Exhibit 10.13.8 PROMISSORY NOTE $250,000.00 LEHI, UTAH October 24, 2001 FOR VALUE RECEIVED, THE MURDOCK GROUP HOLDING CORPORATION (hereinafter referred to as "Maker"), promises to pay to the order of Headwaters Incorporated, a Delaware corporation, or to its successors and assigns (hereinafter referred to as "Lender") the principal sum of Two Hundred Fifty Thousand Dollars ($250,000.00) together with interest on the unpaid principal balance outstanding from time to time, all as hereinafter set forth. Interest shall begin to accrue as of October 1, 2001 on the principal amount outstanding from time to time until and after the maturity hereof (whether by stated maturity, acceleration or otherwise) and shall be payable at the rate of six percent (6%) per annum simple interest based on a three hundred sixty (360) day year comprised of twelve (12) thirty (30) day months. The entire balance of principal and accrued interest shall be due and payable in a single balloon payment on or before December 31, 2003. Payments of both principal and interest shall be paid in lawful money of the United States of America in immediately available funds at such place as Lender may from time to time designate. Except as otherwise provided in this Note, if any payment of principal and/or interest due hereunder is not paid within thirty (30) days after its due date ("Payment Default"), Maker shall pay to Lender on demand a late charge equal to five percent (5%) of the amount of such payment. Upon Payment Default continuing for ten (10) days after written notice is given by the Lender hereof to the guarantor to cure the Payment Default, then the entire unpaid principal sum and accrued interest due shall become immediately due and payable. To the extent permitted by applicable law, all amounts which are not paid when due as provided in this Note shall bear interest at ten percent (10%) per annum, simple interest payable monthly. The prompt payment and performance of this Note is jointly and severally guaranteed by Gerald Larson, Larson Holdings, Inc., Clear Capital Holding, Inc., and Pelican Point Rock Products, Inc. The guaranty of Pelican Point Rock Products, Inc. is secured by a Trust Deed of even date from Pelican Point Rock Products, Inc. as Trustor (the "Security Agreement"). This Note may be prepaid in whole at any time or in part from time to time without premium or penalty. Notwithstanding anything herein to the contrary, the entire balance of principal and accrued interest shall become immediately due and payable upon the occurrence of any one or more of the following events: 1
(i) The sale by Clear Capital Holding, Inc. or Pelican Point Rock Products, Inc. of all or substantially all of the limestone plant and related real property it has acquired from a subsidiary of Larson Holding, Inc. (ii) Any default by Maker ,any guarantor, or pursuant to the Security Agreement after the expiration of any notice periods and opportunities to cure expressly stated therein. All payments hereunder shall be applied first to the payment of accrued and unpaid interest and the balance to the payment of principal. Maker agrees to pay to Lender, and reimburse Lender for, any and all costs and expenses, including reasonable attorneys' fees and court costs, if any, incurred by Lender in connection with the enforcement or collection hereof, both before and after the commencement of any action by Lender. Maker and all guarantors waive presentment, protest and demand, notice of protest, notice of dishonor and nonpayment of this Note and
(i) The sale by Clear Capital Holding, Inc. or Pelican Point Rock Products, Inc. of all or substantially all of the limestone plant and related real property it has acquired from a subsidiary of Larson Holding, Inc. (ii) Any default by Maker ,any guarantor, or pursuant to the Security Agreement after the expiration of any notice periods and opportunities to cure expressly stated therein. All payments hereunder shall be applied first to the payment of accrued and unpaid interest and the balance to the payment of principal. Maker agrees to pay to Lender, and reimburse Lender for, any and all costs and expenses, including reasonable attorneys' fees and court costs, if any, incurred by Lender in connection with the enforcement or collection hereof, both before and after the commencement of any action by Lender. Maker and all guarantors waive presentment, protest and demand, notice of protest, notice of dishonor and nonpayment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of Maker or such guarantor hereunder. The rights and remedies of Lender hereunder and under the Agreement shall be cumulative and concurrent and may be pursued singularly, successively or together at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur, and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release of the same or any other right or remedy. In the event any provision of this Note (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Note; but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had not been contained in this Note, but only to the extent it is invalid, illegal, or unenforceable. This Note, having been executed and delivered in the State of Utah, as of the date first written above, is to be governed by, construed under and enforced in all respects according to laws of the State of Utah, excluding its principles of conflicts of laws. IN WITNESS WHEREOF, the Maker has executed this Promissory Note the date and year first above written. THE MURDOCK GROUP HOLDING CORPORATION
By /s/K. C. Holmes, CEO
2
GUARANTY The undersigned Gerald Larson and Larson Holdings, Inc., jointly and severally, hereby guarantee to Headwaters Incorporated, its successors and assigns, the prompt payment and performance of the foregoing Promissory Note of The Murdock Group Holding Corporation. This is a guaranty of performance, and accordingly the Lender need not exhaust its remedies against Maker or any other guarantor before proceeding on this Guaranty. The obligation of the undersigned with respect to this Guaranty is joint and several with the obligation of the other guarantors. The validity of this Guaranty shall not be affected by any extension or modification of the foregoing Promissory Note or any amendment or waiver of any other guaranty. Dated this 24th day of October, 2001.
