Exhibit 10.47

 

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PW EAGLE, INC.

 

(a Minnesota corporation)

 

REGISTRATION RIGHTS AGREEMENT

 

Dated as of October 25, 2004

 

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TABLE OF CONTENTS

 

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ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION    1

1.1

   Definitions    1 ARTICLE II REGISTRATION RIGHTS    4

2.1

   Required Registration    4

2.2

   Piggyback Registration    6

2.3

   Registrations on Form S-3    6

2.4

   Holdback Agreement    7

2.5

   Preparation and Filing    8

2.6

   Expenses    10

2.7

   Indemnification    11

2.8

   Underwriting Agreement    13

2.9

   Information by Holder    13

2.10

   Exchange Act Compliance    13

2.11

   No Conflict of Rights    14

2.12

   Selection of Managing Underwriter    14 ARTICLE III MISCELLANEOUS    14

3.1

   Amendments and Waivers    14

3.2

   Severability    14

3.3

   Entire Agreement    15

3.4

   Successors and Assigns    15

3.5

   Counterparts; Facsimile Signatures    15

3.6

   Notices    15

3.7

   Governing Law    16

3.8

   Consent to Jurisdiction and Venue; Service of Process; Admissibility of
Photocopies; Waiver of Jury Trial    17

3.9

   Further Assurances    17

 

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REGISTRATION RIGHTS AGREEMENT dated as of October 25, 2004, between PW EAGLE,
INC., a Minnesota corporation (the “Company”), and Churchill Capital Partners
IV, L.P., a Delaware limited partnership (the “Investor”).

 

The Company and the Investor are party to (i) that certain Senior Subordinated
Note Purchase Agreement dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “Senior Subordinated
Note Purchase Agreement”), pursuant to the which the Investor purchased senior
subordinated notes from the Company in accordance with the terms thereof, (ii)
that certain Junior Subordinated Note Purchase Agreement dated as of the date
hereof (as amended, restated, supplemented or otherwise modified from time to
time, the “Junior Subordinated Note Purchase Agreement”), pursuant to the which
the Investor purchased junior subordinated notes from the Company in accordance
with the terms thereof, and (iii) that certain Warrant Agreement dated as of the
date hereof (as amended, restated, supplemented or otherwise modified from time
to time, the “Warrant Agreement”), pursuant to which the Investor acquired from
the Company warrants to purchase shares of the Company’s Common Stock, par value
$.01 per share. The Senior Subordinated Note Purchase Agreement and the Junior
Subordinated Note Purchase Agreement are herein collectively called the “Note
Purchase Agreements” and individually called a “Note Purchase Agreement”. The
Company and the Investor deem it to be in their respective best interests to set
forth the rights of the Investor in connection with public offerings and sales
of the capital stock of the Company.

 

ACCORDINGLY, in consideration of the mutual covenants and agreements contained
in this Agreement, the sufficiency of which is hereby acknowledged, the parties
agree as follows:

 

ARTICLE I

DEFINITIONS; RULES OF CONSTRUCTION

 

1.1 Definitions.

 

Capitalized terms used in this Agreement and not defined herein shall have the
meanings ascribed to them in the Warrant Agreement. The following capitalized
terms used in this Agreement have the meanings ascribed to them below:

 

“Affiliate” has the meaning ascribed to it in Rule 12b-2 promulgated under the
Exchange Act.

 

“Business Day” means any day that is not a Saturday, Sunday, legal holiday or
other day on which banks are required to be closed in Minneapolis, Minnesota.

 

“Commission” means the Securities and Exchange Commission or any other
Governmental Authority at the time administering the Securities Act.

 

“Common Stock” means, collectively, (a) the Common Stock, par value $.01 per
share, of the Company, (b) the Class B Common Stock, par value $.01 per share,
of the Company, and (c) any other class of capital stock of the Company
hereafter authorized that is not limited to a fixed sum or percentage of par or
stated value with respect to the rights of the

 

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holders thereof to participate in dividends or in the distribution of assets
upon any liquidation, dissolution or winding up of the Company.

 

“Common Stock Equivalents” means all shares of Common Stock outstanding and all
shares of Common Stock issuable (without regard to any present restrictions on
such issuance) upon the conversion, exchange or exercise of any Securities of
the Company.

 

“Company” has the meaning given to such term in the preamble to this Agreement.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934 or any successor
federal statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect from time to time.

 

“Holders” means, collectively, the Investor and its direct and indirect
transferees, so long as they hold Registrable Shares.

 

“Information” has the meaning given to such term in Section 2.5.

 

“Inspectors” has the meaning given to such term in Section 2.5.

 

“Investor” has the meaning given to such term in the preamble to this Agreement.

 

“Junior Note Purchase Agreement” has the meaning given to such term in the
preamble to this Agreement.

