AGREEMENT AND PLAN OF REORGANIZATION
AMONG
MID PENN BANCORP, INC.
MID PENN BANK
AND
MINERS BANK OF XXXXXX (LYKENS, PA.)
January 9, 1998
TABLE OF CONTENTS
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Page
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ARTICLE I AGREEMENT AND PLAN OF MERGER.............................. 1
1.1 Agreement and Plan of Merger......................... 1
ARTICLE II CONVERSION OF SHARES AND EXCHANGE
OF STOCK CERTIFICATES..................................... 2
2.1 Conversion of Shares................................. 2
2.2 Exchange of Stock Certificates....................... 3
ARTICLE III REPRESENTATIONS AND WARRANTIES
OF MINERS BANK OF XXXXXX.................................. 5
3.1 Authority............................................ 5
3.2 Organization and Standing............................ 6
3.3 No Subsidiaries...................................... 6
3.4 Capitalization....................................... 6
3.5 Articles of Incorporation, Bylaws and Minute Books... 6
3.6 Consents............................................. 6
3.7 Financial Statements and Regulatory Reports.......... 7
3.8 Absence of Undisclosed Liabilities................... 7
3.9 Absence of Changes................................... 7
3.10 Dividends, Distributions and Stock Purchases......... 7
3.11 Taxes................................................ 8
3.12 Title to and Condition of Assets..................... 8
3.13 Contracts............................................ 8
3.14 Litigation and Governmental Directives............... 9
3.15 Compliance with Laws; Governmental Authorizations... 9
3.16 Insurance............................................ 10
3.17 Financial Institutions Bonds......................... 10
3.18 Labor Relations...................................... 10
3.19 Employee Benefit Plans............................... 11
3.20 Related Party Transactions........................... 11
3.21 Deleted.............................................. 12
3.22 Deleted.............................................. 12
3.23 Complete and Accurate Disclosure..................... 12
3.24 Beneficial Ownership of Mid Penn Bancorp, Inc.
Common Stock......................................... 12
3.25 Environmental Matters................................ 12
ii
3.26 Proxy Statement/Prospectus........................... 14
3.27 Non-Registration Under the 1934 Act.................. 14
3.28 Deposit Insurance.................................... 14
3.29 Repurchase Agreements................................ 15
3.30 Assumability of Contracts and Leases................. 15
3.31 Loans................................................ 15
3.32 Materiality.......................................... 15
3.33 Deleted.............................................. 15
3.34 Deleted.............................................. 15
3.35 Adjustable Rate Mortgages............................ 15
3.36 CRA Compliance....................................... 15
3.37 Deleted.............................................. 16
3.38 Loan Loss Reserve.................................... 16
3.39 Deleted.............................................. 16
3.40 Deleted.............................................. 16
3.41 Deleted.............................................. 16
3.42 Accuracy of Representations.......................... 16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MID PENN
BANCORP, INC.............................................. 16
4.1 Authority............................................ 16
4.2 Organization and Standing............................ 16
4.3 Capitalization....................................... 17
4.4 Deleted.............................................. 17
4.5 Financial Statements................................. 17
4.6 Absence of Undisclosed Liabilities................... 17
4.7 Absence of Changes................................... 18
4.8 Litigation........................................... 18
4.9 Proxy Statement/Prospectus........................... 18
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
MID PENN BANK............................................. 18
5.1 Capital Structure of Mid Penn Bank................... 18
5.2 Organization and Standing............................ 19
5.3 Authorized and Effective Agreement................... 19
ARTICLE VI COVENANTS OF MINERS BANK OF XXXXXX........................ 19
6.1 Conduct of Business.................................. 19
6.2 Best Efforts......................................... 22
6.3 Access to Properties and Records..................... 23
iii
6.4 Subsequent Financial Statements...................... 23
6.5 Board and Committee Minutes.......................... 23
6.6 Update Schedule...................................... 23
6.7 Notice............................................... 23
6.8 Other Proposals...................................... 24
6.9 Dividends............................................ 24
6.10 Core Deposits........................................ 24
6.11 Affiliate Letters.................................... 24
6.12 No Purchases or Sales of Mid Penn Bancorp, Inc.
Common Stock During Price Determination Period....... 24
6.13 Accounting Treatment
6.14 Press Releases....................................... 25
6.15 Deleted.............................................. 25
6.16 Phase I Environmental Audit.......................... 25
6.17 Deleted.............................................. 25
ARTICLE VII COVENANTS OF MID PENN BANCORP, INC. AND
MID PENN BANK............................................. 25
7.1 Best Efforts......................................... 25
7.2 Access to Properties and Records..................... 26
7.3 Subsequent Financial Statements...................... 26
7.4 Update Schedule...................................... 26
7.5 Notice............................................... 26
7.6 No Purchase or Sales of Mid Penn Bancorp, Inc.
Common Stock During Price Determination Period....... 26
ARTICLE VIII CONDITIONS PRECEDENT...................................... 27
8.1 Common Conditions.................................... 27
8.2 Conditions Precedent to Obligations
of Mid Penn Bancorp, Inc. and Mid Penn Bank.......... 28
8.3 Conditions Precedent to the Obligations
of Miners Bank of Xxxxxx............................. 30
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER......................... 31
9.1 Termination.......................................... 31
9.2 Effect of Termination................................ 32
9.3 Amendment............................................ 32
9.4 Waiver............................................... 33
iv
ARTICLE X RIGHTS OF DISSENTING SHAREHOLDERS OF
MINERS BANK OF XXXXXX..................................... 33
10.1 Rights of Dissenting Shareholders
of Miners Bank of Xxxxxx............................. 33
ARTICLE XI CLOSING AND EFFECTIVE DATE................................ 33
11.1 Closing.............................................. 33
11.2 Effective Date....................................... 33
ARTICLE XII NO SURVIVAL OF REPRESENTATIONS
AND WARRANTIES............................................ 34
12.1 No Survival.......................................... 34
ARTICLE XIII POST-MERGER AGREEMENTS.................................... 34
13.1 Employees............................................ 34
13.2 Miners Office Board.................................. 35
13.3 Additional Commitments of MP Corp. and MP Bank....... 36
13.4 Merger of Profit Sharing Plans....................... 36
ARTICLE XIV GENERAL PROVISIONS........................................ 36
14.1 Expenses............................................. 36
14.2 Other Mergers and Acquisitions....................... 36
14.3 Access; Confidentiality.............................. 37
14.4 Notices.............................................. 37
14.5 Captions............................................. 38
14.6 Counterparts......................................... 38
14.7 Severability......................................... 38
14.8 Parties in Interest.................................. 38
14.9 Entire Agreement..................................... 38
14.10Governing Law........................................ 38
EXHIBITS: AGREEMENT AND PLAN OF MERGER..............................A-1
("BANK MERGER AGREEMENT")
SUPPORT AGREEMENT.........................................B-1
EXHIBIT 10.2
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
This Agreement and Plan of Reorganization (hereinafter "Agreement") is
dated and made this 9th day of January, 1998, by and among MID PENN BANCORP,
INC., a Pennsylvania business corporation having its corporate headquarters at
000 Xxxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("MP Corp."),
Mid Penn Bank, a Pennsylvania state-chartered banking institution and the
wholly-owned subsidiary of MP Corp., having its corporate headquarters at 000
Xxxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("MP Bank"); and
Miners Bank of Lykens (Lykens, PA.), a Pennsylvania state-chartered banking
institution having its corporate headquarters at 000 Xxxx Xxxxxx, X.X. Xxx 00,
Xxxxxx, Xxxxxxxxxxxx 00000-0000 ("Miners").
Background:
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MP Corp. is a Pennsylvania business corporation and a registered bank
holding company. MP Bank is a Pennsylvania state-chartered banking institution
and a wholly-owned subsidiary of MP Corp. Miners is a Pennsylvania state-
chartered banking institution. MP Corp. wishes to acquire Miners, and Miners
wishes to merge with and into MP Bank. Subject to the terms and conditions of
this Agreement, the foregoing transaction will be accomplished by means of a
reorganization and merger under which Miners will be merged with and into MP
Bank. MP Bank will survive the merger, and all of the outstanding shares of the
$5.00 par value common stock of Miners ("Miners Common Stock") will be converted
into shares of the $1.00 par value common stock of MP Corp. ("MP Corp. Common
Stock") in the manner, on the terms, and subject to the conditions of this
Agreement.
WITNESSETH:
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NOW, THEREFORE, in consideration of the premises, mutual promises,
covenants, agreements, representations and warranties hereinafter set forth, and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties
agree as follows:
ARTICLE I
AGREEMENT AND PLAN OF MERGER
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Section 1.1. Agreement and Plan of Merger. Subject to the terms and
----------- ----------------------------
conditions of this Agreement, Miners shall merge with and into MP Bank (the
"Merger") in accordance with the Agreement and Plan of Merger attached hereto as
Exhibit "A" ("Bank Merger Agreement") and pursuant to the provisions of the
Pennsylvania Banking Code of 1965, as amended (the "Banking Code").
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ARTICLE II
CONVERSION OF SHARES AND
EXCHANGE OF STOCK CERTIFICATES
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Section 2.1. Conversion of Shares. On the Effective Date (as defined in
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Section 11.2 of this Agreement) the shares of Miners Common Stock then
outstanding shall be converted into shares of MP Corp. Common Stock, as follows:
(a) General. Subject to the provisions of Section 2.1(b); 2.1(c) and
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2.1(d) of this Article II, each share of Miners Common Stock issued and
outstanding immediately before the Effective Date shall, on the Effective
Date, be converted into and become, without any action on the part of the
holder thereof, ten (10) shares of MP Corp. Common Stock. Subject to the
provisions of Section 2.1(b), the aggregate number of shares of MP Corp.
Common Stock to be issued under this Agreement shall not exceed 148,250
shares.
(b) Anti-dilution Provision. In the event that MP Corp. shall at any
-----------------------
time before the Effective Date: (i) declare or pay a dividend in shares of
MP Corp. Common Stock, (ii) combine the outstanding shares of MP Corp.
Common Stock into a smaller number of shares, or (iii) subdivide the
outstanding shares of MP Corp. Common Stock into a greater number of
shares, or (iv) reclassify the shares of MP Corp. Common Stock, then the
exchange provisions of Section 2.1 (a) of this Article II shall be
proportionately adjusted accordingly.
(c) No Fractional Shares. No fractional shares of MP Corp. Common
--------------------
Stock , and no scrip or certificates therefor, shall be issued in
connection with the Merger. In lieu of the issuance of any fractional
share to which he would otherwise be entitled, each former shareholder of
Miners shall receive in cash an amount equal to the fair market value of
his fractional interest, which fair market value shall be determined by
multiplying such fraction by the closing market price of MP Corp. Common
Stock.
(d) Miners Treasury Stock. Each share of Miners Common Stock issued
---------------------
and held in the treasury of Miners as of the Effective Date, if any, shall
be canceled, and no cash, stock, or other property shall be delivered in
exchange therefor.
(e) MP Corp. Common Stock.
---------------------
(i) Each share of MP Corp. Common Stock issued and outstanding
immediately prior to the Effective Date, shall, on and after the
Effective Date, continue to be issued and outstanding as an identical
share of MP Corp. Common Stock.
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(ii) Each share of MP Corp. Common Stock issued and held in the
treasury of MP Corp. as of the Effective Date, if any, shall, on and
after the Effective Date, continue to be issued and held in the
treasury of MP Corp.
Section 2.2. Exchange of Stock Certificates. Miners Common Stock
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certificates shall be exchanged for MP Corp. Common Stock certificates in
accordance with the following procedures:
(a) Exchange Agent. The transfer agent of MP Corp. shall act as
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exchange agent (the "Exchange Agent") to receive Miners Common Stock
certificates from the holders thereof and to exchange such stock
certificates for MP Corp. Common Stock certificates and (if applicable) to
pay cash for fractional shares of Miners Common Stock pursuant to Section
2.1(c) above. The Exchange Agent shall, on or promptly after the Effective
Date, mail to each former shareholder of Miners a notice specifying the
procedures to be followed in surrendering such shareholder's Miners Common
Stock certificates.
(b) Surrender of Certificates. As promptly as possible after receipt
-------------------------
of the Exchange Agent's notice, each former shareholder of Miners shall
surrender his Miners Common Stock certificates to the Exchange Agent;
provided, that if any former shareholder of Miners shall be unable to
surrender his Miners Common Stock certificates due to loss or mutilation
thereof, he may make a constructive surrender by following procedures
comparable to those customarily used by MP Corp. for issuing replacement
certificates to MP Corp. shareholders whose MP Corp. Common Stock
certificates have been lost or mutilated. Upon receiving a proper actual
or constructive surrender of Miners Common Stock certificates from a former
Miners shareholder, the Exchange Agent shall issue to such shareholder, in
exchange therefor, a MP Corp. Common Stock certificate representing the
whole number of shares of MP Corp. Common Stock into which such
shareholder's shares of Miners Common Stock have been converted in
accordance with this Article II, together with a check in the amount of any
cash to which such shareholder is entitled, pursuant to Section 2.1(c) of
this Agreement, in lieu of the issuance of a fractional share.
(c) Dividend Withholding. Dividends, if any, payable by MP Corp.
--------------------
after the Effective Date to any former shareholder of Miners who has not,
prior to the payment date, surrendered his Miners Common Stock certificates
may, at the option of MP Corp., be withheld. Any dividends so withheld
shall be paid, without interest, to such former shareholder of Miners upon
proper surrender of his Miners Common Stock certificates.
(d) Failure to Surrender Certificates. All Miners Common Stock
---------------------------------
certificates must be surrendered to the Exchange Agent within two (2) years
after the Effective Date. In the event that any former shareholder of
Miners shall not have properly surrendered his Miners Common Stock
certificates within two (2) years after the Effective Date, the shares of
MP Corp. Common Stock that would otherwise have been issued to him may, at
the option of MP Corp., be sold and the net proceeds of such sale, together
with the cash (if any) to which he is entitled in lieu of the issuance of a
fractional share and any previously accrued dividends, shall be held in a
non-interest bearing account for his benefit. From and after any
3
such sale, the sole right of such former shareholder of Miners shall be the
right to collect such net proceeds, cash and accumulated dividends. Subject
to all applicable laws of escheat, such net proceeds, cash and accumulated
dividends shall be paid to such former shareholder of Miners, without
interest, upon proper surrender of his Miners Common Stock certificates.