/s/Gerald Larson Gerald Larson LARSON HOLDINGS, INC.
GUARANTY The undersigned Gerald Larson and Larson Holdings, Inc., jointly and severally, hereby guarantee to Headwaters Incorporated, its successors and assigns, the prompt payment and performance of the foregoing Promissory Note of The Murdock Group Holding Corporation. This is a guaranty of performance, and accordingly the Lender need not exhaust its remedies against Maker or any other guarantor before proceeding on this Guaranty. The obligation of the undersigned with respect to this Guaranty is joint and several with the obligation of the other guarantors. The validity of this Guaranty shall not be affected by any extension or modification of the foregoing Promissory Note or any amendment or waiver of any other guaranty. Dated this 24th day of October, 2001.
/s/Gerald Larson Gerald Larson LARSON HOLDINGS, INC.
By:/s/Gerald Larson
3
GUARANTY The undersigned Clear Capital Holding, Inc. and Pelican Point Rock Products, Inc., jointly and severally, hereby guarantee to Headwaters Incorporated, its successors and assigns, the prompt payment and performance of the foregoing Promissory Note of The Murdock Group Holding Corporation. This is a guaranty of performance, and accordingly the Lender need not exhaust its remedies against Maker or any other guarantor before proceeding on this Guaranty. The validity of this Guaranty shall not be affected by any extension or modification of the foregoing Promissory Note or any amendment or waiver of any other guaranty. This Guaranty is secured by a Trust Deed of even date from Pelican Point Rock Products, Inc. as Trustor. Dated this 24th day of October, 2001. CLEAR CAPITAL HOLDINGS, INC.
By:/s/Lance Heaton, CEO
PELICAN POINT ROCK PRODUCTS, INC.
By:/s/Lance Heaton, Pres.
4
Exhibit 10.13.9 PROMISSORY NOTE $200,000.00 LEHI, UTAH October 24, 2001 FOR VALUE RECEIVED, The Murdock Group Holding Corporation, a Utah corporation (hereinafter referred to as "Maker"), promises to pay to the order of Headwaters Incorporated, a Delaware corporation, or to its successors and assigns (hereinafter referred to as "Lender") the principal sum of Two Hundred Thousand Dollars
GUARANTY The undersigned Clear Capital Holding, Inc. and Pelican Point Rock Products, Inc., jointly and severally, hereby guarantee to Headwaters Incorporated, its successors and assigns, the prompt payment and performance of the foregoing Promissory Note of The Murdock Group Holding Corporation. This is a guaranty of performance, and accordingly the Lender need not exhaust its remedies against Maker or any other guarantor before proceeding on this Guaranty. The validity of this Guaranty shall not be affected by any extension or modification of the foregoing Promissory Note or any amendment or waiver of any other guaranty. This Guaranty is secured by a Trust Deed of even date from Pelican Point Rock Products, Inc. as Trustor. Dated this 24th day of October, 2001. CLEAR CAPITAL HOLDINGS, INC.
By:/s/Lance Heaton, CEO
PELICAN POINT ROCK PRODUCTS, INC.
By:/s/Lance Heaton, Pres.
4
Exhibit 10.13.9 PROMISSORY NOTE $200,000.00 LEHI, UTAH October 24, 2001 FOR VALUE RECEIVED, The Murdock Group Holding Corporation, a Utah corporation (hereinafter referred to as "Maker"), promises to pay to the order of Headwaters Incorporated, a Delaware corporation, or to its successors and assigns (hereinafter referred to as "Lender") the principal sum of Two Hundred Thousand Dollars ($200,000.00) together with interest on the unpaid principal balance outstanding from time to time, all as hereinafter set forth. Interest shall begin to accrue as of October 1, 2001 on the principal amount outstanding from time to time until and after the maturity hereof (whether by stated maturity, acceleration or otherwise) and shall be payable at the rate of six percent (6%) per annum simple interest based on a three hundred sixty (360) day year comprised of twelve (12) thirty (30) day months. The entire balance of principal and accrued interest shall be due and payable in a single balloon payment on or before December 31, 2003. Payments of both principal and interest shall be paid in lawful money of the United States of America in immediately available funds at such place as Lender may from time to time designate. Except as otherwise provided in this Note, if any payment of principal and/or interest due hereunder is not paid within thirty (30) days after its due date ("Payment Default"), Maker shall pay to Lender on demand a late charge equal to five percent (5%) of the amount of such payment. Upon Payment Default continuing for ten (10) days after written notice is given by the Lender hereof to the guarantor to cure the Payment Default, then the entire unpaid principal sum and accrued interest due shall become immediately due and payable. To the extent permitted by applicable law, all amounts which are not paid when due as provided in this Note shall bear interest at ten percent (10%) per annum, simple interest payable monthly. The prompt payment and performance of this Note is guaranteed by Clear Capital Holding, Inc. and Pelican Point Rock Products, Inc. The guaranty of Pelican Point Rock Products, Inc. is secured by a Trust Deed of even date from Pelican Point Rock Products, Inc. as Trustor (the "Security Agreement").
Exhibit 10.13.9 PROMISSORY NOTE $200,000.00 LEHI, UTAH October 24, 2001 FOR VALUE RECEIVED, The Murdock Group Holding Corporation, a Utah corporation (hereinafter referred to as "Maker"), promises to pay to the order of Headwaters Incorporated, a Delaware corporation, or to its successors and assigns (hereinafter referred to as "Lender") the principal sum of Two Hundred Thousand Dollars ($200,000.00) together with interest on the unpaid principal balance outstanding from time to time, all as hereinafter set forth. Interest shall begin to accrue as of October 1, 2001 on the principal amount outstanding from time to time until and after the maturity hereof (whether by stated maturity, acceleration or otherwise) and shall be payable at the rate of six percent (6%) per annum simple interest based on a three hundred sixty (360) day year comprised of twelve (12) thirty (30) day months. The entire balance of principal and accrued interest shall be due and payable in a single balloon payment on or before December 31, 2003. Payments of both principal and interest shall be paid in lawful money of the United States of America in immediately available funds at such place as Lender may from time to time designate. Except as otherwise provided in this Note, if any payment of principal and/or interest due hereunder is not paid within thirty (30) days after its due date ("Payment Default"), Maker shall pay to Lender on demand a late charge equal to five percent (5%) of the amount of such payment. Upon Payment Default continuing for ten (10) days after written notice is given by the Lender hereof to the guarantor to cure the Payment Default, then the entire unpaid principal sum and accrued interest due shall become immediately due and payable. To the extent permitted by applicable law, all amounts which are not paid when due as provided in this Note shall bear interest at ten percent (10%) per annum, simple interest payable monthly. The prompt payment and performance of this Note is guaranteed by Clear Capital Holding, Inc. and Pelican Point Rock Products, Inc. The guaranty of Pelican Point Rock Products, Inc. is secured by a Trust Deed of even date from Pelican Point Rock Products, Inc. as Trustor (the "Security Agreement"). This Note may be prepaid in whole at any time or in part from time to time without premium or penalty. Notwithstanding anything herein to the contrary, the entire balance of principal and accrued interest shall become immediately due and payable upon the occurrence of any one or more of the following events: 1
(i) The sale by Clear Capital Holding, Inc. or Pelican Point Rock Products, Inc. of all or substantially all of the limestone plant and related real property it has acquired from a subsidiary of Larson Holding, Inc. (ii) Any default by Maker ,any guarantor, or pursuant to the Security Agreement after the expiration of any notice periods and opportunities to cure expressly stated therein. All payments hereunder shall be applied first to the payment of accrued and unpaid interest and the balance to the payment of principal. Maker agrees to pay to Lender, and reimburse Lender for, any and all costs and expenses, including reasonable attorneys' fees and court costs, if any, incurred by Lender in connection with the enforcement or collection hereof, both before and after the commencement of any action by Lender. Maker and all guarantors waive presentment, protest and demand, notice of protest, notice of dishonor and nonpayment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of Maker or such guarantor hereunder. The rights and remedies of Lender hereunder and under the Agreement shall be cumulative and concurrent and
(i) The sale by Clear Capital Holding, Inc. or Pelican Point Rock Products, Inc. of all or substantially all of the limestone plant and related real property it has acquired from a subsidiary of Larson Holding, Inc. (ii) Any default by Maker ,any guarantor, or pursuant to the Security Agreement after the expiration of any notice periods and opportunities to cure expressly stated therein. All payments hereunder shall be applied first to the payment of accrued and unpaid interest and the balance to the payment of principal. Maker agrees to pay to Lender, and reimburse Lender for, any and all costs and expenses, including reasonable attorneys' fees and court costs, if any, incurred by Lender in connection with the enforcement or collection hereof, both before and after the commencement of any action by Lender. Maker and all guarantors waive presentment, protest and demand, notice of protest, notice of dishonor and nonpayment of this Note and expressly agree that this Note or any payment hereunder may be extended from time to time without in any way affecting the liability of Maker or such guarantor hereunder. The rights and remedies of Lender hereunder and under the Agreement shall be cumulative and concurrent and may be pursued singularly, successively or together at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur, and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release of the same or any other right or remedy. In the event any provision of this Note (or any part of any provision) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision (or remaining part of the affected provision) of this Note; but this Note shall be construed as if such invalid, illegal, or unenforceable provision (or part thereof) had not been contained in this Note, but only to the extent it is invalid, illegal, or unenforceable. This Note, having been executed and delivered in the State of Utah, as of the date first written above, is to be governed by, construed under and enforced in all respects according to laws of the State of Utah, excluding its principles of conflicts of laws. IN WITNESS WHEREOF, the Maker has executed this Promissory Note the date and year first above written. THE MURDOCK GROUP HOLDING CORPORATION
By:/s/K.C. Holmes, CEO
2
GUARANTY The undersigned Clear Capital Holding, Inc. and Pelican Point Rock Products, Inc., jointly and severally, hereby guarantee to Headwaters Incorporated, its successors and assigns, the prompt payment and performance of the foregoing Promissory Note of The Murdock Group Holding Corporation. This is a guaranty of performance, and accordingly the Lender need not exhaust its remedies against Maker or any other guarantor before proceeding on this Guaranty. The validity of this Guaranty shall not be affected by any extension or modification of the foregoing Promissory Note. This Guaranty is secured by a Trust Deed of even date given by Pelican Point Rock Products, Inc. as Trustor. Dated this 24 day of October, 2001. CLEAR CAPITAL HOLDING, INC.
By:/s/Lance Heaton, CEO
GUARANTY The undersigned Clear Capital Holding, Inc. and Pelican Point Rock Products, Inc., jointly and severally, hereby guarantee to Headwaters Incorporated, its successors and assigns, the prompt payment and performance of the foregoing Promissory Note of The Murdock Group Holding Corporation. This is a guaranty of performance, and accordingly the Lender need not exhaust its remedies against Maker or any other guarantor before proceeding on this Guaranty. The validity of this Guaranty shall not be affected by any extension or modification of the foregoing Promissory Note. This Guaranty is secured by a Trust Deed of even date given by Pelican Point Rock Products, Inc. as Trustor. Dated this 24 day of October, 2001. CLEAR CAPITAL HOLDING, INC.
By:/s/Lance Heaton, CEO PELICAN POINT ROCK PRODUCTS, INC.
By:/s/Lance Heaton, Pres.
3
Exhibit 10.71.4 SECOND AMENDMENT TO LOAN AGREEMENT This Second Amendment to Loan Agreement (the "Amendment") is executed this 26th day of September, 2001, by and between HEADWATERS INCORPORATED, ("Borrower") and ZIONS FIRST NATIONAL BANK (the "Lender"). WHEREAS, Borrower and Lender entered into that certain Loan Agreement dated October 18, 2000, an amended on February 1, 2001, which provided, among other things, for Lender to extend a Revolving Line of Credit in the maximum principal amount of Ten Million and 00/100 Dollars ($10,000,000.00) (the "Loan Agreement"); and WHEREAS, Borrower has requested Lender to remove the borrowing base requirement and amend certain financial covenants, and; WHEREAS, Lender has agreed to such request provided, among other things, Borrower executes and delivers this Amendment. NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Loan Agreement as amended is hereby amended as follows: 1. The section entitled "BORROWING BASE" is hereby deleted in its entirety. 2. The section entitled "NET WORTH" is hereby deleted in its entirety and replaced with the following: Tangible Net Worth. Borrower shall maintain a ratio of total liabilities, minus deferred revenue as of the date of this agreement, to tangible net worth of not more than 1.35:1, measured quarterly. 3. A new section entitled "POSITIVE NET INCOME" is hereby added as follows. Positive Net Income. Borrower shall maintain a positive net income, measured quarterly. 4. A new section entitled "NET WORTH" is hereby added as follows.
Exhibit 10.71.4 SECOND AMENDMENT TO LOAN AGREEMENT This Second Amendment to Loan Agreement (the "Amendment") is executed this 26th day of September, 2001, by and between HEADWATERS INCORPORATED, ("Borrower") and ZIONS FIRST NATIONAL BANK (the "Lender"). WHEREAS, Borrower and Lender entered into that certain Loan Agreement dated October 18, 2000, an amended on February 1, 2001, which provided, among other things, for Lender to extend a Revolving Line of Credit in the maximum principal amount of Ten Million and 00/100 Dollars ($10,000,000.00) (the "Loan Agreement"); and WHEREAS, Borrower has requested Lender to remove the borrowing base requirement and amend certain financial covenants, and; WHEREAS, Lender has agreed to such request provided, among other things, Borrower executes and delivers this Amendment. NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Loan Agreement as amended is hereby amended as follows: 1. The section entitled "BORROWING BASE" is hereby deleted in its entirety. 2. The section entitled "NET WORTH" is hereby deleted in its entirety and replaced with the following: Tangible Net Worth. Borrower shall maintain a ratio of total liabilities, minus deferred revenue as of the date of this agreement, to tangible net worth of not more than 1.35:1, measured quarterly. 3. A new section entitled "POSITIVE NET INCOME" is hereby added as follows. Positive Net Income. Borrower shall maintain a positive net income, measured quarterly. 4. A new section entitled "NET WORTH" is hereby added as follows. Net Worth. Borrower shall maintain a positive net worth of not less than $20,000,000.00, measured quarterly. Except as amended herein, all other terms and conditions of the Loan Agreement remain in full force and effect and are applicable to this Amendment. IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as of the date and year first above written.
