Recitals

Second Amendment to Loan and Security Agreement and Second Amendment to Guaranty and Security Agreement

Exhibit 4.9.2

EXECUTION VERSION

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND SECOND

AMENDMENT TO GUARANTY AND SECURITY AGREEMENT

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND SECOND AMENDMENT TO GUARANTY AND SECURITY AGREEMENT (this “Amendment”), dated as of February 15, 2011 is entered into by and among the Lenders signatory hereto, BANK OF AMERICA, N.A., as Agent for the Lenders (in such capacity, “Agent”), HEADWATERS CONSTRUCTION MATERIALS, INC., a Utah corporation (“HCM”), TAPCO INTERNATIONAL CORPORATION, a Michigan corporation (“Tapco”), HEADWATERS RESOURCES, INC., a Utah corporation (“HRI”, and together with HCM, Tapco, and each of HRI’s, HCM’s and Tapco’s subsidiaries identified on the signature pages hereof, each individually a “Borrower”, and collectively, the “Borrowers”) and HEADWATERS INCORPORATED, a Delaware corporation (“Parent”).

RECITALS

A. Borrowers, Agent and the lenders party thereto from time to time (each a “Lender” and collectively the “Lenders”) have previously entered into that certain Loan and Security Agreement dated as of October 27, 2009 (as amended, supplemented, restated and modified from time to time, the “Loan Agreement”), pursuant to which the Lenders have made certain loans and financial accommodations available to Borrowers. Terms used herein without definition shall have the meanings ascribed to them in the Loan Agreement.

B. Parent and Agent have previously entered into that certain Guaranty and Security Agreement dated as of October 27, 2009 (as amended, supplemented, restated and modified from time to time, the “Guaranty”), pursuant to which Parent has guarantied the loans and other financial accommodations made available to Borrowers by Agent and the Lenders.

C. Borrowers have requested that Agent and the Required Lenders amend the Loan Agreement and Parent has requested that Agent and the Required Lenders amend the Guaranty, which Agent and the Required Lenders are willing to do pursuant to the terms and conditions set forth herein.

D. Borrowers and Parent are entering into this Amendment with the understanding and agreement that, except as specifically provided herein, none of Agent’s or any Lender’s rights or remedies as set forth in the Loan Agreement or the Guaranty is being waived or modified by the terms of this Amendment.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

1. Amendments to Loan Agreement.

(a) The following definitions are hereby added in alphabetical order to Section 1.1 of the Loan Agreement:

Senior Notes Refinancing Condition: the following conditions for Senior Notes Refinancing Debt: (a) all such Debt is in an aggregate principal amount that does not exceed $420,000,000; (b) all of the proceeds of such Debt are used (i) to repurchase the Senior Secured Notes through a tender offer, open market purchase, redemption or


discharge of the Senior Secured Notes and (ii) to pay reasonable, documented, out-of-pocket costs and expenses incurred by Borrowers or Parent in connection with the issuance of such Debt, including tender premiums, consent payments, redemption premiums and accrued and unpaid interest; provided, however, that up to $10,000,000 of the proceeds of such Debt may be used for working capital and other lawful corporate purposes of Borrowers and Parent; (c) any such Debt has a final maturity no sooner than, a weighted average life no less than, and an interest rate no greater than, the Debt evidenced by the Senior Secured Notes Documents; (d) any such Debt is subordinated to the Obligations at least to the same extent as the Debt evidenced by the Senior Secured Notes Documents; (e) all such Debt is subject to the Intercreditor Agreement; (f) the representations, covenants and defaults applicable to any such Debt are no less favorable to Borrowers than those applicable to the Debt evidenced by the Senior Secured Notes Documents; (g) no additional Lien is granted to secure any such Debt; (h) no additional Person is obligated on any such Debt; and (i) upon giving effect to any such Debt, no Default or Event of Default exists.”

Senior Notes Refinancing Debt: Borrowed Money that is the result of an extension, renewal or refinancing of the Debt evidenced by the Senior Secured Notes Documents.”

(b) Clause (d) of the definition of “Change of Control” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(d) any “change of control” occurs under the Senior Secured Notes Documents or any document governing Senior Notes Refinancing Debt.”