 

“Material Transaction” means any material transaction in which the Company or
any of its Subsidiaries proposes to engage or is engaged, including a purchase
or sale of assets or securities, financing, merger, consolidation, tender offer
or any other transaction that would require disclosure pursuant to the Exchange
Act, and with respect to which the Board of Directors of the Company reasonably
has determined in good faith that compliance with this Agreement may reasonably
be expected to either materially interfere with the Company’s or such
Subsidiary’s ability to consummate such transaction in a timely fashion or
require the Company to disclose material, non-public information prior to such
time as it would otherwise be required to be disclosed.

 

“Note Purchase Agreements” has the meaning given to such term in the preamble to
this Agreement.

 

“Other Shares” means at any time those shares of Common Stock which do not
constitute Primary Shares or Registrable Shares.

 

“Primary Shares” means, at any time, the authorized but unissued shares of
Common Stock or Common Stock held by the Company in its treasury or by any
Subsidiary of the Company.

 

“Prospectus” means any prospectus included in a Registration Statement,
including any prospectus subject to completion, and any such prospectus as
amended or

 

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supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Shares and, in each case, by all
other amendments and supplements to such prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.

 

“Public Offering” means the closing of a public offering of Common Stock
pursuant to a registration statement declared effective under the Securities
Act, except that a Public Offering shall not include an offering of securities
to be issued as consideration in connection with a business acquisition or an
offering of securities issuable pursuant to an employee benefit plan.

 

“Public Sale” means any sale, occurring simultaneously with or after a Public
Offering, of Securities to the public pursuant to an offering registered under
the Securities Act or to the public through a broker, dealer or market maker
(pursuant to the provisions of Rule 144 or otherwise).

 

“Records” has the meaning given to such term in Section 2.5.

 

“Registrable Shares” means all outstanding shares of Common Stock at any time
held by the Investor and all shares of Common Stock issuable (without regard to
any present restrictions on such issuance) upon the conversion, exchange or
exercise of any Securities of the Company at any time held by the Investor
(except any outstanding shares, and any shares issuable upon the conversion,
exchange or exercise of any Securities of the Company, theretofore disposed of
in a Public Sale or transferred to the Company or a Subsidiary of the Company).

 

“Registration Statement” means any registration statement of the Company which
covers any of the Registrable Shares, and all amendments and supplements to any
such Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

 

“Requisite Holders” means those Holders who hold in the aggregate at least 51%
of the Registrable Shares held by all Holders at any date of determination.

 

“Rule 144” means Rule 144 promulgated by the Commission under the Securities
Act, as such rule may be amended from time to time, or any similar or successor
rule then in force.

 

“Securities” means, with respect to any Person, such Person’s “securities” as
defined in Section 2(1) of the Securities Act and includes such Person’s capital
stock or other equity interests or any options, warrants or other securities
that are directly or indirectly convertible into, or exercisable or exchangeable
for, such Person’s capital stock or other equity or equity-linked interests,
including phantom stock and stock appreciation rights. Whenever a reference
herein to Securities is referring to any derivative Securities, the rights of
the Holders shall apply to such derivative Securities and all underlying
Securities directly or indirectly issuable upon conversion, exchange or exercise
of such derivative securities.

 

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“Securities Act” means the Securities Act of 1933 or any successor federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect from time to time.

 

“Senior Note Purchase Agreement” has the meaning given to such term in the
preamble to this Agreement.

 

“Spell Group” has the meaning given to such term in the Note Purchase
Agreements, as in effect on the date hereof.

 

“Stockholders’ Counsel” has the meaning given to such term in Section 2.5.

 

“Subsidiary” means, with respect to any Person, any other Person of which more
than 50% of the shares of stock or other interests entitled to vote in the
election of directors or comparable Persons performing similar functions
(excluding shares or other interest entitled to vote only upon the failure to
pay dividends thereon or other contingencies) are at the time owned or
controlled, directly or indirectly through one or more Subsidiaries, by such
Person. Notwithstanding the foregoing, USPoly Company, f/k/a PW Poly Corp.,
shall not be deemed to be a Subsidiary of the Company.

 

“Warrant Agreement” has the meaning given to such term in the preamble to this
Agreement.

 

ARTICLE II

REGISTRATION RIGHTS

 

2.1 Required Registration.

 

(a) If at any time the Company shall be requested by the Requisite Holders to
effect a registration under the Securities Act of Registrable Shares, it shall
promptly give written notice of such proposed registration to all Holders of
Registrable Shares and shall offer to include in such proposed registration any
Registrable Shares requested to be included in such proposed registration by
such Holders who respond in writing to the Company’s notice within 15 days after
delivery of such notice (which response shall specify the number of Registrable
Shares proposed to be included in such registration). The Company shall, subject
to Section 2.1(b) below, use its best efforts promptly to effect such
registration on an appropriate form under the Securities Act of the Registrable
Shares which the Company has been so requested to register.