(e) Expenses of Share Surrender and Exchange. All costs and expenses
----------------------------------------
associated with the foregoing surrender and exchange procedure shall be
borne by MP Corp. Notwithstanding the foregoing, no party hereto will be
liable to any holder of Miners Common Stock for any amount paid in good
faith to a public official or agency pursuant to any applicable abandoned
property, escheat or similar law.
(f) Exchange Procedures. Each certificate for shares of Miners Common
-------------------
Stock delivered for exchange under this Article II must be endorsed in
blank by the registered holder thereof or be accompanied by a power of
attorney to transfer such shares endorsed in blank by such holder. If more
than one certificate is surrendered at one time and in one transmittal
package for the same shareholder account, the number of whole shares of MP
Corp. Common Stock for which certificates will be issued pursuant to this
Article II will be computed on the basis of the aggregate number of shares
represented by the certificates so surrendered. If shares of Miners Common
Stock or payments of cash are to be issued or made to a person other than
the one in whose name the surrendered certificate is registered, the
certificate so surrendered must be properly endorsed in blank, with
signature(s) guaranteed, or otherwise in proper form for transfer, and the
person to whom certificates for shares of MP Corp. Common Stock is to be
issued or to whom cash is to be paid shall pay any transfer or other taxes
required by reason of such issuance or payment to a person other than the
registered holder of the certificate for shares of Miners Common Stock
which are surrendered. As promptly as practicable after the Effective
Date, MP Corp. shall send or cause to be sent to each shareholder of record
of Miners Common Stock transmittal materials for use in exchanging
certificates representing Miners Common Stock for certificates representing
MP Corp. Common Stock into which the former have been converted in the
Reorganization and Merger.
(g) Closing of Stock Transfer Books; Cancellation of Miners
-------------------------------------------------------
Certificates. Upon the Effective Date, the stock transfer books for Miners
------------
Common Stock will be closed and no further transfers of shares of Miners
Common Stock will thereafter be made or recognized. All certificates for
shares of Miners Common Stock surrendered pursuant to this Article II will
be canceled by MP Corp.
(h) Rights Evidenced by Certificate. Each certificate for shares of
-------------------------------
MP Corp. Common Stock issued in exchange for certificates for Miners Common
Stock pursuant to Section 2.2(f) hereof will be dated as of the Effective
Date and be entitled to dividends and all other rights and privileges
pertaining to such shares of MP Corp. Common Stock from and after the
Effective Date. Until surrendered, each certificate theretofore evidencing
shares of Miners Common Stock will, from and after the Effective Date,
evidence solely the right
4
to receive certificates for shares of MP Corp. Common Stock pursuant to
Section 2.2(f) hereof. If certificates for shares of Miners Common Stock
are exchanged for MP Corp. Common Stock at a date following one or more
record dates for the payment of dividends or of any other distribution on
the shares of MP Corp. Common Stock subsequent to the Effective Date, MP
Corp. will pay cash in an amount equal to dividends theretofore payable on
such MP Corp. Common Stock and pay or deliver any other distribution to
which holders of shares of MP Corp. Common Stock have theretofore become
entitled. No interest will accrue or be payable in respect of dividends or
cash otherwise payable under this Section 2.2 upon surrender of
certificates for shares of MP Corp. Common Stock. Notwithstanding the
foregoing, no party hereto will be liable to any holder of Miners Common
Stock for any amount paid in good faith to a public official or agency
pursuant to any applicable abandoned property, escheat or similar law.
Until such time as certificates for shares of Miners Common Stock are
surrendered by a Miners shareholder to MP Corp. for exchange, MP Corp.
shall have the right to withhold dividends or any other distributions,
without interest, on the shares of the MP Corp. Common Stock issuable to
such shareholder.
(i) Payment Procedures. As soon as practical after the Effective
------------------
Date, MP Corp. shall make payment of the cash consideration provided for in
Section 2.1(c) to each person entitled thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MINERS
----------------------------------------
Miners represents and warrants to MP Corp. and MP Bank as of even date
herewith as follows:
Section 3.1. Authority. Miners has all requisite corporate power and
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authority to enter into and perform all of its obligations under this Agreement
and the Bank Merger Agreement. The execution and delivery of this Agreement and
the Bank Merger Agreement and the performance of the transactions contemplated
herein and therein have been duly and validly authorized by the Board of
Directors of Miners and, except for the approval of this Agreement and the Bank
Merger Agreement by its shareholders, Miners has taken all corporate action
necessary on its part to authorize this Agreement and the Bank Merger Agreement
and the performance of the transactions contemplated herein and therein. This
Agreement and the Bank Merger Agreement have been duly executed and delivered by
Miners and, assuming due authorization, execution and delivery by MP Corp. and
MP Bank, constitute valid and binding obligations of Miners, in each case
enforceable against it in accordance with their respective terms, subject to
bankruptcy, insolvency, and other laws of general applicability relating to or
affecting creditors' rights and general equity principles. Neither the
execution and delivery of this Agreement and the Bank Merger Agreement, nor
consummation of the transactions contemplated hereby or thereby, nor compliance
by Miners with any of the provisions hereof or thereof shall (i) conflict with
or result in a breach of any provisions of the Articles of Incorporation or By-
laws of Miners, (ii) constitute or result in a material breach of any
5
term, condition or provisions of, or constitute a default under or give rise to
any right of termination, cancellation or acceleration with respect to, or
result in the creation of any lien, charge, security interest or other
encumbrance upon any property or asset of Miners pursuant to any note, bond,
mortgage, indenture, deed of trust, license, agreement or other instrument or
obligation, or (iii) violate any order, writ, injunction, decree, statute, code,
ordinance, rule, regulation or judgment applicable to Miners.
Section 3.2. Organization and Standing. Miners is a duly organized bank,
----------- -------------------------
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania. Miners (i) has full power and authority to carry out its business
as now conducted and (ii) is duly qualified to do business in the states of the
United States and foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires such qualification and where
failure to so qualify would have a material adverse effect on the financial
condition, results of operations, business or prospects of Miners.
Section 3.3. No Subsidiaries. Miners owns no subsidiaries, directly or
----------- ---------------
indirectly.
Section 3.4. Capitalization. The authorized capital stock of Miners
----------- --------------
consists solely of 15,000 shares of common stock, par value five dollars ($5.00)
per share ("Miners Common Stock"), of which, at the date hereof, 14,825 shares
are issued and outstanding. All outstanding shares of Miners Common Stock have
been duly issued and are validly outstanding, fully paid and nonassessable.
None of the shares of Miners Common Stock have been issued in violation of the
preemptive rights of any person or entity. There are no authorized, issued, or
outstanding options, convertible securities, warrants or other rights to
purchase or acquire any of the Miners Common Stock from Miners, and there is no
commitment of Miners to issue the same. There are no outstanding agreements,
restrictions, contracts, commitments or demands of any character to which Miners
is a party, which relate to the transfer or restrict the transfer of any shares
of Miners Common Stock. Except as previously disclosed, to the knowledge of
Miners, there are no shareholder agreements, understandings or commitments
relating to the right of Miners to vote or dispose of its shares.
Section 3.5. Articles of Incorporation, Bylaws and Minute Books. The
----------- --------------------------------------------------
copies of the Articles of Incorporation and Bylaws of Miners which have been
delivered to MP Corp. and MP Bank are true, correct and complete. Except as
previously disclosed, all minute books of Miners have been made available to MP
Corp. and MP Bank for inspection and are true, correct and complete in all
material respects and record the actions taken by the Board of Directors of
Miners at the meetings documented in the minutes.
Section 3.6. Consents. Except for the consents, approvals, filings and
----------- --------
registrations contemplated by Sections 8.1(b) and (d) hereof, and compliance
with any conditions contained therein, and the approval of this Agreement and
the Bank Merger Agreement by the Board of Directors and shareholders of Miners,
no consents or approvals of, or filings or registrations with, any public body
or authority are necessary, and no consents or approvals of any third parties
are necessary, or will be, in connection with (i) the execution and delivery of
this Agreement or the Bank
6
Merger Agreement by Miners, and (ii) the consummation by Miners of the
transactions contemplated hereby. Miners has no reason to believe that any
required consents or approvals will not be received or will be received with
conditions, limitations or restrictions unacceptable to it or which would
adversely impact Miners's ability to consummate the transactions contemplated by
this Agreement.
Section 3.7. Financial Statements and Regulatory Reports. Miners has
----------- -------------------------------------------
delivered to MP Corp. and MP Bank its (i) Balance Sheets, Statements of Income,
and Statements of Stockholders' Equity for the years ended December 31, 1996 and
December 31, 1995, and (ii) Call Reports, Consolidated Reports of Condition and
Income, (the aforementioned consolidated report of condition and income as of
September 30, 1997, is referred to herein as the "Bank Balance Sheet") and
accompanying schedules, filed by Miners with any regulatory authority for each
calendar quarter, beginning with the quarter ended September 30, 1997, through
the Closing Date ("Miners Regulatory Reports"). Each of the foregoing financial
statements fairly presents the financial condition, assets and liabilities, and
results of operations of Miners at their respective dates and for the respective
periods then ended and have been prepared in accordance with generally accepted
accounting principles consistently applied, except as otherwise noted in a
footnote thereto. The books and records of Miners are maintained in accordance
with generally accepted accounting principles consistently applied. The Miners
Regulatory Reports have been, or will be, prepared in accordance with applicable
regulatory accounting principles and practices applied on a consistent basis
throughout the periods issued by such statements, and fairly present, or will
fairly present, the financial position, results of operations and changes in
shareholders' equity of Miners as of and for the periods ended on the dates
thereof, in accordance with applicable regulatory accounting principles applied
on a consistent basis.
Section 3.8. Absence of Undisclosed Liabilities. Except as previously
----------- ----------------------------------
disclosed, or as reflected, noted or adequately reserved against in the Bank
Balance Sheet, as at September 30, 1997, Miners had no liabilities (whether
accrued, absolute, contingent or otherwise) or asset impairment which are
required to be reflected, noted or reserved against therein under generally
accepted accounting principles or which are in any case or in the aggregate
material. Except as previously disclosed, since September 30, 1997, Miners has
not incurred any such liability, other than liabilities of the same nature as
those set forth in the Bank Balance Sheet, all of which have been reasonably
incurred in the ordinary course of business consistent with customary business
practices of prudently managed banks (hereinafter referred to as "Ordinary
Course of Business").
Section 3.9. Absence of Changes. Since September 30, 1997, Miners has
----------- ------------------
conducted its business in the Ordinary Course of Business and, except as
previously disclosed, Miners has not undergone any change in condition
(financial or otherwise), assets, liabilities, business or operations, other
than changes in the Ordinary Course of Business which have not been, either in
any case or in the aggregate, materially adverse.
Section 3.10. Dividends, Distributions and Stock Purchases. Except as
------------ --------------------------------------------
previously disclosed, since September 30, 1997, Miners has not declared, set
aside, made or paid any dividend or other distribution in respect of the Miners
Common Stock, or purchased, issued or sold any shares of Miners Common Stock.
7
Section 3.11. Taxes. Miners has filed all federal, state, county,
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municipal and foreign tax returns, reports and declarations which are required
to be filed by Miners. Except as previously disclosed, (i) Miners has paid all
taxes, penalties and interest which have become due pursuant thereto or which
became due pursuant to assessments, and (ii) Miners has not received any notice
of deficiency or assessment of additional taxes and no tax audits are in
process. The Internal Revenue Service ("IRS") has not, to the knowledge of
Miners, commenced, or given notice of its intention to commence any examination
or audit of the federal income tax returns of Miners for any year through and
including the year ended December 31, 1996. Miners has not granted any waiver
of any statute of limitations or otherwise agreed to any extension of a period
for the assessment of any federal, state, county, municipal or foreign income
tax. Except as previously disclosed, the accruals and reserves reflected in the
Bank Balance Sheet are adequate to cover all taxes (including interest and
penalties, if any, thereon) payable or accrued as a result of its operations for
all periods prior to the date of the Bank Balance Sheet.
Section 3.12. Title to and Condition of Assets. Miners has good and
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marketable title to all real and personal properties and assets reflected in the
Bank Balance Sheet or acquired subsequent to September 30, 1997 (other than
property and assets disposed of in the Ordinary Course of Business), free and
clear of all liens or encumbrances of any kind whatsoever other than: (i) as
reflected in the Bank Balance Sheet; (ii) liens of current taxes not yet due;
and (iii) such imperfections of title, encumbrances and easements, if any, as
are not substantial in character, amount or extent and do not materially detract
from the value, or interfere with the present or pro posed use, of the
properties and assets subject thereto. The structures and other improvements to
real estate, furniture, fixtures and equipment reflected in the Bank Balance
Sheet or acquired subsequent to September 30, 1997, are in good operating
condition and repair (ordinary wear and tear excepted) and comply in all
material respects with all applicable laws, ordinances and regulations,
including without limitation all building codes, zoning ordinances and other
similar laws. Miners owns or has the right to use all real and personal
properties and assets necessary to the conduct of its business as now conducted.
Section 3.13. Contracts. All contracts, agreements, leases, licenses and
------------ ---------
other commitments are valid and in full force and effect, and all parties
thereto have in all material respects performed all obligations required to be
performed by them to date and are not in default in any material respect.
Miners is not a party to or subject to (i) any employment, consulting or
severance contract or arrangement with any past or present officer, director or
employee, except for "at will" arrangements (ii) any plan, arrangement or
contract providing for bonuses, options, deferred compensation, profit sharing
or similar arrangements for or with any past or present officers, directors or
employees of Miners; (iii) any collective bargaining agreement with any labor
union relating to employees of Miners; (iv) any agreement which by its terms
limits the payment of dividends by Miners; (v) any instrument evidencing or
related to indebtedness for borrowed money in excess of $20,000, whether
directly or indirectly, by way of purchase money obligation, conditional sale,
lease purchase, guaranty or otherwise, in respect of which Miners is an obligor
to any person, which instrument evidences or relates to indebtedness other than
deposits, repurchase
8
agreements, bankers acceptances and "treasury tax and loan" accounts established
in the Ordinary Course of Business and transactions in federal funds or which
contains financial covenants or other restrictions (other than those relating to
the payment of principal and interest when due) which would be applicable on or
after the Closing Date to MP Corp. or any MP Corp. subsidiary; (vi) any contract
(other than this Agreement) limiting the freedom of Miners to engage in any type
of banking or banking-related business permissible under law; or (vii) any
contract, plan or arrangement which provides for payments or benefits in certain
circumstances which, together with other payments or benefits payable to any
participant therein or party thereto, might render any portion of any such
payments or benefits subject to disallowance of deduction therefor as a result
of the application of Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code").
