AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

FIRST BUSEY CORP /NV/ | FBC ACQUISITION III CORP. | TARPON COAST BANCORP, INC.

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Illinois Date: 2/25/2005
Industry: Regional Banks Law Firm: Chapman and Cutler LLP; Smith Mackinnon, PA Sector: Financial

AGREEMENT AND PLAN OF MERGER, Parties: first busey corp /nv/ , fbc acquisition iii corp. , tarpon coast bancorp inc.

<PAGE>

EXECUTION COPY

================================================================================

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

================================================================================

<PAGE>

TABLE OF CONTENTS

<TABLE>

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

</TABLE>

-i-

<PAGE>

<TABLE>

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

</TABLE>

-ii-

<PAGE>

<TABLE>

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

</TABLE>

<TABLE>

SCHEDULES

<S> <C>

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

</TABLE>

EXHIBITS

EXHIBIT A -- Form of Employment Agreement

-iii-

<PAGE>

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;

<PAGE>

(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;

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

-2-

<PAGE>

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.

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

-3-

<PAGE>

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.

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

-4-

<PAGE>

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

-5-

<PAGE>

"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

-6-

<PAGE>

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:

-7-

<PAGE>

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.

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

-8-

<PAGE>

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

-9-

<PAGE>

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.

-10-

<PAGE>

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.

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.

-11-

<PAGE>

(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.

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.

-12-

<PAGE>

(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:

-13-

<PAGE>

(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.

-14-

<PAGE>

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.

-15-

<PAGE>

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, defect

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates