate to waive or exclude a breach of any representation, warranty or covenant of this Agreement.
11.5. Expenses.
Except as otherwise provided
in Section 10.2, and except for the cost of printing and mailing the Proxy Statement-Prospectus which shall be shared equally,
each party hereto shall bear and pay all costs and expenses incurred by it in connection with the transactions contemplated hereby, including
fees and expenses of its own financial advisors, accountants and legal counsel and, in the case of Mid Penn, the registration fee to
be paid to the SEC in connection with the Registration Statement.
11.6. Notices.
All notices or other communications
hereunder shall be in writing and shall be deemed given if delivered by receipted hand delivery, mailed by United States prepaid registered
or certified mail (return receipt requested), or by a nationally recognized overnight courier promising next Business Day delivery, addressed
as follows:
| If to Mid Penn, to: |
Rory G. Ritrievi |
| |
President and Chief Executive Officer |
| |
Mid Penn Bancorp, Inc. |
| |
2407 Park Drive |
| |
Harrisburg, Pennsylvania 17110 |
| |
|
| |
|
| With required copies |
Kenneth J. Rollins, Esq. |
| (which shall not constitute notice) to: |
Pillar+Aught |
| |
4201 E. Park Circle |
| |
Harrisburg, Pennsylvania 17111 |
| |
E-mail:
krollins@pillaraught.com |
| |
|
| If to William Penn, to: |
Kenneth J. Stephon |
| |
President and Chief Executive Officer |
| |
William Penn Bancorporation |
| |
10 Canal Street, Suite 104 |
| |
Bristol, Pennsylvania 19007 |
| |
|
| With required copies |
Gary R. Bronstein, Esq. |
| (which shall not constitute notice) to: |
Stephen F. Donahoe, Esq. |
| |
Kilpatrick Townsend & Stockton LLP |
| |
701 Pennsylvania Avenue, Suite 200 |
| |
Washington, DC 20004 |
| |
E-mail: |
gbronstein@ktslaw.com |
| |
|
sdonahoe@ktslaw.com |
or such other address as shall be furnished in
writing by any party, and any such notice or communication shall be deemed to have been given: (a) as of the date delivered by hand;
(b) three (3) Business Days after being delivered to the U.S. mail, postage prepaid; or (c) one (1) Business Day
after being delivered to the overnight courier and requesting next Business Day delivery.
11.7. Parties in Interest.
This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that neither
this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party hereto without the prior written
consent of the other party. Except for the provisions of Article III and Section 7.9 and except as otherwise
expressly provided by this Agreement, following the Effective Time, nothing in this Agreement, express or implied, is intended to confer
upon any person, other than the parties hereto and their respective successors, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
11.8. Complete Agreement.
This Agreement, including
the Exhibits and Disclosure Schedules hereto and the documents and other writings referred to herein or therein or delivered pursuant
hereto, and the Confidentiality Agreement referred to in Section 11.1, contains the entire agreement and understanding of
the parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants or undertakings
between the parties other than those expressly set forth herein or therein. This Agreement supersedes all prior agreements and understandings
(other than the Confidentiality Agreement referred to in Section 11.1 hereof) between the parties, both written and oral,
with respect to its subject matter.
11.9. Counterparts.
This Agreement may be executed
in one or more counterparts (including by transmission of duly executed signature pages in .pdf format) all of which shall be considered
one and the same agreement and each of which shall be deemed an original. A facsimile copy or electronic transmission of a signature
page shall be deemed to be an original signature page.
11.10. Severability.
In the event that any one
or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, by any court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement and the parties
shall use commercially reasonable efforts to substitute a valid, legal and enforceable provision which, insofar as practical, implements
the purposes and intents of this Agreement.
11.11. Governing Law.
This Agreement shall be governed
by the laws of the Commonwealth of Pennsylvania, without giving effect to its laws or principles of conflicts of laws, except that matters
relating to the fiduciary duties of the Board of Directors of William Penn shall be subject to the laws of the State of Maryland.
11.12. Interpretation.
When a reference is made
in this Agreement to Sections or Exhibits, such reference shall be to a Section of or Exhibit to this Agreement unless
otherwise indicated. The recitals hereto constitute an integral part of this Agreement. References to Sections include subsections,
which are part of the related Section (e.g., a section numbered “Section 2.2(a)” would be part of “Section 2.2”
and references to “Section 2.2” would also refer to material contained in the subsection described as “Section 2.2(a)”).
The table of contents, index and headings contained in this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation”. The phrases “the
date of this Agreement”, “the date hereof” and terms of similar import, unless the context otherwise requires, shall
be deemed to refer to the date set forth in the Recitals to this Agreement. The phrases “transactions contemplated hereby”
and “transactions contemplated by this Agreement” shall include the Merger and the Bank Merger. The parties have participated
jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises,
this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. A disclosure set forth in any Mid Penn
Disclosure Schedule shall be deemed to be a disclosure under all Mid Penn Disclosure Schedules, and a disclosure in any William Penn
Disclosure Schedule shall be deemed to be a disclosure under all William Penn Disclosure Schedules.