No party to any material contract, plan, arrangement or instrument that
requires annual payments in excess of $10,000 will have the right to terminate
any or all of the provisions of any such contract, plan, arrangement or
instrument as a result of the transactions contemplated by this Agreement, and
none of the employees of Miners possess the right to terminate their employment
as a result of the execution of this Agreement. No plan, employment agreement,
termination agreement, or similar agreement or arrangement to which Miners is a
party or under which Miners may be liable contains provisions which permit an
employee or independent contractor to terminate it without cause and continue to
accrue future benefits thereunder. No such agreement, plan or arrangement
provides for acceleration in the vesting of benefits or payments due thereunder
upon the occurrence of a change in ownership or control of Miners absent the
occurrence of a subsequent event; provides for benefits which may cause the
disallowance of a federal income tax deduction under Section 280G of the Code;
or requires Miners to provide a benefit in the form of Miners Common Stock or
determined by reference to the value of Miners Common Stock.
Section 3.14. Litigation and Governmental Directives. There is no
------------ --------------------------------------
litigation, investigation or proceeding pending, or to the knowledge of Miners
threatened, that involves Miners or its properties and that, if determined
adversely, would materially and adversely affect the condition (financial or
otherwise), assets, liabilities, business, operations or future prospects of
Miners; there are no outstanding orders, writs, injunctions, judgments,
decrees, regulations, directives, consent agreements or memoranda of
understanding issued by any federal, state or local court or governmental
authority or arbitration tribunal issued against or with the consent of Miners
that materially and adversely affect the condition (financial or otherwise),
assets, liabilities, business, operations or future prospects of Miners or that
in any manner restrict Miners's right to conduct its business as presently
conducted, or challenge the validity or propriety of any of the transactions
contemplated by the Agreement, or which could adversely affect the ability of
Miners to perform under this Agreement; and Miners is not aware of any fact or
condition presently existing that might give rise to any litigation,
investigation or proceeding which, if determined adversely to Miners, would
materially and adversely affect the condition (financial or otherwise), assets,
liabilities, business, operations or future prospects of Miners.
Section 3.15. Compliance with Laws; Governmental Authorizations. Miners is
------------ -------------------------------------------------
in compliance with all statutes, laws, ordinances, rules, regulations,
judgments, orders, decrees, directives, consent agreements, memoranda of
understanding, permits, concessions, grants,
9
franchises, licenses, and other governmental authorizations or approvals
applicable to Miners or to any of its properties; all permits, concessions,
grants, franchises, licenses and other governmental authorizations and approvals
necessary for the conduct of the business of Miners as presently conducted have
been duly obtained and are in full force and effect, and there are no
proceedings pending, or to the knowledge of Miners threatened, which may result
in the revocation, cancellation, suspension or materially adverse modification
of any thereof; and Miners has not received any notification or communication
from any regulatory authority (A) asserting that it is not in substantial
compliance with any of the statues, regulations or ordinances which such
regulatory authorities enforce; (B) requiring or threatening to require Miners,
or indicating that Miners may be required, to enter into a cease and desist
order, agreement or memorandum of understanding or any other agreement
restricting or limiting, or purporting to restrict or limit, in any manner the
operations of Miners, including without limitation, any restriction on the
payment of dividends (any such notice, communication, memorandum, agreement or
order described herein is referred to as a "Regulatory Agreement"); (C)
threatening to revoke any license, franchise, permit or governmental
authorization which is material to Miners; Miners has not consented to or
entered into any Regulatory Agreement; (D) requesting board resolutions be
adopted pursuant to regulatory action.
Section 3.16. Insurance. All policies of insurance, including all
------------ ---------
policies of title insurance and financial institutions bonds, held by or on
behalf of Miners are in full force and effect and no notices of cancellation
have been received in connection therewith. All such policies of insurance have
been issued by reputable insurers which in respect of amounts, types and risks,
such insurance is customary with industry practices for the business conducted
by Miners.
Section 3.17. Financial Institutions Bonds. Since January 1, 1991, Miners
------------ ----------------------------
has continuously maintained in full force and effect a financial institutions
bond insuring Miners against acts of dishonesty by each of its employees.
Except as previously disclosed, no claim has been made under any such bond, and
Miners is not aware of any fact or condition presently existing which might form
the basis of a claim under any such bond. Miners has no reason to believe that
its present financial institutions bond will not be renewed by its carrier on
substantially the same terms and at the same rate as now in effect.
Section 3.18. Labor Relations. Miners is not a party to or bound by any
------------ ---------------
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is Miners the subject of a
proceeding asserting that Miners has committed an unfair labor practice or
seeking to compel Miners to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving Miners pending, or to the knowledge of Miners, threatened, that might
materially adversely affect the condition (financial or otherwise), assets,
liabilities, business or operations of Miners. Miners is not subject to or a
party in any Complaint or action before the Pennsylvania Human Relations
Commission, the Equal Employment Opportunity Commission, or the Department of
Labor. There are no labor disputes pending, or to the knowledge of Miners
threatened, that might materially and adversely affect the condition (financial
or otherwise), assets, liabilities, business or operations of Miners.
10
Section 3.19. Employee Benefit Plans. Each "employee benefit plan", as
------------ ----------------------
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that now covers any employee of Miners, its predecessors
or affiliates, complies in all material respects with all applicable
requirements of ERISA, the Code and other applicable laws. Neither Miners nor
any of its predecessors or affiliates has engaged in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) or
any breach of fiduciary responsibility under Part 4 of Title I of ERISA, with
respect to any such plan which prohibited transaction is likely to result in any
material penalties or taxes under Section 502 of ERISA or Section 4975 of the
Code, or any material liability to any participant or beneficiary of such plan.
No material liability to the Pension Benefit Guaranty Corporation has been or is
expected to be incurred by Miners with respect to itself or its predecessors or
affiliates with respect to any such plan which is subject to Title IV of ERISA,
or with respect to any "single employer plan" (as defined in Section 4001(a)(15)
of ERISA) currently or formerly maintained. No such plan had an "accumulated
funding deficiency" (as defined in Section 302 of ERISA) (whether or not waived)
as of the last day of the end of the most recent plan year ending prior to the
date hereof. The fair market value of the assets of each such plan exceeds the
present value of the "benefit liabilities" (as defined in Section 4001(a)(16) of
ERISA) under each such plan as of the end of the most recent plan year,
calculated on the basis of the actuarial assumptions used in the most recent
actuarial valuation for each such plan. No notice of a "reportable event" (as
defined in Section 4043 of ERISA) for which the 30-day reporting requirement has
not been waived has been required to be filed for any of such plans within the
12-month period ending on the date hereof. Neither Miners, its predecessors or
affiliates has provided, or is required to provide, security to any such plans
pursuant to Section 401(a)(29) of the Code. Miners, its predecessors and
affiliates have contributed to no "multi-employer plan", as defined in Section
3(37) of ERISA, on or after September 26, 1980. All actuarial valuations and
other documents and information concerning benefit plans delivered or made
available in connection with this Agreement are true and correct as of the
date(s) shown thereon, and all actuarial methods and assumptions are appropriate
for such plans, and are consistent with the methods and assumptions permitted by
the Code and ERISA. All such plans are funded to such level as assets of each
such plan would then be sufficient to pay all vested accrued benefits
thereunder, and there would be no employer liability under Title IV of ERISA.
Since 1990, there has been no audit of any benefit plan of Miners by the
Department of Labor, the IRS or the Pension Benefit Guaranty Corporation
("PBGC"). There has not been any audit of the Pension Plan or any of Miners's
other employee benefit plans by the Department of Labor, the IRS or the PBGC
since 1988. Miners, its predecessors and affiliates, have no obligation for
retiree health and life benefits under any benefit plan, contract, or
arrangement. Miners has no obligation for any post-retirement benefits under
any plan, contract or arrangement except as previously disclosed.
Section 3.20. Related Party Transactions. Except as previously disclosed,
------------ --------------------------
Miners has no contract, extension of credit, business arrangement or other
relationship of any kind with any of the following persons: (i) any present or
former officer or director of Miners; (ii) any shareholder owning five percent
or more of the outstanding Miners Common Stock; and (iii) any "associate" (as
defined in SEC Rule 405) of the foregoing persons or any business in which any
of the foregoing persons is an officer, director, employee or five percent or
greater equity owner. Each such extension of credit previously disclosed has
been made in the Ordinary Course of Business on
11
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable arms' length transactions with other
persons that do not involve more than a normal risk of collectibility or present
other unfavorable features.
Section 3.21. DELETED.
------------
Section 3.22. DELETED.
------------
Section 3.23. Complete and Accurate Disclosure. Neither this Agreement
------------ --------------------------------
(insofar as it relates to Miners, Miners Common Stock and Miners's involvement
in the transactions contemplated hereby) nor any financial statement, schedule,
certificate, or other statement or document delivered by Miners to MP Corp. and
MP Bank in connection herewith contains any statement which, at the time and in
light of the circumstances under which it is made, is false or misleading with
respect to any material fact or omits to state any material fact necessary to
make the statements contained herein or therein not false or misleading. In
particular, without limiting the generality of the foregoing sentence, the
information provided and the representations made by Miners to MP Corp. and MP
Bank in connection with the Registration Statement (as defined in Section 7.1(b)
of this Agreement), both at the time such information and representations are
provided and made and at the time of the Closing, will be true and accurate in
all material respects and will not contain any false or misleading statement
with respect to any material fact or omit to state any material fact necessary
(i) to make the statements made therein not false or misleading, or (ii) to
correct any statement contained in an earlier communication with respect to such
information or representations which has become false or misleading.
Section 3.24. Beneficial Ownership of MP Corp. Common Stock. Prior to the
------------ ---------------------------------------------
Effective Date, Miners and its officers and directors will not beneficially own,
in the aggregate, (within the meaning of SEC Rule 13d-3(d)(1)) more than five
percent of the outstanding shares of MP Corp. Common Stock.
Section 3.25. Environmental Matters. For purposes of this Section 3.25,
------------ ---------------------
the following terms shall have the indicated meaning:
"Environmental Law" 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 governmental entity relating to: 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
the use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of
Hazardous Substances. The term Environmental Law includes without
limitation: the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. (S)9601, et seq., the Resource
-- ---
Conservation and Recovery Act, as amended, 42 U.S.C. (S)6901, et seq., the
-- ---
Clean Air Act, as amended, 42 U.S.C.
12
(S)7401, et seq., the Federal Water Pollution Control Act, as amended, 33
-- ---
U.S.C. (S)1251, et seq., the Toxic Substances Control Act, as amended, 15
-- ---
U.S.C. (S)9601, et seq., the Emergency Planning and Community Right to Know
-- ---
Act, 42 U.S.C. (S)11001, et seq., the Safe Drinking Water Act, 42 U.S.C.
-- ---
(S)300f, et seq., and all comparable state and local laws; and any common
-- ---
law (including without limitation common law that may impose strict
liability) that may impose liability or obligation for injuries or damages
due to, or threatened as a result of, the presence of or exposure to any
Hazardous Substance.
"Hazardous Substance" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous or
otherwise regulated under any Environmental Law, whether by type or by
quantity, including any material containing any such substance as a
component. Hazardous Substances include, without limitation, petroleum or
any derivative or by-product thereof, asbestos, radioactive material, and
polychlorinated biphenyls.
"Miners Loan Portfolio Properties and Other Properties Owned" means
those properties serving as collateral for loans in Miners' loan portfolio,
or properties owned or operated by Miners (including, without limitation,
in a fiduciary capacity).
Except as previously disclosed:
(a) Miners has not been and is not in violation of or liable under any
Environmental Law.
(b) To the knowledge of Miners, after reasonable investigation, none
of the Miners Loan Portfolio Properties and Other Properties Owned have
been or are in violation of or liable under any Environmental Law.
(c) After reasonable investigation, Miners has no knowledge that any
environmental contaminant, pollutant, toxic or hazardous waste or other
similar substance has been generated, used, stored, processed, disposed of
or discharged onto any of the real estate now or previously owned or
acquired (including without limitation any real estate acquired by means of
foreclosure or exercise of any other creditor's right) or leased by Miners,
except as previously disclosed. In particular, without limiting the
generality of the foregoing sentence, except as previously disclosed,
Miners has no knowledge that: (i) any materials containing asbestos have
been used or incorporated in any building or other structure or improvement
located on any of the real estate now or previously owned or acquired
(including without limitation any real estate acquired by means of
foreclosure or exercise of any other creditor's right) or leased by Miners;
(ii) any electrical transformers, fluorescent light fixtures with ballasts
or other equipment containing PCB's are or have been located on any of the
real estate now or previously owned or acquired (including without
limitation any real estate acquired by means of foreclosure or exercise of
any other
13
creditor's right) or leased by Miners; (iii) any underground storage tanks
for the storage of gasoline, petroleum products or other toxic or hazardous
substances are or have ever been located on any of the real estate now or
previously owned or acquired (including without limitation any real estate
acquired by means of foreclosure or exercise of any other creditor's right)
or leased by Miners.
(d) Except as previously disclosed, there is no legal, administrative,
arbitration or other proceeding, claim, action, or to the knowledge of
Miners cause of action or governmental investigation of any nature seeking
to impose, or that could result in the imposition, on Miners of any
liability arising under any local, state or federal environmental statute,
regulation or ordinance including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
pending or to the knowledge of Miners threatened against Miners; there is
no reasonable basis for any such proceeding, claim, action or governmental
investigation; and Miners is not subject to any agreement, order, judgment,
decree or memorandum by or with any court, governmental authority,
regulatory agency or third party imposing any such liability.
Section 3.26. Proxy Statement/Prospectus. At the time the Proxy
------------ --------------------------
Statement/ Prospectus (as defined in Section 7.1(b) of this Agreement) is mailed
to the shareholders of Miners, and at all times subsequent to such mailing, up
to and including the Effective Date, such Proxy Statement/Prospectus (including
any pre- and post-effective amendments and supplements thereto), with respect to
all information relating to Miners, Miners Common Stock, and actions taken and
statements made by Miners in connection with the transactions contemplated
herein (except for information provided by MP Corp. and MP Bank to Miners) will:
(i) comply in all material respects with applicable provisions of the Securities
Act of 1933, as amended (the "1933 Act"), and the pertinent rules and
regulations thereunder; and (ii) not contain any statement which, at the time
and in light of the circumstances under which it is made, is false or misleading
with respect to any material fact, or omits to state any material fact that is
necessary to be stated therein in order (A) to make the statements therein not
false or misleading, or (B) to correct any statement in an earlier communication
with respect to the Proxy Statement/Prospectus which has become false or
misleading.
Section 3.27. Non-Registration Under the 1934 Act. Miners Common Stock is
------------ -----------------------------------
neither registered nor required to be registered under Section 12 of the
Securities Exchange Act of 1934 (the "1934 Act") and is not subject to the
periodic reporting requirements imposed by Section 13 or 15(d) of the 1934 Act.
Section 3.28. Deposit Insurance. The deposits of Miners are insured by
------------ -----------------
the Bank Insurance Fund, as administered by the Federal Deposit Insurance
Corporation ("FDIC") in accordance with the Federal Deposit Insurance Act, and
Miners has paid all assessments and filed all reports required by the Federal
Deposit Insurance Act.
14
Section 3.29. Repurchase Agreements. With respect to any agreement,
------------ ---------------------
pursuant to which Miners has purchased securities subject to an agreement to
resell, if any, Miners has a valid, perfected first lien or security interest in
the government securities or other collateral securing the repurchase agreement,
and the value of such collateral equals or exceeds the amount of the debt
secured thereby.
Section 3.30. Assumability of Contracts and Leases. Except as previously
------------ ------------------------------------
disclosed, all Material Contracts between Miners and any other entity or person
are assumable and assignable and do not contain any term or provision that would
accelerate or increase payments that would otherwise be due by Miners to such
person or entity, or change or modify the provisions or terms of such leases,
contracts and agreements by reason of this Agreement or the transactions
contemplated hereby. Except as previously disclosed, each lease pursuant to
which Miners, as lessee, leases real or personal property is valid and in effect
in accordance with its respective terms, and there is not, under any of such
leases, on the part of the lessee any material existing default or any event
which, with notice or lapse of time, or both, would constitute such a default,
other than defaults which would not individually or in the aggregate have a
material adverse effect on the financial condition, business, prospects, or
operating results of Miners.
Section 3.31. Loans. Except as previously disclosed, each loan reflected
------------ -----
as an asset on Miners's financial statements as of September 30, 1997, or
acquired since that date, is the legal, valid and binding obligation of the
obligor named therein, enforceable in accordance with its terms, subject to
bankruptcy, insolvency and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles. All such loans,
and the collateral and other security therefor, and the documentation for the
same, meet the requirements, rules, regulations or directives of the FDIC, or
other applicable governmental authorities.
Section 3.32. Materiality. For purposes of this Article III, unless
------------ -----------
otherwise defined, the term "material" or "materially" refers to amounts in
excess of $20,000.
Section 3.33. DELETED.
------------
Section 3.34. DELETED.
------------
Section 3.35. Adjustable Rate Mortgages. Miners has made all interest
------------ -------------------------
rate adjustments to any mortgage loan according to the terms of said mortgage
loan and has complied and is in compliance in all material respects with all
federal, state and other applicable laws, rules and regulations, including
orders, writs, decrees, injunctions and other requirements of any court or
governmental authorities having jurisdiction over adjustable rate mortgages.
Section 3.36. CRA Compliance. Miners has received a satisfactory
------------ --------------
compliance rating and has received a satisfactory Community Reinvestment Act
rating. Miners has no knowledge of any facts or circumstances which would
prevent it from receiving such satisfactory ratings upon its next appropriate
examination.
15
Section 3.37. DELETED.
------------
Section 3.38. Loan Loss Reserve. The loan loss reserve of Miners is and
------------ -----------------
shall remain adequate in light of generally accepted accounting principles,
directives of governmental authorities, and all regulations, rules and
directives of the Banking Department and the FDIC. No regulatory authority
requested Miners to increase the allowance for loan losses during 1997, 1996,
1995 or 1994.
Section 3.39. DELETED.
------------
Section 3.40. DELETED.
------------
Section 3.41. DELETED.
------------
Section 3.42. Accuracy of Representations. Miners will promptly notify MP
------------ ---------------------------
Corp. if any of the representations contained in this Article III cease to be
true and correct subsequent to the date hereof. Further, no representations
made by Miners pursuant to this Agreement contain any untrue statement of
material fact or omit to state a material fact necessary to make the statements
not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MP CORP.
------------------------------------------
MP Corp. represents and warrants to Miners, as of even date herewith, as
follows:
Section 4.1. Authority. The execution and delivery of this Agreement and
----------- ---------
the Bank Merger Agreement and the consummation of the transactions contemplated
herein and therein have been duly and validly authorized by the Board of
Directors of MP Corp., and no other corporate action on the part of MP Corp. is
necessary to authorize the approval of this Agreement and the Bank Merger
Agreement or the consummation of the transactions contemplated herein and
therein. This Agreement and the Bank Merger Agreement have been duly executed
and delivered by MP Corp. and, assuming due authorization, execution and
delivery by Miners, and receipt of all required regulatory and shareholder
approvals, constitutes a valid and binding obligation of MP Corp. Assuming
regulatory and shareholder approval, the execution, delivery and consummation of
this Agreement will not constitute a violation or breach of or default under the
Articles of Incorporation or the Bylaws of MP Corp. or any statute, rule,
regulation, order, decree, directive, agreement, indenture or other instrument
to which MP Corp. is a party or by which MP Corp. or any of its properties are
bound.
Section 4.2. Organization and Standing. MP Corp. is a business
----------- -------------------------
corporation that is duly organized, validly existing and in good standing under
the laws of the Commonwealth of Pennsylvania. MP Corp. is a registered bank
holding company under the Bank Holding Company
16
Act of 1956, as amended, and has full power and lawful authority to own and hold
its properties and to carry on its present business. MP Corp. owns all of the
issued and outstanding shares of capital stock of Mid Penn Bank. Mid Penn Bank
is a Pennsylvania state-chartered banking institution validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and of the
United States, and is duly authorized to engage in the banking business as an
insured bank under the Federal Deposit Insurance Act, as amended.
Section 4.3. Capitalization. The authorized capital stock of MP Corp.
----------- --------------
consists of Ten Million (10,000,000) shares of common stock, par value one
dollar ($1.00) per share ("MP Corp. Common Stock") of which, at September 30,
1997, 2,607,552 shares were issued and outstanding. All outstanding shares of MP
Corp. Common Stock have been duly issued and are validly outstanding, fully paid
and nonassessable. The shares of MP Corp. Common Stock to be issued in
connection with the Bank Merger have been duly authorized and, when issued in
accordance with the terms of this Agreement and the Bank Merger Agreement, will
be validly issued, fully paid and nonassessable.
Section 4.4. DELETED.
-----------
Section 4.5. Financial Statements. MP Corp. has delivered to Miners the
----------- --------------------
following financial statements: (i) Consolidated Balance Sheets, Consolidated
Statements of Income, Consolidated Statements of Shareholders' Equity, and
Consolidated Statements of Cash Flows as of and for the years ended December 31,
1996 and December 31, 1995, certified by Parente, Xxxxxxxx, Xxxxxxx, Xxxxx and
Associates and set forth in the Annual Report to the shareholders of MP Corp.
for the year ended on December 31, 1996; and (ii) a Consolidated Statement of
Condition, a Consolidated Statement of Income and a Consolidated Statement of
Changes in Shareholders' Equity for the three-month period ended September 30,
1997, set forth in a "Quarterly Report" to the shareholders of MP Corp. (the
foregoing Consolidated Statement of Condition being hereinafter referred to as
the "MP Corp. Balance Sheet"). Each of the foregoing financial statements
fairly presents the consolidated financial position, assets, liabilities and
results of operations of MP Corp. at their respective dates and for the
respective periods then ended and has been prepared in accordance with generally
accepted accounting principles consistently applied, except as otherwise noted
in a footnote thereto and subject, in the case of the interim financial
statements contained in the aforesaid Quarterly Report, to normal recurring
year-end adjustments, which are not material in any case or in the aggregate.
Section 4.6. Absence of Undisclosed Liabilities. Except as previously
----------- ----------------------------------
disclosed, or as reflected, noted or adequately reserved against in the MP Corp.
Balance Sheet, at September 30, 1997, MP Corp. had no material liabilities
(whether accrued, absolute, contingent or otherwise) which are required to be
reflected, noted or reserved against therein under generally accepted accounting
principles or which are in any case or in the aggregate material. Except as
previously disclosed, since September 30, 1997, MP Corp. has not incurred any
such liability other than liabilities of the same nature as those set forth in
the MP Corp. Balance Sheet, all of which have been reasonably incurred in the
Ordinary Course of Business.
17
Section 4.7. Absence of Changes. Since September 30, 1997, there has not
----------- ------------------
been any material and adverse change in the condition (financial or otherwise),
assets, liabilities, business or operations of MP Corp. or MP Bank.
Section 4.8. Litigation. Except as previously disclosed: (i) there is no
----------- ----------
litigation, investigation or proceeding pending, or to the knowledge of MP Corp.
threatened, that involves MP Corp. or its properties and that, if determined
adversely to MP Corp., would materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business, operations or future
prospects of MP Corp.; (ii) there are no outstanding orders, writs, injunctions,
decrees, consent agreements, memoranda of understanding or other directives of
any federal, state or local court or governmental authority or of any
arbitration tribunal against MP Corp. which materially and adversely affect the
condition (financial or otherwise), assets, liabilities, business, operations or
future prospects of MP Corp., or restrict in any manner the right of MP Corp. to
conduct its business as presently conducted; and (iii) MP Corp. is not aware of
any fact or condition presently existing that might give rise to any litigation,
investigation or proceeding which, if determined adversely to MP Corp., would
materially and adversely affect the condition (financial or otherwise), assets,
liabilities, business or operations of MP Corp. For purposes of this Section
4.8, MP Corp. shall be deemed to include MP Bank.
Section 4.9. Proxy Statement/Prospectus. At the time the Proxy
----------- --------------------------
Statement/ Prospectus (as defined in Section 7.1(b) of this Agreement) is mailed
to the shareholders of Miners, and at all times subsequent to such mailing, up
to and including the Effective Date, the Proxy Statement/Prospectus (including
any pre- and post-effective amendments and supplements thereto), with respect to
all information relating to MP Corp. and MP Bank, MP Corp. Common Stock, and
actions taken and statements made by MP Corp. and MP Bank in connection with the
transactions contemplated herein (other than information provided by Miners to
MP Corp. and MP Bank), will: (i) comply in all material respects with applicable
provisions of the 1933 Act and the 1934 Act and the pertinent rules and
regulations thereunder; and (ii) not contain any statement which, at the time
and in light of the circumstances under which it is made, is false or misleading
with respect to any material fact, or omits to state any material fact that is
necessary to be stated therein in order (A) to make the statements therein not
false or misleading, or (B) to correct any statement in an earlier communication
with respect to the Proxy Statement/Prospectus which has become false or
misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MP BANK
-----------------------------------------
MP Bank represents and warrants to Miners, as of even date herewith, as
follows:
Section 5.1. Capital Structure of MP Bank. MP Bank is authorized to
----------- ----------------------------
issue ten million (10,000,000) shares of capital stock, par value one dollar
($1.00) per share, of which all shares outstanding are owned by MP Corp.
18
Section 5.2. Organization and Standing. MP Bank is a Pennsylvania state-
----------- -------------------------
chartered banking institution which is duly organized, validly existing and in
good standing under the laws of the Commonwealth of Pennsylvania and of the
United States. MP Bank has full power and lawful authority to own and hold its
properties and to carry on its present business.
Section 5.3. Authorized and Effective Agreement. The execution, delivery
----------- ----------------------------------
and performance of this Agreement and the Bank Merger Agreement have been duly
and validly authorized by the Board of Directors of MP Bank. Subject to
appropriate shareholder and regulatory approvals, neither the execution and
delivery of this Agreement or the Bank Merger Agreement nor the consummation of
the transactions provided for herein or therein will violate any agreement to
which MP Bank is a party or by which it is bound or any law, regulation, order,
decree or any provision of its Articles of Incorporation or By-laws.
ARTICLE VI
COVENANTS OF MINERS
-------------------
From the date of this Agreement until the Effective Date (as defined in
Section 11.2 of this Agreement), Miners covenants and agrees to do the
following:
Section 6.1. Conduct of Business. Except as otherwise consented to by MP
----------- -------------------
Corp. and MP Bank in writing, Miners shall:
(a) use all reasonable efforts to carry on its business in, and only
in, the Ordinary Course of Business, consistent with past practices and
written policies;
(b) to the extent consistent with prudent business judgment, use all
reasonable efforts to preserve its present business organization, to retain
the services of its present officers and employees, to maintain good
relationships with its employees, and to maintain its relationships with
customers, suppliers and others having business dealings with Miners;
(c) maintain all of Miners's structures, equipment and other real
property and tangible personal property in good repair, order and
condition, except for ordinary wear and tear and damage by unavoidable
casualty;
(d) use all reasonable efforts to preserve or collect all material
claims and causes of action belonging to Miners;
(e) keep in full force and effect all insurance policies now carried
by Miners;
(f) perform in all material respects each of Miners's obligations
under all material agreements, contracts, instruments and other commitments
to which Miners is a party or by which Miners may be bound or which relate
to or affect its properties, assets and business;
19
(g) maintain its books of account and other records in the Ordinary
Course of Business;
(h) comply in all material respects with all statutes, laws,
ordinances, rules and regulations, decrees, orders, consent agreements,
examination reports, memoranda of understanding and other federal, state,
county, local and municipal governmental directives applicable to Miners
and to the conduct of its business;
(i) not amend Miners's Articles of Incorporation or Bylaws;
(j) not enter into or assume any material contract, incur any material
liability or obligation, make any material commitment, acquire or dispose
of any property or asset or engage in any transaction or subject any of
Miners's properties or assets to any material lien, claim, charge, or
encumbrance of any kind whatsoever;
(k) not take or permit to be taken any action which would constitute a
breach of any representation, warranty or covenant set forth in this
Agreement;
(l) not declare, set aside or pay any dividend or make any other
distribution in respect of Miners Common Stock, except as provided in
Section 6.9 of this Article VI;
(m) not authorize, purchase, issue or sell (or authorize, issue or
grant options, warrants or rights to purchase or sell) any shares of Miners
Common Stock or any other equity or debt securities of Miners or any
securities convertible into Miners Common Stock;
(n) not increase the rate of compensation of, pay a bonus or severance
compensation to, or enter into any employment, severance, deferred
compensation or other agreement with any officer, director, employee or
consultant of Miners;
(o) not enter into any related party transaction of the kind
contemplated in Section 3.20 of Article III of this Agreement except such
related party transactions relating to extensions of credit made in
accordance with all applicable laws, regulations and rules and in the
Ordinary Course of Business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable arms' length transactions with other persons that do not involve
more than the normal risk of collectibility or present other unfavorable
features and after disclosure of such to MP Corp.;
(p) not change the presently outstanding number of shares or declare
or effect any capitalization, reclassification, stock dividend, stock split
or like change in capitalization;
(q) not enter into or substantially modify (except as may be required
by applicable law) any pension, retirement, stock option, stock warrant,
stock purchase, stock appreciation right, savings, profit sharing, deferred
compensation, severance, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, or plan or
20
arrangement, or any trust agreement related thereto, in respect to any of
its directors, officers, or other employees;
(r) not merge with or into, or consolidate with, or be purchased or
acquired by, any other corporation, financial institution, entity, or
person (or agree to any such merger, consolidation, affiliation, purchase
or acquisition) or permit (or agree to permit) any other corporation,
financial institution, entity or person to be merged with it or consolidate
or affiliate with any other corporation, financial institution, entity or
person; acquire control over any other firm, financial institution,
corporation or organization or create any subsidiary; acquire, liquidate,
sell or dispose (or agree to acquire, liquidate, sell or dispose) of any
assets, other than in the Ordinary Course of Business and consistent with
prior practice;
(s) not solicit or encourage inquiries or proposals with respect to,
furnish any information relating to, or participate in any negotiations or
discussions concerning any acquisition or purchase of all or a substantial
equity interest or portion of the assets in or of Miners or any business
combination with Miners, other than as contemplated by this Agreement, or
authorize or permit any officer, director, agent or affiliate of it to do
any of the above; or fail to notify MP Corp. immediately if any such
inquiries or proposals are received by, any such information is requested
from, or any such negotiations are sought to be initiated with Miners;
(t) not change any method, practice or principle of accounting except
as may be required by generally accepted accounting principles or any
applicable regulator or take any action that would preclude satisfaction of
the condition to closing contained in Section 8.1(c) relating to financial
accounting treatment of the Merger;
(u) DELETED.