 

(b) Anything contained in Section 2.1(a) to the contrary notwithstanding, the
Company shall not be obligated to use its best efforts to effect pursuant to
Section 2.1(a) any registration under the Securities Act except in accordance
with the following provisions:

 

(i) the Company shall not be obligated to use its best efforts to effect (A)
more than two registrations initiated pursuant to Section 2.1(a), provided that,
except as contemplated by Section 2.1(c), a registration shall not count as a
registration initiated pursuant to Section 2.1(a) unless a Registration
Statement has become effective and the participating Holders are able to sell
all of the Registrable Shares sought to be included in such Registration
Statement, or (B) any registration pursuant to Section 2.1(a) during any

 

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period in which any other registration statement (other than on Form S-4 or Form
S-8 promulgated under the Securities Act or any successor forms thereto)
pursuant to which Primary Securities are to be or were sold has been filed and
not withdrawn (provided that the Company is actively employing in good faith its
best efforts to cause such registration statement to become effective) or has
been declared effective within the prior 60 days;

 

(ii) the Company may delay the filing or effectiveness of any Registration
Statement for a period of up to 90 days after the date of a request for
registration pursuant to Section 2.1(a) if at the time of such request the
Company is engaged in a Material Transaction; provided, however, that the
Company may only delay the filing or effectiveness of a Registration Statement
pursuant to this Section 2.1(b)(ii) or suspend the effectiveness of a
Registration Statement on Form S-3 pursuant to Section 2.3 on one occasion
during any twelve-month period; and

 

(iii) with respect to any registration pursuant to Section 2.1(a), the Company
may include in such registration any Primary Shares or Other Shares; provided,
however, that if the managing underwriter advises the Company or any of the
Holders participating in such registration that the inclusion of all Securities
proposed or requested to be included in such registration would interfere with
the successful marketing (including pricing) of any such Securities, then the
number of Registrable Shares, Primary Shares and Other Shares proposed or
requested to be included in such registration shall be included in the following
order:

 

(A) first, the Registrable Shares requested to be included in such registration
pursuant to Section 2.1(a), pro rata based upon the ratio that the number of
Registrable Shares proposed to be sold by each Holder in such registration bears
to the aggregate number of Registrable Shares proposed to be sold by all Holders
in such registration; and

 

(B) second, the Primary Shares proposed to be included in such registration; and

 

(C) third, any Other Shares requested to be included in such registration.

 

(c) A requested registration under Section 2.1(a) may be rescinded by written
notice to the Company by the Holders of at least 51% of the Registrable Shares
to be included in such registration at any time (i) prior to the filing date of
a Registration Statement, in which event such rescinded registration shall not
count as a registration initiated pursuant to Section 2.1(a) above for purposes
of subclause (A) of clause (i) of subsection (b) above, and (ii) after the
filing date but prior to such registration being declared effective by the
Commission, in which event such rescinded registration shall not count as a
registration initiated pursuant to Section 2.1(a) for purposes of subclause (A)
of clause (i) of subsection (b) above if (x) the participating Holders
reasonably believed that the Registration Statement contained an untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, (y)
the participating Holders notified the Company of such

 

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fact and required that the Company correct such alleged misstatement or omission
and (z) the Company refused to correct such alleged misstatement or omission.

 

2.2 Piggyback Registration.

 

If the Company at any time proposes for any reason to register Primary Shares or
Other Shares under the Securities Act (other than on Form S-4 or Form S-8
promulgated under the Securities Act or any successor forms thereto), it shall
promptly give written notice to each Holder of its intention to so register such
Securities and, upon the written request, given within 20 days after delivery of
any such notice by the Company, of any such Holder to include in such
registration Registrable Shares (which request shall specify the number of
Registrable Shares proposed to be included in such registration), the Company
shall use its best efforts to cause all such Registrable Shares to be included
in such registration on the same terms and conditions as the Securities
otherwise being sold in such registration; provided, however, that if the
managing underwriter advises the Company and the Holders that the inclusion of
all Securities proposed or requested to be included in such registration would
interfere with the successful marketing (including pricing) of any such
Securities, then the number of Registrable Shares, Primary Shares and Other
Shares proposed or requested to be included in such registration shall be
included in the following order:

 

(i) first, (A) the Primary Shares proposed to be included in such registration,
if the registration was initiated by the Company, or (B) any Other Shares
requested to be included in such registration, if the registration was initiated
by the holder or holders of such Other Shares pursuant to the exercise of demand
registration rights in respect thereof;

 

(ii) second, the Primary Shares proposed to be included in such registration, if
the registration was not initiated by the Company;

 

(iii) third, the Registrable Shares requested to be included in such
registration pursuant to this Section 2.2, and any Other Shares requested to be
included in such registration pursuant to the exercise of incidental
registration rights, pro rata based upon the ratio that the number of shares of
Common Stock proposed to be sold by each such proposed seller in such
registration bears to the aggregate number of shares of Common Stock proposed to
be sold by all such prospective sellers in such registration; and

 

(iv) fourth, any Other Shares requested to be included in such registration
other than pursuant to the exercise of demand or incidental registration rights.

