INVESTOR RIGHTS AGREEMENT
Exhibit 99.2
THIS
INVESTOR RIGHTS AGREEMENT (this “Agreement”) is made
as of February 22, 2008, by and between Aldabra 2 Acquisition Corp., a
Delaware corporation and which shall be renamed as “Boise Inc.” promptly
following the Closing (the “Company”) and each of
the following Persons: Boise Cascade, L.L.C., a Delaware limited liability
company (“Boise”), Boise
Cascade Holdings, L.L.C., a Delaware limited liability company (“BCH”), certain
directors and officers of the Company and other Persons who are shareholders of
the Company on the date hereof and who are signatories to this Agreement under
the heading “Aldabra Shareholders” on the signature pages hereto (the
“Aldabra
Shareholders”), and each other Person who becomes a party to this
Agreement after the date hereof pursuant to Section 14(e).
Certain capitalized terms used herein are defined in Section 12.
The
Company, Boise and certain other Persons are parties to that certain Purchase
and Sale Agreement, dated as of September 7, 2007 (as amended, modified,
supplemented or waived from time to time, the “Purchase Agreement”)
pursuant to which the Company is acquiring the Business (as such term is defined
in the Purchase Agreement) and, in partial consideration therefor, Boise is
receiving shares of Common Stock of the Company.
The Aldabra Shareholders own shares of Common Stock of the Company and warrants
exercisable for shares of Common Stock and are agreeing to the covenants herein
as a condition to the obligation of Boise to consummate the transactions
contemplated by the Purchase Agreement.
The execution and delivery of this Agreement by the Company is a condition to
Boise’s obligations under the Purchase Agreement, and the execution and delivery
of this Agreement by Boise is a condition to the Company’s obligations under the
Purchase Agreement.
The
parties hereto, intending to be legally bound, hereby agree as
follows:
1. Demand
Registrations.
(a) Requests for
Registration. At any time and from time to time after the date
hereof, holders of Registrable Securities may, to the extent permitted in
accordance with Section 1(b) and
Section 1(c) hereof,
request registration under the Securities Act of all or any portion of their
Registrable Securities (i) on Form S-1 or any similar long-form
registration (“Long-Form Registrations”)
and/or (ii) on Form S-2 or S-3 (including pursuant to Rule 415
under the Securities Act) or any similar short-form registration (“Short-Form Registrations”).
All registrations requested pursuant to this Section 1(a) are
referred to herein as “Demand
Registrations”. Each request for a Demand Registration shall
specify the approximate number of Registrable Securities requested to be
registered. The Company shall give prompt written notice of such requested
registration to all other holders of Registrable Securities (which notice shall
be given at least 20 days prior to the date the applicable registration
statement is to be filed) and, subject to the remainder of this Section 1, shall
include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company’s
notice. Notwithstanding the provisions of this Section 1(a) to
the contrary, as long as the Company determines that such delay would not impair
the ability of holders of Registrable Securities to participate in such
registration (e.g., because the registration statement therefor is likely to be
reviewed by the Securities and Exchange Commission and/or such offering will not
be completed until at least 20 days after the registration statement therefor is
filed), at the request of the holders requesting such registration, the Company
shall delay the notice of a Demand Registration requested in accordance with
this Section 1 until
the day after the registration statement with respect to such Demand
Registration is filed, in which
case,
subject to the remainder of this Section 1, the
Company shall include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company’s notice;
provided that
in no event shall such Demand Registration be closed unless such notice has been
provided at least 20 days prior to the closing thereof.
Notwithstanding anything herein to the contrary, unless otherwise consented to
by the holders of Registrable Securities initially requesting such registration,
no other holder to whom such notice is provided may include in such Demand
Registration a greater percentage of such holder’s Registrable Securities than
the percentage of Registrable Securities included by the holders requesting such
registration.
(b)
Long-Form Registrations.
The Boise Majority Holders shall be entitled to request five
(5) Long-Form Registrations and the Aldabra Majority Holders shall be
entitled to request two (2) Long-Form Registrations; provided that the
aggregate offering value of the Registrable Securities requested to be
registered in any Long-Form Registration must equal at least
$25,000,000. All Long-Form Registrations shall be underwritten
registrations if requested by the holders of a majority of the Registrable
Securities initially requesting such registration. The Company shall pay
all Registration Expenses in connection with any registration initiated as a
Long-Form Registration, whether or not it becomes effective. A
registration shall not count as one of the permitted
Long-Form Registrations until it has become effective and no registration
shall count as one of the permitted Long-Form Registrations unless the
holders of Registrable Securities are able to register and sell at least 90% of
the Registrable Securities requested to be included in such registration within
the price range acceptable to the holders of a majority of the Registrable
Securities initially requesting registration (with it being understood and
agreed that a holder of Registrable Securities instituting a Demand Registration
shall be entitled to withdraw his, her or its request to effect a
Long-Form Registration at any time prior to the effectiveness thereof, in
which case such registration shall not proceed with respect to any holder and
such registration shall not thereafter count as one of the permitted
Long-Form Registrations). In no event shall any holder of Registrable
Securities have liability to another for determining to withdraw its request for
registration.
(c)
Short-Form Registrations.
In addition to the Long-Form Registrations provided pursuant to Section 1(b),
the Boise Majority Holders shall be entitled to request an unlimited number of
Short-Form Registrations, and the Aldabra Majority Holders shall be
entitled to request an unlimited number of Short-Form Registrations, and,
in each case, the Company shall pay all Registration Expenses provided that the
aggregate offering value of the Registrable Securities requested to be
registered in any Short-Form Registration must equal at least
$5,000,000. The Company shall use its reasonable best efforts to make
Short-Form Registrations on Form S-3 available for the sale of
Registrable Securities as promptly as practicable under applicable law.
Each of the Boise Majority Holders and the Aldabra Majority Holders may, in
connection with any Demand Registration requested by such holders that is a
Short-Form Registration, require the Company to file such
Short-Form Registration with the Securities and Exchange Commission in
accordance with and pursuant to Rule 415 under the Securities Act (or any
successor rule then in effect) (a “Shelf
Registration”).
(d)
Priority on Demand
Registrations. The Company shall not include in any Demand
Registration any securities which are not Registrable Securities without the
prior written consent of the holders of at least 50% of the Registrable
Securities included in such registration. If a Demand Registration is an
underwritten offering and the managing underwriters advise the Company that in
their opinion the number of Registrable Securities and, if permitted hereunder,
other securities requested to be included in such offering exceeds the number of
Registrable Securities and other securities, if any, which can be sold in an
orderly manner in such offering within the price range acceptable to the holders
of a majority of the Registrable Securities initially requesting registration,
the Company will include in such registration (i) first, the number of
Registrable Securities requested to be included in such
registration
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which in
the opinion of such underwriters can be sold in such manner in the acceptable
price range, pro rata among the respective holders thereof on the basis of the
number of Registrable Securities owned by each such holder and (ii) second,
other securities requested to be included in such Demand Registration, pro rata
among the holders of such securities on the basis of the number of such
securities owned by each such holder; provided, however,
that in the event that any holder of Aldabra Registrable Securities was
prevented from participating in a Demand Registration or Piggyback Registration
on or prior to the date the Aldabra Registrable Securities are released from
escrow (a “Prior
Registration”) as a result of his, her or its shares being held in a
share escrow account, the pro rata share referenced in clause (i) shall be,
for each holder of Registrable Securities requesting inclusion of Registrable
Securities in the first Demand Registration after the date the Aldabra
Registrable Securities are released from escrow (the “Escrow Release
Date”), determined as such holder’s Revised Pro Rata Share; provided further,
however that the foregoing proviso shall be disregarded if the Revised Pro Rata
Share was applied in a Piggyback Registration prior to such Demand
Registration. Notwithstanding anything herein to the contrary, if the
managing underwriters determine that the inclusion of the number of
Aldabra Registrable Securities or Registrable Securities held by management of
the Company proposed to be included in any such offering would adversely affect
the marketability of such offering, the Company may exclude such number of
Aldabra Registrable Securities or Registrable Securities held by management as
necessary or desirable to negate such adverse impact; provided that the
provisions of this sentence shall not, to the extent applicable to holders of
Aldabra Registrable Securities, apply in a Demand Registration effected by
holders of Aldabra Registrable Securities in accordance with the first sentence
of Section 1(b) or
the first sentence of Section 1(c).
Any Persons other than holders of Registrable Securities who participate in
Demand Registrations which are not at the Company’s expense must pay their share
of the Registration Expenses as provided in Section 5
hereof.
(e)
Restrictions on Demand
Registrations. The Company shall not be obligated to effect any
Demand Registration within 90 days after the effective date of a previous Demand
Registration. The Company may postpone for up to 60 days the filing or the
effectiveness of a registration statement for a Demand Registration if the
Company’s Board determines in its reasonable good faith judgment that such
Demand Registration would reasonably be expected to have a material adverse
effect on any proposal or plan by the Company or any of its Subsidiaries to
engage in any acquisition of assets or stock from a third party (other than in
the ordinary course of business) or any merger, consolidation, tender offer,
recapitalization, reorganization or similar transaction or require the Company
to disclose any material nonpublic information which would reasonably be likely
to be detrimental to the Company and its Subsidiaries; provided that in such
event, the holders of Registrable Securities initially requesting such Demand
Registration shall be entitled to withdraw such request and, if such request is
withdrawn, such Demand Registration shall not count as one of the permitted
Demand Registrations hereunder and the Company shall pay all Registration
Expenses in connection with such registration; provided further that
in no event shall the restrictions set forth in this sentence be deemed to apply
to a redemption or repurchase of, or plan to redeem or repurchase, capital
stock, options or warrants of the Company. The Company may delay a Demand
Registration hereunder only once in any twelve-month period. In addition,
notwithstanding any provision herein to the contrary, neither the Boise Majority
Holders, on the one hand, or the Aldabra Majority Holders, on the other hand,
shall be entitled to request any Demand Registration otherwise permitted to be
requested hereunder by such group within the twelve (12) month period following
any request by such group for a Demand Registration in which (i) the
aggregate offering value of the Registrable Securities of such group requested
to be registered by such group in such prior Demand Registration was less than
$25,000,000 and/or (ii) such group requested that any of its Registrable
Securities consisting of warrants exercisable for shares of Common Stock be
included in such prior Demand Registration.
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(f) Selection of
Underwriters. The holders of a majority of the Registrable
Securities requesting a Demand Registration shall be entitled to select the
underwriters to manage such Demand Registration.
2. Piggyback
Registrations.
(a)
Right to
Piggyback. Whenever the Company proposes to register any of its
equity securities (including any proposed registration of the Company’s
securities by any third party) under the Securities Act (other than
(i) pursuant to a Demand Registration, which is governed by Section 1, or
(ii) pursuant to a registration on Form S-4 or S-8 or any successor or
similar forms), whether or not for sale for its own account, and the
registration form to be used may be used for the registration of Registrable
Securities (a “Piggyback
Registration”), the Company shall give prompt written notice to all
holders of Registrable Securities of its intention to effect such a registration
(which notice shall be given at least 20 days prior to the date the applicable
registration statement is to be filed) and, subject to Sections 2(c) and
2(d), shall
include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company’s
notice. Notwithstanding the provisions of this Section 2(a) to
the contrary, as long as the Company determines that such delay would not impair
the ability of holders of Registrable Securities to participate in such
registration (e.g., because the registration statement therefor is likely to be
reviewed by the Securities and Exchange Commission and/or such offering will not
be completed until at least 20 days after the registration statement therefor is
filed), the Company may delay the notice of a Piggyback Registration until the
day after the registration statement with respect to such Piggyback Registration
is filed, in which case, subject to the remainder of this Section 2, the
Company shall include in such registration (and in all related registrations and
qualifications under state blue sky laws or in compliance with other
registration requirements and in any related underwriting) all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within 15 days after the receipt of the Company’s notice;
provided that
in no event shall such Demand Registration be closed unless such notice has been
provided at least 20 days prior to the closing thereof.
(b)
Piggyback
Expenses. Subject to the qualifications set forth in Section 5(b),
the Registration Expenses of the holders of Registrable Securities shall be paid
by the Company in all Piggyback Registrations.
(c)
Priority on Primary
Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and the managing underwriters
advise the Company that in their opinion the number of securities requested to
be included in such registration exceeds the number which can be sold in an
orderly manner in such offering within a price range acceptable to the Company,
the Company shall include in such registration (i) first, the securities
the Company proposes to sell, (ii) second, the Registrable Securities
requested to be included in such registration, pro rata among the holders of
such Registrable Securities on the basis of the amount of such securities owned
by each such holder, and (iii) third, the other securities requested to be
included in such registration pro rata among the holders of such securities on
the basis of the amount of such securities shares owned by each such holder;
provided,
however, that in the event that any holder of Aldabra Registrable Securities was
prevented from participating in a Prior Registration as a result of his, her or
its shares being held in a share escrow account, the pro rata share referenced
in clause (ii) shall be, for each holder of Registrable Securities
requesting inclusion of Registrable Securities in the first Piggyback
Registration after the Escrow Release Date, determined as such holder’s Revised
Pro Rata Share; provided further,
however that the foregoing proviso shall be disregarded if the Revised Pro Rata
Share was applied in a Demand Registration or another Piggyback Registration
prior to such Piggyback Registration. Notwithstanding anything herein
to
4
the
contrary, if the managing underwriters determine that the inclusion of the
Aldabra Registrable Securities or Registrable Securities held by management of
the Company proposed to be included in any such offering would adversely affect
the marketability of such offering, the Company may exclude such number of
Aldabra Registrable Securities or Registrable Securities held by management of
the Company pro rata as necessary or desirable to negate such adverse
impact.
