EXECUTION COPY
AMENDMENT NO. 4 TO THE CREDIT AGREEMENT
Dated as of October 26, 2005
AMENDMENT NO. 4 TO THE CREDIT AGREEMENT (this "Amendment No. 4") 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 and modified pursuant to consents
dated November 6, 2004 and December 16, 2004, Amendment No. 2 to the Credit
Agreement dated March 14, 2005 and Amendment No. 3 to the Credit Agreement dated
May 19, 2005, 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. 4, hereby
amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
(i) adding to the end of the definition of "Subsidiary",
immediately before the period, the following proviso: "; provided that
no JV Entity shall be considered a "Subsidiary" of the Borrower for any
purpose under this Agreement, including, without limitation, for
purposes of the covenants set forth in Sections 6.21, 6.22 and 6.23".
(ii) inserting the following new definitions in the
appropriate alphabetical position:
" "JV Entity" means a JV Subsidiary or a JV Subsidiary Holding
Company."
" "JV Subsidiary" means (i) Blue Flint Ethanol, LLC formed on
June 3, 2005 and (ii) any Subsidiary formed or invested in by the
Borrower or one of its Subsidiaries after October 26, 2005 pursuant to
Section 6.13.4."
" "JV Subsidiary Holding Company" means each direct or
indirect Subsidiary of the Borrower that holds the Equity Interests in
a JV Subsidiary in accordance with Section 6.31 and that does not own
any assets other than Equity Interests in one or more JV Subsidiaries."
(b) Section 6.13.4 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"6.13.4 Investments in joint ventures or Persons in which the Borrower
or any Subsidiary owns less than 100% of the issued and outstanding
equity interests thereof, including the Investments described in
Schedule 6.13(B), provided that (a) Investments made pursuant to this
Section 6.13.4 after June 1, 2005 shall not exceed in the aggregate
$85,000,000 outstanding at any time (giving effect to any returns in
respect of such Investment actually received by the Borrower or another
Credit Party in cash) and (b) Investments pursuant to this Section
6.13.4 shall be made in compliance with Section 6.31; provided further
that (i) both before and after such Investment, on a pro forma basis,
the Borrower would have been in compliance with its financial covenants
set forth in Sections 6.21, 6.22 and 6.23 for the four fiscal quarter
period reflected in the compliance certificate most recently delivered
to the Administrative Agent pursuant to Section 6.1.3 prior to the
consummation of such Investment (giving effect to such Investment and
all Indebtedness funded in connection therewith as if made on the first
day of such period) and (ii) no Default or Unmatured Default is
occurring or continuing or would result from such Investment (including
all Indebtedness funded in connection therewith)."
(c) Section 6.23 of the Credit Agreement is hereby amended by deleting
the table that appears therein in its entirety and replacing it with the
following:
"For fiscal year: Capital Expenditures
---------------- --------------------
2005 $62,000,000
2006 $72,000,000
2007 through 2011 $75,000,000".
(d) A new Section 6.33 is added to the Credit Agreement to read as
follows:
6.33 JV Entities Separateness. The Borrower shall comply, and cause
each of its Subsidiaries and each JV Entity to comply, with the following:
6.33.1 To the extent that any JV Entity has cash, each JV
Entity will maintain its own deposit account or accounts, separate from
those of the Borrower and its Subsidiaries, with commercial banking
institutions and ensure that its funds will not be used for other than
its corporate uses, nor will such funds be commingled with the funds of
any of the Borrower and its Subsidiaries and vice versa.
6.33.2 Each JV Entity will maintain a separate address from
the address of any of the Borrower and its Subsidiaries and vice versa,
or to the extent any JV Entity may have offices in the same location as
any of the Borrower and its Subsidiaries, maintain a fair and
appropriate allocation of additional, incremental overhead costs among
them, with each such entity bearing its fair share of such expense.
6.33.3 Any JV Entity will issue separate financial statements
prepared not less frequently than quarterly and prepared in accordance
with GAAP (except for the omission of certain footnotes and other
presentation items required by GAAP with respect to audited financial
statements), which financial statements need not be separately audited
or reviewed by an independent accounting firm.
6.33.4 Each JV Entity will be a corporate or limited liability
company and each JV Entity will conduct its affairs strictly in
accordance with its certificate of incorporation or formation and
by-laws or limited liability company agreement (or similar constitutive
documents) and observe all necessary, appropriate and customary company
(or corporate) formalities, including, but not limited to, holding all
regular and special members' and board of managers' (or stockholders'
and directors' or other similar Persons') meetings appropriate to
authorize all company (or corporate) action, keeping separate and
accurate minutes of its meetings, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts, to the
extent applicable.