11.13. Specific Performance; Jurisdiction.
The parties hereto agree
that irreparable damage, for which monetary damages (even if available) would not be an adequate remedy, would occur in the event that
the provisions contained in this Agreement were not performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions
to prevent breaches of this Agreement and to enforce specifically the terms and provisions thereof in any federal or state court of competent
jurisdiction located in the Commonwealth of Pennsylvania (or, alternatively, in the State of Delaware), this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of any federal or state court of competent jurisdiction located in the Commonwealth of Pennsylvania (or,
alternatively, in the State of Delaware) in the event any dispute arises out of this Agreement or the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave
from any such court and (c) agrees that it will not bring any action relating to this Agreement or the transactions
contemplated
by this Agreement in any court other a federal or state court of competent jurisdiction located in the Commonwealth of Pennsylvania (or,
alternatively, in the State of Delaware).
11.14. Waiver of Trial by Jury.
The parties hereto hereby
knowingly, voluntarily and intentionally waive the right any may have to a trial by jury in respect to any litigation based on, or rising
out of, under, or in connection with this Agreement and any agreement contemplated to be executed in connection herewith, or any course
of conduct, course of dealing, statements (whether verbal or written) or actions of either party in connection with such agreements.
11.15. Delivery by Facsimile
or Electronic Transmission.
This Agreement and any signed
agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent
signed and delivered by means of a facsimile machine or by e-mail delivery of a “.pdf” format data file, shall
be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect
as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise
the use of a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement
or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of
a facsimile machine or e-mail delivery of a “.pdf” format data file as a defense to the formation of a contract
and each party hereto forever waives any such defense.
[Remainder of page intentionally blank]
IN WITNESS WHEREOF, Mid Penn
and William Penn have caused this Agreement to be executed under seal by their duly authorized officers as of the date first set forth
above.
| MID PENN BANCORP, INC. |
| | | |
| | By: | /s/ Rory G. Ritrievi |
| | | Name: |
Rory G. Ritrievi |
| | | Title: |
President and Chief Executive
Officer |
| | | |
| | WILLIAM PENN BANCORPORATION |
| | | |
| | By: | /s/ Kenneth J. Stephon |
| | | Name: |
Kenneth J. Stephon |
| | | Title: |
President & Chief Executive
Officer |
[Signature Page to Agreement and Plan
of Merger]
Exhibit A
Form of William Penn Affiliate Letter
October 31, 2024
Mid Penn Bancorp, Inc.
2407 Park Drive
Harrisburg, Pennsylvania 17110
Ladies and Gentlemen:
Mid Penn Bancorp, Inc.
(“Mid Penn”) and William Penn Bancorporation (“William Penn”) desire to enter into, concurrently
with or following the execution of this letter agreement (this “Agreement”), an Agreement and Plan of Merger (as the
same may be amended from time to time, the “Merger Agreement”), pursuant to which, among other things, William Penn
will merge with and into Mid Penn with Mid Penn surviving the merger (the “Merger”) pursuant to the terms and conditions
of the Merger Agreement. Defined terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.
Mid Penn has required that,
as a condition to its willingness to enter into the Merger Agreement and pursuant to Section 6.11 of the Merger Agreement, the undersigned
shareholder of William Penn, being either a director or executive officer as of the date hereof, execute and deliver to Mid Penn this
Agreement.
The undersigned, in order
to induce Mid Penn to enter into the Merger Agreement, hereby irrevocably (in his or her individual capacity and not as a director or
officer of William Penn):
(a) represents and warrants
to Mid Penn that (i) the undersigned (A) beneficially owns (as such term is defined in Rule 13d-3 under the Exchange Act
of 1934 (the “Exchange Act”)), and has the sole power to vote or to direct the voting of, all of the shares of William
Penn Common Stock set forth below on the signature page hereto (the “Original Shares” and, together with any additional
shares of William Penn Common Stock pursuant to paragraph (d) below, the “Shares”) (provided that the term “Shares”
shall not include any securities beneficially owned by the undersigned as a trustee or fiduciary) free and clear of all Liens (other than
Liens which do not affect the ability of the undersigned to vote the Shares), (B) does not beneficially own any shares of William
Penn Common Stock over which the undersigned has the sole power to vote or direct the voting of other than the Original Shares, and (C) has
the capacity to enter into this Agreement and that this Agreement is a valid and binding obligation enforceable against the undersigned
in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting creditors’ rights and general equitable
principles, (ii) except pursuant hereto, there are no options, warrants or other rights, agreements, arrangements or commitments
of any character to which the undersigned is a party relating to the pledge, disposition or voting of any of the Original Shares (other
than Liens which do not affect the ability of the undersigned to vote the Original Shares) and there are no voting trusts or voting agreements
with respect to the Original Shares, (iii) neither the execution and delivery of this Agreement nor the consummation by the undersigned
of the transactions contemplated hereby will conflict with or result in a breach, or constitute a default (with or without notice of lapse
of time or both) under any provision of, any trust agreement, loan
Mid Penn Bancorp, Inc.