(v) DELETED.
(w) DELETED.
(x) take any action which would result in any of the representations
and warranties of Miners set forth in this Agreement becoming untrue as of
any date after the date hereof;
(y) not sell, exchange or otherwise dispose of any investment
securities or loans that are held for sale, prior to scheduled maturity and
other than pursuant to policies agreed upon from time to time by the
parties;
(z) not purchase any security for its investment portfolio not rated
"A" or higher by either Standard & Poor's Corporation or Xxxxx'x Investor
Services, Inc.;
21
(aa) not waive, release, grant or transfer any rights of value or
modify or change in any material respect any existing agreement to which
Miners is a party, other than in the ordinary course of business consistent
with past practice;
(bb) not knowingly take any action that would, under any statute,
regulation or administrative practice of any regulatory agency, materially
or adversely affect the ability of any party to this Agreement to obtain
any required approvals for consummation of the transaction; and
(cc) not agree to any of the foregoing items (i) through (bb).
Section 6.2. Best Efforts. Miners shall cooperate with MP Corp. and MP
----------- ------------
Bank and shall use its best efforts to do or cause to be done all things
necessary or appropriate on its part in order to fulfill the conditions
precedent set forth in Article VIII of this Agreement and to consummate this
Agreement. In particular, without limiting the generality of the foregoing
sentence, Miners shall:
(a) cooperate with MP Corp. and MP Bank in the preparation of all
required applications for regulatory approval of the transactions
contemplated by this Agreement and in the preparation of the Registration
Statement (as defined in Section 7.1(b) of this Agreement);
(b) call a special or annual meeting of its shareholders and take, in
good faith, all actions which are necessary or appropriate on its part in
order to secure the approval and adoption of this Agreement and the Bank
Merger Agreement by its shareholders at that meeting, including
recommending the approval of such agreements by the shareholders of Miners;
(c) cooperate with MP Corp. and MP Bank in making Miners's employees
reasonably available for training by MP Corp. and MP Bank prior to the
Effective Date, to the extent that such training is deemed reasonably
necessary by MP Corp. and MP Bank to ensure that Miners's office will be
properly operated as a part of MP Bank after the Merger;
(d) make additions to loan loss reserves and make loan write-offs,
write-downs and other adjustments that reasonably should be made by Miners
in light of generally accepted accounting principles, directives of
governmental authorities, and all regulations, rules and directives of the
FDIC, Department of Banking, and Federal Reserve, prior to the closing of
Miners's books of account for its fiscal year ending December 31, 1997, and
for the period from that date until the Effective Date;
(e) suspend any dividend reinvestment and/or stock repurchase plan, as
soon as practicable;
22
(f) modify the Articles of Incorporation or Bylaws or any other
documents of Miners reasonably requested by MP Corp. necessary to
effectuate the transactions contemplated hereby; and
(g) use its best efforts to assure that the directors of Miners shall
have executed and delivered the Support Agreement in the form attached
hereto as Exhibit "B".
Section 6.3. Access to Properties and Records. Miners shall give to MP
----------- --------------------------------
Corp., MP Bank and their authorized representatives (including, without
limitation, their counsel, accountants, economic and environmental consultants
and other designated representatives) reasonable access during normal business
hours to all properties, books, contracts, documents and records of Miners as MP
Corp. or MP Bank may reasonably request, subject to the obligation of MP Corp.,
MP Bank and their authorized representatives to maintain the confidentiality of
all non-public information concerning Miners obtained by reason of such access.
Section 6.4. Subsequent Financial Statements. Between the date of
----------- -------------------------------
execution of this Agreement and the Effective Date, Miners shall promptly
prepare and deliver to MP Corp. and MP Bank, as soon as practicable, all
internal monthly and quarterly financial statements, reports to shareholders and
reports to regulatory authorities prepared by or for Miners, including all audit
reports submitted to Miners by independent auditors in connection with each
annual, interim or special audit of the books of Miners made by such
accountants. In particular, without limiting the generality of the foregoing
sentence, Miners shall deliver to MP Corp. and MP Bank, as soon as practicable,
a balance sheet as of December 31, 1997, and a related statement of income for
the twelve (12) months then ended (which financial statements are hereinafter
referred to as the "December 31, 1997 Bank Financial Statements"). The
representations and warranties set forth in Sections 3.7, 3.8 and 3.9 of this
Agreement shall apply to the December 31, 1997 Bank Financial Statements.
Section 6.5. Board and Committee Minutes. Miners shall provide to MP
----------- ---------------------------
Corp., within 10 days after any meeting of the Board of Directors, or any
committee thereof, or any senior or executive management committee, a copy of
the minutes of such meeting.
Section 6.6. Update Information. Miners shall promptly disclose to MP
----------- ------------------
Corp. and MP Bank, in writing, any change, addition, deletion or other
modification to the information previously disclosed.
Section 6.7. Notice. Miners shall promptly notify MP Corp. and MP Bank,
----------- ------
in writing, of any actions, claims, investigations, proceedings or other
developments which, if pending or in existence on the date of this Agreement,
would have been required to be disclosed to MP Corp. and MP Bank in order to
ensure the accuracy of the representations and warranties set forth in this
Agreement or which otherwise could materially and adversely affect the condition
(financial or otherwise), assets, liabilities, business operations or future
prospects of Miners.
23
Section 6.8. Other Proposals. Miners shall not, nor shall it permit any
----------- ---------------
officer, director, employee, agent, consultant, counsel or other representative,
to directly or indirectly solicit, encourage, initiate or engage in discussions
or negotiations with, or respond to requests for information, inquiries or other
communications from, any person, other than MP Corp., concerning the fact of, or
the terms and conditions of, this Agreement, or concerning any acquisition of
Miners, or any assets or business thereof (except that Miners' officers may
respond to inquiries from analysts, regulatory authorities and holders of Miners
Common Stock in the Ordinary Course of Business); and Miners shall notify MP
Corp. immediately if any such discussions or negotiations are sought to be
initiated with Miners by any such person other than MP Corp. or if any such
requests for information, inquiries, proposals or communications are received
from any person other than MP Corp.
Section 6.9. Dividends. Between the date of this Agreement and the
----------- ---------
Effective Date, Miners shall only declare and pay cash dividends as provided
herein. Miners shall only pay regular semi-annual cash dividends in amounts and
on dates consistent with past practices.
Section 6.10. Core Deposits. Miners shall use commercially reasonable
------------ -------------
efforts to maintain deposits.
Section 6.11. Affiliate Letters. Miners shall deliver or cause to be
------------ -----------------
delivered to MP Corp. and MP Bank, at or before the Closing (as defined in
Section 11.1 of this Agreement), a letter or agreement from each officer,
director and shareholder of Miners who may be deemed to be an "affiliate" (as
that term is defined for purposes of Rules 145 and 405 promulgated by the SEC
under the 0000 Xxx) of Miners, in form and substance satisfactory to MP Corp.
and MP Bank, under the terms of which each such officer, director or shareholder
acknowledges and agrees to abide by all limitations imposed by the 1933 Act and
by all rules, regulations and releases promulgated thereunder with respect to
the sale or other disposition of the shares of MP Corp. Common Stock to be
received by such person pursuant to this Agreement.
Section 6.12. No Purchases or Sales of MP Corp. Common Stock During Price
------------ -----------------------------------------------------------
Determination Period. Neither Miners nor any executive officer or director of
--------------------
Miners nor any shareholder of Miners who may be deemed to be an "affiliate" (as
that term is defined for purposes of Rules 145 and 405 promulgated by the SEC
under the 0000 Xxx) of Miners shall purchase or sell or submit a bid to purchase
or an offer to sell directly or indirectly, any shares of MP Corp. Common Stock
or any options, rights or other securities convertible into shares of MP Corp.
Common Stock
within 20 days of the Effective Date.
Section 6.13. Accounting Treatment. Miners acknowledges that MP Corp. and
------------ --------------------
MP Bank intend to treat the business combination contemplated by this Agreement
as a "pooling of interests" for financial reporting purposes. Miners shall not
take (and shall use its best efforts not to permit any of its directors,
officers, employees, shareholders, agents, consultants or other representatives
to take) any action which would preclude MP Corp. and MP Bank from treating such
business combination as a "pooling of interests" for financial reporting
purposes.
24
Section 6.14. Press Releases. Miners shall not issue any press release
------------ --------------
related to this Agreement and the Bank Merger Agreement or the transactions
contemplated hereby or thereby as to which MP Corp. has not given its prior
written consent, and shall consult with MP Corp. as to the form and substance of
other public disclosures related thereto.
Section 6.15. DELETED.
------------
Section 6.16. Phase I Environmental Audit. Miners shall permit, if MP
------------ ---------------------------
Corp. elects to do, at its own expense, a "phase I environmental audit" to be
performed at any physical location owned or occupied by Miners on the date
hereof.
Section 6.17. DELETED.
------------
ARTICLE VII
COVENANTS OF MP CORP. AND MP BANK
---------------------------------
From the date of this Agreement until the Effective Date (as defined in
Section 11.2 of this Agreement), MP Corp. and MP Bank covenant and agree to do
the following:
Section 7.1. Best Efforts. MP Corp. and MP Bank shall cooperate with
----------- ------------
Miners and shall use their best efforts to do or cause to be done all things
necessary or appropriate on their part in order to fulfill the conditions
precedent set forth in Article VIII of this Agreement and to consummate this
Agreement. In particular, without limiting the generality of the foregoing
sentence, MP Corp. and MP Bank agree to do the following:
(a) Applications for Regulatory Approval. MP Corp. and MP Bank shall
------------------------------------
promptly prepare and file, with the cooperation and assistance of Miners,
all required applications for regulatory approval of the transactions
contemplated by this Agreement and the Bank Merger Agreement.
(b) Registration Statement. MP Corp. shall promptly prepare, with the
----------------------
cooperation and assistance of Miners, and file with the SEC a registration
statement under the 1933 Act (the "Registration Statement") for the purpose
of registering the shares of MP Corp. Common Stock to be issued under the
provisions of this Agreement. MP Corp. may rely upon all information
provided to it by Miners in this connection, and MP Corp. shall not be
liable for any untrue statement of a material fact or any omission to state
a material fact in the Registration Statement or in the proxy statement and
prospectus (the "Proxy Statement/Prospectus") which is prepared as a part
thereof, if such statement is made by MP Corp. in reliance upon any
information provided to MP Corp. by Miners or by its agents and
representatives. MP Corp. will advise Miners, after it receives notice
thereof, of the time when the Registration Statement or any Pre- or Post-
Effective Amendment thereto has become effective or any supplement or
amendment, thereto has been filed.
25
(c) State Securities Laws. MP Corp. and MP Bank, with the cooperation
---------------------
of Miners, shall promptly take all such actions as may be necessary or
appropriate in order to comply with all applicable securities laws of any
state having jurisdiction over the transactions contemplated by this
Agreement.
Section 7.2. Access to Properties and Records. MP Corp. and MP Bank
----------- --------------------------------
shall give to Miners and to its authorized representatives (including without
limitation Miners's counsel, accountants, economic and environmental consultants
and other designated representatives) reasonable access during normal business
hours to all properties, books, contracts, documents and records of MP Corp. and
MP Bank as Miners may reasonably request, subject to the obligation of Miners
and its authorized representatives to maintain the confidentiality of all non-
public information concerning MP Corp. or MP Bank obtained by reason of such
access.
Section 7.3. Subsequent Financial Statements. Between the date of
----------- -------------------------------
execution of this Agreement and the Effective Date, MP Corp. shall promptly
prepare and deliver to Miners, as soon as practicable, each Quarterly Report to
MP Corp.'s shareholders and any Annual Report to MP Corp.'s shareholders
normally prepared by MP Corp. The representations and warranties set forth in
Sections 4.5, 4.6 and 4.7 of this Agreement shall apply to the financial
statements set forth in the foregoing Quarterly Reports and any Annual Report to
MP Corp.'s shareholders.
Section 7.4. Update Information. MP Corp. and MP Bank shall promptly
----------- ------------------
disclose to Miners, in writing, any change, addition, deletion or other
modification to the information previously disclosed.
Section 7.5. Notice. MP Corp. and MP Bank shall promptly notify Miners,
----------- ------
in writing, of any actions, claims, investigations or other developments which,
if pending or in existence on the date of this Agreement, would have been
required to be disclosed to Miners in order to ensure the accuracy of the
representations and warranties set forth in this Agreement or which otherwise
could materially and adversely affect the condition (financial or otherwise),
assets, liabilities, business or operations of MP Corp. or MP Bank.
