2.10 Upset Condition.
2.10.1 The "Upset Condition" shall have occurred if both of the following conditions exist as of the last
day of the Pricing Period: (a) the Average Purchaser Closing Price is less than $22.3953 (the "Floor Purchaser Price"); and (b) the number determined by dividing the Average Purchaser
Closing Price by $27.9941 is less than the number obtained by subtracting (i) 20% from (ii) the quotient obtained by dividing the Final Index Price by the Initial Index Price. The "Initial
Index Price" means the $116.18 closing price of the KBW Nasdaq Regional Banking Index (KRX) on July 23, 2024. The "Average Purchaser Closing Price" means the average volume weighted trading price per share of Purchaser Common Stock on which shares of Purchaser Common Stock were actually traded in transactions reported on the
Nasdaq stock exchange during the ten (10) trading days immediately preceding the date that is seven (7) Business Days prior to the Closing Date (the "Pricing
Period"). The "Final Index Price" means the closing price of the KBW Nasdaq Regional Banking Index (KRX) on the last day of the Pricing Period.
2.10.2 If the Upset Condition exists as of the last day of the Pricing Period, Company shall have the right, exercisable at any time prior to 5:00 p.m., Eastern Time on
the second Business Day after the last day of the Pricing Period (the "Exercise Period") to (a) proceed with the Merger on the basis of the Per Share Merger Consideration as calculated
pursuant to Section 2.1, subject to applicable adjustment as provided in Section 2.9, by delivering to Purchaser within the Exercise Period written notice of its
decision to do so or by failing to deliver any notice to Purchaser; or (b) request Purchaser to adjust the Per Share Merger Consideration, by delivering to Purchaser within the Exercise Period written notice
to such effect (an "Increase Notice"), to a Per Share Merger Consideration computed by multiplying the Per Share Merger Consideration by a fraction that has as its numerator the Floor
Purchaser Price and that has as its denominator the Average Purchaser Closing Price (the "Adjusted Per Share Merger Consideration").
2.10.3 If the Upset Condition occurs and Purchaser receives an Increase Notice, Purchaser shall either accept or decline the Adjusted Per Share Merger Consideration by
delivering written notice of its decision to Company at or before 5:00 p.m., Eastern Time on the second Business Day after receipt of the Increase Notice (the "Acceptance Period"). If
Purchaser accepts the Adjusted Per Share Merger Consideration within the Acceptance Period, this Plan of Merger shall remain in effect in accordance with its terms except that the Per Share Merger Consideration shall be equal to the Adjusted Per
Share Merger Consideration. If Purchaser declines the Adjusted Per Share Merger Consideration or fails to deliver written notice of its decision to accept or decline the Adjusted Per Share Merger Consideration within the Acceptance Period, the
Merger shall be abandoned and this Plan of Merger shall thereupon terminate without further action by Company or Purchaser effective as of 5:00 p.m., Eastern Time on the Business Day following the expiration of the Acceptance Period; provided, that if Purchaser so declines the Adjusted Per Share Merger Consideration or fails to deliver written notice of its decision to accept or decline the Adjusted Per Share Merger Consideration within the
Acceptance Period, Company may, by written notice delivered to Purchaser at or before 5:00 p.m., Eastern Time on the Business Day following the expiration of the Acceptance Period, elect to proceed with the Merger on the basis of the Per Share
Merger Consideration calculated in accordance with Section 2.1, subject to applicable adjustment as provided in Section 2.9, and, upon such election, no abandonment
of the Merger or termination of the Plan of Merger shall be deemed to have occurred, this Plan of Merger shall remain in effect in accordance with its terms, and the Closing shall thereafter occur, in accordance with the terms of this Plan of
Merger.
2.11 Dissenting Shares. Notwithstanding any other provision of this Plan of Merger to the contrary, shares of Company Common Stock that are
outstanding immediately prior to the Effective Time and which are held by shareholders who shall have not voted in favor of the Merger or consented thereto in writing and who properly shall have demanded payment of the fair value for such shares in
accordance with the MBCA (collectively, the "Dissenters’ Shares") shall not be converted into or
represent the right to receive the Per Share Merger Consideration. Such shareholders instead shall be entitled to receive payment of the fair value of such shares held by them in accordance with the provisions of the MBCA, except that all
Dissenters’ Shares held by shareholders who shall have failed to perfect or who effectively shall have withdrawn or otherwise lost their rights as dissenting shareholders under the MBCA shall thereupon be deemed to have been converted into and to
have become exchangeable, as of the Effective Time, for the right to receive, without any interest thereon, the Per Share Merger Consideration upon surrender in the manner provided in Section 2.2 of the Certificates or Book-Entry Shares
that, immediately prior to the Effective Time, evidenced such shares. The Company shall give Purchaser: (a) prompt notice of any written demands for payment of fair value of any shares of Company Common Stock, attempted withdrawals of such demands
and any other instruments served pursuant to the MBCA and received by the Company relating to shareholders’ dissenters’ rights; and (b) the opportunity to participate in all negotiations and proceedings with respect to demands under the MBCA
consistent with the obligations of the Company thereunder. The Company shall not, except with the prior written consent of Purchaser, (i) make any payment with respect to such demand, (ii) offer to settle or settle any demand for payment of fair
value or (iii) waive any failure to timely deliver a written demand for payment of fair value or timely take any other action to perfect payment of fair value rights in accordance with the MBCA.
ARTICLE III
COMPANY'S REPRESENTATIONS AND WARRANTIES
On or prior to the date hereof, Company has delivered to Purchaser a schedule (the "Company Disclosure Letter") setting forth, among
other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of the representations or warranties contained in this
Article III or to one or more of its covenants contained in Article V. Accordingly, Company hereby represents and warrants to Purchaser as follows, except as set
forth on the Company Disclosure Letter:
3.1 Authorization, No Conflicts, Etc.
3.1.1 Authorization of Plan of Merger. Company has the requisite corporate power and authority to execute and deliver this
Plan of Merger, to perform its obligations hereunder and, subject to the affirmative vote of the holders of at least a majority of the outstanding shares of Company Common Stock entitled to vote to approve the Plan of Merger (the "Company Shareholder Approval"), to consummate the transactions contemplated by this Plan of Merger. This Plan of Merger has been duly adopted, and the consummation of the Merger and the other
transactions contemplated by this Plan of Merger have been duly authorized, at a meeting duly called and held, by the Company Board of Directors. The Company Board of Directors at such meeting has unanimously (a) determined that the terms of this
Plan of Merger are advisable, fair to and in the best interests of Company and the Company Shareholders, and (b) adopted this Plan of Merger, approved and authorized the transactions contemplated by this Plan of Merger and, subject to Section 5.3.5, resolved to recommend approval by the Company Shareholders of this Plan of Merger and the transactions contemplated by it (such recommendation, the "Company Board Recommendation") and (c) directed this Plan of Merger and the Merger be submitted to the Company Shareholders for approval. Except for the Company Shareholder Approval, no other corporate proceedings on the part of
Company are necessary to authorize this Plan of Merger or to consummate the Merger. This Plan of Merger has been duly executed and delivered by, and (assuming due authorization, execution and delivery by Purchaser) constitutes valid and binding
obligations of, Company and is enforceable against Company in accordance with its terms, except to the extent that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or
hereafter in effect, relating to creditors' rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
3.1.2 No Conflict, Breach, Violation, Etc. The execution, delivery, and performance of this Plan of Merger by Company and
the consummation of the Merger, do not and will not violate, conflict with, or result in a breach of: (a) any provision of the articles of incorporation or bylaws (or similar organizational documents) of Company or any Subsidiary of Company (each a
"Company Subsidiary" and collectively, the "Company Subsidiaries"); or (b) any Law or Order applicable to Company or any Company
Subsidiary, in each case assuming the timely receipt of each of the approvals referred to in Section 3.1.4.
3.1.3 Regulatory Restrictions. Subject to Section 3.1.4, the execution, delivery,
and performance of this Plan of Merger by Company and the consummation of the Merger do not and will not violate, conflict with, result in a breach of, constitute a default under, or require any consent, approval, waiver, extension, amendment,
authorization, notice, or filing under, any cease and desist order, written agreement, memorandum of understanding, board resolutions or other regulatory agreement or commitment with or from a Governmental Entity to which Company or any Company
Subsidiary is a party or subject, or by which Company or any Company Subsidiary is bound or affected.
3.1.4 Required Approvals. No notice to, filing with, authorization of, exemption by, or consent or approval of any
Governmental Entity or any stock market, stock exchange or over-the-counter market on which Company Common Stock is listed or quoted for trading is required for the consummation of the transactions contemplated by this Plan of Merger by Company
other than in connection or compliance with (a) the filing of the Certificate of Merger in accordance with the MBCA, (b) such consents, approvals, orders, authorizations, registrations, declarations, notices and
filings as may be required under applicable federal securities, state securities or "blue sky" Laws, and (c) the consents, authorizations, approvals, or
exemptions required under the Bank Holding Company Act, the Federal Reserve Act, and the Michigan Banking Code. Company has no Knowledge of any reason why the regulatory approvals referred to in this Section
3.1.4 cannot be obtained or why the regulatory approval process would be materially impeded.
3.2 Organization and Good Standing.
Company is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Michigan. Company has all requisite corporate power and authority to own, operate, and lease its
properties and assets and to carry on its business as it is now being conducted in all material respects. Company is a bank holding company duly registered as such with the Federal Reserve Board under the Bank Holding Company Act. Company is not,
and is not required to be, qualified or admitted to conduct business as a foreign corporation in any other state, except where such failure to be so qualified has not had, and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
3.3 Subsidiaries.
3.3.1 Ownership. Section 3.3.1 of the Company Disclosure Letter sets forth a true and complete list of each Company
Subsidiary as of the date of this Plan of Merger. Other than the Company Subsidiaries, Company does not have "control" (as defined in Section 2(a)(2) of the Bank Holding Company Act, using 5 percent rather than 25 percent), either directly or
indirectly, of any Person engaged in an active trade or business or that holds any significant assets. Except as set forth in Section 3.3.1 of the Company Disclosure Letter, Company or a Company Subsidiary owns all of the issued and
outstanding capital stock or other equity interests of each of the Company Subsidiaries, free and clear of any claim or Lien of any kind. All of the issued and outstanding shares of capital stock or other equity
interests of each Company Subsidiary have been, as applicable, duly authorized and validly issued and are fully paid and nonassessable and except as set forth in Section 3.3.1 of the Company Disclosure Letter, not subject to or issued in
violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right. Except as set forth in Section 3.3.1 of the Company Disclosure Letter, there is no legally binding
and enforceable subscription, option, warrant, right to acquire, or any other similar agreement pertaining to the capital stock or other equity interests of any Company Subsidiary.
3.3.2 Organization and Good Standing. Each of the Company Subsidiaries (a) is duly organized, validly existing and in good
standing under the Laws of its jurisdiction of organization; (b) is duly qualified to do business and in good standing in all jurisdictions (whether federal, state, or local) where its ownership or leasing of property or the conduct of its business
requires it to be so qualified; and (c) has all requisite corporate power and authority to own or lease its properties and assets and to carry on its business as now conducted, except in each of (b) and (c) as has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Company has made available to Purchaser true, correct and complete copies of the organizational documents of each Company
Subsidiary (and all amendments thereto) as currently in effect, and no Company Subsidiary is in default in the performance, observation or fulfillment of its obligations under such documents, except for such defaults that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect.
3.3.3 Deposit Insurance; Other Assessments. The deposit accounts of each Company Subsidiary that is a depository institution
are insured by the FDIC to the fullest extent permitted by Law, and all premiums and assessments to be paid in connection therewith have been paid by each such Company Subsidiary when due. No proceeding for the revocation or termination of such
deposit insurance is pending or, to the Knowledge of Company, threatened. Company and each Company Subsidiary has paid as and when due all material fees, charges, assessments, and the like as required by Law to each and every Governmental Entity
having jurisdiction over Company or each Company Subsidiary.
3.4 Capital Stock.
3.4.1 Classes and Shares. The authorized capital stock of Company consists of 10,200,000 shares, divided into two
classes, as follows: (a) 10,000,000 shares of common stock, no par value ("Company Common Stock"), of which 4,490,087 shares were issued and outstanding as of the close of business on
July 24, 2024 and (b) 200,000 shares of preferred stock, no par value, none of which were issued and outstanding as of the date of this Plan of Merger. As of the date of this Plan of Merger, there is no security or class of securities
outstanding that represents or is convertible into capital stock of Company. All of the issued and outstanding shares of Company Common Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.
3.4.2 Stock Plans. Section 3.4.2 of the Company Disclosure Letter sets forth, as of the date of this Plan of Merger,
(a) the number of shares of Company Common Stock that are authorized and reserved for issuance under the Company Stock Plan, and (b) the number of outstanding unvested shares of restricted stock awarded under the Company Stock Plan, including the
name of each holder thereof, the applicable grant date thereof, the vesting conditions thereof, and the dollar amount of any accrued dividend equivalents thereon. As of the date of this Plan of Merger, there are no other compensatory awards
outstanding pursuant to which Company Common Stock is issuable, or that relate to or are determined by reference to the value of Company Common Stock. All outstanding shares of Company Common Stock, and all Company Common Stock reserved for
issuance under the Company Stock Plan, when issued in accordance with the terms of the Company Stock Plan, are or will be duly authorized, validly issued, fully paid and non-assessable and not issued in violation of any preemptive rights, purchase
option, call or right of first refusal rights. Company has made available to Purchaser complete and accurate copies of the Company Stock Plan and forms of agreements evidencing restricted stock awards. All
outstanding Company restricted stock awards have been granted pursuant to, and in compliance with, the Company Stock Plan, and have been granted pursuant to one of the forms made available pursuant to the foregoing sentence, without any material
deviation therefrom.
3.4.3 Issuance of Shares. After the date of this Plan of Merger, the number of issued and outstanding shares of capital
stock of Company is not subject to change before the Effective Time, other than the issuance of shares of restricted stock in the ordinary course of business and consistent with past practice and as otherwise set forth on Section 5.1.3 of the
Company Disclosure Letter.
3.4.4 Voting Rights. Other than the issued and outstanding shares of Company Common Stock described in Section 3.4.1, neither Company nor any Company Subsidiary has outstanding any security or issue of securities the holder or holders of which have the right to vote on the approval of the Merger or this Plan of
Merger, or that entitle the holder or holders to consent to, or withhold consent on, the Merger or this Plan of Merger. Company is not party to a shareholder rights agreement, “poison pill” or similar anti-takeover agreement or plan.
3.4.5 Appraisal Rights. Except as set forth on Section 3.4.5 of the Company Disclosure Letter, no Company
Shareholder will be entitled to appraisal rights, whether pursuant to the MBCA, Company's articles of incorporation or bylaws, or any resolution of Company's Board of Directors, as a result of the consummation of the Merger.
3.5 Financial Statements. The consolidated financial statements of Company as of and for each of the three years ended December 31, 2023, 2022 and
2021 as audited by Company's independent auditors and the unaudited consolidated financial statements of Company as of and for the six months ended June 30, 2024, including all schedules and notes relating to such statements (collectively, "Company Financial Statements") fairly present, and the unaudited consolidated financial statements of Company as of and for each quarter ending after the date of this Plan of Merger until the
Effective Time, including all schedules and notes, if any, relating to such statements, will fairly present, the consolidated financial condition and the results of operations, changes in shareholders' equity, and cash flows of Company as of the
respective dates of and for the periods referred to in such financial statements, all in accordance in all material respects with GAAP, consistently applied, subject, in the case of unaudited interim financial statements, to normal, recurring
year-end adjustments (the effect of which has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect) and the absence of notes (that, if presented, would not differ materially from
those included in the Company Financial Statements). No financial statements of any entity or enterprise other than the Company Subsidiaries are required by GAAP to be included in the consolidated financial statements of Company. The Company
Financial Statements have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries.
3.6 Absence of Certain Changes or Events. Since December 31, 2023, (a) Company and the Company Subsidiaries have conducted their respective
businesses in the ordinary course consistent with past practice (other than discussions and negotiations related to this Plan of Merger), and (b) no event or events have occurred that have had, individually or in the aggregate, or would reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
3.7 Legal Proceedings. There is no Action pending or, to the Knowledge of Company, threatened, against Company or any of the Company Subsidiaries
or any of their respective properties, rights or assets (a) as of the date of this Plan of Merger, that challenges or seeks to enjoin, alter, prevent or materially delay the Merger or (b) except as set forth in Section 3.7 of the Company
Disclosure Letter, has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. There is no material unsatisfied judgment, penalty or award against Company or any of the Company
Subsidiaries. Neither Company nor any of the Company Subsidiaries, nor any of their respective properties, rights or assets, is subject to any (i) Order or any investigation by a Governmental Entity, (ii) unresolved violation, criticism or
exception by any Governmental Entity, or (iii) formal or informal inquiry by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of Company or any Company Subsidiary, in each
case of clauses (i) through (iii), which has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. No officer or director of Company or any of the Company Subsidiaries is a defendant in
any Action commenced by any shareholder of Company or any of the Company Subsidiaries with respect to the performance of his or her duties as an officer or a director of Company or any of the Company Subsidiaries under any applicable Law, except
for any Action arising out of or relating to the Merger and the transactions contemplated by this Plan of Merger.
3.8 Regulatory Filings. Since January 1, 2021, Company and each Company Subsidiary has timely filed or furnished all material reports,
registrations, statements and filings, together with any amendments required to be made with respect thereto, that they were required to file or furnish with Governmental Entities as required by applicable Law, including filings with (a) the
Michigan Secretary of State, the Michigan Department of Insurance and Financial Services, and any other state regulatory authority, (b) the Federal Reserve Board, (c) the FDIC and (d) the FFIEC. All such filings, as of their respective filing
dates, complied in all material respects with all Laws, forms, and guidelines applicable to such filings.
3.9 No Indemnification Claims. To the Knowledge of Company, no claims are outstanding against the Company or any Company Subsidiaries for
indemnification or reimbursement of any Person.
3.10 Conduct of Business; Compliance with Law.
3.10.1 Company and each Company Subsidiary has conducted its business and used its properties in compliance in all material respects with all, and are not in material
default or violation under any, applicable Orders and Laws.
3.10.2 None of Company, any Company Subsidiary, nor, to the Knowledge of Company, any director, officer, employee or agent acting in
such capacity on behalf and at the direction of Company or any Company Subsidiary, has, directly or indirectly, (a) used any funds of Company or any Company Subsidiary for unlawful contributions, unlawful gifts, unlawful entertainment or other
expenses relating to political activity, (b) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of Company or any Company Subsidiary, (c)
violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar law, (d) established or maintained any unlawful fund of monies or other assets of Company or any Company
Subsidiary, (e) made any fraudulent entry on the books or records of Company or any Company Subsidiary, or (f) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to
any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business to obtain special concessions for Company or any Company Subsidiary, to pay for favorable treatment for
business secured or to pay for special concessions already obtained for Company or any Company Subsidiary, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury
Department.
3.11 Transaction Documents. None of the information supplied or to be supplied by Company for inclusion or incorporation by reference and contained
in any Transaction Document will contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading, (a) in the case of any Transaction Document (other than the Registration Statement and the Proxy Statement) at the time it is filed or at any time it is amended or supplemented, (b) in the case of the Registration Statement, at the time
it is filed with the SEC, at any time it is amended or supplemented and at the time it becomes effective under the Securities Act, and (c) in the case of the Proxy Statement, at the date it is first mailed to the Company Shareholders and at the
time of the Company Shareholder Meeting.
3.12 Agreements With Bank Regulators. Neither Company nor any Company Subsidiary is a party to any Contract, cease and desist order, written
agreement or memorandum of understanding with, or a party to any commitment letter, board resolution or similar undertaking to, or is subject to any Order by, or, since January 1, 2021, has been ordered to pay any
civil money penalty by, or is a recipient of any extraordinary supervisory letter from, any Governmental Entity that restricts materially the conduct of Company's or a Company Subsidiary's business, or in any manner relates to the capital
adequacy, credit or reserve policies or management of Company or any Company Subsidiary (a "Regulatory Agreement"), nor has Company nor any Company Subsidiary been advised by any
Governmental Entity since January 1, 2021 that a Governmental Entity is contemplating issuing or requesting an Order or a Regulatory Agreement. Neither Company nor any Company Subsidiary is required by Section 32 of the FDI Act or FDIC Regulation
Part 359 or the Federal Reserve Board to give prior notice to a federal banking agency of the proposed addition of an individual to its board of directors or the employment of an individual as a senior executive officer or to limit golden parachute
payments or indemnification. Neither Company nor any Company Subsidiary has been designated as in "troubled condition" by any Governmental Entity.
3.13 Tax Matters.
3.13.1 Except as set forth in Section 3.13.1 of the Company Disclosure Letter, all Tax Returns required by applicable Law to have been filed by Company and
each Company Subsidiary have been filed when due (taking into account any applicable extensions), and each such Tax Return was true, correct and complete in all material respects when filed. Except as set forth in Section 3.13.1 of the
Company Disclosure Letter, Company and each Company Subsidiary has withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid to any third party. Except as set forth in Section 3.13.1
of the Company Disclosure Letter, all income and other material Taxes that are due and payable by Company and each Company Subsidiary have been paid.
3.13.2 None of the Tax Returns of Company, the Company Subsidiaries, or any entity treated as a partnership for tax purposes in which the Company or any Company
Subsidiary is an owner (“Partnership”), filed for any Tax year beginning after December 31, 2018 have been audited by the IRS or any federal, state, local or foreign taxing authority. There is no tax audit
or legal or administrative proceeding concerning Tax Returns or the assessment or collection of Taxes ongoing or pending or, to Company's Knowledge, threatened with respect to Company, any Company Subsidiary or Partnership and the Company has not
been notified in writing of any such threatened audit or proceeding. No claim concerning the calculation, assessment or collection of Taxes has been asserted with respect to Company, any Company Subsidiary or Partnership except for any claim that
has been fully resolved and the costs of such resolution fully paid and reflected in the Company Financial Statements. There are no Liens on any of the assets of Company or any of the Company Subsidiaries that arose in connection with any failure
(or alleged failure) to pay any Tax, other than Liens for Taxes not yet due and payable.
3.13.3 No claim has been made by any taxing authority in any jurisdiction where the Company does not file Tax Returns that it is, or
may be, subject to Tax by that jurisdiction.
3.13.4 The amount of the Company's Liability for unpaid Taxes for all periods ending on or before June 30, 2024 does not, in the
aggregate, exceed the amount of accruals for Taxes (excluding reserves for deferred Taxes) reflected on the Financial Statements. The amount of the Company's Liability for unpaid Taxes for all periods following June 30, 2024 shall not, in the
aggregate, exceed the amount of accruals for Taxes (excluding reserves for deferred Taxes) as adjusted for the passage of time in accordance with the past custom and practice of the Company (and which accruals shall not exceed comparable amounts
incurred in similar periods in prior years).
3.13.5 No private letter rulings, technical advice memoranda or similar agreement or rulings have been requested, entered into or
issued by any taxing authority with respect to the Company.
3.13.6 Neither Company, any Company Subsidiary nor Partnership has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect
to any Taxes, which waiver or extension is still open.
3.13.7 Neither Company nor any Company Subsidiary has been included in any "consolidated," "unitary" or "combined" Tax Return for any taxable period for which the statute
of limitations has not expired (other than a group of which Company is the common parent). Neither Company nor any Company Subsidiary is a general partner in any partnership.
3.13.8 In any year for which the applicable statute of limitations remains open, neither Company nor any Company Subsidiary has been or has purported to be a
"distributing corporation" or a "controlled corporation" in a distribution intended to qualify for tax-free treatment under Section 355 of the Code.
3.13.9 The Company is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the
Code) during the applicable period in Section 897(c)(1)(a) of the Code.
3.13.10 The tax and audit positions taken by Company and the Company Subsidiaries in connection with Tax Returns were reasonable and asserted in good faith. No listed or
other reportable transaction within the meaning of Sections 6011, 6111 or 6112 of the Code or any comparable provision of any other applicable Tax Law has been engaged in by, or with respect to, Company or any Company Subsidiary. Company and the
Company Subsidiaries have disclosed on their federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income tax within the meaning of Section 6662 of the Code.
3.13.11 Neither Company nor any Company Subsidiary has participated in or been a party to a transaction that, as of the date of this Plan of Merger, constitutes a "listed
transaction" for purposes of Section 6011 of the Code (or a similar provision of state Law).
3.13.12 Neither Company nor any Company Subsidiary has taken any action or has Knowledge of any fact that would reasonably be expected to prevent the Merger from
qualifying for the Intended Tax Treatment.
3.13.13 Except as set forth in Section 3.13.13 of the Company Disclosure Letter, there has been no disallowance of a deduction under Section 162(m) of the Code
or excise tax imposed under Section 280G of the Code for any amount paid or payable by Company or any Company Subsidiary as employee compensation, whether under any contract, plan, program or arrangement, understanding or otherwise, and neither
Company nor any Company Subsidiary has taken any action or has Knowledge of any fact that would reasonably be expected to cause any such disallowance or imposition of excise tax in the future.
3.13.14 Company and the Company Subsidiaries have each maintained all necessary and appropriate accounting records to support the positions taken on all filed Tax Returns
and all exemptions from filing Tax Returns.
