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Exhibit
10.2
EXECUTION COPY
INVESTOR RIGHTS
AGREEMENT
This INVESTOR RIGHTS
AGREEMENT (this “ 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 (“
Endurance ”).
WHEREAS, the Company and
Endurance have entered into a stock purchase agreement dated as of
April 6, 2005 (the “ Purchase Agreement ”),
whereby Endurance is purchasing shares of Common Stock (as defined
below) from the Company;
WHEREAS, after Endurance
purchases the Shares, it will own 567,588 shares of Common Stock;
and
WHEREAS, the Company has
agreed to provide Endurance with certain information rights
regarding the Company and with certain registration rights with
respect to the shares of Common Stock Endurance will own as set
forth herein.
NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants of the
parties set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, subject to the terms and conditions set forth herein,
the parties hereby agree as follows:
Section 1. Certain
Definitions . In this Agreement, the following terms shall have
the meanings specified below. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the
Purchase Agreement.
“ Agreement
” shall have the meaning ascribed to it in the preamble of
this Agreement.
“ Bank ”
shall mean The Peoples Bank and Trust Company, an Alabama banking
corporation.
“ 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.
“ Common Stock
” shall mean the Company’s common stock, $.10 par value
per share.
“ Company
” shall have the meaning ascribed to it in the preamble of
this Agreement.
“ CPR ”
shall mean Center for Public Resources.
“ Endurance
” shall have the meaning ascribed to it in the preamble of
this Agreement.
“ Exchange Act
” shall mean the Securities Exchange Act of 1934.
“ Fair Market
Value ” shall mean the average of the daily high sales
price per share of Common Stock and daily low sales price per share
of Common Stock as of a given day or over a specified
period.
“ GAAP ”
shall mean United States generally accepted accounting principles
at the time in effect.
“ 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.
“ Indemnified
Party ” shall have the meaning ascribed to it in
Section 8(c) of this Agreement.
“ Indemnifying
Party ” shall have the meaning ascribed to it in
Section 8(c) of this Agreement.
“ 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.
“ 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).
“ 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.
“ Piggyback
Notice ” shall have the meaning ascribed to it in
Section 3(a) of this Agreement.
“ Piggyback
Registration ” shall have the meaning ascribed to it in
Section 3(a) of this Agreement.
“ Purchase
Agreement ” shall have the meaning ascribed to it in the
recitals to this Agreement.
Unless the context otherwise
requires, the terms “ register ,” “
registered ” and “ registration ”
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act and
the declaration or ordering of the effectiveness of such
registration statement by the SEC.
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“ Registrable
Stock ” shall mean the Common Stock owned by Endurance as
of the date hereof and any other Common Stock issuable upon any
stock split, stock dividend, recapitalization or otherwise with
respect to such Common Stock.
“ Rule 144
” shall mean Rule 144 promulgated by the SEC under the
Securities Act.
“ SEC ”
shall mean the United States Securities and Exchange Commission or
its successor in interest.
“ Securities Act
” shall mean the Securities Act of 1933.
“ Registration
Request ” shall have the meaning ascribed to it in
Section 2(a) of this Agreement.
“ Shares ”
shall mean the number of shares of the Company’s Common Stock
that Endurance purchased under the Purchase Agreement.
“ 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.
“ Suspension
Right ” shall have the meaning ascribed to it in
Section 2(c) of this Agreement.
Section 2. Demand
Registration .
(a) (i) Upon receipt of a
written request from Endurance to the Company (a “
Registration Request ”) delivered not earlier than one
(1) year after the date hereof, the Company shall promptly prepare
and file with the SEC, but in any event within 90 days after its
receipt of such Registration Request, a registration statement for
the purpose of effecting a registration of the sale of all
Registrable Stock requested to be Registered by Endurance. Unless
otherwise requested in the Registration Request, each such
registration shall be an underwritten registration, and Endurance
shall have the right to designate the lead managing underwriter for
such registration; provided , however , that such
underwriter is reasonably satisfactory to the Company. The Company
shall use its best efforts to effect such registration as soon as
practicable (including, without limitation, the execution of an
undertaking to file post-effective amendments and appropriate
qualification under applicable state securities laws).
