EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
FIRST BUSEY CORPORATION,
FBC ACQUISITION III CORP.
and
TARPON COAST BANCORP, INC.
Dated as of February 24, 2005
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TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I THE MERGER............................................................................ 1
Section 1.1. The Merger............................................................................ 1
Section 1.2. Effective Time........................................................................ 2
Section 1.3. Effects of the Merger................................................................. 2
Section 1.4. Effect on Capital Stock............................................................... 2
Section 1.5. Reserved.............................................................................. 4
Section 1.6. Manner of Conversion of Tarpon Common Stock........................................... 4
Section 1.7. Adjustments for Dilution and Other Matters............................................ 5
Section 1.8. Conversion of Dissenting Tarpon Shares................................................ 5
Section 1.9. Stock Options and Warrants............................................................ 5
Section 1.10. The Closing........................................................................... 6
ARTICLE II EXCHANGE OF CERTIFICATES.............................................................. 6
Section 2.1. Buyer to Make Merger Consideration Available.......................................... 6
Section 2.2. Exchange of Certificates.............................................................. 6
Section 2.3. Dividends............................................................................. 7
Section 2.4. Withholding Rights.................................................................... 7
Section 2.5. Tax and Accounting Consequences....................................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF TARPON.............................................. 7
Section 3.1. Corporate Organization................................................................ 8
Section 3.2. Capitalization........................................................................ 8
Section 3.3. Authority............................................................................. 9
Section 3.4. Consents and Approvals................................................................ 9
Section 3.5. Reports............................................................................... 10
Section 3.6. Broker's Fees......................................................................... 10
Section 3.7. Absence of Certain Changes or Events.................................................. 10
Section 3.8. Legal Proceedings..................................................................... 11
Section 3.9. Taxes and Tax Returns................................................................. 11
Section 3.10. Employee Benefit Plans................................................................ 12
Section 3.11. Compliance with Applicable Law........................................................ 13
Section 3.12. Certain Contracts..................................................................... 13
Section 3.13. Agreements with Regulatory Agencies................................................... 15
Section 3.14. Reserved.............................................................................. 15
Section 3.15. Investment Securities................................................................. 15
Section 3.16. Undisclosed Liabilities............................................................... 15
Section 3.17. Insurance............................................................................. 15
Section 3.18. Allowance for Loan Loss............................................................... 16
Section 3.19. Title to Properties; Leases........................................................... 16
Section 3.20. Environmental Matters................................................................. 16
Section 3.21. Approval Delays....................................................................... 17
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Section 3.22. Vote Required......................................................................... 17
Section 3.23. Powers of Attorney.................................................................... 17
Section 3.24. Fairness Opinion...................................................................... 17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION CORP.......................... 18
Section 4.1. Corporate Organization................................................................ 18
Section 4.2. Authority............................................................................. 18
Section 4.3. Consents and Approvals................................................................ 18
Section 4.4. Financial Resources................................................................... 18
Section 4.5. Approval Delays....................................................................... 19
Section 4.6. Vote Required......................................................................... 19
Section 4.7. Taxes................................................................................. 19
Section 4.8 Capital Stock......................................................................... 19
Section 4.9. Reports and Financial Statements...................................................... 19
Section 4.10. Undisclosed Liabilities............................................................... 20
ARTICLE V ADDITIONAL AGREEMENTS................................................................. 20
Section 5.1. Conduct of Business................................................................... 20
Section 5.2. Negative Covenants.................................................................... 20
Section 5.3. Access to Information and Due Diligence............................................... 22
Section 5.4. Meeting of Shareholders of Tarpon; Preparation of Tarpon Proxy
Materials and S-4 Registration Statement.......................................... 23
Section 5.5. Nasdaq Listing........................................................................ 25
Section 5.6. Regulatory Filings.................................................................... 25
Section 5.7. Reasonable Efforts.................................................................... 25
Section 5.8. Business Relations and Publicity...................................................... 25
Section 5.9. No Conduct Inconsistent with this Agreement........................................... 25
Section 5.10. Board of Directors' Notices, Minutes, Etc............................................. 26
Section 5.11. Untrue Representations and Warranties................................................. 26
Section 5.12. Indemnification, Directors' and Officers' Insurance................................... 26
Section 5.13. Employee Benefit and Incentive Plans.................................................. 26
Section 5.14. COBRA................................................................................. 27
Section 5.15. Certain Consents...................................................................... 28
Section 5.16. Title to Real Property................................................................ 28
Section 5.17. Environmental Surveys................................................................. 28
Section 5.18. List of Tarpon Stockholders........................................................... 29
Section 5.19. Tax Treatment and Tax Certificates.................................................... 29
Section 5.20. Rule 144 Compliance................................................................... 29
Section 5.21. Tax Disclosure........................................................................ 30
ARTICLE VI CONDITIONS PRECEDENT.................................................................. 30
Section 6.1. Conditions Precedent to Obligations of Buyer and Acquisition Corp..................... 30
Section 6.2. Conditions Precedent to Obligations of Tarpon......................................... 32
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ARTICLE VII TERMINATION, EXPENSES AND AMENDMENT................................................... 33
Section 7.1. Termination........................................................................... 33
Section 7.2. Termination Fee; Expenses............................................................. 35
Section 7.3. Effect of Termination................................................................. 36
Section 7.4. Amendment............................................................................. 36
Section 7.5. Extension; Waiver..................................................................... 36
ARTICLE VIII GENERAL PROVISION..................................................................... 37
Section 8.1. Non-Survival of Representations, Warranties and Agreements............................ 37
Section 8.2. Notices............................................................................... 37
Section 8.3. Interpretation........................................................................ 38
Section 8.4. Counterparts.......................................................................... 38
Section 8.5. Entire Agreement...................................................................... 38
Section 8.6. Governing Law......................................................................... 38
Section 8.7. Severability.......................................................................... 38
Section 8.8. Publicity............................................................................. 39
Section 8.9. Assignment; Third Party Beneficiaries................................................. 39
SCHEDULES
SCHEDULE 3.1(b) -- Ownership of Voting Stock or Equity Securities by Tarpon
SCHEDULE 3.1(c) -- Ownership of Voting Stock or Equity Securities by Tarpon Subsidiaries
SCHEDULE 3.2(a) -- Stock Options and Warrants
SCHEDULE 3.4 -- Consents and Approvals
SCHEDULE 3.6 -- Financial Advisor Contract
SCHEDULE 3.9(b) -- Code Section 6111 or 6112 Transactions
SCHEDULE 3.10(b) -- List of Tarpon Plans
Schedule 3.12(a) -- Certain Contracts and Agreements
SCHEDULE 3.13 -- Agreements with Regulatory Agencies
SCHEDULE 3.16 -- Undisclosed Liabilities
SCHEDULE 3.17 -- Insurance
SCHEDULE 3.19(b) -- Tarpon Leases
EXHIBITS
EXHIBIT A -- Form of Employment Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of the 24th day of February, 2005, by and among FIRST BUSEY CORPORATION,
a Nevada corporation ("Buyer"), FBC ACQUISITION III CORP., a Florida corporation
and wholly-owned subsidiary of Buyer ("Acquisition Corp."), and TARPON COAST
BANCORP, INC., a Florida corporation ("Tarpon").
WHEREAS, the respective Boards of Directors of the parties hereto deem it
advisable and in the best interests of the parties hereto and their respective
shareholders to consummate the Merger (as defined in Section 1.1), upon the
terms and subject to the conditions of this Agreement;
WHEREAS, as a further material inducement and condition to Buyer's and
Acquisition Corp.'s willingness to enter into this Agreement, each of Lewis S.
Albert and Todd H. Katz have concurrently entered into an Employment Agreement
with Buyer, in the form attached hereto as Exhibit A hereto and hereby made part
hereof, which shall become effective at the Effective Time (as defined in
Section 1.2) (collectively referred to herein as the "Employment Agreements");
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement and the
Merger;
NOW THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants, agreements and conditions herein
contained, the parties hereto covenant and agree as follows.
ARTICLE I
THE MERGER
Section 1.1. The Merger. At the Effective Time (as hereinafter defined)
and subject to and upon the terms and conditions of this Agreement and the
Florida Business Corporation Act ("Florida Law"), Acquisition Corp. shall merge
with and into Tarpon, the separate corporate existence of Acquisition Corp.
shall cease, and Tarpon shall continue as the surviving corporation (as such,
the "Surviving Corporation"), which shall be a wholly owned subsidiary of Buyer.
Pursuant to the Merger:
(a) the Articles of Incorporation of Tarpon, as in effect
immediately before the Effective Time, shall be, from and after the
Effective Time, the Articles of Incorporation of the Surviving
Corporation, until thereafter amended as provided therein and under
Florida Law;
(b) the Bylaws of Tarpon, as in effect immediately before the
Effective Time, shall be, from and after the Effective Time, the Bylaws of
the Surviving Corporation, until thereafter amended as provided therein
and under Florida Law;
(c) the directors of Acquisition Corp. immediately before the
Effective Time shall be, from and after the Effective Time, the directors
of the Surviving Corporation to serve until his or her death, resignation
or removal or until his or her successor is duly elected and qualified;
(d) the officers of Acquisition Corp. immediately before the
Effective Time shall be, from and after the Effective Time, the officers
of the Surviving Corporation to serve until his or her death, resignation
or removal or until his or her successor is duly elected and qualified;
and
(e) immediately after the Effective Time, the Surviving Corporation
shall merge with and into Buyer (the "Holding Company Merger," and
together with the Merger, the "Mergers").
Section 1.2. Effective Time. As promptly as practicable on the Closing
Date (as hereinafter defined), the parties shall cause the Merger to be
consummated by filing the Articles of Merger (the "Articles of Merger") with the
Florida Department of State with respect to the Merger, in such form as required
by, and executed in accordance with, the relevant provisions of Florida Law. The
Merger shall become effective at such time as the Articles of Merger are duly
filed with the Florida Department of State, or at such later date or time as may
be set forth in the Articles of Merger (such time as the Merger becomes
effective being hereinafter referred to as the "Effective Time").
Section 1.3. Effects of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Florida Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
Tarpon and Acquisition Corp. shall continue with, or vest in, as the case may
be, Tarpon as the Surviving Corporation, and all debts, liabilities and duties
of Tarpon and Acquisition Corp. shall continue to be, or become, as the case may
be, the debts, liabilities and duties of Tarpon as the Surviving Corporation. At
the Effective Time, the Surviving Corporation shall be a direct wholly owned
subsidiary of Buyer.
Section 1.4. Effect on Capital Stock. (a) At the Effective Time, subject
to Section 1.6, Section 1.7 and Section 2.2 hereof, by virtue of the Merger and
without any action on the part of Tarpon, or the holder of any securities of
Tarpon, each share of common stock, $.01 par value per share, of Tarpon (the
"Tarpon Common Stock") issued and outstanding immediately before the Effective
Time, other than Dissenting Shares (as hereinafter defined), shall be converted
into the right to receive $27.00 in a combination of shares of common stock, no
par value of Buyer (the "Buyer Common Stock") and cash, without interest in a
proportion of 55% Buyer Common Stock (or $14.85 divided by the "Buyer Share
Price") and 45% cash (or $12.15) per share of Tarpon Common Stock (the "Per
Share Consideration"). As used herein, the "Buyer Share Price" shall mean the
average (rounded to the nearest $.01) of the closing prices of Buyer
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Common Stock on the ten (10) trading days immediately prior to the fourth (4th)
calendar day preceding the Closing Date that shares of Buyer Common Stock are
traded on the Nasdaq National Market ("Nasdaq").
(b) Each outstanding share of Tarpon Common Stock as to which a written
demand for payment is filed in accordance with Sections 607.1301 through 1333 of
Florida Law (the "Dissent Provisions") at or prior to the Shareholders' Meeting
(as such term is defined in Section 5.4 hereof) and not withdrawn at or prior to
the Shareholders' Meeting and which is not voted in favor of the Merger shall
not be converted into or represent a right to receive Buyer Common Stock or cash
hereunder unless and until the holder thereof shall have failed to perfect, or
shall have effectively withdrawn or lost his or her right to dissent and obtain
payment for his or her Tarpon Common Stock under the Dissent Provisions, at
which time his or her shares shall either be converted into Buyer Common Stock
or cash as set forth in Section 1.8 hereof. All such shares of Tarpon Common
Stock as to which such a written demand for payment is so filed and not
withdrawn at or prior to the Shareholders' Meeting and which are not voted in
favor of the Merger, except any such shares of Tarpon Common Stock the holder of
which, prior to the Effective Time, shall have effectively withdrawn or lost his
or her right to dissent and obtain payment for his or her shares of Tarpon
Common Stock under the Dissent Provisions, are hereinafter referred to as
"Dissenting Shares." Tarpon shall give Buyer prompt notice upon receipt by
Tarpon of any written demands for payment, withdrawal of such demands, and any
other written communications delivered to Tarpon pursuant to the Dissent
Provisions and Tarpon shall give Buyer the opportunity to direct all
negotiations and proceedings with respect to such demands. Tarpon shall not
voluntarily make any payment with respect to any demands for payment and shall
not, except with the prior written consent of Buyer, settle or offer to settle
any such demands. Each holder of Tarpon Common Stock who becomes entitled,
pursuant to the provisions of the Dissent Provisions, to payment for his or her
shares of Tarpon Common Stock under the Dissent Provisions shall receive payment
therefor from the Surviving Corporation and such shares of Tarpon Common Stock
shall be cancelled.
(c) Each of the shares of Tarpon Common Stock (i) held in the treasury of
Tarpon or (ii) held by Buyer or any of its wholly-owned subsidiaries or by
Tarpon or any of its wholly-owned subsidiaries, other than shares held by Buyer
or any of its wholly owned subsidiaries or by Tarpon or any of its wholly-owned
subsidiaries in a fiduciary capacity or as a result of debts previously
contracted, shall be cancelled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
(d) Notwithstanding any other provisions of this Agreement, each holder of
shares of Tarpon Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of Buyer Common
Stock (after taking into account all certificates delivered by such holder)
shall receive, in lieu thereof, cash, without interest, in an amount equal to
such fractional part of a share of Buyer Common Stock multiplied by the Buyer
Share Price. No such holder will be entitled to dividends, voting rights or any
other rights as a shareholder in respect of any fractional share.
(e) At the Effective Time, the share transfer books of Tarpon shall be
closed as to the holders of shares of Tarpon Common Stock immediately prior to
the Effective Time and no
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transfer of shares of Tarpon Common Stock by any such holder shall thereafter be
made or recognized. Any other provision of this Agreement notwithstanding,
neither Buyer, Tarpon, Acquisition Corp., Surviving Corporation nor the exchange
agent selected by Buyer (the "Exchange Agent") shall be liable to a holder of
Tarpon Common Stock for any amount paid or property delivered in good faith to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(f) At the Effective Time, the shares of common stock, par value $.01 per
share, of Acquisition Corp. issued and outstanding immediately before the
Effective Time, and all rights in respect thereof, shall, without any action on
the part of Buyer, forthwith cease to exist and be converted into an aggregate
of 100 validly issued, fully paid and nonassessable shares of common stock of
the Surviving Corporation, par value $.01 per share (the "Surviving Corporation
Common Stock"). Immediately after the Effective Time and upon surrender by Buyer
of the certificate representing the shares of the common stock of Acquisition
Corp., the Surviving Corporation shall deliver to Buyer an appropriate
certificate or certificates representing the shares of Surviving Corporation
Common Stock created by conversion of the common stock of Acquisition Corp.
owned by Buyer.
Section 1.5. Reserved.
Section 1.6. Manner of Conversion of Tarpon Common Stock. Within five (5)
business days after the Shareholders' Meeting, unless the Effective Time has not
yet occurred, in which case as soon thereafter as practicable, Buyer shall cause
the Exchange Agent to effect the allocation among the holders of Tarpon Common
Stock of rights to receive Buyer Common Stock and cash in the Merger as follows:
(a) Less Than Share Minimum. If the number of Buyer Common Stock to
be issued in exchange for Tarpon Common Stock is less than the Share
Minimum (as defined in Section 1.6(d) hereof), then, subject to the
provisions of Section 1.6(c) hereof, the Exchange Agent shall select from
each of the holders of Tarpon Common Stock, proportionately, a sufficient
number of shares of the Tarpon Common Stock to be converted into the right
to receive solely Buyer Common Stock that will, together with all other
Buyer Common Stock to be issued, equal as closely as practicable (but in
no event be less than) the Share Minimum.
(b) Equal to or Greater Than Share Minimum. Subject to Section
1.6(c) hereof, if the number of Buyer Common Stock to be issued in
exchange for Tarpon Common Stock is equal to or greater than the Share
Minimum, then all Tarpon Common Stock shall be converted into the right to
receive cash and Buyer Common Stock in the proportion set forth in Section
1.4 of this Agreement.
(c) Greater than Share Maximum. Notwithstanding the allocations
determined pursuant to Sections 1.6(a) and 1.6(b) hereof, if the number of
shares of Buyer Common Stock to be issued in exchange for Tarpon Common
Stock is greater than the Share Maximum (as defined in Section 1.6(d)
hereof), then the Exchange Agent shall select from each of the holders of
Tarpon Common Stock, proportionately, a sufficient
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number of shares of the Tarpon Common Stock, which if converted solely to
cash would result in the Buyer Common Stock to be issued in the Merger to
equal as closely as practicable (but in no event be greater than) the
Share Maximum, and all such shares of Tarpon Common Stock held by such
holders shall be converted into the right to receive cash.
(d) For purposes of this Section 1.6, (i) "Share Minimum" means the
number shares of Buyer Common Stock, priced by the Buyer Share Price,
required to comprise at least fifty percent (50%) of the aggregate value
of the Merger consideration received by shareholders of Tarpon for their
Tarpon Common Stock and (ii) "Share Maximum" means 850,000 shares of Buyer
Common Stock, subject to appropriate adjustment or adjustments in the
event that Buyer shall declare a share dividend or distribution upon or
subdivide, split up, reclassify or combine the Buyer Common Stock, or
declare a dividend, or make a distribution, in any security convertible
into Buyer Common Stock. For these purposes, cash and other property
exchanged, or reasonably expected to be exchanged, for Tarpon Common Stock
surrendered by the dissenters, paid, or reasonably expected to be paid, in
lieu of receipt of fractional shares by shareholders of Tarpon and
otherwise paid, or reasonably expected to be paid, to shareholders of
Tarpon, in exchange for Tarpon Common Stock, shall be treated as Merger
consideration.
Section 1.7. Adjustments for Dilution and Other Matters. If prior to the
Effective Time, Tarpon shall declare a share dividend or distribution upon or
subdivide, split up, reclassify or combine the Tarpon Common Stock, or declare a
dividend, or make a distribution, on the Tarpon Common Stock in any security
convertible into Tarpon Common Stock (provided that no such action may be taken
by Tarpon without Buyer's prior written consent as so provided in Section 5.2
hereof), appropriate adjustment or adjustments will be made to the Per Share
Consideration, the Share Minimum and the Share Maximum. If at the Effective Time
Tarpon shall have outstanding more shares of Tarpon Common Stock than are
contemplated to be outstanding by the representation and warranty contained in
Section 3.2 hereof then, at Buyer's election and notwithstanding other
provisions hereof, and without limiting any of its other rights hereunder, the
Per Share Consideration shall be appropriately adjusted downward.
Section 1.8. Conversion of Dissenting Tarpon Shares. If prior to the
Effective Time any holder of the Tarpon Common Stock shall fail to perfect, or
shall effectively withdraw or lose, his or her right to dissent and obtain
payment for his or her shares of Dissenting Shares under the Dissent Provisions,
the Dissenting Shares of such holder shall be treated for purposes of this
Article I like any other shares of outstanding Tarpon Common Stock. If after the
Effective Time any holder of Tarpon Common Stock shall fail to perfect, or shall
effectively withdraw or lose, his or her right to dissent and obtain payment for
his or her Tarpon Common Stock under the Dissent Provisions each share of Tarpon
Common Stock of such holder shall be converted into the right to receive the Per
Share Consideration in accordance with the procedures, and subject to the
conditions, set forth in Article II of this Agreement.
Section 1.9. Stock Options and Warrants. Buyer shall, as of the Effective
Time, (i) convert any outstanding stock option granted by Tarpon for the
purchase of shares of Tarpon Common Stock, exercisable pursuant to the terms of
the 1997 Incentive Stock Option Plan (the
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"Tarpon Option Plan"), as such plan may be amended prior to the Effective Time
and (ii) convert any outstanding warrant issued by Tarpon for the purchase of
shares of Tarpon Common Stock, pursuant to the Stock Purchase Warrant dated
January 28, 1998 (the "Tarpon Warrant Agreement") into cash in an amount equal
to the excess of the Per Share Consideration (or $27.00) over the exercise price
of such option or warrant, multiplied by the number of shares of Tarpon Common
Stock subject to such option or warrant, as applicable. Such cash, net of any
amount that must be withheld for federal, state or local tax purposes, shall be
paid to the holder of such option on the Closing Date, whereupon such option or
warrant shall terminate. Prior to the Closing Date, Tarpon shall obtain, in form
and substance satisfactory to Buyer, any necessary written consent or agreement
of the holders of such stock options and warrants required in order to effect
the conversion of such stock options and warrants in accordance with the terms
hereof.
Section 1.10. The Closing. The consummation of the transactions
contemplated by this Agreement shall take place at a closing (the "Closing") to
be held upon the satisfaction or waiver of all of the conditions to the Merger
set forth herein, which Closing shall take place at 10:00 a.m., local time, at
the offices of Chapman and Cutler LLP (or at such other place upon which the
parties may agree), on a date mutually agreeable to the parties hereto
(hereinafter referred to as the "Closing Date").
ARTICLE II
EXCHANGE OF CERTIFICATES
Section 2.1. Buyer to Make Merger Consideration Available. Upon the latest
to occur of the Effective Time and the completion of the allocation procedure
set forth in Section 1.4 hereof, Buyer shall issue and pay to the Exchange Agent
the number of shares of Buyer Common Stock issuable pursuant to the Merger and
the amount of cash payable pursuant to the Merger. The Exchange Agent shall not
issue or pay Buyer Common Stock or cash payable with respect to Tarpon Common
Stock to any shareholder of Tarpon unless and until share certificates and
required transmittal materials pursuant to Article I have been received from
such shareholder in proper form by the Exchange Agent. The Exchange Agent shall
not be entitled to vote or exercise any rights of ownership with respect to
Buyer Common Stock held by it from time to time hereunder, except that it shall
receive and hold all dividends or other distributions paid or distributed with
respect to such shares for the account of the persons entitled thereto.
Section 2.2. Exchange of Certificates. (a) Promptly after the Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented shares of
Tarpon Common Stock, a certificate or certificates representing the number of
whole shares of Buyer Common Stock and a check representing the amount of cash
into which the Tarpon Common Stock held by such holder was converted pursuant to
the terms of Article I of this Agreement. If any certificate for shares of Buyer
Common Stock, or any check representing cash and/or declared but unpaid
dividends, is to be issued in a name other than that in which a certificate
surrendered for exchange is issued, the certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and the person
requesting such exchange shall affix any requisite stock
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transfer tax stamps to the certificate surrendered or provide funds for their
purchase or establish to the satisfaction of the Exchange Agent that such taxes
are not payable.
(b) All Buyer Common Stock issued and cash paid upon the surrender for
exchange of certificates for Tarpon Common Stock in accordance with the terms of
this Agreement shall be deemed to have been issued and paid in full satisfaction
of all rights pertaining to the Tarpon Common Stock theretofore represented by
such certificates, subject, however, to the Surviving Corporation's obligation
to pay any dividends or make any other distributions, otherwise permitted under
this Agreement, with a record date prior to the Effective Time which may have
been declared or made by Tarpon on such Tarpon Common Stock which remains unpaid
at the Effective Time. If, after the Effective Time, certificates representing
Tarpon Common Stock are presented to the Surviving Corporation or the Exchange
Agent for any reason, they shall be canceled and exchanged as provided in this
Agreement, except as otherwise provided by law.
Section 2.3. Dividends. Subject to the effect of applicable laws,
following surrender of any such certificate of Tarpon Common Stock, there shall
be paid to the holder of the certificates representing whole shares of Buyer
Common Stock issued in exchange therefor, without interest, (a) the amount of
any cash payable with respect to a fractional share of Buyer Common Stock to
which such holder is entitled pursuant to Section 1.4(d) hereof and the amount
of dividends or other distributions with a record date after the Effective Time
theretofore paid with respect to such whole shares of Buyer Common Stock and (b)
at the appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to surrender and a payment
date subsequent to surrender payable with respect to such whole shares of Buyer
Common Stock.
Section 2.4. Withholding Rights. Buyer or the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Tarpon Common Stock such
amounts as Buyer or the Exchange Agent is required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code, as
amended (the "Code"), or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by Buyer or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of the shares of Tarpon Common Stock in respect to which
such deduction and withholding was made by Buyer or the Exchange Agent.
Section 2.5. Tax and Accounting Consequences. It is intended by the
parties hereto that the Mergers shall constitute a reorganization within the
meaning of Section 368 of the Code. The parties hereto adopted this Agreement as
a "plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Income Tax Regulations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TARPON
Tarpon hereby represents and warrants to Buyer as follows:
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Section 3.1. Corporate Organization. (a) Tarpon is a corporation duly
organized and validly existing under the laws of the State of Florida. Tarpon
has the corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted, and is duly
licensed or qualified to do business in each jurisdiction in which the nature of
the business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not have a
Material Adverse Effect (as defined below) on Tarpon. Tarpon is duly registered
as a bank holding company under the Bank Holding Company Act of 1956, as amended
(the "BHCA"). True and complete copies of the Articles of Incorporation and
Bylaws of Tarpon, as in effect as of the date of this Agreement, have previously
been made available by Tarpon to Buyer. As used in this Agreement, the term
"Material Adverse Effect" means, with respect to Tarpon or Buyer, as the case
may be, a material adverse effect (i) on the business, assets, properties,
results of operations, financial condition, or (insofar as they can reasonably
be foreseen) prospects of such party and its subsidiaries, taken as a whole, or
(ii) on the consummation of the Merger. The word "subsidiary" when used with
respect to any party means any bank, corporation, partnership, limited liability
company, or other organization, whether incorporated or unincorporated, which is
consolidated with such party for financial reporting purposes.
(b) As of the date of this Agreement, Tarpon has, as its sole direct or
indirect subsidiaries, Tarpon Coast National Bank, a national banking
association (the "Bank"), and Tarpon Coast Financial Services, Inc., a Florida
corporation (together with the Bank, the "Tarpon Subsidiaries"). Except as set
forth in Schedule 3.1(b) of the disclosure schedules to this Agreement prepared
and delivered by Tarpon (the "Tarpon Disclosure Schedules"), Tarpon does not own
any voting stock or equity securities of any bank, corporation, partnership,
limited liability company, or other organization, whether incorporated or
unincorporated, other than the Tarpon Subsidiaries.
(c) Each Tarpon Subsidiary (i) is duly organized and validly existing as a
business corporation or depository institution, as the case may be, under the
laws of its jurisdiction of organization, (ii) is duly qualified to do business
and in good standing in all jurisdictions (whether federal, state, local or
foreign) where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and in which the failure to be so
qualified would have a Material Adverse Effect on Tarpon, and (iii) 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 as set forth in
Schedule 3.1(c) of the Tarpon Disclosure Schedules, none of the Tarpon
Subsidiaries owns any voting stock or equity securities of any bank,
corporation, partnership, limited liability company, or other organization,
whether incorporated or unincorporated.
Section 3.2. Capitalization. (a) The authorized capital stock of Tarpon
consists of 10,000,000 shares of Tarpon Common Stock, $.01 par value per share,
of which, as of the date hereof, 1,182,151 shares were issued and outstanding,
and 2,000,000 shares of Preferred Stock, of which, as of the date hereof, none
were issued and outstanding. As of the date hereof, no shares of Tarpon Common
Stock were held in treasury. All of the issued and outstanding shares of Tarpon
Common Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights. Except for the Tarpon Option Plan
and the Tarpon
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Warrant Agreement, respectively, Tarpon does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments, agreements,
preemptive or other rights of any character calling for the purchase or issuance
of any shares of Tarpon Common Stock or any other equity securities of Tarpon or
any securities representing the right to purchase or otherwise receive any
shares of the capital stock of Tarpon, nor are there any securities, debts,
obligations or rights outstanding which are convertible into or exchangeable for
shares of the capital stock of Tarpon. No shares of Tarpon Common Stock have
been reserved for issuance, other than the shares of Tarpon Common Stock
reserved for issuance under the Tarpon Option Plan and the Tarpon Warrant
Agreement, respectively. Since September 30, 2004, Tarpon has not issued any
shares of its capital stock. Schedule 3.2(a) of the Tarpon Disclosure Schedules
sets forth as of the date hereof the number of outstanding stock options and
warrants for the purchase of Tarpon Common Stock granted under the Tarpon Option
Plan and the Tarpon Warrant, and the dates on which such options and warrants
became or become exercisable pursuant to the Tarpon Option Plan and the Tarpon
Warrant, as applicable.
(b) Tarpon owns, directly or indirectly, all of the issued and outstanding
shares of capital stock of each of the Tarpon Subsidiaries, free and clear of
any liens, pledges, charges, encumbrances and security interests whatsoever
("Liens"). All of the shares of capital stock of each Tarpon Subsidiary are duly
authorized and validly issued and are fully paid and nonassessable. No Tarpon
Subsidiary has or is bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity security of such
Tarpon Subsidiary or any securities representing the right to purchase or
otherwise receive any shares of capital stock or any other equity security of
such Tarpon Subsidiary.
Section 3.3. Authority. Tarpon has full corporate power and authority to
execute and deliver this Agreement and, subject to shareholder and regulatory
approvals, to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly approved by the Board of Directors of Tarpon.
The Board of Directors of Tarpon has directed that this Agreement and the
transactions contemplated hereby be submitted to Tarpon's shareholders for
approval at a meeting of such shareholders and, except for the adoption of this
Agreement by the affirmative vote of the holders of a majority of the
outstanding shares of Tarpon Common Stock, no other corporate proceedings on the
part of Tarpon are necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Tarpon and (assuming due authorization, execution and
delivery by Buyer) constitutes a valid and binding obligation of Tarpon,
enforceable against Tarpon in accordance with its terms.