(c) The definition of “Fixed Charges” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

Fixed Charges: the sum of cash interest paid or scheduled to be paid (other than cash premiums paid in connection with extinguishing the Debt evidenced by the Senior Secured Notes Documents to the extent such premiums constitute interest expense), principal payments made or scheduled to be made on Consolidated Borrowed Money (other than repayments of the Revolver Loans and payments made to extinguish the Debt evidenced by the Senior Secured Notes Documents solely to the extent such Debt is replaced or refinanced on a dollar-for-dollar basis with Senior Notes Refinancing Debt), and Distributions made.”

(d) The definition of “Intercreditor Agreement” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

Intercreditor Agreement: the Intercreditor Agreement of even date herewith, between the Senior Secured Notes Collateral Agent and the Agent, and any amendments or joinders thereto, in form and substance satisfactory to Agent, to include any agent for the holders of any Senior Notes Refinancing Debt.”

(e) The definition of “Refinancing Debt” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

Refinancing Debt: Borrowed Money that is the result of an extension, renewal or refinancing of Debt permitted under Section 10.2.1(b), (d), (k) or (p).”

 

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(f) The definition of “Senior Secured Notes Collateral Agent” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

Senior Secured Notes Collateral Agent: Wilmington Trust, FSB, or any successor Trustee under any indenture governing any Senior Notes Refinancing Debt.”

(g) Section 10.2.1(k) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(k) Subject to the terms of the Intercreditor Agreement, Debt of any Borrower or any Guarantor outstanding at any time under the Senior Secured Notes Documents in an aggregate principal amount not to exceed $328,250,000 (as such amount shall be reduced on a dollar-for-dollar basis to give effect to the payments described in clause (b)(i) of the definition of Senior Notes Refinancing Condition);”

(h) Section 10.2.1 of the Loan Agreement is hereby amended by: (i) deleting the “and” immediately after clause (n) of such Section, (ii) deleting the “.” immediately after clause (o) of such Section and inserting a “; and” in lieu thereof, and (iii) adding the following clause (p) thereafter:

“(p) Subject to the terms of the Intercreditor Agreement, Senior Notes Refinancing Debt of any Borrower or any Guarantor as long as each Senior Notes Refinancing Condition is satisfied.”

(i) Section 10.2.2(m) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(m) so long as such Liens are subject to the terms of the Intercreditor Agreement, Liens securing (i) Debt arising under the Senior Secured Notes Documents and (ii) Senior Notes Refinancing Debt;”

(j) Section 10.2.4(a) of the Loan Agreement is hereby amended by: (i) deleting the “and” immediately after clause (iii) of such Section, (ii) deleting the “; or” immediately after clause (iv) of such Section and inserting a “; and” in lieu thereof, and (iii) adding the following clause (v) at the end of such section:

“(v) so long as the conditions set forth in Section 5.2(g)(e)(ii) of the Guaranty and Security Agreement dated as of October 27, 2009 between Parent and Agent have been satisfied, Borrowers may make distributions to Parent for the sole purpose of allowing Parent to, and Parent shall use the proceeds thereof solely to, make voluntary prepayments on the Debt evidenced by the 14.75% Notes (as defined in the Guaranty and Security Agreement dated as of October 27, 2009 between Parent and Agent); or”

(k) Section 10.2.8(b) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(b) Borrowed Money (other than the Obligations, the Debt evidenced by the Senior Secured Notes Documents or any Senior Notes Refinancing Debt) prior to its due date under the agreements evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of the Required Lenders);”

 

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(l) Section 10.2.8(c) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(c) Debt evidenced by the Senior Secured Notes Documents or any Senior Notes Refinancing Debt, except (i) mandatory payments due thereunder as in effect on the Closing Date (or as amended thereafter with the consent of the Required Lenders), and (ii) voluntary prepayments on such Debt so long as (A)(1) no Event of Default exists, (2) Excess Availability is no less than 50% of the aggregate Revolver Commitments immediately after giving effect to any such prepayment, and (3) Borrowers shall have delivered to Agent five Business Days prior written notice of any such prepayment accompanied by detailed calculations confirming that Borrowers are in compliance with the requirements set forth in this clause (c)(ii)(A); or (B) if Excess Availability is less than 50% of the aggregate Revolver Commitments immediately after giving effect to any such prepayment, (1) no Event of Default exists, (2) Excess Availability is no less than 20% of the aggregate Revolver Commitments immediately after giving effect to any such prepayment, (3) on a pro forma basis the Fixed Charge Coverage Ratio, measured on a trailing twelve (12) month basis after giving effect to any such prepayment and recomputed for the most recent month for which financial statements have been delivered to Agent, is at least 1.0 to 1.0, and (4) Borrowers shall have delivered to Agent five Business Days prior written notice of any such prepayment accompanied by detailed calculations confirming that Borrowers are in compliance with the requirements set forth in this clause (c)(ii)(B);”