(ii) The Company shall not be
required to effect (A) more than two registrations pursuant to
Section 2(a)(i) or (B) a registration of Registrable Stock,
(1) of less than 50% of the Shares issued pursuant to the Purchase
Agreement or (2) if the Fair Market Value of the Registrable Stock
on the date of the Registration Request is less than $1,000,000. No
registration shall be counted toward the number set forth in
Section 2(a)(ii)(A) unless and until such registration has
been declared effective by the SEC and remains continuously
effective until the earlier of (x) 180 days thereafter and (y) the
date on which all shares of Registrable Stock registered in such
registration have been sold (but not before the expiration of the
period referred
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to in Section 4(3) of the Securities Act
and Rule 174 thereunder, if applicable). The Company shall not be
required to prepare and file a registration statement or otherwise
effect a registration under this Section 2 during the period
beginning on the date of filing of, and ending on the date one
hundred eighty (180) days following, the effective date of a
registration statement pertaining to a public offering of Common
Stock, whether such registration statement was filed pursuant to a
demand under Section 2 of this Agreement or otherwise;
provided that the Company makes reasonable good faith efforts to
cause such registration statement to become effective.
(b) The Company shall keep
any registration effected pursuant to Section 2(a)
continuously effective until the earliest of (i) 180 days
thereafter, (ii) the date on which all shares of Registrable Stock
registered in such registration have been sold pursuant to an
effective registration statement or Rule 144 and (iii) the date on
which, in the reasonable opinion of counsel to the Company, all of
the Registrable Stock registered in such registration may be sold
in accordance with Rule 144(k).
(c) Notwithstanding the
foregoing, the Company shall have the right (the “
Suspension Right ”) to defer any such filing under
Section 2(a) (or suspend sales under any registration
statement filed under Section 2(a) or defer the updating of
any such filed registration statement and suspend sales thereunder)
at any time or from time to time, for one period of not more than
90 days during any period of 365 days, if the Company shall furnish
to Endurance a certificate signed by the Chief Executive Officer of
the Company stating that, in the good faith judgment of the
Company, it would be detrimental to the Company and its
stockholders to file such registration statement or amendment
thereto at such time (or continue sales under a filed registration
statement) and therefore the Company has elected to defer the
filing of such registration statement (or suspend sales under a
filed registration statement), and the reasons for such
judgment.
Section 3. Piggyback
Registrations .
(a) If the Company proposes
to register any Common Stock or any securities convertible into
Common Stock under the Securities Act (other than pursuant to (i) a
registration on Form S-4 or any successor form or on Form S-3 in
the case of a resale prospectus delivered to selling shareholders
in any acquisition transaction structured as a private placement or
(ii) an offering of securities in connection with an employment
agreement or employee benefit, share dividend, share ownership or
dividend reinvestment plan) and the registration form to be used
may be used for the registration of Registrable Stock, the Company
shall give prompt written notice to Endurance of its intention to
effect such a registration (each, a “ Piggyback Notice
”) and, subject to Section 3(c) , the Company shall
include in such registration all or any portion of the Registrable
Stock as so designated by Endurance as directed by Endurance
pursuant to a written request for inclusion therein within 15
Business Days after the date of receipt by Endurance of the
Piggyback Notice (a “ Piggyback Registration ”).
Nothing herein shall affect the right of the Company to withdraw
any such registration in its sole discretion, whether or not
Endurance has elected to include Registrable Stock in such
registration.
(b) If a Piggyback
Registration is a primary underwritten registration and the
managing underwriters advise the Company in writing that, in their
opinion, registration of the number of securities requested to be
included in such registration would materially adversely
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affect the registration, offering and
sale of the Registered Stock, the Company shall include in such
registration (i) first, the securities the Company proposes to sell
and (ii) second, the Registrable Stock and similar securities
requested to be included in such registration pro rata according to
the total number of Registrable Stock and similar securities
requested to be registered among Endurance and other Persons who
have similar rights on the basis of the number of shares of Common
Stock requested to be included in such registration by each such
Person.