(d)
Priority on Secondary
Registrations. If a Piggyback Registration is an underwritten
secondary registration on behalf of holders of the Company’s securities other
than a Demand Registration (a “Secondary
Registration”), and the managing underwriters advise the Company that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold without adversely affecting
the marketability of the offering, the Company shall include in such
registration (i) first, except to the extent otherwise previously agreed to
by holders of a majority of the
Registrable Securities, the securities requested to be included therein by the
holders requesting such registration, together with the Registrable Securities
requested to be included in such registration, pro rata among the holders of
such securities and Registrable Securities on the basis of the amount of such
securities owned by each such holder, and (ii) second, other securities
requested to be included in such registration pro rata among the holders of such
securities on the basis of the amount of such securities owned by each such
holder; provided, however,
that in the event that any holder of Aldabra Registrable Securities was
prevented from participating in a Prior Registration as a result of his, her or
its shares being held in a share escrow account, the pro rata share referenced
in clause (i) shall be, for each holder of Registrable Securities
requesting inclusion of Registrable Securities in the first Piggyback
Registration after the Escrow Release Date, determined as such holder’s Revised
Pro Rata Share; provided further,
however that the foregoing proviso shall be disregarded if the Revised Pro Rata
Share was applied in a Demand Registration or another Piggyback Registration
prior to such Piggyback Registration. Notwithstanding anything herein to
the contrary, if the managing underwriters determine that the inclusion of the
Aldabra Registrable Securities or Registrable Securities held by management of
the Company proposed to be included in any such offering would adversely affect
the marketability of such offering, the Company may exclude such number of
Aldabra Registrable Securities or Registrable Securities held by management of
the Company pro rata as necessary or desirable to negate such adverse
impact.
(e)
Selection of
Underwriters. If any Piggyback Registration is an underwritten
offering, the Company will have the right to select the investment
banker(s) and manager(s) for the offering.
(f)
Obligations of
Seller. During such time as any holder of Registrable Securities may be
engaged in a distribution of securities pursuant to an underwritten Piggyback
Registration, such holder shall distribute such securities only under the
registration statement and solely in the manner described in the registration
statement.
(g)
Right to Terminate
Registration. The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 2
whether or not any holder of Registrable Securities has elected to include
securities in such registration. The Registration Expenses of such
withdrawn registration shall be borne by the Company in accordance with Section 5
hereof.
3. Holdback
Agreements.
(a)
To the extent not inconsistent with applicable law, each holder of Registrable
Securities shall not sell, transfer, make any short sale, grant any option for
the purchase, or enter into any hedging or similar transaction with the same
economic effect as a sale (including sales pursuant to Rule 144) (a “Sale Transaction”) of
equity securities of the Company, or any securities, warrants, options or rights
convertible into or exchangeable or exercisable for such securities, during the
seven days prior to
5
and the
90-day period beginning on the effective date of all underwritten Demand
Registrations and all underwritten Piggyback Registrations, except as part of
such underwritten registration or unless the underwriters managing such public
offering agree in writing; provided that, in
each case, such restrictions with respect to a particular Demand Registration or
Piggyback Registration (as applicable) shall automatically lapse ten
(10) days after such registration is withdrawn; provided further
that, in connection with a Demand Registration or any Piggyback Registration,
the holders of Registrable Securities requesting such registration shall be
entitled, by notice to the holders of Registrable Securities, to begin the
lock-up period for each holder of Registrable Securities on the date that the
registration statement with respect to such Demand Registration is filed with
the Securities and Exchange Commission or such later date after the filing of,
but prior to the effectiveness of, such registration statement as may be
determined by the holders of Registrable Securities requesting such Demand
Registration. Furthermore, upon notice from any holder(s) of
Registrable Securities subject to a Shelf Registration and who are otherwise
entitled to initiate a Shelf Registration hereunder that such
holder(s) intend to effect an underwritten distribution of Registrable
Securities pursuant to such Shelf Registration (upon receipt of which, the
Company will promptly notify all other holders of Registrable Securities of the
date of the commencement of such distribution), to the extent not inconsistent
with applicable law, each holder of Registrable Securities shall not engage in a
Sale Transaction of equity securities of the Company, or any securities,
warrants, options or rights convertible into or exchangeable or exercisable for
such securities, during the seven days prior to and the 90-day period beginning
on the date of the commencement of such distribution. If
(1) the Company issues an earnings release or other material news or a
material event relating to the Company and its Subsidiaries occurs during the
last 17 days of any holdback period described in clause (ii) above, or
(2) prior to the expiration of any holdback period described in clause
(ii) above, the Company announces that it will release earnings results
during the 16-day period beginning upon the expiration of such period, then to
the extent necessary for a managing or co-managing underwriter of a registered
offering required hereunder to comply with NASD Rule 2711(f)(4), the
holdback periods described in clauses (i) and (ii) above shall be
extended until 18 days after the earnings release or the occurrence of the
material news or event, as the case may be (such period referred to herein as
the “Holdback
Extension”). The Company may impose stop-transfer instructions with
respect to the securities subject to the foregoing restriction until the end of
such period, including any period of Holdback Extension.
(b)
Notwithstanding anything herein to the contrary, the restrictions in Section 3(a) shall
not apply in the case of any holder of Registrable Securities, to the extent
that such holder provides to the Company an opinion of nationally recognized
outside counsel to the effect that such holder is prohibited by applicable law
or exercise of fiduciary duties from agreeing to withhold Registrable Securities
from sale or is acting in its capacity as a fiduciary or investment
advisor. Without limiting the scope of the term “fiduciary,” a holder
shall be deemed to be acting as a fiduciary or an investment advisor if its
actions or the Registrable Securities proposed to be sold are subject to the
Employee Retirement Income Security Act of 1974, as amended, or the Investment
Company Act of 1940, as amended, or if such Registrable Securities are held in a
separate account under applicable insurance law or regulation.
(c)
The Company (i) shall not effect any public sale or distribution of its
equity securities, or any securities convertible into or exchangeable or
exercisable for such securities, during (x) the seven days prior to and the
90-day period beginning on the effective date of all underwritten Demand
Registrations, underwritten Piggyback Registrations, except as part of such
underwritten registration or unless the underwriters managing such public
offering agree in writing and (y) upon notice from any holder(s) of
Registrable Securities subject to a Shelf Registration and who are otherwise
entitled to initiate a Shelf Registration hereunder that such
holder(s) intend to effect an underwritten distribution of Registrable
Securities pursuant to such Shelf Registration (upon receipt of which, the
Company will promptly notify all other holders of Registrable Securities of the
date of the commencement of such distribution), the seven days prior to and the
90-day period beginning on the date of the commencement of such distribution,
unless, in each case, the underwriters managing the registered public
offering
6
otherwise
agree in writing (and, in each case, except as part of such underwritten
registration or pursuant to registrations on Form S-8 or any successor
form), and (ii) shall use reasonable best efforts to cause each holder of
at least 1% (on a fully-diluted basis) of its Common Stock, or any securities
convertible into or exchangeable or exercisable for Common Stock, purchased from
the Company at any time after the date of this Agreement (other than in a
registered public offering) to agree not to effect any public sale or
distribution (including sales pursuant to Rule 144) of any such securities
during such period (as extended by any Holdback Extension), except as part of
such underwritten registration, if otherwise permitted, unless the underwriters
managing the registered public offering otherwise agree in writing.
Notwithstanding clause (i)(x) foregoing, in connection with a Demand
Registration, the holders of Registrable Securities requesting such registration
shall be entitled, by notice to the Company, to begin the lock-up period for the
Company on the date that the registration statement with respect to such Demand
Registration is filed with the Securities and Exchange Commission or such later
date after the filing of, but prior to the effectiveness of, such registration
statement as may be determined by the holders of Registrable Securities
requesting such Demand Registration.
(d)
Each of the Aldabra Shareholders and each holder of Registrable Securities that
is a member of the Company’s management agrees that the restrictions on transfer
in this Section 3 are in
addition to, and not in lieu of, any other restrictions on transfer that such
Aldabra Shareholder or such management holder may have agreed to with respect to
its shares of Common Stock and warrants exercisable for Common
Stock.
4. Registration
Procedures. Whenever the holders of Registrable Securities have
requested that any Registrable Securities be registered pursuant to this
Agreement, the Company shall use its reasonable best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company shall
as expeditiously as practicable:
(a)
in accordance with the Securities Act and all applicable rules and
regulations promulgated thereunder, prepare and file with the Securities and
Exchange Commission a registration statement, and all amendments and supplements
thereto and related prospectuses, with respect to such Registrable Securities
and use its reasonable best efforts to cause such registration statement to
become effective (provided that before
filing a registration statement or prospectus or any amendments or supplements
thereto, the Company shall furnish to the counsel selected by the holders of a
majority of the Registrable Securities covered by such registration statement
copies of all such documents proposed to be filed), and include in any
Short-Form Registration such additional information reasonably requested by
a majority of the Registrable Securities registered under the applicable
registration statement, or the underwriters, if any, for marketing purposes,
whether or not required by applicable securities laws, but only to the extent
such information does not contravene applicable securities laws or include
information not readily in the possession of the Company;
(b)
notify each holder of Registrable Securities of the effectiveness of each
registration statement filed hereunder and prepare and file with the Securities
and Exchange Commission such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective for a period of not less than 180
days (or in the case of a Shelf Registration, ending on the earliest of
(1) the date on which all Registrable Securities have been sold pursuant to
the Shelf Registration or have otherwise ceased to be Registrable Securities,
(2) the second anniversary of the effective date of such Shelf
Registration, (3) such other date determined by the holders of a majority
of the Registrable Securities requesting such Shelf Registration and
(4) when all such Registrable Securities are freely saleable under
Rules 144 and 145 under the Securities Act) and comply with the provisions
of the Securities Act with respect to the disposition of all securities covered
by such registration statement during such period in accordance
with
7
the
intended methods of disposition by the sellers thereof set forth in such
registration statement; provided, however, that at any
time, upon written notice to the participating holders of Registrable Securities
and for a period not to exceed sixty (60) days thereafter (the “Suspension Period”),
the Company may delay the filing or effectiveness of any registration statement
or suspend the use or effectiveness of any registration statement (and the
holders of Registrable Securities hereby agree not to offer or sell any
Registrable Securities pursuant to such registration statement during the
Suspension Period) if the Company reasonably believes that there is or may be in
existence material nonpublic information or events involving the Company or any
of its Subsidiaries, the failure of which to be disclosed in the prospectus
included in the registration statement could result in a Violation (as defined
in Section 6(a)).