October 31, 2024
Page 2
or credit agreement, mortgage, lease or other agreement, instrument
or law applicable to the undersigned or to the undersigned’s property or assets, and (iv) no consent, approval or authorization
of any other party is required in order for the undersigned to enter into and perform his or her obligations under this Agreement;
(b) agrees to (i) be
present (in person or by proxy) at all William Penn Shareholders’ Meetings in order to be counted for the purpose of determining
the presence of a quorum at such meetings, and (ii) vote or cause to be voted all such Shares (A) in favor of approval and adoption
of the Merger, the Merger Agreement and the transactions contemplated thereby (including any amendments or modifications of the terms
thereof approved by the William Penn Board of Directors), and (B) against (x) any William Penn Acquisition Proposal, including
a Superior Proposal, (y) any action, proposal, transaction or agreement which could reasonably be expected to result in a breach
of any covenant, representation or warranty or any other obligation or agreement of William Penn under the Merger Agreement or of the
undersigned under this Agreement and (z) any action, proposal, transaction or agreement that could reasonably be expected to impede,
interfere with, delay, discourage, adversely affect or inhibit the timely consummation of the Merger or the fulfillment of Mid Penn’s
or William Penn’s conditions under the Merger Agreement;
(c) agrees that (1) the
undersigned will not, directly or indirectly, contract to sell, sell, exchange, assign, pledge or otherwise dispose of or encumber (“Transfer”)
any of the Shares or any interest therein or any voting rights with respect thereto, other than (i) to any immediate family member
of the undersigned, (ii) to a trust for the benefit of the undersigned or his or her immediate family member or upon the undersigned’s
death, (iii) to William Penn in connection with the vesting, settlement or exercise of William Penn equity awards to satisfy any
withholding for the payment of taxes incurred in connection with such vesting, settlement or exercise, or, in respect of William Penn
equity awards, the exercise price thereon, (iv) as is otherwise permitted by Mid Penn in its sole discretion, (v) Transfers
by will or operation of law, in which case this Agreement shall bind the transferee, (vi) to any charitable organization that is
tax exempt under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or (vii) Transfers to any other shareholder
of William Penn who has executed a copy of this Agreement on the date hereof; provided that, as a precondition to that in the case of
the foregoing clauses (i), (ii), (iv), (v), (vi) and (vii), the transferee has agreed in writing to abide by the terms of this Agreement
in a form reasonably satisfactory to Mid Penn, and (2) any attempted Transfer of the Shares or any interest therein in violation
of this paragraph (c) by the undersigned shall be null and void; and
(d) agrees that all shares
of William Penn Common Stock, for which the undersigned has the sole power to vote or to direct the voting of, that the undersigned purchases
or otherwise acquires beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of after the execution of this Agreement
shall be subject to the terms of this Agreement and shall constitute Shares for all purposes of this Agreement; provided however, that
such purchases by the undersigned shall not constitute Shares if the undersigned does nothave the sole power to vote or to direct the
voting of such shares.
It is understood and agreed
that the provisions of this Agreement relate solely to the capacity of the undersigned as a shareholder or other beneficial owner of shares
of William Penn
Mid Penn Bancorp, Inc.
October 31, 2024
Page 3
Common Stock and is not in any way intended to affect the exercise or omission by the undersigned of the undersigned’s
responsibilities as a director or officer of William Penn. It is further understood and agreed that this Agreement is not in any way intended
to affect the exercise or omission, including under the Merger Agreement, by the undersigned of any fiduciary responsibility which the
undersigned may have in respect of any shares of William Penn Common Stock held or controlled by the undersigned as of the date hereof.
No such actions or omissions in furtherance of the undersigned’s responsibilities as a director or officer shall be deemed a breach
of this Agreement.
The obligations set forth
in this Agreement shall terminate upon the earliest to occur of (i) the William Penn Shareholders’ Meeting (including any adjournment
or postponement thereof) and (ii) the date on which the Merger Agreement is terminated in accordance with its terms.
This Agreement may be executed
in one or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and
the same Agreement. Each party hereto shall execute and deliver such additional documents as may be necessary or desirable to effect the
transactions contemplated by this Agreement.
This Agreement shall inure
to the benefit of Mid Penn, shall be binding on the undersigned and his or her executors, personal representatives, administrators, heirs,
legatees, guardians and other personal representatives, and may not be assigned by any party without the written consent of the other.
This Agreement shall survive the death or incapacity of the undersigned.
If any term or provision of
this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner
in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
The undersigned agrees that,
in the event of his or her breach of this Agreement, Mid Penn shall be entitled to such remedies and relief against the undersigned as
are available at law or in equity. The undersigned acknowledges that there is not an adequate remedy at law to compensate Mid Penn for
a violation of this Agreement, and irrevocably waives, to the extent permitted by law, any defense that he or she might have based on
the adequacy of a remedy at law which might be asserted as a bar to specific performance, injunctive relief, or other equitable relief.
The undersigned agrees to the granting of injunctive relief without the posting of any bond and further agrees that, if any bond shall
be required, such bond shall be in a nominal amount.
Please confirm, intending
to be legally bound, that the foregoing correctly states the understanding between the undersigned and Mid Penn by signing and returning
to Mid Penn a counterpart hereof.
Mid Penn Bancorp, Inc.