Section 7.6. No Purchase or Sales of MP Corp. Common Stock During Price
----------- ----------------------------------------------------------
Determination Period. Neither MP Corp. nor any subsidiary of MP Corp., nor any
--------------------
executive officer or director of MP Corp. or any subsidiary of MP Corp., nor any
shareholder of MP Corp. who may be deemed to be an "affiliate" (as that term is
defined for purposes of Rules 145 and 405 promulgated by the SEC under the 0000
Xxx) of MP Corp., shall purchase or sell on AMEX, or submit a bid to purchase or
an offer to sell on AMEX, directly or indirectly, any shares of MP Corp. Common
Stock or any options, rights or other securities convertible into shares of MP
Corp. Common Stock within 20 days of the Effective Date; provided, however, that
MP Corp. may purchase shares of MP Corp. Common Stock in the Ordinary Course of
Business during this period pursuant to MP Corp.'s employee benefit plans or MP
Corp.'s dividend reinvestment plan.
26
ARTICLE VIII
CONDITIONS PRECEDENT
--------------------
Section 8.1. Common Conditions. The obligations of the parties to
----------- -----------------
consummate this Agreement shall be subject to the satisfaction of each of the
following common conditions prior to or as of the Closing, except to the extent
that any such condition shall have been waived in accordance with the provisions
of Section 9.4 of this Agreement:
(a) Shareholder and Regulatory Approvals. The Parties hereto are not
------------------------------------
under any obligation to consummate the Agreement until the approval of the
FRB (or waiver thereof), the Banking Department and any other approvals
that may be necessary or required by the federal or state regulators has
been received, and all conditions and waiting periods required by such
approvals, if any, have been satisfied or have expired, and until any other
approvals required under the Articles of Incorporation or Bylaws of Miners,
MP Corp. or MP Bank, or from the shareholders of Miners or MP Corp., as the
case may be, have been received. Provided, however, that no such approval
shall have imposed any condition or requirement which, in the opinion of
the Board of Directors of MP Corp., renders consummation of the
transactions contemplated herein inadvisable.
(c) Tax Matters. There shall have been received an opinion of counsel
-----------
from Xxxxxxxx Xxxxxxxx, P.C., reasonably satisfactory in form and substance
to MP Corp. and MP Bank and to Miners, to the effect that:
(i) The transactions contemplated by this Agreement and by the
Bank Merger Agreement will constitute a reorganization within the
meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal
Revenue Code of 1986, as amended;
(ii) No gain or loss will be recognized by MP Corp. or MP Bank or
by Miners as a result of the reorganization;
(iii) No gain or loss will be recognized by the shareholders of
Miners upon receipt of MP Corp. Common Stock in exchange for Miners
Common Stock pursuant to the provisions of this Agreement (except in
respect of cash which is received in lieu of the issuance of
fractional shares of MP Corp. Common Stock and any shareholder of
Miners who receives payment in cash as a dissenting shareholder);
(iv) The tax basis of the MP Corp. Common Stock to be received by
the shareholders of Miners pursuant to the provisions of this
Agreement will be the same as the tax basis of the Miners Common Stock
surrendered in exchange therefor;
(v) The holding periods of the MP Corp. Common Stock to be
received by the shareholders of Miners pursuant to the provisions of
this Agreement will include the holding periods of the Miners Common
Stock surrendered in exchange
27
therefor, provided that such Miners Common Stock is held as a capital
asset on the Effective Date; and
(vi) MP Bank, as the surviving bank to the Bank Merger, will
carry-over and take into account all accounting items and tax
attributes of Miners, including, but not limited, to earnings and
profits, methods of accounting, and tax basis and holding periods of
the assets of Miners.
(d) Registration Statement. The Registration Statement (as defined in
----------------------
Section 7.1(b) of this Agreement, including any amendments thereto) shall
have been declared effective by the SEC; the information contained therein
shall be true, complete and correct in all material respects as of the date
of mailing of the Proxy Statement/Prospectus (as defined in Section 7.1(b)
of this Agreement) to the shareholders of Miners; regulatory clearance for
the offering contemplated by the Registration Statement (the "Offering")
shall have been received from each federal and state regulatory authority
having jurisdiction over the Offering, and no stop order shall have been
issued or proceedings instituted or threatened by any federal or state
regulatory authority to suspend or terminate the effectiveness of the
Registration Statement or the Offering.
(e) No Suits. No action, suit or proceeding shall be pending or
--------
threatened before any federal, state or local court or governmental
authority or before any arbitration tribunal which seeks to modify, enjoin
or prohibit or otherwise adversely and materially affect the transactions
contemplated by this Agreement.
(f) Statutes; Orders. No statute, rule, regulation, order, injunction
----------------
or decree shall have been enacted, entered, promulgated or enforced by any
governmental authority which prohibits, restricts or makes illegal the
consummation of the transactions contemplated by this Agreement.
(g) Antitrust Laws. All applicable notifications, statutory and
--------------
regulatory Antitrust Law requirements have been met.
(h) Other Requirements. All other requirements prescribed by law, and
------------------
the Articles of Incorporation, Bylaws and Contracts of the parties hereto
which are necessary to the consummation of the transactions contemplated by
this Agreement shall have been satisfied.
Section 8.2. Conditions Precedent to Obligations of MP Corp. and MP Bank.
----------- -----------------------------------------------------------
The obligations of MP Corp. and MP Bank to consummate this Agreement shall be
subject to the satisfaction of each of the following conditions prior to or as
of the Closing, except to the extent that any such condition shall have been
waived by MP Corp. and MP Bank in accordance with the provisions of Section 9.4
of this Agreement:
28
(a) Accuracy of Representations and Warranties. All of the
------------------------------------------
representations and warranties of Miners, as set forth in this Agreement
and the information contained in all Bank Closing Documents (as defined in
Section 8.2(j) of this Agreement), shall be true and correct in all
material respects as of the Closing as if made on such date (or on the date
to which it relates in the case of any representation or warranty which
expressly relates to an earlier date).
(b) Covenants Performed. Miners shall have performed or complied in
-------------------
all material respects with each of the covenants required by this Agreement
to be performed or complied with by it.
(c) DELETED.
(d) Financial Confirmation. Within sixty (60) days of the execution
----------------------
of this Agreement, MP Corp. and MP Bank (and their accountants if the
advice of such accountants is deemed necessary or desirable by MP Corp. and
MP Bank) shall have established to their satisfaction that the Bank Balance
Sheet fairly presents the financial condition, assets and liabilities of
Miners as at September 30, 1997, and that, since September 30, 1997, there
has not been any material and adverse change in the condition (financial or
otherwise), assets, liabilities, business, operations or future prospects
of Miners.
(e) DELETED.
(f) Accounting Treatment. MP Corp., MP Bank and their accountants
--------------------
shall have established to their satisfaction that, as of the Closing, the
transactions contemplated by this Agreement can be accounted for as a
"pooling of interests" for financial reporting purposes.
(g) Federal and State Securities and Antitrust Laws. MP Corp., MP
-----------------------------------------------
Bank and their counsel shall have determined to their satisfaction that, as
of the Closing, all applicable securities and antitrust laws of the federal
government and of any state government having jurisdiction over the
transactions contemplated by this Agreement shall have been complied with.
(h) DELETED.
(i) Environmental Matters. No environmental problem of the kind
---------------------
contemplated in Section 3.25 of Article III of this Agreement, and not
previously disclosed shall have been discovered which would, or which
potentially could, materially and adversely affect the condition (financial
or otherwise), assets, liabilities, business, operations or future
prospects of Miners. The result of any "Phase I environmental audit"
conducted pursuant to Section 6.16 with respect to owned or occupied bank
premises shall be reasonably satisfactory to MP Corp.
29
(j) Closing Documents. Miners shall have delivered to MP Corp. and MP
-----------------
Bank: (i) a certificate signed by Miners' Chairman of the Board or
President and by its Secretary, or such other designated and authorized
officers, verifying that, to the best of their knowledge after reasonable
investigation, all of the representations and warranties of Miners set
forth in this Agreement are true and correct in all material respects as of
the Closing and that Miners has performed in all material respects each of
the covenants required to be performed by it under this Agreement; (ii) all
consents and authorizations of landlords and other persons that are
necessary to permit this Agreement to be consummated without violation of
any lease or other agreement to which Miners is a party or by which Miners
or any of its properties are bound; and (iii) such other certificates and
documents as MP Corp., MP Bank and their counsel may reasonably request
(all of the foregoing certificates and other documents being herein
referred to as the "Bank Closing Documents").
(k) DELETED.
(l) DELETED.
(m) Support Agreement. Each of the Directors of Miners shall have
-----------------
executed and delivered to MP Corp. a "Support Agreement" in the form
attached hereto as Exhibit "B".
(n) Shareholder Approval. MP Corp. shareholders, if required, have
--------------------
approved and/or adopted this Agreement and the transactions contemplated
thereby.
Section 8.3. Conditions Precedent to the Obligations of Miners. The
----------- -------------------------------------------------
obligation of Miners to consummate this Agreement shall be subject to the
satisfaction of each of the following conditions prior to or as of the Closing,
except to the extent that any such condition shall have been waived by Miners in
accordance with the provisions of Section 9.4 of this Agreement:
(a) Accuracy of Representations and Warranties. All of the
------------------------------------------
representations and warranties of MP Corp. and MP Bank, as set forth in
this Agreement and the information contained in Schedule II and all MP
Corp./MP Bank Closing Documents (as defined in Section 8.3(e) of this
Agreement), shall be true and correct in all material respects as of the
Closing as if made on such date (or on the date to which it relates in the
case of any representation or warranty which expressly relates to an
earlier date).
(b) Covenants Performed. MP Corp. and MP Bank shall have performed or
-------------------
complied in all material respects with each of the covenants required by
this Agreement to be performed or complied with by them.
(c) DELETED.
(d) DELETED.
30
(e) Closing Documents. MP Corp. shall have delivered to Miners: (i) a
-----------------
certificate signed by its Chairman of the Board or President and its
Secretary verifying that, to the best of their knowledge after reasonable
investigation, all of the representations and warranties of MP Corp. and MP
Bank set forth in this Agreement are true and correct in all material
respects as of the Closing and that MP Corp. and MP Bank have performed in
all material respects each of the covenants required to be performed by
them; and (ii) such other certificates and documents as Miners and its
counsel may reasonably request (all of the foregoing certificates and
documents being herein referred to as the "MP Corp./MP Bank Closing
Documents").
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 9.1. Termination. This Agreement may be terminated at any time
----------- -----------
before the Effective Date (whether before or after the authorization, approval
and adoption of this Agreement by the shareholders) as follows:
(a) Mutual Consent. This Agreement may be terminated by mutual
--------------
consent of the parties upon the affirmative vote of a majority of each of
the Boards of Directors of Miners, MP Corp. and MP Bank, followed by
written notices given to each of the other parties.
(b) Unilateral Action by MP Corp. and MP Bank. This Agreement may be
-----------------------------------------
terminated unilaterally by the affirmative vote of each of the Boards of
Directors of MP Corp. and MP Bank, followed by written notice given to
Miners, if: (i) there has been a material breach by Miners of any
representation, warranty or covenant set forth in this Agreement and such
breach has not been cured within thirty (30) days after written notice of
such breach has been given by MP Corp. and MP Bank to Miners; or (ii) any
condition precedent to MP Corp.'s and MP Bank's obligations, as set forth
in Article VIII of this Agreement, remains unsatisfied, through no fault of
MP Corp. or MP Bank, on December 31, 1998.
(c) Unilateral Action By Miners. This Agreement may be terminated
---------------------------
unilaterally by the affirmative vote of a majority of the Board of
Directors of Miners, followed by written notice given to MP Corp. and MP
Bank, if: (i) there has been a material breach by MP Corp. or MP Bank of
any representation, warranty or covenant set forth in this Agreement and
such breach has not been cured within thirty (30) days after written notice
of such breach has been given to MP Corp. and MP Bank; or (ii) any
condition precedent to Miners's obligations as set forth in Article VIII of
this Agreement remains unsatisfied, through no fault of Miners, on December
31, 1998.
31
(d) Automatic Termination. If, for any reason, this transaction shall
---------------------
not have been consummated by December 31, 1998, this Agreement shall
terminate automatically as of that date unless extended, in writing, prior
to said date by mutual action of the Boards of Directors of the parties
hereto.
(e) Due Diligence Termination. MP Corp. and MP Bank may terminate
-------------------------
this Agreement by giving written notice to Miners, if any matter or thing
has come to the attention of MP Corp. in the course of its due diligence
investigation or otherwise with respect to Miners that, in its sole
opinion, leads it to believe that any such matter or thing materially and
adversely affects the financial or business performance or prospects of
Miners so that it would be inadvisable for MP Corp., in its sole and
exclusive judgment, exercised in a commercial and reasonable manner, to
proceed with this transaction.
Section 9.2. Effect of Termination.
----------- ---------------------
(a) Effect. In the event of termination, this Agreement shall become
------
null and void and the transactions contemplated herein shall thereupon be
abandoned, except that the provisions relating to limited liability and
confidentiality set forth in Sections 9.2(b) and 9.2(c) of this Agreement
shall survive.
(b) Limited Liability. The termination of this Agreement in
-----------------
accordance with the terms of Section 9.1 shall create no liability on the
part of any party, or on the part of any party's directors, officers,
shareholders, agents or representatives, except that if this Agreement is
terminated by MP Corp. and MP Bank by reason of a material breach by
Miners, or if this Agreement is terminated by Miners by reason of a
material breach by MP Corp. or MP Bank, and such breach involves an
intentional, willful or grossly negligent misrepresentation or breach of
covenant, the breaching party shall be liable to the non-breaching party or
parties for all costs and expenses reasonably incurred by the non-breaching
party or parties in connection with the preparation, execution and
consummation of this Agreement, including the fees of its or their counsel,
accountants, consultants and other representatives.
(c) Confidentiality. In the event of the termination of this
---------------
Agreement, neither MP Corp. nor MP Bank nor Miners shall use or disclose to
any other person any confidential information obtained by it during the
course of its investigation of the other party or parties.
Section 9.3. Amendment. To the extent permitted by law, this Agreement
----------- ---------
may be amended at any time before the Effective Date (whether before or after
the authorization, approval and adoption of this Agreement by the shareholders
of Miners) by a written instrument duly authorized, executed and delivered by MP
Corp. and MP Bank and by Miners; provided, however, that any amendment to the
provisions of Article II of this Agreement relating to the consideration to be
received by the former shareholders of Miners in exchange for their shares of
Miners Common Stock shall not take effect until such amendment has been
approved, adopted or ratified by the shareholders of Miners in accordance with
applicable federal and state law.