 

2.3 Registrations on Form S-3.

 

At such time as the Company shall have qualified for the use of Form S-3
promulgated under the Securities Act or any successor form thereto, the
Requisite Holders shall have the right to request in writing an unlimited number
of registrations on Form S-3, or such successor form, of Registrable Shares, and
upon receipt of such request, the Company shall use its best efforts promptly to
effect the registration under the Securities Act of the Registrable Shares so
requested to be registered. A requested registration on Form S-3 or any such
successor form in compliance with this Section shall not count as a registration
statement demanded pursuant to Section 2.1(a)

 

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for purposes of subclause (A) of clause (i) of Section 2.1(b), but shall
otherwise be treated as a registration initiated pursuant to and shall, except
as otherwise expressly provided in this Section, be subject to Section 2.1(b)
(including without limitation the provisions of Section 2.1(b)(ii)). Upon notice
to each Holder of Registrable Shares included therein, the Company may suspend
the effectiveness of any Registration Statement on Form S-3 for a period of up
to 90 days if at the time of such suspension the Company is engaged in a
Material Transaction; provided, however, that the Company may only delay the
filing or effectiveness of a Registration Statement pursuant to Section
2.1(b)(ii) or suspend the effectiveness of a Registration Statement on Form S-3
pursuant to this Section 2.3 on one occasion during any twelve-month period.

 

2.4 Holdback Agreement.

 

(a) If the Company at any time shall register shares of Common Stock under the
Securities Act in an underwritten offering pursuant to any other registration,
the Holders shall not, if requested by the managing underwriter, sell, make any
short sale of, grant any option for the purchase of, or otherwise dispose of for
value any Common Stock or Securities convertible into or exercisable or
exchangeable for Common Stock (other than (i) sales by a Holder as part of such
registration, (ii) Transfers by a Holder to any of its Affiliates, (iii)
Transfers by a Holder to the Company pursuant to Section 6.4 of the Warrant
Agreement, (iv) Transfers by a Holder to any successor corporation or other
successor business entity of such Holder as a result of a merger or
consolidation with, or sale of all or substantially all of the assets of, such
Holder, (v) Transfers by the Investor to any of its partners in connection with
the liquidation or dissolution of the Investor, or (vi) Transfers by a Holder to
any Person (other than as a part of a public offering) if such Holder
concurrently Transfers all or any part of its interest in any Note (as defined
in either Note Purchase Agreement) to such Person) without the prior written
consent of the Company for a period as shall be determined by the managing
underwriters, which period cannot begin more than seven days prior to the
effectiveness of such Registration Statement and cannot last more than 180 days
after the effective date of such Registration Statement (provided that no Holder
shall be bound by the restrictions contained in this Section 2.4(a) unless all
officers and directors of the Company and members of the Spell Group who hold
any Common Stock or Securities convertible into or exercisable or exchangeable
for Common Stock shall have agreed to comparable restrictions in respect of such
registration).

 

(b) If the Company at any time pursuant to Sections 2.1, 2.2 or 2.3 of this
Agreement shall register under the Securities Act Registrable Shares held by
Holders for sale to the public pursuant to an underwritten offering, the Company
shall not, without the prior written consent of the Holders of at least 51% of
the Registrable Shares included in such registration, effect any public sale or
distribution of Securities similar to those being registered, or any Securities
convertible into or exercisable or exchangeable for such Securities, for such
period as shall be determined by the managing underwriters, which period shall
not begin more than seven days prior to the effectiveness of the Registration
Statement pursuant to which such Public Offering shall be made and shall not
last more than 180 days after the effective date of such Registration Statement
(except as part of such underwritten registration or pursuant to registrations
on Form S-8 or any successor form).

 

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2.5 Preparation and Filing.

 

If and whenever the Company is under an obligation pursuant to the provisions of
this Article II to use its best efforts to effect the registration of any
Registrable Shares, the Company shall, as expeditiously as practicable:

 

(i) use its best efforts to cause a Registration Statement that registers such
Registrable Shares to become and remain effective for a period of 180 days or
until all of such Registrable Shares have been disposed of (if earlier);

 

(ii) furnish, at least five Business Days before filing a Registration Statement
that registers such Registrable Shares, a Prospectus relating thereto and any
amendments or supplements relating to such Registration Statement or Prospectus,
to one counsel selected by the Requisite Holders (the “Stockholders’ Counsel”),
copies of all such documents proposed to be filed (it being understood that such
five-Business Day period need not apply to successive drafts of the same
document proposed to be filed so long as such successive drafts are supplied to
the Stockholder’s Counsel in advance of the proposed filing by a period of time
that is customary and reasonable under the circumstances);

