Exhibit 10.1

 
 
 
December 19, 2011
 
W. Bibb Lamar Jr.
Chief Executive Officer
BancTrust Financial Group, Inc.
100 Saint Joseph Street, PO Box 3067
Mobile AL  36652
 
Dear Bibb:
 
This letter agreement (this “Agreement”) confirms certain terms related to the
contemplated investment (the “Investment”) by Capital Z Partners III, L.P.
(together with its affiliated entities, “Capital Z”) and Pine Brook Road
Partners (together with its affiliated entities, “Pine Brook”) in BankTrust (the
“Bank”) and BancTrust Financial Group Inc. (the “Company”).
 
In furtherance of the foregoing, the parties hereto agree as follows:
 
A.  Exclusivity.
 
i. No Solicitation of Transactions: From and after the date of this Agreement
until March 15, 2012 (the “Exclusivity End Date”), none of the Bank, the Company
or any of their respective directors, officers, employees, representatives,
agents or advisors shall (i) initiate, solicit or knowingly encourage any
inquiry, proposal or offer that constitutes, or could reasonably be expected to
result in, an Acquisition Proposal (as defined below), (ii) make or authorize
any statement, recommendation or solicitation in support of any Acquisition
Proposal, or (iii) engage in, continue or otherwise participate in any
discussions or negotiations regarding, or provide any non-public information to
any person relating to, an Acquisition Proposal.
 
For purposes of this Agreement, the term “Acquisition Proposal” means (a) any
proposal or offer with respect to a merger, joint venture, partnership,
consolidation, dissolution, liquidation, tender offer, recapitalization,
reorganization, rights offering, share exchange, business combination or similar
transaction, involving the Company or the Bank and (b) any acquisition by any
person resulting in, or proposal or offer, which, if consummated, would result
in, any person becoming the beneficial owner, directly or indirectly, of 25% or
more of the total voting power of any class of equity securities of the Company
or the Bank, or 25% or more of the consolidated total assets of the Company, in
each case, other than the transactions contemplated by this Agreement.
 
ii. Superior Proposal:  Notwithstanding the limitations set forth above, if,
after the date of this Agreement and before the Exclusivity End Date, the
Company receives an unsolicited Acquisition Proposal which did not result from
or arise in connection with a breach of this Agreement, and which the Company’s
Board of Directors determines in good faith, after consultation with the
Company’s outside legal and financial advisors, either (1) constitutes a
Superior Proposal (as defined below) or (2) could reasonably be expected to
result in a Superior Proposal, the Company may terminate this Agreement to
negotiate a definitive acquisition agreement (an “Acquisition Agreement”) with
respect to any Superior Proposal; provided, that the Company shall have promptly
paid any amounts due pursuant to Paragraph D.ii., regardless of whether the
Company is successful in negotiating and/or signing an Acquisition Agreement.
 
 
 
 

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For purposes of this Agreement, the term “Superior Proposal” means a bona fide
written Acquisition Proposal that (1) relates to the acquisition by any third
party or parties of any of (i) a majority of the outstanding common stock of the
Company, by tender or exchange offer, merger or otherwise, or (ii) all or
substantially all of the consolidated total assets of the Company, (2) is on
terms that the Company’s Board of Directors determines in good faith, after
consultation with the Company’s financial and legal advisors and taking into
account all the terms and conditions of such proposal and this Agreement, are
more favorable to the Company from a financial point of view than the Investment
and (3) is, in the reasonable judgment of the Company’s Board of Directors,
reasonably capable of being completed on its stated terms, taking into account
all financial, regulatory, legal and other aspects of such inquiry, proposal or
offer and the third party or parties making the inquiry, proposal or offer.
 
B.  Definitive Investment Agreement:  The parties agree to work in good faith to
sign and execute definitive documentation (the “Investment Agreement”) for the
Investment during the period through the Exclusivity End Date, and will sign the
Investment Agreement at the earliest mutually agreed upon time.
 
