Exhibit 10.13.7
NOTE RESTRUCTURE AND ASSUMPTION AGREEMENT
THIS AGREEMENT is made and entered into this 24th day of October, 2001
by and between Gerald M. Larson ("Larson"), Larson Holdings, Inc., a Utah
corporation, ("Larson Holdings"), The Murdock Group Holding Corporation, a Utah
corporation ("Murdock"), Clear Capital Holdings, Inc., a Utah corporation
("CCH"), Pelican Point Rock Products, Inc., a Utah corporation ("Pelican" and
collectively with Larson, Larson Holdings, Murdock and CCH, the "Borrowers") and
Headwaters Incorporated, a Delaware corporation ("Headwaters").
RECITALS
A. Pursuant to a Note Restructure Agreement dated January 26,
2001, Larson issued to Headwaters a Promissory Note dated January 26, 2001 in
the original principal amount of One Million Seven Hundred Fifty Thousand
Dollars (the "Original Note").
B. In June, 2001, Larson Holding's subsidiary Larson
Limestone, Inc. ("LLI") sold substantially all of its assets to CCH in exchange
for cash, assumption of the Original Note and other debt and the issuance of
shares in Murdock valued at $2,550,000. As a result of such sale, the Original
Note became immediately due and payable.
C. The Borrowers have proposed that the Original Note be
restructured such that (i) Larson makes an immediate payment of $750,000 of
principal and Headwaters forgive any accrued interest, (ii) Murdock makes a
further $550,000 principal reduction through the issuance to Headwaters of
Murdock common stock, (iii) $250,000 of the remaining principal balance will be
the primary responsibility of Murdock, guaranteed by Larson, Larson Holdings,
Murdock, CCH, and Pelican (iv) $200,000 of the remaining principal will be the
primary responsibility of Murdock, guaranteed by CCH and Pelican, and (v)
Pelican will secure its guarantee of the $250,000 Murdock note and the $200,000
Murdock note by a security interest in the limestone plant and related real
property acquired from LLI; provided that Headwaters agrees to subordinate such
security interest to certain bank financing described below. Headwaters is
willing to accede to such request on the terms and conditions described below.
NOW THEREFORE, in consideration of the premises, the covenants and
conditions contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree to be
legally bound as follows:
1. The Borrowers shall deliver to Headwaters, and Headwaters shall
accept from the Borrowers, in full satisfaction of the Original Note, the
following:
(a) A payment in cash, cashier's check or wire
transfer of immediately available funds in the amount of
$750,000 to be applied against the principal of the Original
Note through the effective date of the restructure (as defined
below).
(b) A new Promissory Note in the original principal
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amount of $250,000 (the "$250,000 Note") in the form attached
hereto as Exhibit "A" signed by Murdock and guaranteed by
Larson, Larson Holdings, CCH, and Pelican.
(c) A new Promissory Note in the original principal
amount of $200,000 (the "$200,000 Note") in the form attached
hereto as Exhibit "B" signed by Murdock and guaranteed by CCH
and Pelican.
(d) A Trust Deed from Pelican relating to the LLI
limestone plant and real property securing Pelican's
guaranties of the $250,000 Note and the $200,000 Note in the
form attached hereto as Exhibit "C".
(e) A lender's policy of Title Insurance from a
reputable title insurance company doing business in Utah
insuring Headwaters' interest under the Trust Deed in form and
substance satisfactory to Headwaters.
(f) Certificate(s) for 1,122,449 restricted common
shares of Murdock (the "Murdock Shares"), valued at
$550,000.00 based on a $0.4899999 per share price for the
Murdock common shares (which per share price is the same as
the per share price use to calculate Murdock shares
deliverable to Larson by Murdock as a part of the merger
transaction). The Murdock Shares will be entitled to the
benefit of the Registration Rights Agreement attached hereto
as Exhibit "D".
2. The effective date of the restructure shall be such time as
Headwaters has received the funds and documents set forth in Paragraphs 1(a)
through (f) duly executed in form acceptable to it. Upon the effective date of
the restructure, Headwaters (i) will mark the Original Note as "paid in full" or
"canceled" and deliver it to Larson; (ii) will deliver to Larson the stock of
Larson Holdings held pursuant to a Stock Pledge and Security Agreement from
Larson, such agreement being of no further force or effect; and (iii) will
deliver to Larson Holdings the stock of LLI held pursuant to a Stock Pledge and
Security Agreement from Larson Holdings, such agreement being of no further
force or effect.
