MUTUAL TERMINATION AGREEMENT
EXHIBIT
10.1
This
MUTUAL TERMINATION AGREEMENT is entered into as of June 24, 2008 (this
“Agreement”), by and between Jacksonville Bancorp, Inc., a Florida corporation
(“JBI”), and Heritage Bancshares, Inc., a Florida corporation
(“HBI”).
RECITALS
WHEREAS,
JBI and HBI are parties to that certain Agreement and Plan of Merger dated
as of
January 28, 2008 (the “Merger Agreement”); and
WHEREAS,
the board of directors of JBI and the board of directors of HBI have determined
that it is in the best interests of their respective corporations and
shareholders to terminate the Merger Agreement as provided herein, effective
immediately upon execution of this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the agreements set forth herein,
and intending to be legally bound hereby, the parties agree as
follows:
1. Termination
of Merger Agreement.
a. Pursuant
to Section 10.1(a) of the Merger Agreement, and effective immediately upon
the
execution of this Agreement, the Merger Agreement is hereby terminated and
shall
be of no further force or effect, and there shall be no further obligations,
or
restrictions on future activities on the part of JBI or HBI, except as otherwise
explicitly set forth in this Agreement.
b. As
a
result of the termination of the Merger Agreement as set forth in Section 1(a)
above, JBI and HBI agree and acknowledge that the Stockholders Agreement and
the
Non-Competition Agreements related to the sale of goodwill, each dated as of
January 28, 2008, shall terminate effective immediately upon execution of this
Agreement, and shall be of no further force or effect.
2. Survival
of Confidentiality Obligations and Other Provisions of Merger
Agreement.
a. Notwithstanding
anything contained in this Agreement to the contrary, and in accordance with
Section 10.2(a) of the Merger Agreement, Sections 8.2, 8.7, 10.2 and Article
11
of the Merger Agreement shall survive and remain in full force and effect in
accordance with their terms.
b. Each
of
HBI and JBI shall promptly return or use its reasonable efforts to destroy
all
agreements, documents, contracts, instruments, books, records, materials and
other information (in any format) (“Proprietary Information”) of the other party
(except for such agreements, documents, contracts, instruments, books, records,
material and other information that is otherwise publicly available), as well
as
all copies, reproductions, summaries, analyses or extracts thereof or based
thereon (whether in hard-copy form or on intangible media, such as electronic
mail or computer files) in the party's possession or in the possession of any
of
its representatives. Notwithstanding the return or destruction of any
Proprietary Information, or documents or material containing or reflecting
any
Proprietary Information, the parties will continue to be bound by their
obligations of confidentiality and other obligations under Section 8.2 of the
Merger Agreement.
3. Mutual
Discharge and Release.
Each
party hereto, on behalf of itself and its affiliates, subsidiaries, directors,
and to the extent legally permissible, its officers and employees, and the
successors and assigns of each of them (each, a “Releasing Party”), hereby
fully, finally and forever releases the other party hereto and each of its
respective affiliates, subsidiaries, directors, officers, stockholders,
employees, agents, financial and legal advisors and other representatives,
and
the successors and assigns of each of them, from any and all liabilities and
obligations, claims, causes of action and suits, at law or in equity, whether
arising under any United States federal, state or local or any foreign law
or
otherwise, that any Releasing Party has, has had or may have, arising out of,
relating to, or in connection with the Merger Agreement and the transactions
contemplated thereby, including, without limitation, any liability or obligation
arising out of any breach of any representation, warranty, covenant or agreement
contained in the Merger Agreement, provided that nothing in this Section 3
shall
impair the survival and full force of the provisions of the Merger Agreement
set
forth in Section 2(a) hereof. By authorizing the execution of this Agreement,
each member of the board of directors of each party acknowledges and agrees
(and
shall be estopped from arguing otherwise) that they are bound by this
release.
4. Expenses.
Each
party agrees that it shall bear all costs and expenses incurred by it and its
affiliates and subsidiaries in connection with the Merger Agreement and the
transactions contemplated thereby, and this Agreement, without recourse to
the
other party.
5. Representations
and Warranties.
Each of
JBI and HBI hereby represents and warrants to the other party that: (a) it
has
full power and authority to enter into this Agreement and to perform its
obligations hereunder in accordance with the provisions of this Agreement,
(b)
this Agreement has been duly authorized, executed and delivered by such party,
and (c) this Agreement constitutes a legal, valid and binding obligation of
such
party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights and remedies
generally and to general principles of equity, whether applied in a court of
law
or a court of equity. Each party agrees that no party is in breach or default
of
the Merger Agreement, and each party has agreed to the terms of, and has
executed, this Agreement without admitting any liability or wrongdoing of any
nature.
6. Public
Announcement.
Promptly following the execution of this Agreement, JBI and HBI will issue
the
joint press release (the “Joint Press Release”) attached as Exhibit 1 to this
Agreement. JBI will promptly prepare and file with the U.S. Securities and
Exchange Commission (the “SEC”) a Current Report on Form 8-K disclosing the
termination of the Merger Agreement. Except as described above or as required
by
law or applicable listing agreement, no other press release or other form of
public announcement shall be issued regarding this Agreement and the termination
of the Merger Agreement by either JBI or HBI without the prior written consent
of the other, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, both JBI and HBI will be permitted to make
reference to the matters addressed in this Agreement in other press releases
or
required filings with the SEC, provided that such references are consistent
in
substance with the Joint Press Release or are required by applicable law or
listing requirements and each may issue general communications regarding the
termination of the Merger Agreement to its employees and customers.
7. Non-Disparagement.
Except
as required by applicable law or the rules or regulations of any governmental
authority or by the order of any court of competent jurisdiction, each party
agrees that such party shall not, directly or indirectly (through such party’s
affiliates or otherwise), make, publish or cause to be made or published any
statement or remark concerning the subject matter of the Merger Agreement,
the
participation or involvement of the parties in the transactions contemplated
by
the Merger Agreement or the reasons for or any of the events or circumstances
surrounding the termination of the transactions contemplated by the Merger
Agreement that could reasonably be understood as disparaging the business or
conduct of the other party or its respective affiliates or as intended to harm
the business or reputation of the other party or its respective
affiliates.
8. Nonsolicitation.
For a
period of three years following the date of this Agreement, neither party will
solicit any Customer of the other as a means to offer banking services to any
Customer. Notwithstanding the foregoing, each party shall be permitted to (a)
engage in advertising, solicitations or marketing campaigns, programs or other
efforts not primarily targeted to or targeted at a Customer, including without
limitation, campaigns, programs or efforts in connection with lending, deposit,
safe deposit, trust, credit cards or other financial services relationships
with
such Customer, and (b) respond to unsolicited inquiries. For purposes of this
Agreement, a Customer shall mean any individual, partnership, joint venture,
corporation, trust, limited liability company, unincorporated organization,
governmental agency, or other entity which has a deposit account or loan
outstanding with such party as of the date of this Agreement. The term
"Customer" shall not be deemed to include any Customer of either party that
also
has a business relationship with the other party as of the date of this
Agreement.
In
addition, each party agrees that, for a period of three years following the
date
of this Agreement, it shall not, directly or indirectly, hire for employment,
retain as an independent contractor or consultant, or induce to terminate
employment any individual who is employed with the other party as of the date
of
this Agreement.
9. Notices.
All
notices or other communications hereunder shall be in writing and shall be
deemed given if delivered by receipted hand delivery or mailed by prepaid
registered or certified mail (return receipt requested) or by recognized
overnight courier addressed as follows:
|
If
to HBI, to:
|
Xxxxxxxx
X. Xxxxxxx
|
|
President
and Chief Executive Officer
|
|
|
Heritage
Bancshares, Inc.
|
|
|
000
Xxxxxxxx Xxxxxxxxx
|
|
|
Xxxxxx
Xxxx, Xxxxxxx 00000
|
|
|
Telecopy
Number: (000) 000-0000
|
|
With
required copies to:
|
Xxxx
X. Xxxxxxx, Esq.
|
|
Xxxxx
Xxxxxxxxx, PA
|
|
|
000
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
|
|
|
Xxxxxxx,
Xxxxxxx 00000
|
|
|
Telecopy
Number: (000) 000-0000
|
|
|
If
to JBI, to:
|
Xxxxxxx
X. Xxxxx, III
|
|
President
and Chief Executive Officer
|
|
|
Jacksonville
Bancorp, Inc.
|
|
|
000
Xxxxx Xxxxx Xxxxxx
|
|
|
Xxxxxxxxxxxx,
Xxxxxxx 00000
|
|
|
Telecopy
Number: (000) 000-0000
|
|
|
With
required copies to:
|
Halcyon
X. Xxxxxxx, Esq.
|
|
McGuireWoods
LLP
|
|
|
00
Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
|
|
|
Xxxxxxxxxxxx,
Xxxxxxx 00000
|
|
|
Telecopy
Number: (000) 000-0000
|
or
such
other address as shall be furnished in writing by any party, and any such notice
or communication shall be deemed to have been given: (a) as of the date
delivered by hand; (b) three (3) business days after being delivered to the
U.S.
mail, postage prepaid; or (c) one (1) business day after being delivered to
the
overnight courier.
10. Complete
Agreement.
This
Agreement contains the entire agreement and understanding of the parties with
respect to its subject matter. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties other than those
expressly set forth herein or therein. This Agreement supersedes, terminates
and
renders of no further force or effect all prior or contemporaneous agreements
and understandings between the parties, both written and oral, with respect
to
its subject matter.
11. Amendment;
Modification.
This
Agreement may be amended, modified or supplemented only by a written agreement
executed by the parties hereto.
12. Severability.
In the
event that any one or more provisions of this Agreement shall for any reason
be
held invalid, illegal or unenforceable in any respect, by any court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement and the parties shall use their
reasonable efforts to substitute a valid, legal and enforceable provision which,
insofar as practical, implements the purposes and intents of this
Agreement.
13. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Florida, without giving effect to the conflict of law provisions
thereof (except to the extent that mandatory provisions of federal law are
applicable). This Agreement shall be binding upon any successor to JBI or HBI.
The parties have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the parties
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this
Agreement.
14. Counterparts.
This
Agreement may be executed in one or more counterparts all of which shall be
considered one and the same agreement and each of which shall be deemed an
original. A facsimile copy of a signature page shall be deemed to be an original
signature page.
15. Headings.
The
headings in this Agreement have been inserted solely for ease of reference
and
should not be considered in the interpretation or construction of this
Agreement.
16. Attorney’s
Fees.
In the
event any action in law or equity or other proceeding is brought for the
enforcement of this Agreement or in connection with any of the provisions of
this Agreement, the prevailing party shall be entitled to its attorney's fees
and other costs reasonably incurred in such action or proceeding.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their duly authorized officers as of the date first written above.
JACKSONVILLE
BANCORP, INC.
By:
/s/
Xxxxxxx X. Xxxxx, III
Xxxxxxx
X. Xxxxx, III
President
and Chief Executive Officer
HERITAGE
BANCSHARES, INC.
By:
/s/
Xxxxxxxx X. Xxxxxxx
Xxxxxxxx
X. Xxxxxxx
President
and Chief Executive Officer