 

(iii) prepare and file with the 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 at least the
period set forth in clause (i) above or until all of such Registrable Shares
have been disposed of (if earlier) and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of such Registrable
Shares;

 

(iv) notify the Stockholders’ Counsel promptly in writing (A) of any comments by
the Commission with respect to such Registration Statement or Prospectus, or any
request by the Commission for the amending or supplementing thereof or for
additional information with respect thereto, (B) of the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement or Prospectus or any amendment or supplement thereto or the initiation
of any proceedings for that purpose, and (C) of the receipt by the Company of
any notification with respect to the suspension of the qualification of such
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purposes;

 

(v) use its best efforts to register or qualify such Registrable Shares under
such other securities or blue sky laws of such jurisdictions as any seller of
Registrable Shares reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller of
Registrable Shares to consummate the disposition in such jurisdictions of the
Registrable Shares owned by such seller; provided, however, that the Company
will not be required to (A) qualify or register such Registrable Shares in more
than five jurisdictions, or (B) qualify generally to do business, subject itself
to general taxation or consent to general service of process in any jurisdiction
where it would not otherwise be required so to do but for this clause (v);

 

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(vi) furnish to each seller of such Registrable Shares such number of copies of
a summary Prospectus or other Prospectus, including a preliminary Prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such seller of Registrable Shares may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Shares;

 

(vii) use its best efforts to cause such Registrable Shares to be registered
with or approved by such other governmental agencies or authorities as may be
necessary by virtue of the business and operations of the Company and its
Subsidiaries to enable the seller or sellers thereof to consummate the
disposition of such Registrable Shares;

 

(viii) notify on a timely basis each seller of such Registrable Shares at any
time when a Prospectus relating to such Registrable Shares is required to be
delivered under the Securities Act within the appropriate period mentioned in
clause (i) of this Section 2.5 of the happening of any event as a result of
which the Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing and, at the request
of such seller, prepare and furnish to such seller a reasonable number of copies
of a supplement to or an amendment of such Prospectus as may be necessary so
that, as thereafter delivered to the offerees of such Registrable Shares, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing,
and each seller of Registrable Shares agrees not to offer or sell such
Registrable Shares until receipt of timely notice from the Company that such
supplement or amendment is effective;

 

(ix) make available for inspection by any seller of such Registrable Shares, 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 (collectively, the “Inspectors”) all pertinent financial,
business and other records, pertinent corporate documents and properties of the
Company and its Subsidiaries (collectively, the “Records”) as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the officers, directors and employees of the Company
and its Subsidiaries to supply all information (together with the Records, the
“Information”) reasonably requested by any such Inspector in connection with
such Registration Statement (and any of the Information which the Company
determines in good faith to be confidential, and of which determination any
Inspector is so notified, shall not be used by such Inspector for any purpose
other than exercise of such due diligence responsibility and shall not be
disclosed by such Inspector unless (A) the disclosure of such Information is
necessary to avoid or correct a material misstatement or omission in the
Registration Statement, (B) the release of such Information is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction (it being
agreed that promptly following receipt of any such subpoena or order such
Inspector, unless prohibited by law, will notify the Company thereof and allow
the Company, at the Company’s expense, to undertake appropriate action to
prevent disclosure of such Information), or (C) such Information has been made
generally available to the public);

 

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(x) use its best efforts to obtain from its independent certified public
accountants a “cold comfort” letter or letters in customary form and covering
such matters of the type customarily covered by cold comfort letters;

 

(xi) use its best efforts to obtain, from its counsel, an opinion or opinions in
customary form (which shall also be addressed to the Holders selling Registrable
Shares in such registration);

 

(xii) provide a transfer agent and registrar (which may be the same entity and
which may be the Company) for such Registrable Shares;

 

(xiii) issue to any underwriter to which any seller of Registrable Shares may
sell Securities in such offering certificates evidencing such Registrable
Shares;

 

(xiv) list such Registrable Shares on each securities exchange or automated
quotation system on which any shares of Common Stock are listed (to the extent
not theretofore listed in accordance with the provisions of the Warrant
Agreement) and, if the Common Stock is not then listed on a national securities
exchange or national automated quotation system, use its best efforts to qualify
such Registrable Shares for inclusion on such national securities exchange or
national automated quotation system as the Requisite Holders shall request;

 

(xv) otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its securityholders, as
soon as reasonably practicable, earnings statements, which need not be audited,
covering a period of 12 months beginning within three months after the effective
date of the Registration Statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act; and

 

(xvi) use its best efforts to take all other steps necessary to effect the
registration of such Registrable Shares contemplated hereby.