Section 3.4. Consents and Approvals. Except as set forth in Schedule 3.4
of the Tarpon Disclosure Schedules, no consents or approvals of or filings or
registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") or with
any third party are necessary in connection with the execution and delivery by
Tarpon of this Agreement and the consummation by Tarpon of the Mergers and the
other transactions contemplated hereby except for (a) the filing by Buyer of an
application with the Board of Governors of the Federal Reserve System (the
"FRB") and the approval of
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such application (the "Regulatory Application"), (b) the filing of the Articles
of Merger with the Florida Department of State under Florida Law and (c) the
approval of this Agreement by the requisite vote of the shareholders of Tarpon
and by Buyer, as sole shareholder of Acquisition Corp.
Section 3.5. Reports. Tarpon and each of the Tarpon Subsidiaries have
timely filed all reports, registrations and statements, together with any
amendments required to be made with respect thereto, that they were required to
file during the five years preceding the date hereof with (i) the FRB, (ii) the
Office of the Comptroller of the Currency, (iii) the Federal Deposit Insurance
Corporation, (iv) any state regulatory authority, and (v) any self-regulatory
organization with jurisdiction over any of the activities of Tarpon or any of
the Tarpon Subsidiaries (collectively "Regulatory Agencies"), and all other
reports and statements required to be filed by them during the five years
preceding the date hereof, including, without limitation, any report or
statement required to be filed pursuant to the laws, rules or regulations of the
United States, any state, or any Regulatory Agency, and have paid all fees and
assessments due and payable in connection therewith, except where the failure to
file such report, registration or statement or to pay such fees and assessments,
either individually or in the aggregate, will not have a Material Adverse Effect
on Tarpon. Except for normal examinations conducted by a Regulatory Agency in
the regular course of the business of Tarpon and the Tarpon Subsidiaries, no
Regulatory Agency has initiated any proceeding or, to the best knowledge of
Tarpon, investigation into the business or operations of Tarpon or any of the
Tarpon Subsidiaries during the five years preceding the date hereof. There is no
unresolved written violation, written criticism, or written exception by any
Regulatory Agency with respect to any report or statement relating to any
examinations of Tarpon or any of the Tarpon Subsidiaries, which is likely,
either individually or in the aggregate, to have a Material Adverse Effect on
Tarpon.
Section 3.6. Broker's Fees. Other than Tarpon's arrangement with Keefe
Ventures, LLC to serve as a financial advisor to Tarpon in connection with the
Merger and related transactions contemplated by this Agreement, neither Tarpon
nor any Tarpon Subsidiary nor any of their respective officers or directors has
employed any financial advisor, broker or finder or incurred any liability for
any financial advisory fees, broker's fees, commissions or finder's fees in
connection with the Merger or related transactions contemplated by this
Agreement. Keefe Ventures, LLC's contract with Tarpon is included as Schedule
3.6 of the Tarpon Disclosure Schedules.
Section 3.7. Absence of Certain Changes or Events. (a) Since September 30,
2004, (i) Tarpon and the Tarpon Subsidiaries, taken as a whole, have not
incurred any material liability, except in the ordinary course of their
respective businesses, and (ii) no event has occurred which has had,
individually or in the aggregate, a Material Adverse Effect on Tarpon or will
have a Material Adverse Effect on Tarpon.
(b) Since September 30, 2004, Tarpon and the Tarpon Subsidiaries have
conducted their respective businesses in all material respects in the ordinary
and usual course consistent with past practice and, since the date of this
Agreement, consistent with the restrictions set forth in Section 5.2.
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Section 3.8. Legal Proceedings. (a) There are no pending or threatened,
legal, administrative, arbitration or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against Tarpon or any of
the Tarpon Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement.
(b) There is no injunction, order, judgment, decree, or regulatory
restriction (other than regulatory restrictions that apply to similarly situated
savings and loan holding companies or savings associations) imposed upon Tarpon,
any of the Tarpon Subsidiaries or the assets of Tarpon or any of the Tarpon
Subsidiaries.
Section 3.9 Taxes and Tax Returns. (a) Each of Tarpon and the Tarpon
Subsidiaries has duly filed all federal, state, county, foreign and, to the best
of Tarpon's knowledge, local information returns and Tax (as hereinafter
defined) returns required to be filed by it on or before the date hereof (all
such returns being accurate and complete in all material respects) and has duly
paid or made provisions for the payment of all Taxes (as hereinafter defined)
and other governmental charges which have been incurred or are due or claimed to
be due from it by federal, state, county, foreign or local taxing authorities on
or before the date of this Agreement (including, without limitation, if and to
the extent applicable, those due in respect of its properties, income, business,
capital stock, deposits, franchises, licenses, sales, use and payrolls) other
than Taxes or other charges which are not yet delinquent or are being contested
in good faith and have not been finally determined. There are no material
disputes pending with respect to, or claims asserted for, Taxes or assessments
upon Tarpon or any of the Tarpon Subsidiaries for which Tarpon does not have
adequate reserves, nor has Tarpon or any of the Tarpon Subsidiaries given any
currently effective waivers extending the statutory period of limitation
applicable to any federal, state, county, foreign or local income tax return for
any period. In addition, proper and accurate amounts have been withheld by
Tarpon and each of the Tarpon Subsidiaries from their employees for all prior
periods in compliance in all material respects with the tax withholding
provisions of applicable federal, state, foreign and local laws, except where
failure to do so would not, in the aggregate, have a Material Adverse Effect on
Tarpon. There are no Tax liens upon any property or assets of Tarpon or any of
the Tarpon Subsidiaries except liens for taxes not yet past due. As used in this
Agreement, the term "Tax" or "Taxes" means all federal, state, county, local,
and foreign income, excise, gross receipts, gross income, ad valorem, profits,
gains, property, capital, sales, transfer, use, payroll, employment, severance,
withholding, duties, intangibles, franchise, backup withholding, and other
taxes, charges, levies or like assessments together with all penalties and
additions to tax and interest thereon.
(b) Tarpon has not participated in any transaction required to be
disclosed pursuant to Treasury Regulations Section 1.6011-4. Tarpon has not
acted as a Tax shelter organizer for the purposes of Code Section 6111 and
Section 6112. Except as disclosed on Schedule 3.9(b) of the Tarpon Disclosure
Schedules, Tarpon has invested in no transactions requiring registration under
Code Section 6111 or requiring list maintenance under Section 6112.
(c) Tarpon represents and warrants to each other party in the transaction
and their respective advisers that Tarpon's participation in the transaction is
not part of a reportable transaction as defined in Treas. Reg. Section 1.6011-4.
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(d) Tarpon represents and warrants that Tarpon shall comply with all Tax
reporting requirements with respect to the transaction.
Section 3.10. Employee Benefit Plans.
(a) (i) Tarpon Plan. The term, "Tarpon Plan" includes each bonus, deferred
compensation, pension, retirement, profit sharing, thrift savings, employee
stock ownership, stock bonus, stock purchase, restricted stock and stock option
plan, each employment or severance contract, each other material employee
benefit plan, any applicable "change in control" or similar provisions in any
plan, program, policy, contract or arrangement, and each other benefit plan,
contract, program, policy or arrangement, including but not limited to, each
employee benefit plan, as defined in Section 3(3) of ERISA (other than an Tarpon
Multiemployer Plan and including any terminated Tarpon Plans) that currently or
since January 1, 1997: (1) is or has been maintained for directors or employees
of Tarpon or of any Tarpon Control Group member or (2) to which Tarpon or any
Tarpon Control Group member made or was required to make contributions.
(ii) Tarpon Qualified Plan. The term "Tarpon Qualified Plan" means any
Tarpon Plan which is an employee pension benefit plan as defined in Section 3(2)
of ERISA and which is intended to meet the qualification requirements of the
Code.
(iii) Tarpon Title IV Plan. The term "Tarpon Title IV Plan" means any
Tarpon Qualified Plan that is a defined benefit plan (as defined in Section
3(37) of ERISA) and is subject to Title IV of ERISA.
(iv) Tarpon Multiemployer Plan. The term "Tarpon Multiemployer Plan" means
any employee benefit plan that is a "multiemployer plan" within the meaning of
Section 3(37) of ERISA and to which Tarpon or any Tarpon Control Group member
has or had any obligation to contribute.
(v) Tarpon Control Group. The term "Tarpon Control Group" means a
controlled group of corporations of which Tarpon is a member within the meaning
of Section 414(b) of the Code, any group of corporations or entities under
common control with Tarpon within the meaning of Section 414(c) of the Code or
any affiliated service group of which Tarpon is a member within the meaning of
Section 414(m) of the Code.
(vi) ERISA. The term "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(b) All Tarpon Plans are set forth in Schedule 3.10(b) of the Tarpon
Disclosure Schedules.
(c) (i) Each Tarpon Plan has been administered in material compliance with
its terms and with all filing, reporting, disclosure and other requirements of
all applicable statutes (including but not limited to ERISA and the Code),
regulations or interpretations thereunder.
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(ii) Neither Tarpon nor any Tarpon Control Group member currently or at
any time maintains or maintained, or contributes or contributed to, or is
required to contribute to, any Tarpon Title IV Plan or any Tarpon Multiemployer
Plan.
(iii) Neither Tarpon nor any Tarpon Control Group member, nor any of their
respective employees or directors, nor any fiduciary, has engaged in any
transaction, including the execution and delivery of this Agreement and other
agreements, instruments and documents for which execution and delivery by Tarpon
is contemplated herein, in violation of Section 406(a) or (b) of ERISA or any
"prohibited transaction" (as defined in Section 4975(c)(1) of the Code) for
which no exemption exists under Section 408(b) of ERISA or Section 4975(d) of
the Code or for which no administrative exemption has been granted under Section
408(a) of ERISA.
(iv) Each Tarpon Qualified Plan is the subject of a favorable Internal
Revenue Service determination with respect to such qualification and exemption.
(v) No matter is pending relating to any Tarpon Plan before any court or
governmental agency.
(d) (i) Complete and correct copies of all current and prior documents,
including all amendments thereto, with respect to each Tarpon Plan, have been
delivered to Buyer. These documents include, but are not limited to, the
following: Tarpon Plan documents, trust agreements, insurance contracts, annuity
contracts, summary plan descriptions, filings with governmental agencies,
investment manager and investment adviser contracts, and actuarial reports,
audit reports, financial statements and annual reports (Form 5500) for the most
recent three plan years ending before the date of this Agreement.
(ii) All contributions payable to each Tarpon Qualified Plan for all
benefits earned and other liabilities accrued through December 31, 2004,
determined in accordance with the terms and conditions of such Tarpon Qualified
Plan, ERISA and the Code, have been paid or otherwise provided for, and to the
extent unpaid are reflected in the consolidated balance sheet of Tarpon and
Tarpon Subsidiaries as of December 31, 2004.
Section 3.11. Compliance with Applicable Law. Tarpon and each of the
Tarpon Subsidiaries hold all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to all, and have complied with and are not in default under any,
applicable laws, statutes, orders, rules, regulations, policies and/or
guidelines of any Governmental Entity relating to Tarpon or any of the Tarpon
Subsidiaries, except where the failure to hold such license, franchise, permit
or authorization or such noncompliance or default would not, individually or in
the aggregate, have a Material Adverse Effect on Tarpon.
Section 3.12. Certain Contracts.
(a) Except as set forth in Schedule 3.12(a) of the Tarpon Disclosure
Schedules, neither Tarpon nor any of the Tarpon Subsidiaries is a party to or
bound by:
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(i) any contract, arrangement, commitment or understanding (whether
written or oral) with respect to the employment or compensation of any
directors, officers or employees;
(ii) any contract, arrangement, commitment or understanding (whether
written or oral) which, upon the consummation of the transactions
contemplated by this Agreement, will (either alone or upon the occurrence
of any additional acts or events) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute
or otherwise) becoming due from Tarpon, Buyer, the Surviving Corporation,
or any of their respective subsidiaries to any officer, director or
employee thereof or to the trustee under any "rabbi trust" or similar
arrangement;
(iii) any contract, arrangement, commitment or understanding
(whether written or oral), including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan,
any of the benefits of which will be increased or be required to be paid,
or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement, or
the value of any of the benefits of which will be calculated on the basis
of any of the transactions contemplated by this Agreement;
(iv) any agreement of indemnification or guaranty not entered into
in the ordinary course of business, including any indemnification
agreements between Tarpon or any of the Tarpon Subsidiaries and any of its
officers or directors;
(v) any agreement, contract or commitment currently in force
relating to the disposition or acquisition of assets not in the ordinary
course of business; or
(vi) any material agreement relating to the sale or purchase of any
business or business assets providing for payment of any deferred or
contingent consideration by Tarpon or providing for indemnification by
Tarpon.
Each contract, arrangement, commitment or understanding of the type
described in this Section 3.12(a), is referred to herein as an "Tarpon
Contract," and neither Tarpon nor any of the Tarpon Subsidiaries knows of, or
has received notice of, any violation of any Tarpon Contract by any of the other
parties thereto, which, individually or in the aggregate, would have a Material
Adverse Effect on Tarpon.
(b) (i) Each Tarpon Contract is valid and binding on Tarpon or the
applicable Tarpon Subsidiary, as the case may be, and is in full force and
effect, (ii) Tarpon and each of the Tarpon Subsidiaries has performed all
obligations required to be performed by it to date under each Tarpon Contract to
which it is a party, except where such noncompliance, individually or in the
aggregate, would not have a Material Adverse Effect on Tarpon, and (iii) no
event or condition exists which constitutes or, after notice or lapse of time or
both, would constitute, a default on the part of Tarpon or any of the Tarpon
Subsidiaries under any such Tarpon Contract, except where any such default,
individually or in the aggregate, would not have a Material Adverse Effect on
Tarpon.
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Section 3.13. Agreements with Regulatory Agencies. Except as set forth in
Schedule 3.13 of the Tarpon Disclosure Schedules, neither Tarpon nor any of the
Tarpon Subsidiaries is subject to any cease-and-desist or other order issued by,
or is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or has been during
the three years preceding the date hereof, a recipient of any supervisory letter
from, or during the three years preceding the date hereof, has adopted any board
resolutions at the request of any Regulatory Agency or other Governmental Entity
that currently restricts the conduct of its business or that relates to its
capital adequacy, compliance with laws, its credit policies, its management or
its business (each, whether or not set forth in the Tarpon Disclosure Schedules,
an "Tarpon Regulatory Agreement"), nor has Tarpon or any of the Tarpon
Subsidiaries been advised during the three years preceding the date hereof by
any Regulatory Agency or other Governmental Entity that it is considering
issuing or requesting any such Tarpon Regulatory Agreement.
Section 3.14. Reserved.
Section 3.15. Investment Securities. Each of Tarpon and the Tarpon
Subsidiaries has good and marketable title to all securities held by it (except
securities sold under repurchase agreements or held in any fiduciary or agency
capacity), free and clear of any Lien, except to the extent such securities are
pledged in the ordinary course of business consistent with prudent banking
practices to secure obligations of Tarpon or any of the Tarpon Subsidiaries.
Such securities are valued on the books of Tarpon and the Tarpon Subsidiaries in
accordance with GAAP.