6.33.5 Each JV Entity will refrain from assuming or
guaranteeing any of the liabilities or pledging any of its assets for
the benefit of any of the Borrower and its Subsidiaries and each of the
Borrower and its Subsidiaries will refrain from assuming or
guaranteeing any of the liabilities or pledging any of its assets for
the benefit of any JV Entity or holding out its credit as being
available to satisfy the obligations of any JV Entity.
6.33.6 Each JV Entity will use its best efforts to refrain
from using the stationery of any of the Borrower and its Subsidiaries
but instead effecting all written communications in its own name and
vice versa; provided that in the event either (x) a JV Entity, on the
one hand, or (y) any of the Borrower or any Subsidiary of the Borrower,
on the other hand, (each of (x) and (y), a "Group") conducts business
on behalf of any member of the other Group, such agency relationships
shall be fully disclosed to applicable third parties when acting in
such capacity.
6.33.7 Each JV Entity will conduct all its business in its own
name and use its best efforts to avoid the appearance that it is
conducting business on behalf of any of the Borrower and its
Subsidiaries and vice versa; provided that in the event either (x) a JV
Entity, on the one hand, or (y) any of the Borrower or any Subsidiary
of the Borrower, on the other hand, (each of (x) and (y), a "Group")
conducts business on behalf of any member of the other Group, such
agency relationship shall be fully disclosed to applicable third
parties when acting in such capacity.
SECTION 2. Consent. Subject to the satisfaction of the conditions
precedent set forth in Section 2 of this Amendment No. 4, the Required Lenders
hereby consent to the release by the Collateral Agent of the pledge, assignment
and security interest in the Equity Interests of Blue Flint Ethanol, LLC granted
by the Credit Parties under the terms of the Collateral Documents.
SECTION 3. Conditions to Effectiveness. This Amendment No. 4 and the
amendments and consent contained herein shall become effective as of the date
hereof (the "Amendment No. 4 Effective Date") when each of the conditions set
forth in this Section 3 to this Amendment No. 4 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. 4, 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. 4.
(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. 4 and other matters relating to the Credit
Agreement from and after the last invoice to the extent invoiced.
(iv) No Default or Unmatured Default shall have occurred and be
continuing, or would occur as a result of the transactions contemplated by this
Amendment No. 4.
SECTION 4. Confirmation of Representations and Warranties(i) . Each of
the Credit Parties hereby represents and warrants, on and as of the date hereof,
that (a) 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. 4, 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 and (b) no Default or Unmatured Default
has occurred and is continuing, or would occur as a result of the transactions
contemplated by this Amendment No. 4.
SECTION 5. Reference to and Effect on the Loan Documents. (a) On and
after the effectiveness of this Amendment No. 4, 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. 4.
(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. 4, 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.
4.
(c) The execution, delivery and effectiveness of this Amendment No. 4
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.
SECTION 6. Execution in Counterparts. This Amendment No. 4 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. 4 by facsimile shall be effective as delivery of a manually
executed original counterpart of this Amendment No. 4.
SECTION 7. Governing Law. This Amendment No. 4 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 8. Entire Agreement; Modification. This Amendment No. 4
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.]
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/ Scott K. Sorensen
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Title: CFO
MORGAN STANLEY SENIOR FUNDING, INC.,
as Administrative Agent and as a Lender
By /s/ Eugene F. Martin
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Title: Vice President
MORGAN STANLEY & CO. INCORPORATED,
as Collateral Agent
By /s/ Eugene F. Martin
----------------------------------------
Title: Managing Director
JPMORGAN CHASE BANK, N.A., as a Lender
By /s/ David F. Howard
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Title: Vice President
[and other lenders]
CONSENT
Dated as of October 26, 2005
Reference is made to the Credit Agreement referred to in the foregoing
Amendment No. 4 (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. 4 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. 4 Effective Date, except that, on and after the Amendment No. 4
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. 4 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,
GLOBAL CLIMATE RESERVE CORPORATION,
each as a Guarantor
By /s/ Harlan M. Hatfield
Name: Harlan M. Hatfield
Title: Vice President
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/ Harlan M. Hatfield
Name: Harlan M. Hatfield
Title: Vice President
ELDORADO FUNDING CO., as a Guarantor
By /s/ Harlan M. Hatfield
Name: Harlan M. Hatfield
Title: Vice President
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/ Harlan M. Hatfield
Name: Harlan M. Hatfield
Title: Vice President