During any such Suspension Period, and as may be extended hereunder, the Company
shall use its reasonable best efforts to correct or update any disclosure
causing the Company to provide notice of the Suspension Period and to file and
cause to become effective or terminate the suspension of use or effectiveness,
as the case may be, of the subject registration statement. In the event
that the Company shall exercise its right to delay or suspend the filing or
effectiveness of a registration hereunder, the applicable time period during
which the registration statement is to remain effective shall be extended by a
period of time equal to the duration of the Suspension Period. The Company
may extend the Suspension Period for an additional consecutive sixty (60) days
with the consent of the holders of a majority of the Registrable Securities
registered under the applicable registration statement, which consent shall not
be unreasonably withheld. If so directed by the Company, all holders of
Registrable Securities registering shares under such registration statement
shall (i) not offer to sell any Registrable Securities pursuant to the
registration statement during the period in which the delay or suspension is in
effect after receiving notice of such delay or suspension; and (ii) use
their reasonable best efforts to deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies then in such holders’
possession, of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice;
(c)
furnish to each seller of Registrable Securities thereunder such number of
copies of such registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement (including each
preliminary prospectus), each Free Writing Prospectus and such other documents
as such seller may reasonably request in order to facilitate the disposition of
the Registrable Securities owned by such seller;
(d)
use its reasonable best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection or (ii) consent to general
service of process in any such jurisdiction or (iii) subject itself to
taxation in any such jurisdiction);
(e)
notify each seller of such Registrable Securities, (i) promptly after it
receives notice thereof, of the date and time when such registration statement
and each post-effective amendment thereto has become effective or a prospectus
or supplement to any prospectus relating to a registration statement has been
filed and when any registration or qualification has become effective under a
state securities or blue sky law or any exemption thereunder has been obtained,
(ii) promptly after receipt thereof, of any request by the Securities and
Exchange Commission for the amendment or supplementing of such registration
statement or prospectus or for additional information, and (iii) at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, the Company shall
prepare a supplement or amendment to such prospectus so that, as
8
thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not contain an untrue statement of a material fact or omit to state any
fact necessary to make the statements therein not misleading;
(f)
prepare and file promptly with the Securities and Exchange Commission, and
notify such holders of Registrable Securities prior to the filing of, such
amendments or supplements to such registration statement or prospectus as may be
necessary to correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be delivered under the
Securities Act, when any event has occurred as the result of which any such
prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and,
in case an of such holders of Registrable Securities or any underwriter for any
such holders is required to deliver a prospectus at a time when the prospectus
then in circulation is not in compliance with the Securities Act or the
rules and regulations promulgated thereunder, the Company shall use its
reasonable best efforts to prepare promptly upon request of any such holder or
underwriter such amendments or supplements to such registration statement and
prospectus as may be necessary in order for such prospectus to comply with the
requirements of the Securities Act and such rules and
regulations;
(g)
cause all such Registrable Securities to be listed on each securities exchange
on which similar securities issued by the Company are then listed;
(h)
provide a transfer agent and registrar for all such Registrable Securities not
later than the effective date of such registration statement;
(i)
enter into and perform such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, participation in “road
shows,” investor presentations and marketing events and effecting a stock split
or a combination of shares);
(j)
make available for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(k)
take all reasonable actions to ensure that any Free-Writing Prospectus utilized
in connection with any Demand Registration or Piggyback Registration hereunder
complies in all material respects with the Securities Act, is filed in
accordance with the Securities Act to the extent required thereby, is retained
in accordance with the Securities Act to the extent required thereby and, when
taken together with the related prospectus, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading;
(l)
otherwise use its reasonable best efforts to comply with all applicable
rules and regulations of the Securities and Exchange Commission, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve months beginning with
the first day of the Company’s first full calendar quarter after the effective
date of the
9
registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158
thereunder;
(m)
permit any holder of Registrable Securities which holder, in its sole and
exclusive judgment, might be deemed to be an underwriter or a controlling person
of the Company, to participate in the preparation of such registration or
comparable statement and to require the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such holder and
its counsel should be included;
(n)
the Company agrees to file all reports and supplements which are required to be
filed by the Company under the Securities Act so that it may be eligible to
effect any registration of Registrable Securities on Form S-3 or any
comparable form, successor form or other form if such form is available for use
by the Company;
(o)
obtain one or more comfort letters, dated the effective date of such
registration statement (and, if such registration includes an underwritten
public offering, dated the date of the closing under the underwriting
agreement), signed by the Company’s independent public accountants (and, unless
waived in writing by holders of a majority of the Registrable Securities
participating in such registration, on which the holders of Registrable
Securities participating in such registration are expressly entitled to rely) in
the then-current customary form and covering such matters of the type
customarily covered from time to time by comfort letters as the holders of a
majority of the Registrable Securities being sold reasonably
request;
(p)
provide a legal opinion of the Company’s outside counsel (and, unless waived in
writing by holders of a majority of the Registrable Securities participating in
such registration, on which the holders of Registrable Securities participating
in such registration are expressly entitled to rely), dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), with respect to the registration statement, each
amendment and supplement thereto, the prospectus included therein (including the
preliminary prospectus) and such other documents relating thereto in the
then-current customary form and covering such matters of the type customarily
covered from time to time by legal opinions of such nature; and
(q)
use its reasonable best efforts to prevent the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any common stock included in such registration statement for
sale in any jurisdiction, and in the event of the issuance of any such stop
order or other such order the Company shall advise such holders of Registrable
Securities of such stop order or other such order promptly after it shall
receive notice or obtain knowledge thereof and shall use its reasonable best
efforts promptly to obtain the withdrawal of such order.
If any
such registration or comparable statement refers to any holder by name or
otherwise as the holder of any securities of the Company and if, in its sole and
exclusive judgment, such holder is or might be deemed to be an underwriter or a
controlling person of the Company, such holder shall have the right to require
(i) the insertion therein of language, in form and substance satisfactory
to such holder and presented to the Company in writing, to the effect that the
holding by such holder of such securities is not to be construed as a
recommendation by such holder of the investment quality of the Company’s
securities covered thereby and that such holding does not imply that such holder
shall assist in meeting any future financial requirements of the Company, or
(ii) in the event that such reference to such holder by name or otherwise
is not required by the Securities Act or any similar Federal statute then in
force, the deletion of the reference to such holder; provided that with
respect to this clause (ii) such holder shall furnish to the
10
Company
an opinion of counsel to such effect, which opinion and counsel shall be
reasonably satisfactory to the Company.
5. Registration
Expenses.
(a)
Subject to Section 5(b),
all expenses incident to the Company’s performance of or compliance with this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
travel expenses, filing expenses, messenger and delivery expenses, fees and
disbursements of custodians, fees and disbursements of counsel for the Company
and fees and disbursements of all independent certified public accountants,
underwriters (including, if necessary, a “qualified independent underwriter”
within the meaning of the rules of the National Association of Securities
Dealers, Inc.) (excluding underwriting discounts and commissions) and other
Persons retained by the Company (all such expenses being herein called “Registration
Expenses”), shall be borne by the Company, except as otherwise expressly
provided in this Agreement, except that the Company shall, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance
and the expenses and fees for listing the securities to be registered on each
securities exchange on which similar securities issued by the Company are then
listed or on the NASD automated quotation system (or any successor or similar
system).
(b)
In connection with each Demand Registration, each Piggyback Registration and
each Shelf Registration (and each underwritten distribution of Registrable
Securities pursuant to a Shelf Registration), the Company shall reimburse the
holders of Registrable Securities included in such registration for the
reasonable fees and disbursements of (i) one counsel (in addition to local
counsel) chosen by the holders of a majority of the Registrable Securities
included in such registration and (ii) each additional counsel retained by
any holder of Registrable Securities, but in the case of this
clause (ii) only to the extent such fees and disbursements were
incurred for the purpose of rendering a legal opinion on behalf of such holder
in connection with any underwritten Demand Registration, underwritten Piggyback
Registration or underwritten distribution of Registrable Securities pursuant to
a Shelf Registration). Otherwise, all fees and expenses of such counsel
shall be borne by the holder or holders of Registrable Securities for whom such
services were rendered.
(c)
To the extent Registration Expenses are not required to be paid by the Company
or, in accordance with the last sentence of Section 5(b),
borne by a particular holder of Registrable Securities, each holder of
securities included in any registration hereunder shall pay those Registration
Expenses allocable to the registration of such holder’s securities so included,
including any underwriting discounts or commissions, and any Registration
Expenses not so allocable shall be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered.
6. Indemnification.
(a)
The Company agrees to indemnify, to the extent permitted by law, each holder of
Registrable Securities, its officers and directors and each Person who controls
such holder (within the meaning of the Securities Act) against all losses,
claims, actions, damages, liabilities and expenses caused by any of the
following statements, omissions or violations (each a “Violation”) by the
Company: (i) any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus, preliminary prospectus or
Free-Writing Prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any
violation or alleged violation by the Company of the
11
Securities
Act or any other similar federal or state securities laws or any rule or
regulation promulgated thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance; provided that the
Company shall have no obligation to provide the indemnification set forth in
this Section 6(a) to
any holder to the extent such Violation arose from a statement provided in
writing to the Company by such holder for inclusion in such registration
statement, prospectus, preliminary prospectus or Free-Writing Prospectus or any
amendment thereof or supplement thereto. The Company shall pay to each
holder of Registrable Securities, its officers and directors and each Person who
controls such holder (within the meaning of the Securities Act) entitled to such
indemnification, as incurred, any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, except insofar as the same are caused
by or contained in any information furnished in writing to the Company by such
holder expressly for use therein. In connection with an underwritten
offering, the Company shall indemnify such underwriters, their officers and
directors and each Person who controls such underwriters (within the meaning of
the Securities Act) to the same extent as provided above with respect to the
indemnification of the holders of Registrable Securities.
(b)
In connection with any registration statement in which a holder of Registrable
Securities is participating, each such holder shall furnish to the Company in
writing such information and affidavits as the Company reasonably requests for
use in connection with any such registration statement or prospectus and, to the
extent permitted by law, shall indemnify the Company, its directors and officers
and each Person who controls the Company (within the meaning of the Securities
Act) against any losses, claims, damages, liabilities and expenses resulting
from any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such
holder; provided that the
obligation to indemnify shall be individual, not joint and several, for each
holder and shall be limited to the net amount of proceeds received by such
holder from the sale of Registrable Securities pursuant to such registration
statement.
(c)
Any Person entitled to indemnification hereunder shall (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification (provided that the
failure to give prompt notice shall not impair any Person’s right to
indemnification hereunder to the extent such failure has not prejudiced the
indemnifying party) and (ii) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If such defense is assumed, the indemnifying party
shall not be subject to any liability for any settlement made by the indemnified
party without its consent (but such consent shall not be unreasonably withheld,
conditioned or delayed). An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim shall not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim. In such instance, the conflicting indemnified parties shall have a right
to retain one separate counsel, chosen by the holders of a majority of the
Registrable Securities included in the registration, at the expense of the
indemnifying party. No indemnifying party, in the defense of such claim or
litigation, shall, except with the consent of each indemnified party, consent to
the entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
12
(d)
If the indemnification provided for in this Section 6 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party or is otherwise unenforceable with respect to any loss, claim, damage,
liability or action referred to herein, then the indemnifying party, in lieu of
indemnifying such indemnified party hereunder, shall contribute to the amounts
paid or payable by such indemnified party as a result of such loss, claim,
damage, liability or action in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other hand in connection with the statements or omissions which
resulted in such loss, claim, damage, liability or action as well as any other
relevant equitable considerations; provided that the
maximum amount of liability in respect of such contribution shall be limited, in
the case of each seller of Registrable Securities, to an amount equal to the net
proceeds actually received by such seller from the sale of Registrable
Securities effected pursuant to such registration. The relative fault of
the indemnifying party and of the indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The parties hereto agree
that it would not be just or equitable if the contribution pursuant to this
Section 6(d) were
to be determined by pro rata allocation or by any other method of allocation
that does not take into account such equitable considerations. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or expenses referred to herein shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending against any action or claim which is
the subject hereof. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who is not guilty of such fraudulent
misrepresentation.
(e)
The indemnification and contribution provided for under this Agreement shall
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party and shall survive the transfer of
securities.
(f)
No indemnifying party shall, except with the consent of the indemnified party,
consent to the entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof giving by the claimant or plaintiff to
such indemnified party of a release from all liability in respect to such claim
or litigation.
7. Participation in
Underwritten Registrations; Shelf Registrations.
(a)
Participation in
Underwritten Registrations.
(i)
No Person may participate in any registration hereunder which is underwritten
unless such Person (i) agrees to sell such Person’s securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements (including pursuant to any
over-allotment or “green shoe” option requested by the underwriters); provided that no
holder of Registrable Securities shall be required to sell more than the number
of Registrable Securities such holder has requested to include and
(ii) completes and executes all questionnaires, powers of attorney, custody
agreements, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements; provided that in no
event shall any holder of Registrable Securities be required to indemnify any
underwriter or other Person in any manner other than that which is specifically
set forth in Section 6(b) with
respect to its indemnification obligations to the Company and other holders of
Registrable Securities. Each holder of Registrable Securities agrees to
execute and deliver such other agreements as may be reasonably requested by the
Company and the lead
13
managing
underwriter(s) that are consistent with such holder’s obligations under
Section 3
or that are necessary to give further effect thereto. Without limiting any
other right or remedy to which a party hereto may be entitled, any holder of
Registrable Securities that does not comply with his, her or its obligations
under this Section 7(a)(i) shall
not be entitled to participate in the registration in question without violation
of such holder’s rights hereunder.
(ii)
Each Person that is participating in any registration hereunder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 4(e) above,
such Person will forthwith discontinue the disposition of its Registrable
Securities pursuant to the registration statement until such Person’s receipt of
the copies of a supplemented or amended prospectus as contemplated by such Section 4(e).
In the event the Company shall give any such notice, the applicable time period
mentioned in Section 4(b) during
which a Registration Statement is to remain effective shall be extended by the
number of days during the period from and including the date of the giving of
such notice pursuant to this Section 7(b) to
and including the date when each seller of a Registrable Security covered by
such registration statement shall have received the copies of the supplemented
or amended prospectus contemplated by Section 4(e).
(b)
Shelf
Take-Downs. At any time that a Shelf Registration is effective, if
any holder or group of holders of Registrable Securities delivers a notice to
the Company (a “Take-Down Notice”)
stating that it intends to effect an offering or distribution of all or part of
its Registrable Securities included by it on the Shelf Registration, whether
such offering or distribution is underwritten or non-underwritten (a “Shelf Offering”) and
stating the number of the Registrable Securities to be included in the Shelf
Offering, then the Company shall amend or supplement the Shelf Registration as
may be necessary in order to enable such Registrable Securities to be
distributed pursuant to the Shelf Offering (taking into account the inclusion of
Registrable Securities by any other holders thereof pursuant to this Section 7(b)).