Section 3.16. Undisclosed Liabilities. Except for those liabilities that
are fully reflected or reserved against on the audited consolidated statement of
financial condition of Tarpon for fiscal year ended December 31, 2003,
liabilities disclosed in Schedule 3.16 of the Tarpon Disclosure Schedules, and
liabilities incurred in the ordinary course of business consistent with past
practice since December 31, 2003, neither Tarpon nor any of the Tarpon
Subsidiaries has incurred any liability of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether due or to become due)
that, either alone or when combined with all similar liabilities, has had, or
could reasonably be expected to have, a Material Adverse Effect on Tarpon.
Section 3.17. Insurance. Schedule 3.17 of the Tarpon Disclosure Schedules
describes all policies of insurance in which Tarpon or any of the Tarpon
Subsidiaries is named as an insured party or which otherwise relate to or cover
any assets or properties of Tarpon or any of the Tarpon Subsidiaries. Each of
such policies is in full force and effect, and the coverage provided under such
policies complies with the requirements of any contracts binding on Tarpon or
any of the Tarpon Subsidiaries relating to such assets or properties. Except as
set forth in Schedule 3.17 of the Tarpon Disclosure Schedules, neither Tarpon
nor any of the Tarpon Subsidiaries has received any notice of cancellation or
termination with respect to any material insurance policy of Tarpon or any of
the Tarpon Subsidiaries.
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Section 3.18. Allowance for Loan Loss. The allowance for loan losses set
forth in the September 30, 2004 financial statements of Tarpon is adequate in
all material respects under the requirements of GAAP to provide for possible
losses, net of recoveries relating to loans previously charged off, on loans
outstanding (including accrued interest receivable) as of September 30, 2004.
The aggregate loan balances of the Association at such date in excess of such
allowance are, to the best knowledge and belief of Tarpon, collectible in
accordance with their terms.
Section 3.19. Title to Properties; Leases. (a) Tarpon, or each of the
Tarpon Subsidiaries, as applicable, is the owner of good and marketable title to
all real properties and is the owner of good title to all other property and
assets, tangible and intangible, that it claims or otherwise purports to own to
the extent it claims or otherwise purports to own them (including, without
limitation, all of its assets reflected in its financial statements for the
fiscal year ended December 31, 2003 or that it purports to have acquired since
December 31, 2003), free and clear of any Liens, except for (the following
collectively referred to as "Permitted Exceptions") (i) pledges and liens given
to secure deposits and other banking liabilities arising in the ordinary course
of business, (ii) liens for current taxes not yet due and payable, (iii) all
easements, covenants, conditions, assignments, defects, restrictions,
exceptions, reservations and other encumbrances, whether recorded or unrecorded,
which do not materially interfere with the use or operation of the property as
the same is being currently used and operated, or render title to any material
portion of the property unmarketable, (iv) all leases, subleases and any
memoranda thereof and any non-disturbance agreements with tenants, subtenants or
other occupants of any property or (v) any liens, encumbrances, objections or
other matters which are caused or created by or on behalf of Buyer or the
Surviving Corporation.
(b) Each lease under which Tarpon or any of the Tarpon Subsidiaries is the
lessee of any real or personal property is set forth in Schedule 3.19(b) of the
Tarpon Disclosure Schedules (the "Tarpon Leases") and will be, upon consummation
of the Merger, in full force and effect, and Tarpon or each of the Tarpon
Subsidiaries has been in peaceable possession of the property covered thereby
since the commencement of the original term of such lease. With respect to the
Tarpon Leases, (i) except as set forth in Schedule 3.4 of the Tarpon Disclosure
Schedules, no right of approval or consent on the part of the lessor under such
lease exists or will exist with respect to the Merger, (ii) no waiver,
indulgence or postponement of Tarpon or the Tarpon Subsidiaries' obligations
under such lease has been granted by the lessor thereunder, or of such lessor's
obligations by Tarpon or the Tarpon Subsidiaries and (iii) neither Tarpon nor
the Tarpon Subsidiaries nor, to the knowledge of Tarpon, the lessor under such
lease has violated, in any material respect, any of the terms or conditions of
such lease, and all of the material covenants to be performed by Tarpon or the
Tarpon Subsidiaries and the lessor as of the date hereof have been fully
performed in all material respects.
Section 3.20. Environmental Matters. Neither Tarpon nor any of the Tarpon
Subsidiaries has received notice of any material violation of any applicable
environmental law, regulation, ordinance, order or requirement relating to its
operations or properties; to Tarpon's knowledge no such violation exists; and to
Tarpon's knowledge all properties and buildings and other structures occupied,
owned, leased or used by Tarpon or the Tarpon Subsidiaries, or in which Tarpon
or any of the Tarpon Subsidiaries has an interest (whether acquired by
foreclosure or
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otherwise), comply, in all material respects, with all applicable environmental
laws, regulations, ordinances, orders and requirement, except where any
noncompliance would not have a Material Adverse Effect on Tarpon. To Tarpon's
knowledge, all properties occupied, owned, leased or used by Tarpon or the
Tarpon Subsidiaries, or in which Tarpon or the Tarpon Subsidiaries has an
interest (whether by foreclosure or otherwise, including all improvements
thereon: (i) are free from contamination; (ii) have not been subject to a
release, discharge or emission, or imminent threat of release, discharge or
emission, of any hazardous substance, gas or liquid, as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act or the rules and
regulations promulgated or published thereunder, or any other substance, gas or
liquid, which is prohibited, controlled or regulated thereunder, or which is
regulated under any law or regulation dealing with protection or public health
or safety, or the environment except as would be expected in the ordinary course
of business (collectively, "Hazardous Substances"); and (iii) have not appeared
or have not proposed to appear on the United States Environmental Protection
Agency's National Priority List or any similar state list. There have been no
past, and to Tarpon's knowledge there are no pending or threatened, claims,
complaints, notices, or requests for information received by Tarpon or the
Tarpon Subsidiaries with respect to any alleged violation of any Environmental
Law, or potential liability under any Environmental Law. The term "Environmental
Law" means all applicable statutes, laws, regulations, orders, judgments,
decrees or principles of common law, and any permits, licenses, authorization,
relating to pollution, protection of the environment, public health or safety,
employee health or safety, or the emission, discharge, release or threatened
release of Hazardous Substances into the environment or otherwise relating to
the presence, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances.
Section 3.21. Approval Delays. Tarpon knows of no reason why any of the
regulatory approvals referenced in Section 6.1(c) and Section 6.2(c) should be
denied or unduly delayed.
Section 3.22. Vote Required. The approval by the holders of a majority of
the votes entitled to be cast by all holders of Tarpon Common Stock of this
Agreement and the Merger is the only vote of the holders of any class or series
of the capital stock of Tarpon required for any of the transactions contemplated
by this Agreement.
Section 3.23. Powers of Attorney. No power of attorney or similar
authorization given by Tarpon not in the ordinary course of business is
currently outstanding.
Section 3.24. Fairness Opinion. Tarpon has received a written opinion from
Keefe Ventures, LLC, dated as of a date within five business days of the date
hereof, to the effect that as of such date, the Per Share Consideration is fair
to Tarpon from a financial point of view. Tarpon has delivered to Buyer a copy
of such opinion.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION CORP.
Each of Buyer and Acquisition Corp. jointly and severally represent and
warrant to Tarpon as follows:
Section 4.1. Corporate Organization. Each of Buyer and Acquisition Corp.
is a corporation duly organized and validly existing under the laws of the
States of Nevada and Florida, respectively. Each of Buyer and Acquisition Corp.
has the corporate power and authority to own or lease all of its properties and
assets and to carry on its business as it is now being conducted. Buyer is duly
registered as a bank holding company under the BHCA. True and complete copies of
the Articles of Incorporation and Bylaws of each of Buyer and Acquisition Corp.,
as in effect as of the date of this Agreement, have previously been made
available by each of Buyer and Acquisition Corp. to Tarpon. Buyer owns directly
all of the issued and outstanding shares of capital stock of Acquisition Corp.
Section 4.2. Authority. Each of Buyer and Acquisition Corp. has full
corporate power and authority to execute and deliver this Agreement subject to
shareholder and regulatory approvals, and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
approved by the Board of Directors of each of Buyer and Acquisition Corp, and
Buyer, as the owner of all of the outstanding shares of capital stock of
Acquisition Corp. has caused this Agreement and the Merger to be approved in
accordance with Florida Law. No corporate proceedings on the part of Buyer or
Acquisition Corp. are necessary to approve this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Buyer and Acquisition Corp. and, assuming due
authorization, execution and delivery by Tarpon, constitutes a valid and binding
obligation of each of Buyer and Acquisition Corp., enforceable against each of
Buyer and Acquisition Corp. in accordance with its terms.
Section 4.3. Consents and Approvals. No consents or approvals of or
filings or registrations with any Governmental Entity or with any third party
are necessary in connection with the execution and delivery by each of Buyer and
Acquisition Corp. of this Agreement and the consummation by Acquisition Corp. of
the Mergers and the other transactions contemplated hereby except for (a) the
filing by Buyer and Acquisition Corp. of the Regulatory Application and the
approval of the Regulatory Application, (b) the filing with the Securities and
Exchange Commission ("SEC") of the Proxy Materials (as such term is hereinafter
defined) and the S-4 (as such term is hereinafter defined) relating to the
Shareholders' Meeting to be held in connection with this Agreement and the
transactions contemplated hereby, (c) the filing of the Articles of Merger with
the Florida Department of State under Florida Law and (d) the approval of this
Agreement by the requisite vote of the shareholders of Acquisition Corp. and
Tarpon.
Section 4.4. Financial Resources. Buyer has the financial wherewithal,
whether by using its internal funds, external financing, or both, to perform its
obligations under this Agreement. Buyer and its subsidiaries are, and will be
following the Merger, in compliance with
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all applicable capital, debt and financial and non-financial criteria of state
and federal banking agencies having jurisdiction over them.
Section 4.5. Approval Delays. Buyer knows of no reason why any of the
regulatory approvals referred to in Section 6.1(c) and Section 6.2(c) should be
denied or unduly delayed.
Section 4.6. Vote Required. The approval by Buyer, as sole stockholder of
Acquisition Corp., of this Agreement and the Merger is the only vote of the
holders of any class or series of the capital stock of Buyer or Acquisition
Corp. required for any of the transactions contemplated by this Agreement.
Section 4.7. Taxes. (a) Buyer represents and warrants to each other party
in the transaction and their respective advisers that Buyer's participation in
the transaction is not part of a reportable transaction as defined in Treas.
Reg. ss. 1.6011-4.
(b) Buyer represents and warrants that Buyer shall comply with all Tax
reporting requirements with respect to the transaction.
Section 4.8. Capital Stock. The authorized capital stock of Buyer, as of
the date of this Agreement, consists of (i) 40,000,000 shares of Buyer Common
Stock, of which 20,577,651 shares are issued and outstanding, and (ii) 1,000,000
shares of Preferred Stock, no par value per share, none of which are issued and
outstanding. All of the shares of Buyer Common Stock to be issued in exchange
for shares of Tarpon Common Stock upon consummation of the Merger, when issued
in accordance with the terms of this Agreement, will be duly and validly issued
and outstanding and fully paid and nonassessable. None of the shares of Buyer
Common Stock to be issued in exchange for shares of Tarpon Common Stock upon
consummation of the Merger will be issued in violation of any preemptive rights
of the current or past stockholders of Buyer. As of the date hereof, there are
outstanding options to purchase 765,525 shares of Buyer Common Stock under its
stock option plans.
Section 4.9. Reports and Financial Statements. Since January 1, 2003,
Buyer has filed all reports and statements, together with any amendments
required to be made with respect thereto, that it was required to file with (i)
the SEC, including, but not limited to, Form 10-K, Forms 10-Q and proxy
statements, and (ii) other regulatory authorities and (iii) applicable state
securities or banking authorities. As of their respective dates, each of such
reports and documents, including the Buyer financial statements included
therein, exhibits, and schedules thereto, complied in all material respects with
applicable laws. As of its respective date, each such report and document did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein in light of the circumstances under which they were made, not
misleading. Since January 1, 2003, except for normal examinations conducted by
the regulatory authorities in the regular course of the business of the Buyer
and its subsidiaries, no regulatory authority has instituted any proceeding or,
to the knowledge of Buyer, investigations into the business or operations of
Buyer or its subsidiaries. Buyer financial statements included in such reports
(excluding call reports), as of the dates thereof and for the periods covered
thereby: (i) are or if dated after the date of this Agreement, will be, in
accordance with the books and records of the Buyer, which are or will be,
-19-
as the case may be, complete and correct and which have been or will have been,
as the case may be, maintained in accordance with good business practices, and
(ii) present, or will present, fairly the consolidated financial position of the
Buyer as of the dates indicated and the consolidated results of operation,
changes in stockholders equity and cash flows of Buyer, on a consolidated basis,
for the periods indicated in accordance with generally accepted accounting
principles (subject to exceptions as to consistency specified therein or as may
be indicated in the notes thereto, or in the case of interim financial
statements, to normal year-end adjustments that are not material).
Section 4.10. Undisclosed Liabilities. Except for those liabilities that
are fully reflected or reserved against on the audited consolidated statement of
financial condition of Buyer for fiscal year ended December 31, 2003 and
liabilities incurred in the ordinary course of business consistent with past
practice since December 31, 2003, Buyer has incurred no liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due
or to become due) that, either alone or when combined with all similar
liabilities, has had, or could reasonably be expected to have, a Material
Adverse Effect on Buyer.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. Conduct of Business. Between the date hereof and the Closing
Date, the parties shall conduct their respective businesses and shall cause
their subsidiaries to conduct their businesses in the usual and ordinary course
consistent in all material respects with prudent banking practices.
Section 5.2. Negative Covenants. Between the date hereof and the Closing
Date, without the prior written consent of Buyer, which consent shall not be
unreasonably withheld:
(a) except upon the exercise of existing options and warrants under
the Tarpon Option Plan or the Tarpon Warrant Agreement, as applicable,
Tarpon shall, and shall cause the Bank to, make no changes in their
respective charters or bylaws or in the number of their issued and
outstanding shares;
(b) Tarpon shall, and shall cause the Bank to, not increase the
compensation of their directors, officers or employees, provided, however,
that the compensation of officers and employees of Tarpon and the Bank may
be increased in a manner consistent with prior practice of Tarpon and the
Bank;
(c) Tarpon shall, and shall cause the Bank to, make no loan for
$500,000 or more, except for loans currently committed to be made pursuant
to written commitment letters, and Tarpon shall, and shall cause the Bank
to, make no other loans, or renewals or restructuring of loans regardless
of amount except in the ordinary course of business and consistent in all
material respects with prudent banking practices and applicable rules and
regulations of regulatory authorities with respect to amount, terms,
security and quality of
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the borrower's credit; provided, however, that the foregoing restriction
on lending shall not apply to any such loans submitted to Buyer by Tarpon
for approval where Buyer does not issue non-approval of such loan within
five (5) business days after the receipt from Tarpon of a completed
underwriting package with respect to such loans.
(d) Tarpon shall not declare or pay any stock dividend, cash
dividend or other distribution without the prior written consent of Buyer;
(e) Tarpon shall, and shall cause the Bank to, use their best
efforts to maintain their present insurance coverage in respect to their
respective properties and businesses;
(f) Tarpon shall, and shall cause the Bank to, make no significant
changes, outside the ordinary course of business, in the general nature of
the business conducted by Tarpon and the Bank, including but not limited
to the investment or use of their assets, the liabilities they incur, or
the facilities they operate;
(g) Tarpon shall, and shall cause the Bank to, not enter into any
employment, consulting or other similar agreements that are not terminable
on 30 days' notice or less without penalty or obligation;
(h) Tarpon shall, and shall cause the Bank to, not take any action
that would result in a termination, partial termination, curtailment,
discontinuance or merger into another plan or trust of any Tarpon Plan,
except as contemplated by this Agreement or as disclosed in the Tarpon
Disclosure Schedules;
(i) Tarpon shall, and shall cause the Bank to, timely file all
required tax returns with all applicable taxing authorities and shall not
make any application for or consent to any extension of time for filing
any tax return or any extension of the period of limitations applicable
thereto;
(j) except as already reflected in the financial statements provided
to Buyer, Tarpon shall, and shall cause the Bank to, not make any
expenditure for fixed assets in excess of $25,000 for any single item, or
$50,000 in the aggregate, or enter into any lease of fixed assets, if the
monthly rental payment under such lease exceeds $5,000;
(k) Tarpon shall, and shall cause the Bank to, not incur any
liabilities or obligations, make any commitments or disbursements, acquire
or dispose of any property or asset, dispose of real estate owned, make
any contract or agreement, or engage in any transaction, except in the
ordinary course consistent in all material respects with prudent banking
practices;
(l) Tarpon shall, and shall cause the Bank to, not do or fail to do
anything that will cause a breach of, or default under, any contract,
agreement, commitment, obligation, appointment, plan, trust or other
arrangement to which Tarpon or the Bank is a party or by which either
Tarpon or the Bank is otherwise bound where such breach would have a
Material Adverse Effect on Tarpon;
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(m) Tarpon shall, and shall cause the Bank to, make no changes of a
material nature in their accounting procedures, methods, policies or
practices or the manner in which they conduct their businesses and
maintain their records;
(n) Tarpon shall cause the Bank not to accept any brokered deposits,
except in the ordinary course of its business consistent with past
practice;
(o) Tarpon shall not grant any new stock options or issue any new
warrants pursuant to any plan, contract or arrangement;
(p) Tarpon shall, and shall cause the Bank to, substantially comply
with all material laws applicable to the conduct of its business;
(q) Tarpon shall, and shall cause the Bank to, use its best efforts
to preserve its business organization in tact, to keep available the
services of its present officers and employees and to preserve the
goodwill of its customers and others having business relations with it;
(r) Tarpon shall, and shall cause the Bank to, not make any
borrowings, except in the ordinary course of business (indebtedness, other
than deposits in customary amounts accepted by the Bank in the ordinary
course of its business, maturing more than one year after its creation is
not for the purpose of this Agreement considered as being in the "ordinary
course");
(s) Tarpon shall, and shall cause the Bank to, not purchase or
invest in securities or obligations, or accept deposits (except for
deposits at rates consistent with those being paid generally by other
financial institutions in markets in which the Bank has branch offices)
having a maturity of more than three years from the date of purchase or
acceptance;
(t) Tarpon shall, and shall cause the Bank to, not extend credit or
make advances, or grant any extension of any outstanding loan, advance or
other credit, to any customer of the Bank who is listed on the Bank's
problem or watch list or who has any outstanding loan, advance or other
credit from the Bank which is in default, has been placed on nonaccrual
status or has been internally classified as among "other loans
specifically mentioned," or as "substandard," "doubtful" or "loss"; and
(u) Tarpon shall, and shall cause the Tarpon Subsidiaries to, not
nominate or appoint any new directors or executive officers of Tarpon or
the Tarpon Subsidiaries, as the case may be.
Section 5.3. Access to Information and Due Diligence. (a) Upon reasonable
notice and subject to applicable laws relating to the exchange of information,
Tarpon shall, and shall cause the Tarpon Subsidiaries to, afford to the
officers, employees, accountants, counsel and other representatives of Buyer,
access, during normal business hours during the period before the Effective
Time, to all its properties, books, contracts, commitments and records and,
during such
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period, Tarpon shall, and shall cause the Tarpon Subsidiaries to, make available
to Buyer (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of federal securities laws or federal banking laws, and (ii) all other
information concerning its business, properties and personnel as Buyer may
reasonably request. Neither Tarpon nor the Tarpon Subsidiaries shall be required
to provide access to or to disclose information where such access or disclosure
would (A) violate or prejudice the rights of Tarpon's customers or contravene
any law, rule, regulation, order, judgment, decree, fiduciary duty or binding
agreement entered into before the date of this Agreement, or (B) impair any
attorney-client privilege of the disclosing party. The parties hereto shall make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
(b) Buyer shall hold all information furnished by or on behalf of Tarpon
or the Tarpon Subsidiaries or their representatives pursuant to Section 5.3(a)
in confidence and shall return all documents containing any information
concerning the properties, business and assets of such parties that may have
been obtained in the course of negotiations or examination of the affairs of
Tarpon either before or after the execution of this Agreement (other than such
information as shall be in the public domain or otherwise ascertainable from
public sources) and shall destroy any information, analyses or the like derived
from such confidential information. Buyer shall use such information solely for
the purpose of conducting business, legal and financial reviews of the Tarpon
and for such other purposes as may be related to this Agreement.
(c) No investigation by either of the parties or their respective
representatives shall affect the representations and warranties of the other set
forth herein. Without limitation of the foregoing, each party shall promptly
notify the other party of any information obtained by such party during the
course of any due diligence conducted by such party or its representatives in
accordance with this Section 5.3 which is materially inconsistent with any
representation or warranty made by the other party under this Agreement;
provided, however, that either party's failure to provide such notice to the
other party shall not, in turn, be deemed to constitute a material breach of
such party's obligations under this Agreement.
Section 5.4. Meeting of Shareholders of Tarpon; Preparation of Tarpon
Proxy Materials and S-4 Registration Statement. (a) Tarpon shall call a special
meeting of its shareholders (the "Shareholders' Meeting") to be held as soon as
reasonably practicable after the date the S-4 (as such term is hereinafter
defined) is declared effective by the SEC for the purpose of voting upon this
Agreement, the Merger and such other related matters as it deems appropriate in
accordance with Tarpon's Articles of Incorporation, its Bylaws and Florida Law.
In connection with the Shareholders' Meeting, (i) Tarpon shall prepare a notice
of Shareholders' Meeting; (ii) Buyer and Acquisition Corp. shall furnish all
information concerning it that Tarpon may reasonably request in connection with
conducting the Shareholders' Meeting; (iii) Tarpon shall prepare for printing,
copying and distribution to Tarpon's shareholders at its own expense,
appropriate proxy materials (hereinafter referred to as the "Proxy Materials"),
including a proxy statement (hereinafter referred to as the "Proxy Statement"),
the form of proxy which complies with the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and audited financial statements for its fiscal
year ended December 31, 2004; (iv) Buyer and Acquisition Corp. shall furnish all
information concerning it that Buyer and Acquisition Corp. may reasonably
request in
-23-
connection with preparing the Proxy Materials; (v) subject to Section 7.1(e) of
this Agreement, the Board of Directors of Tarpon shall recommend to its
shareholders the approval of this Agreement and the Merger; and (vi) Tarpon
shall use its best efforts to obtain its shareholders' approval of this
Agreement and the Merger. The parties will use their commercially reasonable
efforts to prepare a preliminary draft of the Proxy Statement within 45 days of
the date of this Agreement, and will consult with one another on the form and
content of the Proxy Statement (including the presentation of draft copies of
such Proxy Materials to the other) prior to filing with the SEC and delivery to
Tarpon's shareholders. Tarpon will use its commercially reasonable efforts to
deliver notice of the Proxy Materials to its shareholders as soon as practicable
after the S-4 has been declared effective by the SEC.
(b) Buyer shall as soon as practicable after the date of this Agreement
prepare and file with the SEC a registration statement on Form S-4 under the
Securities Act of 1933 (the "Securities Act"), in which the Proxy Statement will
be included as a prospectus, with respect to Buyer Common Stock to be issued in
connection with the Merger (hereinafter referred to as the "S-4"); provided,
however, that Buyer will not file the S-4 prior to Tarpon's filing with the SEC
of its annual report on Form 10-KSB for its fiscal year ended December 31, 2004.
Tarpon and its counsel, accountants and advisors shall have the right to review
and comment upon the S-4, and revisions made in response to such comments, a
reasonable period prior to filing. Buyer and Acquisition Corp. shall use their
commercially reasonable efforts to have the S-4 declared effective under the
Securities Act as promptly as practicable after such filing. If at any time
prior to the Effective Time of the Merger any event shall occur which should be
set forth in an amendment of, or a supplement to, the Proxy Statement, Tarpon
and Buyer, as the case may be, will promptly inform the other and cooperate and
assist each other in preparing such amendment or supplement and mailing the same
to the shareholders of Tarpon.
(c) Buyer and Tarpon shall, upon request, furnish each other all
information concerning themselves, their subsidiaries, directors, officers and
shareholders and such other matters that may be reasonably necessary or
advisable in connection with the Proxy Materials, the S-4 or any other
statement, filing, notice or application made by or on behalf of Buyer, Tarpon
or any of their subsidiaries to the SEC or any Regulatory Agency in connection
with the Merger and the other transactions provided for in this Agreement.
(d) Buyer represents to Tarpon that the S-4 (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the SEC thereunder and (ii) will not contain any untrue statement
of a material fact, or omit to state any material fact necessary in order to
make the statements therein not false or misleading; provided, however, that in
no event, shall Buyer or Acquisition Corp. be liable for any untrue statement of
a material fact or omission to state a material fact in the S-4 made in reliance
upon, and in conformity with, written information concerning Tarpon which was
furnished by Tarpon to Buyer or Acquisition Corp.
(e) Tarpon represents to Buyer and Acquisition Corp that the Proxy
Materials (i) will comply in all material respects with the provisions of the
Exchange Act and the rules and regulations of the SEC thereunder and (ii) will
not contain any untrue statement of a material fact, or omit to state any
material fact necessary in order to make the statements therein not false
-24-
or misleading; provided, however, that in no event, shall Tarpon be liable for
any untrue statement of a material fact or omission to state a material fact in
the Proxy Materials made in reliance upon, and in conformity with, written
information concerning Buyer and Acquisition Corp. which was furnished by Buyer
and Acquisition Corp. to Tarpon.
Section 5.5. Nasdaq Listing. Buyer shall take such actions as are required
to cause the Buyer Common Stock to be issued in the Merger pursuant to this
Agreement to be approved for inclusion on Nasdaq, subject to official notice of
issuance, prior to the Closing.
Section 5.6. Regulatory Filings. Buyer, as soon as is reasonably
practical, but in no event later than the 60th day following the date of this
Agreement, shall take all appropriate actions necessary to obtain the regulatory
approvals referred to in Section 6.1(c) hereof, and Tarpon will cooperate fully
in the process of obtaining all such approvals. As soon as practicable after the
date of this Agreement, Buyer shall make all appropriate initial filings
necessary to obtain the regulatory approvals referred to in Section 6.1(c)
hereof. Buyer shall provide Tarpon with draft copies of all regulatory
applications sufficiently in advance of the proposed filing date to allow Tarpon
time to review and comment on such draft copies. In addition, Buyer shall
provide Tarpon with copies of all applications filed (and all correspondence and
amendments with respect to such filings) and all approvals when received.
Section 5.7. Reasonable Efforts. The parties to this Agreement agree to
use their reasonable efforts in good faith to satisfy the various conditions to
Closing and to consummate the Merger as soon as practicable. None of the parties
hereto shall intentionally take or intentionally permit to be taken any action
that would be in breach of the terms or provisions of this Agreement or that
would cause any of the representations and warranties contained herein to be or
to become untrue.
Section 5.8. Business Relations and Publicity. Tarpon shall use reasonable
efforts to preserve its reputation and relationship with suppliers, clients,
depositors, customers, employees and others having business relations with it.
No press release or other communication in connection with or relating to this
Agreement or the transactions contemplated hereby (other than communications
with appropriate regulatory authorities) shall be issued or made except as
mutually agreed upon, provided that either party hereto, after consultation with
the other party, may make such disclosures concerning the transactions provided
for herein as the disclosing party believes are required by law.
Section 5.9. No Conduct Inconsistent with this Agreement. (a) Tarpon
agrees that it shall not, during the term of this Agreement, (i) solicit,
encourage or authorize any individual, corporation or other entity to solicit
from any third party any inquires or proposals relating to the disposition of
its business or assets, or the acquisition of its capital stock, or the merger
of it or any of the Tarpon Subsidiaries with any corporation or other entity
other than as provided by this Agreement except pursuant to a written direction
from a regulatory authority; or (ii) negotiate with or entertain any proposals
from any other person for any such transaction wherein the business, assets or
capital stock of it or the Tarpon Subsidiaries would be acquired, directly or
indirectly, by any party other than as provided by this Agreement, except
pursuant to a written direction from any regulatory authority or upon the
receipt of an unsolicited offer from a third
-25-
party where the Board of Directors of Tarpon reasonably believes, upon the
opinion of counsel, that its fiduciary duties require it to enter into
discussions with such party. Tarpon shall promptly notify Buyer of all of the
relevant details relating to all inquiries and proposals that it may receive
relating to any proposed disposition of its business or assets, or the
acquisition of its capital stock, or the merger of it or the Tarpon Subsidiaries
with any corporation or other entity other than as provided by this Agreement
and shall keep Buyer informed of the status and details of any such inquiry or
proposal.
(b) Nothing contained in Section 5.9(a) hereof shall prohibit Tarpon from
disclosing to its shareholders a position contemplated by Rule 14e-2(a) under
the Exchange Act with respect to a tender offer for Tarpon's common stock.
Section 5.10. Board of Directors' Notices, Minutes, Etc. Tarpon shall give
reasonable notice to Buyer of all meetings of the Board of Directors and Board
committees of Tarpon and the Bank, and if known, the agenda for or business to
be discussed at such meeting. Tarpon shall transmit to Buyer, promptly, copies
of all notices, minutes, consents and other materials that Tarpon or the Bank
provides to their directors to the extent permissible under law, other than
materials relating to any proposed acquisition of Tarpon or the Bank. Buyer
agrees to hold in confidence and trust and to act in a fiduciary manner with
respect to such information.
Section 5.11. Untrue Representations and Warranties. During the term of
this Agreement, if a party hereto becomes aware of any facts or of the
occurrence or impending occurrence of any event that would cause one or more of
such party's representations and warranties contained in this Agreement to be or
to become untrue as of the Closing Date, or that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on such party, then
such party shall immediately give detailed written notice thereof to the other
party.
Section 5.12. Indemnification; Directors' and Officers' Insurance. From
and after the Effective Time, Buyer shall cause the Surviving Corporation to
fulfill and honor in all respects the obligations of Tarpon or the Tarpon
Subsidiaries pursuant to any indemnification agreements between Tarpon and its
directors and officers existing prior to the date hereof. Furthermore, for a
period of six years following the Effective Time, Buyer agrees to indemnify and
hold harmless those directors and officers of Tarpon entitled to indemnification
under, and to the fullest extent permitted by Florida Law; provided, however,
that all rights to indemnification in respect of any claim asserted or made
within such period shall continue until the final disposition of such claim.