C.  Termination:  This Agreement may be terminated as follows:
 
i. By Capital Z or Pine Brook: upon written notice to the Company, if, prior to
the Exclusivity End Date, there has been a willful breach of the exclusivity
covenant set forth in Paragraph A.i. above; and
 
ii. By Company:  (a) in accordance with Paragraph A.ii., and (b) upon written
notice to Capital Z and Pine Brook, if the parties have not prior to the
Exclusivity End Date entered into the Investment Agreement.
 
D.  Expenses and Early Termination Fee:
 
i. Expenses:  the Company shall bear, and upon request by either Cap Z or Pine
Brook shall promptly reimburse Capital Z or Pine Brook, as applicable, for all
reasonable out-of-pocket expenses incurred in connection with the investigation,
negotiation, execution and consummation of the transactions contemplated by this
Agreement and the Investment Agreement (including without limitation fees and
expenses of attorneys and accounting, financial, tax and other advisers, and any
filing fees incurred by or on behalf of Capital Z and/or Pine Brook); provided,
that  the Company’s reimbursement obligation to Capital Z and Pine Brook shall
not exceed in the aggregate $625,000.
 
ii. Early Termination Fee:  If, before the Exclusivity End Date, either Capital
Z or Pine Brook terminates this Agreement in accordance with Paragraph C.i. or
the Company terminates this Agreement pursuant to Paragraph C.ii.(a), the
Company shall pay to Capital Z and Pine Brook within three (3) business days
after receipt of the written notice described in Paragraph C.i. above or prior
to or with delivery of the notice described in Paragraph  A.ii. above, as
applicable, an aggregate amount (the “Early Termination Fee”) equal to
$1,750,000.
 
 
 

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           iii.  Miscellaneous:  The Early Termination Fee, if due and payable
hereunder, shall be in addition to the expenses paid by the Company to Capital Z
and Pine Brook pursuant to Paragraph D.i.  The payment of the Early Termination
Fee by the Company to Capital Z and Pine Brook constitutes liquidated damages
and not a penalty, and together with expenses payable pursuant to Paragraph D.i.
shall be the sole monetary remedy of Capital Z or Pine Brook in the event of
termination of this Agreement pursuant to either Paragraph C.i. or C.ii.(a), as
applicable.  There shall be no Early Termination Fee payable in the event this
Agreement is terminated pursuant to Paragraph C.ii.(b).  Notwithstanding
anything else contained herein, the Early Termination Fee, if due and payable
hereunder, and the expenses payable pursuant to Paragraph D.i. shall be a joint,
but not several, obligation of both BankTrust and the Company.
 
E. Applicable Law:  This Agreement and any disputes arising under or related
thereto (whether for breach of contract, tortious conduct or otherwise) shall be
governed and construed in accordance with the laws of the State of New York,
without reference to its conflicts of law principles.
 
F.  Counterparts:  This Agreement may be executed in counterparts, which
together will constitute one and the same instrument.
 
Please confirm that the foregoing is in accordance with your understanding and
agreement by signing a copy of this letter agreement in the space provided
below.
 
 

  Very truly yours,         CAPITAL Z         By:     Capital Z Partners III GP,
Ltd.,         its ultimate general partner         By:     /s/ Brad Cooper  
       Name:  Brad Cooper          Title:  Managing Partner         PINE BROOK  
      By:             /s/ Robert E. Glanville          Name:  Robert E.
Glanville          Title:  Executive Vice President         By: 
 __________________________________________________     Name:
_____________________________________________    
Title:   _____________________________________________        

 
 
 
 

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Accepted and agreed as of the date first above written:
 
BANKTRUST

 

                 By: /s/ F. Michael Johnson      Name:  F. Michael Johnson    
 Title: Executive Vice President             BANCTRUST FINANCIAL GROUP INC.    
               By:  /s/ F. Michael Johnson      Name: F. Michael Johnson    
 Title:  Executive Vice President