In connection with any Shelf Offering:
(i)
the Company shall, promptly after receipt of a Take-Down Notice, deliver such
notice to all other holders of Registrable Securities included on such Shelf
Registration and permit each holder to include its Registrable Securities
included on the Shelf Registration in the Shelf Offering if such holder notifies
the proposing holders and the Company within three (3) days after delivery
of the Take-Down Notice to such holder, and
(ii)
in the event that the managing underwriter(s), if any, advises the Company in
writing that in its opinion the number of Registrable Securities to be included
in such Shelf Offering exceeds the number of Registrable Securities which can be
sold therein without adversely affecting the marketability of the offering, such
underwriter(s), if any, may limit the number of shares which would otherwise be
included in such take-down offering in the same manner as is described in Section 1(d).
(c)
Notwithstanding anything in this Section 7(b) to
the contrary, in no event shall any holder or group of holders be entitled to
effect a Shelf Offering unless the aggregate offering price for any such
offering or distribution is not less than $20,000,000. No holder of
Registrable Securities that has included Registrable Securities pursuant to a
Shelf Registration shall be entitled to sell shares included as part of a Shelf
Registration unless included as part of a Shelf Offering. Notwithstanding
anything herein to the contrary, unless otherwise consented to by the holders of
Registrable Securities initially requesting such Shelf Offering, no other holder
to whom such notice is provided may include in such Shelf Offering a greater
percentage of such holder’s Registrable Securities than the percentage of
Registrable Securities included by the holders requesting such Shelf
Offering.
14
8. Rule 144 and
Rule 144A Reporting. With a view to making available the
benefits of certain rules and regulations of the Securities and Exchange
Commission that may permit the sale of Registrable Securities to the public
without registration, the Company agrees at all times after the Company has
filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Exchange Act to
use its reasonable best efforts to: (a) make and keep public
information regarding the Company available as those terms are understood and
defined in Rule 144 and Rule 144A under the Securities Act;
(b) file with the Securities and Exchange Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and (c) so long as a holder owns any Registrable
Securities, furnish to the holder forthwith upon written request a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144 and Rule 144A, and of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the Company, and
such other reports and documents so filed as a holder may reasonably request in
availing itself of any rule or regulation of the Securities and Exchange
Commission allowing a holder to sell any such securities without
registration.
9. Other Rights and
Restrictions.
(a)
Approval of Certain
Activities. For as long as the holders of Boise Registrable Securities
own at least 33% of the shares of Common Stock of the Company issued to holders
of Boise Registrable Securities as of the date hereof (determined after giving
effect to the issuance of Common Stock to Boise under the Purchase Agreement and
as equitably adjusted for any stock splits, stock combinations, reorganizations,
exchanges, merger, recapitalizations or similar transaction after the date
hereof), the Company shall not, and shall not permit any Subsidiary to, and no
officer, employee or agent of the Company or any Subsidiary of the Company shall
take, any of the following actions without the affirmative written consent of
the Boise Majority Holders:
(i)
directly or indirectly declare or pay any dividends or make any distributions
upon any of its capital stock (or any series or class thereof) or other equity
securities, except that (a) the Company may declare and pay or make
(x) dividends or distributions payable in shares of Common Stock issued
ratably upon the outstanding shares of Common Stock and (y) dividends or
distributions payable in cash ratably upon the outstanding shares of Common
Stock and (b) any Subsidiary may declare and pay dividends or make
distributions to the Company or any wholly-owned direct or indirect Subsidiary
of the Company;
(ii)
directly or indirectly redeem, purchase or otherwise acquire, or permit any
Subsidiary to redeem, purchase or otherwise acquire, any of the Company’s or any
Subsidiary’s capital stock or other equity securities (including, without
limitation, warrants, options and other rights to acquire such capital stock or
other equity securities) or directly or indirectly redeem, purchase or make any
payments with respect to any stock appreciation rights, phantom stock plans or
similar rights or plans, except for (a) acquisitions of capital stock
pursuant to agreements or plans, including equity incentive agreements with
service providers, which allow the Company to repurchase shares of Common Stock
upon the termination of services or an exercise of the Company’s right of first
refusal upon a proposed transfer and (b) redemption, purchases or
acquisitions of Common Stock offered ratably to holders of the outstanding
shares of Common Stock.
(iii)
except as expressly contemplated by this Agreement and the Purchase Agreement,
authorize, issue or enter into any agreement providing for the issuance
(contingent or otherwise) of, (a) any notes or debt securities containing
equity or voting features (including, without limitation, any notes or debt
securities convertible into or exchangeable for capital stock or other equity
securities, issued in connection with the issuance of capital stock or other
equity
15
securities
or containing profit participation features) or (b) any capital stock or
other equity securities (or any securities convertible into or exchangeable for
any capital stock or other equity securities);
(iv)
make, or permit any Subsidiary to make, any loans or advances to, guarantees for
the benefit of, or investments in, any Person (other than the Company or a
wholly-owned direct or indirect Subsidiary of the Company) outside of the
ordinary course of business, except for (i) reasonable advances to
employees in the ordinary course of business, (ii) acquisitions permitted
pursuant to subparagraph (viii) below, (iii) investments having a
stated maturity no greater than one year from the date the Company or any
Subsidiary makes such investment in (1) obligations of the United States
government or any agency thereof or obligations guaranteed by the United States
government, (2) certificates of deposit of commercial banks having combined
capital and surplus of at least $50 million, (3) commercial paper with a
rating of at least “Prime-1” by Xxxxx’x Investors Service, Inc., or
(iv) loans for acquisitions of capital stock pursuant to agreements or
plans, including equity incentive agreements with service providers, which allow
the Company to repurchase shares of Common Stock upon the termination of
services or an exercise of the Company’s right of first refusal upon a proposed
transfer;
(v)
merge or consolidate with any Person;
(vi)
sell, lease or otherwise dispose of, or permit any Subsidiary to sell, lease or
otherwise dispose of, more than 25% of the consolidated assets of the Company
and its Subsidiaries (computed on the basis of book value, determined in
accordance with generally accepted accounting principles consistently applied,
or fair market value, determined by the Company’s board of directors in its
reasonable good faith judgment) in any transaction or series of related
transactions or sell or permanently dispose of any of its or any Subsidiary’s
Intellectual Property Rights (as defined in the Purchase
Agreement);
(vii)
liquidate, dissolve or effect a recapitalization or reorganization in any form
of transaction (including, without limitation, any reorganization into a limited
liability company, a partnership or any other non-corporate entity which is
treated as a partnership for federal income tax purposes);
(viii)
acquire or enter into, or permit any Subsidiary to acquire or enter into, any
interest in any company or business (whether by a purchase of assets, purchase
of stock, merger or otherwise), except acquisitions for purchase consideration
of not more than $50,000,000 in the aggregate, or any joint
venture;
(ix)
reclassify or recapitalize any securities of the Company or any of its
Subsidiaries;
(x)
enter into, or permit any Subsidiary to enter into, the ownership, active
management or operation of any line of business other than the lines of business
in which those entities are currently engaged and other activities reasonably
related thereto;
(xi)
make any amendment to or rescind (including, without limitation, in each
case by merger or consolidation) any provision of the certificate of
incorporation, articles of incorporation, bylaws or similar organizational
documents of the Company or any of its Subsidiaries, or file any resolution of
the board of directors, board of managers or similar
16
governing
body with the applicable secretary of state of the state of formation of the
Company or any of its Subsidiaries;
(xii)
enter into, amend, modify or supplement, or permit any Subsidiary to
enter into, amend, modify or supplement, any agreement, transaction, commitment
or arrangement with any of its or any Subsidiary’s officers, directors,
employees, stockholders or Affiliates or with any individual related by blood,
marriage or adoption to any such individual or with any entity in which any such
Person or individual owns a beneficial interest, except for customary employment
arrangements and benefit programs on reasonable terms and except as otherwise
expressly contemplated by this Agreement or the Purchase Agreement;
(xiii)
create, incur, guarantee, assume or suffer to exist, or permit any
Subsidiary to create, incur, guarantee, assume or suffer to exist, indebtedness
for borrowed money and/or capitalized lease obligations exceeding an aggregate
principal amount of $50,000,000 outstanding
at any time on a consolidated basis, other than pursuant to credit facilities in
effect on the date of this Agreement (and refinancings thereof in an aggregate
principal amount not in excess thereof) and other than for the making of capital
expenditures approved by the Company’s Board;
(xiv)
issue or sell, or permit any Subsidiary to issue or sell, any shares of the
capital stock, or rights to acquire shares of the capital stock, of any
Subsidiary to any Person other than the Company or a wholly-owned direct or
indirect Subsidiary of the Company;
(xv)
a Sale of the Company; and/or
(xvi)
agree to any of the foregoing.
(b)
Affirmative
Covenants. For as long as holders of Boise Registrable Securities
own at least 33% of the shares of Common Stock of the Company issued to holders
of Boise Registrable Securities as of the date hereof (determined after giving
effect to the issuance of Common Stock to Boise under the Purchase Agreement and
as equitably adjusted for any stock splits, stock combinations, reorganizations,
exchanges, merger, recapitalizations or similar transaction after the date
hereof), from and after the date hereof, the Company shall unless it has
received the prior written consent of Boise Majority Holders:
(i)
at all times cause to be done all things necessary to maintain, preserve and
renew its corporate existence and all material licenses, authorizations and
permits necessary to the conduct of its businesses;
(ii)
maintain and keep its material properties in good repair, working order and
condition, and from time to time make all necessary or desirable repairs,
renewals and replacements, so that its businesses may be properly and
advantageously conducted in all material respects at all times; provided that in no
event shall this Section 9(b) be
deemed to require the making of capital expenditures in excess of the amount
approved by the Company’s Board;
(iii)
pay and discharge when payable all taxes, assessments and governmental charges
imposed upon its properties or upon the income or profits therefrom (in each
case before the same becomes delinquent and before penalties accrue thereon) and
all claims for labor, materials or supplies which if unpaid would by law become
a lien, encumbrance or other restriction upon any of its property, unless
and to the extent that the same are being contested in good faith and by
appropriate proceedings and adequate reserves (as determined in
accordance
17
with
generally accepted accounting principles, consistently applied) have been
established on its books and financial statements with respect
thereto;
(iv)
comply with all other material obligations which it incurs pursuant to any
contract or agreement, whether oral or written, express or implied, as such
obligations become due, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books and financial
statements with respect thereto;
(v)
comply with all applicable laws, rules and regulations of all governmental
authorities, the violation of which would reasonably be expected to have a
material adverse effect upon the business, condition (financial or otherwise),
operating results, assets, liabilities, operations, business prospects or
customer, supplier or employee relations of the Company and its Subsidiaries
taken as a whole;
(vi)
apply for and continue in force with good and responsible insurance companies
adequate insurance covering risks of such types and in such amounts as are
customary for well-insured companies of similar size engaged in similar lines of
business; and
(vii)
maintain proper books of record and account which present fairly in all material
respects its financial condition and results of operations and make provisions
on its financial statements for all such proper reserves as in each case are
required in accordance with GAAP.
(c)
Financial Statements
and Other Information. The Company shall deliver to each holder of
Registrable Securities holding more than 5% of the Company’s Common
Stock:
(i)
within 45 days after the end of each quarterly accounting period in each fiscal
year, unaudited consolidated statements of income and cash flows of the Company
and its Subsidiaries for such quarterly period and for the period from the
beginning of the fiscal year to the end of such quarter, and unaudited
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such quarterly period, setting forth in each case comparisons to the preceding
fiscal year, and all such items shall be prepared in accordance with GAAP and
shall be certified by a senior executive officer of the Company; provided that, for as
long as the Company is filing quarterly reports on From 10-Q pursuant to the
Exchange Act, the Company’s obligations under this clause (i) shall be
deemed satisfied by timely filing of such report;
(ii)
within 90 days after the end of each fiscal year, consolidated statements of
income, cash flows and shareholders’ equity of the Company and its Subsidiaries
for such fiscal year, and consolidated balance sheets of the Company and its
Subsidiaries as of the end of such fiscal year, setting forth in each case
comparisons to the preceding fiscal year, all prepared in accordance with GAAP,
and accompanied by (a) with respect to the consolidated portions of such
statements, an opinion containing no material exceptions or qualifications
(except for qualifications regarding specified contingent liabilities) of an
independent accounting firm of recognized national standing, and (b) when
applicable, a copy of such firm’s annual management letter to the Company’s
Board; provided
that, for as long as the Company is filing annual reports on From 10-K pursuant
to the Exchange Act, the Company’s obligations under this clause (ii) shall
be deemed satisfied by timely filing of such report;
18
(iii)
promptly upon receipt thereof, any additional reports, management letters or
other detailed information concerning significant aspects of the Company’s
and/or any of its Subsidiaries’ operations or financial affairs given to the
Company’s Audit Committee by its independent accountants (and not otherwise
contained in other materials provided hereunder);
(iv)
not later than 45 days after the beginning of each fiscal year of the Company,
an annual budget prepared on a monthly basis for the Company and its
Subsidiaries for such fiscal year (displaying anticipated statements of income
and cash flows and balance sheets), and promptly upon preparation thereof any
other significant budgets prepared by the Company and any revisions of such
annual or other budgets; and
(v)
with reasonable promptness, such other information and financial data concerning
the Company and its Subsidiaries as any Person entitled to receive information
under this Section 9(c) may
reasonably request.