(m) Section 10.2.14 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“10.2.14 Restrictive Agreements. Become a party to any Restrictive Agreement, except the Senior Secured Notes Documents and the documents governing Senior Notes Refinancing Debt and except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating to secured Debt permitted hereunder, including, without limitation, any Refinancing Debt, as long as the restrictions apply only to collateral for such Debt; (c) constituting customary restrictions on assignment in leases and other contracts; or (d) any restrictions imposed on any Property pursuant to an agreement that has been entered into in connection with a Permitted Asset Disposition of such Property.”

(n) The title of Section 10.2.19 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

Amendments to Subordinated Debt, Senior Secured Notes Documents or Senior Notes Refinancing Debt.”

(o) Section 10.2.19(b) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(b) Amend, supplement or otherwise modify any document, instrument or agreement relating to any Senior Secured Notes Document or any Senior Notes Refinancing Debt, if such modification (a) increases the principal balance of such Debt, or increases any required payment of principal or interest; (b) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption, put or prepayment provisions; (c) shortens the final maturity date or otherwise accelerates amortization; (d) increases the interest rate or in the case of Debt under the Senior

 

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Secured Notes or Senior Notes Refinancing Debt, if the effect of such increase would result in the economic return on such Debt increasing by more than 5.00 percentage points per annum in the aggregate for all such Debt (excluding increases resulting from the accrual of interest at the default rate or similar component of the interest rate that is applicable after the occurrence of an event of default); (e) increases or adds any fees or charges; or (f) modifies any covenant in a manner or adds any representation, covenant or default that is more onerous or restrictive in any material respect for any Guarantor, any Borrower or any Subsidiary, or that is otherwise materially adverse to any Guarantor, any Borrower, any Subsidiary or Lenders, except that any acceleration or prepayment that would be prohibited under clause (b) or (c) shall not be prohibited under this Section 10.2.19(b) where such acceleration or prepayment is made in connection with a refinancing of such Senior Secured Notes permitted under Section 10.2.1(p) or of the Senior Notes Refinancing Debt permitted under Section 10.2.1(j). Nothing contained in this Section 10.2.19(b) shall restrict amendments to the Senior Secured Notes Documents or the documents governing Senior Notes Refinancing Debt that (i) permit an increase in the aggregate Revolver Commitments or (ii) expand the scope of Collateral included in the Revolver Priority Collateral.”

(p) Section 11.1(f) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(f) Any breach or default of a Borrower or Guarantor occurs and is continuing under any document, instrument or agreement to which it is a party or by which it or any of its Properties is bound, relating to any Debt (other than the Obligations and other than Debt evidenced by the Senior Secured Notes Documents, Senior Notes Refinancing Debt or any Refinancing Debt that refinances the Senior Notes Refinancing Debt) in excess of $5,000,000, if the maturity of or any payment with respect to such Debt may be accelerated or demanded due to such breach;”

(q) Section 11.1(m) of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“(m) Any breach or default of a Borrower or Guarantor occurs under the Senior Secured Notes, any Senior Secured Notes Documents, any document governing Senior Notes Refinancing Debt or any document governing any Refinancing Debt that refinances the Senior Notes Refinancing Debt; or”

(r) The first sentence of Section 11.3 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“Subject to the rights of holders of the Senior Secured Notes, holders of any Senior Notes Refinancing Debt and holders of any Refinancing Debt that refinances the Senior Notes Refinancing Debt under the Intercreditor Agreement, Agent is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Borrowers, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral.”

 

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(s) The first sentence of Section 11.4 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

“Subject to the rights of holders of the Senior Secured Notes, holders of any Senior Notes Refinancing Debt and holders of any Refinancing Debt that refinances the Senior Notes Refinancing Debt under the Intercreditor Agreement, at any time during an Event of Default, Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the account of a Borrower or Guarantor against any Obligations, irrespective of whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Agent, Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness.”