Section 5.13. Employee Benefit and Incentive Plans. (a) At the Effective
Time, except as otherwise provided in this paragraph, each employee of Tarpon
and the Tarpon Subsidiaries shall immediately become eligible to participate in
all employee welfare benefit plans and other fringe benefit programs offered or
maintained by Buyer and its subsidiaries on the same terms and conditions that
Buyer and its subsidiaries may make available to their officers and employees,
including, without limitation, any health, life, long-term disability,
severance, vacation or paid time off programs ("Buyer's Welfare Plans"). The
period of employment and compensation of each employee of Tarpon and the Tarpon
Subsidiaries before the Effective Time shall be counted for all purposes under
Buyer's Welfare Plans, including, without limitation, for purposes of service
credit, eligibility and vesting. Any expenses incurred by an employee of Tarpon
or the
-26-
Tarpon Subsidiaries under Tarpon's or the Bank's employee welfare benefit plans
(such as deductibles or co-payments), shall be counted for all purposes under
Buyer's Welfare Plans. Buyer shall waive any pre-existing condition exclusions
for conditions existing on the Closing Date, and actively-at-work requirements
for periods ending on the Closing Date contained in Buyer's Welfare Benefit
Plans as they apply to Tarpon's employees and former employees and their
dependents.
(b) (i) Immediately prior to the Effective Time, Tarpon shall cause the
Bank's Profit Sharing 401(k) Plan (the "401(k) Plan") to be terminated, and in
connection therewith to fully vest the accounts held by the 401(k) Plan
participants on the date of such termination. All 401(k) Plan participants who
are not employed by the Buyer immediately following the Effective Time shall
have the distribution options available to participants who terminate employment
or otherwise separate from service. As soon as practicable after receipt of a
favorable determination letter from the IRS as to the tax-qualified status of
the 401(k) Plan under Section 401(a) and 501(a) of the Code upon its termination
(the "401(k) Determination Letter"), the remaining account balances held under
the 401(k) Plan shall be directly transferred into the First Busey Corporation
Profit Sharing Plan for which Buyer has received a favorable determination
letter from the IRS as to its tax-qualified status under Sections 401(a) and
501(a) of the Code (the "Buyer Plan"). Tarpon and its representatives prior to
the Effective Time and Buyer and its representatives after the Effective Time
shall use their best efforts to apply and obtain such 401(k) Final Determination
Letter from the IRS. In the event that Tarpon and its representatives prior to
the Effective Time and Buyer and its representatives after the Effective Time
reasonably determine that the 401(k) Plan cannot obtain a favorable 401(k) Final
Determination Letter, or that the amounts held therein cannot be transferred to
the Buyer Plan without causing the 401(k) Plan to lose its tax-qualified status,
Tarpon and its representatives prior to the Effective Time and Buyer after the
Effective Time shall take such actions as they may reasonably determine, with
respect to the distribution of benefits to the 401(k) Plan participants,
provided that the assets of the 401(k) Plan shall be held or paid only for the
benefit of such 401(k) Plan participants; and provided further that in no event
shall any portion of the amounts held in the 401(k) Plan revert, directly or
indirectly, to Tarpon or any affiliate thereof, or to Buyer or any affiliate
thereof.
(ii) If employees of Tarpon or any Tarpon Subsidiary become eligible to
participate in the Buyer Plan: (A) all such employees who are or were 401(k)
Plan participants shall become participants in the Buyer Plan on the date the
Buyer Plan is made available; and (B) each such employee's period of employment
with Tarpon or the Tarpon Subsidiary before the Closing Date shall be counted
for all purposes under the Buyer Plan, including, without limitation, for
purposes of eligibility and vesting.
(c) Treatment of Stock Options under the Tarpon Option Plan. Prior to the
Effective Time and in recognition that Buyer has expressly agreed not to assume
the Tarpon Option Plan, the Board of Directors of Tarpon shall terminate the
Tarpon Option Plan and cancel any and all outstanding stock options granted
after December 31, 2004.
Section 5.14. COBRA. Until the Effective Time, Tarpon shall be liable for
all obligations for continued health coverage pursuant to Section 4980B of the
Code and Section 601 through
-27-
609 of ERISA ("COBRA") with respect to each qualified beneficiary (as defined in
COBRA) of Tarpon who incurs a qualifying event (as defined in COBRA) before the
Effective Time. Buyer shall be liable for (i) all obligations for continued
health coverage under COBRA with respect to each Tarpon qualified beneficiary
(as defined in COBRA) who incurs a qualifying event (as defined in COBRA) from
and after the Effective Time, and (ii) for continued health coverage under COBRA
from and after the Effective Time for each Tarpon qualified beneficiary who
incurs a qualifying event before the Effective Time.
Section 5.15. Certain Consents. In the event of a request by Tarpon for
written consent from Buyer for purposes of Sections 5.2 and 6.1 hereof, Buyer
shall use reasonable efforts to respond to such request promptly; Tarpon shall
be entitled to rely, for purposes of any of such sections, on a verbal consent
given on behalf of Buyer by Douglas C. Mills, its Chairman of the Board and
Chief Executive Officer, or Barbara J. Kuhl, its President and Chief Operating
officer.
Section 5.16. Title to Real Property. (a) Within 45 days after the date
hereof, Tarpon, at its expense, will furnish to Buyer the following documents
with respect to the real property owned by Tarpon located at the addresses set
forth on Schedule 5.16 of the Tarpon Disclosure Schedule (the "Owned Real
Property"):
(i) An ALTA owner's title insurance commitment, in the minimum
amount of $10,000 with respect to each parcel of Owned Real Property, and
showing Tarpon or the Tarpon Subsidiaries as the owner of such Owned Real
Property, subject only to Permitted Exceptions; and
(ii) An ALTA Class A survey, including Table 3 requirements 1-12, of
each parcel of Owned Real Property, certified to the title insurance
company issuing the title insurance commitment with respect to such parcel
referred to in clause (i) directly above, Tarpon and Buyer, and disclosing
no survey matters affecting such parcel other than Permitted Exceptions.
(b) Buyer shall have ten days after the delivery of the title commitments
and surveys to examine the title commitments and surveys and notify Tarpon in
writing of any defects noted therein that are not Permitted Exceptions ("Title
Defects"). If Buyer fails to notify Tarpon of any Title Defects, title to the
Owned Real Property shall be deemed accepted. If Buyer timely notifies Tarpon of
any Title Defects within such ten day period, Tarpon shall have five days after
receipt of Buyer's notification to advise Buyer that: (i) Tarpon will remove any
Title Defects on or before the Closing Date; or (ii) Tarpon will not cause the
Title Defects to be removed. If Tarpon advises Buyer that it will not cause the
exceptions to be removed, Buyer will have five days after Tarpon's notification
to elect, as its sole remedy, to: (i) proceed with the transaction and accept
such Title Defects; or (ii) terminate this Agreement by written notice to
Tarpon. If Buyer does not give Tarpon notice of its election within such period,
Buyer will be deemed to have elected to proceed with this transaction.
Section 5.17. Environmental Surveys. Within 45 days after the date hereof,
Tarpon, at its expense, will furnish to Buyer, with respect to each parcel of
Owned Real Property, a written environmental audit prepared by an engineering
firm or other qualified expert satisfactory to
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Buyer, and prepared in accordance with the ASTM standard for Phase I
environmental site assessments exclusive of the title search (as such search is
being done independent of the environmental audit), and designed to meet the
requirements of any applicable state law relating to an innocent owner defense
to liability for releases of Hazardous Substances (the "Phase I Audits"). Buyer
may request with ten days following receipt of any Phase I Audit that recommends
additional investigation, that such recommendations be performed ("Phase II
Work"). Costs associated with Phase II Work shall be paid by Tarpon up to
$15,000 and thereafter paid by Buyer. Within ten days of receiving the results
of any Phase II Work that confirms the presence of a significant environmental
concern that may reasonably have a Material Adverse Effect on Tarpon, Buyer and
Tarpon will agree to negotiate a mutually agreeable resolution. If a mutually
agreeable resolution cannot be reached after ten days, Tarpon and Buyer shall
have the right to terminate this Agreement by providing written notice of the
same.
Section 5.18. List of Tarpon Stockholders. At the Effective Time, Tarpon
shall deliver to Buyer a list of holders of record of the outstanding Tarpon
Common Stock as of the most recent reasonably practicable date, and the accuracy
of such list shall be certified by an authorized officer of Tarpon.
Section 5.19. Tax Treatment and Tax Certificates. (a) Subject to the
provisions of Section 1.6(c) of this Agreement, each of Buyer and Tarpon shall
use reasonable best efforts to cause the Mergers to qualify as a reorganization
under the provisions of Section 368(a) of the Code and to obtain the opinion of
counsel referred to in Section 6.2(g), including, without limitation, forbearing
from taking any action that would cause the Mergers not to qualify as a
reorganization under the provisions of Section 368(a) of the Code.
(b) Each of Buyer and Tarpon shall cooperate with each other in obtaining
the opinion of Crowe Chizek and Company LLC, dated as of the Closing, to the
effect that the Mergers will constitute a reorganization within the meaning of
Section 368(a) of the Code. In connection therewith, Tarpon shall deliver to
Crowe Chizek and Company LLC a customary representation letter in form and
substance reasonably satisfactory to Crowe Chizek and Company LLC and Tarpon
shall obtain any representation letters from appropriate shareholders and shall
deliver any such letters obtained to Crowe Chizek and Company LLC.
(c) FIRPTA. At or prior to the Closing, Tarpon, if requested by Buyer,
shall deliver to the IRS a notice that the shares of Tarpon Common Stock are not
a "U.S. Real Property Interest" as defined in accordance with the requirements
of Treasury Regulation Section 1.897-2(h)(2).
Section 5.20. Rule 144 Compliance. From and after the Effective Time,
Tarpon shall file all reports with the SEC necessary to permit the shareholders
of Tarpon who may be deemed "underwriters" (within the meaning of Rule 145 under
the Securities Act) of Tarpon Common Stock to sell Buyer Common Stock received
by them in connection with the Merger pursuant to Rules 144 and 145(d) under the
Securities Act if they would otherwise be so entitled; provided, however, that
Buyer is otherwise required to file such reports with the SEC.
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Section 5.21. Tax Disclosure. Each party to the transaction (and each
employee, representative, or other agent of each party) may disclose to any and
all persons, without limitation of any kind, the Tax treatment and Tax structure
of the transaction and all materials of any kind (including opinions or other
Tax analyses) that are provided to the party relating to such Tax treatment and
Tax structure.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1. Conditions Precedent to Obligations of Buyer and Acquisition
Corp. Unless the conditions are waived by Buyer or Acquisition Corp., all
obligations of Buyer and Acquisition Corp. under this Agreement are subject to
the fulfillment, before or at the Closing, of each of the following conditions:
(a) Representations and Warranties; Performance of Agreements. The
representations and warranties of Tarpon contained in Article III of this
Agreement, or in any documents, certificates, schedules or exhibits
delivered by, or on behalf, of Tarpon to Buyer pursuant to this Agreement
shall be true and correct as of this date and shall be true and correct as
of the Closing Date as though made on and as of the Closing Date, except
where the failure of such representations and warranties to be so true and
correct would not have, individually or in the aggregate, a Material
Adverse Effect on Tarpon. Tarpon shall have performed all agreements
herein required to be performed by it on or before the Closing Date.
(b) Closing Certificate. Buyer shall have received a certificate
signed by the Chief Executive Officer of Tarpon, dated as of the Closing
Date, certifying in such detail as Buyer may reasonably request, as to the
fulfillment of the conditions to the obligations of Buyer as set forth in
this Agreement and required to be fulfilled by Tarpon on or before the
Closing Date.
(c) Regulatory and Other Approvals. Buyer shall have obtained the
approval of all appropriate regulatory entities (including, without
limitation, the approval of the FRB) with respect to the Mergers of the
transactions contemplated by this Agreement (hereinafter, the "Requisite
Regulatory Approval"), all required regulatory waiting periods shall have
expired, and there shall have been no motion for rehearing or appeal from
such approval or commencement of any suit or action seeking to enjoin the
transaction provided for herein or to obtain substantial damages in
respect of them.
(d) Approval of Merger and Delivery of this Agreement. This
Agreement and the transactions contemplated herein shall have been
approved by the Board of Directors and the shareholders of Tarpon in
accordance with applicable law and the Articles of Incorporation and
Bylaws of Tarpon, and the proper officers of Tarpon shall have executed
and delivered to Buyer copies of this Agreement and the Articles of
Merger, in form suitable for filing with the Florida Department of State,
and shall have executed and
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delivered all such other certificates, statements or other instruments as
may be necessary or appropriate to effect such filings.
(e) Effectiveness of S-4. The S-4 shall have been declared effective
and shall not be subject to a stop order or any threatened stop order.
(f) Nasdaq Listing. The shares of Buyer Common Stock to be issued in
the Merger pursuant to this Agreement will have been accepted for
inclusion on Nasdaq, subject to official notice of issuance, and freely
tradable in the United States.
(g) No Litigation with Respect to Transactions. No suit or other
legal proceeding shall have been instituted or threatened seeking to
enjoin the consummation of the transactions contemplated hereby, which
reasonably could be expected to result in the issuance of a court order
enjoining such transactions.
(h) No Adverse Changes. Between the date of this Agreement and the
Closing Date, the business of Tarpon and the Bank, taken as a whole, shall
have been conducted in the ordinary course consistent in all respects with
prudent banking practices, and there shall not have occurred any material
adverse change or any condition, event, circumstance, fact or occurrence
(other than general economic or competitive conditions) that may
reasonably be expected to result in a material adverse change in the
business, properties, financial condition, loan portfolio, operations or
prospects of Tarpon or the Bank, taken as a whole.
(i) Consents. Tarpon and the Bank shall have obtained all such
written consents, permissions and approvals as required under any
agreements, contracts, appointments, indentures, plans, trusts or other
arrangements with third parties required to effect the transactions
contemplated by this Agreement, except where the failure to obtain any
such written consents, permissions and approvals would not have a Material
Adverse Effect on Buyer, it being understood by the parties hereto that
the failure by Tarpon and the Bank to obtain any consent, permission or
approval required under the Lease Agreement dated August 2001 between City
Center of Charlotte County, Ltd. and Tarpon Coast Bancorp, Inc. shall not
be construed as a Material Adverse Effect on Buyer.
(j) Dissenting Shares. No more than ten percent (10%) of shares of
Tarpon Common Stock outstanding as of the Closing Date shall be Dissenting
Shares.
(k) Employment Agreements. The Employment Agreements shall be in
full force and effect.
(l) Other Documents. Buyer shall have received at the Closing all
such other documents, certificates or instruments as it may have
reasonably requested evidencing compliance by Tarpon with the terms of
this Agreement.
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Section 6.2. Conditions Precedent to Obligations of Tarpon. Unless the
conditions are waived by Tarpon, all obligations of Tarpon under this Agreement
are subject to the fulfillment, before or at the Closing, of each of the
following conditions:
(a) Representations and Warranties; Performance of Agreements. The
representations and warranties of Buyer and Acquisition Corp. contained in
Article IV of this Agreement, or in any documents, certificates or
exhibits delivered by them, or on their behalf to Tarpon pursuant to this
Agreement shall be true and correct as of this date and shall be true and
correct as of the Closing Date as though made on and as of the Closing
Date, except for the representations and warranties of Buyer set forth in
Section 4.8 of this Agreement, which shall be true and correct as of the
date of this Agreement, and except where the failure of such
representations and warranties to be so true and correct would not have,
individually or in the aggregate, a Material Adverse Effect on Buyer.
Buyer and Acquisition Corp. shall have performed all agreements herein
required to be performed by them on or before the Closing Date.
(b) Closing Certificate. Tarpon shall have received a certificate
signed by the Chairman of the Board and Chief Executive Officer of Buyer,
dated as of the Closing Date, certifying in such detail as Tarpon may
reasonably request, as to the fulfillment of the conditions to the
obligations of Tarpon as set forth in this Agreement and required to be
fulfilled by Buyer or Acquisition Corp. on or before the Closing.
(c) Regulatory and Other Approvals. Buyer shall have obtained the
Requisite Regulatory Approval; all required regulatory waiting periods
shall have expired, and there shall have been no motion for rehearing or
appeal from such approval, or commencement of any suit or action seeking
to enjoin the transaction provided for herein or to obtain substantial
damages in respect of them.
(d) Approval of Merger and Delivery of this Agreement. This
Agreement and the transactions contemplated herein shall have been
approved by the Board of Directors of Buyer and Acquisition Corp., in
accordance with applicable law and the Certificate of Incorporation and
Bylaws of Acquisition Corp., and the proper officers of Buyer and
Acquisition Corp. shall have executed and delivered to Tarpon copies of
this Agreement and the Articles of Merger, in form suitable for filing
with the Florida Department of State, and shall have executed and
delivered all such other certificates, statements or other instruments as
may be necessary or appropriate to effect such filings.
(e) Effectiveness of S-4. The S-4 shall have been declared effective
and shall not be subject to a stop order or any threatened stop order.
(f) Nasdaq Listing. The shares of Buyer Common Stock to be issued in
the Merger pursuant to this Agreement will have been accepted for
inclusion on Nasdaq, subject to official notice of issuance, and freely
tradable in the United States.
(g) Tax Opinion. Tarpon shall have received the opinion of Crowe
Chizek and Company LLC, in form and substance reasonably satisfactory to
Tarpon, dated as of
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the Closing, substantially to the effect that on the basis of the facts,
representations and assumptions set forth in each such opinion which are
consistent with the state of facts existing at the Effective Time, the
Mergers will be treated as a reorganization within the meaning of Section
368(a) of the Code. In rendering such opinion, Crowe Chizek and Company
LLC may require and rely upon representations contained in certificates of
officers of Tarpon and others, reasonably satisfactory in form and
substance to Crowe Chizek and Company LLC.
(h) No Litigation with Respect to Transactions. No suit or other
legal proceeding shall have been instituted or threatened seeking to
enjoin the consummation of the transactions contemplated hereby, which
reasonably could be expected to result in the issuance of a court order
enjoining such transactions.
(i) No Adverse Changes. Between the date of this Agreement and the
Closing Date, the business of Buyer and its subsidiaries, taken as a
whole, shall have been conducted in the ordinary course consistent in all
respects with prudent banking practices, and there shall not have occurred
any material adverse change or any condition, event, circumstance, fact or
occurrence (other than general economic or competitive conditions) that
may reasonably be expected to result in a material adverse change in the
business, properties, financial condition, loan portfolio, operations or
prospects of Buyer and its subsidiaries, taken as a whole.
(j) Fairness Opinion. Tarpon shall have received from Keefe
Ventures, LLC, a fairness opinion dated as of the date of the Proxy
Statement and in form and substance reasonably satisfactory to Tarpon, to
the effect that the consideration to be received in the Merger by the
shareholders of Tarpon is fair, from a financial point of view, to the
shareholders of Tarpon.
(k) Other Documents. Tarpon shall have received at the Closing all
such other documents, certificates or instruments as it may have
reasonably requested evidencing compliance by Buyer and Acquisition Corp.
with the terms of this Agreement.
ARTICLE VII
TERMINATION, EXPENSES AND AMENDMENT
Section 7.1. Termination. This Agreement may be terminated before the
Effective Time:
(a) at any time, whether before or after approval of the matters
presented in connection with the Merger by the shareholders of Tarpon, by
written agreement between Buyer and Tarpon, if the Board of Directors of
each so determines;
(b) at any time, whether before or after approval of the matters
presented in connection with the Merger by the shareholders of Tarpon, by
either the Board of
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Directors of Tarpon or the Board of Directors of Buyer and Acquisition
Corp. if (i) any Governmental Entity that must grant a Requisite
Regulatory Approval has denied approval of the Merger and such denial has
become final and nonappealable or (ii) any Governmental Entity of
competent jurisdiction shall have issued a final nonappealable order
permanently enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement;
(c) by either the Board of Directors of Tarpon or the Board of
Directors of Buyer and Acquisition Corp. if the Merger shall not have been
consummated on or before August 30, 2005, unless the failure of the
Closing to occur by such date shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe the covenants
and agreements of such party set forth herein;
(d) by Buyer or Tarpon if any approval of the shareholders of Tarpon
required for the consummation of the Merger shall not have been obtained
by reason of the failure to obtain the required vote at a duly held
meeting of shareholders or at any adjournment or postponement thereof;
(e) by Tarpon, upon two days' prior notice to Buyer, if, as a result
of an unsolicited tender offer by a party other than Buyer or its
affiliates or any written offer or proposal with respect to a merger,
share exchange, sale of a material portion of its assets or other business
combination (each, a "Business Combination Proposal") by a party other
than Buyer or its affiliates, the Board of Directors of Tarpon determines
in good faith that its fiduciary obligations under applicable law require
that such Business Combination Proposal be accepted; provided, however,
that:
(i) the Board of Directors of Tarpon shall have been advised
in an opinion of outside counsel that notwithstanding a binding
commitment to consummate an agreement of the nature of this
Agreement entered into in the proper exercise of its applicable
fiduciary duties, and notwithstanding all concessions that may be
offered by Buyer in negotiations entered into pursuant to clause
(ii) below, such fiduciary duties would require the directors to
reconsider such commitment as a result of such tender offer or other
written offer or proposal; and
(ii) before delivering the two days' prior notice to Buyer to
effect a termination under this paragraph (e), Tarpon shall, and
shall cause its financial and legal advisors to, negotiate with
Buyer for three calendar days to make such adjustments in the terms
and conditions of this Agreement as would enable Tarpon to proceed
with the transactions contemplated herein on such adjusted terms;
(f) by Tarpon, by written notice to Buyer, if:
(i) there exists any material breach or breaches of the
representations and warranties of Buyer made herein, and such
breaches shall not have been
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remedied within 30 days after receipt by Buyer of notice in writing
from Tarpon, specifying the nature of such breaches and requesting
that they be remedied; or
(ii) Buyer shall have failed to perform and comply with, in
all material respects, its agreements and covenants hereunder and
such failure to perform or comply shall not have been remedied
within 30 days after receipt by Buyer of notice in writing from
Tarpon, specifying the nature of such failure and requesting that it
be remedied; or
(g) by Buyer, by written notice to Tarpon, if:
(i) there exists any material breach or breaches of the
representations and warranties of Tarpon made herein, and such
breaches shall not have been remedied within 30 days after receipt
by Tarpon of notice in writing from Buyer, specifying the nature of
such breaches and requesting that they be remedied; or
(ii) Tarpon shall have failed to perform and comply with, in
all material respects, its agreements and covenants hereunder and
such failure to perform or comply shall not have been remedied
within 30 days after receipt by Tarpon of notice in writing from
Buyer, specifying the nature of such failure and requesting that it
be remedied; or
(iii) the Board of Directors of Tarpon or any committee
thereof:
(A) shall withdraw or modify in any manner adverse to
Buyer its approval or recommendation of this Agreement or the
Merger,
(B) shall fail to reaffirm such approval or
recommendation upon Buyer's request,
(C) shall approve or recommend any Business Combination
Proposal involving Tarpon other than the Merger involving
Tarpon, in each case, by or involving a party other than Buyer
or any of its affiliates or
(D) shall resolve to take any of the actions specified
in clause (A), (B) or (C).
(h) by Tarpon, by written notice to Buyer if Tarpon receives written
notice from Crowe Chizek and Company LLC that it is unable to provide the
opinion set forth in Section 6.2(g) of this Agreement.
Section 7.2. Termination Fee; Expenses.
(a) Termination Fee. If this Agreement is terminated at such time that
this Agreement is terminable pursuant to (i) one (but not both) of (A) Section
7.1(f)(i) or (ii), or
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(B) Section 7.1(g)(i) or (ii) or Section 7.1(h), then the breaching party shall
promptly (but no later than three (3) business days after receipt of notice from
the non-breaching party) pay to the non-breaching party in cash an amount equal
to all documented out-of-pocket expenses and fees incurred by the non-breaching
party (including, without limitation, fees and expenses payable to all legal,
accounting, financial, public relations and other professional advisors arising
out of, in connection with or related to the Merger or the transactions
contemplated by this Agreement) not in excess of $750,000; provided, however,
that in the case of a termination pursuant to clause (ii) above, the "breaching
party" shall be deemed to be Buyer and the "non-breaching party" shall be deemed
to be Tarpon; provided, further, that, if this Agreement is terminated by a
party as a result of a willful breach by the other party, the non-breaching
party may pursue any remedies available to it at law or in equity and shall, in
addition to its documented out-of-pocket expenses and fees (which shall be paid
as specified above and shall not be limited to $750,000), be entitled to recover
such additional amounts as such non-breaching party may be entitled to receive
at law or in equity.
(b) Alternative Termination Fee. If this Agreement is terminated at such
time that this Agreement is terminable pursuant to Section 7.1(e), then Tarpon
shall pay to Buyer, in immediately available funds at the time of the
termination of this Agreement, $1,000,000.
(c) Expenses. The parties agree that the agreements contained in this
Section 7.2 are an integral part of the transactions contemplated by this
Agreement and constitute liquidated damages and not a penalty. If one party
fails to promptly pay to any other party any fee due hereunder, the defaulting
party shall pay the costs and expenses (including legal fees and expenses) in
connection with any action, including the filing of any lawsuit or other legal
action, taken to collect payment, together with interest on the amount of any
unpaid fee at the publicly announced prime rate as published in the Wall Street
Journal (Midwest Edition) from the date such fee was required to be paid.
Section 7.3. Effect of Termination. Subject to Section 7.2, in the event
of termination of this Agreement by Tarpon or Buyer pursuant to Section 7.1
there shall be no liability on the part of either Tarpon or Buyer or their
respective officers or directors hereunder, except that Section 5.3(b), Section
7.2 and Section 7.3 shall survive the termination.
Section 7.4. Amendment. Subject to compliance with applicable law, this
Agreement may be amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of
the matters presented in connection with the Merger by the shareholders of
Tarpon; provided, however, that after any approval of the transactions
contemplated by this Agreement by the shareholders of Tarpon, there may not be,
without further approval of such shareholders, any amendment of this Agreement
that changes the amount or the form of the consideration to be delivered to the
holders of Tarpon Common Stock hereunder other than as contemplated by this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
Section 7.5. Extension; Waiver. At any time before the Effective Time, the
parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (a) extend the time for the
performance of any of the obligations or other acts of
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the other parties hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements or conditions contained herein;
provided however that after any approval of the transactions contemplated by
this Agreement by the shareholders of Tarpon, there may not be, without further
approval of such shareholders, any extension or waiver of this Agreement or any
portion thereof which reduces the amount or changes the form of the
consideration to be delivered to the holders of Tarpon Common Stock hereunder
other than as contemplated by this Agreement. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party, but such extension or
waiver or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
ARTICLE VIII
GENERAL PROVISION
Section 8.1. Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and agreements in this
Agreement (or in any instrument delivered pursuant to this Agreement, which
shall terminate in accordance with its terms) shall survive the Effective Time,
except for those covenants and agreements contained herein which by their terms
apply in whole or in part after the Effective Time. Without by implication
limiting the foregoing, none of the directors or officers of the parties hereto
shall have any liability for any of the representations, warranties, covenants
and agreements contained herein.
Section 8.2. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(with confirmation), mailed by registered or certified mail (return receipt
requested) or delivered by an express courier (with confirmation) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
If to Buyer addressed to: First Busey Corporation
201 West Main Street
Urbana, Illinois 61801
Attention: Douglas C. Mills, Chairman of the
Board and Chief Executive Officer
Telephone: (217) 365-4512
Facsimile: (217) 365-4592
with a copy to: Stathy Darcy, Esq.
Chapman and Cutler LLP
111 West Monroe Street
Chicago, Illinois 60603
Telephone: (312) 845-3000
Facsimile: (312) 701-2361
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If to Tarpon, addressed to: Tarpon Coast Bancorp, Inc.
1490 Tamiami Trail
Port Charlotte, Florida 33948
Attention: Lewis S. Albert
Telephone: (941) 629-8111
Facsimile: (941) 625-1732
with a copy to: Smith Mackinnon, PA
Suite 800
255 South Orange Avenue
Orlando, Florida 32801
Attention: John P. Greeley, Esq.
Telephone: (407) 843-7300
Facsimile: (407) 843-2448
Section 8.3. Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a section of or
exhibit or schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." No provision of this Agreement shall be construed to require
Tarpon, the Tarpon Subsidiaries, Buyer or Buyer Subsidiaries or affiliates to
take any action that would violate any applicable law, rule or regulation.
Section 8.4. Counterparts. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
Section 8.5. Entire Agreement. This Agreement (including the documents and
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties hereto with respect to the subject matter hereof.
Section 8.6. Governing Law. This Agreement and the exhibits attached
hereto shall be governed and construed in accordance with the laws of the State
of Illinois, without regard to any applicable conflicts of law.
Section 8.7. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If, however, any
provision of this Agreement is declared invalid or unenforceable by a court of
competent jurisdiction, then the
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parties hereto shall in good faith amend this Agreement to include an
alternative provision that accomplishes a similar result.
Section 8.8. Publicity. Except as otherwise required by applicable law or
the rules of Nasdaq or any other applicable securities exchange, neither Tarpon
nor Buyer shall, nor shall Tarpon or Buyer permit the Tarpon Subsidiaries or any
subsidiary of Buyer, respectively, to issue or cause the publication of any
press release or other public announcement with respect to, or otherwise make
any public statement concerning, the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be unreasonably
withheld.
Section 8.9. Assignment; Third Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations of the parties under this
Agreement shall be assigned by any of the parties hereto (whether by operation
of law or otherwise) without the prior written consent of the other parties.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the parties and their respective
successors and assigns. Except as otherwise specifically provided in this
Section 8.9 and in Section 5.12, this Agreement (including the documents and
instruments referred to herein) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder; provided, however,
each party's respective advisors in connection with the transaction shall be
considered to be third party beneficiaries of Section 3.9(c) and Section 4.7(b)
of this Agreement who have relied upon such representations to their potential
economic detriment.
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IN WITNESS WHEREOF, Buyer, Acquisition Corp. and Tarpon have executed this
Agreement as of the day and year hereinabove first written.
