Indemnification Pursuant to the merger agreement, Mid Penn has agreed that, following the effective time of the merger, it will indemnify, defend and hold harmless the present and former directors or officers or employees of William Penn and its subsidiaries against all liabilities incurred in connection with any litigation arising out of or pertaining to, the fact that such person is or was a director or officer or employee of William Penn, or its subsidiaries or, at William Penn’s request, of another corporation, partnership, joint venture, trust or other enterprise and pertaining to matters, acts or omissions existing or occurring at or prior to the effective time (including matters, acts or omissions occurring in connection with the approval of the merger agreement and the transactions contemplated by therein), whether asserted or claimed prior to, at or after the effective time, to the fullest extent permitted under the Maryland General Corporation Law, William Penn’s articles of incorporation and under William Penn’s bylaws, including provisions relating to advances of expenses incurred in the defense of any litigation; provided, that the indemnified party to whom expenses are advanced provides a written undertaking to repay such advances if it is ultimately determined that such indemnified party is not entitled to indemnification. Directors’ and Officers’ Insurance Mid Penn has further agreed, for a period of six years after the effective time of the merger, to maintain the directors’ and officers’ liability insurance policies of William Penn (provided that Mid Penn may substitute policies of at least the same coverage containing terms and conditions which are not materially less favorable to the insured) with respect to claims arising from factors or events which occurred prior to the effective time of the merger. Mid Penn is not obligated to make aggregate premium payments for such six-year period in respect of such policy (or coverage replacing such policy), which exceed, for the portion related to William Penn’s directors and officers, 200% of annual premium payments paid on William Penn’s current policy in effect as of the date of the merger agreement. Mid Penn will use reasonable efforts to maintain the most advantageous insurance policies obtainable for such amount. In lieu of Mid Penn purchasing and maintaining a directors’ and officers’ liability insurance policy, and upon the consent of Mid Penn, William Penn may, prior to the effective time of the merger, obtain a six year “tail” policy under William Penn’s existing directors’ and officers’ insurance policy which provides equivalent coverage, so long as it does not exceed, for the portion related to William Penn’s directors and officers, 200% of the annual premium payments paid on William Penn’s current policy in effect prior to the effective time of the merger. 91
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