2. Amendments to Guaranty.

(a) The definition of “Refinancing Debt” in Section 1.1 of the Guaranty is hereby amended and restated in its entirety to read as follows:

“ ‘Refinancing Debt’ means Borrowed Money that is the result of an extension, renewal or refinancing of Debt permitted under Section 5.2(a)(i), (iv), (xi) or (xv).”

(b) Section 5.2(a)(xi) of the Guaranty is hereby and restated in its entirety to read as follows:

“(xi) Subject to the terms of the Intercreditor Agreement, Debt of any Guarantor outstanding at any time under the Senior Secured Notes Documents in an aggregate principal amount not to exceed $328,250,000 (as such amount shall be reduced on a dollar-for-dollar basis to give effect to the payments described in clause (b)(i) of the definition of Senior Notes Refinancing Condition);”

(c) Section 5.2(a) of the Guaranty is hereby amended by: (i) deleting the “and” immediately after clause (xiii) of such Section, (ii) deleting the “.” immediately after clause (xiv) of such Section and inserting a “; and” in lieu thereof, and (iii) adding the following clause (xv) thereafter:

“(xv) Subject to the terms of the Intercreditor Agreement, Senior Notes Refinancing Debt of any Guarantor as long as each Senior Notes Refinancing Condition is satisfied.”

(d) Section 5.2(b)(xiii) of the Guaranty is hereby amended and restated in its entirety to read as follows:

“(xiii) so long as such Liens are subject to the terms of the Intercreditor Agreement, Liens securing (A) Debt arising under the Senior Secured Notes Documents and (B) Senior Notes Refinancing Debt;”

(e) Section 5.2(c)(ii) of the Guaranty is hereby amended and restated in its entirety to read as follows:

“(ii) create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make any Upstream Payment, except for restrictions under the Loan Documents, under the Senior Secured Notes Documents, under the documents governing Senior Notes Refinancing Debt, under Applicable Law or in effect on the Closing Date as shown on Schedule 4.1(n).”

 

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(f) The first sentence of Section 5.2(g) of the Guaranty is hereby amended and restated in its entirety to read as follows:

“Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to any (a) Subordinated Debt, except regularly scheduled payments of principal, interest and fees, but only to the extent permitted under any subordination agreement relating to such Debt (and a Senior Officer of Parent shall certify to Agent, not less than five Business Days prior to the date of payment, that all conditions under such agreement have been satisfied); (b) Borrowed Money (other than the Debt evidenced by the Senior Secured Notes Documents, any Senior Notes Refinancing Debt or the Convertible Subordinated Notes) prior to its due date under the agreements evidencing such Debt as in effect on the Closing Date (or as amended thereafter with the consent of Agent) unless (i) the Refinancing Condition is satisfied, (ii) subject to Agent’s consent, acquired in connection with an exchange for Debt or (iii) so long as no Change of Control shall result therefrom, acquired in connection with an exchange for Equity Interests; (c) Debt evidenced by the Senior Secured Notes Documents or any Senior Notes Refinancing Debt, except (i) mandatory payments due thereunder as in effect on the Closing Date (or as amended thereafter with the consent of Agent), (ii) voluntary prepayments on such Debt so long as the conditions set forth in Section 10.2.8.(c)(ii) of the Loan Agreement have been satisfied, or (iii) unless (A) subject to Agent’s consent, acquired in connection with an exchange for Debt or (B) so long as no Change of Control shall result therefrom, acquired in connection with an exchange for Equity Interests; (d) Debt evidenced by the Convertible Subordinated Notes, except (i) mandatory payments due thereunder as in effect on the Closing Date (or as amended thereafter with the consent of Agent) or (ii) voluntary payments (whether prepayment, redemption, retirement, acquisition or tender offer) made by Parent with respect to or for any of the outstanding Convertible Subordinated Notes, but only to the extent that such payments are made from the proceeds of the issuance of the Senior Secured Notes; or (e) Debt evidenced by the 14.75% Notes, except (i) mandatory payments due thereunder as in effect on the Closing Date (or as amended thereafter with the consent of Agent) or (ii) voluntary prepayments on such Debt so long as (A)(1) no Event of Default exists, (2) Excess Availability is no less than 50% of the aggregate Revolver Commitments immediately after giving effect to any such prepayment, and (3) Borrowers or Parent shall have delivered to Agent five Business Days prior written notice of any such prepayment accompanied by detailed calculations confirming that Borrowers and Guarantors are in compliance with the requirements set forth in this clause (e)(ii)(A); or (B) if Excess Availability is less than 50% of the aggregate Revolver Commitments immediately after giving effect to any such prepayment, (1) no Event of Default exists, (2) Excess Availability is no less than 20% of the aggregate Revolver Commitments immediately after giving effect to any such prepayment, (3) on a pro forma basis the Fixed Charge Coverage Ratio, measured on a trailing twelve (12) month basis after giving effect to any such prepayment and recomputed for the most recent month for which financial statements have been delivered to Agent, is at least 1.0 to 1.0, and (4) Borrowers or Parent shall have delivered to Agent five Business Days prior written notice of any such prepayment accompanied by detailed calculations confirming that Borrowers and Guarantors are in compliance with the requirements set forth in this clause (e)(ii)(B); provided, however, that for purposes of the foregoing clause (c) of this Section 5.2(g), no mandatory prepayments shall be made to the extent such prepayments are required on account of sales of Revolver Priority Collateral.”