32
Section 9.4. Waiver. Any term or condition of this Agreement may be
----------- ------
waived, to the extent permitted by law, by the party or parties entitled to the
benefit thereof at any time before the Effective Date (whether before or after
the authorization, approval and adoption of this Agreement by the shareholders
of Miners) by a written instrument duly authorized, executed and delivered by
such party or parties.
ARTICLE X
RIGHTS OF DISSENTING SHAREHOLDERS OF MINERS
-------------------------------------------
Section 10.1. Rights of Dissenting Shareholders of Miners. The
------------ -------------------------------------------
shareholders of Miners shall be entitled to and may exercise dissenters' rights
if and to the extent they are entitled to do so under the provisions of the
Banking Code or applicable law.
ARTICLE XI
CLOSING AND EFFECTIVE DATE
--------------------------
Section 11.1. Closing. Provided that all conditions precedent set forth
------------ -------
in Article VIII of this Agreement shall have been satisfied or shall have been
waived in accordance with Section 9.4 of this Agreement, the parties shall hold
a closing (the "Closing") at the offices of MP Corp. at 000 Xxxxx Xxxxxx, P. O.
Box 111 Millersburg, Pennsylvania, or such other mutually agreed upon location,
within sixty (60) days after the receipt of all required regulatory approvals
and after the expiration of all applicable waiting periods, at which time the
parties shall deliver the Miners Closing Documents, the MP Corp./MP Bank Closing
Documents, and such other documents and instruments as may be necessary or
appropriate to effectuate the purposes of this Agreement.
Section 11.2. Effective Date. The Merger of Miners with and into MP Bank
------------ --------------
shall become effective and this Agreement and the Bank Merger Agreement shall be
consummated on the date upon which Articles of Merger shall be filed with the
Pennsylvania Department of State, or such later date as shall be specified as
the Effective Date in the Articles of Merger pursuant to the mutual agreement of
MP Corp., MP Bank and Miners and in accordance with the Pennsylvania Banking
Code ("Effective Date"). At the Effective Date, Miners shall cease to exist as
a separate banking institution, and MP Bank shall become the surviving
institution of the Merger.
33
ARTICLE XII
NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES
---------------------------------------------
Section 12.1. No Survival. The representations and warranties of Miners
------------ -----------
and of MP Corp. and MP Bank set forth in this Agreement shall expire and be
terminated on the Effective Date by consummation of this Agreement, and no such
representation or warranty shall thereafter survive.
ARTICLE XIII
POST-MERGER AGREEMENTS
----------------------
Section 13.1. Employees.
------------ ---------
(a) Immediately after the Effective Date, MP Bank shall employ all of
the former Miners employees who are employed by Miners immediately prior to
the Effective Date. The aggregate cost of the compensation and benefit
package of such employees shall not be less after the Effective Date than
immediately prior to the Effective Date and will not be reduced during
their employment.
(b) Immediately following the Effective Date, former Miners employees
who are employed by MP Bank shall be entitled to participate in all
benefit, health, incentive, retirement, life insurance, disability, eye and
dental, performance award, vacation, leave and personal days plans,
policies and programs in effect at such time for employees of MP Bank,
subject, however, to the terms of such plans. Former Miners employees who
are employed by MP Bank shall receive service credit from their respective
hire dates for employment at Miners for purposes of eligibility and vesting
requirements under MP Bank's benefit plans and vacation plans.
(c) Immediately after the Effective Date, Xxxxx Xxxxxxx shall be
employed by MP Bank as Executive Vice President, with the aggregate cost of
his compensation and benefits package to be no less than the cost of his
total compensation and benefits package in effect immediately prior to the
date of this Agreement.
(d) Immediately after the Effective Date, Xxxx Xxxxxx shall be
employed by MP Bank as Vice President and Chairman of the Salary and Human
Resource Committee of MP Bank, with the aggregate cost of his compensation
and benefits package to be no less than the cost of his total compensation
and benefits package in effect immediately prior to the date of this
Agreement.
34
Section 13.2. Miners Office Board.
------------ -------------------
(a) Composition; Term; Duties. Immediately following the Effective
-------------------------
Date and until fewer than three (3) of the original members remain, there
shall be established an advisory board (the "Miners Office Board")
comprised of the following members of the Board of Directors of Miners as
of the date of this Agreement and for the position on the Board as
indicated, if any: Xxxxx Xxxxxxx, Xxxxxxxx Xxxx (Chairman and President),
Xxxx Xxxxxx, Xxxxxxx Xxxxxx (Vice Chairman and Secretary), Don Xxxxx,
Xxxxxxx Xxxxxxx, Xxxxxx Jury, and Xxxxxxxx Xxxxxx. Except as provided
herein, the Board of Directors of MP Bank shall determine from time to
time, the duties, obligations and responsibilities of the Miners Office
Board. Members of the Miners Office Board who are age 66 or older shall be
grandfathered for a five (5) year period commencing on the Effective Date
from the MP Bank mandatory retirement policy at age 70.
(b) Fees of Miners Office Board Members. Following the Effective
-----------------------------------
Date, members of the Miners Office Board shall receive fees for services no
less than those currently received as a Miners Board member for service as
a Miners Office Board member and as a member of the MP Bank Board, as may
be the case. Miners Office Board members who also serve on the MP Bank
Board of Directors shall receive the full fees paid to MP Bank Board
members. In no case, however, shall the fees paid to any Miners Office
Board member who serves on both Boards, for his service as a member of the
Miners Office Board, exceed $1,800. Miners Office Board salaried members
shall have salaries and bonuses continued for a five (5) year period
following the Effective Date.
(c) Benefits. Members of the Miners Office Board shall continue to
--------
receive the benefits received by them in their capacity as Miners'
Directors immediately before the Effective Date for service on the Miners
Office Board, and such benefits, subject to the terms and conditions of MP
Bank's Plans, shall be continued for a period of five (5) years following
the Effective Date, as follows:
1. For five years following the Effective Date, members of the
Miners Office Board who, prior to the Effective Date, were enrolled
in the Blue Cross/Blue Shield Plan of Miners shall be entitled to
have 100% of the premiums paid by MP Bank for participation in MP
Bank's current Blue Cross/Blue Shield health insurance plan, subject
to the terms and conditions of the plans.
2. For five years following the Effective Date, medical insurance
for widows and retired employees, covered by Miners as of the date of
this Agreement, will, subject to the terms and conditions of those
plans, be provided by MP Bank, at MP Bank's expense.
3. For five years following the Effective Date, MP Bank shall use
its best efforts to obtain eye and dental insurance coverage for the
members of the Miners Office Board, who prior to the Effective Date
were covered under the Miners eye and dental plan, under the MP Bank
Blue Cross/Blue Shield Plan. If such plan is not
35
available, MP Bank will include the members of the Miners Office
Board in its eye and dental plan, subject to the terms and conditions
of the Plans.
4. For five years following the Effective Date, MP Bank shall
pay 100% of the premiums for the current group life insurance
policies for the members of the Miners Office Board, subject to the
availability of such continued participation.
If such participation or Plan is not available, MP Bank will use its best
efforts to obtain coverage in another group health, life, eye and dental,
insurance plan, the benefits and terms of which are comparable, for the
remainder of the five-year period.
Section 13.3. Board Appointments.
------------ ------------------
Immediately after the Effective Date, the following persons shall be
appointed to serve as members of the Board of Directors of MP Bank until
the 1999 Annual Meeting of Shareholders, and until their successors are
elected and qualified: Xxxx Xxxxxx and Xxx Xxxxx. Xx. Xxxxxx shall also
serve as a member of the Trust Committee of MP Bank. Xx. Xxxxx shall serve
as a member of the Executive Committee of MP Bank.
Section 13.4. Merger of Profit Sharing Plans.
------------ ------------------------------
Miners Profit Sharing Retirement Plan shall be merged into MP Bank's
Profit Sharing Retirement Plan as soon as practicable.
ARTICLE XIV
GENERAL PROVISIONS
------------------
Section 14.1. Expenses. Except as provided in Section 9.2(b) of this
------------ --------
Agreement, each party shall pay its own expenses incurred in connection with
this Agreement and the consummation of the transactions contemplated herein.
For purposes of this Section 14.1, the cost of printing the Proxy
Statement/Prospectus shall be deemed to be an expense of MP Corp. and MP Bank.
Section 14.2. Other Mergers and Acquisitions. Subject to the right of
------------ ------------------------------
Miners to not consummate this Agreement pursuant to Section 9.1(c) of this
Agreement, nothing set forth in this Agreement or any Exhibit hereto shall be
construed:
(a) to preclude MP Corp. from acquiring, or to limit in any way the
right of MP Corp. to acquire, prior to or following the Effective Date, the
stock or assets of any other financial services institution or other
corporation or entity, whether by issuance or exchange of MP Corp. Common
Stock or otherwise;
36
(b) to preclude MP Corp. from issuing, or to limit in any way the
right of MP Corp. to issue, prior to or following the Effective Date, MP
Corp. Common Stock or other securities;
(c) to preclude MP Corp. from granting options at any time with
respect to MP Corp. Common Stock or other securities;
(d) to preclude option holders of MP Corp. from exercising options at
any time with respect to MP Corp. Common Stock or other securities; or
(e) to preclude MP Corp. from taking, or to limit in any way the right
of MP Corp. to take, any other action not expressly and specifically
prohibited by the terms of this Agreement.
Section 14.3. Access; Confidentiality. The parties hereby agree to
------------ -----------------------
conduct the investigations and discussions contemplated by Section 6.3 and
Section 7.2 of this Agreement in a manner so as to not interfere unreasonably
with normal operations and customer and employee relationships. If the
transactions contemplated by this Agreement are not consummated, the parties
hereby agree to destroy or return all documents and records obtained from the
other or their respective representatives, during the course of any
investigation and will cause all information with respect to the other party
obtained pursuant to this Agreement or preliminarily thereto to be kept
confidential, except to the extent such information becomes public through no
fault of the party which has obtained such information or any of its respective
representatives or agents and except to the extent disclosure of any such
information is legally required. Each party hereby agrees to give the other
party prompt notice of any contemplated disclosure where such disclosure is so
legally required.
Section 14.4. Notices. All notices, claims, requests, demands and other
------------ -------
communications which are required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly delivered if delivered
in person, transmitted by facsimile machine (but only if receipt is acknowledged
in writing), mailed by registered or certified mail, return receipt requested or
sent by recognized overnight delivery service guaranteeing next day delivery
addressed as follows:
(a) If to Mid Penn Bancorp, Inc. and/or Mid Penn Bank, to:
Xx. Xxxxxx X. Xxxxxxx
Chairman, President & Chief Executive Officer
MID PENN BANCORP, INC.
000 Xxxxx Xxxxxx, P. O. Xxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
37
(b) If to Miners Bank of Xxxxxx to:
Xx. Xxxxxxxx X. Xxxx
President and Chief Executive Officer
MINERS BANK OF LYKENS
000 Xxxx Xxxxxx, P. O. Xxx 00
Xxxxxx, Xxxxxxxxxxxx 00000
Section 14.5. Captions. The captions contained in this Agreement are for
------------ --------
reference purposes only and are not part of this Agreement.
Section 14.6. Counterparts. This Agreement may be executed simultaneously
------------ ------------
in several counterparts, each of which shall be deemed an original, but all such
counterparts together shall be deemed to be one and the same instrument.
Section 14.7. Severability. If any provision of this Agreement or the
------------ ------------
application thereof to any party or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other parties or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
Section 14.8. Parties in Interest. This Agreement shall be binding upon
------------ -------------------
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, that the rights and obligations of any party
under this Agreement may not be assigned or delegated by that party without the
prior written consent of each other party.
Section 14.9. Entire Agreement. This Agreement, including the documents
------------ ----------------
and other writings referred to herein or delivered pursuant hereto, sets forth
the entire understanding and agreement of the parties hereto and supersedes any
and all prior agreements, arrangements and understandings, oral or written,
relating to the subject matter hereof.
Section 14.10. Governing Law. This Agreement shall be governed by and
------------- -------------
construed in accordance with the domestic internal laws of the Commonwealth of
Pennsylvania, without regard to the conflict laws principles thereof.
38
IN WITNESS WHEREOF, intending to be legally bound hereby, this Agreement is
executed as of the day and year first above written.
ATTEST: MID PENN BANCORP, INC.
By: ______________________ By: ______________________________________
Xxxxx X. Xxxxxx Xxxxxx X. Xxxxxxx, Chairman
Secretary President, and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: MID PENN BANK
By: ______________________ By: ______________________________________
Xxxxx X. Xxxxxx Xxxx X. Xxxxx, President and
Secretary Chief Executive Officer
[BANK SEAL]
ATTEST: MINERS BANK OF XXXXXX
By: ______________________ By: ______________________________________
Xxxxxxx X. Xxxxxx Xxxxxxxx X. Xxxx, Xx., President and
Secretary Chief Executive Officer
[BANK SEAL]
39
Taken from Section 13.2:
(d) Liability Insurance. For a period of two years following the Effective
-------------------
Date, MP Corp. shall purchase for the benefit of the former directors of Miners,
liability insurance, commonly referred to as tail coverage on terms comparable
to the Miners insurance plan currently in effect, so long as said insurance can
be purchased from a reputable insurer at commercially reasonable rates and
terms, including the term that such policy be on a "claims made" basis.
Taken from page 2, Section 2.1 - (d):
Closing Market Price. For purposes of this Agreement, the Closing Market
--------------------
Price shall be the arithmetic average of the per share closing prices for MP
Corp. Common Stock for the twenty (20) trading days immediately preceding the
date which is five (5) business days before the Effective Date, as reported on
the American Stock Exchange ("AMEX"), the foregoing twenty (20) trading days
being hereinafter sometimes referred to as the "Price Determination Period".
(For example, if January 30, 1998 were to be the Effective Date, then the Price
Determination Period would be January 22, 21, 20, 16, 15, 14, 13, 12, 9, 8, 7,
6, 5, 2, December 31, 30, 29, 26, 24, 23.) In the event that AMEX shall fail to
report a closing price for MP Corp. Common Stock for any trading day during the
Price Determination Period, then the closing price for that day shall be equal
to the average of the closing bid price and the closing asked price as quoted on
AMEX for that day. In the event that AMEX shall fail to report a closing price,
closing bid price and closing asked price, respectively, for MP Corp. Common
Stock for any trading day during the Price Determination Period, then the
closing price for that day shall be equal to the average of the closing bid
prices and the closing asked prices as quoted: (i) by _________________________
and by _____________________________; or, in the event that neither of these
firms is then making a market in MP Corp. Common Stock, (ii) by two brokerage
firms then making a market in MP Corp. Common Stock to be selected by MP Corp.
and approved by Miners.
