EXECUTION COPY
AMENDMENT NO. 3 TO THE CREDIT AGREEMENT
Dated as of May 19, 2005
AMENDMENT NO. 3 TO THE CREDIT AGREEMENT (this "Amendment No. 3") among
Headwaters Incorporated, a Delaware corporation, (the "Borrower"), the Lenders
(as hereinafter defined) party hereto, Morgan Stanley & Co. Incorporated
("MS&Co."), as collateral agent (the "Collateral Agent"), and Morgan Stanley
Senior Funding, Inc. ("Morgan Stanley"), as administrative agent (the
"Administrative Agent"; together with the Collateral Agent, the "Agents").
PRELIMINARY STATEMENTS:
(1) The Borrower, certain financial institutions and other persons from
time to time parties thereto (collectively, the "Lenders"), the Agents, JPMorgan
Chase Bank, N.A. ("JPMCB") (as successor to JPMorgan Chase Bank), as syndication
agent, and Morgan Stanley and J.P. Morgan Securities Inc., as joint lead
arrangers and joint bookrunners, have entered into that certain Credit Agreement
dated as of September 8, 2004 (as amended, restated, supplemented or otherwise
modified, the "Credit Agreement"; capitalized terms used herein but not defined
shall be used herein as defined in the Credit Agreement).
(2) The Borrower, the Agents and the Required Lenders have agreed,
subject to the terms and conditions hereinafter set forth, to amend the Credit
Agreement in certain respects as set forth below.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties hereto hereby agree as follows:
SECTION 1. Amendment of Credit Agreement. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 of this Amendment No. 3, hereby
amended as follows:
(a) Section 6.10(iv) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows: "(iv) so long as no
Default or unmatured Default exists at the time thereof or would arise
after giving effect thereto, (A) at any time after September 8, 2005
the Borrower may prepay the Second Lien Financing with cash on hand,
including cash proceeds from any litigation settlements and (B) the
Borrower may apply an aggregate amount of up to $50,000,000 in cash
proceeds from any litigation settlements to prepayment of the Second
Lien Financing, in each case with respect to this clause (iv),
including any prepayment premium and additional amounts or costs
payable in connection with such prepayment."
SECTION 2. Conditions to Effectiveness. This Amendment No. 3 and the
amendments contained herein shall become effective as of the date hereof (the
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2
"Amendment No. 3 Effective Date") when each of the conditions set forth in this
Section 2 to this Amendment No. 3 shall have been fulfilled to the satisfaction
of the Administrative Agent.
(i) Execution of Counterparts. The Administrative Agent shall
have received counterparts of this Amendment No. 3, duly executed and
delivered on behalf of each of the Borrower and the Required Lenders,
or, as to any of the foregoing parties, advice reasonably satisfactory
to the Administrative Agent that such party has executed a counterpart
of this Amendment No. 3.
(ii) Guarantor Consent. The Administrative Agent shall have
received the Consent attached hereto duly executed by each of the
Guarantors.
(iii) Payment of Fees and Expenses. The Borrower shall have
paid all reasonable expenses (including the reasonable fees and
expenses of Shearman & Sterling LLP) incurred in connection with the
preparation, negotiation and execution of this Amendment No. 3 and
other matters relating to the Credit Agreement from and after the last
invoice to the extent invoiced.
(iv) No Default. No Default or Unmatured Default shall have
occurred and be continuing, or would occur as a result of the
transactions contemplated by this Agreement.
SECTION 3. Confirmation of Representations and Warranties. Each of the
Credit Parties hereby represents and warrants, on and as of the date hereof,
that the representations and warranties contained in the Credit Agreement are
correct and true in all material respects on and as of the date hereof, before
and after giving effect to this Amendment No. 3, as though made on and as of the
date hereof, other than any such representations or warranties that, by their
terms, refer to a specific date.
SECTION 4. Reference to and Effect on the Loan Documents. (a) On and
after the effectiveness of this Amendment No. 3, each reference in the Credit
Agreement to "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the other transaction documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement, shall mean and be a reference to the Credit Agreement as
modified by this Amendment No. 3.
(b) The Credit Agreement, the Pledge and Security Agreement, the Notes
and each of the other Loan Documents, as specifically amended by this Amendment
No. 3, are and shall continue to be in full force and effect and are hereby in
all respects ratified and confirmed. Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described therein
do and shall continue to secure the payment of all Obligations of the Credit
Parties under the Loan Documents, in each case as amended by this Amendment No.
3.
(c) The execution, delivery and effectiveness of this Amendment No. 3
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Lender or any Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
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SECTION 5. Execution in Counterparts. This Amendment No. 3 may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment No. 3 by facsimile shall be effective as delivery of a manually
executed original counterpart of this Amendment No. 3.
SECTION 6. Governing Law. This Amendment No. 3 shall be governed by,
and construed in accordance with, the laws of the State of New York, and shall
be subject to the jurisdictional and service provisions of the Credit Agreement,
as if this were a part of the Credit Agreement.
SECTION 7. Entire Agreement; Modification. This Amendment No. 3
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, there being no other agreements or understandings, oral,
written or otherwise, respecting such subject matter, any such agreement or
understanding being superseded hereby, shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, and
may not be amended, extended or otherwise modified, except in a writing executed
in whole or in counterparts by each party hereto.