 

2.6 Expenses.

 

All expenses incurred by the Company in complying with Section 2.5, including,
without limitation, all registration and filing fees (including all expenses
incident to filing with the National Association of Securities Dealers), fees
and expenses of complying with securities and blue sky laws, printing expenses,
fees and expenses of the Company’s counsel and accountants, and fees and
expenses of the Stockholders’ Counsel up to $30,000, shall be paid by the
Company; provided, however, that all underwriting discounts or broker discounts
or commissions applicable to the Registrable Shares and all fees and expenses of
counsel for the seller or sellers (other than fees and expenses of the
Stockholders’ Counsel up to $30,000) shall not be borne by the Company but shall
be borne by the seller or sellers, in proportion to the number of Registrable
Shares sold by such seller or sellers.

 

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2.7 Indemnification.

 

(a) In connection with any registration of any Registrable Shares under the
Securities Act pursuant to this Article II, the Company shall indemnify and hold
harmless the seller of such Registrable Shares, each underwriter, broker or any
other Person acting on behalf of such seller, each other Person, if any, who
controls any of the foregoing Persons within the meaning of the Securities Act
and each representative of any of the foregoing Persons, against any losses,
claims, damages or liabilities, joint or several, to which such Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement under which such Registrable Shares
were registered, any preliminary Prospectus or final Prospectus contained
therein, any amendment or supplement thereto or any document incident to
registration or qualification of any Registrable Shares, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or, with respect to any Prospectus, necessary to make the statements
therein in light of the circumstances under which they were made not misleading,
or any violation by the Company of the Securities Act or state securities or
blue sky laws applicable to the Company and relating to action or inaction
required of the Company in connection with such registration or qualification
under such state securities or blue sky laws, and the Company shall promptly
reimburse such seller, such underwriter, such broker, such controlling Person or
such representative for any legal or other expenses incurred by it in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Company shall not be liable to any such
Person to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in said Registration Statement, preliminary Prospectus,
amendment, supplement or document incident to registration or qualification of
any Registrable Shares in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
Person, or a Person duly acting on its behalf, specifically for use in the
preparation thereof; provided further, however, that the foregoing indemnity
agreement is subject to the condition that, insofar as it relates to any untrue
statement, allegedly untrue statement, omission or alleged omission made in any
preliminary Prospectus but eliminated or remedied in the final Prospectus (filed
pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not
inure to the benefit of any indemnified party from whom the Person asserting any
loss, claim, damage, liability or expense purchased the Registrable Shares which
are the subject thereof, if a copy of such final Prospectus had been timely made
available to such indemnified party and such final Prospectus was not delivered
to such Person with or prior to the written confirmation of the sale of such
Registrable Shares to such Person.

 

(b) In connection with any registration of Registrable Shares under the
Securities Act pursuant to this Article II, each seller of Registrable Shares
shall indemnify and hold harmless the Company, each underwriter or broker
involved in such offering, each other seller of Registrable Shares under such
Registration Statement, each Person who controls any of the foregoing Persons
within the meaning of the Securities Act and any representative of the foregoing
Persons against any losses, claims, damages or liabilities, joint or several, to
which such Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any

 

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statement in or omission from such Registration Statement, any preliminary
Prospectus or final Prospectus contained therein, any amendment or supplement
thereto or any document incident to registration or qualification of any
Registrable Shares, which statement or omission was made in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such seller or a Person duly acting on its behalf
specifically for use in connection with the preparation of such Registration
Statement, preliminary Prospectus, final Prospectus, amendment, supplement or
document, and such seller shall promptly reimburse the Company, such
underwriter, such broker, such other seller, such controlling Person or such
representative for any legal or other expenses incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the maximum amount of liability in respect of such
indemnification shall be limited, in the case of each seller of Registrable
Shares, to an amount equal to the proceeds actually received by such seller from
the sale of Registrable Shares effected pursuant to such registration.

 

(c) Promptly after receipt by an indemnified party of notice of the commencement
of any action involving a claim referred to in the preceding paragraphs of this
Section 2.7, such indemnified party will, if a claim in respect thereof is made
against an indemnifying party, give written notice to the latter of the
commencement of such action (provided however, that an indemnified party’s
failure to give such notice in a timely manner shall only relieve the
indemnification obligations of an indemnifying party to the extent such
indemnifying party is prejudiced by such failure). In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof; provided, however, that if any indemnified
party shall have reasonably concluded that there may be one or more legal or
equitable defenses available to such indemnified party which are in addition to
or conflict with those available to the indemnifying party, or that such claim
or litigation involves or could have an effect upon matters beyond the scope of
the indemnity agreement provided in this Section 2.7, the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
indemnified party and such indemnifying party shall reimburse such indemnified
party and any Person controlling such indemnified party for that portion of the
reasonable fees and expenses of any one lead counsel (plus appropriate special
and local counsel) retained by the indemnified party which are reasonably
related to the matters covered by the indemnity agreement provided in this
Section 2.7. Notwithstanding the foregoing, the indemnity agreements set forth
in this Section 2.7 shall not apply to amounts paid in settlement if such
settlement is effected without the written consent of the indemnifying party
(which consent shall not be unreasonably withheld).

