Exhibit 10.17
INVESTOR RIGHTS
AGREEMENT
THIS INVESTOR RIGHTS AGREEMENT (this
“ Agreement ”) is made as of December 26, 2006,
by and among Aldabra Acquisition Corporation, a Delaware
corporation (the “ Company ”); Madison Dearborn
Capital Partners IV, L.P., a Delaware corporation (“
MDCP ”), certain directors and officers of the Company
who are shareholders of the Company on the date hereof and who are
signatories to this Agreement (the “ Aldabra
Shareholders ”), each of the Persons listed on the
signature pages hereto as “Other Investors” (the
“ Other Investors ”), and for the purposes set
forth in Section 13(e), Great Lakes Dredge & Dock Holdings
Corp. (“ Holdco ”). Certain capitalized
terms have the meanings set forth in Section 12
hereof. Capitalized terms used, but not otherwise defined,
herein shall have the meanings set forth in the Merger Agreement
(as hereinafter defined).
The Company, GLDD Acquisitions Corp.
(“ GLDD ”), Aldabra Merger Sub, L.L.C., a
Delaware limited liability company (“ Merger Sub
”), MDCP (solely in its capacity as Company Representative)
and the Buyer Representative (as named therein) are parties to that
certain Agreement and Plan of Merger, dated as of June 20, 2006 (as
amended, modified, supplemented or waived from time to time, the
“ Merger Agreement ”) pursuant to which GLDD is
merging with and into Merger Sub (the “ Merger
”).
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 the Company to consummate the
Merger.
Certain Other Investors are members
of management of GLDD and its Subsidiaries are parties to a
Management Equity Agreement among such Other Investors and the
Company dated as of December 26, 2003 (as amended or modified from
time to time, the “ Management Equity Agreement
”) and are acquiring shares of Common Stock of the Company in
connection with the Merger and agreeing that the Common Stock so
acquired remain subject to certain restrictions of the Management
Equity Agreement and that certain other provisions of the
Management Equity Agreement are hereby terminated.
MDCP and certain Other Investors
that are not members of management of the Company are acquiring
shares of Common Stock of the Company in connection with the
Merger.
The Company’s execution and
delivery of this Agreement is a condition to GLDD’s
obligations under the Merger Agreement.
The parties hereto agree as
follows:
1.
Board Representatives . Subject to the limitations set
forth in this Section 1 , the holders of a majority of MDCP
Registrable Securities shall have the right to designate up to the
Applicable Number of representatives for election to the Board
(individually a “ Board Representative ” and
collectively the “ Board Representatives
”). 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 that MDCP is no longer entitled to designate directors with
multiple votes (as determined in accordance with the
Company’s Certificate of Incorporation) (the “
Beginning Date ”) until the Expiration Date, the
holders of a majority of the MDCP Registrable Securities may
nominate up to the Applicable Number of 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 Board to the
Company, the Company shall take all action necessary such that the
number of directors on the Board shall (if necessary) be increased
by the Applicable Number and such vacancies shall be filled by the
designees of the holders of a majority of MDCP Registrable
Securities effective as of the day following the Beginning Date
(or, if later, the date that the holders of a majority of MDCP
Registrable Securities determines to appoint such Board
Representative); provided that if the Company avoids its
obligations under this sentence or this Section 1(a) because
it deems such nomination to be in violation of fiduciary duties of
members of the Board, the holders of MDCP Registrable Securities
shall be entitled to appoint an alternative nominee to be a Board
Representative. Each Board Representative appointed pursuant
to this Section 1(a) shall continue to hold office until
such Board Representative’s term expires, subject, however,
to prior death, resignation, retirement, disqualification or
termination of term of office as provided in this Section 1
.
(b)
Continuing Designation of Board Representatives . On
and prior to the Expiration Date, in connection with the expiration
of the term of any Board Representative, the Company shall, subject
to the provisions of Section 1(c) and subject only to such
nomination not being in violation of the fiduciary duties of
members of the Board, nominate the Board Representative(s)
designated by the holders of a majority of MDCP Registrable
Securities for election to the Board by the holders of voting
capital stock and solicit proxies from the Company’s
stockholders in favor of the election of such Board
Representative(s); provided that if the Company avoids its
obligations under this sentence or this Section 1(b) because
it deems such nomination to be in violation of fiduciary duties of
members of the Board, the holders of MDCP Registrable Securities
shall be entitled to appoint an alternative nominee to be a Board
Representative. Subject to the provisions of Section
1(c) , the Company shall use commercially reasonable efforts to
cause such Board Representative(s) to be elected to the Board
(including voting all unrestricted proxies in favor of the election
of such Board Representative(s) and including recommending approval
of such Board Representative(s)’ appointment to the Board as
provided for in the Company’s proxy statement) and shall not
take any action which would diminish the prospects of such Board
Representative(s) being elected to the Board.
(c)
Termination of Board Representative Designation Rights
. The right of holders of a majority of MDCP Registrable
Securities to designate a Board Representative pursuant to this
Section 1 shall terminate on the Expiration Date. If
the rights of holders of a majority of MDCP Registrable Securities
to designate a Board Representative cease under the immediately
preceding sentence, then the Company may use commercially
reasonable efforts to effect the removal of such
director.
(d)
Resignation; Removal; and Vacancies .
(i)
Resignation
. An
elected Board Representative may resign from the Board at any time
by giving written notice to the Company at its principal executive
office. The resignation is effective without acceptance when
the
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notice is given
to the Company, unless a later effective time is specified in the
notice.
(ii)
Removal
. So long
as the holders of a majority of MDCP Registrable Securities retain
the right to designate a director pursuant to Section 1(b) ,
the Company shall use commercially reasonable efforts to remove any
Board Representative only if so directed in writing by the holders
of a majority of MDCP Registrable Securities.
(iii)
Vacancies
. In the
event of a vacancy on the Board resulting from the death,
disqualification, resignation, retirement or termination of term of
office of the Board Representative designated by the holders of a
majority of MDCP Registrable Securities, then the Company shall use
commercially reasonable efforts to fill such vacancy with a
representative designated by the holders of a majority of the MDCP
Registrable Securities 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
Board in the manner set forth in the Company’s Bylaws).
If the holders of MDCP Registrable Securities fail or decline to
fill the vacancy, then the directorship shall remain open until
such time as the holders of a majority of MDCP Registrable
Securities elect to fill it with a representative designated
hereunder. During any such period that the holders of MDCP
Registrable Securities, as the case may be, are entitled to, but
have failed or declined to, designate a Board Representative, the
holders of a majority of MDCP Registrable Securities shall have the
right to designate one representative to attend all Board meetings
as a non-voting observer. The observer shall be entitled to
notice of all Board meetings in the manner that notice is provided
to members of the Board, shall be entitled to receive all materials
provided to members of the Board, shall be entitled to attend
(whether in person, by telephone, or otherwise) all meetings of the
Board as a non-voting observer, and shall be entitled to fees and
expenses paid to Board Representatives pursuant to Section
1(e) .
(e)
Fees & Expenses . Board Representatives shall be
entitled to fees, other compensation and reimbursement of expenses
paid to Board members who are not employees of the Company or its
Subsidiaries.
(f)
Subsidiary Boards; Committees . Subject to applicable
law, at the request of MDCP, the Company shall use commercially
reasonable efforts to cause the Board Representative(s) to have
proportional representation (relative to their percentage on the
whole Board) on the board of directors (or similar governing body)
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 Board
Representative designated pursuant to the provisions of this
Section 1 , the holders of MDCP Registrable Securities shall
cause the Board Representative to provide to the Company with all
necessary
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assistance and
information related to such Board Representative that is required
under Regulation 14A under the Securities Exchange Act of 1934 (as
amended) 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.
2.
Covenants .
(a)
Financial Statements and Other Information. The
Company shall deliver to each holder of more than 25% of the MDCP
Registrable Securities:
(i)
as soon as
available but in any event within 30 days after the end of each
monthly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows
of the Company and its Subsidiaries for such monthly period and for
the period from the beginning of the fiscal year to the end of such
month, and unaudited consolidating and consolidated balance sheets
of the Company and its Subsidiaries as of the end of such monthly
period, setting forth in each case comparisons to the
Company’s annual budget and to the corresponding period in
the preceding fiscal year;
(ii)
within 45 days
after the end of each quarterly accounting period in each fiscal
year, unaudited consolidating and 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 consolidating
and 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 Company’s annual budget and to the
corresponding period in the preceding fiscal year, and all such
items shall be prepared in accordance with generally accepted
accounting principles, consistently applied and shall be certified
by a senior executive officer of the Company;
(iii)
within 90 days
after the end of each fiscal year, consolidating and consolidated
statements of income, cash flows and shareholders’ equity of
the Company and its Subsidiaries for such fiscal year, and
consolidating 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 Company’s annual budget and
to the preceding fiscal year, all prepared in accordance with
generally accepted accounting principles, consistently applied, 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 of directors;
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(iv)
promptly upon
receipt thereof, any additional reports, management letters or
other detailed information concerning significant aspects of the
Company’s or its Subsidiaries’ operations or financial
affairs given to the Company by its independent accountants (and
not otherwise contained in other materials provided
hereunder);
(v)
not later than 45
days after the beginning of each fiscal year, 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
(vi)
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 2(a) may reasonably
request.
Each of the financial statements
referred to in subparagraphs (i), (ii) and (iii) above shall be
true and correct in all material respects as of the dates and for
the periods stated therein, subject in the case of the unaudited
financial statements to 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).
(b)
Inspection Rights . The Company shall permit any
representatives designated by any holder of more than 25% of the
MDCP Registrable Securities, upon reasonable notice and during
normal business hours 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 holder to the
Company’s independent accountants shall constitute the
Company’s permission to its independent accountants to
participate in discussions with such Persons.