October 31, 2024
Page 4
Accepted as of this 31st day of October, 2024:
| MID PENN BANCORP, INC. |
|
| |
|
| By: |
|
|
| Name: |
Rory G. Ritrievi |
|
| Title: |
President & CEO |
|
Exhibit B
Form of Mid Penn Affiliate Letter
October 31, 2024
William Penn Bancorporation
10 Canal Street, Suite 104
Bristol, Pennsylvania 19007
Ladies and Gentlemen:
Mid Penn Bancorp, Inc.
(“Mid Penn”) and William Penn Bancorporation (“William Penn”) desire to enter into, concurrently
with or following the execution of this letter agreement (this “Agreement”), an Agreement and Plan of Merger (as the
same may be amended from time to time, the “Merger Agreement”), pursuant to which, among other things, William Penn
will merge with and into Mid Penn with Mid Penn surviving the merger (the “Merger”) pursuant to the terms and conditions
of the Merger Agreement. Defined terms used but not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.
William Penn has required
that, as a condition to its willingness to enter into the Merger Agreement and pursuant to Section 6.11 of the Merger Agreement,
the undersigned shareholder of Mid Penn, being either a director or executive officer as of the date hereof, execute and deliver to William
Penn this Agreement.
The undersigned, in order
to induce William Penn to enter into the Merger Agreement, hereby irrevocably (in his or her individual capacity and not as a director
or officer of Mid Penn):
(a) represents and warrants
to William Penn that (i) the undersigned (A) beneficially owns (as such term is defined in Rule 13d-3 under the Exchange
Act of 1934 (the “Exchange Act”)), and has the sole power to vote or to direct the voting of, all of the shares of
Mid Penn Common Stock set forth below on the signature page hereto (the “Original Shares” and, together with any
additional shares of Mid Penn Common Stock pursuant to paragraph (d) below, the “Shares”) (provided that the term
“Shares” shall not include any securities beneficially owned by the undersigned as a trustee or fiduciary) free and
clear of all Liens (other than Liens which do not affect the ability of the undersigned to vote the Shares), (B) does not beneficially
own any shares of Mid Penn Common Stock over which the undersigned has the sole power to vote or direct the voting of other than the Original
Shares, and (C) has the capacity to enter into this Agreement and that this Agreement is a valid and binding obligation enforceable
against the undersigned in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting creditors’ rights
and general equitable principles, (ii) except pursuant hereto, there are no options, warrants or other rights, agreements, arrangements
or commitments of any character to which the undersigned is a party relating to the pledge, disposition or voting of any of the Original
Shares (other than Liens which do not affect the ability of the undersigned to vote the Original Shares) and there are no voting trusts
or voting agreements with respect to the Original Shares, (iii) neither the execution and delivery of this Agreement nor the consummation
by the undersigned of the transactions contemplated hereby will conflict with or result in a breach, or constitute a default (with or
without notice of lapse of time or both) under any provision of, any trust agreement, loan
William Penn Bancorporation
October 31, 2024
Page 2
or credit agreement, mortgage, lease or other
agreement, instrument or law applicable to the undersigned or to the undersigned’s property or assets, and (iv) no consent,
approval or authorization of any other party is required in order for the undersigned to enter into and perform his or her obligations
under this Agreement;
(b) agrees to (i) be
present (in person or by proxy) at all Mid Penn Shareholders’ Meetings in order to be counted for the purpose of determining the
presence of a quorum at such meetings, and (ii) vote or cause to be voted all such Shares (A) in favor of approval and adoption
of the Merger, the Merger Agreement and the transactions contemplated thereby (including any amendments or modifications of the terms
thereof approved by the Mid Penn Board of Directors), and (B) against (y) any action, proposal, transaction or agreement which
could reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of
Mid Penn under the Merger Agreement or of the undersigned under this Agreement and (z) any action, proposal, transaction or agreement
that could reasonably be expected to impede, interfere with, delay, discourage, adversely affect or inhibit the timely consummation of
the Merger or the fulfillment of Mid Penn’s or William Penn’s conditions under the Merger Agreement;
(c) agrees that (1) the
undersigned will not, directly or indirectly, contract to sell, sell, exchange, assign, pledge or otherwise dispose of or encumber (“Transfer”)
any of the Shares or any interest therein or any voting rights with respect thereto, other than (i) to any immediate family member
of the undersigned, (ii) to a trust for the benefit of the undersigned or his or her immediate family member or upon the undersigned’s
death, (iii) to Mid Penn in connection with the vesting, settlement or exercise of Mid Penn equity awards to satisfy any withholding
for the payment of taxes incurred in connection with such vesting, settlement or exercise, or, in respect of Mid Penn equity awards, the
exercise price thereon, (iv) as is otherwise permitted by William Penn in its sole discretion, (v) Transfers by will or operation
of law, in which case this Agreement shall bind the transferee, (vi) to any charitable organization that is tax exempt under Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, or (vii) Transfers to any other shareholder of Mid Penn who has executed a copy of
this Agreement on the date hereof; provided that, as a precondition to that in the case of the foregoing clauses (i), (ii), (iv), (v),
(vi) and (vii), the transferee has agreed in writing to abide by the terms of this Agreement in a form reasonably satisfactory to
William Penn, and (2) any attempted Transfer of the Shares or any interest therein in violation of this paragraph (c) by
the undersigned shall be null and void; and
(d) agrees that all shares
of Mid Penn Common Stock, for which the undersigned has the sole power to vote or to direct the voting of, that the undersigned purchases
or otherwise acquires beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of after the execution of this Agreement
shall be subject to the terms of this Agreement and shall constitute Shares for all purposes of this Agreement; provided however, that
such purchases by the undersigned shall not constitute Shares if the undersigned does not have the sole power to vote or to direct the
voting of such shares.