FIRST BUSEY CORPORATION
By /s/ Douglas C. Mills
---------------------------------
Name: Douglas C. Mills
Title: Chairman of the Board and
Chief Executive Officer
FBC ACQUISITION III CORP.
By /s/ Douglas C. Mills
---------------------------------
Name: Douglas C. Mills
Title: President
TARPON COAST BANCORP, INC.
By /s/ Lewis S. Albert
---------------------------------
Name: Lewis S. Albert
Title: Chairman of the Board and
Chief Executive Officer
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EXHIBIT A
FORM OF
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of the ___ day of ___________, 2005, by and
among First Busey Corporation, a Nevada corporation (the "Employer" or "First
Busey") and ______________________ (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently a stockholder and officer of Tarpon
Coast Bancorp, Inc., a Florida corporation ("Tarpon") and Tarpon Coast National
Bank, a national banking association ("Tarpon Bank"), a wholly-owned subsidiary
of Tarpon.
WHEREAS, simultaneously with the execution of this Agreement, First
Busey, its wholly-owned subsidiary FBC Acquisition III Corp., a Florida
corporation ("Acquisition Corp."), and Tarpon have entered into that certain
Merger Agreement dated February __, 2005 (the "Merger Agreement");
WHEREAS, at the Effective Time (as defined in the Merger Agreement),
Acquisition Corp. shall be merged into Tarpon and First Busey shall become the
sole stockholder of Tarpon and immediately following the Effective Time, Tarpon
shall merge into First Busey;
WHEREAS, as a material inducement to and condition to First Busey's and
Acquisition Corp.'s willingness to enter into the Merger Agreement, the
Executive agreed to concurrently enter into this Agreement which shall become
effective at the Effective Time;
WHEREAS, the Executive had previously entered into an employment
agreement with Tarpon and Tarpon Bank, dated January 1, 2004 (the "Prior
Agreement");
WHEREAS, the Executive, First Busey, Tarpon and Tarpon Bank desire that
the Prior Agreement be terminated at the Effective Time;
WHEREAS, the Executive agrees that the payments potentially required by
Section 10.a. and 11.b. of the Prior Agreement shall be waived and such Sections
shall have no force or effect;
WHEREAS, the Board of Directors of the Employer desire to employ
Executive to serve as ___________________________ of Tarpon Bank; and
WHEREAS, Executive is willing to become employed by Tarpon Bank as
_____________ in accordance with the terms and conditions hereinafter set forth:
Section 1. Employment. Employer employs Executive and Executive
accepts employment upon the terms and conditions set forth in this Agreement.
Section 2. Term. The term of employment of Executive under this
Agreement shall commence on the Effective Time and end on December 31, 2006.
Section 3. Compensation. For all services rendered by Executive,
Executive shall be paid a minimum annual base salary of $_______ per year. The
minimum annual base salary will be paid by Tarpon Bank in equal installments
during the term of this Agreement. Salary payments shall be subject to
withholding and other applicable taxes.
Section 4. Title and Duties. Executive shall serve as
___________________________ of Tarpon Bank. Executive shall be responsible for
overall operations of Tarpon Bank, including __________________________.
Section 5. Extent of Services. Executive shall devote his entire
time, attention and energies to the business of Employer and shall not during
the term of this Agreement be engaged in any other business activity which
requires the attention or participation of Executive during normal business
hours of Employer, recognition being given to the fact that Executive is
expected on occasion to participate in client development during and after
normal business hours. However, Executive may invest his assets in such form or
manner as will not require his services in the operation of the affairs of the
companies in which such investments are made, except that Executive shall not
make an investment in the securities of any competing financial institution
without the express approval of the Board of Directors of the Employer.
Executive shall notify Employer of any significant participation by him in any
trade association or similar organization.
Section 6. Working Facilities. Executive shall receive from Tarpon
Bank, such assistants, perquisites, facilities and services as are suitable to
his position and appropriate for the performance of his duties on behalf of such
entity. In addition, Tarpon Bank shall pay for the Executive's membership dues
and assessments in the country or golf club to which he belongs on the date
hereof.
Section 7. Expenses. Executive may incur reasonable expenses for
promoting the business of Tarpon Bank, including expenses for entertainment,
travel, and similar items. Executive will be reimbursed by Tarpon Bank for all
such expenses upon Executive's periodic presentation of an itemized account of
such expenditures with receipts attached.
Section 8. Vacations. Executive shall be entitled each year to five
(5) weeks of vacation time in accordance with the personnel policy established
by Tarpon Bank's Board of Directors, during which time Executive's compensation
shall be paid in full.
Section 9. Additional Compensation. As additional consideration
paid to Executive, Executive shall be provided with and participate in all
employee benefit plans offered to similarly situated employees of First Busey,
which shall include but not be limited to First Busey 401(k)/profit sharing
plan, employee stock ownership plan, health, dental and life insurance benefits,
bonus and incentive programs.
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Section 10. Termination.
a. For Cause. This Agreement may be terminated by the
Board of Directors of the Employer without notice and without further
obligations other than for monies already paid, for any of the
following reasons:
i. failure of Executive to follow reasonable
written instructions or policies of the Board of Directors of
the Employer;
ii. gross negligence or willful misconduct of
Executive materially damaging to the business of the Employer
during the term of this Agreement, or at any time while he was
employed by the Employer prior to the term of this Agreement,
if not disclosed to the Employer prior to the commencement of
the term of this Agreement;
iii. conviction of Executive during the term of
this Agreement of a crime involving breach of trust or moral
turpitude; or
iv. at the request of any bank regulatory
authority with jurisdiction over the Employer.
In the event that the Employer discharges Executive alleging
"cause" under this Section 10.a. and it is subsequently determined
judicially that the termination was "without cause," then such
discharge shall be deemed a discharge without cause subject to the
provisions of Section 10.b. hereof. In the event that the Employer
discharges Executive alleging "cause" under this Section 10.a. such
notice of discharge shall be accompanied by a written and specific
description of the circumstances alleging such "cause."
b. Without Cause.
i. Notwithstanding the provisions of Section 2
of this Agreement, the Employer may, upon thirty (30) days'
written notice to Executive, or by the giving of a notice
under Section 2 of this Agreement terminate this Agreement
without cause at any time during the term of this Agreement
upon the condition that Executive shall be entitled, as
liquidated damages in lieu of all other claims, to a cash
payment equal to one times (100%) the compensation, including
incentive compensation, if any, received by the Executive in
the one-year period immediately preceding such termination.
ii. Executive may upon thirty (30) days' written
notice to Employer terminate his Agreement without cause at
any time during the term of this Agreement. In the event of
termination of this Agreement by Executive, the Employer shall
have no further obligation to Executive than for monies paid.
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Section 11. Death or Disability.
a. In the event of Executive's death during the term of
this Agreement, Employer shall pay to Executive's designated
beneficiary, or if Executive has failed to designate a beneficiary, to
his estate, an amount equal to Executive's base salary pursuant to
Section 3 hereof through the end of the month in which Executive's
death occurred plus an amount equal to ninety (90) days salary.
Employer shall also continue to provide Executive's survivors with any
benefits it provided Executive for such additional ninety (90) day
period.
b. In the event of Executive's disability during the
term of this Agreement, Employer shall pay to Executive an amount equal
to Executive's base salary pursuant to Section 3 hereof through the end
of the month in which Executive's disability occurred plus an amount
equal to six (6) months salary. Employer shall also continue to provide
Executive with any benefits it provided Executive prior to his
disability for a period of six (6) months following his disability and
shall continue to pay the premiums on any life and disability policies
provided by the Employer for the benefit of Executive prior to his
disability.
c. The compensation set forth in Sections a. and b. of
this Section 11 shall be in lieu of any other benefits provided
hereunder, except that (i) any benefit payable pursuant to Section 3
shall be prorated and made available to Executive or his beneficiary or
estate in respect of any period prior to his death or disability and
(ii) in the event of Executive's disability, Employer shall continue to
pay the premiums on any life and disability policies provided by the
Employer for the benefit of Executive prior to his disability. The
Employer may maintain insurance on its behalf to satisfy in whole or in
part the obligations of this Section 11.
d. Executive shall be deemed disabled if, by reason of
physical or mental impairment, he is incapable of performing his duties
hereunder for a period of 180 consecutive days.
Section 12. Restrictive Covenants. The Executive agrees that,
provided that the Executive terminates his employment within six months after
the Effective Time, for one year after the Executive's termination, the
following restrictions shall apply to the Executive:
a. He will not be an officer, director, employee, agent
or representative, or an owner (directly, indirectly, legally,
beneficially, or as a trustee or a fiduciary) of more than five percent
(5%) of the outstanding capital stock, of any corporation, association,
or an owner, directly or indirectly, of any interest in, or employee,
agent or representative of, any other form of business association,
sole proprietorship, limited liability company or partnership, which
conducts a banking, trust company, savings and loan, credit union or
other similar or related retail or commercial banking business anywhere
within Lee County, Collier County, Sarasota County and Charlotte
County, Florida (the "Restricted Territory"); and
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b. He will not be an officer, director, employee, agent
or representative, or an owner (directly, indirectly, legally,
beneficially, or as a trustee or a fiduciary) of more than five percent
(5%) of the outstanding capital stock, of any corporation, or an owner
of any interest in, or employee, agent or representative of, any other
form of business association, sole proprietorship, limited liability
company or partnership, which solicits or otherwise attempts to induce
(x) any person who was an employee, agent, independent contractor or
representative of Tarpon or Tarpon Bank prior to the Effective Time to
terminate his position as employee, agent, independent contractor or
representative of Tarpon, Tarpon Bank, First Busey or any of their
subsidiaries or (y) any person who was a customer of Tarpon Bank prior
to the Effective Time to cease to be a customer of Tarpon Bank, Busey
Bank, or any of their subsidiaries or to reduce the business such
customer does with Tarpon Bank, First Busey or any of their
subsidiaries.
Section 13. Non-Disclosure of Confidential Information. The
Executive acknowledges and agrees that the Executive had access to and received
certain confidential and proprietary information and trade secrets of Tarpon and
Tarpon Bank used or useful in connection with the operation of Tarpon and Tarpon
Bank, including, without limitation, the financial information, research,
customer lists, employee information, plans, methods, identity and special needs
of customers, ideas, concepts, techniques, models, data, diagrams, business
systems and techniques of Tarpon and Tarpon Bank (collectively, "Confidential
Information"). All information disclosed to the Executive, or to which the
Executive obtained access, which the Executive had reasonable basis to believe
to be Confidential Information, or which was treated by Tarpon and Tarpon Bank
as being Confidential Information, shall be presumed to be Confidential
Information, including information of, and with respect to, customers and
employees.
The Executive covenants and agrees that the Executive will not, at all
times from and after the date of this Agreement, directly or indirectly, for the
Executive's own benefit or for the benefit of any person other than Tarpon or
Tarpon Bank, or their successors, use, divulge, disseminate, disclose or
communicate to any other person any of the Confidential Information in any
manner whatsoever, unless (a) disclosure is made by the Executive for the
benefit of First Busey or its subsidiaries or (b) First Busey otherwise consents
to such use or disclosure of any item of the Confidential Information in writing
prior to the use or disclosure thereof and then only with respect to those items
of Confidential Information specifically described, and only to the extent
specifically authorized, in such written consent. Notwithstanding the foregoing,
Confidential Information may be provided by the Executive in response to a
lawful order of a court of competent venue and jurisdiction, in response to a
statutory or regulatory requirement, or in response to a request from an agency
having competent jurisdiction; provided, however, the Executive shall provide
First Busey with prompt written notice of any such request or requirement so
that First Busey may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Agreement.
Notwithstanding the foregoing, Confidential Information does not
include information: (i) in the public domain as of the date of the disclosure
or breach, unless such information is made public as a result of the breach of
this Agreement or as a result of a breach by a third party of a contractual,
legal or fiduciary obligation to Tarpon or Tarpon Bank, or their successors,
which third party breach is known to the Executive, or should reasonably have
been known to
-5-
the Executive based on information generally known by, or available to, the
Executive; or (ii) that is developed by any third party without access to the
Confidential Information.
Section 14. Remedies. The Executive acknowledges that the covenants
and agreements which he has made in this Agreement are reasonable and are
required for the reasonable protection of First Busey's purchase of Tarpon and
Tarpon Bank. The Executive agrees that the breach of any covenant or agreement
contained herein will result in irreparable injury to First Busey, and that in
addition to all other remedies provided by law or in equity with respect to the
breach of any provision of this Agreement, First Busey and its successors and
assigns will be entitled to enforce the specific performance by the Executive of
his obligations hereunder and to enjoin him from engaging in any activity in
violation hereof and that no claim by the Executive against First Busey or its
successors or assigns will constitute a defense or bar to the specific
enforcement of such obligations. In the event of a lawsuit under this Agreement,
the successful party shall be entitled to recover from the losing party
reasonable attorney's fees and costs of litigation. In the event of a breach or
a violation by the Executive of any of the provisions of this Agreement, the
running of the restrictive covenant period (but not of the Executive's
obligations hereunder) shall be tolled during the period of the continuance of
any actual breach or violation and the Executive's obligations hereunder shall
be extended for the amount of time during which such breach or violation
continued.
Section 15. Partial Invalidity. The various covenants and provisions
of this Agreement are intended to be severable and to constitute independent and
distinct binding obligations. Should any covenant or provision of this Agreement
be determined to be void and unenforceable, in whole or in part, it shall not be
deemed to affect or impair the validity of any other covenant or provision or
part thereof, and such covenant or provision or part thereof shall be deemed
modified to the extent required to permit enforcement. Without limiting the
generality of the foregoing, if the scope of any covenant contained in this
Agreement is too broad to permit enforcement to its full extent, such covenant
shall be enforced to the maximum extent permitted by law, and the Executive
hereby agrees that such scope may be judicially modified accordingly. and the
parties hereby request that any such court make such modification.
Section 16. Notices. Any notice required or desired to be given
under this Agreement shall be deemed given if in writing sent by certified mail
to his residence in the case of Executive, or to its principal office in the
case of Employer.
Section 17. Waiver of Breach. The waiver of Employer of a breach of
any provision of this Agreement by Executive shall not operate or be construed
as a waiver of any subsequent breach by Executive. No waiver shall be valid
unless in writing and signed by an authorized officer of Employer.
Section 18. Assignment. Executive acknowledges that the services to
be rendered by him are unique and personal. Accordingly, Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of Executive under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
Employer.
-6-
Section 19. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Illinois. The sole and
exclusive venue for any action arising out of this Agreement shall be a state or
federal court located in Charlotte County, Florida, and the parties agree to the
jurisdiction of any such courts.
Section 20. Entire Agreement. This Agreement contains the entire
understanding of the parties hereto regarding employment of Executive, and at
the Effective Time shall supersede and replace any prior agreement relating
thereto (except for Section 10.b. and 10.c. of the Prior Agreement). Sections
10.a. and 11.b. of the Prior Agreement shall be waived at the Effective Time and
such Sections shall have no force or effect thereafter. This Agreement may not
be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension, or
discharge is sought.
-7-
WHEREAS, as of the day and date first above set forth, the parties
hereto execute this Agreement.
FIRST BUSEY CORPORATION
By:
-------------------------------------
Its
----------------------------------
[NAME]
By:
-------------------------------------
Executive
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