3.13.15 Each of Company and the Company Subsidiaries has withheld and paid over all material Taxes required to have been withheld and paid over, and has complied with all
information reporting and backup withholding requirements, including maintenance of required records with respect thereto, in connection with amounts paid or owing to any employee, creditor, independent contractor or other third parties. The
provisions made for Taxes on the Company Financial Statements are sufficient for the payment of all accrued but unpaid Taxes as of the dates of the applicable Company Financial Statement, whether or not disputed.
3.13.16 Neither Company nor any Company Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any: (a) change in method of accounting for a taxable period ending on or prior to the Closing Date; (b) "closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date; (c) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or
any corresponding or similar provision of state, local or foreign income Tax Law); (d) installment sale or open transaction disposition made on or prior to the Closing Date; or (e) prepaid amounts received or deferred revenue accrued on or prior to
the Closing Date. No property of Company or any Company Subsidiary is "tax exempt use property" within the meaning of Section 168(h) of the Code or directly or indirectly secures any debt the interest on which is exempt from tax under Section
103(a) of the Code. Any federal income tax liability related to bad debt deductions of Company or any Company Subsidiary are recorded in the Company Financial Statements.
3.13.17 Neither Company nor any Company Subsidiary is a party to a Tax sharing, indemnification or similar agreement, is or has been a member of an affiliated group filing
consolidated or combined tax returns (other than a group over which Company is the common parent) or otherwise has any liability for the Taxes of any party other than Company and the Company Subsidiaries.
3.13.18 There is currently no limitation on the utilization of net operating losses, capital losses, built-in losses, tax credits or
similar items of the Company under Sections 269, 382, 383, 384 or 1502 of the Code and the Treasury Regulations thereunder (and comparable provisions of state, local or foreign Law). Neither Company nor any Company Subsidiary (a) has
failed to report any compensation as required by Section 409A of the Code; or (b) has taken any action or has Knowledge of any fact that could reasonably be expected to result in any liability under Section 409A of the Code.
3.14 Properties. With respect to each parcel of real property owned by Company or any Company Subsidiary, including all other real estate owned (but
only for purposes of Sections 3.14.1 and 3.14.4) ("Company Real Property"), and also with respect to
each parcel of real property leased by Company or any Company Subsidiary ("Company-Leased Real Property") (Section 3.14 of the Company Disclosure Letter sets forth a complete and
correct list and brief description of all Company Real Property and Company-Leased Real Property):
3.14.1 Title to and Interest in Properties. Company and each Company Subsidiary has good and valid title to, or valid
leasehold interests in, all of their Company Real Property and Company-Leased Real Property free and clear of all Liens, except for Permitted Liens.
3.14.2 No Encroachments. Except for encroachments that have been insured by a title insurance policy benefitting Company or a
Company Subsidiary, no building or improvement to Company Real Property or, to the Knowledge of Company, Company-Leased Real Property encroaches on any easement or property owned by another Person. No building or property owned by another Person
encroaches on Company Real Property or, to the Knowledge of Company, Company-Leased Real Property or on any easement benefiting Company Real Property or Company-Leased Real Property. No claim of encroachment has been asserted by any Person with
respect to any of Company Real Property or, to the Knowledge of Company, Company-Leased Real Property.
3.14.3 Buildings. All buildings and improvements to Company Real Property and, to the Knowledge of Company, Company-Leased Real
Property are in good condition (normal wear and tear excepted and subject to maintenance and repair in the ordinary course), are structurally sound and are not in need of material repairs, are fit for their intended purposes, and are adequately
serviced by all utilities necessary for the effective operation of business as presently conducted at that location.
3.14.4 No Condemnation. None of Company Real Property or, to the Knowledge of Company, Company-Leased Real Property is the
subject of any condemnation action. To the Knowledge of Company, there is no proposal under active consideration by any public or governmental authority or entity to acquire Company Real Property or Company-Leased Real Property for any
governmental purpose.
3.14.5 Validity. Each premises comprising Company Real Property and, to the Knowledge of Company, Company-Leased Real Property
is a lawfully existing parcel that is: (a) a valid platted parcel; (b) a valid condominium unit; or (c) a lawfully existing parcel within the meaning of the Land Division Act, Act No. 288 of the Public Acts of 1967, as amended.
3.14.6 Access. Each premises comprising Company Real Property and, to the Knowledge of Company, Company-Leased Real Property
has both legal and practical pedestrian and vehicular access to a public street.
3.14.7 Obligations. Company and each Company Subsidiary, as applicable, has paid all amounts due and owing and performed in
all material respects all obligations under each agreement that affects any of Company Real Property or Company-Leased Real Property.
3.14.8 Additional Representations Regarding Real and Personal Property Leases. With respect to each lease and license pursuant
to which Company or any Company Subsidiary, as lessor, lessee, licensor or licensee, has possession or leases or licenses to others any real or personal property, excluding any personal property lease with payments of less than $50,000 per year
(each, a "Company Lease"):
(a) Valid. Each of Company's Leases is valid, effective, and enforceable against the lessor or licensor in accordance
with its terms, except as limited by bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the rights of creditors generally and the availability of equitable remedies.
(b) No Default. There is no existing default under any of Company's Leases or any event that with notice or passage of
time, or both, would constitute a default with respect to Company, any Company Subsidiary or, to the Knowledge of Company, any other party to the contract, which default is reasonably expected to have a Company Material Adverse Effect.
3.14.9 Personal Property. Company or a Company Subsidiary, as applicable, has good,
valid and insurable title to, or a valid leasehold interest in, all tangible and intangible assets used, intended or required for use by Company and the Company Subsidiaries in the conduct of their businesses, free and clear of any Liens, except
for Permitted Liens, and all such tangible personal property is in good working condition and repair, normal wear and tear excepted and subject to maintenance and repair in the ordinary course.
3.15 Intellectual Property. Company and the Company Subsidiaries exclusively own, or have a valid license or other valid right to use, all material
Intellectual Property as used in their business as presently conducted; it being understood that the foregoing shall not be construed to expand or diminish the scope of the non-infringement representations and warranties that follow in this Section 3.15. No Actions, suits or other proceedings are pending or, to the Knowledge of Company, threatened that Company or any of the Company Subsidiaries is infringing, misappropriating or otherwise
violating the rights of any Person with regard to any Intellectual Property. To the Knowledge of Company, no Person is infringing, misappropriating or otherwise violating the rights of Company or any of the Company Subsidiaries with respect to any
Intellectual Property owned or purported to be owned by Company or any of the Company Subsidiaries, all of which registered Intellectual Property is listed on Section 3.15 of the Company Disclosure Letter (collectively the "Company-Owned Intellectual Property"). Except as have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, to the
Knowledge of Company: (a) no circumstances exist which could reasonably be expected to give rise to any (i) Action that challenges the rights of Company or any of the Company Subsidiaries with respect to the validity or enforceability of the
Company-Owned Intellectual Property or (ii) claim of infringement, misappropriation, or violation by the Company of the Intellectual Property rights of any Person, and (b) the consummation of the transactions contemplated by this Plan of Merger
will not give rise to any claim by any Person to a right to own, purchase, transfer, use, alter, impair, extinguish or restrict any Company-Owned Intellectual Property or Intellectual Property licensed to Company or any Company Subsidiary.
3.16 Required Licenses, Permits, Etc. Company and each Company Subsidiary hold all material Permits and other rights from all appropriate
Governmental Entities necessary for the conduct of its business substantially as presently conducted. All such material Permits and rights are in full force and effect, and none of Company or any Company
Subsidiaries has received any notice (whether written or, to the Knowledge of the Company, oral) of any pending or threatened action by any Governmental Entity to suspend, revoke, cancel or limit any Permit.
3.17 Material Contracts and Change of Control.
3.17.1 "Material Contracts" Defined. For the purposes of this Plan of Merger, the term "Company Material Contract" means any of the following Contracts to which Company or any of the Company Subsidiaries is a party or to which any of them or their assets are bound as of the date of this Plan of Merger:
3.17.1.1 Each Contract that would be required to be filed by Company as a material contract pursuant to Item 601(b)(10) of Regulation S-K on Form 10-K under the
Exchange Act as if Company were required to file a Form 10-K;
3.17.1.2 Each Contract, other than any Contracts contemplated by this Plan of Merger, that limits in any material respect the ability of Company or any of the Company
Subsidiaries to engage or compete in any business (including geographic restrictions and exclusive or preferential arrangements);
3.17.1.3 Each Contract that creates a partnership or joint venture to which Company or any of the Company Subsidiaries is a party;
3.17.1.4 Each Contract between or among Company and any Company Subsidiary or Company Subsidiaries;
3.17.1.5 Each employment Contract with an employee of Company or any Company Subsidiary or any other compensatory Contract or plan in which any executive officer of
Company or any Company Subsidiary participates (other than any compensatory Contract or plan which pursuant to its terms is available to employees, officers, or directors generally and which in operation provides for the same method of allocation
of benefits between management and non-management participants);
3.17.1.6 Each Contract with a correspondent bank;
3.17.1.7 Any commitment made to Company or the Company Subsidiaries relating to outstanding Indebtedness, permitting it to borrow money, any letter of credit, any
pledge, any security agreement, any guarantee or any subordination agreement, or other similar or related type of understanding, as to which Company or any of the Company Subsidiaries is a debtor or pledgor, other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully secured repurchase agreements, FHLB advances, or trade payables made in the ordinary course of business consistent with past practices;
3.17.1.8 Each Contract that relates to the acquisition or disposition of any material business (whether by merger, sale of stock, sale of assets or otherwise) or
material asset, other than this Plan of Merger, pursuant to which Company or any of the Company Subsidiaries has any continuing obligations, contingent or otherwise;
3.17.1.9 Each Contract that grants any right of first refusal or right of first offer or similar right or that limits the ability of Company or any of the Company
Subsidiaries to own, operate, sell, transfer, pledge or otherwise dispose of any material amount of assets or businesses;
3.17.1.10 Other than as contemplated by this Plan of Merger, each voting agreement or registration rights agreement with respect to the capital stock of Company or any
of the Company Subsidiaries;
3.17.1.11 Each Contract granting Company or any Company Subsidiary the right to use, restricting Company's or any Company Subsidiary's right to use, or granting any
other Person the right to use Intellectual Property that is material to the conduct of Company's or any Company Subsidiary's business (including any license, franchise agreement, co-existence agreement, concurrent-use agreement, settlement
agreement or other similar type Contract) (other than “off the shelf” shrink-wrap license agreements or other similar license agreements);
3.17.1.12 Each Contract that limits the payment of dividends by Company or any Company Subsidiary;
3.17.1.13 Except agreements made in accordance with Regulation O and agreements entered into in the ordinary course of business consistent with past practice for
compensation or indemnity, any Contract between Company or any Company Subsidiary, on the one hand, and, on the other hand (a) any officer or director of Company or a Company Subsidiary, or (b) to the Knowledge of Company, any (i) record or
beneficial owner of 5 percent or more of the voting securities of Company, (ii) Affiliate or “immediate family member” (as defined by the Federal Reserve Board in Regulation Y) of any such officer, director, or record or beneficial owner, or (iii)
other Affiliate of Company, except in each case those Contracts of a type available to employees of Company generally;
3.17.1.14 Each Contract for any one capital expenditure or a series of capital expenditures, the aggregate amount of which is in excess of $100,000;
3.17.1.15 As of June 30, 2024, each Contract or commitment to make a loan not yet fully disbursed or funded to any Person, wherein the undisbursed or unfunded amount
exceeds $1,000,000;
3.17.1.16 Each Contract or commitment for a loan participation agreement with any other Person in excess of $500,000; and
3.17.1.17 Each Contract with a labor union, including any Collective Bargaining Agreement.
3.17.2 Full Force and Effect. Prior to the date of this Plan of Merger, Company has provided or made available to Purchaser a
true and complete copy of each Company Material Contract in effect as of the date of this Plan of Merger. Each such Company Material Contract is listed on Section 3.17.2 of the Company Disclosure Letter. Except for matters that have not
had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) all Company Material Contracts are, valid, binding and in full force and effect as of the date of this Plan of Merger, (b)
neither Company nor any of the Company Subsidiaries is in violation or breach of or default under (or with notice or lapse of time, or both, would be in violation or breach of or default under) the terms of any Company Material Contract, (c) to the
Knowledge of Company, no other party to any Company Material Contract is in breach of or in default under any Company Material Contract, and (d) neither Company nor any Company Subsidiary has received written notice of breach or termination (or
proposed breach or termination) of any Company Material Contract.
3.17.3 Effect of Merger and Related Transactions. There is no Company Material Contract under which (a) except as set forth
on Section 3.17.3(a) of the Company Disclosure Letter consent or approval is required from any Person, (b) a prohibited assignment by operation of Law could occur, (c) a waiver or loss of any right of Company or any Company Subsidiary could
occur, or (d) an acceleration of any obligation, or the creation or imposition of a Lien on any asset, property or right, of the Company or any Company Subsidiary, could occur, in each case as a result of the execution and delivery of this Plan of
Merger or the consummation of the transactions contemplated herein, where any such occurrence would reasonably be expected to (i) materially interfere with the ordinary course of business consistent with past practices conducted by Company or any
Company Subsidiary or (ii) have a Company Material Adverse Effect.
3.17.4 Except as set forth in Section 3.17.4 of the Company Disclosure Letter, all data processing contracts of Company or the Company Subsidiaries are
cancelable by Company or the Company Subsidiaries on or before the Effective Time without cost, penalty, or further obligation, except for costs, penalties or further obligations that, in the aggregate with respect to any Contract, do not exceed
$150,000. Except as set forth in Section 3.17.4 of the Company Disclosure Letter, neither Company nor any Company Subsidiary is a party to any contract, agreement, arrangement, or understanding (other than ordinary and customary banking
relationships) that would require any payment to another party upon termination in excess of $150,000.
3.18 Labor and Employment Matters.
3.18.1 Compliance with Labor and Employment Laws. (a) Company and all of the Company Subsidiaries are in compliance with all
applicable Laws relating to labor and employment practices, including those relating to wages, employee benefits, hours and overtime, workplace safety and health, immigration, individual and collective termination, non-discrimination,
non-harassment, non-retaliation, accommodations, leave (paid and unpaid), workers’ compensation insurance, unemployment insurance, and data privacy, the identification of particular employees or job classifications as "exempt" or "non-exempt" for
purposes of such obligations, and any and all other matters involving compensation or benefits afforded to or not afforded to employees, contractors or consultants except for such noncompliance as has not had, and would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect; (b) there is no unfair labor practice charge or complaint pending before the NLRB or, to the Knowledge of Company, threatened against Company or any of the Company
Subsidiaries; (c) during the past three years, there has been no labor strike, slowdown, work stoppage or lockout pending or, to the Knowledge of Company, threatened against or affecting Company or any of the Company Subsidiaries; (d) to the
Knowledge of the Company, there is no current claim or activity by any labor organization seeking representational status with respect to the employees of the Company or any Company Affiliate, and there is no representation claim or petition
pending before the NLRB or any similar foreign agency relating to the employees of Company or any Company Subsidiary; (e) Company has not received written notice of any charge or complaint with respect to or relating to Company or any Company
Subsidiary pending before the Equal Employment Opportunity Commission or any other Governmental Entity responsible for the enforcement of labor or employment laws; and (f) neither Company nor any Company Subsidiary has received any written notice
from any Governmental Entity responsible for the enforcement of labor or employment Laws of an intention to conduct an investigation or audit of Company or any Company Subsidiary and, to the Knowledge of Company, no such investigation or audit is
in progress.
3.18.2 Collective Bargaining Agreements. Neither Company nor any Company Subsidiary is party to, bound by, or negotiating any
Collective Bargaining Agreement or any other Contract with any labor organization, union, works council, employee representative or association relating to the employees of Company or any Company Subsidiary.
3.18.3 At-Will Employment. Except as set forth on Section 3.18.3 of the Company Disclosure Letter, all salaried
employees, hourly employees, and temporary employees of Company and any of the Company Subsidiaries are employed on an at-will basis by Company or any of the Company Subsidiaries and may be terminated at any time with or without cause and without
any severance or other liabilities to Company or any Company Subsidiary, and have signed an agreement or acknowledged in writing that their employment is at will. There has been no written representation by Company or any Company Subsidiary made
to any employees that commits Company, any Company Subsidiary, or the Surviving Corporation to retain them as employees for any period of time subsequent to the Closing.
3.18.4 WARN Act. Since January 1, 2011, neither Company nor any Company Subsidiary has effectuated a "plant closing" or a
"mass lay off" (in each case, as defined in the WARN Act or any applicable state laws pertaining to such matters), in either case affecting any site of employment or facility of Company or any Company Subsidiary, except in compliance with the WARN
Act and any applicable state laws pertaining to such matters.
3.18.5 Occupational Health and Safety. There is no audit, investigation, charge or proceeding with respect to a material
violation of any occupational health and safety standards that is pending or unremedied, or to the Knowledge of Company, threatened against Company or any Company Subsidiary. Company and all of the Company Subsidiaries are in compliance with all
applicable occupational health and safety Laws, except for such failures to comply as have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
3.18.6 Liabilities under Employment and Benefit Contracts. Except as set forth in Section 3.18.6 of the Company
Disclosure Letter, the consummation of the transactions contemplated by this Plan of Merger will not create Liabilities for any act by Company or any Company Subsidiary on or prior to the Closing under any Collective Bargaining Agreement,
employment or benefit Contract or Company Benefit Plan.
3.18.7 Eligibility Verification. Company has implemented commercially reasonable procedures to ensure that all employees who
are performing services for Company or any Company Subsidiary in the United States are legally permitted to work in the United States and will be legally permitted to work in the United States for the Surviving Corporation or any of its Affiliates
following the consummation of the transactions contemplated by this Plan of Merger.
3.18.8 Employment Policies, Programs, and Procedures. The policies, programs, and practices of Company and all Company
Subsidiaries relating to equal opportunity and affirmative action, wages, employee classifications (including independent contractor versus employee and exempt versus non-exempt), hours of work, employee disabilities, employment termination,
employment discrimination, employee safety, labor relations, and other terms and conditions of employment are in compliance in all material respects with applicable Law governing or relating to employment and employer practices and facilities.
3.18.9 Record of Payments. There is no existing or outstanding material obligation of Company or the Company Subsidiaries,
whether arising by operation of Law, civil or common, by contract, or by past custom, for any Employment-Related Payment to any trust, fund, company, governmental agency, or any person that has not been duly recorded on the books and records of
Company and/or the Company Subsidiaries and paid when due or duly accrued in the ordinary course of business in accordance with GAAP. For purposes of this Plan of Merger, "Employment-Related
Payments" include any payment to be made with respect to any contract for employment or severance agreement; unemployment compensation benefits, profit sharing, pension, employee stock ownership plan or retirement benefits; social security
benefits; compensation; fringe benefits, including vacation or holiday pay, bonuses, and other forms of compensation; or for medical insurance or medical expenses; any of which are payable with respect to any present or former director, officer,
employee, or agent, or his or her survivors, heirs, legatees, or legal representatives.
3.18.10 Additional Employment Related Agreements. Except as set forth in Section 3.18.10 of the Company Disclosure
Letter, Company and the Company Subsidiaries are not parties to, or bound by, any oral or written, express or implied, (a) plan, contract, arrangement, understanding, or practice providing for bonuses, pensions, options, stock purchases,
restricted stock, stock appreciation rights, stock awards, deferred compensation, retirement payments, retirement benefits of the type described Accounting Standard Codification 715 (Compensation – Retirement Benefits), or profit sharing; or (b)
plan, contract, arrangement, understanding or practice with respect to payment of medical expenses, insurance (except insurance continuation limited to that required under provisions of Consolidated Omnibus Budget Reconciliation Act), or other
benefits for any former director, employee or any spouse, child, member of the same household, estate or survivor of any director or employee or former director or employee.
3.19 Employee Benefits.
3.19.1 Section 3.19.1 of the Company Disclosure Letter sets for a true and complete list of each Company Benefit Plan. Company has delivered or made available
to Purchaser true and complete copies of the following, to the extent applicable, (i) all Company Benefit Plans, including amendments thereto, (ii) each trust agreement, group annuity contract, summary plan description and summary of material
modifications, relating to such Company Benefit Plan, (iii) the most recent actuarial report, financial statement or valuation report for such Company Benefit Plan, and (iv) all material correspondence to or from any Governmental Entity relating to
any audit or investigation of such Company Benefit Plan in the six year period prior to the date hereof. Each Company Benefit Plan is in compliance with all applicable requirements of ERISA, the Code and all other applicable Laws and has been
administered in accordance with its terms and such Laws, except for such noncompliance that has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
3.19.2 Each Company Benefit Plan intended to qualify under Section 401(a) of the Code or under Section 501(c)(9) of the Code is listed in Section 3.19.2 of the
Company Disclosure Letter and has received a favorable determination, advisory, or opinion letter from the IRS that it is so qualified, and the related trusts have been determined to be exempt from taxation, or is established on a
pre-approved form or prototype of plan document that has received or requested a favorable opinion or advisory letter from the IRS that such form or plan document is so qualified or exempt. A copy of the most recent determination, advisory, or
opinion letter with respect to each such Company Benefit Plan has been delivered to Purchaser, and to the Knowledge of Company, no condition exists or existed and nothing has occurred prior to or since the date of such letter that would cause the
loss of such qualification or exemption. All contributions, payments or premiums required to be made with respect to any Company Benefit Plan by Company have been timely made, and all benefits accrued under any unfunded Company Benefit Plan have
been paid, accrued or otherwise adequately reserved in accordance with GAAP.
3.19.3 Neither Company nor any ERISA Affiliate of Company participates in nor has ever participated in any Multiemployer Plan, and neither Company nor any ERISA
Affiliate of Company maintains or contributes to, or is party to, and, nor has it ever maintained, contributed to, or was a party to, any plan, program, agreement or policy that (a) is a "defined benefit plan" within the meaning of Section 414(j)
of the Code or Section 3(35) of ERISA, (b) is a "multiple employer plan" as defined in ERISA or the Code (whether or not subject thereto), (c) is described in Section 401(a)(1) of ERISA (whether or not subject thereto), (d) is a multiple employer
welfare arrangement within the meaning of Section 3(40)(A) of the Code, (e) is a voluntary employees beneficiary association within the meaning of Code Section 501(c)(9), or (f) is primarily for the benefit of employees who reside outside of the
United States.
3.19.4 Except as required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code or any state Laws requiring continuation of benefits coverage
following termination of employment, neither Company nor any Company Subsidiary provides health or welfare benefits for any retired or former employee or service provider to the Company or a Company Subsidiary following such individual's retirement
or other termination of service.
3.19.5 Except as disclosed in Section 3.19.5 of the Company Disclosure Letter, the execution, delivery of, and performance by Company of its obligations under the
transactions contemplated by this Plan of Merger (either alone or upon the occurrence of any additional or subsequent event) will not (a) result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of Indebtedness,
vesting, distribution, increase in benefits or obligation to fund benefits with respect to any current, former or retired employees, officers, consultants, independent contractors, agents or directors of Company or any of the Company Subsidiaries;
(b) result in the triggering or imposition of any restrictions or limitations on the right of Company or any of the Company Subsidiaries to amend or terminate any Company Benefit Plan; or (c) result in any payment that is non-deductible to
Purchaser or that is an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code.
3.19.6 Except as set forth in Section 3.19.6 of the Company Disclosure Letter, Company and the Company Subsidiaries may, subject to the limitations imposed by
applicable Law and the terms of the applicable Company Benefit Plan, without the consent of any employee, beneficiary, or other person, prospectively terminate, modify, or amend any such Company Benefit Plan effective as of any date on or after
the date of this Plan of Merger.
3.19.7 Each Company Benefit Plan that is a "nonqualified deferred compensation plan" (as defined under Section 409A(d)(1) of the Code) has been operated and administered
in compliance with Section 409A of the Code in all material respects. Neither Company nor any of the Company Subsidiaries have entered into any agreement or arrangement to, and do not otherwise have any obligation to, indemnify or hold harmless
any Person for any Liability that results from the failure to comply with the requirements of Section 409A of the Code and the regulations promulgated thereunder.
3.19.8 No stock options, stock appreciation rights or other grants of stock-based awards by Company or any Company Subsidiaries were backdated, spring‑loaded, or granted
at less than fair market value.
3.19.9 There is no pending or, to the Knowledge of Company, threatened Action with respect to any Company Benefit Plans, other than ordinary and usual claims for
benefits by participants and beneficiaries.
3.19.10 No Company Benefit Plan and no trust created thereunder has been involved in any nonexempt "prohibited transaction" as defined in Section 4975 of the Code or in
Sections 406 and 408 of ERISA which has subjected, or would reasonably be expected to subject, a Company Benefit Plan or related trust or Company or any Company Subsidiary to any material Tax or penalty imposed under Section 4975 of the Code or
Section 502 of ERISA.
3.19.11 Except as set forth in Section 3.19.11 of the Company Disclosure Letter, no payment that is owed or may become due to any director, officer,
employee, or agent of Company or any Company Subsidiary will be non-deductible or subject to any penalty or excise tax; nor do any Company Benefit Plans require Company or a Company Subsidiary to "gross up" or otherwise compensate any such person
because of the imposition of any excise tax on a payment to such person.