(c) If a Piggyback
Registration is a secondary underwritten registration on behalf of
third parties and the managing underwriters advise the Company in
writing that, in their opinion, registration of the number of
securities requested to be included in such registration would
materially adversely affect the registration, offering and sale of
the Registered Stock, the Company shall include in such
registration the Registrable Stock and similar securities requested
to be included in such registration pro rata according to the total
number of Registrable Stock and similar securities requested to be
registered among Endurance and other Persons who have similar
rights on the basis of the number of shares of Common Stock
requested to be included in such registration by each such
Person.
(d) In the case of an
underwritten Piggyback Registration, the Company will have the
right to select the investment banker(s) and manager(s) to
administer the offering, and Endurance’s right to be included
in such registration pursuant to this Section 3 shall be
conditioned on Endurance’s participation in such underwriting
and the inclusion of the Registrable Stock in the underwriting to
the extent provided in this Section 3 .
Section 4. Exchange Act
Registration . The Company (a) shall (i) remain organized under
the laws of Alabama or another State of the United States of
America and will continue to have its principal operations in
Alabama or another State of the United States of America and (ii)
cause its Common Stock to continue to be registered under Section
12(b) or 12(g) of the Exchange Act, (b) shall comply in all
respects with its reporting and filing obligations under the
Exchange Act, and shall not take any action or file any document
(whether or not permitted by the Exchange Act) to terminate or
suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act and (c) shall
otherwise remain eligible to file a registration statement on Form
S-3.
Section 5. Limitations on
Subsequent Registration Rights . The Company shall not, without
the consent of Endurance, enter into any agreement granting any
holder or prospective holder of any securities of the Company
registration rights with respect to such securities unless (i) such
new registration rights are on a pari passu basis with those rights
granted to Endurance hereunder, or (ii) such new registration
rights, are subordinate to the registration rights granted to
Endurance hereunder.
Section 6. Registration
Procedures .
(a) The Company shall provide
Endurance with a reasonable opportunity to review any registration
statement or prospectus relating to Registrable Stock or amendment
or supplement thereto prior to filing, if such registration
statement, prospectus, amendment or supplement contains information
about Endurance other than the name of Endurance, the number of
shares of Common Stock held by Endurance and the number of shares
being sold by Endurance, if applicable.
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(b) The Company shall
promptly notify Endurance of the occurrence of the following
events:
(i) when any registration
statement relating to the Registrable Stock or post-effective
amendment thereto filed with the SEC has become
effective;
(ii) the issuance by the SEC
of any request for amendment or supplement or the issuance of any
stop order suspending the effectiveness of any registration
statement relating to the Registrable Stock;
(iii) the Company’s
receipt of any notification of the suspension of the qualification
of any Registrable Stock covered by a registration statement for
sale in any jurisdiction; and
(iv) the existence of any
event, fact or circumstance that results in a registration
statement or prospectus relating to Registrable Stock or any
document incorporated therein by reference containing an untrue
statement of material fact or omitting to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading during the distribution of the Registrable
Stock.
The Company agrees to use its
best efforts to obtain the withdrawal of any order suspending the
effectiveness of any such registration statement or any
qualification as promptly as possible. Endurance agrees that upon
receipt of any notice from the Company of the occurrence of any
event of the type described in Sections 6(b)(ii) ,
(iii) or (iv) , to immediately discontinue its
disposition of Registrable Stock pursuant to any registration
statement relating to such Registrable Stock until Endurance
receives written notice from the Company that such disposition may
be made.
(c) The Company shall provide
to Endurance, at no cost to Endurance, such reasonable number of
copies of the registration statement and any amendment thereto used
to effect the registration of the Registrable Stock, each
prospectus contained in such registration statement or
post-effective amendment and any amendment or supplement thereto
and such other documents as Endurance may reasonably request in
order to facilitate the disposition of the Registrable Stock
covered by such registration statement. The Company consents to the
use of each such prospectus and any supplement thereto by
Endurance
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