(c)
Confidentiality . To the extent that any such
information made available to any holder of MDCP Registrable
Securities 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 Registrable
Securities party to this Agreement shall be deemed by its execution
hereof to have satisfied the condition referred to in this
Section 2(c) .
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(d)
Restrictions . As long as MDCP owns at least 25% of
the voting power of all shares of capital stock of the Company,
from and after the Effective Time, the Company shall not, without
the prior written consent of MDCP:
(i)
directly or
indirectly declare or pay any dividends or make any distributions
upon any of its capital stock or other equity securities, except
that the Company may declare and pay dividends payable in shares of
Common Stock issued upon the outstanding shares of Common Stock and
any Subsidiary may declare and pay dividends or make distributions
to the Company or any Wholly-Owned Subsidiary;
(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 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.
(iii)
except as
expressly contemplated by this Agreement and the Merger 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
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 Subsidiary), except for
(a) reasonable advances to employees in the ordinary course of
business, (b) acquisitions permitted pursuant to subparagraph
(viii) below, (c) 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 Moody’s Investors Service, Inc., or
(d) loans for acquisitions of capital stock pursuant to
agreements or plans,
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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;
(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
$20,000,000 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 business other than dredging and
demolition;
(xi)
make any
amendment to or rescind (including, without limitation, in each
case by merger or consolidation) any provision of the certificate
of incorporation or articles of incorporation, or the by-laws, of
the Company or any of its Subsidiaries, or file any resolution of
the board of directors with the secretary of state of the state of
incorporation 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
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reasonable terms
and except as otherwise expressly contemplated by this
Agreement;
(xiii)
create, incur,
assume or suffer to exist, or permit any Subsidiary to create,
incur, assume or suffer to exist, indebtedness for borrowed money
and/or capitalized lease obligations exceeding an aggregate
principal amount of $20,000,000 outstanding at any time on a
consolidated basis, other than pursuant to facilities in effect on
the date of this Agreement;
(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
Subsidiary; or
(xv)
agree to any of
the foregoing.
(e)
Affirmative Covenants . As long as MDCP owns at least
25% of the voting power of all shares of capital stock of the
Company, from and after the Effective Time, the Company shall
unless it has received the prior written consent of
MDCP:
(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;
(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 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;
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(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 generally accepted
accounting principles, consistently applied.
3.
Demand Registrations .
(a)
Requests for Registration . At any time after the date
hereof, the holders of at least a majority of MDCP Registrable
Securities may 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 (ii) on Form S-3 or any similar
short-form registration (“ Short-Form Registrations
”) if available. In addition, from and after February
17, 2008, the holders of at least a majority of Aldabra Registrable
Securities may request registration under the Securities Act of all
or any portion of their Registrable Securities in the form of (i) a
Long-Form Registration and (ii) a Short-Form Registration ,
if available. All registrations requested pursuant to this
Section 3(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 and the anticipated per share
price range for such offering. Within ten days after receipt
of any such request, the Company shall give written notice of such
requested registration to all other holders of Registrable
Securities and (subject to the remainder of this Section 3 )
shall include in such registration 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.
(b)
Number of Demand Registrations . The holders of MDCP
Registrable Securities shall be entitled to request three Long-Form
Registrations and an unlimited number of Short-Form Registrations
and the holders of Aldabra Registrable Securities shall be
entitled, to the extent provided under Section 3(a) , to
request one Long-Form Registration and one Short-Form Registration,
as applicable, with respect to which the Company shall pay all
Registration Expenses as set forth in Section 4 ;
provided that the aggregate offering value of the
Registrable Securities requested to be registered in any Long-Form
Registration must equal at least $20 million. A registration
shall not count as one of the permitted Long-Form Registrations
until it has become effective, and no Long-Form Registration shall
count as one of the permitted Long-Form Registrations unless the
holders of Registrable Securities are able to register and sell
at
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least 90% of the
Registrable Securities requested to be included in such
registration; provided that in any event the Company shall
pay all Registration Expenses in connection with any registration
initiated as a Demand Registration whether or not it has become
effective.
(c)
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 50% or more of the Registrable Securities included in
such registration. If a Demand Registration is an
underwritten offering and the managing underwriters advise the
Company in writing 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 therein
in an orderly manner in such offering within a price range
acceptable to the holders of a majority of the Registrable
Securities requested to be included therein, then the Company (i)
shall include in such registration only such number as may be sold
therein in such an orderly manner, and (ii) prior to the inclusion
of any securities which are not Registrable Securities shall
include Registrable Securities pro rata among the respective
holders thereof on the basis of the amount of Registrable
Securities owned by each such holder (with the pro rata share of
each such holder determined in accordance with Section 4 of this
Agreement); provided , however, that if the managing
underwriters determine that the inclusion of the number of Other
Investor Registrable Securities and Aldabra Registrable Securities
proposed to be included in any such offering would adversely affect
the marketability of such offering, the Company may exclude such
number of Other Investor Registrable Securities and Aldabra
Registrable Securities as necessary to negate such adverse impact;
provided that the provisions of
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