3.19.12 There is no payment that has become due from any Company Benefit Plan, any trust created thereunder, or from Company or any Company Subsidiary that has not been
paid through normal administrative procedures to the plan participants or beneficiaries entitled thereto, except for claims for benefits for which administrative claims procedures under such plan have not been exhausted.
3.19.13 No statement, either written or oral, has been made by Company or any Company Subsidiary to any person with regard to any Company Benefit Plan that was not in
accordance with the Company Benefit Plan and that could have a Company Material Adverse Effect.
3.19.14 Neither Company nor any Company Subsidiary provides health or welfare benefits that are self-insured. To the extent Company or a Company Subsidiary provides
self-insured health or welfare benefits, all such benefits are covered by a stop-loss policy.
3.19.15 Neither Company nor any Company Subsidiary has any liability to any governmental or regulatory body with respect to any Company Benefit Plan or any related trust,
account or other funding vehicle.
3.19.16 The assets and liabilities of each Company Benefit Plan have been reported on the Company Financial Statements in accordance with GAAP.
3.20 Environmental Matters.
3.20.1 Except for any matters that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (a)
Company and each of the Company Subsidiaries is and has been in compliance with and has no Liability under applicable Environmental Laws; (b) Company and each of the Company Subsidiaries possesses, has possessed and is and has been in compliance
with all required Environmental Permits; (c) there are no Environmental Claims pending or, to the Knowledge of Company, threatened against Company or any of the Company Subsidiaries, and, to the Knowledge of Company, there are no facts or
circumstances which could reasonably be expected to form the basis for any Environmental Claim against Company or any of the Company Subsidiaries; (d) no Releases of Hazardous Materials have occurred and no Person has been exposed to any Hazardous
Materials at, from, in, to, on, or under any Company Site and no Hazardous Materials are present in, on, about or migrating to or from any Company Site that could give rise to an Environmental Claim against Company or any of the Company
Subsidiaries; (e) neither Company nor any of the Company Subsidiaries has entered into or is subject to, any judgment, decree, order or other similar requirement of or agreement with any Governmental Entity under any Environmental Laws; (f) neither
Company nor any of the Company Subsidiaries has assumed responsibility for or agreed to indemnify or hold harmless any Person for any Liability arising under or relating to Environmental Laws; and (g) neither Company, any predecessors of Company or
any of the Company Subsidiaries, nor any entity previously owned by Company or any of the Company Subsidiaries, has transported or arranged for the treatment, storage, handling, disposal, containment, generation, manufacture, management or
transportation of any Hazardous Material to any off-Site location which has or could result in an Environmental Claim against Company or any of the Company Subsidiaries.
3.20.2 Without limiting the generality of Section 3.20.1, to the Knowledge of Company, the Company Sites are free of asbestos
except for asbestos that has been properly sealed and encapsulated to the extent required by all applicable Environmental Laws and all workplace safety and health Laws and regulations.
3.20.3 No Company Site contains, and to the Knowledge of Company has ever contained, any underground tanks for the storage of Hazardous Materials. Each underground
storage tank presently or previously located on any Company Site has been operated, maintained and removed or closed in place, as applicable, in compliance with all applicable Environmental Laws, and to the Knowledge of the Company has not been the
source of any Release of a Hazardous Material to the environment that has not been fully remediated.
3.21 Duties as Fiduciary. Company and each Company Subsidiary has performed all of its respective duties in any capacity as trustee, executor,
administrator, registrar, guardian, custodian, escrow agent, receiver, or other fiduciary in a fashion that complies in all material respects with all applicable Laws, Contracts, wills, instruments and common law standards. Neither Company nor any
Company Subsidiary has received any notice of any Action, claim, allegation or complaint from any Person that Company or any Company Subsidiary failed to perform these duties in a manner that complies in all material respects with all applicable
Laws, Contracts, wills, instruments and common law standards, except for notices involving matters that have been resolved and any cost of such resolution is reflected in the Company Financial Statements.
3.22 Investment Bankers and Brokers. Company has employed Hovde Group, LLC ("Company Investment
Banker") in connection with the Merger. Company, the Company Subsidiaries, and their respective Representatives have not employed, engaged, or consulted with any broker, finder, or investment banker other than Company Investment Banker in
connection with this Plan of Merger or the Merger. Other than the fees and expenses payable by Company to Company Investment Banker in connection with the Merger, as described in Section 3.22 of the Company Disclosure Letter, there is no
investment banking fee, financial advisory fee, brokerage fee, finder's fee, commission, or compensation of a similar type payable by Company or any Company Subsidiary to any Person with respect to the Plan of Merger or the consummation of the
Merger.
3.23 Company-Related Persons. For purposes of this Plan of Merger, the term "Company-Related
Person" shall mean any shareholder owning 5% or more of the Company Common Stock, any director or executive officer of Company or any Company Subsidiary, their spouses and any children or other persons who share the same household with
such persons, and any corporation, limited liability company, partnership, proprietorship, trust, or other entity of which any such persons, alone or together, have control.
3.23.1 Insider Loans. No Company-Related Person has any loan, credit or other Contract outstanding with Company or any Company
Subsidiary that does not conform to applicable rules and regulations of the FDIC, the Federal Reserve Board, or any other Governmental Entity with jurisdiction over Company or any Company Subsidiary.
3.23.2 Control of Material Assets. Except as set forth in Section 3.23.2 of the Company Disclosure Letter, other
than in a capacity as a shareholder, director, or executive officer of Company or any Company Subsidiary, no Company-Related Person owns or controls any material assets or properties that are used in the business of Company or any Company
Subsidiary.
3.23.3 Contractual Relationships. Except as set forth in Section 3.23.3 of the Company Disclosure Letter, other
than ordinary and customary banking relationships, no Company-Related Person has any contractual relationship with Company or any Company Subsidiary.
3.23.4 Loan Relationships. Except as set forth in Section 3.23.4 of the Company Disclosure Letter, no
Company-Related Person has any outstanding loan or loan commitment from, or on whose behalf an irrevocable letter of credit has been issued by, Company or any Company Subsidiary in a principal amount of $500,000 or more.
3.24 Change in Business Relationships. As of the date of this Plan of Merger, the Company has no actual knowledge, whether on account of the Merger
or otherwise, that any customer, agent, representative, supplier of Company or any Company Subsidiary, or other person with whom Company or any Company Subsidiary has a contractual relationship, intends to discontinue, diminish, or change its
relationship with Company or any Company Subsidiary, the effect of which would reasonably be expected to have a Company Material Adverse Effect.
3.25 Insurance. Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect, Company and the Company Subsidiaries maintain in full force and effect insurance policies on their respective assets, properties, premises, operations, and personnel in such amounts and against such risks and losses as are customary and
adequate for comparable entities engaged in the same business and industry, and the Company and the Company Subsidiaries are in compliance with, and not in default under, any such insurance policy. There is no unsatisfied claim of $50,000 or more
under such insurance as to which the insurance carrier has denied liability. Since January 1, 2021, no insurance company has canceled or failed to renew a policy of insurance covering Company's or any Company Subsidiary's assets, properties,
premises, operations, directors or personnel. Company and the Company Subsidiaries have given adequate and timely notice to each insurance carrier, and have complied with all policy provisions, with respect to any material known claim for which a
defense or indemnification or both may be available to Company or the Company Subsidiaries. Section 3.25 of the Company Disclosure Letter sets forth a true and correct listing of all Company and Company Subsidiaries insurance policies,
policy expiration dates, carriers, coverage limits, premiums and deductibles.
3.26 Allowance for Credit Losses. The allowance for credit losses as reflected in Company's consolidated financial statements and the Company’s
regulatory reports as of December 31, 2023 and as of June 30, 2024, in the reasonable opinion of Company's management, (a) was adequate to meet all reasonably anticipated credit losses, net of recoveries related to loans previously charged off as
of those dates, (b) was consistent with GAAP and safe and sound banking practices, and (c) conforms to recommendations and comments in reports of examination in all material respects.
3.27 Loan Origination and Servicing. In originating, underwriting, servicing, selling, transferring, and discharging loans, mortgages, land
contracts, and other contractual obligations, either for its own account or for the account of others, Company and each Company Subsidiary has complied in all material respects with all applicable terms and conditions of such obligations and with
all applicable Laws, Contracts, rules, and procedures.
3.28 Data Security and Customer Privacy. Company and each Company Subsidiary is in compliance in all material respects with (a) all applicable Laws
and applicable requirements of Governmental Entities regarding the security of each of their customers' data and the systems operated by Company and each Company Subsidiary, and (b) their respective privacy policies, including as it relates to the
use of individually identifiable personal information relating to identifiable or identified natural persons. Company and each Company Subsidiary has implemented backup and disaster recovery technology
reasonably consistent with industry standards and practices. To the Knowledge of Company, since January 1, 2021, no third party has gained unauthorized access to any information systems or networks controlled by and material to the operation of
the business of Company and Company Subsidiaries, and, to the Knowledge of Company, there are no material data security or other technological vulnerabilities with respect to its information technology systems or networks.
3.29 Loans and Investments. All investments and, to the Knowledge of Company, all loans of Company and each Company Subsidiary are: (a) evidenced by
notes, agreements or other evidences of Indebtedness that are true, genuine and what they purport to be; (b) legal and enforceable in accordance with their terms, except as may be limited by any bankruptcy, insolvency, moratorium, or other Laws
affecting the rights of creditors generally or by the exercise of judicial discretion; (c) authorized under all applicable Laws; and (d) to the extent secured, secured by valid Liens which have been perfected. Neither Company nor any of the
Company Subsidiaries have entered into any interest rate swaps, caps, floors, option agreements, futures and forward contracts, or other similar risk management arrangements, whether entered into for their own account or for the account of one or
more of their respective customers, except for contractual interest rate swaps, caps and floors in loans to customers made in the ordinary course of business consistent with past practices and except for interest rate locks on real estate mortgage
loans expected to be sold in the ordinary course of business consistent with past practices.
3.30 Securities Laws Matters. Neither Company nor any Company Subsidiary is or has been, since January 1, 2013, required to file periodic reports
with the SEC. Neither Company nor any Company Subsidiary has Knowledge of any written complaint, allegation, assertion or claim, in each case since January 1, 2021, regarding the accounting or auditing practices, procedures, methodologies or
methods of Company or any Company Subsidiary or their respective internal accounting controls, including any written complaint, allegation, assertion or claim that Company or any Company Subsidiary has engaged in questionable accounting or auditing
practices, which, if true, would constitute a significant deficiency or a material weakness.
3.31 Investment Securities.
3.31.1 Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each of Company and
the Company Subsidiaries have good title to all securities and commodities owned by it (except those sold under repurchase agreements), free and clear of any Lien other than Permitted Liens and except as set forth in the Company Financial
Statements or to the extent such securities or commodities are pledged in the ordinary course of business to secure obligations of Company or Company Subsidiaries. Such securities and commodities are valued on the books of the Company in accordance
with GAAP in all material respects.
3.31.2 Company and the Company Subsidiaries and their respective businesses employ investment, securities, commodities, risk management and other policies, practices and
procedures that the Company believes are prudent and reasonable in the context of such businesses, and, to the Knowledge of Company, Company and the Company Subsidiaries have been in material compliance with such policies, practices and procedures
in all material respects since January 1, 2021.
3.32 Books and Records. The books and records of Company are, in all material respects, complete and accurately reflect the basis for the financial
condition, results of operations, business, assets and capital of Company on a consolidated basis set forth in the Company Financial Statements, represent bona fide transactions, and have been maintained in accordance with sound business practices,
including the maintenance of an adequate internal control system. The corporate minute books of Company and the Company Subsidiaries contain accurate and complete records of all meetings of, and corporate action taken by, their shareholders,
boards, and committees in all material respects. Since January 1, 2021, the minutes of each meeting (or corporate action without a meeting) of any such shareholders, boards, or committees have been duly prepared and are contained in such minute
books.
3.33 Community Reinvestment Act. Each Company Subsidiary that is a depository institution received a rating of "satisfactory" or better in its most
recent examination or interim review with respect to the Community Reinvestment Act. Neither Company nor the Company Subsidiaries knows of any facts or circumstances which would cause a Company Subsidiary that is a depository institution to fail
to comply with the Community Reinvestment Act or to receive a rating of less than “satisfactory.”
3.34 Bank Secrecy Act. Neither Company nor any Company Subsidiary has been notified of any supervisory criticisms or charges alleging noncompliance
with the Bank Secrecy Act (41 USC 5422, et seq.) or related state or federal anti-money laundering Laws, regulations and guidelines, including without limitation those provisions of federal regulations requiring (a) the filing of reports, such as
Currency Transaction Reports and Suspicious Activity Reports, (b) the maintenance of records and (c) the exercise of due diligence in identifying customers.
3.35 Takeover Statutes. The Company Board of Directors has taken all actions necessary so that no "moratorium,"
"control share," "fair price," "affiliate transaction," "business combination" or other anti-takeover Laws, or similar provisions in Company’s articles of incorporation or bylaws, apply or will apply to
Company with respect to this Plan of Merger or the other transactions contemplated by this Plan of Merger.
3.36 No Undisclosed Liabilities. Except for those Liabilities (a) that are fully reflected or reserved against in the most recent consolidated
balance sheet of Company and the Company Subsidiaries, (b) incurred in connection with this Plan of Merger and the transactions contemplated hereby, or (c) incurred in the ordinary course of business since the date of the most recent consolidated
balance sheet of Company and the Company Subsidiaries, neither Company nor any of the Company Subsidiaries has any Liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP to be set forth on its
consolidated balance sheet or in the notes thereto.
3.37 No Other Representations or Warranties. Except for the representations and warranties made by Company and the Company Subsidiaries in this Article III, neither Company nor any other Person makes or has made any representation or warranty with respect to Company or the Company Subsidiaries or their respective business, operations, assets,
Liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or disclosure to Purchaser or any of its Affiliates or Representatives of any documentation, projections, forecasts, estimates, budgets, prospect information
or other information with respect to any one or more of the foregoing.
ARTICLE IV
PURCHASER'S REPRESENTATIONS AND WARRANTIES
On or prior to the date hereof, Purchaser has delivered to Company a schedule (the "Purchaser Disclosure Letter") setting forth, among
other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more of the representations or warranties contained in this
Article IV or to one or more of its covenants contained in Article V. Accordingly, Purchaser hereby represents and warrants to Company as follows, except (a) as set
forth on the Purchaser Disclosure Letter or (b) as disclosed in the Purchaser SEC Reports filed with or furnished to the SEC since January 1, 2021 and publicly available prior to the date hereof (excluding any risk factor disclosures set forth
under the heading "Risk Factors," any disclosure of risks included in any "forward-looking statements" disclaimer or any other predictive, cautionary or forward-looking statement of risk); provided, that nothing disclosed in the Company SEC Reports
will be deemed to modify or qualify the representations and warranties set forth in Section 4.1, Section 4.2, Section 4.3.1,
Section 4.3.2, or Section 4.4.1; provided further that nothing disclosed in the Company SEC Reports will alleviate Purchaser’s obligation to list information in the
Purchaser Disclosure Letter where it is specifically required to do so in this Article IV:
4.1 Authorization, No Conflicts, Etc.
4.1.1 Authorization of Plan of Merger. Purchaser has the requisite corporate power and authority to execute and deliver this
Plan of Merger, to perform its obligations hereunder, and, subject to the Purchaser Shareholder Approval, to consummate the transactions contemplated by this Plan of Merger. For purposes of this Plan of Merger, "Purchaser Shareholder Approval" means obtaining (A) the approval of the holders of at least a majority of the outstanding shares of Purchaser Common Stock entitled to vote on the proposal to amend the Purchaser’s
articles of incorporation to increase the number of authorized shares of Purchaser Common Stock to 30,000,000, and (B) the approval of a majority of the shares of Purchaser Common stock that are voted on the
proposal to issue the Per Share Merger Consideration. This Plan of Merger has been duly adopted, and the consummation of the Merger and the other transactions contemplated by this Plan of Merger have been duly authorized, at a meeting duly
called and held, by the Purchaser Board of Directors. The Purchaser Board of Directors at such meeting has unanimously (a) determined that the terms of this Plan of Merger are advisable, fair to and in the best interests of Purchaser and the
Purchaser Shareholders, (b) adopted this Plan of Merger, approved and authorized the transactions contemplated by this Plan of Merger and resolved to make the Purchaser Board Recommendation, and (c) directed the Purchaser Shareholder Approval be
submitted to the Purchaser Shareholders. For purposes of this Plan of Merger, "Purchaser Board Recommendation" means the recommendation of the Purchaser Board of Directors to the Purchaser
Shareholders in favor of the Purchaser Shareholder Approval. Except for the Purchaser Shareholder Approval, no other corporate proceedings on the part of Purchaser are necessary to authorize this Plan of Merger or to consummate the Merger. This
Plan of Merger has been duly executed and delivered by, and (assuming due authorization, execution and delivery by Company) constitutes valid and binding obligations of, Purchaser and is enforceable against Purchaser in accordance with its terms,
except to the extent that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors' rights generally and (ii) equitable remedies of
specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. The issuance of the shares of Purchaser Common
Stock constituting the Per Share Merger Consideration has been duly authorized by the Purchaser Board of Directors and there are sufficient shares of Purchaser Common Stock authorized but unissued to complete the Merger, and when issued, the shares
of Purchaser Common Stock constituting the Per Share Merger Consideration will be fully paid and non-assessable.
4.1.2 No Conflict, Breach, Violation, Etc. The execution, delivery, and performance of this Plan of Merger by Purchaser,
the issuance of shares of Purchaser Common Stock constituting the Per Share Merger Consideration and the consummation of the Merger, do not and will not violate, conflict with, or result in a breach of: (a) any provision of the articles of
incorporation or bylaws (or similar organizational documents) of Purchaser or any Subsidiary of Purchaser (each a "Purchaser Subsidiary" and collectively, the "Purchaser Subsidiaries"); or (b) any Law or Order applicable to Purchaser or any Purchaser Subsidiary, assuming the timely receipt of each of the approvals referred to in Section
4.1.4.
4.1.3 Regulatory Restrictions. The execution, delivery, and performance of this Plan of Merger by Purchaser, the issuance of
shares of Purchaser Common Stock constituting the Per Share Merger Consideration and the consummation of the Merger do not and will not violate, conflict with, result in a breach of, constitute a default under, or require any consent, approval,
waiver, extension, amendment, authorization, notice, or filing under, any cease and desist order, written agreement, memorandum of understanding, board resolutions or other regulatory agreement or commitment with or from a Governmental Entity to
which Purchaser or any Purchaser Subsidiary is a party or subject, or by which Purchaser or any Purchaser Subsidiary is bound or affected.
4.1.4 Required Approvals. No notice to, filing with, authorization of, exemption by, or consent or approval of any
Governmental Entity or any stock market, stock exchange or over-the-counter market on which Purchaser Common Stock is listed or quoted for trading is required for the consummation of the transactions contemplated by this Plan of Merger by Purchaser
other than in connection or compliance with (a) the filing of the Certificate of Merger in accordance with the MBCA, (b) the filing with the SEC of the Registration Statement and the Proxy Statement, and such
reports under Section 13(a) of the Exchange Act, and such other compliance with the Exchange Act and the rules and regulations thereunder, as may be required in connection with this Plan of Merger and the transactions contemplated hereunder, (c)
such consents, approvals, orders, authorizations, registrations, declarations, notices and filings as may be required under applicable state securities or "blue sky" Laws or the rules and regulations of the Nasdaq stock exchange, (d) the consents, authorizations, approvals, or exemptions required under the Bank Holding Company Act, the Federal Reserve Act, and the Michigan Banking Code and (e)
the acceptance for listing on the Nasdaq Capital Stock Market of the shares of Purchaser Common Stock to be issued as Per Share Merger Consideration. Purchaser has no Knowledge of any reason why the regulatory approvals referred to in this Section 4.1.4 cannot be obtained or why the regulatory approval process would be materially impeded.
4.2 Organization and Good Standing. Purchaser is a corporation duly organized, validly existing, and in good standing under the Laws of the State
of Michigan. Purchaser has all requisite corporate power and authority to own, operate, and lease its respective properties and assets and to carry on its respective business as it is now being conducted in all material respects. Purchaser is a
financial holding company duly registered as such with the Federal Reserve Board under the Bank Holding Company Act. Purchaser is not, and is not required to be, qualified or admitted to conduct business as a foreign corporation in any other
state, except where such failure to be so qualified has not had, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
4.3 Subsidiaries.
4.3.1 Ownership. Section 4.3.1 of the Purchaser Disclosure Letter sets forth a true and complete list of each
Purchaser Subsidiary as of the date of this Plan of Merger. Other than the Purchaser Subsidiaries, Purchaser does not have "control" (as defined in Section 2(a)(2) of the Bank Holding Company Act, using 5 percent rather than 25 percent), either
directly or indirectly, of any Person engaged in an active trade or business or that holds any significant assets. Purchaser or a Purchaser Subsidiary owns all of the issued and outstanding capital stock or other equity interests of each of the
Purchaser Subsidiaries, free and clear of any claim or Lien of any kind. All of the issued and outstanding shares of capital stock or other equity interests of each Purchaser Subsidiary have been, as applicable, duly authorized and validly issued
and are fully paid and nonassessable and not subject to or issued in violation of any purchase option, call option, right of first refusal, preemptive right, subscription right or any similar right. There is no legally binding and enforceable
subscription, option, warrant, right to acquire, or any other similar agreement pertaining to the capital stock or other equity interests of any Purchaser Subsidiary.
4.3.2 Organization and Good Standing. Each of the Purchaser Subsidiaries (a) is duly organized, validly existing and in good
standing under the Laws of its jurisdiction of organization; (b) is duly qualified to do business and in good standing in all jurisdictions (whether federal, state, or local) where its ownership or leasing of property or the conduct of its business
requires it to be so qualified; and (c) has all requisite corporate power and authority to own or lease its properties and assets and to carry on its business as now conducted, except in each of (b) and (c) as has not had, and would not reasonably
be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect. Purchaser has made available to Company true, correct and complete copies of the organizational documents of each Purchaser Subsidiary (and all amendments
thereto) as currently in effect, and no Purchaser Subsidiary is in default in the performance, observation or fulfillment of its obligations under such documents, except for such defaults that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Purchaser Material Adverse Effect.
4.3.3 Deposit Insurance; Other Assessments. The deposit accounts of each Purchaser Subsidiary that is a depository
institution are insured by the FDIC to the fullest extent permitted by Law, and all premiums and assessments to be paid in connection therewith have been paid by each such Purchaser Subsidiary when due. No proceeding for the revocation or
termination of such deposit insurance is pending or, to the Knowledge of Purchaser, threatened. Purchaser and each Purchaser Subsidiary has paid as and when due all material fees, charges, assessments, and the like as required by Law to each and
every Governmental Entity having jurisdiction over Purchaser or each Purchaser Subsidiary.
4.4 Capital Stock.
4.4.1 Classes and Shares. The authorized capital stock of Purchaser consists of 15,100,000 shares, divided into two
classes, as follows: (a) 15,000,000 shares of common stock, no par value ("Purchaser Common Stock"), of which 7,577,495 shares were issued and outstanding as of the close of business on
July 24, 2024; and (b) 100,000 shares of preferred stock, no par value, of which 0 shares were issued and outstanding as of the date of this Plan of Merger. Except as set forth in the immediately preceding sentence, as of the date of this Plan
of Merger, there is no security or class of securities outstanding that represents or is convertible into capital stock of Purchaser. All of the issued and outstanding shares of Purchaser Common Stock have
been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. As of the date of this Plan of Merger, no shares of Purchaser capital stock
were reserved for issuance except for (x) 98,908 shares of Purchaser Common Stock reserved for issuance in connection with outstanding stock options, restricted stock units, or other equity awards under the Purchaser Stock Plan, and (y)
460,202 shares of Purchaser Common Stock reserved for issuance pursuant to future awards or purchase under the Purchaser Stock Plan.
4.4.2 Voting Rights. Neither Purchaser nor any Purchaser Subsidiary has outstanding any security or issue of securities the
holder or holders of which have the right to vote on the approval of the Merger, this Plan of Merger or the issuance of Purchaser Common Stock that constitutes the Per Share Merger Consideration, or that entitle the holder or holders to consent to,
or withhold consent on, the Merger, this Plan of Merger or the issuance of Purchaser Common Stock that constitutes the Per Share Merger Consideration.
4.5 Financial Statements. The consolidated financial statements of Purchaser as of and for each of the three years ended December 31, 2023, 2022
and 2021, as audited by Purchaser's independent registered public accounting firm and the unaudited consolidated financial statements of Purchaser as of and for the six months ended June 30, 2024, including all schedules and notes relating to such
statements (collectively, "Purchaser Financial Statements"), fairly present, and the unaudited consolidated financial statements of Purchaser as of and for each quarter ending after the
date of this Plan of Merger until the Effective Time, including all schedules and notes, if any, relating to such statements, will fairly present, the consolidated financial condition and the results of operations, changes in shareholders' equity,
and cash flows of Purchaser as of the respective dates of and for the periods referred to in such financial statements, all in accordance in all material respects with GAAP, consistently applied, subject, in the case of unaudited interim financial
statements, to normal, recurring year-end adjustments (the effect of which has not had, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect) and the absence of notes (that, if
presented, would not differ materially from those included in the Purchaser Financial Statements). The Purchaser Financial Statements have complied, as of their respective dates of filing with the SEC, in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC with respect thereto. No financial statements of any entity or enterprise other than the Purchaser Subsidiaries are required by GAAP to be included in the consolidated
financial statements of Purchaser. The Purchaser Financial Statements have been prepared from, and are in accordance with, the books and records of Purchaser and the Purchaser Subsidiaries.