3. If the effective date of the restructure does not occur by October
31, 2001, Headwaters may notify Larson and Murdock that it is terminating this
Agreement and Headwaters may immediately thereafter enforce its rights and
remedies under the Original Note and Murdock's agreement to assume the Original
Note.
4. Larson and Larson Holdings, jointly and severally, represent and
warrant to Headwaters as follows:
(a) The guaranty of the $250,000 Note by Larson and Larson
Holdings and this Agreement have been duly authorized by all necessary
corporate action on the part of Larson and Larson Holdings,
respectively, and such agreements are binding upon Larson and Larson
Holdings, respectively in accordance with their terms.
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(b) Larson acknowledges that Headwaters' forgiveness of the
accrued interest on the Original Note may be deemed forgiveness of
indebtedness income to Larson.
5. Murdock, CCH and Pelican, jointly and severally, represent and
warrant to Headwaters as follows:
(a) The $250,000 Note, the $200,000 Note, the guaranties, the
Trust Deed, the Registration Rights Agreement and this Agreement have
been duly authorized by all necessary corporate action on the part of
Murdock, CCH and Pelican, respectively, and such agreements are binding
upon Murdock, CCH and Pelican respectively in accordance with their
terms.
(b) The Murdock Shares have been duly authorized by Murdock
and shall be duly issued, fully paid and non-assessable. On the
effective date of the restructure, the Murdock Shares will represent
____% of Murdock's issued and outstanding common stock and a ____%
interest in Murdock on a fully-diluted basis.
(c) Murdock has provided Headwaters with all of its reports
and other documents filed, or required to be filed, during the past
fourteen months with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934 (the "Exchange Act"). CCH does not
file reports under the Exchange Act, but has provided Headwaters with
all of its filings with the Securities and Exchange Commission pursuant
to the Securities Act of 1933. Except as maybe supplemented in writing
by Murdock, Murdock's Exchange Act filings and CCH's Securities act
filings do not, and at the effective date of the restructure will not,
contain any misstatement of material fact, or omit to state any
material fact required to be stated therein or necessary to keep the
statements therein from becoming misleading.
(d) The limestone plant and real property described in the
Trust Deed are owned by Pelican free and clear of all liens and
encumbrances other than a first priority lien in favor of Zions First
National Bank (the "Bank Interest") securing a Promissory Note dated
October 19, 2001 in the original principal amount of $2,940.000.00. CCH
is not in default with respect to the Bank Interest.
(e) Pelican has been duly formed and is currently in good
standing as a corporation under the laws of the state of Utah. Pelican
is a 100% owned subsidiary of CCH. Pelican acknowledges that it has
received good and valuable consideration for its guarantee of the
Murdock Note and the granting of the Trust Deed in that the Murdock
Note represents part of the purchase price for the limestone plant
which Pelican obtained from CCH.
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6. Headwaters represents and warrants to Murdock that it is an
"accredited investor" (as defined in Rule 501 of Regulation D promulgated by the
Securities and Exchange Commission) and has the financial and business
experience necessary to evaluate the merits and risks of its investment
represented by Murdock Shares.
7. The parties to this Agreement will execute, acknowledge and deliver
all such instruments and take all such action as may be reasonably requested by
the other party in order to further effectuate the purposes of this Agreement
and to carry out the terms hereof.
8. This Agreement shall inure to the benefit of and shall be binding
upon the heirs, personal representatives and successors of the parties hereto.
9. This Agreement and the rights and obligations hereunder shall be
construed in accordance with and governed by the laws of the State of Utah
without regard to principles of conflicts of law.
10. This Agreement may be executed in multiple counterpart, which taken
together shall constitute a single instrument.
11. This Agreement, together with the $250,000 Note, the $200,000 Note,
the guaranties, the Registration Rights Agreement and the Trust Deed (together,
the "Transaction Documents") contain all covenants, terms, provisions, and
agreements between the parties hereto or thereto relating to the subject matter
of the Transaction Documents. No prior agreement with respect to the same shall
be of any force or effect, and no covenant, term, provision, or agreement of any
Transaction Document may be modified except in a writing executed by all parties
to the Transaction Documents.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
/s/Gerald M. Larson
Gerald M. Larson
LARSON HOLDINGS, INC.
By:/s/Gerald M. Larson, CEO
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THE MURDOCK GROUP HOLDING
CORPORATION
By:/s/K.C. Holmes, CEO
CLEAR CAPITAL HOLDINGS, INC.
By:/s/Lance Heaton, CEO
PELICAN POINT ROCK PRODUCTS, INC.
By:/s/Lance Heaton, Pres.
HEADWATERS INCORPORATED
By:/s/Brent M. Cook
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