Each of
the financial statements referred to in subparagraphs (i) and
(ii) above shall fairly present in all material respects in accordance with
GAAP, the financial condition at such date and the results of operations and
cash flows for such period, subject in the case of the unaudited financial
statements to absence of footnote disclosure and changes resulting from normal
year-end adjustments for recurring accruals (none of which would, alone or in
the aggregate, be materially adverse to the business, condition (financial or
otherwise), operating results, assets, liabilities, operations, business
prospects or customer, supplier or employee relations of the Company and its
Subsidiaries taken as a whole).
(d)
Inspection
Rights. The Company shall permit, upon reasonable notice and during
normal business hours, any Representatives designated by Boise and each holder
of Registrable Securities holding more than 5% of the Common Stock as of such
date, at such holder’s own expense, to (i) visit and inspect any of the
properties of the Company and its Subsidiaries, (ii) examine the corporate
and financial records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and (iii) discuss the affairs, finances and
accounts of any such corporations with the directors, officers, key employees
and independent accountants of the Company and its Subsidiaries. The
presentation of an executed copy of this Agreement by any such Person to the
Company’s independent accountants shall constitute the Company’s permission to
its independent accountants to participate in discussions with such
Person.
(e)
Confidentiality.
To the extent that any such information made available to any holder of Boise
Registrable Securities pursuant to this Section 9
(including Section 9(c))
would require disclosure under Regulation FD, such holder shall, as a condition
to receiving any such information that is not otherwise publicly available,
agree in writing to keep such information confidential and not disclose such
information to any Person (i) unless such Person agrees to keep such
information confidential or (ii) except as may be required by applicable
law (including securities law). Each holder of Boise Registrable
Securities party to this Agreement shall be deemed by its execution hereof to
have satisfied the condition referred to in this Section 9(e).
Any holder of Boise Registrable Securities may, at any time and from time to
time, deliver written notice to the Company that it does not desire to receive
all or any portion of any material non-public information to which it is
otherwise entitled pursuant to Section 9
(without prejudice to such holder’s right to receive such information in the
future).
(f)
Corporate
Governance. As long as any Boise Registrable Securities are issued
and outstanding, the Company will not, without the prior written consent of the
Boise Majority Holders (which may be withhold in their sole and absolute
discretion), take, or cause to be taken, directly or indirectly, any action,
including making or failing to make any election under the law of any state,
which has the effect, directly or indirectly, of restricting or limiting the
ability of any holder of Boise Registrable
19
Securities
freely to sell, transfer, assign, pledge or otherwise dispose of shares of the
Company’s capital stock or would restrict or limit the rights of any transferee
of any holder of Boise Registrable Securities as a holder of the Company’s
capital stock, other than the restrictions expressly agreed to herein by Boise
which are applicable to the holders of Boise Registrable Securities.
Without limiting the generality of the foregoing, the Company will not, as long
as any Boise Registrable Securities are issued and outstanding, without the
prior written consent of the Boise Majority Holders (which may be withhold in
their sole and absolute discretion), take any action, or take any action to
recommend to its stockholders any action, which would, among other things, limit
the legal rights of, or deny any benefit to, any holder of Boise Registrable
Securities as a stockholder of the Company either (i) solely as a result of
the amount of Common Stock owned by Boise or (ii) in a manner not
applicable to the Company’s stockholders generally.
(g)
Information to
Competitor. The Company may, without violation of this Section 9,
refuse to provide any information or grant access to any Person that is a
competitor or its Representatives to the extent it determines that provision of
such information or access to such Person or its Representatives would be
reasonably likely to cause economic or competitive harm to the Company or its
Subsidiaries or would be reasonably likely to result in a violation of
applicable law; provided that, no
Person or its Representatives may be prevented from receiving such information
or access as a result of the Company’s determination that provision of such
information or access would cause a violation of applicable securities law if
such Person or its Representatives acknowledge in writing the restrictions under
applicable securities law about trading on material nonpublic
information.
10. Board
Representatives. Subject to the limitations set forth in this Section 10, the
Boise Majority Holders shall have the right to designate not less than the Boise
Applicable Number of representatives for election to the Board of the Company
(individually a “Boise
Board Representative” and collectively the “Boise Board
Representatives”) and the Aldabra Majority Holders shall have the right
to designate not less than the Aldabra Applicable Number of representatives for
election to the Board of the Company (individually an “Aldabra Board
Representative” and collectively the “Aldabra Board
Representatives”); provided that
(x) from time to time, the Boise Majority Holders may elect to designate
any lesser number of representatives for election to the Board of the Company
(e.g., a number of representatives less than the Boise Applicable Number
including, if the Boise Majority Holders so elect, zero representatives), and
any such election by the Boise Majority Holders to designate any lesser number
of representatives shall in no event operate as a waiver of their right
hereunder to thereafter designate not less than the Boise Applicable Number of
representatives for election to the Board of the Company or otherwise operate to
preclude the Boise Majority Holders from fully exercising their rights under
this Section 10 and
(y) from time to time, the Aldabra Majority Holders may elect to designate
any lesser number of representatives for election to the Board of the Company
(e.g., a number of representatives less than the Aldabra Applicable Number
including, if the Aldabra Majority Holders so elect, zero representatives), and
any such election by the Aldabra Majority Holders to designate any lesser number
of representatives shall in no event operate as a waiver of their right
hereunder to thereafter designate not less than the Aldabra Applicable Number of
representatives for election to the Board of the Company or otherwise operate to
preclude the Aldabra Majority Holders from fully exercising their rights under
this Section 10.
The terms and conditions governing the election, term of office, filling of
vacancies and other features of such directorships shall be as
follows:
(a)
Interim Appointment of
Directors. From and after the date hereof (the “Beginning Date”)
until the Boise Expiration Date, the Boise Majority Holders may nominate not
less than the Boise Applicable Number of Boise Board Representatives to be
elected to the Board. From and after the Beginning Date until the Aldabra
Expiration Date, the Aldabra Majority Holders may nominate not less than the
Aldabra Applicable Number of Aldabra Board Representatives to be elected to the
Board. Subject only to such actions not being in violation of the
fiduciary duties of members of the Company’s
20
Board to
the Company, the Company shall take all action necessary such that the number of
directors on the Board of the Company shall (if necessary) be increased such
that the Boise Applicable Number of Boise Board Representatives and the Aldabra
Applicable Number of Aldabra Board Representatives may then serve on the Board
and such vacancies shall be filled by the designees of the Boise Majority
Holders or the Aldabra Majority Holders, as applicable, effective as of the day
following the Beginning Date (or, if later, the date that the Boise Majority
Holders determine to appoint such Boise Board Representative or the date that
the Aldabra Majority Holders determine to appoint such Aldabra Board
Representative); provided that if the
Company avoids its obligations under this sentence or this Section 10(a) because
it deems such nomination to be in violation of fiduciary duties of members of
the Board of the Company, the Boise Majority Holders or the Aldabra Majority
Holders, as applicable, shall be entitled to appoint an alternative nominee to
be a Boise Board Representative or Aldabra Board Representative, as
applicable. Each Boise Board Representative and each Aldabra Board
Representative appointed pursuant to this Section 10(a) shall
continue to hold office until such Boise Board Representative’s term or such
Aldabra Board Representative’s term, as applicable, expires, subject, however,
to prior death, resignation, retirement, disqualification or termination of term
of office as provided in this Section 10.
(b)
Continuing Designation
of Boise Board Representatives. On and prior to the Boise
Expiration Date and the Aldabra Expiration Date, as applicable, in connection
with the expiration of the term of any Boise Board Representative or Aldabra
Board Representative, as applicable, the Company shall, subject to the
provisions of Section 10(c) and
subject only to such nomination not being in violation of the fiduciary duties
of members of the Board of the Company, nominate the Boise Board
Representative(s) designated by the Boise Majority Holders and the Aldabra
Board Representative(s) designated by the Aldabra Majority Holders for
election to the Board of the Company by the holders of voting capital stock and
solicit proxies from the Company’s stockholders in favor of the election of such
Boise Board Representative(s) and Aldabra Board Representative(s); provided that if the
Company avoids its obligations under this sentence or this Section 10(b) because
it deems such nomination to be in violation of fiduciary duties of members of
the Board of the Company, the Boise Majority Holders shall be entitled to
appoint an alternative nominee to be a Boise Board Representative and the
Aldabra Majority Holders shall be entitled to appoint an alternative nominee to
be an Aldabra Board Representative. Subject to the provisions of Section 10(c),
the Company shall use reasonable best efforts to cause such Boise Board
Representative(s) to be elected to the Board of the Company (including
voting all unrestricted proxies in favor of the election of such Boise Board
Representative(s) and Aldabra Board Representative(s) and including
recommending approval of such Boise Board Representative(s)’ appointment to the
Board of the Company and such Aldabra Board Representative(s)’ appointment to
the Board of the Company as provided for in the Company’s proxy statement) and
shall not take any action which would diminish the prospects of such Boise Board
Representative(s) or such Aldabra Board Representative(s) of being
elected to the Board of the Company.
(c)
Termination of Boise
Board Representative Designation Rights. The right of the Boise
Majority Holders to designate a Boise Board Representative pursuant to this
Section 10
shall terminate on the Boise Expiration Date. The right of the Aldabra
Majority Holders to designate an Aldabra Board Representative pursuant to this
Section 10
shall terminate on the Aldabra Expiration Date. If the rights of the Boise
Majority Holders or the Aldabra Majority Holders, as applicable, to designate a
Boise Board Representative or Aldabra Board Representative, as applicable, cease
under the immediately preceding sentence, then the Company may use reasonable
best efforts to effect the removal of such director.
(d)
Resignation; Removal;
and Vacancies.
(i)
Resignation. An
elected Boise Board Representative may resign from the Company’s Board at any
time by giving written notice to the Company at its principal
21
executive
office. An elected Aldabra Board Representative may resign from the
Company’s Board at any time by giving written notice to the Company at its
principal executive office. The resignation is effective without
acceptance when the notice is given to the Company, unless a later effective
time is specified in the notice.
(ii)
Removal.
So long as the Boise Majority Holders or the Aldabra Majority Holders, as
applicable, retain the right to designate a director pursuant to Section 10(b),
the Company shall use reasonable best efforts to remove any Boise Board
Representative or Aldabra Board Representative, as applicable, only if so
directed in writing by the Boise Majority Holders or the Aldabra Majority
Holders, as applicable.
(iii)
Vacancies. In
the event of a vacancy on the Company’s Board resulting from the death,
disqualification, resignation, retirement or termination of term of office of a
Boise Board Representative designated by the Boise Majority Holders or an
Aldabra Board Representative designated by the Aldabra Majority Holders, then
the Company shall use reasonable best efforts to fill such vacancy with a
representative designated by Boise Majority Holders or the Aldabra Majority
Holders, as applicable, as provided hereunder, in either case to serve until the
next annual or special meeting of the stockholders (and at such meeting, such
representative, or another representative designated by such holders, will be
elected to the Company’s Board in the manner set forth in the Company’s
Bylaws). If the Boise Majority Holders or the Aldabra Majority Holders, as
applicable, fail or decline to fill the vacancy, then the directorship shall
remain open until such time as the Boise Majority Holders or the Aldabra
Majority Holders, as applicable, elect to fill it with a representative
designated hereunder. During any such period that the Boise Majority
Holders or the Aldabra Majority Holders, as applicable, are entitled to, but
have failed or declined to, designate a Boise Board Representative or an Aldabra
Board Representative, as applicable, the Boise Majority Holders or the Aldabra
Majority Holders, as applicable, shall have the right to designate one
representative to attend all Company Board meetings as a non-voting
observer. The observer shall be entitled to notice of all Company Board
meetings in the manner that notice is provided to members of the Board of the
Company, shall be entitled to receive all materials provided to members of the
Board of the Company, shall be entitled to attend (whether in person, by
telephone, or otherwise) all meetings of the Board of the Company as a
non-voting observer, and shall be entitled to fees and expenses paid to Boise
Board Representatives pursuant to Section 1(e).
(e)
Fees &
Expenses. Boise Board Representatives and Aldabra Board
Representatives shall be entitled to fees, other compensation and reimbursement
of expenses paid to members of the Company’s Board who are not employees of the
Company or its Subsidiaries.
(f)
Subsidiary Boards;
Committees. Subject to applicable law and the rules of any
exchange on which the Company’s securities are listed, at the request of the
Boise Majority Holders or the Aldabra Majority Holders, as applicable, the
Company shall use reasonable best efforts to cause the Boise Board
Representative(s) or the Aldabra Majority Holders, as applicable, to have
proportional representation (relative to their percentage on the whole Board of
the Company) on the Boards of each Subsidiary of the Company (each, a “Sub Board”) and each
committee of the Board and each Sub Board.
(g)
Reporting
Information. With respect to each Boise Board Representative
designated pursuant to the provisions of this Section 10, the
Boise Majority Holders shall cause the Boise Board Representative to provide to
the Company with all necessary assistance and information related to such Boise
Board Representative that is required under Regulation 14A under the Exchange
Act to be disclosed in solicitations of proxies or otherwise, including such
Person’s written consent to being named in the proxy statement (if applicable)
and to serving as a director if elected. With respect to each
Aldabra
22
Board
Representative designated pursuant to the provisions of this Section 10, the
Aldabra Majority Holders shall cause the Aldabra Board Representative to provide
to the Company with all necessary assistance and information related to such
Aldabra Board Representative that is required under Regulation 14A under the
Exchange Act to be disclosed in solicitations of proxies or otherwise, including
such Person’s written consent to being named in the proxy statement (if
applicable) and to serving as a director if elected.
11. Special Financial
Procedures, Controls, Reports and Related Matters.
(a)
Financial
Information.
(i)
In addition to the reports and financial statements required to be delivered by
the Company pursuant to this Agreement, the Company will, and will cause each of
its Subsidiaries to, maintain disclosure controls and procedures and internal
control over financial reporting as defined in Exchange Act Rule 13a-15,
and the Company will, and will cause each of its officers to, make such
disclosures and certifications as are required by the Exchange Act with respect
thereto.
(ii)
The Company will, and will cause each of its Subsidiaries to, maintain a fiscal
year that commences and ends on the same calendar days as Boise’s fiscal year
commences and ends, and to maintain monthly and quarterly accounting periods
that commence and end on the same calendar days as Boise’s monthly and quarterly
accounting periods commence and end;
(iii)
While the provisions of this Section 11 are
applicable, no later than ten (10) calendar days after the end of each of
the Company’s monthly accounting periods following the date hereof, the Company
will deliver to Boise such financial information for such period as is
reasonably necessary such that Boise may report its equity in earnings from the
Company and its Subsidiaries for such period and such other financial
information that Boise may reasonably request in connection with its preparation
of financial statements and notes to financial statements for such
period;
(iv)
Notwithstanding any time periods to the contrary in Section 9(c),
while the provisions of this Section 11 are
applicable, as soon as practicable after the end of each of the Company’s fiscal
quarters following the date hereof, the Company will deliver to Boise the
financial statements specified in Section 9(c)(i) for
such period, in each case in such format and detail as Boise may request.
In any event no later than the earlier of (x) ten (10) Business Days
prior to the date on which the Company is required to file a Form 10-Q or
other document containing Quarterly Financial Statements with the Securities and
Exchange Commission for each of the Company’s first three fiscal quarters in
each fiscal year and (y) ten (10) Business Days prior to the date on
which Boise has notified the Company that Boise intends to file its
Form 10-Q or other document containing Quarterly Financial Statements with
the Securities and Exchange Commission, the Company will deliver to Boise drafts
of the following:
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(A)
the consolidated financial statements of the Company and its
Subsidiaries (and notes thereto) for such periods and for the period from
the beginning of the current fiscal year to the end of such quarter,
setting forth in each case in comparative form for each such fiscal
quarter of the Company the consolidated figures (and notes thereto) for
the corresponding quarter and periods of the previous fiscal year and all
in reasonable detail and prepared in accordance with Article 10 of
Regulation S-X and GAAP, and
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(B)
a discussion and analysis by the Company’s management of the
Company’s and its Subsidiaries’ financial condition and results of
operations for such fiscal period, including, without limitation, an
explanation of any material period-to-period change and any off-balance
sheet transactions, all in reasonable detail and prepared in accordance
with Item 303(b) and 305 of Regulation
S-K.
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The
information set forth in (A) and (B) above is referred to in this
Agreement as the “Quarterly Financial
Statements” and a draft of the Company’s report on Form 10-Q
containing the above-referenced information for such quarter delivered when
required by this clause (iv) shall be deemed to satisfy the requirements of
this clause (iv). No later than the earlier of (x) three
(3) Business Days prior to the date the Company publicly files the
Quarterly Financial Statements with the Securities and Exchange Commission or
otherwise makes such Quarterly Financial Statements publicly available or
(y) three (3) Business Days prior to the date on which Boise has
notified the Company that Boise intends to file Boise’s quarterly financial
statements with the Securities and Exchange Commission, the Company will deliver
to Boise the final form of its quarterly report on Form 10-Q and
certifications thereof by the Company’s principal executive and financial
officers in substantially the forms required under Securities and Exchange
Commission rules for periodic reports and in form and substance reasonably
satisfactory to Boise; provided, however, that the
Company may continue to revise such quarterly report on Form 10-Q prior to
the filing thereof in order to make corrections and changes which corrections
and changes will be delivered by the Company to Boise as soon as
practicable. Notwithstanding anything to the contrary in this Section 11(a)(iv),
the Company will use its reasonable best efforts to file its quarterly report on
Form 10-Q with the Securities and Exchange Commission on the same date that
Boise files Boise’s quarterly financial statements with the Securities and
Exchange Commission unless otherwise required by applicable law or as otherwise
reasonably agreed between the parties after due consideration to, among other
things, the securities law implications of filing on different
dates.
(v)
As soon as practicable, and in any event no later than:
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(A)
the earlier of (x) ten (10) Business Days prior to the
date on which the Company is required to file a Form 10-K or other
document containing its Annual Financial Statements with the Securities
and Exchange Commission and (y) ten (10) Business Days prior to
the date on which Boise has notified the Company that Boise intends to
file its Form 10-K or other document containing annual financial
statements with the Securities and Exchange Commission, the Company will
deliver to Boise (A) any financial and other information and data
with respect to the Company and its Subsidiaries and their business,
properties, financial position, results of operations and prospects as is
reasonably requested by Boise in connection with the preparation of
Boise’s financial statements and annual report on Form 10-K and
(B) a discussion and analysis by the Company’s management of the
Company and its Subsidiaries’ financial condition and results of
operations for such year, including, without limitation, an explanation of
any material period-to-period change and any off-balance sheet
transactions, all in reasonable detail and prepared in accordance with
Items 303(a) and 305 of Regulation S-K;
and
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(B)
the earlier of (x) ten (10) Business Days prior to the
date on which the Company is required to file a Form 10-K or other
document containing its Annual Financial Statements with the Securities
and Exchange Commission and (y) ten (10) Business Days prior to
the date on which Boise has notified the Company that Boise intends to
file its Form 10-K or other document containing annual financial
statements with the Securities and Exchange Commission, the Company will
deliver to Boise, drafts of the consolidated financial statements of the
Company and its Subsidiaries (and notes thereto) for such year, setting
forth in each case in comparative form the consolidated figures (and notes
thereto) for the previous fiscal years and all in reasonable detail and
prepared in accordance with Regulation S-X and
GAAP.
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The
information set forth in (A) and (B) above is referred to in this
Agreement as the “Annual Financial
Statements” and a draft of the Company’s report on Form 10-K
containing the above-referenced information for such annual period delivered
when required by this clause (v) shall be deemed to satisfy the
requirements of this clause (v). The Company will deliver to Boise all
revisions to such drafts as soon as any such revisions are prepared or
made. No later than the earlier of (A) five Business Days prior to
the date the Company publicly files the annual report on Form 10-K with the
Securities and Exchange Commission or otherwise makes such annual report on
Form 10-K publicly available or (B) five Business Days prior to the
date on which Boise has notified the Company that Boise (and/or any Person
affiliated with Boise) intends to file the Boise Annual Financial Statements (as
defined below) with the Securities and Exchange Commission, the Company will
deliver to Boise the final form of its annual report on Form 10-K and
certifications thereof by the Company’s principal executive and financial
officers in substantially the forms required under Securities and Exchange
Commission rules for periodic reports and in form and substance reasonably
satisfactory to Boise; provided, however, that the
Company may continue to revise such annual report on Form 10-K prior to the
filing thereof in order to make corrections and changes which corrections and
changes will be delivered by the Company to Boise as soon as practicable.
In any event, the Company will deliver to Boise, no later than three days prior
to the date on which Boise has notified the Company that Boise intends to file
the Boise Annual Financial Statements with the Securities and Exchange
Commission, the final form of the annual report on Form 10-K accompanied by
an opinion on the annual financial statements included therein by the Company’s
independent certified public accountants. Notwithstanding anything to the
contrary in this Section 11(a)(v),
the Company will use its reasonable best efforts to file its Annual Financial
Statements with the Securities and Exchange Commission on the same date that
Boise files the Boise Annual Financial Statements with the Securities and
Exchange Commission unless otherwise required by applicable law or as otherwise
reasonably agreed between the parties after due consideration to, among other
things, the securities law implications of filing on different
dates.
(v)
With reasonable promptness, the Company and its Subsidiaries will deliver to
Boise such additional audited and unaudited financial statements, financial and
other information and data with respect to the Company and its Subsidiaries and
their business, properties, financial positions, results of operations and
prospects as from time to time may be reasonably requested by Boise, including
such financial information and comfort letters as may be requested or required
in connection with the sale or registration of securities by Boise.
Without limiting the generality of the foregoing, the Company and its
Subsidiaries shall make available to Boise and its Representatives reasonable
access to the books and records of the Company and its Subsidiaries with respect
to, or as may be necessary to prepare audited financial statements and/or
financial statements compliant with Regulations S-X and S-K for, the
Company
25
and its
Subsidiaries. Seller understands that, from time to time, Boise and its
Affiliates may do one or more financings and/or securities law filings for which
financial information with respect to the Company and its Subsidiaries will be
reported. The Company and its Subsidiaries shall provide Boise and its
representatives with such financial information as may be reasonably requested
by Boise and its representatives as promptly as practicable after the request
therefor and enter into and deliver such management representation letters and
cold comfort letters with respect to such financial information as may be
reasonably requested by Boise and its Affiliates in order to complete their
financings and/or filings and/or as otherwise may be necessary for Boise and its
Affiliates to prepare audited financial statements and/or financial statements
prepared in accordance with Regulations S-X and S-K.
(b)
Cooperation on Boise
Filings.
(i)
The Company will cooperate fully, and cause its auditors and other
Representatives to cooperate fully, with Boise to the extent requested by Boise
in the preparation of Boise’s public earnings or other press releases, Quarterly
Reports on Form 10-Q, Annual Reports to Stockholders, Annual Reports on
Form 10-K, any Current Reports on Form 8-K and any other proxy,
information and registration statements, reports, notices, prospectuses and any
other filings made by Boise with the Securities and Exchange Commission, any
national securities exchange or otherwise made publicly available (collectively,
the “Boise Public
Filings”).
(ii)
The Company agrees to provide to Boise all information that Boise reasonably
requests in connection with any Boise Public Filings or that, in the judgment of
Boise’s legal advisors, is required to be disclosed or incorporated by reference
therein under any law, rule or regulation. The Company will provide
such information in a timely manner on the dates requested by Boise (which may
be earlier than the dates on which the Company otherwise would be required
hereunder to have such information available) to enable Boise to prepare, print
and release all Boise Public Filings on such dates as Boise will determine but
in no event later than as required by applicable law. The Company will use its
reasonable best efforts to cause the Company’s auditors and other
Representatives to consent to any reference to them as experts in any Boise
Public Filings required under any law, rule or regulation and to provide
their consent to the incorporation of their reports in Boise Public
Filings.
(iii)
If and to the extent requested by Boise, the Company diligently and promptly
will review all drafts of such Boise Public Filings and prepare in a diligent
and timely fashion any portion of such Boise Public Filing pertaining to the
Company.
(iv)
Prior to any printing or public release of any Boise Public Filing, an
appropriate executive officer of the Company will, if requested by Boise,
certify that the information relating to any the Company and/or any of its
Subsidiaries and/or
any of their respective businesses in such Boise Public Filing is accurate,
true, complete and correct in all material respects.
(c)
Auditors and Audits;
Annual Financial Statements and Accounting.
(i)
Unless required by law, the Company will not select a different accounting firm
than KPMG LLC (or its affiliate accounting firms) to serve as its (and the
Company’s Affiliates’) independent certified public accountants (the “Company’s Auditors”)
without Boise’s prior written consent (which will not be unreasonably withheld);
provided that
nothing herein shall prevent a change in the Company’ Auditors to the extent
that the Company’s
26
Board or
its audit committee determines that a change is reasonably necessary in order
for the members thereof to comply with their fiduciary duties..
(ii)
The Company will provide to Boise on a timely basis all information that Boise
reasonably requires to meet its schedule for the preparation, printing, filing,
and public dissemination of the Boise Annual Financial Statements in accordance
with Sections
11(a) through (f) hereof and
as required by applicable law. Without limiting the generality of the
foregoing, the Company will provide all required financial information with
respect to the Company and its Subsidiaries to the Company’s Auditors in a
sufficient and reasonable time and in sufficient detail to permit the Company’s
Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to Boise’s Auditors with respect to information to be
included or contained in the Boise Annual Financial Statements.
(iii)
The Company will authorize the Company’s Auditors to make available to Boise’s
Auditors both the personnel who performed, or are performing, the annual audit
of the Company and work papers related to the annual audit of the Company, in
all cases within a reasonable time prior to the Company’s Auditors’ opinion
date, so that Boise’s Auditors are able to perform the procedures they consider
necessary to take responsibility for the work of the Company’s Auditors as it
relates to Boise’s Auditors’ report on Boise’s statements, all within sufficient
time to enable Boise to meet its timetable for the printing, filing and public
dissemination of the Boise Annual Financial Statements.
(iv)
If Boise determines in good faith that there may be some inaccuracy in the
financial statements of the Company or any its Subsidiaries or deficiency in
such Person’s internal accounting controls or operations that could materially
impact Boise’s financial statements, at Boise’s request, the Company will
provide Boise’s internal auditors with access to the books and records of the
Company and its Subsidiaries so that Boise may conduct reasonable audits
relating to the financial statements provided by the Company under this
Agreement as well as to the internal accounting controls and operations of the
Company and its Subsidiaries.
(d)
Notice of
Changes. Subject to Section 9(a) and
Section 11(c),
the Company will give Boise as much prior notice as reasonably practicable of
any proposed determination of, or any significant changes in, the Company’s
accounting estimates or accounting principles with respect to the Business from
those in effect with respect to the Business as of immediately prior to the
Closing. The Company will consult with Boise and, if requested by Boise,
the Company will consult with Boise’s Auditors with respect thereto. The
Company will not make any such determination or changes without Boise’s prior
written consent (not to be unreasonably withheld) if such a determination or a
change would be sufficiently material to be required to be disclosed in the
Company’s or Boise’s financial statements as filed with the Securities and
Exchange Commission or otherwise publicly disclosed therein; provided that nothing
herein shall limit the right of the Company’s Board or its audit committee to
make such a determination or change to the extent it determines is reasonably
necessary in order for its members to comply with their fiduciary
duties.
(e)
Special Reports of
Deficiencies or Violations. The Company will report in reasonable
detail to Boise the following events or circumstances promptly after any
executive officer of the Company or any member of the Company’s Board becomes
aware of such matter:
(i)
all material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the
Company’s ability to record, process, summarize and report financial
information;
27
(ii)
any fraud, whether or not material, that involves management or other employees
who have a significant role in the Company’s internal control over financial
reporting;
(iii)
any illegal act within the meaning of Section 10A(b) and (f) of
the Exchange Act; and
(iv)
any report of a material violation of law that an attorney representing the
Company and/or any of its Subsidiaries / Affiliates has formally made to any
officers or directors of the Company pursuant to the Securities and Exchange
Commission’s attorney conduct rules (17 C.F.R. Part 205).
(f)
Applicability of
Section 11. The provisions of this Section 11 shall
apply during any and each period(s) in which Boise and/or any Person
(including any member of the Boise Group) affiliated with Boise (in Boise’s good
faith determination) is required to consolidate the results of operations and
financial position of the Company and/or any of its Subsidiaries or to account
for its investment in the Company under the equity method of accounting
(determined in accordance with GAAP and consistent with the Securities and
Exchange Commission reporting requirements). Without limiting the
generality of the foregoing, but for the avoidance of doubt, in the event that
Boise is not filing periodic reports with the Securities and Exchange
Commission, Boise may waive any of the requirements of this Section 11
without prejudice to its rights to receive such information (including with
respect to periods previously waived) at a time in the future in the event that
Boise subsequently is required to file periodic reports with the Securities and
Exchange Commission. In no event shall the provisions of this Section 11 be
deemed to apply to accounting judgments made by the Company in connection with
the working capital adjustment contemplated by the Purchase
Agreement.
12.
Definitions.
“Affiliate” means any
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the party specified (it
being understood and agree that from and after the Closing, for purposes of this
Agreement, none of the Company or any of its Subsidiaries shall be deemed to be
an Affiliate of Boise or any of its Affiliates).
“Aldabra Applicable
Number” means such number of directors of the Company which, as a
percentage of all directors of the Company, when rounded up most closely
approximates (but is not less than) the percentage of voting power represented
by the shares of capital stock of the Company held by holders of Aldabra
Registrable Securities.
“Aldabra Expiration
Date” means the first date that the aggregate voting power of capital
stock of the Company owned by holders of Aldabra Registrable Securities
represents less than 5% of the voting power of all capital stock of the
Company.
“Aldabra Majority
Holders” means, at any time, the holders of a majority of the Aldabra
Registrable Securities then outstanding.
“Aldabra Registrable
Securities” means, without duplication, (i) any shares of Common
Stock held by any Aldabra Shareholder on the date hereof, (ii) if such
Aldabra Shareholder otherwise holds Aldabra Registrable Securities as of the
date of such acquisition, any other shares of Common Stock of the Company
acquired by any Aldabra Shareholder after the date hereof, (iii) any shares
of Common Stock issued upon exercise of any warrants outstanding on the date
hereof held by any Aldabra Shareholder exercisable for shares of Common Stock,
(iv) any Common Stock issued or issuable with respect to the securities
referred to in clauses (i), (ii) and (iii) by way of a stock dividend
or stock split or
28
stock
conversion or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization and (v) any warrants
outstanding on the date hereof held by any Aldabra Shareholder exercisable for
shares of Common Stock (except that, in the case of (1) any Demand
Registration made by the Aldabra Majority Holders other than a Demand
Registration made by the Aldabra Majority Holders in which such holders request
registration of the warrants outstanding on the date hereof which are held by
the Aldabra Shareholders, (2) any Demand Registration made by the Boise
Majority Holders, (3) any Piggyback Registration and/or (4) any
Secondary Registration, any and all such warrants shall not be entitled to be
included in any such registration (and shall be disregarded for purposes of
determining the number of Registrable Securities any Aldabra Shareholder may
otherwise be entitled to include in such registration, except to the extent
provided in the last sentence of this definition)). For the avoidance of
doubt, as to any particular Aldabra Registrable Securities, such securities
shall cease to be Aldabra Registrable Securities when they have been
(x) distributed to the public pursuant to a offering registered under the
Securities Act or sold to the public through a broker, dealer or market maker in
compliance with Rule 144 under the Securities Act (or any similar
rule then in force), (y) distributed or otherwise transferred to any
Holder (as such term is defined in any CVR Agreement) and/or any of such
Holder’s permitted transferee(s) under any CVR Agreement upon exercise of
any CVR pursuant to the CVR Agreement or (y) repurchased by the Company or
any Subsidiary. For purposes of this Agreement, a Person shall be deemed
to be a holder of Aldabra Registrable Securities whenever such Person has the
right to acquire such Aldabra Registrable Securities (upon conversion or
exercise in connection with a transfer of securities or otherwise, but
disregarding any restrictions or limitations upon the exercise of such right),
whether or not such acquisition has actually been effected; provided that such
right must be converted or exercised and the Aldabra Registrable Securities
acquired not later than immediately prior to the initial closing of an offering
in which the Aldabra Registrable Securities issuable upon exchange or conversion
of such rights are to be included (although such conversion or exercise may be
conditioned upon the occurrence of such closing).
“Board” means
(i) in the case of a Person that is a limited liability company, the
managers authorized to act therefor (or, if the limited liability company has no
managers, the members), (ii) in the case of a Person that is a corporation,
the board of directors of such Person or any committee authorized to act
therefor, (iii) in the case of a Person that is a limited partnership, the
board of directors of its corporate general partner (or, if the general partner
is itself a limited partnership, the board of directors of such general
partner’s corporate general partner) and (iv) in the case of any other
Person, the board of directors, management committee or similar governing body
or any authorized committee thereof responsible for the management of the
business and affairs of such Person; provided that, in
each case, the “Board” shall be deemed to include any duly authorized committee
thereof that is authorized to take the action in question.
“Boise Applicable
Number” means such number of directors of the Company which, as a
percentage of all directors of the Company, when rounded up most closely
approximates (but is not less than) the percentage of voting power represented
by the shares of capital stock of the Company held by holders of Boise
Registrable Securities.
“Boise Expiration
Date” means the first date that the aggregate voting power of capital
stock of the Company owned by holders of Boise Registrable Securities represents
less than 5% of the voting power of all capital stock of the
Company.
“Boise Group” means
Boise and each Person (other than any member of the Company Group) that is an
Affiliate of Boise immediately after the Closing Date.
“Boise Majority
Holders” means, at any time, the holders of at least a majority of the
Boise Registrable Securities then outstanding.
29
“Boise Registrable
Securities” means (i) any shares of Common Stock originally issued
to Boise pursuant to the Purchase Agreement, (ii) any shares of Common
Stock transferred or otherwise distributed from Boise to BCH, (iii) if any
such holder of Boise Registrable Securities otherwise holds Boise Registrable
Securities as of the date of such acquisition, any other shares of Common Stock
of the Company acquired by such holder of Boise Registrable Securities after the
date hereof and (iv) any securities of the Company issued or issuable
directly or indirectly with respect to the securities referred to in clauses
(i), (ii) and (iii) foregoing by way of stock dividend or stock split
or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Boise
Registrable Securities, such securities shall cease to be Boise Registrable
Securities when they have been (x) distributed to the public pursuant to a
offering registered under the Securities Act or sold to the public through a
broker, dealer or market maker in compliance with Rule 144 under the
Securities Act (or any similar rule then in force), (y) distributed or
otherwise transferred to any Holder (as such term is defined in any CVR
Agreement) and/or any of such Holder’s permitted transferee(s) under any
CVR Agreement upon exercise of any CVR pursuant to the CVR Agreement or
(y) repurchased by the Company or any Subsidiary. For purposes of
this Agreement, a Person shall be deemed to be a holder of Boise Registrable
Securities whenever such Person has the right to acquire such Boise Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected; provided that such
right must be converted or exercised and the Boise Registrable Securities
acquired not later than immediately prior to the initial closing of an offering
in which the Boise Registrable Securities issuable upon exchange or conversion
of such rights are to be included (although such conversion or exercise may be
conditioned upon the occurrence of such closing).
“Business Day” has the
meaning given to such term in the Purchase Agreement.
“Certificate of
Incorporation” means the Company’s Certificate of Incorporation,
including any certificate of designations relating to any series of Preferred
Stock (as amended or amended and restated from time to time).
“Closing” has the
meaning given to such term in the Purchase Agreement.
“Closing Date” has the
meaning given to such term in the Purchase Agreement.
“Common Stock” means
the Company’s Common Stock, par value $0.0001 per share.
“Company Group” means
the Company, each Subsidiary of the Company Group immediately after the Closing
Date, and each other Person that is controlled directly or indirectly by the
Company immediately after the Closing Date.
“CVR Agreements” means
those certain contingent value rights agreements, dated on or about
February 1, 2008, by and among, Boise, Terrapin, the Company and the
Holders (as such term is used in the CVR Agreements) party thereto, pursuant to
which such Holders received certain contingent value rights to receive certain
payments in cash or in shares of Common Stock (collectively, the “CVRs”) from Boise and
Terrapin on the terms and subject to the conditions set forth
therein
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Family Group” means a
Person’s spouse and descendants (whether natural or adopted) and any trust
solely for the benefit of the Person and/or the Person’s spouse and/or
descendants.
30
“Free Writing
Prospectus” means a free-writing prospectus, as defined in Rule 405
of the Securities Act.
“GAAP” means U.S.
generally accepted accounting principles, consistently applied.
“Group” means either
the Company Group or the Boise Group, as the context requires.
“Independent Third
Party” means any Person who, immediately prior to the contemplated
transaction does not own directly or indirectly in excess of 5% of the Company’s
voting capital stock on a fully-diluted basis (a “Non-Independent
Owner”), who does not control, is not controlled by or under common
control with any such Non-Independent Owner and who is not the spouse or
descendent (by birth or adoption) of any such Non-Independent Owner or a trust
for the benefit of such Non-Independent Owner and/or such other
Persons.
“MDCP IV” means
Madison Dearborn Capital Partners IV, L.P.
“Other Registrable
Securities” means (i) any shares of Common Stock issued to a Person
that becomes party to this Agreement after the date hereof in accordance with
Section 14(e),
and (ii) any Common Stock issued or issuable with respect to the securities
referred to in clause (i) by way of a stock dividend or stock split or
stock conversion or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization; provided that “Other
Registrable Securities” shall not include any shares of Common Stock issued,
distributed or otherwise transferred to any Holder (as such term is defined in
any CVR Agreement) and/or any of such Holder’s permitted
transferee(s) under any CVR Agreement upon exercise of any CVR pursuant to
the CVR Agreement. As to any particular Other Registrable Securities, such
securities shall cease to be Other Registrable Securities when they have been
distributed to the public pursuant to a offering registered under the Securities
Act or sold to the public through a broker, dealer or market maker in compliance
with Rule 144 under the Securities Act (or any similar rule then in
force) or repurchased by the Company or any Subsidiary. For purposes of
this Agreement, a Person shall be deemed to be a holder of Other Registrable
Securities whenever such Person has the right to acquire such Other Registrable
Securities (upon conversion or exercise in connection with a transfer of
securities or otherwise, but disregarding any restrictions or limitations upon
the exercise of such right), whether or not such acquisition has actually been
effected; provided that such
right must be converted or exercised and the Other Registrable Securities
acquired not later than immediately prior to the initial closing of an offering
in which the Other Registrable Securities issuable upon exchange or conversion
of such rights are to be included (although such conversion or exercise may be
conditioned upon the occurrence of such closing).
“Person” means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
“Registrable
Securities” means Aldabra Registrable Securities, Boise Registrable
Securities and Other Registrable Securities.
“Representative”
means, with respect to any Person, any of such Person’s directors, officers,
employees, agents, consultants, advisors, accountants or attorneys.
“Restricted
Securities” means (i) the Common Stock, and (ii) any securities
issued with respect to the securities referred to in clause (i) above by
way of a stock dividend or stock split or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization and any
warrants exercisable for Common Stock outstanding on the date hereof that are
not freely
31
tradable
under applicable law and regulation. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them, or (b) been
distributed to the public through a broker, dealer or market maker pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act
or become eligible for sale pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act. Whenever any particular
securities cease to be Restricted Securities, the holder thereof shall be
entitled to receive from the Company, without expense, new securities of like
tenor not bearing a Securities Act legend of the character set forth in this
Agreement.
“Revised Pro Rata
Share” means, for each holder, a fraction, (x) the numerator of
which equals the difference between (i) the product of (a) the
percentage of Registrable Securities owned by such holder (as a percentage of
all Registrable Securities and, in the event that the Prior Registration was a
Secondary Registration, other securities then outstanding) immediately prior to
the Prior Registration multiplied by (b) the sum of (A) the aggregate
number of Registrable Securities (and, in the event that the Prior Registration
was a Secondary Registration, other securities) included in the Prior
Registration plus (B) the aggregate number of Registrable Securities (and,
in the event such registration is to be a Secondary Registration, other
securities) to be included in the Demand Registration or Piggyback Registration
in question minus (ii) the
aggregate number of Registrable Securities sold by such holder in the Prior
Registration and (y) the denominator of which is the number of Registrable
Securities (and, in the event that the Prior Registration was a Secondary
Registration, other securities) to be included in such Demand Registration or
Piggyback Registration.
“Sale of the Company”
means the sale of the Company (however structured) to an Independent Third Party
or group of Independent Third Parties acting in concert pursuant to which such
party or parties acquire (i) equity securities of the Company that,
directly or indirectly through one or more intermediaries, have more than 50% of
the ordinary voting power then outstanding to elect a majority of the Company’s
board of directors or (ii) all or substantially all of the Company’s assets
determined on a consolidated basis (in either case, whether by merger,
consolidation, sale or transfer of the Company’s or any Subsidiary’s equity
securities, sale or transfer of the Company’s consolidated assets, or other
reorganization).
“Securities Act” means
the Securities Act of 1933, as amended.
“Securities and Exchange
Commission” includes any governmental body or agency succeeding to the
functions thereof.
“Subsidiary” means,
with respect to any Person, any corporation, limited liability company,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability
company, partnership, association or other business entity, a majority of the
partnership or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more Subsidiaries of
that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a limited
liability company, partnership, association or other business entity if such
Person or Persons shall be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses or shall be or
control any managing director or general partner of such limited liability
company, partnership, association or other business entity.
32
“Terrapin” means
Terrapin Partners Venture Partnership, a California general
partnership.
13. Transfer of Restricted
Securities.
(a)
General
Provisions. In addition to any other restrictions on transfer to
which such shares may be subject, Restricted Securities are transferable only
pursuant to (i) public offerings registered under the Securities Act,
(ii) Rule 144 or Rule 144A of the Securities and Exchange
Commission (or any similar rule or rules then in force) if such
rule is available and (iii) subject to the conditions specified in
Section 13(b) below,
any other legally available means of transfer.
(b)
Opinion
Delivery. In connection with the transfer of any Restricted
Securities (other than a transfer described in Section 13(a)(i) or
(ii) above),
upon the request of the Company, the holder thereof shall deliver written notice
to the Company describing in reasonable detail the transfer or proposed
transfer, together with an opinion of Xxxxxxxx & Xxxxx LLP or other
counsel which (to the Company’s reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted Securities
may be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the holder of the Restricted Securities
delivers to the Company an opinion of Xxxxxxxx & Xxxxx LLP or such
other counsel that no subsequent transfer of such Restricted Securities shall
require registration under the Securities Act, the Company shall promptly upon
such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in Section 13(c).
If the Company is not required to deliver new certificates for such Restricted
Securities not bearing such legend, the holder thereof shall not transfer the
same until the prospective transferee has confirmed to the Company in writing
its agreement to be bound by the conditions contained in this Section 13.
(c)
Legend.
Each certificate or instrument representing Restricted Securities shall be
imprinted with a legend in substantially the following form:
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AND CERTAIN OTHER AGREEMENTS SET FORTH IN AN INVESTOR
RIGHTS AGREEMENT BETWEEN THE COMPANY AND CERTAIN OF ITS STOCKHOLDERS DATED AS OF
FEBRUARY 22, 2008, AS AMENDED AND MODIFIED FROM TIME TO TIME. A COPY OF
SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY’S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.”
(d)
Legend
Removal. If any Restricted Securities become eligible for sale
without restriction pursuant to Rule 144, the Company shall, upon the
request of the holder of such Restricted Securities, remove the legend set forth
in Section 13(c) from
the certificates for such Restricted Securities.
14. Miscellaneous.
(a)
Counterparts.
This Agreement may be executed simultaneously in two or more counterparts
(including by facsimile or electronic transmission), any one of which need not
contain the
33
signatures
of more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.
(b)
Descriptive
Headings. The descriptive headings of this Agreement are inserted
for convenience only and do not constitute a part of this
Agreement.
(c)
Remedies.
Any Person having rights under any provision of this Agreement shall be entitled
to recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law (including in the case
of injunctive relief, without a requirement of posting a bond).
(d)
Amendments and
Waivers. Except as otherwise provided herein, the provisions of
this Agreement may be amended or waived only upon the prior written consent of
the Company and Boise Majority Holders; provided that if any
such amendment or waiver would adversely affect in any material manner the
rights of any holders of Registrable Securities relative to other holders of
Registrable Securities similarly situated with respect to such rights under this
Agreement, such amendment or waiver must be approved in writing by the holders
of a majority of such Registrable Securities so adversely affected.
(e)
Additional
Parties. Except as otherwise described below, the Board of the
Company shall be entitled, but not obligated, to allow any purchaser of Common
Stock from the Company (or securities or rights convertible or exercisable into
Common Stock) other than a transferee of Boise Registrable Securities or Aldabra
Registrable Securities (which Transferees shall become holders of New Boise
Registrable Securities or Aldabra Registrable Securities, as applicable, and
such transferees shall be required to execute a counterpart to this Agreement
and become a party hereto as a condition to such transferee’s receipt of such
securities), to execute a counterpart to this Agreement and become a party
hereto (each, an “Other Investor”), in
which case the Common Stock issued or issuable to any such Other Investor shall,
except if such Other Investor holds securities that meet the definition of
“Boise Registrable Securities” or “Aldabra Registrable Securities” be deemed
“Other Registrable Securities” for purposes of this Agreement.
Except as set forth in this Section 14(e),
the Company will not grant to any other Persons any registration rights (other
than Piggyback Registration Rights in accordance with this Agreement) without
the prior written consent of holders of a majority of the Registrable Securities
then outstanding.
(f)
Successors and
Assigns. All covenants and agreements in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, whether or not any express assignment has been made, the
provisions of this Agreement which are for the benefit of the purchasers or
holders of any type of Registrable Securities are, except as otherwise described
herein, also for the benefit of, and enforceable by, any subsequent holder of
such type of Registrable Securities (e.g., any subsequent purchaser of Boise
Registrable Securities or Aldabra Registrable Securities, as the case may be,
shall, except as otherwise described herein, have the rights of a holder of
Boise Registrable Securities or Aldabra Registrable Securities,
respectively). Furthermore, Boise may assign in writing, without the
consent of any other party hereto, any rights specific to Boise hereunder in
whole or in part to any transferee of Boise Registrable Securities.
Nothing herein shall limit the right of Boise or its shareholders to distribute
or otherwise transfer any Boise Registrable Securities hereunder to its direct
and indirect members, subject to such conditions as may be imposed by Boise with
respect thereto; provided that, upon any distribution by
OfficeMax, Inc. to its shareholders, Forest Products Holdings, L.L.C. to
its members or MDCP IV to its partners of any Boise Registrable
Securities, such distributing party may, with effect immediately prior to such
distribution, by written notice to the Company terminate the rights and
obligations of each distributee of such Registrable Securities that will
(together with its Affiliates),
34
after
giving effect to such distribution, hold less than 10% of the Company’s Common
Stock on a fully-diluted basis and is not otherwise an officer, director or
employee of the Company. Notwithstanding anything herein to the contrary, in
order to obtain any benefits of this Agreement, any subsequent holder of
Registrable Securities or any assignee of Boise must execute a counterpart to
this Agreement in form and substance satisfactory to the Company, thereby
agreeing to be bound the terms hereof.
(g)
Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
(h)
Governing
Law. The corporate law of the State of Delaware shall govern all
issues and questions concerning the relative rights of the Company and its
stockholders. All other issues and questions concerning the construction,
validity, interpretation and enforcement of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Delaware, without giving effect to any choice of law
or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. In furtherance of the
foregoing, the internal law of the State of Delaware shall control the
interpretation and construction of this Agreement (and all schedules and
exhibits hereto), even though under that jurisdiction’s choice of law or
conflict of law analysis, the substantive law of some other jurisdiction would
ordinarily apply. Whenever used herein, “including” means “including,
without limitation.”
(i)
Notices.
All notices, demands or other communications to be given or delivered under or
by reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given when delivered personally to the recipient, sent to
the recipient by reputable overnight courier service (charges prepaid) or mailed
to the recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications shall be
sent to a particular holder of Registrable Securities at the address indicated
on the books and records of the Company and to the Company at its principal
executive office (to the attention of the Company’s president) or to such other
address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party.
(j)
Entire
Agreement. Except as otherwise expressly set forth herein, this Agreement
embodies the complete agreement and understanding among the parties and
supersedes and preempts any prior understandings, agreements, or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way (including that certain Registration Rights Agreement,
dated as of June 19, 2007, by and among the Company and certain of its
stockholders, which is hereby terminated in its entirety).
(k)
References to Equity
Securities. Whenever there is a reference to any series, class or
type of equity securities (e.g., Common Stock),
such reference shall include a reference to any equity securities issued to the
holder thereof in respect of such securities in any merger, consolidation,
recapitalization, restructuring, exchange, conversion, stock spilt, stock
combination or other transaction.
(l)
Other
Matters. Promptly following the Closing, Boise intends distribute
to its parent company, BCH, all of the Boise Registrable Securities issued to
Boise on the date hereof pursuant to the Purchase Agreement. By BCH’s
execution of a counterpart signature page hereto and upon its receipt of
any Boise Registrable Securities, it is acknowledged and agreed that
(x) BCH shall automatically be deemed to be a party to this Agreement as a
holder of Boise Registrable Securities and (y) BCH shall succeed to all of
the rights and obligations of a holder of Boise Registrable Securities
hereunder.
35
*
* * * *
36
IN
WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as of
the date first written above.
|
ALDABRA
2 ACQUISITION CORPORATION
|
|
|
By:
|
/s/
Xxxxx X. Xxxxx
|
|||
Its:
|
Chief
Executive Officer
|
|||
BOISE
CASCADE, L.L.C.
|
||||
By:
|
/s/
Xxxxx X. Xxxxx
|
|||
Its:
|
Vice
President
|
|||
BOISE
CASCADE HOLDINGS, L.L.C.
|
||||
By:
|
/s/
Xxxxx X. Xxxxx
|
|||
Its:
|
Vice
President
|
|||
|
|
|
|
ALDABRA
SHAREHOLDERS:
|
||
/s/
Xxxxxx X. Xxxxxx
|
||
Xxxxxx
X. Xxxxxx
|
||
/s/
Xxxxx X. Xxxxx
|
||
Xxxxx
X. Xxxxx
|
||
/s/
Xxxxxxxx X. Xxxxxx
|
||
Xxxxxxxx
X. Xxxxxx
|
||
/s/
Xxxxxxx X. Xxxxx
|
||
Xxxxxxx
X. Xxxxx
|
/s/
Xxxx X. Xxxxxx
|
||
Xxxx
X. Xxxxxx
|
||
/s/
Xxxx Xxxxxxx
|
||
Xxxx
Xxxxxxx
|
||
|
|
|
TERRAPIN
PARTNERS VENTURE PARTNERSHIP
|
|
|
By:
|
/s/
Xxxxx X. Xxxxx
|
||||
Name:
|
Xxxxx
X. Xxxxx
|
||||
Title:
|
General
Partner
|
||||
TERRAPIN
PARTNERS EMPLOYEE PARTNERSHIP
|
|||||
By:
|
Terrapin
Partners, LLC,
|
||||
its
General Partner
|
|||||
By:
|
/s/
Xxxxx X. Xxxxx
|
|||
Name:
|
Xxxxx
X. Xxxxx
|
|||
Title:
|
Managing
Partner
|
|||
CONTINUATION
OF SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT