ACQUISITION FACILITY AGREEMENT

Exhibit 10.4

 

EXECUTION COPY

 

 

ACQUISITION FACILITY AGREEMENT

 

BY AND BETWEEN

 

THE PEOPLES BANCTRUST COMPANY, INC.

 

AND

 

ENDURANCE CAPITAL INVESTORS, L.P.

 

 

 

Dated as of April 6, 2005

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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ACQUISITION FACILITY AGREEMENT

 

THIS ACQUISITION FACILITY AGREEMENT is made as of the 6th day of April, 2005, by and between The Peoples BancTrust Company, Inc., an Alabama business corporation and bank holding company (the “ Company ”), and Endurance Capital Investors, L.P., a Delaware limited partnership (“ Purchaser ”). Certain capitalized terms used herein are defined in Article I .

 

W I T N E S S E T H:

 

WHEREAS, the parties desire that the Company issue (or cause to be issued), and Purchaser purchase, Tranches of Securities in an aggregate purchase price up to the Total Amount, all upon the terms and subject to the conditions contained herein;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, the Company and Purchaser agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1 Definitions . The following terms shall have the following meanings for the purposes of this Agreement:

 

“ Affiliate ” shall mean, with respect to any specified Person, any other Person which, directly or indirectly, controls, is under common control with, or is controlled by, such specified Person.

 

“ Agreement ” shall mean this Acquisition Facility Agreement, as it may be amended or modified from time to time in accordance with its terms.

 

“ Bank ” shall mean The Peoples Bank and Trust Company, an Alabama banking corporation.

 

“ BHCA ” shall mean the Bank Holding Company Act.

 

“ Business Day ” shall mean any day of the year other than (a) any Saturday or Sunday or (b) any other day on which the Bank or banks located in New York, New York are generally closed for business.

 

“ Business Trust ” shall mean a Subsidiary of the Company which is a newly formed business trust organized under the Delaware Statutory Trust Act and the sole asset of which is Indebtedness of the Company.

“ Change of Control ” shall mean any of the following:

 

(i) The Company ceases to own all of the outstanding capital stock of the Bank.

 

(ii) A majority of the board of directors of the Company or the Bank consists of individuals who are not Continuing Directors. A “Continuing Director” of a Person means an individual (x) who is a director of the Person on the date hereof or (y) who becomes a director of the Person subsequent to the date hereof and whose election or nomination for election is approved by a vote of at least a majority of the directors then comprising the Continuing Directors of such Person.

 

(iii) Any merger, consolidation, share exchange or similar transaction in which the Company is not the surviving corporation unless the holders of common equity of the surviving entity own directly or indirectly, in substantially the same proportions as their ownership of such common equity immediately prior to such merger, consolidation, share exchange or similar transaction, more than 50% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors of the entity resulting from such merger, consolidation, share exchange or similar transaction.

 

“ Closing ” shall mean a consummation of a sale and purchase of Securities in accordance with Article VII .

 

“ Closing Date ” shall mean the date on which a Closing occurs or is to occur.

 

“ Code ” shall mean the United States Internal Revenue Code of 1986, as amended.

 

“ Common Stock ” shall mean the common stock, $.10 par value per share, of the Company.

 

“ Company ” shall have the meaning set forth in the preamble to this Agreement.

 

“ Contract ” shall mean any contract, lease, sales order, purchase order, agreement, indenture, mortgage, note, bond, warrant or instrument, undertaking, commitment, understanding, or other arrangement (whether written or oral).

 

“ Convertible Company Indebtedness ” shall mean Indebtedness of the Company that is convertible into Common Stock and has such terms as may be negotiated by the Company and Purchaser.

 

“ Convertible Preferred Stock ” shall mean Preferred Stock that is convertible into Common Stock and has such terms as may be negotiated by the Company and Purchaser.

 

“ Default ” shall mean any condition, occurrence or event which with notice or lapse of time, or both, would constitute an Event of Default.

 

“ Dollars ” or numbers preceded by the symbol “$” shall mean amounts in United States Dollars.

 

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“ Event of Default ” shall mean any of the following:

 

(a) Breach . There shall have been a material breach of any representation, warranty, covenant or obligation of the Company or an Issuer under this Agreement or any Related Agreement, and in any case, such breach shall not have been remedied within thirty (30) days after receipt by of a notice in writing from Purchaser or a Purchaser specifying the breach and requesting such breached by remedied.

 

(b) Payment Default . The Company or an Issuer shall fail to make promptly when due (including by mandatory prepayment or redemption) any principal, interest, redemption, dividend or fee payment with respect to the Securities in any Tranche; or the Company or an Issuer shall fail to make any payment of any other amount payable under this Agreement or any Related Agreement within five (5) Business Days after the date on which such other amount is due.

 

(c) Bankruptcy . The Company or any of its Subsidiaries becomes insolvent or generally fails to pay or admits in writing its inability to pay its debts as they become due, or the Company or any of its Subsidiaries applies for, consents to or acquiesces in the appointment of a trustee, receiver or other custodian for the Company or any of its Subsidiaries or a substantial part of the Company’s or such Subsidiary’s property, or the Company or any of its Subsidiaries makes a general assignment for the benefit of creditors; or in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for the Company or any of its Subsidiaries or a substantial part of the Company’s or such Subsidiary’s property and is not discharged or dismissed within sixty (60) days; or any bankruptcy, reorganization debt arrangement or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is instituted by or against the Company or any of its Subsidiaries; or any warrant of attachment or similar legal process is issued against the Company or any of its Subsidiaries or any of the Company’s or such Subsidiary’s property.

 

(d) Cross Defaults . The Company or any of its Subsidiaries shall fail to make when due (whether at stated maturity, by acceleration, on demand or otherwise, and after giving effect to any applicable grace period), any payment of principal of or interest on any indebtedness exceeding $1,000,000 in the aggregate; or the Company or any of its Subsidiaries shall fail to observe or perform within any applicable grace period any covenants or agreements relating to any such indebtedness, or any other event shall occur, if the effect of such failure or other event is to accelerate, or permit the holder of such indebtedness or any other Person to accelerate, the maturity of such indebtedness.

 

(e) Default Judgments . A judgment or order, for the payment of money in excess of $1,000,000, or otherwise having a Material Adverse Effect, shall be rendered against the Company or any of its Subsidiaries and such judgment or order shall continue unsatisfied (in the case of a money judgment) and in effect for a period of thirty (30) days during which execution shall not be effectively stayed or deferred (by action of a court, by agreement or otherwise).

 

“ Exchange Act ” shall mean the Securities Exchange Act of 1934.

 

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“ Exchangeable Bank Indebtedness ” shall mean Indebtedness of the Bank that is exchangeable for Common Stock and has such terms as may be negotiated by the Company and Purchaser.

 

“ Exchangeable Trust Preferred Securities ” shall mean Trust Preferred Securities that are exchangeable for Common Stock and have such terms as may be negotiated by the Company or the Bank and Purchaser.

 

“ FRB ” shall mean the Board of Governors of the Federal Reserve System.

 

“ Governmental Authority ” shall mean the government of the United States or any foreign country or any state or political subdivision thereof or any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any quasi-governmental entity established to perform such functions.

 

“ Indebtedness ” shall mean indebtedness for borrowed money evidenced by one or more bonds, debentures, promissory notes or similar instruments.

 

“ Investor Rights Agreement ” shall mean an investor rights agreement with respect to all or a portion of a Tranche of Securities to be entered into between the Company and Purchaser at the Closing for such Tranche.

 

“ Issuance Request ” shall mean a request by the Company for the issuance of Securities in the form of Exhibit A.

 

“ Issuer ” shall mean (i) in the case of any Securities other than Indebtedness of the Bank and Trust Preferred Securities, the Company, (ii) in the case of Straight Bank Indebtedness and Exchangeable Bank Indebtedness, the Bank, and (iii) in the case of Straight Trust Preferred Securities and Exchangeable Trust Preferred Securities, a Business Trust.

 

“ Law ” shall mean any law, statute, regulation, ordinance, rule, order (including cease and desist orders), decree (including consent decrees), memorandum of understanding, directive, regulatory action, judgment , settlement agreement or other governmental requirement enacted, promulgated or imposed by any Governmental Authority.