Borrower: HEADWATERS INCORPORATED By: /s/ Kirk A. Benson -----------------------------Kirk A. Benson, Chairman & CEO
Zions First National Bank By: /s/ Tracy Groll ---------------------------Tracy Groll, Vice President
Exhibit 10.73
CONTRIBUTION AND SUBSCRIPTION AGREEMENT
Exhibit 10.73
CONTRIBUTION AND SUBSCRIPTION AGREEMENT AMONG HEADWATERS INCORPORATED AND AVINTAQUIN CAPITAL, LLC September 24, 2001
CONTRIBUTION AND SUBSCRIPTION AGREEMENT This CONTRIBUTION AND SUBSCRIPTION AGREEMENT, dated as of September 24, 2001, is made among Headwaters Incorporated, a Delaware corporation ("Headwaters") and Avintaquin Capital, LLC, a California limited liability company (the "Company"). RECITALS WHEREAS Headwaters will contribute $400,000 in cash (the "Cash") and transfer certain assets of Headwaters (the "Assets") as set forth in and pursuant to the General Assignment and Bill of Sale (the "Bill of Sale") in the form of Exhibit A hereto, in consideration for (i) 600 Class B Membership Units of the Company (the "Class B Membership Units"), to be subscribed to by Headwaters herein and (ii) a promissory note (the "Note") of the Company in the principal amount of $4,000,000 substantially in the form attached hereto as Exhibit B. WHEREAS the Company is willing to accept the Assets and issue the Units and the Note to Headwaters as provided herein. NOW, THEREFORE, in consideration of the foregoing, the Company and Headwaters hereby agree as follows: ARTICLE I TRANSFER OF ASSETS AND CASH AND SUBSCRIPTION FOR SECURITIES Section 1.1 Transfer of Assets. Headwaters hereby contributes the Cash and transfers, assigns, conveys and sets over to and vests in the Company, and the Company hereby accepts from Headwaters, as of the date hereof, all of the right, title and interest of Headwaters in the Assets. Headwaters agrees to execute and deliver to the Company on the Closing Date (as defined below) the Bill of Sale. Section 1.2 Delivery of Note and Units. The Company agrees to deliver the Note, a pledge agreement with respect to the Assets in the form attached hereto as Exhibit C (the "Pledge Agreement") and the Class B Membership Units to Headwaters on the Closing Date. Section 1.3 Closing. Upon the terms and subject to the conditions of this Agreement, the closing of the transfer of the Assets, and the issuance of the Class B Membership Units and the Note hereunder (the "Closing") shall take place at the principal executive office of the Company within five (5) business days following the execution and delivery of this Agreement by all of the parties hereto (the date of the Closing hereunder being referred to as the "Closing Date").
CONTRIBUTION AND SUBSCRIPTION AGREEMENT This CONTRIBUTION AND SUBSCRIPTION AGREEMENT, dated as of September 24, 2001, is made among Headwaters Incorporated, a Delaware corporation ("Headwaters") and Avintaquin Capital, LLC, a California limited liability company (the "Company"). RECITALS WHEREAS Headwaters will contribute $400,000 in cash (the "Cash") and transfer certain assets of Headwaters (the "Assets") as set forth in and pursuant to the General Assignment and Bill of Sale (the "Bill of Sale") in the form of Exhibit A hereto, in consideration for (i) 600 Class B Membership Units of the Company (the "Class B Membership Units"), to be subscribed to by Headwaters herein and (ii) a promissory note (the "Note") of the Company in the principal amount of $4,000,000 substantially in the form attached hereto as Exhibit B. WHEREAS the Company is willing to accept the Assets and issue the Units and the Note to Headwaters as provided herein. NOW, THEREFORE, in consideration of the foregoing, the Company and Headwaters hereby agree as follows: ARTICLE I TRANSFER OF ASSETS AND CASH AND SUBSCRIPTION FOR SECURITIES Section 1.1 Transfer of Assets. Headwaters hereby contributes the Cash and transfers, assigns, conveys and sets over to and vests in the Company, and the Company hereby accepts from Headwaters, as of the date hereof, all of the right, title and interest of Headwaters in the Assets. Headwaters agrees to execute and deliver to the Company on the Closing Date (as defined below) the Bill of Sale. Section 1.2 Delivery of Note and Units. The Company agrees to deliver the Note, a pledge agreement with respect to the Assets in the form attached hereto as Exhibit C (the "Pledge Agreement") and the Class B Membership Units to Headwaters on the Closing Date. Section 1.3 Closing. Upon the terms and subject to the conditions of this Agreement, the closing of the transfer of the Assets, and the issuance of the Class B Membership Units and the Note hereunder (the "Closing") shall take place at the principal executive office of the Company within five (5) business days following the execution and delivery of this Agreement by all of the parties hereto (the date of the Closing hereunder being referred to as the "Closing Date").