[Signatures follow.]
NYDOCS03/768241.1 Headwaters - First Lien Amendment No. 3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
HEADWATERS INCORPORATED
By /s/ Steven G. Stewart
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Title: Chief Financial Officer
MORGAN STANLEY SENIOR FUNDING, INC.,
as Administrative Agent and as a Lender
By /s/ Todd Vannucci
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Title: Executive Director
MORGAN STANLEY & CO. INCORPORATED,
as Collateral Agent
By /s/ Todd Vannucci
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Title: Executive Director
[And Other Lenders]
NYDOCS03/768241.1 Headwaters - First Lien Amendment No. 3
CONSENT
Dated as of May 19, 2005
Reference is made to the Credit Agreement referred to in the foregoing
Amendment No. 3 (capitalized terms used herein and not defined being used herein
as defined in the Credit Agreement). Each of the undersigned, in its capacity as
a Guarantor under the Guaranty Agreement and as a Grantor under the Pledge and
Security Agreement, hereby (i) consents to the execution, delivery and
performance of Amendment No. 3 and agrees that each of the Guaranty Agreement
and the Pledge and Security Agreement is, and shall continue to be, in full
force and effect and is hereby in all respects ratified and confirmed on the
Amendment No. 3 Effective Date, except that, on and after the Amendment No. 3
Effective Date, each reference to "the Credit Agreement", "thereunder",
"thereof", "therein" or words of like import referring to the Credit Agreement
shall mean and be a reference to the Credit Agreement as amended and otherwise
modified by Amendment No. 3 and (ii) confirms that the Collateral Documents to
which each of the undersigned is a party and all of the Collateral described
therein do, and shall continue to, secure the payment of all of the Secured
Obligations.
ACM BLOCK & BRICK GENERAL, INC.,
ACM BLOCK & BRICK PARTNER, LLC,
ACM BLOCK & BRICK, LLC,
ACM BLOCK & BRICK, LP,
ACM FLEXCRETE, LP,
ACM GEORGIA, INC.,
AMERICAN CONSTRUCTION MATERIALS, INC.,
BEST MASONRY & TOOL SUPPLY, INC.,
CHIHUAHUA STONE LLC,
COVOL ENGINEERED FUELS, LC,
COVOL SERVICES CORPORATION,
DON'S BUILDING SUPPLY, L.P.,
EAGLE STONE & BRICK LLC,
ELDORADO ACQUISITION, LLC,
ELDORADO G-ACQUISITION CO.,
ELDORADO SC-ACQUISITION CO.,
ELDORADO STONE ACQUISITION CO., LLC,
ELDORADO STONE CORPORATION,
ELDORADO STONE FUNDING CO., LLC,
ELDORADO STONE LLC,
ELDORADO STONE OPERATIONS LLC,
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GLOBAL CLIMATE RESERVE CORPORATION,
each as a Guarantor
By /s/ Steven G. Stewart
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Name: Steven G. Stewart
Title: Chief Financial Officer
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HEADWATERS CLEAN COAL CORP.,
HEADWATERS HEAVY OIL, INC.,
HEADWATERS NANOKINETIX, INC.,
HEADWATERS OLYSUB CORPORATION,
HEADWATERS TECHNOLOGY INNOVATION GROUP, INC.,
HTI CHEMICAL SUBSIDIARY, INC.
HYDROCARBON TECHNOLOGIES, INC.,
ISG MANUFACTURED PRODUCTS, INC.,
ISG PARTNER, INC.,
ISG RESOURCES, INC.,
ISG SERVICES CORPORATION,
ISG SWIFT CRETE, INC.,
L&S STONE LLC,
L-B STONE LLC,
LEWIS W. OSBORNE, INC.,
MAGNA WALL, INC.,
NORTHWEST PROPERTIES LLC,
NORTHWEST STONE & BRICK CO., INC.,
NORTHWEST STONE & BRICK LLC,
PALESTINE CONCRETE TILE COMPANY, L.P.,
STONECRAFT INDUSTRIES LLC,
TEMPE STONE LLC,
UNITED TERRAZZO SUPPLY CO., INC.,
VFL TECHNOLOGY CORPORATION,
each as a Guarantor
By /s/ Steven G. Stewart
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Name: Steven G. Stewart
Title: Chief Financial Officer
ELDORADO FUNDING CO., as a Guarantor
By /s/ Steven G. Stewart
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Name: Steven G. Stewart
Title: President
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TAPCO HOLDINGS, INC.,
TAPCO INTERNATIONAL CORPORATION,
VANTAGE BUILDING PRODUCTS CORPORATION,
MTP, INC.,
ATLANTIC SHUTTER SYSTEMS, INC.,
METAMORA PRODUCTS CORPORATION,
METAMORA PRODUCTS CORPORATION OF ELKLAND,
WAMCO CORPORATION,
BUILDERS EDGE, INC.,
COMACO, INC.,
each as a Guarantor
By /s/ Steven G. Stewart
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Name: Steven G. Stewart
Title: Vice President, Finance
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