 

“ Lien ” shall mean any lien (except for any lien for Taxes not yet due and payable), mortgage, pledge, charge, claim, title imperfection, defect or objection, security interest, encumbrance, easement, third-party right or restriction (whether on voting, disposition or otherwise).

 

“ Loss ” or “ Losses ” shall mean any and all losses (including reductions in value), liabilities, costs, claims, damages and expenses (including attorney’s fees and expenses and costs of investigation and litigation).

 

“ Material Adverse Effect ” shall mean any change in or effect which, individually or in the aggregate with other changes or effects, is materially adverse to the business, assets, liabilities, condition (financial or otherwise), results of operations or prospects of the Company and its Subsidiaries, taken as a whole, and/or any condition, circumstance, or situation that would prohibit or otherwise interfere with the ability of the Company or any Issuer to enter into and perform its obligations under this Agreement or any Related Agreement.

 

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“ NASD ” shall mean the National Association of Securities Dealers, Inc.

 

“ Organization Documents ” shall mean, with respect to any business organization, any certificate or articles of incorporation and any bylaws, each as amended to date, that regulate the basic organization of the business organization and its internal relations.

 

“ Permit ” shall mean any permit, license, approval or other authorization required or granted by any Governmental Authority.

 

“ Permitted Acquisition ” shall mean any transaction, or series of related transactions, in which the Company or one of its Subsidiaries merges with, acquires substantially all of the assets of or any business (including one or more branches) of, or acquires all of the capital stock or other equity interests of, any bank or bank holding company which is organized under the Laws of United States of America, one of the fifty States thereof or the District of Columbia and which transaction or series of transactions has been approved by a majority of the board of directors of such bank or bank holding company.

 

“ Person ” shall mean any individual, corporation, proprietorship, firm, partnership, limited partnership, limited liability company, trust, association or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d) of the Exchange Act.

 

“ Preferred Stock ” shall mean the preferred stock, $.10 par value per share, of the Company.

 

“ Purchaser ” shall have the meaning set forth in the preamble to this Agreement.

 

“ Related Agreement ” shall mean any agreement, instrument or other document that is or is to be entered into or otherwise delivered at a Closing or otherwise pursuant to this Agreement, including any Issuance Request, any Securities Purchase Agreement, any Investor Rights Agreement and the Stock Purchase Agreement and Investor Rights Agreement, each dated as of April 6, 2005, between Purchaser and the Company.

 

“ SEC ” shall mean the United States Securities and Exchange Commission.

 

“ SEC Documents ” shall mean the Company’s most recently filed Form 10-K, and all exhibits and schedules thereto, and all Forms 10-Q and 8-K, and all exhibits and schedules thereto, filed or furnished thereafter, and the most recently filed proxy statement for the Company’s annual meeting.

 

“ Securities Act ” shall mean the Securities Act of 1933.

 

“ Securities ” shall mean Common Stock, Straight Preferred Stock, Convertible Preferred Stock, Warrants, Straight Company Indebtedness, Convertible Company Indebtedness, Straight Bank Indebtedness, Convertible Bank Indebtedness, Straight Trust Preferred Securities, and Exchangeable Trust Preferred Securities.

 

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“ Securities Purchase Agreement ” shall mean a Securities purchase agreement with respect to all or a portion of a Tranche of Securities to be entered into between the Company and the Purchaser of such Tranche or portion of such Tranche at the Closing for such Tranche.

 

“ Straight Bank Indebtedness ” shall mean Indebtedness of the Bank that is not convertible into or exchangeable for Common Stock or any other security and that has such terms as may be negotiated by the Company or the Bank and Purchaser.

 

“ Straight Company Indebtedness ” shall mean Indebtedness of the Company that is not convertible into or exchangeable for Common Stock or any other security and that has such terms as may be negotiated by the Company and Purchaser.

 

“ Straight Preferred Stock ” shall mean Preferred Stock that is not convertible into or exchangeable for Common Stock or any other security and that has such terms as may be negotiated by the Company and Purchaser.

