Exhibit 10.55

 

FIRST AMENDMENT TO WARRANT

 

THIS FIRST AMENDMENT TO WARRANT (this “Amendment”) is made and entered into as
of October 25, 2004, by and between CORPORATE PROPERTY ASSOCIATES 14
INCORPORATED, a Maryland corporation (the “Holder”) having an address at c/o
W.P. Carey & Co. LLC, 50 Rockefeller Plaza, 2nd Floor, New York, NY 10020, and
PW EAGLE, INC., a Minnesota corporation (“Company”), having an address at 1550
Valley River Drive Eugene, OR 97401.

 

W I T N E S S E T H:

 

WHEREAS, Holder and Company entered into that certain Warrant dated as of
February 28, 2002 (the “Warrant”), pursuant to which Company issued to Holder
warrants for the purchase of 120,000 shares of common stock of the Company;

 

WHEREAS, Holder and Company desire to amend the Warrant to modify certain
provisions;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Holder and Company covenant and agree as
follows:

 

1. All undefined capitalized terms used herein shall have the same meanings as
set forth in the Warrant.

 

2. Article I of the Warrant is hereby amended by insertion of the following
definitions to read in their entireties as follows:

 

“2004 Warrants” means the warrants issued under that certain Warrant Agreement
dated on or about the date hereof between the Company and the holders of a
senior subordinated note in the original principal amount of $16,000,000 and a
junior subordinated note in the original principal amount of $8,000,000 executed
by the Company in favor of the purchasers thereof dated on or about the date
hereof.”

 

3. The definition of “Subsidiary” in Article I of the Warrant is amended in its
entirety to read as follows:

 

““Subsidiary” means any corporation or association (a) more than 50% (by number
of votes) of the Voting Stock of which is at the time owned by the Company or by
one or more Subsidiaries or by the Company and one or more Subsidiaries, or any
other business entity in which the Company or one or more Subsidiaries or the
Company and one or more Subsidiaries owns more than a 50% interest either in the
profits or capital of such business entity or (b) whose net earnings, or
portions thereof, are

 

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consolidated with the net earnings of the Company and are recorded on the books
of the Company for financial reporting purposes in accordance with generally
accepted accounting principles. Notwithstanding the foregoing, USPoly Company,
f/k/a PW Poly Corp., shall not be deemed to be a Subsidiary of the Company.

 

4. As a result of the issuance of the 2004 Warrants, under Sections 4.1 and
4.2(b) and (c) of the Warrant Agreement, the Warrant shall be exercisable for
125,818 shares of Common Stock and the Exercise Price shall be $0.00954 per
share of Common Stock (in each case subject to adjustment, other than as a
result of such issuance, as provided in the Warrant).

 

5. Section 4.1(o) of the Warrant is hereby amended by striking the word “and”
following the phrase “Class B Common Stock” within subsection (v) and by the
addition of the following text immediately after the reference to “approved by
the Company’s shareholders” within subsection (vi):

 

“and; (vii) the issuance of shares of Common Stock upon the exercise of the 2004
Warrants.”

 

6. The last full paragraph of Section 5.2 of the Warrant is amended in its
entirety to read as follows:

 

“If the managing underwriter, who shall be selected by the Person originally
requesting such registration to manage the distribution of the Warrant Shares
being registered, advises the prospective sellers in writing that the aggregate
number of Warrant Shares and shares of Common Stock proposed to be sold in the
proposed distribution by the Company and other security holders should be less
than the number of such shares requested to be registered by all prospective
sellers, then the shares proposed or requested to be included in such
registration shall be included in the following order: (a) first, all of the
shares proposed to be sold by the Person originally requesting such registration
pursuant to this Section 5.2; (b) second, any securities being registered by the
Company; (c) third, any shares proposed to be sold by any security holders
exercising incidental registration rights, pro rata based upon the ratio that
the number of shares of Common Stock proposed to be sold by each such
prospective seller bears to the aggregate number of shares of Common Stock
proposed to be sold by all such prospective sellers; and (d) fourth, any other
shares requested to be included in such registration other than pursuant to the
exercise of demand or incidental registration rights. If such underwriter
determines that the number of Shares of Common Stock (including all Warrant
Shares) proposed to be sold is insufficient to proceed with such registration or
qualification, the Company shall immediately recapitalize its Common Stock to
enable such registration and qualification to be completed as such underwriter
advises.

 

7. The second full paragraph of Section 5.3 of the Warrant is amended in its
entirety to read as follows:

 

“If the managing underwriter, who shall be selected by the Company, if such
distribution is a primary offering, or by the security holders, if such security
holders are exercising demand registration rights, to manage the distribution of
the shares of Common Stock being registered, advises the Company in writing
that, in its opinion, the inclusion of the Piggy-Back Shares with the securities
being registered by the Company and/or other prospective sellers would
materially adversely affect the distribution of all such securities, then the
shares proposed or requested to be included in such registration

 

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shall be included in the following order: (a) first, all of the shares proposed
to be sold by the Company, if the registration was initiated by the Company, or
by the security holders exercising demand registration rights, as the case may
be; (b) second, the securities being registered by the Company, if the
registration was not initiated by the Company; (c) third, any shares proposed to
be sold by any security holders exercising incidental registration rights
(including without limitation any Piggy-Back Shares), pro rata based upon the
ratio that the number of shares of Common Stock proposed to be sold by each such
prospective seller bears to the aggregate number of shares of Common Stock
proposed to be sold by all such prospective sellers; and (d) fourth, any other
shares requested to be included in such registration other than pursuant to the
exercise of demand or incidental registration rights. In the event that some or
all of the Piggy-Back Shares proposed to be sold by prospective sellers are not
included in such distribution, the Company shall use its best efforts to effect
and maintain any such registration or qualification under the Securities Act and
the securities or blue sky laws of any jurisdiction as may be necessary to
permit such prospective seller to make its proposed offering and sale following
the end of a period not to exceed 90 days after the effective date of such
registration and shall pay all expenses related thereto in accordance with
Section 5.4.

 

8. The Company represents and warrants that the information set forth in Exhibit
1 to this Amendment, setting forth the detail for the calculation of the amounts
set forth in Section 4 hereof, is true and correct. Exhibit 1, together with
this Amendment, shall constitute the certificate described in Section 4.4(a) of
the Warrant.

 

9. This Amendment may be executed in any number of and by different parties
hereto on separate counterparts, including by facsimile, all of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement.

 

10. This Amendment and the Warrant together contain the entire understanding
between the parties hereto and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof or thereof. Any
promises, representations, warranties or guarantees not herein or therein
contained and hereinafter made shall have no force and effect unless in writing,
and executed by the party or parties making such representations, warranties or
guarantees. Neither this Amendment nor the Warrant nor any portion or provisions
hereof or thereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged.

 

THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the day and year first above written.

 

       

HOLDER:

        CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED             By:  

/s/ Tom Lewis

           

Name:

 

Tom Lewis

           

Title:

 

Senior Vice President

       

COMPANY:

        PW EAGLE, INC., a Minnesota corporation

By:

 

/s/ Jerry Dukes

      By:  

/s/ Dobson West

Name:

 

Jerry Dukes

     

Name:

 

Dobson West

Title:

 

President

     

Title:

 

Secretary

 

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EXHIBIT 1

 

PW Eagle, Inc.

Anti-Dilution Calculations

 

     Before Adjustment Data     

A

   Exercise Price    0.01

B

   Outstanding Shares    7,539,591

H

   Warrant Shares Issuable    120,000

C

   Market Price Date of Issuance    3.43

D

   New Warrants Issued    366,651

E

   Exercise Price of New Warrants    0.01

F

   Consideration Received on Exercise    3,667

G

   After Issuance Outstanding Shares    7,906,242

J

   Adjusted Exercise Price    0.00954

 

Exercise Price Adjustment:

A*

  

((B*C)+F)/B

     =   0.00954      C                

Number of Shares Adjustment:

H*

  

A

     =   125,818     

J

               

Additional Shares Issuable

   5,818

 

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