It is understood and agreed
that the provisions of this Agreement relate solely to the capacity of the undersigned as a shareholder or other beneficial owner of shares
of Mid Penn Common Stock and is not in any way intended to affect the exercise or omission by the
William Penn Bancorporation
October 31, 2024
Page 3
undersigned of the undersigned’s
responsibilities as a director or officer of Mid Penn. It is further understood and agreed that this Agreement is not in any way intended
to affect the exercise or omission, including under the Merger Agreement, by the undersigned of any fiduciary responsibility which the
undersigned may have in respect of any shares of Mid Penn Common Stock held or controlled by the undersigned as of the date hereof. No
such actions or omissions in furtherance of the undersigned’s responsibilities as a director or officer shall be deemed a breach
of this Agreement.
The obligations set forth
in this Agreement shall terminate upon the earliest to occur of (i) the Mid Penn Shareholders’ Meeting (including any adjournment
or postponement thereof) and (ii) the date on which the Merger Agreement is terminated in accordance with its terms.
This Agreement may be executed
in one or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and
the same Agreement. Each party hereto shall execute and deliver such additional documents as may be necessary or desirable to effect the
transactions contemplated by this Agreement.
This Agreement shall inure
to the benefit of William Penn, shall be binding on the undersigned and his or her executors, personal representatives, administrators,
heirs, legatees, guardians and other personal representatives, and may not be assigned by any party without the written consent of the
other. This Agreement shall survive the death or incapacity of the undersigned.
If any term or provision of
this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner
in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
The undersigned agrees that,
in the event of his or her breach of this Agreement, William Penn shall be entitled to such remedies and relief against the undersigned
as are available at law or in equity. The undersigned acknowledges that there is not an adequate remedy at law to compensate William Penn
for a violation of this Agreement, and irrevocably waives, to the extent permitted by law, any defense that he or she might have based
on the adequacy of a remedy at law which might be asserted as a bar to specific performance, injunctive relief, or other equitable relief.
The undersigned agrees to the granting of injunctive relief without the posting of any bond and further agrees that, if any bond shall
be required, such bond shall be in a nominal amount.
Please confirm, intending
to be legally bound, that the foregoing correctly states the understanding between the undersigned and William Penn by signing and returning
to William Penn a counterpart hereof.
William Penn Bancorporation
October 31, 2024
Page 4
Accepted as of this 31st day of October, 2024:
| WILLIAM PENN BANCORPORATION |
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| By: |
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| Name: |
Kenneth J. Stephon |
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| Title: |
President & CEO |
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Exhibit C
Form of Bank Plan of Merger
BANK
PLAN OF MERGER
THIS BANK PLAN OF MERGER (“Plan
of Merger”) dated as of October 31, 2024, is by and between MID PENN BANK, a Pennsylvania bank and trust company (“MP
Bank”), and WILLIAM PENN BANK, a Pennsylvania stock savings bank (“William Penn Bank”).
BACKGROUND
1. MP Bank is a Pennsylvania
bank and trust company and a wholly-owned subsidiary of Mid Penn Bancorp, Inc., a Pennsylvania corporation (“Mid Penn”).
The authorized capital stock of MP Bank consists of 10,000,000 shares of common stock, par value $1.00 per share (the “MP Capital
Stock”), of which at the date hereof 150,000 shares are issued and outstanding.
2. William Penn Bank is a
Pennsylvania stock savings bank and a wholly-owned subsidiary of William Penn Bancorporation (“William Penn”). The
authorized capital stock of William Penn Bank consists of 4,000,000 shares of common stock, par value $1.00 per share (the “William
Penn Bank Common Stock”), of which at the date hereof 100 shares are issued and outstanding, and 1,000,000 shares of serial
preferred stock, of which at the date hereof no shares are issued and outstanding.
3. The respective Boards
of Directors of MP Bank and William Penn Bank deem the merger of William Penn Bank with and into MP Bank, pursuant to the terms and conditions
set forth or referred to herein, to be desirable and in the best interests of the respective corporations and their respective shareholders.
4. The respective Boards
of Directors of MP Bank and William Penn Bank have adopted resolutions approving this Plan of Merger. The respective Boards of Directors
of Mid Penn and William Penn have adopted resolutions approving an Agreement and Plan of Merger of even date herewith (the “Holding
Company Merger Agreement”) between Mid Penn and William Penn, providing for the merger of William Penn with and into Mid Penn
(the “Holding Company Merger”) and pursuant to which this Plan of Merger is being executed by MP Bank and William Penn
Bank.
5. For U.S. federal income
tax purposes, it is intended that the Bank Merger (defined below) shall qualify as a “reorganization” within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and this Plan of Merger is
intended to be and is adopted as a plan of reorganization for purposes of Sections 354 and 361 of the Code.
AGREEMENT
In consideration of the premises
and of the mutual covenants and agreements herein contained, MP Bank and William Penn Bank, intending to be legally bound hereby, agree:
ARTICLE I
MERGER; BUSINESS
1.1 Merger.
Subject to the terms and conditions of this Plan of Merger and in accordance with the applicable laws and regulations of the Commonwealth
of Pennsylvania, and the provisions of the Pennsylvania Banking Code of 1965, as amended, on the Effective Date (as that term is defined
in Article V hereof), William Penn Bank shall merge with and into MP Bank; the separate existence of William Penn Bank shall cease;
and MP Bank shall be the surviving bank under the name and title “Mid Penn Bank” (such transaction referred to herein as the
“Bank Merger” and MP Bank, as the surviving bank in the Bank Merger, referred to herein as the “Surviving
Bank”).
1.2 Business.
The business of the Surviving Bank shall be conducted at the main office of MP Bank, and shall be located at 349 Union Street, Millersburg,
Pennsylvania 17061, and its legally established branches, which shall include the main office and all of the branch offices of William
Penn Bank.
ARTICLE II
ARTICLES OF INCORPORATION AND BY-LAWS
On and after the Effective
Date of the Bank Merger, the articles of incorporation and by-laws of MP Bank in effect immediately prior to the Effective Date shall
continue to be the articles of incorporation and bylaws of the Surviving Bank.
ARTICLE III
BOARD OF DIRECTORS AND OFFICERS
3.1 Board of Directors.
On and after the Effective Date, the Board of Directors of the Surviving Bank shall consist of the existing directors of MP Bank holding
office immediately prior to such Effective Date and the William Penn Nominee (as defined in Section 7.13(a) of the Holding Company
Merger Agreement), each to hold office until his or her successor is elected and qualified in accordance with applicable law and the articles
of incorporation and bylaws of the Surviving Bank.
3.2 Officers.
On and after the Effective Date of the Bank Merger, the officers of MP Bank duly appointed and holding office immediately prior to such
Effective Date shall be the officers of MP Bank, as the Surviving Bank in the Bank Merger, and the William Penn Nominee shall be appointed
and serve as Vice Chairman of MP Bank.
ARTICLE IV
CONVERSION OF SHARES
4.1 Stock of MP Bank.
Each share of MP Capital Stock issued and outstanding immediately prior to the Effective Date shall, on and after the Effective Date,
continue to be issued and outstanding as a share of capital stock of the Surviving Bank.
4.2 Stock of William
Penn Bank. Each share of William Penn Bank Common Stock issued and outstanding immediately prior to the Effective Date shall,
on the Effective Date, be canceled and no cash, stock or other property shall be delivered in exchange therefor.
ARTICLE V
EFFECTIVE DATE OF THE MERGER
The Bank Merger shall be effective
on the date on which articles of merger executed by William Penn Bank and MP Bank are filed with the Pennsylvania Department of State,
unless a later date is specified in such articles of merger (the “Effective Date”).
ARTICLE VI
EFFECT OF THE MERGER
On the Effective Date: The
separate existence of William Penn Bank shall cease; the principal and branch offices of William Penn Bank shall become authorized branch
offices of the Surviving Bank; and all of the property (real, personal and mixed), rights, powers, duties and obligations of MP Bank and
William Penn Bank shall be taken and deemed to be transferred to and vested in the Surviving Bank, without further act or deed, as provided
by applicable laws and regulations.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of MP Bank
and William Penn Bank to effect the Bank Merger shall be subject to (i) the approval of this Plan of Merger by William Penn and Mid
Penn in their capacities as the sole shareholder of William Penn Bank and MP Bank, respectively, (ii) receipt of the required approval
of the Federal Deposit Insurance Corporation, the Pennsylvania Department of Banking and Securities, and any other applicable regulatory
authority, (iii) receipt of any necessary approval to operate the main office of William Penn Bank and the branch offices of William
Penn Bank as offices of the Surviving Bank, and (iv) the completion of the transactions contemplated by the Holding Company Merger
Agreement on or before the Effective Date.
ARTICLE VIII
TERMINATION
This Plan of Merger shall
terminate upon any termination of the Holding Company Merger Agreement in accordance with its terms; provided, however, that any such
termination of this Plan
of Merger shall not relieve any party hereto from liability on account of a breach by such party of any of the
terms hereof or thereof.
ARTICLE IX
AMENDMENT
Subject to applicable law,
this Plan of Merger may be amended, by action of the respective Boards of Directors of the parties hereto, at any time prior to consummation
of the Holding Company Merger, but only by an instrument in writing signed by duly authorized officers on behalf of the parties hereto.
ARTICLE X
MISCELLANEOUS
10.1 Extensions; Waivers.
Each party, by a written instrument signed by a duly authorized officer, may extend the time for the performance of any of the obligations
or other acts of the other party hereto and may waive compliance with any of the obligations of the other party contained in this Plan
of Merger.