Section 1.4 Subscription to Securities. For the consideration set forth in Article 2 hereof, Headwaters hereby subscribes to 600 Class B Membership Units, with such rights and benefits as are set forth in the Operating Agreement of the Company (the "Operating Agreement"), a copy of which is attached as Exhibit D hereto. Section 1.5 Deliveries at Closing. At the Closing: (a) Headwaters will deliver to the Company: (i) the Bill of Sale, duly executed, transferring the Assets, together with the original copies of all promissory notes, agreements, stock certificates, warrants, documents and other instruments representing or relating to the Assets; (ii) certified copies of the resolutions duly adopted by the board of directors of Headwaters authorizing on behalf of Headwaters the execution, delivery and performance of this Agreement and the other agreements contemplated hereby; (iii) the duly executed Pledge Agreement; (iv) a copy of the Operating Agreement duly executed by Headwaters;
Section 1.4 Subscription to Securities. For the consideration set forth in Article 2 hereof, Headwaters hereby subscribes to 600 Class B Membership Units, with such rights and benefits as are set forth in the Operating Agreement of the Company (the "Operating Agreement"), a copy of which is attached as Exhibit D hereto. Section 1.5 Deliveries at Closing. At the Closing: (a) Headwaters will deliver to the Company: (i) the Bill of Sale, duly executed, transferring the Assets, together with the original copies of all promissory notes, agreements, stock certificates, warrants, documents and other instruments representing or relating to the Assets; (ii) certified copies of the resolutions duly adopted by the board of directors of Headwaters authorizing on behalf of Headwaters the execution, delivery and performance of this Agreement and the other agreements contemplated hereby; (iii) the duly executed Pledge Agreement; (iv) a copy of the Operating Agreement duly executed by Headwaters; (v) such other instruments of sale, transfer, conveyance and assignment as reasonably requested by the Company in connection with transfer to the Company of good title to the Assets; and (vi) the Cash in immediately available U.S. funds. (b) The Company will deliver to Headwaters: (i) a duly executed certificate or certificates representing the Class B Membership Units; (ii) the duly executed Note; (iii) the duly executed Pledge Agreement; and (iv) a copy of the Operating Agreement duly executed by the members and managers of the Company. ARTICLE 2 CONSIDERATION Section 2.1 Consideration. The Cash and the Assets transferred to and accepted by the Company pursuant to Section 1.1 hereof shall be consideration for the issuance by the Company to Headwaters, of the Class B Membership Units and the Note. 2
ARTICLE 3 HEADWATERS' REPRESENTATIONS AND WARRANTIES Headwaters represents and warrants to the Company as follows: Section 3.1 Assets. (a) Headwaters is the owner of and has good and marketable title to the Assets, has full legal right, power and authority to deliver the Assets to the Company, and the Assets are free and clear of all claims, security interests, mortgages, pledges, liens and other encumbrances of every nature whatsoever. The transfer and delivery of the Assets by Headwaters to the Company as contemplated by this Agreement will transfer good title to the Assets to the Company free and clear of all claims, security interests, mortgages, pledges, liens and other encumbrances of every nature whatsoever, other than any such claims, security interests, mortgages, pledges, liens granted by or arising out of action taken by the Company. (b) As of the Closing, to the best of Headwaters' knowledge, each of the Assets consisting of equity securities,
ARTICLE 3 HEADWATERS' REPRESENTATIONS AND WARRANTIES Headwaters represents and warrants to the Company as follows: Section 3.1 Assets. (a) Headwaters is the owner of and has good and marketable title to the Assets, has full legal right, power and authority to deliver the Assets to the Company, and the Assets are free and clear of all claims, security interests, mortgages, pledges, liens and other encumbrances of every nature whatsoever. The transfer and delivery of the Assets by Headwaters to the Company as contemplated by this Agreement will transfer good title to the Assets to the Company free and clear of all claims, security interests, mortgages, pledges, liens and other encumbrances of every nature whatsoever, other than any such claims, security interests, mortgages, pledges, liens granted by or arising out of action taken by the Company. (b) As of the Closing, to the best of Headwaters' knowledge, each of the Assets consisting of equity securities, debt securities, warrants or