 

(d) If the indemnification provided for in this Section 2.7 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, claim, damage or liability 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 or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the

 

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indemnified party on the other hand in connection with the statements, omissions
or violations which resulted in such loss, claim, damage or liability as well as
any other relevant equitable considerations; provided, however, that the maximum
amount of liability in respect of such contribution shall be limited, in the
case of each seller of Registrable Shares, to an amount equal to the proceeds
actually received by such seller from the sale of Registrable Shares effected
pursuant to such registration. The relative fault of the indemnifying party and
of the indemnified party in connection with any untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact shall be determined by reference to, among other things, whether
such statement or omission 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.

 

(e) The indemnification and contribution provided for under this Article II will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party and will survive the transfer of Securities.

 

2.8 Underwriting Agreement.

 

(a) Notwithstanding the provisions of Sections 2.5 and 2.7, to the extent that
the sellers of Registrable Shares in a proposed registration shall enter into an
underwriting or similar agreement, which agreement contains provisions covering
one or more issues addressed in such sections of this Article II, the provisions
contained in such sections of this Article II addressing such issue or issues
shall be of no force or effect with respect to such registration, but this
provision shall not apply to the Company if the Company is not a party to the
underwriting or similar agreement.

 

(b) If any registration pursuant to Sections 2.1 or 2.2 is requested to be an
underwritten offering, the Company shall negotiate in good faith to enter into a
reasonable and customary underwriting agreement with the underwriters thereof.
The Company shall be entitled to receive indemnities from underwriters
participating in the distribution, to the same extent as provided above with
respect to information so furnished in writing by such Persons specifically for
inclusion in any Prospectus or Registration Statement and to the extent
customary given their role in such distribution.

 

2.9 Information by Holder.

 

Each Holder of Registrable Shares to be included in any registration shall
furnish to the Company and the managing underwriter such written information
regarding such Holder and the distribution proposed by such Holder as the
Company or the managing underwriter may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Article II.

 

2.10 Exchange Act Compliance.

 

The Company shall comply with all of the reporting requirements of the Exchange
Act and shall comply with all other public information reporting requirements of
the Commission which are conditions to the availability of Rule 144 for the sale
of the Common Stock. The Company shall cooperate with each Holder in supplying
such information as may be necessary

 

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for such Holder to complete and file any information reporting forms presently
or hereafter required by the Commission as a condition to the availability of
Rule 144.

 

2.11 No Conflict of Rights.

 

The Company represents and warrants to the Investor that the registration rights
granted to the Investor hereby do not conflict with any other registration
rights granted by the Company. The Company shall not, after the date hereof,
grant any registration rights which conflict with or impair, or have any
priority over, the registration rights granted hereby.

 

2.12 Selection of Managing Underwriter.

 

In any underwritten Public Offering of Registrable Shares, the managing
underwriter shall be an investment banking firm selected by the Company and
reasonably acceptable to the Holders of at least 51% of the Registrable Shares
to be included in the registration.

 

ARTICLE III

MISCELLANEOUS

 

3.1 Amendments and Waivers.

 

(a) Written Document. Any provision of this Agreement may be amended or waived,
but only pursuant to a written agreement signed by the Company and the Requisite
Holders, provided that no such amendment or modification shall affect the rights
and benefits of less than all of the Holders without the prior written consent
of each Holder materially and adversely affected thereby.

 

(b) No Waiver; Cumulative Remedies. No failure on the part of any Holder to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.

 

3.2 Severability.

 

It is the desire and intent of the parties hereto that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

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3.3 Entire Agreement.

 

This Agreement, and the Note Documents and other Equity Documents referred to in
the Note Purchase Agreements, embody the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof and thereof
and supersede and preempt any and all prior and contemporaneous understandings,
agreements, arrangements or representations by or among the parties, written or
oral, which may relate to the subject matter hereof or thereof in any way. Other
than this Agreement, the Note Documents and the other Equity Documents, there
are no agreements continuing in effect relating to the subject matter hereof and
thereof.

 

3.4 Successors and Assigns.

 

Except as otherwise provided herein, this Agreement will bind and inure to the
benefit of and be enforceable by the Company and its successors and assigns and
the Investor and any subsequent Holders of Registrable Shares and the respective
successors and assigns of each of them, so long as they hold Registrable Shares.
This Agreement is not intended to create any third party beneficiaries, except
as provided in Section 2.7 hereof.

 

3.5 Counterparts; Facsimile Signatures.

 

This Agreement may be executed in any number of counterparts, and each such
counterpart hereof shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement. Facsimile counterpart
signatures to this Agreement shall be acceptable and binding.