 

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(g) Section 5.2(m) of the Guaranty is hereby amended and restated in its entirety to read as follows:

“(m) Restrictive Agreements. Become a party to any Restrictive Agreement, except the Senior Secured Notes Documents and the documents governing Senior Notes Refinancing Debt and except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating to secured Debt permitted hereunder, including, without limitation, any Refinancing Debt, as long as the restrictions apply only to collateral for such Debt; (c) constituting customary restrictions on assignment in leases and other contracts; or (d) any restrictions imposed on any Property pursuant to an agreement that has been entered into in connection with a Permitted Asset Disposition of such Property.”

(h) The title of Section 5.2(r) of the Guaranty is hereby amended and restated in its entirety to read as follows:

Amendments to Subordinated Debt, Senior Secured Notes Documents or Senior Notes Refinancing Debt.”

(i) Section 5.2(r)(ii) of the Guaranty is hereby amended and restated in its entirety to read as follows:

“(ii) Amend, supplement or otherwise modify any document, instrument or agreement relating to any Senior Secured Notes Document or any Senior Notes Refinancing Debt, if such modification (A) increases the principal balance of such Debt, or increases any required payment of principal or interest; (B) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption, put or prepayment provisions; (C) shortens the final maturity date or otherwise accelerates amortization; (D) increases the interest rate or in the case of Debt under the Senior Secured Notes or Senior Notes Refinancing Debt, if the effect of such increase would result in the economic return on such Debt increasing by more than 5.00 percentage points per annum in the aggregate for all such Debt (excluding increases resulting from the accrual of interest at the default rate or similar component of the interest rate that is applicable after the occurrence of an event of default); (E) increases or adds any fees or charges; or (F) modifies any covenant in a manner or adds any representation, covenant or default that is more onerous or restrictive in any material respect for any Guarantor, any Borrower or any Subsidiary, or that is otherwise materially adverse to any Guarantor, any Borrower or any Subsidiary or Lenders, except that any acceleration or prepayment that would be prohibited under clause (B) or (C) and any fees or charges prohibited under clause (E) shall not be prohibited under this Section 5.2(r)(ii) where such acceleration or prepayment is made, or such fees or charges are incurred, in connection with a refinancing of such Senior Secured Notes permitted under Section 5.2(a)(xv) or of the Senior Notes Refinancing Debt permitted under Section 5.2(a)(x). Nothing contained in this Section 5.2(r)(ii) shall restrict amendments to the Senior Secured Notes Documents or the documents governing Senior Notes Refinancing Debt that (i) permit an increase in the aggregate Revolver Commitments or (ii) expand the scope of Collateral included in the Revolver Priority Collateral.”

 

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(j) The first sentence of Section 5.5 of the Guaranty is hereby amended and restated in its entirety to read as follows:

“Subject to the rights of holders of the Senior Secured Notes, holders of any Senior Notes Refinancing Debt and holders of any Refinancing Debt that refinances the Senior Notes Refinancing Debt under the Intercreditor Agreement, Agent is hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Guarantors, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral.”

(k) The first sentence of Section 5.6 of the Guaranty is hereby amended and restated in its entirety to read as follows:

“Subject to the rights of holders of the Senior Secured Notes, holders of any Senior Notes Refinancing Debt and holders of any Refinancing Debt that refinances the Senior Notes Refinancing Debt under the Intercreditor Agreement, at any time during an Event of Default, Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the account of a Guarantor against any Guaranteed Obligations, irrespective of whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Guaranteed Obligations may be contingent or unmatured or are owed to a branch or office of Agent, Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness.”

3. Effectiveness of this Amendment. The following shall have occurred before this Amendment is effective:

(a) Amendment. Agent shall have received this Amendment, executed by Borrowers, Parent and each Required Lender in a sufficient number of counterparts for distribution to all parties.

(b) Representations and Warranties. The representations and warranties set forth herein must be true and correct.

(c) Amendment Fee. Agent shall have received, for the ratable benefit of the Lenders, a non-refundable amendment fee in the amount of two hundred ten thousand Dollars ($210,000), which shall be fully earned and due and payable on the date of this Amendment.

(d) No Default. No event has occurred and is continuing that constitutes an Event of Default.

(e) Other Required Documentation. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall have been delivered or executed or recorded and shall be in form and substance satisfactory to Agent.

 

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4. Representations and Warranties. Each of Parent and each Borrower represents and warrants as follows:

(a) Authority. Each of Parent and such Borrower has the requisite power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party. The execution, delivery and performance by each of Parent and such Borrower of this Amendment have been duly approved by all necessary action and no other proceedings are necessary to consummate such transactions.

(b) Enforceability. This Amendment has been duly executed and delivered by each of Parent and such Borrower. This Amendment and each Loan Document to which Parent or such Borrower is a party (as amended or modified hereby) is the legal, valid and binding obligation of Parent and such Borrower, enforceable against Parent and such Borrower in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity, and is in full force and effect.

(c) Representations and Warranties. The representations and warranties contained in each Loan Document to which Parent or such Borrower is a party (other than any such representations or warranties that, by their terms, are specifically made as of a date other than the date hereof) are correct on and as of the date hereof as though made on and as of the date hereof.

(d) Due Execution. The execution, delivery and performance of this Amendment are within the power of each of Parent and such Borrower, have been duly authorized by all necessary corporate action, have received all necessary governmental approval, if any, and do not contravene any law or any contractual restrictions binding on Parent or such Borrower.

(e) No Default. No event has occurred and is continuing that constitutes an Event of Default.

5. Choice of Law. The validity of this Amendment, its construction, interpretation and enforcement, the rights of the parties hereunder, shall be determined under, governed by, and construed in accordance with the internal laws of the State of California, without giving effect to any conflict of law principles (but giving effect to Federal laws relating to national banks). The consent to forum and arbitration provisions set forth in Section 14.15 of the Loan Agreement are hereby incorporated in this Amendment by reference.

6. Counterparts. This Amendment may be executed in any number of counterparts and by different parties and separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by telefacsimile or a substantially similar electronic transmission shall have the same force and effect as the delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or a substantially similar electronic transmission shall also deliver an original executed counterpart, but the failure to do so shall not affect the validity, enforceability or binding effect of such agreement.

7. Reference to and Effect on the Loan Documents.

(a) Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Loan Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereof” or

 

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words of like import referring to the Loan Agreement, shall mean and be a reference to the Loan Agreement as modified and amended hereby. Upon and after the effectiveness of this Amendment, each reference in the Guaranty to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Guaranty, and each reference in the other Loan Documents to “the Guaranty”, “thereof” or words of like import referring to the Guaranty, shall mean and be a reference to the Guaranty as modified and amended hereby.

(b) Except as specifically amended above, the Loan Agreement, the Guaranty and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable obligations of Parent and Borrowers, as applicable, to Agent and the Lenders.

(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.

(d) To the extent that any terms and conditions in any of the Loan Documents shall contradict or be in conflict with any terms or conditions of the Loan Agreement, after giving effect to this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to reflect the terms and conditions of the Loan Agreement as modified or amended hereby.

8. Ratification. Each Borrower hereby restates, ratifies and reaffirms each and every term and condition set forth in the Loan Agreement, as amended hereby, and the Loan Documents effective as of the date hereof, and Parent hereby restates, ratifies and reaffirms each and every term and condition set forth in the Guaranty, as amended hereby, and the Loan Documents effective as of the date hereof.

9. Estoppel. To induce Lenders to enter into this Amendment and to continue to make advances to Borrowers under the Loan Agreement, each Borrower and Parent hereby acknowledges and agrees that, as of the date hereof, there exists no right of offset, defense, counterclaim or objection in favor of such Borrower or Parent as against Agent or any Lender with respect to the Obligations.

10. Integration. This Amendment, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

11. Severability. In case any provision in this Amendment shall be invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Amendment and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

[Remainder of Page Left Intentionally Blank]

 

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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above written.

 

BORROWERS:

HEADWATERS RESOURCES, INC.,

a Utah corporation

By:  

    /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

METAMORA PRODUCTS CORPORATION OF ELKLAND,

a Pennsylvania corporation

By:  

    /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

HEADWATERS SERVICES CORPORATION,

a Utah corporation

By:  

    /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

HEADWATERS CONSTRUCTION MATERIALS, INC.,

a Utah corporation

By:  

    /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

HCM UTAH, LLC,

a Utah limited liability company

By:  

    /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

 

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HEADWATERS CONSTRUCTION MATERIALS, LLC,
a Texas limited liability company
By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

HCM STONE, LLC,

a Utah limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

DUTCH QUALITY STONE, INC.,

an Ohio corporation

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

ELDORADO SC-ACQUISITION CO.,

a Utah corporation

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

ELDORADO G-ACQUISITION CO.,

a Utah corporation

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

ELDORADO STONE LLC,

a Delaware limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

 

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ELDORADO STONE ACQUISITION CO., LLC,
a Utah limited liability company
By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

ELDORADO STONE FUNDING CO., LLC,

a Utah limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

STONECRAFT MANUFACTURING, LLC,

an Ohio limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

CHIHUAHUA STONE, LLC,

a Utah limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

ELDORADO STONE OPERATIONS, LLC,

a Utah limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

L-B STONE, LLC,

a Utah limited liability company

By:  

        /s/ Scott Jackson

Name:  

    Scott Jackson

Title:  

      Treasurer

 

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TAPCO INTERNATIONAL CORPORATION,
a Michigan corporation
By:  

          /s/ Scott Jackson

Name:  

     Scott Jackson

Title:  

        Treasurer

METAMORA PRODUCTS CORPORATION,

a Michigan corporation

By:  

          /s/ Scott Jackson

Name:  

     Scott Jackson

Title:  

        Treasurer

MTP, INC.,

an Ohio corporation

By:  

          /s/ Scott Jackson

Name:  

     Scott Jackson

Title:  

        Treasurer

ATLANTIC SHUTTER SYSTEMS, INC.,

a South Carolina corporation

By:  

          /s/ Scott Jackson

Name:  

     Scott Jackson

Title:  

        Treasurer

INSPIRE SERVICES, LLC,

a Michigan limited liability company

By:  

          /s/ Scott Jackson

Name:  

     Scott Jackson

Title:  

        Treasurer

STONECRAFT SALES, LLC,

a Michigan limited liability company

By:  

          /s/ Scott Jackson

Name:  

     Scott Jackson

Title:  

       Treasurer

 

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PARENT:

HEADWATERS INCORPORATED,

a Delaware corporation

By:  

    /s/ Donald P. Newman

Name:  

    Donald P. Newman

Title:  

    Chief Financial Officer

AGENT AND LENDERS:

BANK OF AMERICA, N.A.,

as Agent and as a Lender

By:  

    /s/ Todd Eggertsen

Name:  

    Todd Eggertsen

Title:  

    Vice President

U.S. BANK NATIONAL ASSOCIATION,

as a Lender

By:  

    /s/ Gregg L. Corey

Name:  

    Gregg L. Corey

Title:  

    Vice President

ZIONS FIRST NATIONAL BANK,

as a Lender

By:  

    /s/ Tracy Groll

Name:  

Tracy Groll

Title:  

Senior Vice President

 

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