 

“ Straight Securities ” shall mean any of Straight Preferred Stock, Straight Company Indebtedness, Straight Bank Indebtedness or Straight Trust Preferred Securities.

 

“ Straight Trust Preferred Securities ” shall mean Trust Preferred Securities that are not convertible into or exchangeable for Common Stock or any other security and that has such terms as may be negotiated by the Company and Purchaser.

 

“ Subsidiary ,” when used with reference to a specified Person, means any corporation, partnership, trust or other entity of which the majority of outstanding voting securities are owned (directly or indirectly) by such Person. Unless the context otherwise requires, any reference to a Subsidiary shall be a Subsidiary of the Company.

 

“ Taxes ” shall mean all taxes, charges, fees, duties, levies or other assessments (including income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, goods and services, value added, stamp, user, transfer, fuel, excess profits, occupational, interest equalization, windfall profits, severance, payroll, unemployment and social security taxes) which are imposed by any Governmental Authority, and such term shall include any interest, penalties or additions to tax attributable thereto.

 

“ Total Amount ” shall mean twenty million Dollars ($20,000,000).

 

“ Tranche ” shall mean the Securities to be sold and purchased at any particular Closing.

 

“ Trust Preferred Securities ” shall mean preferred equity securities issued by a Business Trust.

 

“ Warrants ” shall mean warrants to acquire Common Stock upon such terms as may be negotiated by the Company and Purchaser.

 

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1.2 Interpretation . The headings preceding the text of Articles and Sections included in this Agreement are for convenience only and shall not be deemed part of this Agreement or be given any effect in interpreting this Agreement. The use of the masculine, feminine or neuter gender or the singular or plural form of words herein shall not limit any provision of this Agreement. The use of the terms “including” or “include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively. Reference to any Person includes such Person’s successors and assigns to the extent such successors and assigns are permitted by the terms of any applicable agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually. Reference to any agreement (including this Agreement), document or instrument means such agreement, document or instrument as amended or modified and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof. Reference to any Law shall mean such Law as amended, modified, codified, replaced or re-enacted, in whole or in part, including rules, regulations, enforcement procedures and any interpretations promulgated hereunder. Underscored references to Articles, Sections or clauses shall refer to those portions of this Agreement. The use of the terms “hereunder,” “hereof,” “hereto” and words of similar import shall refer to this Agreement as a whole and not to any particular Article, Section or clause of this Agreement.

 

ARTICLE II

 

SALE AND PURCHASE OF SECURITIES

 

2.1 Request for Issuance . At any time during the Term of this Agreement, the Company, at its sole option, may request, by delivery of an Issuance Request to Purchaser, that Purchaser purchase a Tranche of one or more types of Securities.

 

2.2 Tranche Size Requirements . Notwithstanding anything to the contrary in this Agreement, the total purchase price of any Tranche shall be at least $5,000,000, and the total purchase price of any type of Securities included in any Tranche shall be at least $2,000,000 and shall be a multiple of $1,000,000.

 

2.3 Warrants . In the event that the Company wishes to include Straight Securities in any Tranche, the Company shall also include in such Tranche a number of Warrants to be negotiated based on the number or amount of Straight Securities to be issued as part of such Tranche.

 

2.4 Total Amount . Notwithstanding anything to the contrary in this Agreement, Purchaser shall not be obligated to purchase Securities if and to the extent that the aggregate purchase price of all Securities sold or to be sold to Purchaser pursuant to this Agreement exceeds or would exceed the Total Amount.

 

2.5 Negotiation of Terms . Upon receipt of an Issuance Request for a Tranche, Purchaser and the Company, acting in good faith, shall attempt to negotiate the terms of the Securities in such Tranche, including price or coupon rate, and the terms of such purchase (including a Securities Purchase Agreement). Purchaser and the Company expect that each Securities Purchase Agreement will be substantially similar to the Stock Purchase Agreement

 

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dated April 6, 2005 between Purchaser and the Company, except for differences attributable to differences in the types of Securities that are the subject of the applicable Securities Purchase Agreement and changes to the Company that are reflected in each applicable Securities Purchase Agree