 

3.6 Notices.

 

All notices, demands and requests of any kind to be delivered to any party
hereto in connection with this Agreement shall be in writing and (i) delivered
personally, (ii) sent by nationally-recognized overnight courier, (iii) sent by
first class, registered or certified mail, return receipt requested or (iv) sent
by facsimile, in each case to such party at its address as follows:

 

  (a) if to the Company, to:

 

PW Eagle, Inc.

1550 Valley River Drive

Eugene, Oregon 97401

Attention: Scott Long

Telecopier No.: (541) 686-9248

 

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with a copy (which shall not constitute notice) to:

 

Fredrikson & Byron, P.A.

4000 US Bank Plaza

200 South Sixth Street

Minneapolis, Minnesota 55402-3397

Attention: K. Lisa Holter, Esq.

Telecopier No.: (612) 347-7077

 

  (b) if to the Investor, to:

 

Churchill Capital Partners IV, L.P.

2400 Metropolitan Centre

333 South Seventh Street

Minneapolis, Minnesota 55402

Attention: Kevin C. Dooley, General Counsel

Telecopier No: (612) 673-6615

- and -

Attention: Mark McDonald, Partner

Telecopier No.: (612) 673-6630

 

with a copy (which shall not constitute notice) to:

 

Faegre & Benson LLP

2200 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota 55402

Attention: Susan L. Jacobson

Telecopier No: (612) 766-1600

 

  (c) if to any other Holder, to such address as such Holder shall have
specified to the Company in writing.

 

Any notice, demand or request so delivered shall constitute valid notice under
this Agreement and shall be deemed to have been received (i) on the day of
actual delivery in the case of personal delivery, if delivered on a Business Day
(otherwise on the next Business Day), (ii) on the next Business Day after the
date when sent in the case of delivery by nationally-recognized overnight
courier, (iii) on the fifth Business Day after the date of deposit in the U.S.
mail in the case of mailing or (iv) upon receipt in the case of a facsimile
transmission. Any party hereto may from time to time by notice in writing served
as aforesaid upon the Company, if such party is a Holder, or upon each of the
Holders, if such party is the Company, designate a different address or a
different Person or Persons to whose attention all such notices, demands or
requests thereafter are to be addressed.

 

3.7 Governing Law.

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota (without giving effect to principles of conflicts of
laws).

 

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3.8 Consent to Jurisdiction and Venue; Service of Process; Admissibility of
Photocopies; Waiver of Jury Trial.

 

Regardless of any present or future domicile of the Company, the Company hereby
submits to the jurisdiction and venue of the United States District Court for
the District of Minnesota, and the Hennepin County District Court, State of
Minnesota, for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company hereby
irrevocably agrees that all claims in respect of such action or proceeding may
be heard and determined in any such court and irrevocably waives any objection
it may now or hereafter have as to the jurisdiction or venue of any such suit,
action or proceeding brought in such a court or that such court is an
inconvenient forum. Nothing herein shall limit the right of the Holders to bring
proceedings against the Company in any other court of competent jurisdiction.
Any legal proceeding by the Company against any Holder involving, directly or
indirectly, any matter in any way arising out of, related to, or connected with
this Agreement shall be brought only in the United States District Court for the
District of Minnesota, or the Hennepin County District Court, State of
Minnesota. In the event the Company commences any action against a Holder in
another jurisdiction or venue arising directly or indirectly from the
relationship created by this Agreement, such Holder shall be entitled to have
the case transferred to the jurisdiction and venue above-described, or if such
transfer cannot be accomplished under applicable law, to have such case
dismissed without prejudice. The Company hereby consents to service of process
by registered mail delivered in accordance with the provisions of Section 3.6 or
service of process in any other legal manner at the option of any Holder. This
Agreement and all documents relating thereto, including, without limitation, (a)
consents, waivers and modifications that may hereafter be executed, (b)
documents received by any Holder, and (c) financial statements, certificates and
other information previously or hereafter furnished to any Holder may be
reproduced by such Holder by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process. The Company agrees
and stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course of
business) and any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.

 

THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

3.9 Further Assurances.

 

Each party hereto shall do and perform or cause to be done and performed all
such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the provisions of this Agreement
and the consummation of the transactions contemplated hereby.

 

* * * * *

 

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IN WITNESS WHEREOF, the undersigned have duly executed this Registration Rights
Agreement as of the date first written above.

 

COMPANY: PW EAGLE, INC.

By:

 

/s/ Dobson West

Name:

 

Dobson West

Title:

 

Secretary

 

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INVESTOR:

CHURCHILL CAPITAL PARTNERS IV, L.P.,

a Delaware limited partnership

By Churchill Capital IV, L.L.C., its General Partner

By Churchill Capital, Inc. as Managing Agent

By:

 

/s/ Mark McDonald

Its

 

Partner

 

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