4.6 Absence of Certain Changes or Events. Since December 31, 2023, (a) Purchaser and the Purchaser Subsidiaries have conducted their respective
businesses in the ordinary course of business consistent with past practice (other than discussions and negotiations related to this Plan of Merger), and (b) no event has or events have occurred that have had, individually or in the aggregate, or
would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
4.7 Legal Proceedings. There is no Action pending or, to the Knowledge of Purchaser, threatened, against Purchaser or any of the Purchaser
Subsidiaries or any of their respective properties, rights or assets (a) as of the date of this Plan of Merger, that challenges or seeks to enjoin, alter, prevent or materially delay the Merger or (b) has had, or would reasonably be expected to
have, individually or in the aggregate, a Purchaser Material Adverse Effect. There is no material unsatisfied judgment, penalty or award against Purchaser or any of the Purchaser Subsidiaries. Neither Purchaser nor any of the Purchaser
Subsidiaries, nor any of their respective properties, rights or assets, is subject to any (i) Order or any investigation by a Governmental Entity, (ii) unresolved violation, criticism or exception by any Governmental Entity, or (iii) formal or
informal inquiry by, or disagreements or disputes with, any Governmental Entity with respect to the business, operations, policies or procedures of Purchaser or any Purchaser Subsidiary, in each case of clauses (i) through (iii), which has had, or
would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
4.8 Regulatory Filings. Since January 1, 2021, Purchaser and each Purchaser Subsidiary has timely filed or furnished all material reports,
registrations, statements and filings, together with any amendments required to be made with respect thereto, that they were required to file or furnish with Governmental Entities as required by applicable Law, including filings with (a) the
Michigan Secretary of State, the Michigan Department of Insurance and Financial Services, and any other state regulatory authority, (b) the Federal Reserve Board, (c) the SEC, and (d) the FFIEC. All such filings, as of their respective filing
dates, complied in all material respects with all Laws, forms, and guidelines applicable to such filings.
4.9 Conduct of Business. Purchaser and each Purchaser Subsidiary has conducted its business and used its properties in compliance in all material
respects with all, and are not in material default or violation under any, applicable Orders and Laws.
4.10 Transaction Documents. None of the information supplied or to be supplied by Purchaser for inclusion or incorporation by reference and
contained in any Transaction Document will contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were
made, not misleading, (a) in the case of any Transaction Document (other than the Registration Statement and Proxy Statement) at the time it is filed or at any time it is amended or supplemented, (b) in the case of the Registration Statement, at
the time it is filed with the SEC, at any time it is amended or supplemented and at the time it becomes effective under the Securities Act, and (c) in the case of the Proxy Statement, at the date it is first mailed to the Purchaser Shareholders and
at the time of the Purchaser Shareholder Meeting. The portions of the Registration Statement and Proxy Statement relating to Purchaser and the Purchaser Subsidiaries will comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder.
4.11 Agreements With Bank Regulators. Neither Purchaser nor any Purchaser Subsidiary is a party to any Regulatory Agreement, nor has Purchaser nor
any Purchaser Subsidiary been advised by any Governmental Entity that a Governmental Entity is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) an Order or a Regulatory Agreement.
4.12 Tax Matters.
4.12.1 All Tax Returns required by applicable Law to have been filed by Purchaser and each Purchaser Subsidiary have been filed when due (taking into account any
applicable extensions), and each such Tax Return was true, correct and complete in all material respects when filed. Purchaser and each Purchaser Subsidiary has withheld and paid all material Taxes required to have been withheld and paid in
connection with amounts paid to any third party. All income and other material Taxes that are due and payable by Purchaser and each Purchaser Subsidiary have been paid.
4.12.2 None of the Tax Returns of Purchaser or the Purchaser Subsidiaries filed for any Tax year beginning after December 31, 2018 have been audited by the IRS or any
federal, state, local or foreign taxing authority. There is no tax audit or legal or administrative proceeding concerning Tax Returns or the assessment or collection of Taxes ongoing or pending or, to Purchaser's Knowledge, threatened with respect
to Purchaser or any Purchaser Subsidiary and the Purchaser has not been notified in writing of any such threatened audit or proceeding. No claim concerning the calculation, assessment or collection of Taxes has been asserted with respect to
Purchaser or any Purchaser Subsidiary except for any claim that has been fully resolved and the costs of such resolution fully paid and reflected in the Purchaser Financial Statements. There are no material Liens on any of the assets of Purchaser
or any of the Purchaser Subsidiaries that arose in connection with any failure (or alleged failure) to pay any Tax, other than Liens for Taxes not yet due and payable.
4.12.3 No claim has been made by any taxing authority in any jurisdiction where the Company does not file Tax Returns that is, or may be, subject to Tax by that
jurisdiction.
4.12.4 The amount of the Purchaser’s Liability for unpaid Taxes for all periods ending on or before June 30, 2024 does not, in the aggregate, exceed the amount of
accruals for Taxes (excluding reserves for deferred Taxes) reflected on the Purchaser Financial Statements. The amount of the Purchaser’s Liability for unpaid Taxes for all periods following June 30, 2024 shall not, in the aggregate, exceed the
amount of accruals for Taxes (excluding reserves for deferred Taxes) as adjusted for the passage of time in accordance with the past custom and practice of the Purchaser (and which accruals shall not exceed comparable amounts incurred in similar
periods in prior years).
4.12.5 No private letter rulings, technical advice memoranda or similar agreement or rulings have been requested, entered into or issued by any taxing authority with
respect to the Purchaser.
4.12.6 Neither Purchaser nor any Purchaser Subsidiary has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any
Taxes, which waiver or extension is still open.
4.12.7 Neither Purchaser nor any Purchaser Subsidiary has been included in any "consolidated," "unitary" or "combined" Tax Return for any taxable period for which the
statute of limitations has not expired (other than a group of which Purchaser is the common parent). Neither Purchaser nor any Purchaser Subsidiary is a general partner in any partnership.
4.12.8 In any year for which the applicable statute of limitations remains open, neither Purchaser nor any Purchaser Subsidiary has been or has purported to be a
"distributing corporation" or a "controlled corporation" in a distribution intended to qualify for tax-free treatment under Section 355 of the Code.
4.12.9 The Purchaser is not, nor has it been, a United States real property holding corporation (as defined in Section 897(c)(2) of the Code) during the applicable
period in Section 897(c)(1)(a) of the Code.
4.12.10 The tax and audit positions taken by Purchaser and the Purchaser Subsidiaries in connection with Tax Returns were reasonable and asserted in good faith. No listed
or other reportable transaction within the meaning of Sections 6011, 6111 or 6112 of the Code or any comparable provision of any other applicable Tax Law has been engaged in by, or with respect to, Purchaser or any Purchaser Subsidiary. Purchaser
and the Purchaser Subsidiaries have disclosed on their federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income tax within the meaning of Section 6662 of the Code.
4.12.11 Neither Purchaser nor any Purchaser Subsidiary has participated in or been a party to a transaction that, as of the date of this Plan of Merger, constitutes a
"listed transaction" for purposes of Section 6011 of the Code (or a similar provision of state Law).
4.12.12 Neither Purchaser nor any Purchaser Subsidiary has taken any action or has Knowledge of any fact that would reasonably be expected to prevent the Merger from
qualifying for the Intended Tax Treatment.
4.12.13 There has been no disallowance of a deduction under Section 162(m) of the Code or excise tax imposed under Section 280G of the Code for any amount paid or payable
by Purchaser or any Purchaser Subsidiary as employee compensation, whether under any contract, plan, program or arrangement, understanding or otherwise, and neither Purchaser nor any Purchaser Subsidiary has taken any action or has Knowledge of any
fact that would reasonably be expected to cause any such disallowance or imposition of excise tax in the future.
4.12.14 Purchaser and the Purchaser Subsidiaries have each maintained all necessary and appropriate accounting records to support the positions taken on all filed Tax
Returns and all exemptions from filing Tax Returns.
4.12.15 Each of Purchaser and the Purchaser Subsidiaries has withheld and paid over all material Taxes required to have been withheld and paid over, and has complied with
all information reporting and backup withholding requirements, including maintenance of required records with respect thereto, in connection with amounts paid or owing to any employee, creditor, independent contractor or other third parties. The
provisions made for Taxes on the Purchaser Financial Statements are sufficient for the payment of all accrued but unpaid Taxes as of the dates of the applicable Purchaser Financial Statement, whether or not disputed.
4.12.16 Neither Purchaser nor any Purchaser Subsidiary will be required to include any item of income in, or exclude any item of deduction from, taxable income for any
taxable period (or portion thereof) ending after the Closing Date as a result of any: (a) change in method of accounting for a taxable period ending on or prior to the Closing Date; (b) "closing agreement" as described in Section 7121 of the Code
(or any corresponding or similar provision of state, local or foreign income Tax Law) executed on or prior to the Closing Date; (c) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the
Code (or any corresponding or similar provision of state, local or foreign income Tax Law); (d) installment sale or open transaction disposition made on or prior to the Closing Date; or (e) prepaid amounts received or deferred revenue accrued on or
prior to the Closing Date. No property of Purchaser or any Purchaser Subsidiary is "tax exempt use property" within the meaning of Section 168(h) of the Code or directly or indirectly secures any debt the interest on which is exempt from tax under
Section 103(a) of the Code. Any federal income tax liability related to bad debt deductions of Purchaser or any Purchaser Subsidiary are recorded in the Purchaser Financial Statements.
4.12.17 Neither Purchaser nor any Purchaser Subsidiary is a party to a Tax sharing, indemnification or similar agreement, is or has been a member of an affiliated group
filing consolidated or combined tax returns (other than a group over which Purchaser is the common parent) or otherwise has any liability for the Taxes of any party other than Purchaser and the Purchaser Subsidiaries.
4.12.18 There is currently no limitation on the utilization of net operating losses, capital losses, built-in losses, tax credits or similar items of the Purchaser under
Sections 269, 382, 383, 384 or 1502 of the Code and the Treasury Regulations thereunder (and comparable provisions of state, local or foreign Law). Neither Purchaser nor any Purchaser Subsidiary (a) has failed to report any compensation as required
by Section 409A of the Code; or (b) has taken any action or has Knowledge of any fact that could reasonably be expected to result in any liability under Section 409A of the Code.
4.13 Properties. With respect to each parcel of real property owned by Purchaser or any Purchaser Subsidiary, excluding all other real estate owned
("Purchaser Real Property"), and also with respect to each parcel of real property leased by Purchaser or any Purchaser Subsidiary ("Purchaser-Leased
Real Property"):
4.13.1 Title to and Interest in Properties. Purchaser and each Purchaser Subsidiary has good and valid title to, or valid
leasehold interests in, all of their Purchaser Real Property and Purchaser-Leased Real Property free and clear of all Liens, except for Permitted Liens.
4.13.2 No Condemnation. None of Purchaser Real Property or, to the Knowledge of Purchaser, Purchaser-Leased Real Property is
the subject of any condemnation action. To the Knowledge of Purchaser, there is no proposal under active consideration by any public or governmental authority or entity to acquire Purchaser Real Property or Purchaser-Leased Real Property for any
governmental purpose.
4.13.3 Obligations. Purchaser and each Purchaser Subsidiary, as applicable, has paid all amounts due and owing and performed
in all material respects all obligations under each agreement that affects any of Purchaser Real Property or Purchaser-Leased Real Property.
4.14 Intellectual Property. Purchaser and the Purchaser Subsidiaries exclusively own, or have a valid license or other valid right to use, all
material Intellectual Property as used in their business as presently conducted; it being understood that the foregoing shall not be construed to expand or diminish the scope of the non-infringement representations and warranties that follow in
this Section 4.14. No Actions, suits or other proceedings are pending or, to the Knowledge of Purchaser, threatened that Purchaser or any of the Purchaser Subsidiaries is infringing, misappropriating or otherwise violating the rights of any Person
with regard to any Intellectual Property. To the Knowledge of Purchaser, no Person is infringing, misappropriating or otherwise violating the rights of Purchaser or any of the Purchaser Subsidiaries with respect to any Intellectual Property owned
or purported to be owned by Purchaser or any of the Purchaser Subsidiaries (collectively the "Purchaser-Owned Intellectual Property"). Except as have not had, and would not reasonably be
expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect, to the Knowledge of Purchaser no circumstances exist which could reasonably be expected to give rise to any (i) Action that challenges the rights of Purchaser
or any of the Purchaser Subsidiaries with respect to the validity or enforceability of the Purchaser-Owned Intellectual Property or (ii) claim of infringement, misappropriation, or violation by the Purchaser of the Intellectual Property rights of
any Person.
4.15 Required Licenses, Permits, Etc. Purchaser and each Purchaser Subsidiary hold all material Permits and other rights from all appropriate
Governmental Entities necessary for the conduct of its business substantially as presently conducted. All such material Permits and rights are in full force and effect, and none of Purchaser or any Purchaser Subsidiaries has received any notice
(whether written or, to the Knowledge of the Purchaser, oral) of any pending or threatened action by any Governmental Entity to suspend, revoke, cancel or limit any Permit.
4.16 Employee Benefits.
4.16.1 Each Purchaser Benefit Plan is in compliance with all applicable requirements of ERISA, the Code and all other applicable Laws and has been administered in
accordance with its terms and such Laws, except for such noncompliance that has not had, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
4.16.2 Each Purchaser Benefit Plan intended to qualify under Section 401(a) of the Code or under Section 501(c)(9) of the Code has received a favorable determination,
advisory, or opinion letter from the IRS that it is so qualified, and the related trusts have been determined to be exempt from taxation, or is established on a pre-approved form or prototype of plan document that has received or requested a
favorable opinion or advisory letter from the IRS that such form or plan document is so qualified or exempt. To the Knowledge of Purchaser, no condition exists or existed and nothing has occurred prior to or since the date of the most recent
determination, advisor, or opinion letter with respect to each such Purchaser Benefit Plan that would cause the loss of such qualification or exemption. All contributions, payments or premiums required to be made with respect to any Purchaser
Benefit Plan by Purchaser have been timely made, and all benefits accrued under any unfunded Purchaser Benefit Plan have been paid, accrued or otherwise adequately reserved in accordance with GAAP.
4.16.3 Neither Purchaser nor any ERISA Affiliate of Purchaser participates in any Multiemployer Plan, and neither Purchaser nor any ERISA Affiliate of Purchaser
maintains or contributes to, or is liable for or a party to, any plan, program, agreement or policy that (a) is a "defined benefit plan" within the meaning of Section 414(j) of the Code or Section 3(35) of ERISA, (b) is described in Section
401(a)(1) of ERISA (whether or not subject thereto), (c) is a multiple employer welfare arrangement within the meaning of Section 3(40)(A) of the Code, (d) is a voluntary employees beneficiary association within the meaning of Code Section
501(c)(9), or (e) is primarily for the benefit of employees who reside outside of the United States.
4.16.4 Each Purchaser Benefit Plan that is a "nonqualified deferred compensation plan" (as defined under Section 409A(d)(1) of the Code) has been operated and
administered in compliance with Section 409A of the Code in all material respects.
4.16.5 There is no pending or, to the Knowledge of Purchaser, threatened Action with respect to any Purchaser Benefit Plans, other than ordinary and usual claims for
benefits by participants and beneficiaries.
4.16.6 Neither Purchaser nor any Purchaser Subsidiary has any liability to any governmental or regulatory body with respect to any Purchaser Benefit Plan or any
related trust, account or other funding vehicle.
4.16.7 The assets and liabilities of each Purchaser Benefit Plan have been reported on the Purchaser Financial Statements in accordance with GAAP.
4.17 Environmental Matters.
4.17.1 Except for any matters that have not had, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect:
(a) Purchaser and each of the Purchaser Subsidiaries is and has been in compliance with and has no Liability under applicable Environmental Laws; (b) Purchaser and each of the Purchaser Subsidiaries possesses, has possessed and is and has been in
compliance with all required Environmental Permits; (c) there are no Environmental Claims pending or, to the Knowledge of Purchaser, threatened against Purchaser or any of the Purchaser Subsidiaries, and, to the Knowledge of Purchaser, there are no
facts or circumstances which could reasonably be expected to form the basis for any Environmental Claim against Purchaser or any of the Purchaser Subsidiaries; (d) no Releases of Hazardous Materials have occurred and no Person has been exposed to
any Hazardous Materials at, from, in, to, on, or under any Purchaser Site and no Hazardous Materials are present in, on, about or migrating to or from any Purchaser Site that could give rise to an Environmental Claim against Purchaser or any of the
Purchaser Subsidiaries; (e) neither Purchaser nor any of the Purchaser Subsidiaries has entered into or is subject to, any judgment, decree, order or other similar requirement of or agreement with any Governmental Entity under any Environmental
Laws; (f) neither Purchaser nor any of the Purchaser Subsidiaries has assumed responsibility for or agreed to indemnify or hold harmless any Person for any Liability arising under or relating to Environmental Laws; and (g) neither Purchaser, any
predecessors of Purchaser or any of the Purchaser Subsidiaries, nor any entity previously owned by Purchaser or any of the Purchaser Subsidiaries, has transported or arranged for the treatment, storage, handling, disposal, containment, generation,
manufacture, management or transportation of any Hazardous Material to any off-Site location which has or could result in an Environmental Claim against Purchaser or any of the Purchaser Subsidiaries.
4.17.2 Without limiting the generality of Section 4.14.1, to the Knowledge of Purchaser, the Purchaser Sites are free of
asbestos except for asbestos that has been properly sealed and encapsulated to the extent required by all applicable Environmental Laws and all workplace safety and health Laws and regulations.
4.17.3 No Purchaser Site contains, and to the Knowledge of Purchaser has ever contained, any underground tanks for the storage of Hazardous Materials. Each underground
storage tank presently or previously located on any Purchaser Site has been operated, maintained and removed or closed in place, as applicable, in compliance with all applicable Environmental Laws, and has not been the source of any Release of a
Hazardous Material to the environment that has not been fully remediated.
4.18 Investment Bankers and Brokers. Purchaser has employed Janney Montgomery Scott (the “Purchaser
Investment Banker") in connection with the Merger. Purchaser, the Purchaser Subsidiaries, and their respective Representatives have not employed, engaged, or consulted with any broker, finder, or investment banker other than the Purchaser
Investment Banker in connection with this Plan of Merger or the Merger. Other than the fees and expenses payable by Purchaser to Purchaser Investment Banker in connection with the Merger, as described in Section 4.15 of the Purchaser Disclosure
Letter, there is no investment banking fee, financial advisory fee, brokerage fee, finder's fee, commission, or compensation of a similar type payable by Purchaser or any Purchaser Subsidiary to any Person with respect to the Plan of Merger
or the consummation of the Merger.
4.19 Allowance for Credit Losses. The allowance for credit losses as reflected in Purchaser's consolidated financial statements and the Purchaser’s
regulatory reports as of December 31, 2023 and as of the quarter ended March 31, 2024, in the reasonable opinion of Purchaser's management, (a) was adequate to meet all reasonably anticipated credit losses, net of recoveries related to loans
previously charged off as of those dates, (b) was consistent with GAAP and safe and sound banking practices, and (c) conforms to recommendations and comments in reports of examination in all material respects.
4.20 Securities Laws Matters.
4.20.1 Since January 1, 2021, Purchaser has filed or furnished all forms, documents and reports and amendments thereto required to be filed or furnished with the SEC
under the Securities Act or the Exchange Act (collectively, but excluding the Proxy Statement and the Registration Statement, the "Purchaser SEC Reports"), and has paid all fees and
assessments due and payable in connection therewith. Each of the Purchaser SEC Reports, in each case as of its filing or furnishing date, or, if amended, as amended prior to the date of this Plan of Merger,
has complied as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act and published rules and regulations of the SEC, and none of the Purchaser SEC Reports, when filed or furnished, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. None of
the Purchaser Subsidiaries are or ever have been required to file periodic reports with the SEC. As of the date of this Plan of Merger, no executive officer of Purchaser has failed in any respect to make the certifications required of him or her
under Section 302 or 906 of the SOX. As of the date of this Plan of Merger, there are no material outstanding or unresolved comments received from the SEC with respect to any of the Purchaser SEC Reports.
4.20.2 Purchaser has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) as required by Rule
13a-15(a) under the Exchange Act, and Purchaser has established and maintains internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) as required by Rule 13a-15(a) under the Exchange Act.
Purchaser has disclosed, based on its most recent evaluation prior to the date of this Plan of Merger, to Purchaser’s auditors and the audit committee of the Purchaser Board of Directors (a) any significant deficiencies and material weaknesses in
the design or operation of its internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect Purchaser’s ability to record, process, summarize and report financial
information and (b) any fraud that involves management or other employees who have a significant role in Purchaser’s internal controls over financial reporting. Since January 1, 2021, neither Purchaser nor any of the Purchaser Subsidiaries has
Knowledge of any written complaint, allegation, assertion or claim regarding the accounting or auditing practices, procedures, methodologies or methods of Purchaser or any Purchaser Subsidiary or their respective internal accounting controls,
including any written complaint, allegation, assertion or claim that Purchaser or any Purchaser Subsidiary has engaged in questionable accounting or auditing practices, which, if true, would constitute a significant deficiency or a material
weakness. Since January 1, 2021, subject to any applicable grace periods, Purchaser has been and is in compliance with (a) the applicable provisions of the SOX and (b) the applicable listing and corporate governance rules and regulations of
Nasdaq, except in each case as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect. As of the date of this Plan of Merger, to the Knowledge of Purchaser, there is no
reason to believe that Purchaser’s outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section
404 of the SOX, without qualification, when next due and for so long as this Plan of Merger continues in existence.
4.21 Insurance. Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material
Adverse Effect, Purchaser and the Purchaser Subsidiaries maintain in full force and effect insurance policies on their respective assets, properties, premises, operations, and personnel in such amounts and against such risks and losses as are
customary and adequate for comparable entities engaged in the same business and industry, and the Purchaser and the Purchaser Subsidiaries are in compliance with, and not in default under, any such insurance policy. There is no unsatisfied claim of
$50,000 or more under such insurance as to which the insurance carrier has denied liability. Since January 1, 2021, no insurance company has canceled or failed to renew a policy of insurance covering Purchaser’s or any Purchaser Subsidiary's
assets, properties, premises, operations, directors or personnel. Purchaser and the Purchaser Subsidiaries have given adequate and timely notice to each insurance carrier, and have complied with all policy provisions, with respect to any material
known claim for which a defense or indemnification or both may be available to Purchaser or the Purchaser Subsidiaries.
4.22 Investment Securities.
4.22.1 Except as would not have, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect, each of Purchaser
and the Purchaser Subsidiaries have good title to all securities and commodities owned by it (except those sold under repurchase agreements), free and clear of any Lien, except as set forth in the Purchaser Financial Statements or to the extent
such securities or commodities are pledged in the ordinary course of business to secure obligations of Purchaser or Purchaser Subsidiaries. Such securities and commodities are valued on the books of the Purchaser in accordance with GAAP in all
material respects.
4.22.2 Purchaser and the Purchaser Subsidiaries and their respective businesses employ investment, securities, commodities, risk management and other policies, practices
and procedures that the Purchaser believes are prudent and reasonable in the context of such businesses, and, to the knowledge of Purchaser, Purchaser and the Purchaser Subsidiaries have been in material compliance with such policies, practices and
procedures in all material respects since January 1, 2021.
4.23 No Undisclosed Liabilities. Except for those Liabilities (a) that are fully reflected or reserved against in the most recent consolidated
balance sheet of Purchaser and the Purchaser Subsidiaries, (b) incurred in connection with this Plan of Merger and the transactions contemplated hereby, or (c) incurred in the ordinary course of business since the date of the most recent
consolidated balance sheet of Purchaser and the Purchaser Subsidiaries, neither Purchaser nor any of the Purchaser Subsidiaries has any Liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by GAAP to be set forth on its consolidated balance sheet or in the notes thereto.
4.24 Financial Capability. Purchaser has, and will have prior to the Effective Time, sufficient funds to pay the aggregate cash consideration
payable pursuant to Section 2.1 and to perform its other obligations contemplated by this Plan of Merger.
4.25 Books and Records. The books and records of Purchaser are, in all material respects, complete and accurately reflect the basis for the financial
condition, results of operations, business, assets and capital of Purchaser on a consolidated basis set forth in the Purchaser Financial Statements, represent bona fide transactions, and have been maintained in accordance with sound business
practices, including the maintenance of an adequate internal control system. The corporate minute books of Purchaser and the Purchaser Subsidiaries contain accurate and complete records of all meetings of, and corporate action taken by, their
shareholders, boards, and committees in all material respects. Since January 1, 2021, the minutes of each meeting (or corporate action without a meeting) of any such shareholders, boards, or committees have been duly prepared and are contained in
such minute books.
4.26 Community Reinvestment Act. Each Purchaser Subsidiary that is a depository institution received a rating of "satisfactory" or better in its most
recent examination or interim review with respect to the Community Reinvestment Act. Neither Purchaser nor the Purchaser Subsidiaries knows of any facts or circumstances which would cause a Purchaser Subsidiary that is a depository institution to
fail to comply with the Community Reinvestment Act or to receive a rating of less than "satisfactory."
4.27 Bank Secrecy Act. Neither Purchaser nor any Purchaser Subsidiary has been notified of any material supervisory criticisms or charges alleging
noncompliance with the Bank Secrecy Act (41 USC 5422, et seq.) or related state or federal anti-money laundering Laws, regulations and guidelines, including without limitation those provisions of federal regulations requiring (a) the filing of
reports, such as Currency Transaction Reports and Suspicious Activity Reports, (b) the maintenance of records and (c) the exercise of due diligence in identifying customers.
4.28 No Other Representations or Warranties. Except for the representations and warranties made by Purchaser and the Purchaser Subsidiaries in this
Article IV, neither Purchaser, nor any other Person makes or has made any representation or warranty with respect to Purchaser or the Purchaser Subsidiaries or their respective business, operations, assets,
Liabilities, condition (financial or otherwise) or prospects, notwithstanding the delivery or disclosure to Company or any of its Affiliates or Representatives of any documentation, projections, forecasts, estimates, budgets, prospect information
or other information with respect to any one or more of the foregoing.
ARTICLE V
COVENANTS
5.1 Conduct of Business by Company. Company shall, and shall
cause each of the Company Subsidiaries to, during the period from the date of this Plan of Merger and ending at the earlier of the Effective Time and the termination of this Plan of Merger in accordance with Article
VII, except as expressly contemplated by this Plan of Merger or as required by applicable Law or with the prior written consent of Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed), (a) conduct its
business in the ordinary course of business consistent with past practice in all material respects, and, to the extent consistent therewith, Company shall, and shall cause each of the Company Subsidiaries to, use its commercially reasonable
efforts to preserve substantially intact its and the Company Subsidiaries' business organization and advantageous customer and business relationships and keep available the services of the present officers and employees and (b) take no action
that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Governmental Entity required for the transactions contemplated hereby or to consummate the transactions contemplated
hereby on a timely basis. Without limiting the generality of the foregoing, between the date of this Plan of Merger and ending at the earlier of the Effective Time and the termination of this Plan of Merger in accordance with Article VII, except as otherwise expressly contemplated by this Plan of Merger or as set forth in Section 5.1 of the Company Disclosure Letter or as required by applicable Law, Company shall not, nor
shall it permit any of the Company Subsidiaries to, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed, other than with respect to Section
5.1.1, 5.1.2, 5.1.3, subsections (b), (c), (d), (e) or (h) of 5.1.4, 5.1.11 or 5.1.12, for which Purchaser may withhold its consent at its sole discretion):
5.1.1 amend its articles of incorporation or bylaws (or other comparable organizational
documents);
5.1.2 (a) split, combine or reclassify any securities issued by Company or any of the
Company Subsidiaries or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its securities, (b) purchase, repurchase, redeem or otherwise acquire any securities issued by Company or
any of the Company Subsidiaries, or (c) declare, set aside or pay any dividend or distribution (whether in cash, stock, property or otherwise) in respect of, or enter into any Contract with respect to the voting of, any shares of its capital
stock, except for distributions by a Company Subsidiary to its parent, and except for quarterly cash dividends by Company in an amount not to exceed $0.11 per share of Company Common Stock and paid in a manner consistent with past practice with
respect to the timing of the declaration, payment and record date of such dividend, subject to the terms of Section 5.20;
5.1.3 except as set forth on Section 5.1.3 of the Company Disclosure Letter,
issue, offer, deliver, sell, pledge, grant, dispose of or otherwise permit to become outstanding any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible or exchangeable securities, or encumber any securities issued by Company or any of the Company Subsidiaries;
5.1.4 except as required by applicable Law or the express terms of any Company Benefit
Plan or Contract in effect as of the date of this Plan of Merger, (a) increase the compensation, benefits, severance or termination pay of (or accelerate payment or vesting of), or pay or award any bonus or other incentive compensation to, any
director, officer, employee or individual independent contractor (except as set forth on Section 5.1.4 of the Company Disclosure Letter), and except for customary salary increases in amounts in the ordinary course of business consistent
with past practices in connection with promotions or annual salary adjustments made in the ordinary course of business consistent with past practices for employees with individual salaries or wages of less than $200,000 per year and not in
excess of 4% for any individual); (b) enter into any new or amend in any material respect any existing employment, consulting, severance, termination, retention, change in control or similar agreement with any of its past or present officers,
directors, employees or independent contractors; (c) establish, adopt, enter into, amend, terminate, or take any action to accelerate rights under any Company Benefit Plan; (d) grant any severance or termination pay unless provided under any
Company Benefit Plan; (e) grant any compensatory awards that are payable in, relate to, or are determined by reference to the value of, Company Common Stock; (f) fund or in any other way secure any payment of compensation or benefit under any
Company Benefit Plan; (g) hire any new employees or individual independent contractors, other than, to the extent hired in the ordinary course of business consistent with past practices, individual independent contractors or non-executive
employees with individual salaries, wages or base pay of less than $100,000 per year; or (h) establish, adopt, enter into, amend or terminate any Collective Bargaining Agreement.
5.1.5 acquire, by merger, consolidation, acquisition of stock or assets, or otherwise,
any business or division of a business or, except for transactions with or among wholly-owned Subsidiaries, make any capital contributions to any Person, other than (a) incident to foreclosures in connection with debts previously contracted in
good faith, (b) acquisitions of personal property in the ordinary course of business consistent with past practice not to exceed $25,000 individually or $50,000 in the aggregate for all such transactions, or (c) as set forth on Section
5.1.5 of the Company Disclosure Letter;
5.1.6 (a) transfer, license (or sublicense), sell, lease, pledge, mortgage or otherwise
dispose of or permit any Lien (other than Permitted Liens) to attach to, any assets, including the capital stock or other equity interests in any Company Subsidiary; provided, however, the foregoing shall not apply to dealings with financial assets or investment securities nor prohibit Company and the Company Subsidiaries from transferring, licensing, selling, leasing or disposing of obsolete or
unused equipment, fixtures or assets, in each case in the ordinary course of business consistent with past practice not to exceed $25,000 individually or $50,000 in the aggregate for all such transactions; (b) adopt or effect a plan of complete
or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; or (c) adopt any shareholder rights plan;
5.1.7 incur any Indebtedness for borrowed money or guarantee, assume, endorse or
otherwise as an accommodation become responsible for any such Indebtedness of another Person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company or any of the Company
Subsidiaries, guarantee any debt securities of another Person, or enter into any "keep well" or other Contract to maintain any financial statement condition of any other Person (other than any wholly-owned Company Subsidiary) (it being
understood and agreed that incurrence of Indebtedness in the ordinary course of business consistent with past practices in connection with the creation of deposit liabilities, issuance of letters of credit, purchases of federal funds,
borrowings from the FHLB, sales of certificates of deposits, and entry into repurchase agreements shall not be prohibited by this Section 5.1.7);
5.1.8 make any application for the opening, relocation, or closing of any branch
office, loan production office or other material office or facility, or open, relocate or close any branch office, loan production office or other material office or facility;
5.1.9 enter into or amend or modify in any material respect, or consent to the
termination of (other than at its stated expiration date), any Company Material Contract, other than in the ordinary course of business consistent with past practice;
5.1.10 institute, settle or compromise any Actions pending or threatened before any
arbitrator, court or other Governmental Entity (a) involving the payment of monetary damages or an admission of liability by Company or any Company Subsidiary of any amount exceeding $50,000, (b) involving injunctive or similar relief, or (c)
having a material impact on Company's business;
5.1.11 make any material change in any method of financial accounting principles or
practices, in each case except for any such change required or to be required by a change in GAAP or applicable Law;
5.1.12 (a) settle or compromise any Tax claims, audits or assessments in excess of the
amount reserved for such claims, audits or assessments as set forth on the Company Financial Statements, (b) make or change any Tax election, change any annual Tax accounting period, adopt or change any method of Tax accounting or (c) enter
into any closing agreement, surrender in writing any right to claim a Tax refund, offset or other reduction in Tax liability or consent to any extension or waiver of the limitation period applicable to any Tax claim or assessment relating to
Company or the Company Subsidiaries;
5.1.13 except for (a) capital expenditures set forth on Section 5.1.13 of the Company
Disclosure Letter, (b) capital expenditures required by Law or Governmental Entities or incurred in connection with the repair or replacement of facilities destroyed or damaged due to casualty or accident (whether or not covered by
insurance), or (c) each Contract for any one capital expenditure or series of capital expenditures, the aggregate amount of which is less than $10,000, make any capital expenditure or permit any of the Company Subsidiaries to make any capital
expenditure;
5.1.14 enter into any material new line of business or change in any material respect its
lending, investment, underwriting, risk and asset liability management, interest rate or fee pricing with respect to depository accounts, hedging and other material banking or operating policies or practices, except in the ordinary course of
business consistent with past practice or as required by Law or any regulatory agency having jurisdiction over Company or any of the Company Subsidiaries;
5.1.15 except as required by Law or any regulatory agency having jurisdiction over
Company or any of the Company Subsidiaries, make any material changes in its policies and practices with respect to underwriting, pricing, originating, acquiring, selling, servicing, or buying or selling rights to service loans;
5.1.16 restructure or materially change the nature of the composition of its investment
securities portfolio through purchases, sales or otherwise, or its policies with respect to the classification or reporting of such portfolios;
5.1.17 fail to charge off loans and maintain its allowance for credit losses, in each
case in a manner in conformity with the prior respective practices of Company and the Company Subsidiaries and applicable industry, regulatory, and GAAP standards;
5.1.18 fail to promptly notify Purchaser of the threat (to the Knowledge of Company) or
the commencement, of any material Action against, relating to, or affecting: (a) Company or any Company Subsidiary; (b) Company's or any Company Subsidiary's directors, officers, or employees in their capacities as such; (c) Company's or any
Company Subsidiary's assets, liabilities, businesses, or operations; or (d) the Merger or this Plan of Merger;
5.1.19 enter into or amend any Contract or other transaction with any Company-Related
Person, except as contemplated or permitted by this Plan of Merger;
5.1.20 except as and to the extent required by applicable Law or regulatory agencies
having jurisdiction over Company or any of the Company Subsidiaries, (a) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Plan of
Merger, or (b) take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VI not being satisfied;
5.1.21 (a) enter into any new credit or new lending relationships greater than
$1,000,000 that would require an exception to The State Bank’s formal loan policy as in effect as of the date of this Plan of Merger or that are not in compliance with the provisions of such loan policy; or (b) other than incident to a
reasonable loan restructuring, extend additional credit to any Person and any director or officer of, or any owner of a material interest in, such Person (any of the foregoing with respect to a Person being referred to as a "Borrowing Affiliate") if such Person or such Borrowing Affiliate is the obligor under any Indebtedness to Company or any of its Subsidiaries which constitutes a nonperforming loan or
against any part of such Indebtedness Company or any of its Subsidiaries has established loss reserves or any part of which has been charged-off by Company or any of its Subsidiaries;
5.1.22 except in the ordinary course of business consistent with past practices (a)
terminate, materially amend, or waive any material provision of, any Company Material Contract; make any change in any instrument or agreement governing the terms of any of its securities, or material lease or contract, other than normal
renewals of contracts and leases without material adverse changes of terms with respect to Company, or (b) or enter into any contract that would constitute a Company Material Contract if it were in effect on the date of this Agreement; or
5.1.23 agree or commit to do any of the foregoing.
For the purposes of this Section 5.1, prior written consent of Purchaser will be deemed to have been given with respect to any
matter for which Company has requested consent in writing and delivered to the chief executive officer or president of Purchaser and in accordance with Section 9.8 (including by providing copies to all
required parties), but Purchaser has not responded in writing within five Business Days of such request.
5.2 Conduct of Business by Purchaser. Between the date of this
Plan of Merger and ending at the earlier of the Effective Time and the termination of this Plan of Merger in accordance with Article VII, except as otherwise expressly contemplated by this Plan of Merger
or as required by applicable Law, Purchaser (a) shall take no action that would reasonably be expected to adversely affect or materially delay the ability to obtain any necessary approvals of any Governmental Entity required for the transactions
contemplated hereby or to consummate the transactions contemplated hereby on a timely basis, and (b) shall not, nor shall it permit any of the Purchaser Subsidiaries to, without the prior written consent of Company (which consent shall not be
unreasonably withheld, conditioned or delayed):
5.2.1 (a) Except as contemplated by the Purchaser Shareholder Approval, if received, amend
the Purchaser's articles of incorporation or (b) amend the Purchaser’s bylaws in a manner that would materially and adversely affect the holders of Company Common Stock relative to the holders of Purchaser Common Stock;
5.2.2 take any action that would prevent the Merger from qualifying for the Intended
Tax Treatment;
5.2.3 fail to comply in all material respects with applicable Law and internal policies
and procedures formally adopted by its board of directors applicable to the conduct of its business, except to the extent and the application of any Law is being contested in good faith and Company has been notified of such contest;
5.2.4 except as and to the extent required by applicable Law or regulatory agencies
having jurisdiction over Purchaser or any of the Purchaser Subsidiaries, (a) take any action that would reasonably be expected to prevent, materially impede or materially delay the consummation of the transactions contemplated by this Plan of
Merger, or (b) take, or knowingly fail to take, any action that is reasonably likely to result in any of the conditions to the Merger set forth in Article VI not being satisfied; or
5.2.5 agree or commit to do any of the foregoing.
5.3 No Solicitation by Company.
5.3.1 Except as specifically permitted by this Section
5.3, Company shall not and shall cause each of the Company Subsidiaries and their Representatives not to, during the period from the date of this Plan of Merger until the earlier of the Effective Time and the termination of this Plan
of Merger in accordance with Article VII, directly or indirectly, (a) solicit, initiate, facilitate or knowingly encourage (including by way of furnishing
information) any inquiries regarding, or the making of any proposal or offer that constitutes, or could reasonably be expected to lead to, a Company Takeover Proposal, (b) engage or enter into, continue or otherwise participate in any
discussions or negotiations regarding, or furnish to any other Person information in connection with any Company Takeover Proposal, or otherwise cooperate with or assist or participate in, or facilitate or knowingly encourage any such
inquiries, proposals, discussions or negotiations or any effort or attempt to make a Company Takeover Proposal, (c) grant any waiver, amendment or release of or under, or fail to enforce, any confidentiality, standstill or similar agreement (or
any confidentiality, standstill or similar provision of any other contract) or (d) enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other contract providing for,
relating to or in connection with any Company Takeover Proposal or any proposal or offer that could reasonably be expected to lead to a Company Takeover Proposal. Company shall, and shall cause each of the Company Subsidiaries and each of its
and the Company Subsidiaries' Representatives to (i) immediately upon execution of this Plan of Merger, cease any solicitation, encouragement, discussions or negotiations with any Person that may be ongoing with respect to an existing or
potential Company Takeover Proposal as of the date of this Plan of Merger, (ii) request promptly thereafter that any Person furnished with confidential or non-public information concerning the Company or any of the Company Subsidiaries on or
prior to the date hereof in connection with its consideration of a Company Takeover Proposal promptly return or destroy all confidential or non-public information concerning Company or any of the Company Subsidiaries delivered or made available
to such Person or its Representatives by Company, the Company Subsidiaries or any Representatives thereof, and any summaries, analyses or extracts thereof or based thereon, and any files, copies or records containing such information in any
computer or electronic media, and (iii) immediately upon execution of this Plan of Merger, terminate all physical and electronic data room access previously granted to any Person or its Representatives (other than Purchaser and its
Representatives).
5.3.2 Notwithstanding anything to the contrary contained herein, if at any time prior to
obtaining the Company Shareholder Approval, Company or any of its Representatives receives a bona fide unsolicited Company Takeover Proposal from any Person or group of Persons, which Company Takeover Proposal did not result from any breach of
this Section 5.3, then Company and its Representatives may (a) contact such Person or group of Persons and their Representatives to request that such Person or group of Persons provide clarification of
any term or condition of such Company Takeover Proposal that the Company Board of Directors determines in good faith to be ambiguous or unclear, and (b) if the Company Board of Directors determines in good faith, after consultation with its
independent financial advisors and outside legal counsel, that such Company Takeover Proposal constitutes, or is reasonably expected to lead to, a Company Superior Proposal (i) furnish, pursuant to an Acceptable Company Confidentiality
Agreement, information (including non-public information) with respect to Company and the Company Subsidiaries to the Person or group of Persons who has made such Company Takeover Proposal and their respective Representatives; provided that Company shall (subject to the terms of the Company Confidentiality Agreement) promptly (and in any event within 24 hours) make available to Purchaser (through an electronic data room or
otherwise), and concurrently provide express written notification, via electronic mail notification to Purchaser in accordance with the applicable provisions of Section 9.8, of the availability of, any
written confidential or non-public information that is provided to any such Person or group of Persons or their respective Representatives, if such information was not previously provided to Purchaser or its Representatives, and (ii) engage in
or otherwise participate in discussions or negotiations with the Person or group of Persons making such Company Takeover Proposal and their respective Representatives; provided, further that Company shall promptly (and in any event within 24 hours) provide to Purchaser (A) a copy of any Company Takeover Proposal made in writing by any such Person or group of Persons to Company or
any of its Representatives, and the identity of the Person making the Company Takeover Proposal, and (B) a written summary of the material terms of any such Company Takeover Proposal not made in writing. For the purposes of this Plan of
Merger, "Acceptable Company Confidentiality Agreement" means any confidentiality agreement that contains terms that are no less favorable to Company than those contained in the Company
Confidentiality Agreement, which shall not provide such Person with any exclusive right to negotiate or otherwise prevent Company from providing information to Purchaser in accordance with this Agreement or otherwise complying with its
obligations under this Agreement.
5.3.3 Company shall keep Purchaser informed of any developments, discussions or
negotiations regarding any Company Takeover Proposal on a reasonably current basis (and in any event with 24 hours) and shall notify Purchaser of the status of such Company Takeover Proposal. For the
avoidance of doubt, all information provided to Purchaser pursuant to this Section 5.3.3 will be subject to the terms of the Company Confidentiality Agreement. Company agrees that it and its
Subsidiaries will not enter into any confidentiality or other agreements with any Person subsequent to the date of this Plan of Merger which prohibits Company from providing any information to Purchaser in accordance with this Section 5.3.
5.3.4 Except as permitted by Section 5.3.5,
neither the Company Board of Directors nor any committee thereof shall (a) (i) fail to recommend to the Company Shareholders that the Company Shareholder Approval be given or fail to include the Company Board Recommendation in the Proxy
Statement, (ii) change, qualify, withhold, withdraw or modify, or publicly propose to change, qualify, withhold, withdraw or modify, in a manner adverse to Purchaser, the Company Board Recommendation, (iii) fail to recommend against any tender
offer or exchange offer that is a Company Takeover Proposal within 10 Business Days after the commencement thereof other than a temporary "stop, look and listen" communication by the Company Board of Directors consistent with Rule 14d-9(f) of
the Exchange Act, (iv) adopt, approve or recommend, or submit to the vote of the Company Shareholders, or publicly propose to approve or recommend to the Company Shareholders, a Company Takeover Proposal or (v) make any public statement
inconsistent with the Company Board Recommendation (actions described in this clause (a) being referred to as a "Company Adverse Recommendation Change") or (b) cause or permit Company
or any of the Company Subsidiaries to enter into any letter of intent, agreement or agreement in principle with respect to any Company Takeover Proposal (other than an Acceptable Company Confidentiality Agreement) (each, a "Company Acquisition Agreement").
5.3.5 Notwithstanding anything to the contrary herein, prior to the time the Company
Shareholder Approval is obtained, the Company Board of Directors may, in connection with a bona fide written Company Takeover Proposal which Company Takeover Proposal was made after the date of this Plan of Merger and that did not result from
any breach of this Section 5.3, make a Company Adverse Recommendation Change or terminate this Plan of Merger pursuant to Section 7.1.8 to enter into a
definitive merger agreement or other definitive purchase or acquisition agreement with respect to such Company Takeover Proposal, if and only if, prior to taking such action, Company has complied with its obligations under this Section 5.3 and the Company Board of Directors has determined in good faith, after consultation with its independent financial advisors and outside legal counsel, that such Company Takeover Proposal
constitutes a Company Superior Proposal and that the failure to take the actions contemplated by this sentence are reasonably likely to be inconsistent with its fiduciary duties under applicable Law; provided,
however, that prior to taking any such action (a) Company has given Purchaser at least four Business Days prior written notice of its intention to take such action (which notice shall specify the
material terms and conditions of any such Company Superior Proposal, including the identity of the party making such Company Superior Proposal) and has contemporaneously provided a copy to Purchaser of all written materials (including all
transaction agreements and related documents) with or from the party making such Company Superior Proposal, (b) Company has negotiated, and has caused its Representatives to negotiate, in good faith with Purchaser during such notice period to
the extent Purchaser wishes to negotiate, to enable Purchaser to revise the terms of this Plan of Merger such that it would cause such Company Superior Proposal to no longer constitute a Company Superior Proposal and (c) following the end of
such notice period, the Company Board of Directors shall have considered in good faith any changes to this Plan of Merger proposed in writing by Purchaser, and shall have determined that the Company Superior Proposal would continue to
constitute a Company Superior Proposal if such revisions were to be given effect and that the failure to take the actions contemplated in the first sentence of this Section 5.3.5 would be reasonably
likely to be inconsistent with its fiduciary duties under applicable Law. In the event of any material revisions to a Company Takeover Proposal, Company shall deliver a new written notice to Purchaser pursuant to the foregoing clause (a) and
again comply with the requirements of this Section 5.3.5 with respect to such new written notice; provided, however,
that references herein to the four Business Day period shall be deemed to be references to a two Business Day period with respect thereto.
5.3.6 Provided that Company and the Company Board of Directors comply with their
applicable obligations under Section 5.3.5, nothing in this Section 5.3 shall prohibit the Company Board of Directors from (a) taking and disclosing to the
Company Shareholders a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or (b) making any "stop-look-and-listen" communications to Company Shareholders pursuant to Section
14d-9(f) promulgated under the Exchange Act (or any similar communications to the Company Shareholders); provided, however, that the taking of any action
pursuant to any of the preceding clauses (a) or (b) shall in no way limit or modify the effect of this Plan of Merger with respect to any such action taken.
5.3.7 As used in this Plan of Merger, "Company Takeover Proposal" shall mean any inquiry, proposal or offer from any Person (other than Purchaser and its Subsidiaries) or "group", within the meaning of Section 13(d) of the Exchange Act, relating to, in a single
transaction or series of related transactions, any (a) direct or indirect acquisition of assets of Company and its Subsidiaries equal to more than 15% of Company's consolidated assets or to which more than 15% of Company's net income on a
consolidated basis are attributable, (b) acquisition of more than 15% of the outstanding Company Common Stock or the capital stock of any Subsidiary of Company, (c) tender offer or exchange offer that if consummated would result in any Person
or "group" beneficially owning more than 15% of the outstanding Company Common Stock, (d) merger, consolidation, share exchange, business combination, recapitalization, reorganization, liquidation, dissolution or similar transaction involving
Company or any of its Subsidiaries or (e) any combination of the foregoing types of transactions if the sum of the percentage of consolidated assets, consolidated net income and Company Common Stock involved is more than 15%; in each case,
other than the Merger.
5.3.8 As used in this Plan of Merger, "Company Superior Proposal" shall mean any bona fide written Company Takeover Proposal that the Company Board of Directors has determined in its good faith judgment, after consultation with its independent financial advisors
and outside legal counsel, is reasonably likely to be consummated in accordance with its terms and that is reasonably likely to result in the consummation of a transaction more favorable to the Company Shareholders from a financial point of
view than the Merger, taking into account (a) all legal, regulatory and financial aspects of the proposal (including availability of financing and certainty of closing) and the Person making the proposal; and (b) any changes to the terms of
this Plan of Merger proposed by Purchaser in response to such proposal or otherwise. For purposes of the definition of "Company Superior Proposal", the references to "15%" in the definition of Company Takeover Proposal shall be deemed to be
references to "50%."
5.3.9 For purposes of this Section 5.3, any
breach of this Section 5.3 by any of Company's Representatives in his or her individual capacity shall be deemed to be a breach by Company.
5.4 Preparation of the Registration Statement; Shareholder Meetings.
5.4.1 Purchaser shall use commercially reasonable efforts to prepare and cause to be
filed with the SEC a Registration Statement on Form S-4 (the "Registration Statement"), in which a prospectus and proxy statement to be sent to the Purchaser Shareholders and the
Company Shareholders relating to the Purchaser Shareholder Meeting and to the Company Shareholder Meeting (the "Proxy Statement") will be included, as promptly as practicable following
the date of this Plan of Merger. Purchaser shall use commercially reasonable efforts to have the Registration Statement declared effective under the Securities Act as promptly as practicable after such filing and shall use commercially
reasonable efforts to keep the Registration Statement effective as long as reasonably necessary to consummate the Merger. Prior to the filing of the Registration Statement, Purchaser shall consult with Company with respect to such filing and
shall afford Company and its Representatives reasonable opportunity to review and comment thereon, and shall consider in good faith for inclusion any comments thereon submitted by Company. If at any time prior to the Purchaser Shareholder
Meeting or the Company Shareholder Meeting any event with respect to Purchaser or Company or any of their respective officers and directors or Subsidiaries should occur which is required to be described in an amendment of, or a supplement to,
the Proxy Statement or the Registration Statement, Purchaser or Company, as applicable, shall promptly inform the other party so that such event may be so described, and such amendment or supplement shall be promptly filed with the SEC and, as
required by Law, disseminated to the shareholders of Purchaser and Company.
5.4.2 Purchaser shall use commercially reasonable efforts to take any actions (other
than qualifying to do business in any jurisdiction in which it is not now so qualified) required to be taken under the Securities Act, the Exchange Act, any applicable foreign or state securities or "blue sky" Laws and the rules and regulations
thereunder in connection with the Merger and the issuance of Purchaser Common Stock as Per Share Merger Consideration.
5.4.3 Company shall, as soon as is reasonably practicable following the date on which
the Registration Statement is declared effective or the effective date can be predicted with reasonable certainty (and in no event later than 45 days after such date), duly call, give proper notice of, convene and hold a special meeting of the
Company Shareholders for the purpose of seeking the Company Shareholder Approval ("Company Shareholder Meeting"). Company shall consult with Purchaser regarding the record date for
the Company Shareholder Meeting and shall cause appropriate searches to be made in accordance with SEC Rule 14a-13 as if SEC Rule 14a-13 applies to the Company. Company shall not change the record date for the Company Shareholder Meeting
without the prior written consent of Purchaser (such consent not to be unreasonably withheld, conditioned or delayed). Company shall use its commercially reasonable efforts to (a) cause the Proxy Statement to be mailed to the Company
Shareholders and to hold the Company Shareholder Meeting as promptly as practicable after the Registration Statement is declared effective under the Securities Act; (b) solicit from its shareholders proxies to vote on the proposal to approve
this Plan of Merger and to secure a quorum at the Company Shareholder Meeting; and (c) except if the Company Board of Directors shall have made a Company Adverse Recommendation Change as permitted by Section
5.3, solicit the Company Shareholder Approval. Company shall, through the Company Board of Directors, recommend to the Company Shareholders that they vote for the Company Shareholder Approval and shall include such recommendation in
the Proxy Statement, except to the extent that the Company Board of Directors shall have made a Company Adverse Recommendation Change as permitted by Section 5.3. Company may, in consultation with
Purchaser, adjourn or postpone the Company Shareholder Meeting (i) to the extent necessary to ensure that any necessary supplement or amendment to the Proxy Statement is provided to the Company Shareholders in advance of a vote on the Company
Shareholder Approval or (ii) if, as of the time for which the Company Shareholder Meeting is originally scheduled (as set forth in the Proxy Statement), there are insufficient Company Shareholders represented (either in person or by proxy) to
constitute a quorum necessary to conduct the business of such Company Shareholder Meeting or there are insufficient votes to obtain the Company Shareholder Approval. Notwithstanding the foregoing, (A) Company shall not adjourn, recess or
postpone the Company Shareholder Meeting to a date that is more than 20 days after the date on which the Company Shareholder Meeting was orginally scheduled without the prior written consent of Purchaser, such consent not to be unreasonably
withheld, conditioned, or delayed and (B) if Purchaser requests that Company adjourn, postpone or recess the Company Shareholder Meeting to solicit additional proxies for the purpose of obtaining the Company Shareholder Approval, the Company
will do so, provided, however, Purchaser shall not request Company to adjourn, postpone or recess the Company Sharheolder Meeting more than two times. Company shall keep Purchaser updated with respect to proxy solicitation results as
reasonably requested by Purchaser.
5.4.4 Purchaser shall, as soon as is reasonably practicable following the date on which
the Registration Statement is declared effective or the effective date can be predicted with reasonable certainty (and in no event later than 45 days after such date), duly call, give proper notice of, convene and hold a special meeting of the
Purchaser Shareholders for the purpose of seeking the Purchaser Shareholder Approval ("Purchaser Shareholder Meeting"). Purchaser shall consult with Company regarding the record date
for the Purchaser Shareholder Meeting and shall cause appropriate searches to be made in accordance with Rule 14a-13. Purchaser shall not change the record date for the Purchaer Shareholder Meeting without the prior written consent of Company
(such consent not to be unreasonably withheld, conditioned or delayed). Purchaser shall use its commercially reasonable efforts to (a) cause the Proxy Statement to be mailed to the Purchaser Shareholders and to hold the Purchaser Shareholder
Meeting as promptly as practicable after the Registration Statement is declared effective under the Securities Act; (b) solicit from its shareholders proxies to vote on the proposal to approve this Plan of Merger and to secure a quorum at the
Purchaser Shareholder Meeting and (c) solicit the Purchaser Shareholder Approval. Purchaser shall, through the Purchaser Board of Directors, recommend to the Purchaser Shareholders that they vote for the Purchaser Shareholder Approval and
shall include such recommendation in the Proxy Statement. Purchaser may, in consultation with Company, adjourn or postpone the Purchaser Shareholder Meeting (i) to the extent necessary to ensure that any necessary supplement or amendment to the
Proxy Statement is provided to the Purchaser Shareholders in advance of a vote on the Purchaser Shareholder Approval or (ii) if, as of the time for which the Purchaser Shareholder Meeting is originally scheduled (as set forth in the Proxy
Statement), there are insufficient Purchaser Shareholders represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of such Purchaser Shareholder Meeting or there are insufficient votes to obtain the
Purchaser Shareholder Approval. Notwithstanding the foregoing, Purchaser shall not adjourn, recess or postpone the Purchaser Shareholder Meeting to a date that is more than 20 days after the date on which the Purchaser Shareholder Meeting was
orginally scheduled without the prior written consent of Company, such consent not to be unreasonably withheld, conditioned, or delayed. Purchaser shall keep Company updated with respect to proxy solicitation results as reasonably requested by
Company.
5.5 Stock Exchange Listing. Purchaser shall use its
commercially reasonable efforts to cause the shares of Purchaser Common Stock to be issued as Per Share Merger Consideration to be accepted for listing on the Nasdaq Capital Stock Market, subject to official notice of issuance, prior to the
Effective Time.
5.6 Regulatory Matters and Approvals.
5.6.1 Subject to the terms and conditions of this Plan of Merger, each of the parties
shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable Laws and regulations to consummate and make effective the Merger.
Subject to the terms and conditions of this Plan of Merger, the parties will use commercially reasonable efforts to obtain as promptly as practical consents, approvals and authorizations of all third parties and Governmental Entities necessary
or desirable for the consummation of the Merger.
5.6.2 In furtherance of the foregoing, as soon as practicable after the date of this
Plan of Merger, Purchaser shall prepare and file with each Governmental Entity having jurisdiction all applications and documents required to obtain, and shall use its commercially reasonable efforts to obtain each necessary approval of or
consent to consummate the Merger. Subject to applicable Law, Purchaser shall provide Company with reasonable opportunities to review and comment upon the non-confidential sections of such applications and documents before filing and to make
such amendments and file such supplements thereto as Company may reasonably request. To the extent permitted by applicable Law, Purchaser shall provide Company with copies of all material correspondence received from these Governmental
Entities and all material responsive correspondence sent to these agencies.
5.6.3 From the date of this Plan of Merger until the Effective Time, each of Company and
Purchaser shall promptly notify the other party in writing of any pending or, to the Knowledge of Company or Purchaser (as the case may be), threatened Action or Order by any Governmental Entity or any other Person (a) challenging or seeking
material damages in connection with the Merger or the other transactions contemplated by this Plan of Merger; (b) seeking to restrain or prohibit the consummation of the Merger or the other transactions contemplated by this Plan of Merger; or
(c) otherwise relating to this Plan of Merger or any of the transactions contemplated by this Plan of Merger. If any Action or Order is instituted (or threatened to be instituted) challenging any of the transactions contemplated by this Plan
of Merger as violative of any Law, each of Company and Purchaser shall, and shall cause their respective Representatives to, cooperate and use their commercially reasonable efforts to contest and resist, except insofar as Company and Purchaser
may otherwise agree, any such Action or Order, including any Action or Order that seeks a temporary restraining order or preliminary injunction that would prohibit, prevent or restrict consummation of the Merger or the other transactions
contemplated by this Plan of Merger. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to require Purchaser or Company to take any action, or commit to take any action, or agree to any condition or restriction
which the Purchaser Board of Directors reasonably determines in good faith would, individually or in the aggregate, materially and adversely reduce the economic benefits of the Merger to such a degree that Purchaser would not have entered into
this Agreement had such action, condition or restriction been known at the date hereof (a "Materially Burdensome Regulatory Condition").
5.7 Absence of Control. Nothing contained in this Plan of Merger shall give
Company, directly or indirectly, the right to control or direct the operations of Purchaser or give Purchaser, directly or indirectly, the right to control or direct the operations of Company prior to the Effective Time. Prior to the Effective
Time, subject to Sections 5.1 and 5.2, as applicable, Company and Purchaser each shall exercise, consistent with the terms and conditions of this Plan of Merger, complete control and supervision over their respective business operations.
5.8 Employee Matters.
5.8.1 Benefit Continuation. All employees of
Company or any of the Company Subsidiaries immediately before the Effective Time shall automatically become employees of the Surviving Corporation or its Subsidiaries as of the Effective Time. Purchaser covenants and agrees to provide to each
employee of Company or any Company Subsidiary who becomes employed by Purchaser or any of its Subsidiaries as a result of the Merger (each, a "Continuing Employee") with the same
employee benefits then provided to similarly situated employees at Purchaser and consistent with this Section 5.8.
5.8.2 Employee Severance. Purchaser covenants
and agrees to pay severance payments to all employees of Company whose job is eliminated as a result of the Merger and whose employment is terminated by Purchaser other than for cause within twelve months after
the Effective Time, in accordance with the severance terms as set forth on Section 5.8.2 of the Purchaser Disclosure Letter.
5.8.3 Years of Service Credit; Deductible Credit.
5.8.3.1 Years of Service Credit. Purchaser covenants and agrees
that each Continuing Employee shall receive credit for years of service at Company or the Company Subsidiaries (i) for all purposes, including, without limitation, for purposes of eligibility to participate, vesting credit, entitlement to
benefits, and levels of benefits of any Purchaser employee benefit plan (including, but not limited to, Purchaser's 401(k) plan and vacation leave policy) or any other employee benefit plan of the Surviving Corporation or its Affiliates
commencing after the Effective Time, and (ii) for purposes of determining seniority in connection with employment with the Surviving Corporation and Affiliates, to the same extent as such Continuing Employee was entitled, before the Effective
Time, to credit for such service under any similar Company Benefit Plan in which such Continuing Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing shall not apply to the
extent that its application would result in a duplication of benefits.
5.8.3.2 Deductible Credit. Purchaser covenants and agrees that
each Continuing Employee shall receive full credit under Purchaser’s group health plans, for the year in which the Effective Time occurs, for any deductible or co-payment incurred by the Continuing Employee prior to the Effective Time under the
applicable Company Benefit Plan and for any other out-of-pocket expenses that count against any maximum out-of-pocket expense provision of the applicable Company Benefit Plan or Purchaser’s group health plans.
5.8.4 Retention and Stay Bonuses. Company will cooperate with Purchaser in its efforts to cause any employees of Company identified by Purchaser to enter into retention or stay bonus agreements (in a form mutually agreed to by
Purchaser and the employee) prior to the Effective Time.
5.8.5 Severance/Employment Agreements. Purchaser will honor all of Company's obligations and assume all its defenses under existing severance, change of control or employment agreements to which the Company or any Company Subsidiary is a party
and which are listed on Section 5.8.5 of the Company Disclosure Letter in accordance with the terms thereof.
5.8.6 Termination of Company Retirement Plan;
Redemption of Purchaser Common Stock from Company Retirement Plan.
5.8.6.1 The Company Board of Directors will, prior to the Effective Time, adopt resolutions terminating the
Company Retirement Plan effective as of immediately prior to the Effective Time. The accounts of all participants and beneficiaries in the Company Retirement Plan will become fully vested upon termination of the Company Retirement Plan. As
soon as practicable following the Effective Time, all account balances in the Company Retirement Plan will be either distributed to participants and beneficiaries or rolled over to an eligible tax‑qualified retirement plan or individual
retirement account as a participant or beneficiary may direct. Purchaser agrees to permit participants in the Company Retirement Plan who become employees of Purchaser to roll over their account balances in the Company Retirement Plan to
Purchaser's 401(k) plan. Notwithstanding the foregoing, (a) no shares of Purchaser common stock may be rolled over into Purchaser's 401(k) plan, and (b) a participant may roll over into Purchaser's 401(k) plan loans made by the Company
Retirement Plan only if such participant rolls over the participant's entire account balance. Until the Effective Time, Company will be permitted to make profit‑sharing and matching contributions to the Company Retirement Plan based on
participants' elective contributions to the Company Retirement Plan, in the ordinary course of business consistent with past practice.
5.8.6.2 Within two Business Days after Purchaser receives written notice from the trustee of the Company
Retirement Plan that the Company Retirement Plan has completed the exchange of all of the issued and outstanding shares of Company Common Stock owned by it immediately before the Effective Time for shares of Purchaser Common Stock pursuant to Section 2.2, Purchaser will make payment to the Company Retirement Plan by wire transfer in immediately available funds an amount of cash equal to such number of shares of Purchaser Common Stock owned by the
Company Retirement Plan multiplied by the Average Purchaser Closing Price for the redemption by the Purchaser from the trustee of the Company Retirement Plan of all such shares of Purchaser Common Stock.
5.8.7 Non-Equity Incentive and Bonus Plans.
Immediately on or prior to the Effective Time, Company and each Company Subsidiary shall, subject to the occurrence of the Effective Time, terminate all non-equity incentive and/or bonus plans, and the accrued benefits as of the Effective Time
shall be paid on a prorated basis based on the portion of the plan year completed before the Effective Time, assuming any individual performance goals are satisfied at the targeted level of performance and any Company performance goals are
satisfied at the targeted level of performance, and in a lump sum as soon as practicable following the Effective Time.
5.8.8 Supplemental Executive Retirement Plan. If
requested by Purchaser on or before December 1, 2024, the Company shall terminate on or before December 31, 2024, and pay out in a lump sum all of Company’s outstanding SERPs, provided the Effective Time is expected to occur within 30 days of
the date of termination.
5.9 Press Releases and Public Announcement. Purchaser and
Company agree that the initial press release with respect to the execution and delivery of this Plan of Merger shall be a release that is mutually agreed to by the parties. Thereafter, neither Company nor Purchaser will issue any press release
or make any public announcement relating to this Plan of Merger, the Merger or the other transactions contemplated by this Plan of Merger without the prior written approval of, in the case of Company, Purchaser, and in the case of Purchaser,
Company. However, each party may issue any such press release or make such public announcement (a) it believes in good faith is required to be made by applicable Law or any applicable rule or regulation promulgated by any applicable securities
exchange after consultation with outside legal counsel, in which case the disclosing party will use its commercially reasonable efforts to advise and consult with the other party regarding any such press release or other announcement prior to
making any such disclosure or (b) for such press release or such public announcement that are consistent with such other press releases or public announcements made after the date of this Plan of Merger in compliance with this Section 5.9.
5.10 Access to Information.
5.10.1 Subject to applicable Law, during the period commencing on the date of this Plan
of Merger and ending at the earlier of the Effective Time and the termination of this Plan of Merger in accordance with Article VII, (a) Company will, and will cause each of the Company Subsidiaries to,
upon reasonable prior written notice, permit Purchaser and its Representatives to have reasonable access at all reasonable times, and in a manner so as not to interfere with the normal business operations of Company and the Company
Subsidiaries, to the officers and senior management, premises, agents, books, records, and Contracts of or pertaining to Company and the Company Subsidiaries as may be reasonably
requested in writing; and (b) Purchaser will, and will cause each of the Purchaser Subsidiaries to, upon reasonable prior written notice, permit Company and its Representatives to have reasonable access at all reasonable times, and in a manner
so as not to interfere with the normal business operations of Purchaser and the Purchaser Subsidiaries, to the officers and senior management, premises, agents, books, records, and Contracts of or pertaining to Purchaser and the Purchaser
Subsidiaries as may be reasonably requested in writing; provided, however, that such access or disclosure of information will (i) comply with all applicable
Laws, (ii) not result in, or reasonably be expected to result in, the waiver of the attorney-client privilege, or (iii) not result in, or reasonably be expected to result in, a material breach of any material Contract. No such access shall
affect the representations, warranties, covenants or agreements of the parties (or the remedies with respect thereto) or the conditions to the obligations of the parties under this Plan of Merger.
5.10.2 All Confidential Material of Company (as defined in the Confidentiality Agreement)
and all Confidential Material of Purchaser provided pursuant to this Plan of Merger shall be subject to the provisions of the Confidentiality Agreement, dated as of August 3, 2023 between Company and Purchaser ("Confidentiality Agreement"), which shall remain in full force and effect in accordance with its terms.
5.11 Indemnification and Insurance.
5.11.1 All rights to exculpation, indemnification and advancement of expenses now
existing in favor of the current or former directors and officers, as the case may be, of Company or the Company Subsidiaries as provided in their respective articles of incorporation or bylaws or other organization documents or in existing
indemnity agreements with Company or any of the Company Subsidiaries shall survive the Merger and shall continue in full force and effect in accordance with their terms.
5.11.2 From and after the Effective Time, the Surviving Corporation shall indemnify and
hold harmless to the fullest extent permitted under applicable Law, each current or former director or officer of Company or any of the Company Subsidiaries (each, together with such person's heirs, executors or administrators, an "Indemnified Party") against any costs or expenses (including advancing attorneys' fees and expenses in advance of the final disposition of any claim, suit, proceeding or investigation to
each Indemnified Party to the fullest extent permitted by Law and following receipt of any undertaking required by applicable Law or applicable organizational documents), judgments, fines, losses, claims, damages, liabilities and amounts paid
in settlement in connection with any actual or threatened Actions, arising out of, relating to or in connection with any action or omission occurring or alleged to have occurred at or before the Effective Time in such Indemnified Party's
capacity as a director or officer of Company or any of the Company Subsidiaries or in such Indemnified Party's capacity as a director, officer, member, trustee or fiduciary of another corporation, partnership, joint venture, trust, pension or
other employee benefit plan or enterprise at the request or for the benefit of Company or any Company Subsidiary, including in connection with the transactions contemplated by this Plan of Merger. All rights to indemnification or advancement
of expenses in respect of any Action pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution of such claim. In the event of any such Action, the Surviving Corporation shall
reasonably cooperate with the Indemnified Party in the defense of the Action.
5.11.3 The Surviving Corporation shall maintain in effect for not less than six years
from the Effective Time the current policies of directors' and officers' liability insurance and fiduciary liability insurance maintained by Company and the Company Subsidiaries for the Indemnified Parties prior to the Effective Time with
respect to matters occurring at or prior to the Effective Time, including the transactions contemplated by this Plan of Merger. Alternatively, the Surviving Corporation may substitute therefor policies of substantially the same coverage
containing terms and conditions that, taken as a whole, are no less advantageous to the Indemnified Parties. After the Effective Time, the Surviving Corporation shall not be required to pay premiums for insurance coverages in excess of 300% of
the last annual premium (such 300% threshold, the "Maximum Amount") paid by Company prior to the date of this Plan of Merger in respect of the coverages required to be obtained
pursuant to this Section 5.11.3, and if such amount is not sufficient to purchase insurance in such amount, then the Surviving Corporation shall purchase such amount of insurance with the best coverage
reasonably available as can be purchased for an aggregate amount that is equal to the Maximum Amount. Alternatively, the Surviving Corporation may purchase at or after the Effective Time, at a total aggregate cost not exceeding the Maximum
Amount, a six-year prepaid "tail" policy on terms and conditions providing substantially equivalent benefits as the current policies of directors' and officers' liability insurance and fiduciary liability insurance maintained by Company and the
Company Subsidiaries for the Indemnified Parties with respect to matters occurring at or prior to the Effective Time, including the transactions contemplated by this Plan of Merger. If such "tail" prepaid policy has been obtained, the
Surviving Corporation shall use its commercially reasonable efforts to maintain it in full force and effect for its full term and honor all obligations thereunder, provided, however, that if such "tail" prepaid policy is terminated by the
insurance provider, then the Surviving Corporation shall use its commercially reasonable efforts to obtain and maintain a replacement "tail" prepaid policy on terms and conditions providing substantially equivalent benefits as the terminated
"tail" prepaid policy, for an aggregate cost not exceeding the Maximum Amount.
5.11.4 The rights of each Indemnified Party hereunder shall be in addition to, and not
in limitation of, any other rights such person may have under the articles of incorporation or bylaws or other organization documents of Company or any of the Company Subsidiaries or the Surviving Corporation, any other indemnification
arrangement, the MBCA, directors' and officers' insurance claims under any policy that is or has been in existence with respect to Company or the Company Subsidiaries or otherwise. The provisions of this Section
5.11 shall survive the consummation of the Merger and expressly are intended to benefit, and are enforceable by, each of the Indemnified Parties, each of whom is a third-party beneficiary of this Section
5.11.
5.11.5 In the event that the Surviving Corporation or its successors or assigns (a)
consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (b) transfers all or substantially all of its properties and assets to any Person, in each
case, the Surviving Corporation shall take commercially reasonable efforts so that the successors and assigns of the Surviving Corporation shall assume the obligations set forth in this Section 5.11.
5.11.6 Notwithstanding any provisions to the contrary, the indemnification obligations in
this Section 5.11 are limited by federal banking and securities Laws and any such obligations that violate any federal banking or securities Laws or published public policy are void and unenforceable.
5.12 Takeover Laws. If any "moratorium,"
"control share," "fair price," "affiliate transaction," "business combination" or other anti-takeover Law is or may become applicable to the Merger, Company and the Company Board of Directors shall use their respective commercially reasonable
efforts to (a) take all such actions as are reasonably necessary so that the transactions contemplated hereunder may be consummated as promptly as practicable on the terms contemplated by this Plan of Merger and (b) otherwise take all such
actions as are reasonably necessary to eliminate or minimize the effects of any such Law on the Merger and the transactions contemplated by this Plan of Merger.
5.13 Securityholder Litigation. Each
party shall give prompt notice of and keep the other party reasonably informed with respect to the threat, filing, defense or settlement of any securityholder Action against it or its directors or officers relating to the Merger or the other
transactions contemplated by this Plan of Merger. Each party shall give the other party the opportunity to participate (at its own expense) in the defense or settlement of any such securityholder Action and shall not settle any such Action
without the other party’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed).
5.14 Tax-Free Reorganization Treatment.
5.14.1 Company and Purchaser intend that the Merger will qualify as a reorganization under
Section 368(a) of the Code (the "Intended Tax Treatment"), and each shall not, and shall not permit any of their respective Subsidiaries to, take any action, or fail to take any
action, that would preclude the Merger from qualifying as a reorganization under Section 368(a) of the Code. Company and Purchaser shall use commercially reasonable efforts, and shall cause their respective Subsidiaries to use commercially
reasonable efforts, to cause the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code, including providing reasonable and customary representations, covenants and certificates requested by counsel under Sections 6.2.5 and 6.3.5. Within 45 days following the Effective Time, the Surviving Corporation shall comply with the reporting requirements of Section
1.6045B-1(a)(2) of the Treasury Regulations.
5.14.2 Each of Company and Purchaser shall report the Merger as a reorganization within
the meaning of Section 368(a) of the Code on its United States federal income Tax Return, unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code.
5.15 Expenses. Whether or not the Merger is consummated, except
as otherwise provided in this Plan of Merger, all costs and expenses incurred in connection with this Plan of Merger and the transactions contemplated by this Plan of Merger shall be paid by the party incurring such expenses, except that
Purchaser shall pay and bear the cost of (a) each regulatory filing, application, notification, registration or similar fee required to be paid by any party in connection with this Plan of Merger and the transactions contemplated by this Plan of
Merger under the Securities Act, the Exchange Act, applicable banking Laws and other applicable Laws and (b) any fees and expenses (excluding each party's internal costs and fees and expenses of attorneys, accountants and financial and other
advisors) payable to the SEC in respect of filing the Registration Statement and Proxy Statement.
5.16 Miscellaneous Agreements and Consents. Subject to the terms
and conditions of this Plan of Merger, each of the parties shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable Laws and
regulations or as otherwise reasonably requested in writing by Purchaser to consummate and make effective the Merger. Subject to the terms and conditions of this Plan of Merger, the parties will use commercially reasonable efforts to obtain
consents of all third parties and governmental bodies necessary or desirable for the consummation of the Merger.