10.2 Notices.
Any notice or other communication required or permitted under this Plan of Merger shall be given, and shall be effective, in accordance
with the provisions of the Holding Company Merger Agreement.
10.3 Captions.
The headings of the several Articles herein are inserted for convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Plan of Merger.
10.4 Counterparts.
For the convenience of the parties hereto, this Plan of Merger may be executed in several counterparts, each of which shall be deemed
the original, but all of which together shall constitute one and the same instrument.
10.5 Governing Law.
This Plan of Merger shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard
to the conflict of laws principles thereof.
[Signature Page Follows]
IN WITNESS WHEREOF, each party
has caused this Plan of Merger to be executed on its behalf and its corporate seal to be affixed hereto by its duly authorized officers,
all as of the day and year first written above.
| ATTEST: |
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MID PENN BANK |
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By: |
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| Elizabeth Martin, Secretary |
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Rory G. Ritrievi, President & CEO |
| (SEAL) |
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| ATTEST: |
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WILLIAM PENN BANK |
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By: |
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| Jonathan Logan, Secretary |
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Kenneth J. Stephon, President & CEO |
| (SEAL) |
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Exhibit 99.1
MID PENN BANCORP, INC. TO ACQUIRE
WILLIAM PENN BANCORPORATION
HARRISBURG, PENNSYLVANIA (November 1,
2024) - Mid Penn Bancorp, Inc. (NASDAQ: MPB) (“Mid Penn”) and William Penn Bancorporation (“William Penn”)
(NASDAQ: WMPN) jointly announced today that they have entered into a definitive agreement and plan of merger, pursuant to which William
Penn will merge with and into Mid Penn (the “Merger”) in an all-stock transaction valued at approximately $127 million, based
on Mid Penn’s closing stock price as of October 30, 2024. The Merger has been approved unanimously by each company’s
board of directors and is expected to close in the first half of 2025. Completion of the transaction is subject to customary closing conditions,
including the receipt of required regulatory approvals and the approval of Mid Penn and William Penn shareholders.
Headquartered in Bristol, Pennsylvania, William
Penn operates 12 branches across Pennsylvania and New Jersey. As of September 30, 2024, William Penn had approximately $812 million
in total assets, $465 million in total loans and $630 million in total deposits. The Merger will create a powerful combined community
banking franchise with approximately $6.5 billion in total assets, $5.0 billion in total loans and $5.5 billion in total deposits, based
on financial data as of September 30, 2024.
“We are excited to welcome the William Penn
shareholders, customers and employees to Mid Penn. As longstanding community banks headquartered in Pennsylvania, both Mid Penn and William
Penn have grown to know and respect each other’s operating philosophy, dedication to providing best-in-class customer service and
commitment to the communities in which we operate,” Mid Penn Chair, President, and Chief Executive Officer, Rory G. Ritrievi said.
“This merger will bolster Mid Penn’s presence in the attractive greater Philadelphia metro area market, aligning with our
strategic plan of disciplined growth in the southeastern region of Pennsylvania and the southern region of New Jersey. Together, we look
forward to joining the two companies to expand our footprint and, in turn, enhance our ability to deliver for our customers, communities
and shareholders.”
William Penn Chairman, President and Chief Executive
Officer, Kenneth J. Stephon, said, “We are incredibly pleased to partner with Mid Penn in this strategic combination that allows
our shareholders to participate in a fabulous long-term growth opportunity while also providing them with immediate value. The merger
enables us to accelerate our growth far more rapidly than we could as an independent company, while also creating excellent value for
our shareholders, customers, and employees.” Mr. Stephon will join Mid Penn’s Board of Directors and will become the
Vice Chairman of Mid Penn Bank.
According to the terms of the merger agreement,
shareholders of William Penn will receive 0.4260 shares of Mid Penn common stock for each share of William Penn common stock. Additionally,
all options of William Penn will be rolled into Mid Penn equivalent options. Based on Mid Penn’s closing stock price of $31.88 per
share as of October 30, 2024, the implied transaction value is approximately $13.58 per William Penn share, or $127 million, in the
aggregate. The merger is expected to be immediately accretive to Mid Penn’s estimated earnings per share and to have a positive
long-term impact on Mid Penn’s key profitability and operating ratios.
Stephens Inc. is serving as Mid Penn’s exclusive
financial advisor, and Pillar + Aught is serving as its legal advisor. Keefe, Bruyette & Woods, A Stifel Company, rendered a
fairness opinion to Mid Penn’s board of directors. Piper Sandler & Co. is serving as William Penn’s exclusive financial
advisor and rendered a fairness opinion to William Penn’s board of directors, and Kilpatrick Townsend & Stockton LLP is
serving as its legal advisor.
ABOUT MID PENN BANCORP, INC.:
Mid Penn Bancorp Inc. (NASDAQ: MPB), headquartered
in Harrisburg, Pennsylvania, is the parent company of Mid Penn Bank, a full-service commercial bank. Mid Penn operates 45 retail
locations throughout Pennsylvania and central New Jersey, has total assets of approximately $5 billion, and offers a comprehensive portfolio
of financial products and services to the communities it serves. To learn more, please visit www.midpennbank.com.