3.21 No Finder. Except as previously disclosed, Miners has not paid or become
-------
obligated to pay any fee or commission of any kind whatsoever to any broker,
finder or other intermediary for, on account of or in connection with the
transactions contemplated in this Agreement.
3.22 Significant Customers. All significant customers of Miners have been
----------
previously identified. For purposes of this Section 3.22, a "significant
customer" shall mean any customer who, at any time between January 1, 1997 and
the date of this Agreement, had or has (i) aggregate outstanding loans in the
amount of $50,000 or more, or (ii) aggregate daily deposits in the amount of
$50,000 or more.
3.33 Absence of Questionable Payments. Miners has not, nor, to the knowledge of
-------------------------
Miners, has any director, officer, agent, employee, consultant or other person
associated with or acting on behalf of Miners (i) used any Miners corporate
funds for unlawful contributions, gifts, entertainment or unlawful expenses
relating to political activity; or (ii) made any direct or indirect unlawful
payments to governmental officials from any Miners corporate funds, or
established or maintained any unlawful or unrecorded accounts with funds
received from Miners.
40
3.34 Powers of Attorney; Guarantees. Except as previously disclosed, Miners
------------------------------
does not have any power of attorney outstanding, or any obligation or liability
either actual, construing or contingent, as guarantor, surety, cosigner,
endorser, co-maker or indemnitor in respect of the obligation of any person,
corporation, partnership, joint venture, association, organization or other
entity, except for letters of credit issued in the ordinary course of business
which have been previously disclosed.
3.37 Derivatives. Except as previously disclosed, Miners does not own or hold
-----------
any derivatives, "caps", or "floors", in its investment portfolio.
3.39 Loan Portfolio. Except as previously disclosed, all evidences of
--------------
indebtedness reflected as assets of Miners are in all respects binding
obligations of the respective primary obligors associated therewith, and no
material amount thereof is subject to any defenses known to Miners which may be
asserted against Miners. Except as previously disclosed, Miners has delivered
to MP Corp. a true and correct list and brief description of all real property
(other than personal residences) in which Miners has an interest as a creditor
or mortgagee securing an amount or amounts greater than $25,000 to one borrower
or a series of related borrowers. Except as set forth in such list (i) there
are no outstanding loans by Miners with an unpaid balance of $10,000 or more on
which a default has occurred, and (ii) Miners has no loans reflected as assets
in such financial statements which have principal balances in excess of $10,000
except for fully-secured mortgage loans. For purposes hereof, "default" shall
include, but not be limited, to a failure of an obligor to make payments with
respect to any loans for 30 days or more past the due date for such payment.
3.40 Annual Meeting Documents. Miners has delivered, or will deliver, to MP
---- ------------------------
Corp. copies of its (i) annual reports to shareholders for the three years ended
December 31, 1997, 1996 and 1995, (ii) semi-annual reports to shareholders for
the period ended September 30, 1997, and (iii) proxy materials used or for use
in connection with its meetings of shareholders held in 1997, 1996 and 1995.
3.41 Trust Department and Fiduciary Relationships. Miners has established,
--------------------------------------------
maintained and administered all fiduciary and custodian relationships, accounts
and agreements; and undertaken and performed all fiduciary and custodian duties,
obligations, and responsibilities in compliance with all applicable laws,
statutes, rules, regulations and the governing instruments of such fiduciary and
custodian relationships.
4.4 Articles of Incorporation and Bylaws. The copies of the Articles of
----------------------------
Incorporation, as amended, and of the Bylaws, as amended, of MP Corp. which have
been delivered to Miners are true, correct, and complete in all material
respects.
6.1 (u) not make any loan or other credit facility commitment in excess of
$100,000 (including without limitation, lines of credit and letters of credit)
to any affiliate or compromise, expend, renew or modify any such outstanding
commitment;
41
(v) not enter into any swap or similar commitment, agreement or
arrangement which is not consistent with past practice and which increases
the credit or interest rate risk over the levels existing at September 30,
1997;
(w) not enter into any derivative, cap or floor or similar commitment,
agreement or arrangement, except in the Ordinary Course of Business and
consistent with past practices;
6.15 Professional Fees. Miners shall not incur professional expenses in
-----
connection with the transactions contemplated by this Agreement in excess of
$30,000, unless Miners and MP Corp. mutually agree, in writing, to increase such
amount because of unique and unforeseen circumstances. Such professional
expenses shall include those paid and payable to attorneys, accountants,
consultants and investment bankers.
6.17 Loan Loss Reserves. Miners shall increase its Loan Loss Reserves by
--------------
$_______ from the date hereof to Closing.
8.1(C) Opinion of Counsel for Miners. Miners shall have delivered to MP
----------------------
Corp. and MP Bank an opinion of its counsel in form and substance reasonably
satisfactory to MP Corp. and MP Bank, to the effect that, as of the Closing:
(i) Miners is a Pennsylvania state-chartered banking institution,
duly organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania and has full power and lawful
authority to own and hold its properties and to carry on its present
business;
(ii) Miners is an insured bank under the provisions of the
Federal Deposit Insurance Act, as amended;
(iii) the authorized capital of Miners consists exclusively of
15,000 shares of common stock of the par value of five dollars ($5.00)
par value per share, of which 15,000 shares are validly issued, 14,825
shares are outstanding, fully paid and non-assessable and 175 shares
are held as treasury shares; and, to the knowledge of such counsel
after reasonable inquiry, there are no outstanding obligations,
options or rights of any kind entitling other persons to purchase or
sell any such shares, and there are no outstanding securities or other
instruments of any kind convertible into such shares;
(iv) Miners has full corporate power and authority to execute and
deliver this Agreement and to carry out the transactions contemplated
herein, and all corporate actions required to be taken by Miners to
authorize the execution and delivery of this Agreement and the
performance of the transactions contemplated herein have been taken;
42
(v) this Agreement has been duly executed and delivered by Miners
and, assuming due authorization, execution and delivery by MP Corp.
and MP Bank, constitutes a valid and binding obligation of Miners and
is enforceable against Miners in accordance with its terms, subject to
bankruptcy, insolvency, and other laws of general applicability
relating to or affecting creditors' rights and general equity
principles;
(vi) the performance of this Agreement by Miners will not violate
the Articles of Incorporation or the Bylaws of Miners or, to the
knowledge of such counsel after reasonable inquiry, any applicable
statute, rule, regulation, order, decree, directive, consent
agreement, memorandum of understanding, contract, indenture or other
instrument to which Miners is a party or by which its properties are
bound;
(vii) to the knowledge of such counsel after reasonable inquiry,
there is no action, suit or proceeding, pending or threatened, of the
kind contemplated under Section 8.1(e) of this Agreement;
(viii) to the knowledge of such counsel after reasonable
inquiry, there is no action, suit or proceeding pending or threatened
against Miners (except as previously disclosed or in such counsel's
opinion) that, if determined adversely to Miners, would have a
material and adverse effect upon the condition (financial or
otherwise), assets, liabilities, business or operations of Miners;
(ix) no consent, approval, authorization or order of any federal,
state or local court or governmental authority is required to be
obtained by Miners in connection with the consummation of the
transactions contemplated in this Agreement, other than such consents,
approvals, authorizations and orders as have been obtained prior to
the Closing; and
(x) such other legal matters incident to the matters contemplated
hereby as may reasonably be requested by MP Corp. and MP Bank.
For purposes of Clause (viii) above, any action, suit or proceeding
seeking to recover from Miners damages, fines, penalties or other relief
having a monetary value of $10,000 or more shall be deemed to be
"material". In giving the foregoing opinion, such counsel may rely as to
matters of fact without independent investigation, to the extent such
counsel deems such reliance necessary, appropriate, and reasonable,
provided, however, that such reliance is expressly noted in such opinion,
and on certificates of federal, state or local governmental officials and
on certificates of officers and directors of Miners. Such counsel may
expressly exclude any opinions as to choice of law matters and antitrust
matters and may add other qualifications and explanations of the basis of
its opinions as are reasonably acceptable to MP Corp. and MP Bank.
43
[The opinion of Miners' counsel shall be governed by the Legal Opinion
Accord ("Accord") of the American Bar Association Section of Business Law
(1991). The term "Actual Knowledge" as used herein shall have the meaning
set forth in the Accord. In addition, such opinion may be limited to
present statutes, regulations, rulings and formal agency and judicial
interpretations and to facts as they presently exist; in rendering such
opinion, such counsel need assume no obligation to revise or supplement it
should the present laws be changed by the legislative or regulatory action,
judicial decision or otherwise after such opinion is rendered. Such
counsel may assume that any agreement is the valid and binding obligation
of any parties to such agreement other than Miners. In giving such
opinion, such counsel may rely as to all matters of facts or certificates
of officers or directors of Miners and certificates of public officials, so
long as such reliance and the facts thereunder are expressly stated. Such
counsel's opinion shall be limited to matters governed by federal laws and
by the laws of the Commonwealth of Pennsylvania. With respect to matters
involving the application of Pennsylvania law, such counsel may rely, to
the extent it deems proper and as specified in its opinion, upon the
opinion of local counsel.]
8.1(E) Accountants' Comfort Letter. MP Corp. shall have received "comfort"
---------------
letters from Miners' independent certified public accountants dated (i) the date
of the mailing of the Proxy Statement and (ii) the Effective Date, in each case
substantially to the effect that:
(A) it is a firm of independent public accountants with respect
to Miners within the rules and regulations of the SEC;
(B) in its opinion, the audited financial statements of Miners
examined by it and included in the Proxy Statement comply as to form
in all material respects with the applicable rules and regulations of
the SEC; and
(C) on the basis of specified procedures (which do not constitute
an examination in accordance with generally accepted auditing
standards), nothing has come to its attention which causes it to
believe: (1) that the financial statements, if any, of Miners
included in such Proxy Statement do not comply in all material
respects with the applicable accounting requirements and with the
rules and regulations of the SEC and (2) that any such unaudited
financial statements of Miners from which unaudited, quarterly
financial information set forth in such Proxy Statement has been
derived, are not fairly presented in conformity with generally
accepted accounting principles applied on a basis consistent with that
of the audited financial statements.
8.1 (h) Dissenting Shareholders. Holders of no more than five percent (5%)
-----------------------
of the issued and outstanding shares of Miners shall have exercised their
statutory appraisal or Dissenters' Rights.
8.1 (k) Miners's Shareholders Equity. The total shareholders equity of Miners
----------------------------
(excluding the reserve for loan losses), on a generally accepted accounting
basis, on the Effective Date shall be no less than
___________________________________ Dollars ($__00,000).
44
8.1 (l) Benefit Plans. MP Corp. and MP Bank shall have determined, within 60
-------------
days of the execution of this Agreement, that the medical, health, insurance,
and employee benefit plans or programs of Miners shall not contain any provision
or term which, upon assumption by MP Corp. or MP Bank, on the Effective Date
would require MP Corp. or MP Bank to provide benefits or incur cost in excess of
those provided or paid by MP Corp. or MP Bank to or on behalf of its existing
employees.
8.3 (c) Opinion of Counsel for MP Corp. and MP Bank. MP Corp. and MP Bank shall
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have delivered to Miners an opinion of its special counsel, Xxxxxxxx Xxxxxxxx,
P.C., in form and substance reasonably satisfactory to Miners, to the effect
that, as of the Closing:
(i) MP Corp. is a business corporation that is duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania;
(ii) MP Corp. is a registered bank holding company under the Bank
Holding Company Act of 1956, as amended, and has full corporate power
and authority to own and hold its properties and to carry on its
present business;
(iii) MP Bank is a Pennsylvania state-chartered banking
institution that is duly organized and validly existing under the laws
of the Commonwealth of Pennsylvania and of the United States and has
full corporate power and authority to own and hold its properties and
to carry on its present business;
(iv) MP Corp. and MP Bank have full corporate power and authority
to execute and deliver this Agreement and to carry out the
transactions contemplated herein, and all corporate actions required
to be taken by MP Corp. and MP Bank to authorize the execution and
delivery of this Agreement and the performance of the transactions
contemplated herein have been taken;
(v) this Agreement has been duly authorized, executed and
delivered by MP Corp. and MP Bank and, assuming due authorization,
execution and delivery by Miners, constitutes a valid and binding
obligation of each of MP Corp. and MP Bank and is enforceable against
MP Corp. in accordance with its terms, subject to bankruptcy,
insolvency, and other laws of general applicability relating to or
affecting creditors' rights and general equity principles;
(vi) to the knowledge of such counsel, there is no action, suit,
or proceeding pending or threatened against MP Corp. or MP Bank
(except as described in Schedule II to this Agreement or in such
counsel's opinion) that, if determined adversely to MP Corp. or MP
Bank, would have a material and adverse affect upon the condition
(financial or otherwise), assets, liabilities, business or operations
of MP Corp. or MP Bank;
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(vii) to the knowledge of such counsel after reasonable
investigation, there is no action, suit or proceeding pending or
threatened of the kind contemplated under Section 8.1(e) of this
Agreement;
(viii) the shares of MP Corp. Common Stock to be issued under
this Agreement have been duly authorized and, when issued, will be
validly issued, fully paid and non-assessable;
(ix) no consent, approval, authorization or order of any federal,
state or local court or governmental authority is required to be
obtained by MP Corp. or MP Bank in connection with the consummation of
the transactions contemplated in this Agreement, other than such
consents, approvals, authorizations and orders as have been obtained
prior to the Closing; and
(x) such other legal matters incident to the matters contemplated
hereby as may reasonably be requested by Miners.
In giving the foregoing opinion, such counsel may rely as to matters
of fact without reasonable investigation, to the extent such counsel deems
such reliance necessary, appropriate and reasonable, provided, however,
that such reliance is expressly noted on such opinion, and on certificates
of federal, state or local governmental officials and on certificates of
officers and directors of MP Corp. and MP Bank. Such counsel may exclude
any opinions as to choice of law matters and antitrust matters and may add
other qualifications and explanations of the basis of its opinions as are
reasonably acceptable to Miners.
8.3 (d) Fairness Opinion. Miners shall have obtained from an independent
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financial advisor selected by the Board of Directors of Miners, an opinion,
dated as of the date of the Proxy Statement/Prospectus for the special or annual
meeting of Miners' shareholders, contemplated by Section 6.2(b) of this
Agreement, stating that the consideration to be received by the holders of
Miners Common Stock is fair, from a financial point of view, to such
shareholders.
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