5.17 Advice of Changes. Each party shall promptly advise the
other party of any change or event (a) having or reasonably likely to have a Material Adverse Effect on it or (b) that it believes would or would be reasonably likely to cause or constitute a material breach of any of its representations,
warranties, or covenants contained in this Plan of Merger or that reasonably could be expected to give rise, either individually or in the aggregate, to the failure of a condition of such party set forth in Article
VI; provided, that a failure to comply with this Section 5.17 shall not constitute a breach of this Plan of Merger or the failure of any condition set forth in Article
VI to be satisfied unless the underlying Material Adverse Effect or material breach would independently result in the failure of one or more of such party’s conditions set forth in Article VI to
be satisfied.
5.18 280G Matters. Company and Purchaser will cooperate in good
faith to mitigate the impact of Section 280G of the Code on any "parachute payment" as that term is defined in Section 280G of the Code to an executive officer of Company in connection with the Merger, provided, however, that if a "parachute
payment" cannot otherwise be mitigated, the Company agrees to cause such payment to be reduced in accordance with the terms of the applicable agreement(s) and/or plan(s). To mitigate the potential for non-deductible or excess parachute payments,
Company agrees to use its best efforts to mitigate the effect of such payments, including taking the following actions by the end of 2024, in each case, if requested by Purchaser on or before December 1, 2024: (i) terminating all outstanding
Supplemental Executive Retirement Agreements ("SERP") pursuant to Section 5.8, (ii) accelerating vesting of unvested restricted stock that would otherwise vest in connection with the Plan of Merger for all
employees who are SERP participants, and (iii) amending the Severance Compensation Agreements to exclude any compensation accelerated to 2024 by reason of the application of Section 5.18(i) or Section 5.18(ii) of this Plan of Merger related to the SERP and restricted stock, respectively.
5.19 Section 16 Matters. Prior to the Effective Time, Company
and Purchaser each will take all such steps as may be required to cause any acquisitions or dispositions of Purchaser Common Stock (including derivative securities with respect to Purchaser Common Stock) resulting from the Merger and the other
transactions contemplated by this Plan of Merger, by each individual who may become or is reasonably expected to become subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to Purchaser immediately following the
Effective Time, to be exempt under Rule 16b‑3 promulgated under the Exchange Act.
5.20 Dividends. Company and Purchaser shall coordinate with
each other regarding the declaration, setting of record dates, and payment dates of dividends with respect to shares of Company Common Stock and Purchaser Common Stock for the purpose of minimizing the risk that holders of shares of Company
Common Stock (a) in respect of any calendar quarter, receive dividends on both shares of Company Common Stock and shares of Purchaser Common Stock received as Per Share Merger Consideration or (b) in respect of any calendar quarter, fail to
receive a dividend on shares of Company Common Stock or shares of Purchaser Common Stock received as Per Share Merger Consideration.
5.21 Governance Matters. Subject to any
necessary approval by any appropriate Governmental Entities, Nasdaq listing rules (including Nasdaq listing rule 5605 related to independent directors), and Purchaser’s corporate governance standards, including Purchaser’s satisfactory completion
of its customary screening and evaluation procedures for directors, Purchaser shall take all appropriate action, subject to and in accordance with the articles of incorporation and bylaws of Purchaser (including Article III, Section 2 of
Purchaser’s bylaws with respect to mandatory director retirement at age 70), to appoint two individuals serving on the Company Board of Directors and mutually agreeable to Company and Purchaser ("Company Designated Directors"), to the Purchaser Board of Directors, effective immediately following the Effective Time to serve until the next annual meeting of Purchaser shareholders, and each such Company Designated Director
shall be nominated for election to a subsequent term at such annual meeting of Purchaser shareholders. Subject to any necessary approval by any appropriate Governmental Entities, and subject to Purchaser’s corporate governance standards,
including satisfactory completion of its customary screening and evaluation procedures for directors, Purchaser shall take all appropriate action, subject to and in accordance with the articles of incorporation and bylaws of ChoiceOne Bank
(including Article IV, Section 2 of ChoiceOne Bank’s bylaws with respect to mandatory director retirement at age 70), to appoint two individuals other than the Company Designated Directors and mutually agreeable to Company and Purchaser ("Company Designated Bank Directors"), to the ChoiceOne Bank Board of Directors, effective immediately following the Effective Time to serve until ChoiceOne Bank’s next annual meeting of the
sole shareholder, and each such Company Designated Bank Director shall be nominated for election to a subsequent term at such annual meeting of the sole shareholder. Upon a vacancy in the Purchaser Board of Directors for whatever reason, the
Purchaser’s Governance and Nominating Committee shall consider in good faith nominating or appointing a Company Designated Bank Director to fill such vacancy.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger are subject to the fulfillment (or waiver by Company and Purchaser) at or prior to the Effective Time of the following conditions:
6.1.1 The Company Shareholder Approval and the Purchaser Shareholder Approval shall
have been obtained.
6.1.2 Company and Purchaser shall have received all regulatory approvals required in
connection with the transactions contemplated by this Plan of Merger, all applicable notice periods and waiting periods shall have expired, and all such regulatory approvals shall be in effect (the "Requisite Regulatory Approvals"); provided, that no such Requisite Regulatory Approvals shall contain any Materially Burdensome Regulatory Condition.
6.1.3 No provision of any applicable Law making illegal or otherwise prohibiting the
consummation of the Merger shall be in effect and no temporary, preliminary or permanent restraining Order issued by a court or agency of competent jurisdiction preventing the consummation of the Merger or any other transaction contemplated by
this Plan of Merger will be in effect.
6.1.4 Neither party shall be subject to any Order of a court or agency of competent
jurisdiction that enjoins or prohibits the consummation of the Merger.
6.1.5 The Registration Statement shall have become effective under the Securities Act,
no stop order suspending the effectiveness of the Registration Statement shall have been issued by the SEC and no proceedings for that purpose shall have been commenced or threatened by the SEC and not withdrawn.
6.1.6 The shares of Purchaser Common Stock to be issued as Per Share Merger
Consideration shall have been accepted for listing on the Nasdaq stock exchange, subject to official notice of issuance.
6.2 Conditions to Company's Obligation to Effect the Merger.
The obligation of Company to effect the Merger is subject to the fulfillment (or waiver by Company) at or prior to the Effective Time of the following additional conditions:
6.2.1 The representations and warranties of Purchaser set forth in Sections 4.4.1 and 4.6(b) of this Plan of Merger shall be true and correct (other than, in the case of Section 4.4.1, such
failures to be true and correct as are de minimis) in each case as of the date of this Plan of Merger and as of the Closing Date as though made as of such date (except to the extent such representations
and warranties speak as of another time, in which case such representations and warranties will be true and correct as of such other time). The representations and warranties of Purchaser set forth in Sections
4.1.1, 4.2, 4.3.1, 4.3.2 and 4.19 of this Plan of Merger (without giving effect to any limitation as to "materiality" or "Purchaser Material Adverse
Effect" contained therein) will be true and correct in all material respects in each case as of the date of this Plan of Merger and as of the Closing Date as though made as of such date (except to the extent such representations and warranties
speak as of another time, in which case such representations and warranties will be true and correct as of such other time). All other representations and warranties of Purchaser set forth in this Plan of Merger (without giving effect to any
limitation as to "materiality" or "Purchaser Material Adverse Effect" contained therein) will be true and correct in each case as of the date of this Plan of Merger and as of the Closing Date as though made as of such date (except to the
extent such representations and warranties speak as of another time, in which case such representations and warranties will be true and correct as of such other time), except where the failure of such representations and warranties to be so
true and correct does not have, and would not reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect.
6.2.2 Purchaser shall have performed or complied in all material respects all of the
covenants and obligations required to be performed by it under this Plan of Merger at or prior to the Closing Date.
6.2.3 Purchaser shall have delivered to Company a certificate, dated as of the Closing
Date and signed on behalf of Purchaser by its Chief Executive Officer or Chief Financial Officer certifying to the effect that the conditions set forth in Sections 6.2.1, 6.2.2 and 6.2.4 have been satisfied.
6.2.4 Since the date of this Plan of Merger, (a) there shall not have been any change,
state of facts, event, development or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a Purchaser Material Adverse Effect; and (b) neither Purchaser nor any Purchaser Subsidiary shall be subject
to any Regulatory Agreement.
6.2.5 Company shall have received the opinion of Dickinson Wright, acting as counsel to
Company, on the basis of certain facts, representations and assumptions set forth in such opinion, dated the Closing Date, a copy of which shall be furnished to Purchaser, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to receive and rely upon customary representations of officers of Company and Purchaser as to such matters
as such counsel may reasonably request.
6.3 Conditions to Purchaser's Obligation to Effect the Merger.
The obligation of Purchaser to effect the Merger is subject to the fulfillment (or waiver by Purchaser) at or prior to the Effective Time of the following additional conditions:
6.3.1 The representations and warranties of Company set forth in Sections 3.4.1 and 3.6(b) of this Plan of Merger shall be true and correct (other than, in the case of Section 3.4.1, such
failures to be true and correct as are de minimis) in each case as of the date of this Plan of Merger and as of the Closing Date as though made as of such date (except to the extent such representations
and warranties speak as of another time, in which case such representations and warranties will be true and correct as of such other time). The representations and warranties of Company set forth in Sections
3.1.1, 3.2, 3.3.1, 3.3.2 and 3.22 of this Plan of Merger (without giving effect to any limitation as to "materiality" or "Company Material Adverse
Effect" contained therein) will be true and correct in all material respects in each case as of the date of this Plan of Merger and as of the Closing Date as though made as of such date (except to the extent such representations and warranties
speak as of another time, in which case such representations and warranties will be true and correct as of such other time). All other representations and warranties of Company set forth in this Plan of Merger (without giving effect to any
limitation as to "materiality" or "Company Material Adverse Effect" contained therein) will be true and correct in each case as of the date of this Plan of Merger and as of the Closing Date as though made as of such date (except to the extent
such representations and warranties speak as of another time, in which case such representations and warranties will be true and correct as of such other time), except where the failure of such representations and warranties to be so true and
correct does not have, and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
6.3.2 Company shall have performed in all material respects all of the covenants
required to be performed by it under this Plan of Merger at or prior to the Closing Date.
6.3.3 Company shall have delivered to Purchaser a certificate, dated as of the Closing
Date and signed on behalf of Company by its Chief Executive Officer or Chief Financial Officer certifying to the effect that the conditions set forth in Sections 6.3.1, 6.3.2 and 6.3.4 have been satisfied.
6.3.4 Since the date of this Plan of Merger, (a) there shall not have been any change,
state of facts, event, development or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and (b) neither Company nor any Company Subsidiary shall be subject to any
Regulatory Agreement.
6.3.5 Purchaser shall have received the opinion of Warner Norcross + Judd LLP, acting as
counsel to Purchaser, on the basis of certain facts, representations and assumptions set forth in such opinion, a copy of which shall be furnished to Company, to the effect that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to receive and rely upon customary representations of officers of Company and Purchaser as to such matters as such
counsel may reasonably request.
ARTICLE VII
TERMINATION
7.1 Termination of Plan of Merger.
Notwithstanding anything contained in this Plan of Merger to the contrary, this Plan of Merger may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or, subject to the terms of this Plan of
Merger, after receipt of the Company Shareholder Approval or the Purchaser Shareholder Approval (the date of such termination, the "Termination Date"), as follows:
7.1.1 by mutual written consent of Company and Purchaser;
7.1.2 by either Company or Purchaser, if any Governmental Entity has issued an Order or
taken any other action permanently enjoining, restraining or otherwise prohibiting the consummation of the Merger and such Order or other action is final and nonappealable; provided, however, that the
right to terminate this Plan of Merger pursuant to this Section 7.1.2 shall not be available to the party seeking to terminate if (a) the failure of Company, in the case of a termination by Company, or
(b) the failure of Purchaser, in the case of a termination by Purchaser, to perform any of its obligations under this Plan of Merger required to be performed at or prior to the Effective Time has been a substantial cause of, or a substantial
factor that resulted in, the issuance of such an Order or the taking of such an action;
7.1.3 by either Company or Purchaser, if the Merger does not occur on or before
July 25, 2025 (the "End Date") provided, however, that the right to terminate this Plan of
Merger pursuant to this Section 7.1.3 shall not be available to the party seeking to terminate if (a) the failure of Company, in the case of a termination by Company, or (b) the failure of Purchaser, in
the case of a termination by Purchaser, to perform any of its obligations under this Plan of Merger required to be performed at or prior to the Effective Time has been a substantial cause of, or a substantial factor that resulted in, the
failure of the Effective Time to occur on or before the End Date;
7.1.4 by either Company or Purchaser, (a) if the Company Shareholder Meeting (including
any postponements or adjournments) shall have concluded and been finally adjourned and the Company Shareholder Approval shall not have been obtained or (b) if the Purchaser Shareholder Meeting (including any postponements or adjournments) shall
have concluded and been finally adjourned and the Purchaser Shareholder Approval shall not have been obtained; provided, however, that right to terminate this Plan of Merger pursuant to this Section 7.1.4 shall not be available to the party seeking to terminate if (i) the failure of Company, in the case of a termination by Company, or (ii) the failure of Purchaser, in the case of a termination
by Purchaser, to perform any of its obligations under this Plan of Merger required to be performed at or prior to the Company Shareholder Meeting or the Purchaser Shareholder Meeting, as applicable, has been a substantial cause of, or a
substantial factor that resulted in, the Company Shareholder Approval or the Purchaser Shareholder Approval, as applicable, not having been obtained;
7.1.5 by Company, if Purchaser shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements contained in this Plan of Merger, which breach or failure to perform (a) would result in a failure of a condition set forth in Sections 6.1 or
6.2 and (b) (i) cannot be cured by the End Date or (ii) if capable of being cured by the End Date, shall not have been cured within 20 Business Days following receipt of written notice (which notice
shall specify in reasonable detail the nature of such breach or failure and Company's intention to terminate this Plan of Merger if such breach or failure is not cured) from Company of such breach or failure; provided,
that Company shall not have a right to terminate this Plan of Merger pursuant to this Section 7.1.5 if it is then in breach of any representations, warranties, covenants or other agreements contained in
this Plan of Merger that would result in a failure of a condition set forth in Sections 6.1 or 6.3;
7.1.6 by Purchaser, if Company shall have breached or failed to perform any of its
representations, warranties, covenants or other agreements contained in this Plan of Merger, which breach or failure to perform (a) would result in a failure of a condition set forth in Sections 6.1 or
6.3 and (b) (i) cannot be cured by the End Date or (ii) if capable of being cured by the End Date, shall not have been cured within 20 Business Days following receipt of written notice (which notice
shall specify in reasonable detail the nature of such breach or failure and Purchaser's intention to terminate this Plan of Merger if such breach or failure is not cured) from Purchaser of such breach or failure; provided, that Purchaser shall not have a right to terminate this Plan of Merger pursuant to this Section 7.1.6 if it is then in breach of any representations, warranties, covenants or
other agreements contained in this Plan of Merger that would result in a failure of a condition set forth in Sections 6.1 or 6.2;
7.1.7 by Purchaser prior to the receipt of the Company Shareholder Approval if (a) the
Company Board of Directors shall have effected a Company Adverse Recommendation Change; (b) the Company Board of Directors shall have failed to reject a Company Takeover Proposal and reaffirm the Company Board Recommendation within three
Business Days following the public announcement of such Company Takeover Proposal and in any event at least two Business Days prior to the Company Shareholder Meeting; (c) Company enters into a Company Acquisition Agreement; or (d) in the
absence of a Company Takeover Proposal with respect to which Company is then in active negotiations with the Person making such Company Takeover Proposal in accordance with, and to the extent permitted by, Section
5.3.2, the Company Board of Directors fails to publicly reaffirm its recommendation of this Plan of Merger within three Business Days of a written request by Purchaser to provide such reaffirmation (or such less time as remains prior
to the Company Shareholder Meeting);
7.1.8 by Company prior to receipt of the Company Shareholder Approval, in order to enter
into a Company Acquisition Agreement in respect of a Company Superior Proposal; provided, however, that (a) Company has complied with Section 5.3 and (b) Company pays (or causes to be paid) the Company Termination Fee prior to or simultaneously with such termination;
7.1.9 by Purchaser, if, prior to the Closing, The State Bank is examined for compliance
with the Community Reinvestment Act and receives written notification of a rating lower than "Satisfactory";
7.1.10 by Company, if prior to the Closing, ChoiceOne Bank is examined for compliance
with the Community Reinvestment Act and receives written notification of a rating lower than "Satisfactory"; or
7.1.11 in accordance with the terms of Section 2.10.3.
7.2 Effect of Termination.
7.2.1 In the event that:
7.2.1.1 this Plan of Merger is terminated by Purchaser pursuant to Section
7.1.7, Company shall pay, or cause to be paid, to Purchaser cash in an amount equal to $7,000,000 (the "Company Termination Fee");
7.2.1.2 this Plan of Merger is terminated by Purchaser pursuant to Section
7.1.6 or by Company or Purchaser pursuant to Section 7.1.4, and if (a) any Person shall have made a Company Takeover Proposal (i) on or after the date of this Plan of Merger but prior to the
date that this Plan of Merger is terminated in the case of a termination pursuant to Section 7.1.6 or (ii) on or after the date of this Plan of Merger but prior to the Company Shareholder Meeting in the
case of a termination pursuant to Section 7.1.4, and (b) at any time prior to the date that is 12 months after the date of any such termination, Company consummates a Company Takeover Proposal or enters
into any definitive agreement providing for a Company Takeover Proposal (provided that, for purposes of this Section 7.2.1.2, the references to "15%" in the
definition of "Company Takeover Proposal" shall be deemed to be references to "50%"), then Company shall pay, or cause to be paid, to Purchaser cash in an amount equal to the Company Termination Fee;
7.2.1.3 (a) this Plan of Merger is terminated by Company or Purchaser pursuant to Section 7.1.3, (b) any Person shall have made a Company Takeover Proposal on or after the date of this Plan of Merger but prior to the date of any such termination, and (c) at any time prior to the date that is 12 months after
the date of any such termination, Company consummates a Company Takeover Proposal or enters into any definitive agreement providing for a Company Takeover Proposal (provided that, for purposes of this Section 7.2.1.3, the references to "15%" in the definition of "Company Takeover Proposal" shall be deemed to be references to "50%"), then Company shall pay, or cause to be paid, to Purchaser cash in an
amount equal to the Company Termination Fee; provided, however, that in the case of a termination by Company, Company shall not be obligated to pay the Company Termination Fee if the failure of Purchaser to perform any of its obligations under
this Plan of Merger required to be performed at or prior to the Effective Time has been a substantial cause of, or a substantial factor that resulted in, the failure of the Effective Time to occur on or before the End Date; or
7.2.1.4 this Plan of Merger is terminated by Company pursuant to Section
7.1.8, then Company shall pay, or cause to be paid, to Purchaser, prior to or contemporaneously with such termination, cash in an amount equal to the Company Termination Fee.
7.2.2 Each of the parties hereto acknowledge and agree that the agreements contained in
this Section 7.2 are an integral part of the transactions contemplated by this Plan of Merger, and that without these agreements, the other party would not enter into this Plan of Merger. Accordingly,
if Company fails to pay the amount due pursuant to this Section 7.2 and, in order to obtain such payment, Purchaser commences a suit that results in a judgment against Company for the Company
Termination Fee, then Company shall pay Purchaser its costs and expenses (including reasonable attorneys' fees and expenses) in connection with such suit, together with interest on the amount of the Company Termination Fee from the date such
payment was required to be made until the date of payment at the prime rate published in the Wall Street Journal on the date such payment was required to be made.
7.2.3 Upon the effectiveness of any termination of this Plan of Merger pursuant to Section 7.1, this Plan of Merger shall become void and have no further force or effect (except for the provisions of Sections 5.8, 5.9.2,
5.14, 7.2 and Article IX) as between the parties, and, subject to the payment of any amounts owing pursuant to this Section 7.2, there shall be no other liability between the parties as to any other party. Notwithstanding anything in this Plan of Merger to the contrary, no party hereto will be relieved or released from
any liability or damages arising from a willful or intentional breach of any provision of this Plan of Merger or fraud, and the aggrieved party will be entitled to all rights and remedies available at Law or in equity.
7.2.4 The Company Termination Fee will be paid in the aggregate to Purchaser at the
direction of Purchaser in immediately available funds in the case of Section 7.2.1, upon the occurrence of the event giving rise to the obligation to make such payment.
7.2.5 Except as provided in Section 7.2.3 in
the case of fraud or willful or intentional breach of this Plan of Merger, in the circumstances in which the Company Termination Fee is or becomes payable pursuant to Section 7.2.1, Purchaser’s sole and
exclusive remedy (whether at law, in equity, in contract, in tort or otherwise) against Company or any Company Subsidiary with respect to the facts and circumstances giving rise to such payment obligation shall be payment of the Termination Fee
pursuant to Section 7.2.1, and upon payment in full of such amount, none of Purchaser or any Purchaser Subsidiary, nor any other Person shall have any rights or claims against Company or any Company
Subsidiary (whether at law, in equity, in contract, in tort other otherwise) under or relating to this Plan of Merger or the transactions contemplated hereby. For the avoidance of doubt, in no event shall Company be required to pay the Company
Termination Fee on more than one occasion.
ARTICLE VIII
CERTAIN DEFINITIONS
8.1 When used in this Plan of Merger, the following terms will have the meanings assigned to them in this Section 8.1:
"Action" means (a) any litigation, claim, action, suit, hearing, proceeding or arbitration, (b) any material
investigation by a Governmental Entity or (c) any demand or notice of violation by a Governmental Entity (in the case of clauses (a), (b) and (c), whether civil, criminal, administrative, labor or investigative).
"Affiliate" means, with respect to a Person, any other Person that is an "affiliate" of that first Person within
the meaning of Rule 405 promulgated under the Securities Act.
"Bank Holding Company Act" means the Bank Holding Company Act of 1956, as amended.
"Book-Entry Shares" means shares of Company Common Stock represented by book-entry immediately prior to the
Effective Time (other than Excluded Shares).
"Business Day" means a day other than a Saturday, Sunday or other day on which The NASDAQ Capital Market is
closed.
"Certificates" means outstanding certificates that immediately prior to the Effective Time represented shares of
Company Common Stock (other than Excluded Shares).
"Collective Bargaining Agreement" means any Contract that has been entered into with any labor organization,
union, works council, employee representative or association.
"Company Benefit Plan" means (a) any "employee benefit plan" within the meaning of Section 3(3) of ERISA
(including but not limited to any multiple employer plan or Multiemployer Plan in which the Company or an ERISA Affiliate of the Company participates, contributes or is, or at any time in the past was, required to contribute), and (b) any
deferred compensation, retirement, defined contribution, defined benefit, pension, profit sharing, employee welfare, fringe benefit, flexible spending account, stock purchase, stock option, stock ownership, phantom stock, stock appreciation
rights, restricted stock, restricted stock units, severance, separation, employment, change in control, vacation pay, leave of absence, layoff, salary continuation, sick leave, excess benefit, bonus or other incentive compensation, day or
dependent care, legal services, cafeteria, health, life, accident, disability, workers' compensation or other insurance, or other employee benefit plan, or contract, program, or practice, whether written or oral, for the benefit of Company's
current or former officers, employees, independent contractors, or directors, in each case either (i) existing at the Closing Date and sponsored, maintained, or contributed to by Company or any of its Subsidiaries, or (ii) existing at the Closing
Date or prior thereto, in respect of which Company or any of its Subsidiaries has or could reasonably be expected to have any Liability.
"Company Board of Directors" shall mean the board of directors of Company.
"Company Material Adverse Effect" means a Material Adverse Effect with respect to Company.
"Company Retirement Plan" means the Fentura Financial, Inc. Employee Deferred Compensation and Stock Ownership
Plan.
"Company Shareholders" means holders of shares of Company Common Stock.
"Company Site" means, with respect to Company, any real properties (in each case, including all soil, subsoil,
surface waters and groundwater thereat) currently or previously owned, leased or operated (excluding other real estate owned) by (a) Company or any of the Company Subsidiaries, (b) any predecessors of Company or any of the Company Subsidiaries,
or (c) any entities previously owned by Company or any of the Company Subsidiaries.
"Company Stock Plan" means the Fentura Financial, Inc. 2017 Stock Compensation Plan.
"Contract" means, with respect to any Person, any agreement, contract, commitment, arrangement, memorandum of
understanding, side letter, understanding, lease license, indenture, note, contractual obligation or other instrument of a contractual nature, whether written or oral.
"DPC Shares" means shares of Company Common Stock held as collateral by the Purchaser or Company or any of their
respective Subsidiaries in respect of a debt.
"Environmental Claim" means any and all administrative or judicial actions, suits, orders, claims, liens, notices, notices of violations, investigations,
complaints, requests for information, proceedings, or other communication (written or oral), whether criminal or civil, pursuant to or relating to any applicable Environmental Law.
"Environmental Law" means any and all Laws, Environmental Permits, or binding agreements with any Governmental
Entity, relating to the protection of health and the environment, or governing the handling, use, generation, treatment, storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling, or Release of or exposure to
Hazardous Materials, including without limitation the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, and any analogous state Law.
"Environmental Permit" means any Permit required or issued by any Governmental Entity under or in connection with
any Environmental Law, including without limitation, any and all orders, consent orders or binding agreements issued by or entered into with a Governmental Entity under any applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations
promulgated thereunder.