ABOUT WILLIAM PENN BANCORPORATION:
William Penn Bancorporation (NASDAQ: WMPN), headquartered
in Bristol, Pennsylvania, is the parent company of William Penn Bank and provides community banking services to individuals and small
– to medium-sized businesses in the Delaware Valley area. William Penn currently conducts business through 12 branch offices located
in Pennsylvania and New Jersey.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations
or predictions of future financial or business performance, conditions relating to Mid Penn and William Penn, or other effects of the
proposed Merger of Mid Penn and William Penn. Forward-looking statements are typically identified by words such as “believe,”
“approximately,” “expect,” “anticipate,” “intend,” “target,” “estimate,”
“continue,” “positions,” “prospects” or “potential,” by future conditional verbs such
as “will,” “would,” “should,” “could” or “may,” or by variations of such words
or by similar expressions. These forward-looking statements may include the expectations relating to the anticipated opportunities
and financial and other benefits for the proposed Merger between Mid Penn and William Penn, and the projections of, or guidance on, Mid
Penn’s or the combined company’s future financial performance, asset quality, liquidity, capital levels, expected levels of
future expenses, including future credit losses, anticipated growth strategies, descriptions of new business initiatives and anticipated
trends in Mid Penn’s business or financial results. Mid Penn and William Penn are subject to numerous assumptions, risks and uncertainties,
which change over time. Forward-looking statements are made only as of the date of this press release, and neither Mid Penn nor William
Penn undertakes any obligation to update any forward-looking statements contained in this presentation to reflect events or conditions
after the date hereof. Actual results may differ materially from those described in any such forward-looking statements.
In addition to factors previously disclosed in
the reports filed by Mid Penn and William Penn with the SEC and those identified elsewhere in this document, the following factors, among
others, could cause actual results to differ materially from forward looking statements or historical performance: the occurrence of any
event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the Merger Agreement
entered into between Mid Penn and William Penn; the ability to obtain regulatory approvals and satisfy other closing conditions to the
Merger, including approval by shareholders of Mid Penn and William Penn; the outcome of any legal proceedings that may be instituted against
Mid Penn or William Penn; the possibility that the Merger may be more expensive to complete than anticipated; diversion of management’s
attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of the Merger; changes in Mid Penn’s share price before the closing
of the Merger; risks relating to the potential dilutive effect of shares of Mid Penn company stock to be issued in the Merger; the timing
of closing the Merger; difficulties and delays in integrating the business or fully realizing cost savings and other benefits; changes
in asset quality and credit risk; the inability to sustain revenue and earnings growth; changes in interest rates and capital markets;
inflation; customer acceptance of products and services; customer borrowing, repayment, investment and deposit practices; competitive
conditions; economic conditions, including downturns in the local, regional or national economies; the impact, extent and timing of technological
changes; changes in accounting policies or practices; changes in laws and regulations; other actions of the Federal Reserve Board and
other legislative and regulatory actions and reforms; and any other factors that may affect future results of Mid Penn, William Penn and
the combined company.
Important Additional Information About the
Merger and Where to Find It
The proposed Merger transaction will be
submitted to the shareholders of William Penn and Mid Penn for their consideration and approval. In connection with the proposed
Merger transaction, Mid Penn will be filing with the SEC a registration statement on Form S-4, which will
include a joint proxy statement of Mid Penn and William Penn and a prospectus of Mid Penn and other relevant documents concerning
the proposed transaction. INVESTORS AND SHAREHOLDERS OF MID PENN AND WILLIAM PENN ARE URGED TO READ THE REGISTRATION STATEMENT
AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Investors will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings
containing information about Mid Penn and William Penn, free of charge from the SEC’s Internet site (www.sec.gov).
Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint
proxy statement/prospectus can also be obtained, free of charge, or by contacting Mid Penn Bancorp, Inc., 2407 Park Drive,
Harrisburg, Pennsylvania, 17110, attention: Investor Relations (telephone (866) 642-7736); or William Penn
Bancorporation, 10 Canal Street, Suite 104, Bristol, Pennsylvania 19007, attention: Kenneth J. Stephon, President and CEO
(telephone (267) 540-8500).
No Offer or Solicitation
This communication not a proxy statement or solicitation
of a proxy, consent or authorization with respect to any securities or in respect of the proposed Merger and shall not constitute an offer
to sell or a solicitation of an offer to buy any securities nor shall there be any sale of securities in any state or jurisdiction in
which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such
state or jurisdiction.
Participants in the Solicitation
Mid Penn, William Penn and their respective directors,
executive officers, and certain other members of management and employees may be deemed to be participants in the solicitation of proxies
from Mid Penn and/or William Penn shareholders in connection with the proposed Merger transaction under the rules of the SEC. Information
regarding the directors and executive officers of Mid Penn and William Penn is available in each company’s respective most recent
definitive proxy statement filed with the SEC and other documents filed by Mid Penn and William Penn with the SEC. Other information
regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials filed with the SEC, which may be obtained
free of charge as described under the heading “Important Additional Information About the Merger and Where to Find It.”
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