"ERISA Affiliate"
means, with respect to Company or Purchaser, as applicable, any Person who is, or at any time was, a member of a controlled group (within the meaning of Section 414(n)(6)(B) of the Code) that includes, or at any time included, Company or
Purchaser, as applicable, or any Affiliate of Company or Purchaser, as applicable, or any predecessor of any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"FDI Act" means the Federal Deposit Insurance Act of 1950, as amended.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Reserve Act" shall mean the Federal Reserve Act of 1913, as amended.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve System or its delegees.
"FFIEC” means the Federal Financial Institutions Examination Council.
"FHLB" means the Federal Home Loan Bank.
"GAAP" means United States generally accepted accounting principles, consistently applied.
"Governmental Entity" means any entity or body exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to United States federal, state, county, municipal or local government or other non-United States international, multinational or other government, including any department, commission, board, agency,
instrumentality, political subdivision, bureau, official or other regulatory, administrative or judicial authority thereof and any self-regulatory organization, commission or authority, including any securities exchange.
"Hazardous Material" means petroleum, petroleum hydrocarbons or petroleum products, petroleum by-products,
radioactive materials, asbestos or asbestos-containing materials, gasoline, diesel fuel, pesticides, radon, urea formaldehyde, mold, lead or lead-containing materials, polychlorinated biphenyls, polyfluoroalkyl substances, and any other
chemicals, materials, substances or wastes in any amount or concentration which are regulated under or for which liability can be imposed under any Environmental Law.
"Indebtedness" means, with respect to any Person, (a) all obligations for borrowed money, (b) all obligations
evidenced by bonds, debentures, notes or similar instruments, (c) all Indebtedness of others secured by any Lien on owned or acquired property, whether or not the Indebtedness secured thereby has been assumed, (d) all guarantees (or any other
arrangement having the economic effect of a guarantee) of Indebtedness of others, (e) all lease obligations of such Person capitalized on the books and records of such Person (or required to be so capitalized or treated as a finance lease in
accordance with GAAP), (f) all obligations, contingent or otherwise, of such Person as an account party in respect of financial guaranties, letters of credit, letters of guaranty, surety bonds and other similar instruments, (g) all securitization
transactions, (h) all obligations representing the deferred and unpaid purchase price of property or services (including any potential future earn-out, purchase price adjustment, release of "holdback" or similar payment, but excluding accounts
payable incurred in the ordinary course of business consistent with past practices), (i) all obligations, contingent or otherwise, in respect of bankers’ acceptances, and (j) all obligations of such Person under swaps, options, derivatives and
other hedging agreements, transactions or arrangements (assuming they were terminated on the date of determination).
"Intellectual Property" means, with respect to any Person, all intellectual property and other similar proprietary
rights in any jurisdiction worldwide, whether registered or unregistered, including such rights in and to: (a) patents (including all reissues, divisions, provisionals, continuations and continuations-in-part, re-examinations, renewals and
extensions thereof), patent applications, patent disclosures or other patent rights; (b) copyrights, design, design registration, and all registrations, applications for registration, and renewals for any of the foregoing, and any "moral" rights;
(c) trademarks, service marks, trade names, business names, logos, trade dress, certification marks and other indicia of commercial source or origin together with all goodwill associated with the foregoing, and all registrations, applications and
renewals for any of the foregoing; (d) trade secrets and business, technical and know-how information, databases, data collections and other confidential and proprietary information and all rights therein; (e) software, including data files,
source code, object code, application programming interfaces, architecture, files, records, schematics, computerized databases and other software-related specifications and documentation; (f) Internet domain name registrations; and (g) all rights
in the foregoing and other similar intangible or intellectual property assets and their foreign equivalents in any jurisdiction.
"IRS" means the United States Internal Revenue Service.
"Knowledge" or any similar phrase means those facts that are actually known, after reasonable inquiry, by any of
the individuals listed in Section 8.1 of the Company Disclosure Letter, in the case of Company, and any of the individuals listed in Section 8.1 of the Purchaser Disclosure Letter, in the case of Purchaser.
"Law" means any federal, state, county, local or foreign constitution, statute, law, ordinance, rule, code,
executive order, common law, injunction, judgment, decree, Order, regulation, treaty, Permit, directive or governmental requirement enacted, promulgated, entered into, agreed or imposed by any Governmental Entity.
"Liability" means all Indebtedness, obligations and other liabilities and contingencies of a Person, whether
absolute, accrued, contingent, fixed or otherwise, or whether due or to become due.
"Lien" means, with respect to any property or asset, any mortgage, lien, pledge, security interest, hypothecation,
or other encumbrance or change of any kind affecting such property or asset.
"Material Adverse Effect" means, with respect to any Person, any effect, event, occurrence, fact, condition,
development or change that (a) individually or in the aggregate, would reasonably be excepted to have a materially adverse effect on the business, results of operations, financial condition or assets of such Person and its Subsidiaries, taken as
a whole, or (b) prohibits or materially impairs the ability of such Person to consummate the transactions contemplated by this Plan of Merger on a timely basis; provided, however, that, for the purposes of clause (a), a Material Adverse Effect shall not include effects, events, occurrences, facts, conditions, developments or changes arising out of, attributable to or resulting from (either alone
or in combination): (i) conditions or changes generally affecting the economy or financial, credit or securities markets; (ii) any outbreak or escalation of hostilities, war (whether or not declared) or military action or any act of terrorism,
the occurrence of any natural disaster, or occurrence of any man-made disaster; (iii) general conditions in or changes generally affecting the banking industry or geographic regions in which such Person or its Subsidiaries operate, including
changes in prevailing interest rates, credit availability or liquidity; (iv) changes in Laws (or interpretations thereof) of general applicability to companies in the industries in which such party and its Subsidiaries operate, or interpretations
thereof by courts of competent jurisdiction or Governmental Entities; (v) changes in GAAP or accounting standards (or interpretations thereof); (vi) compliance with the terms of, or the taking of any action required by, this Plan of Merger; (vii)
any decline in the market price, or change in trading volume, of Company Common Stock or Purchaser Common Stock, as applicable (provided, however, that any event,
occurrence, fact, condition or change that caused or contributed to any decline in market price or change in trading volume, of Company Common Stock or Purchaser Common Stock, as applicable, shall not be excluded unless otherwise specifically
excluded by this definition); (viii) the announcement or pendency of the Merger or any other transaction contemplated by this Plan of Merger; (ix) global or material pandemics, endemics or disease outbreaks, public health emergencies or
widespread occurrences of infectious disease; and (x) acts or omissions of (A) Company prior to the Effective Time taken at the written request of Purchaser or with the prior written consent of Purchaser or (B) Purchaser prior to the Effective
Time taken at the written request of Company or with the prior written request of Company, in each case, in connection with the transactions contemplated by this Plan of Merger or applicable Law; provided,
further, that any event, occurrence, fact, condition or change referred to in clauses (i), (ii), (iii), (iv), (v), (ix) or (x) immediately above shall be taken into account in determining whether a
Material Adverse Effect has occurred or would reasonably be expected to occur to the extent that such event, change or effect has a disproportionate effect on such Person and its Subsidiaries, taken as a whole, compared to other companies
operating in the industry in which such Person and its Subsidiaries conduct their businesses.
"Michigan Banking Code" means the Michigan Banking Code of 1999, as amended.
"Multiemployer Plan" means a multiemployer plan within the meaning of Section 3(37) of ERISA.
"NLRB" means the National Labor Relations Board.
"Order" means any award, writ, arbitral awards, injunction, judgment, decree, order, ruling or verdict or other
similar decision issued, promulgated or entered by or with any Governmental Entity of competent jurisdiction.
"Permit" means any grant, exemption, declaration, registration, filing, order, authorization, approval, consent,
exception, variance, consent, accreditation, certificate, license, permit or franchise of, from or required by any Governmental Entity of competent jurisdiction or pursuant to any Law, and all pending applications therefor or renewals thereof.
"Permitted Liens" means with respect to Company or Purchaser, as applicable, (a) Liens for Taxes that are not yet
due and payable or that are being contested in good faith for which adequate accruals or reserves have been established on the books and records of Company or Purchaser, as applicable, (b) statutory Liens of landlords and workers', carriers' and
mechanics' or other like Liens incurred in the ordinary course of business consistent with past practices for amounts that are not yet due and payable or that are being contested in good faith for which adequate accruals or reserves have been
established on the books and records of Company or Purchaser, as applicable, (c) Liens and encroachments which do not materially interfere with the present use of the properties or assets they affect, (d) Liens that will be released prior to or
as of the Closing, (e) Liens that are disclosed on the most recent audited consolidated balance sheet of Company or Purchaser, as applicable, or notes thereto or securing liabilities reflected on such balance sheet, (f) Liens that were incurred
in the ordinary course of business consistent with past practices since the date of the most recent consolidated balance sheet of Company or Purchaser, as applicable, (g) Liens set forth in Section 8.1 of the Company Disclosure Letter,
(h) with respect to real property, whether owned or leased, any Lien that has not had and would not reasonably be expected to be, individually or in the aggregate, material to Company and the Company Subsidiaries taken as a whole or the Purchaser
and the Purchaser Subsidiaries taken as a whole, as applicable, (i) pledges or liens required to be granted in connection with the acceptance of government deposits, granted in connection with repurchase or reverse repurchase agreements, securing
any discount with, borrowing from, or obligations to any Federal Reserve Bank or FHLB, interbank credit facilities or any transaction by a Company Subsidiary acting in a fiduciary capacity, and (j) liens on property required by Regulation W of
the Federal Reserve Board.
"Person" means an individual, a corporation, a partnership, a limited liability company, a joint venture, a trust,
an unincorporated association, a Governmental Entity or any other entity or body.
"Purchaser Benefit Plan" means (a) any "employee benefit plan" within the meaning of Section 3(3) of ERISA
(including but not limited to any multiple employer plan or Multiemployer Plan in which the Purchaser or an ERISA Affiliate of the Purchaser participates, contributes or is, or at any time in the past was, required to contribute), and (b) any
deferred compensation, retirement, defined contribution, defined benefit, pension, profit sharing, employee welfare, fringe benefit, flexible spending account, stock purchase, stock option, stock ownership, phantom stock, stock appreciation
rights, restricted stock, restricted stock units, severance, separation, employment, change in control, vacation pay, leave of absence, layoff, salary continuation, sick leave, excess benefit, bonus or other incentive compensation, day or
dependent care, legal services, cafeteria, health, life, accident, disability, workers' compensation or other insurance, or other employee benefit plan, or contract, program, or practice, whether written or oral, for the benefit of Purchaser’s
current or former officers, employees, independent contractors, or directors, in each case either (i) existing at the Closing Date and sponsored, maintained, or contributed to by Purchaser or any of its Subsidiaries, or (ii) existing at the
Closing Date or prior thereto, in respect of which Purchaser or any of its Subsidiaries has or could reasonably be expected to have any Liability.
"Purchaser Board of Directors" shall mean the board of directors of Purchaser.
"Purchaser Material Adverse Effect" means a Material Adverse Effect with respect to Purchaser.
"Purchaser Site" means, with respect to Purchaser, any real properties (in each case, including all soil, subsoil,
surface waters and groundwater thereat) currently or previously owned, leased or operated (including other real estate owned) by (a) Purchaser or any of the Purchaser Subsidiaries, (b) any predecessors of Purchaser or any of the Purchaser
Subsidiaries, or (c) any entities previously owned by Purchaser or any of the Purchaser Subsidiaries.
“Purchaser Stock Plan” means the Purchaser Stock Incentive Plan of 2012, the Purchaser Equity Incentive Plan of
2022, the Purchaser 2022 Employee Stock Purchase Plan, the Purchaser Directors’ Stock Purchase Plan and the Purchaser Director Equity Compensation Plan of 2019, collectively.
"Regulation O" means Regulation O of the Federal Reserve Board.
"Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
migrating, leaching, dumping or disposing of a Hazardous Material.
"Representatives" means, with respect to any Person, the respective officers, directors, managers, members,
employees, consultants, accountants, brokers, financial advisors, legal counsel, agents, advisors, Affiliates and other representatives of that Person.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"SOX" means the United States Sarbanes Oxley Act, as amended.
"Subsidiary" shall have the meaning ascribed to it in Section 2(d) of the Bank Holding Company Act.
"Tax" or "Taxes" means any and all federal, state,
local, or foreign net or gross income, gross receipts, net proceeds, sales, use, ad valorem, value added, franchise, withholding, payroll, employment, excise, property, abandoned property, escheat, deed, stamp, alternative or add-on minimum,
environmental, profits, windfall profits, transaction, license, lease, service, service use, occupation, severance, energy, transfer, real property transfer, recording, documentary, stamp, registration, unemployment, social security, workers'
compensation, capital, premium, deficiencies, charges, backup withholding, personal property, franchise, and other governmental taxes, assessments, customs, duties or levies, whether disputed or not, together with any interest, penalties,
additions to tax, or additional amounts with respect thereto.
"Tax Returns" means any return, declaration, report, claim for refund, estimate or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, filed or required to be filed under applicable Law with any Governmental Entity.
"Transaction Documents" means (a) the Proxy Statement, (b) the Registration Statement, and (c) any other documents
to be filed with any other Governmental Entity in connection with the Merger.
"Trust Account Shares" means shares of Company Common Stock held directly or indirectly in trust accounts, managed
or custodial accounts and the like or otherwise held in a fiduciary capacity for the benefit of third parties including all shares of Company Common Stock held in connection with the Company 401(k) Plan.
"WARN Act" means the Worker Adjustment and Retraining Notification Act of 1988, and any similar foreign, state or
local Law.
8.2 For purposes of this Plan of Merger, except as otherwise expressly provided herein or unless the context
otherwise requires: (a) the meaning assigned to each term defined herein will be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting any gender will include all genders as the context
requires; (b) where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding meaning; (c) the terms "hereof", "herein", "hereunder", "hereby" and "herewith" and words of similar import will, unless
otherwise stated, be construed to refer to this Plan of Merger as a whole and not to any particular provision of this Plan of Merger; (d) when a reference is made in this Plan of Merger to an Article, Section, paragraph, Exhibit or Schedule
without reference to a document, such reference is to an Article, Section, paragraph, Exhibit or Schedule to this Plan of Merger; (e) a reference to a subsection without further reference to a Section is a reference to such subsection as
contained in the same Section in which the reference appears, and this rule will also apply to paragraphs and other subdivisions; (f) the word "include", "includes" or "including" when used in this Plan of Merger will be deemed to include the
words "without limitation", unless otherwise specified; (g) a reference to any party to this Plan of Merger or any other agreement or document will include such party's predecessors, successors and permitted assigns; (h) a reference to any Law
means such Law as amended, modified, codified, replaced or reenacted, and all rules and regulations promulgated thereunder; (i) all accounting terms used and not defined herein have the respective meanings given to them under GAAP; and (j) any
references in this Plan of Merger to "dollars" or "$" shall be to U.S. dollars.
8.3 The following terms are defined on the following pages of this Plan of Merger:
|
Acceptable Company Confidentiality Agreement
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52
|
|
Acceptance Period
|
9
|
|
Adjusted Per Share Merger Consideration
|
8
|
|
Average Purchaser Closing Price
|
8
|
|
Bank Consolidation
|
3
|
|
Borrowing Affiliate
|
50
|
|
Certificate of Merger
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2
|
|
Closing
|
2
|
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Closing Date
|
2
|
|
Code
|
1
|
|
Company
|
1
|
|
Company Acquisition Agreement
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53
|
|
Company Adverse Recommendation Change
|
53
|
|
Company Board Recommendation
|
10
|
|
Company Common Stock
|
12
|
|
Company Designated Bank Directors
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65
|
|
Company Designated Directors
|
65
|
|
Company Disclosure Letter
|
10
|
|
Company Financial Statements
|
13
|
|
Company Investment Banker
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29
|
|
Company Lease
|
19
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|
Company Material Contract
|
20
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|
Company Real Property
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18
|
|
Company Shareholder Approval
|
10
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|
Company Shareholder Meeting
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56
|
|
Company Subsidiaries
|
10
|
|
Company Subsidiary
|
10
|
|
Company Superior Proposal
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55
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|
Company Takeover Proposal
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54
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|
Company Termination Fee
|
70
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|
Company-Leased Real Property
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18
|
|
Company-Owned Intellectual Property
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20
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|
Company-Related Person
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29
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|
Confidentiality Agreement
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61
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|
Constituent Corporation
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1
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|
Continuing Employee
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58
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|
Dissenters’ Shares
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9
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Effective Time
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2
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|
Employment-Related Payments
|
25
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|
End Date
|
69
|
|
Exchange Agent
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4
|
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Exchange Fund
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4
|
|
Excluded Shares
|
4
|
|
Exercise Period
|
8
|
|
Final Index Price
|
8
|
|
Floor Purchaser Price
|
8
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|
Increase Notice
|
8
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|
Indemnified Party
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61
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|
Initial Index Price
|
8
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|
Intended Tax Treatment
|
63
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Materially Burdensome Regulatory Condition
|
58
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|
Maximum Amount
|
62
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MBCA
|
1
|
|
Merger
|
1
|
|
Outstanding Company Common Stock
|
4
|
|
Per Share Merger Consideration
|
4
|
|
Plan of Merger
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1
|
|
Pricing Period
|
8
|
|
Proxy Statement
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55
|
|
Purchaser
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1
|
|
Purchaser Board Recommendation
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33
|
|
Purchaser Common Stock
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36
|
|
Purchaser Disclosure Letter
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33
|
|
Purchaser Financial Statements
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36
|
|
Purchaser Investment Banker
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43
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|
Purchaser Real Property
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40
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|
Purchaser SEC Reports
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44
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|
Purchaser Shareholder Approval
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33
|
|
Purchaser Shareholder Meeting
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57
|
|
Purchaser Subsidiaries
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34
|
|
Purchaser Subsidiary
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34
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Purchaser-Leased Real Property
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40
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Purchaser-Owned Intellectual Property
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41
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Registration Statement
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55
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Regulatory Agreement
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15
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Requisite Regulatory Approvals
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66
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SERP
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64
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Surviving Corporation
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1
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Termination Date
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68
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Upset Condition
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8
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ARTICLE IX
MISCELLANEOUS
9.1 No Third-Party Beneficiaries. This Plan of Merger will not confer any
rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns, other than Section 5.11 (which will be for the benefit of the Persons set forth
therein, and any such Person will have the rights provided for therein) and Article II (which shall be for the benefit of holders of Company Common Stock after the Effective Time, whether represented by
Certificates or Book-Entry Shares to receive the Per Share Merger Consideration in accordance with the terms, and subject to the conditions set forth in, Article II).
9.2 Specific Performance.
9.2.1 The parties agree that irreparable damage to Company or Purchaser, as applicable, would occur in the event that any of
the provisions of this Plan of Merger were not performed in accordance with their specific terms or were otherwise breached and that any breach of this Plan of Merger could not be adequately compensated in all cases by monetary damages
alone. The parties acknowledge and agree that (a) Company shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Plan of Merger by Purchaser or to enforce specifically the terms
and provisions of this Plan of Merger and (b) Purchaser shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Plan of Merger by Company or to enforce specifically the terms and
provisions of this Plan of Merger, in each case, in addition to any other remedy to which such party is entitled at Law or in equity.
9.2.2 The parties hereby agree not to raise any objections to the availability of the equitable remedy of specific performance
to prevent or restrain breaches of this Plan of Merger by Company or Purchaser, as applicable, and to specifically enforce the terms and provisions of this Plan of Merger to prevent breaches or threatened breaches of, or to enforce compliance
with, the respective covenants and obligations of Company or Purchaser, as applicable, under this Plan of Merger, all in accordance with the terms of this Section 9.2.
9.2.3 Neither Company nor Purchaser shall be required to provide any bond or other security in connection with seeking an
injunction or injunctions to prevent breaches of this Plan of Merger and to enforce specifically the terms and provisions of this Plan of Merger, all in accordance with the terms of this Section 9.2.
9.3 Entire Agreement. This Plan of Merger (including the exhibits and the
schedules hereto), together with the Confidentiality Agreement, constitutes the entire agreement between the parties hereto and supersedes any prior understandings, agreements or representations by or between the parties hereto, written or
oral, to the extent they are related in any way to the subject matter of this Plan of Merger.
9.4 Succession and Assignment. This Plan of Merger will be binding upon and inure
to the benefit of the parties named herein and their respective successors and permitted assigns. Except as provided for in Section 1.6, no party hereto may assign either this Plan of Merger or any of
its rights, interests or obligations hereunder without the prior written approval of, in the case of assignment by Company, Purchaser, and, in the case of assignment by Purchaser, Company.
9.5 Construction. The parties have participated jointly in the negotiation and
drafting of this Plan of Merger, and, in the event an ambiguity or question of intent or interpretation arises, this Plan of Merger will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise
favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Plan of Merger.
9.6 Exclusive Jurisdiction. Each of the parties to this Plan of Merger
irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the state and federal courts of the State of Michigan, and any appellate courts from any thereof, in any Action or proceeding arising out of
or relating to this Plan of Merger or the transactions contemplated by this Plan of Merger, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such Action or proceeding shall be heard and determined
in such Michigan court or, to the extent permitted by Law, in such federal court.
9.7 Waiver of Jury Trial. EACH OF THE PARTIES WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS PLAN OF MERGER OR THE TRANSACTIONS CONTEMPLATED BY THIS PLAN
OF MERGER.
9.8 Notices. All notices, requests, demands, and other communications under
this Plan of Merger shall be in writing and shall be deemed to have been duly given and effective (a) immediately if delivered or sent and received by electronic mail transmission (if receipt by the intended recipient is confirmed by the same
means, which confirmation each party agrees to transmit reasonably promptly); (b) when delivered if sent by hand (with written confirmation of receipt); or (c) when received by addressee if sent by a nationwide overnight delivery service (all
fees prepaid) to the following addresses:
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If to Purchaser:
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With a copy to:
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ChoiceOne Financial Services, Inc.
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Warner Norcross + Judd LLP
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Attn: Kelly J. Potes
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Attn: Charlie Goode and Malaina Weldy
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109 East Division
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150 Ottawa Avenue NW, Suite 1500
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Sparta, Michigan 49345
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Grand Rapids, Michigan 49503
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Telephone: 616-887-6837
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Telephone: 616-752-2176; 616-752-2580
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and
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If to Company:
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With a copy to:
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Fentura Financial, Inc.
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Dickinson Wright PLLC
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Attn: Ronald L. Justice
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Attn: Mark Ryerson
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175 North Leroy Street
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55 West Monroe, Suite 1200
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Fenton, MI 48430-3805
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Chicago, Illinois 60603
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Telephone: 810-714-3902
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Telephone: 312-377-7863
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9.9 Governing Law. This Plan of Merger shall be governed, construed, and enforced
accordance with the Laws of the State of Michigan, without regard to principles of conflicts of Laws.
9.10 Counterparts. This Plan of Merger may be executed in one or more
counterparts, which taken together shall constitute one and the same instrument. Executed counterparts of this Plan of Merger shall be deemed to have been fully delivered and shall become legally binding if and when executed signature pages
are received by electronic mail transmission from a party.
9.11 Headings. The article headings and section headings contained in this Plan of
Merger are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Plan of Merger.
9.12 Calculation of Dates and Deadlines. Unless otherwise specified, any period of
time to be determined under this Plan of Merger shall be deemed to commence at 12:01 a.m. on the first full day after the specified starting date, event, or occurrence. Any deadline, due date, expiration date, or period-end to be calculated
under this Plan of Merger shall be deemed to end at 5 p.m. on the last day of the specified period. The time of day shall be determined with reference to the then-current local time in Grand Rapids, Michigan.
9.13 Severability. If any term, provision, covenant, or restriction contained in
this Plan of Merger is held by a final and unappealable Order of a court of competent jurisdiction to be invalid, void, or unenforceable, then the remainder of the terms, provisions, covenants, and restrictions contained in this Plan of Merger
shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated unless the effect would be to cause this Plan of Merger to not achieve its essential purposes.
9.14 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other agreements in this Plan of Merger or in any instrument delivered pursuant to this Plan of Merger, including any rights arising out
of any breach of such representations, warranties, covenants and other agreements, will survive the Effective Time, except for those covenants and agreements contained herein that by their terms apply or are to be performed in whole or in part
after the Effective Time and this Article IX.
9.15 Amendments. This Plan of Merger may be amended by the parties hereto, by
action taken or authorized, in the case of Company, by the Company Board of Directors or a duly authorized committee of the Company Board of Directors and, in the case of Purchaser, by the Purchaser Board of Directors or a duly authorized
committee of the Purchaser Board of Directors at any time before or after the receipt of the Company Shareholder Approval or the Purchaser Shareholder Approval. This Plan of Merger may not be amended except by an instrument in writing signed
on behalf of Company and Purchaser.
[Signature page follows.]
IN WITNESS WHEREOF, the undersigned parties have duly executed and acknowledged this Plan of Merger as of the date first written above.
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CHOICEONE FINANCIAL SERVICES, INC.
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/s/ Kelly J. Potes
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By:
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Kelly J. Potes
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Its:
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Chief Executive Officer
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FENTURA FINANCIAL, INC.
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|
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/s/ Ronald L. Justice |
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|
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By:
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Ronald L. Justice
|
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Its:
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Chief Executive Officer
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Signature Page to Agreement and Plan of Merger