other rights (the "Securities") shall constitute a legal, valid and binding obligation of the issuer of such Securities enforceable by the Company in accordance with its terms. With respect to each of the Securities, Schedule 1 attached hereto sets forth, as applicable, the issuer, the aggregate outstanding principal, interest and other amounts due and payable thereunder and the maturity date thereof. Headwaters is the sole owner and holder of the each of the Securities and, under the terms of each of the documents, agreements or other instruments setting forth rights and obligations with respect to such Securities (the "Security Documents"), has full right to transfer its interest in such Securities on the terms and conditions set forth herein without the consent of any third party, except consents that have been obtained and previously delivered to the Company, and the transfer and assignment of the Securities pursuant to this Agreement will not constitute a default under the terms of any of the Securities. Concurrently herewith, Headwaters has delivered to the Company true, correct and complete copies of the Security Documents. Section 3.2 Organization and Power. Headwaters is a corporation duly formed, validly existing and in good standing under the law of the State of Delaware. Headwaters has full corporate power and authority to execute, deliver and perform this Agreement and the other agreements contemplated hereby to which it is a party. Section 3.3 Authorization. The execution, delivery and performance by Headwaters of this Agreement and the other agreements contemplated hereby to which it is a party have been duly authorized by Headwaters. This Agreement and the other agreements contemplated hereby to which it is a party constitute valid and binding obligations of Headwaters, enforceable in accordance with their respective terms, except to the extent such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights generally. 3
Section 3.4 No Violation. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby to which it is a party by Headwaters and the consummation of the transactions contemplated hereby or thereby do not and will not (a) conflict with or result in any breach of, (b) constitute a default under; (c) result in a violation of, (d) give any third party the right to accelerate any obligation or (e) require any authorization, consent, approval, exemption or other action by any court, other governmental body, or other third party under the provisions of, (x) Headwaters' charter documents or (y) any indenture, mortgage, lease, loan agreement or other agreement or instrument to which Headwaters is bound, or any law, statute, rule, regulation, judgment or decree to which Headwaters or any of its assets is subject. Section 3.5 Litigation. There are no actions, suits, proceedings, orders or investigations pending or, to the best knowledge of Headwaters, threatened against or affecting Headwaters at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which might adversely affect Headwaters' performance under this Agreement or the consummation of the transactions contemplated hereby. Section 3.6 Subscription for Investment. Headwaters is subscribing for the Class B Membership Units to which it is subscribing pursuant to Article 1 for investment purposes only and not with a view to resale or in connection with any distribution of such Class B Membership Units to the public. Headwaters is an "accredited investor"
Section 3.4 No Violation. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby to which it is a party by Headwaters and the consummation of the transactions contemplated hereby or thereby do not and will not (a) conflict with or result in any breach of, (b) constitute a default under; (c) result in a violation of, (d) give any third party the right to accelerate any obligation or (e) require any authorization, consent, approval, exemption or other action by any court, other governmental body, or other third party under the provisions of, (x) Headwaters' charter documents or (y) any indenture, mortgage, lease, loan agreement or other agreement or instrument to which Headwaters is bound, or any law, statute, rule, regulation, judgment or decree to which Headwaters or any of its assets is subject. Section 3.5 Litigation. There are no actions, suits, proceedings, orders or investigations pending or, to the best knowledge of Headwaters, threatened against or affecting Headwaters at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which might adversely affect Headwaters' performance under this Agreement or the consummation of the transactions contemplated hereby. Section 3.6 Subscription for Investment. Headwaters is subscribing for the Class B Membership Units to which it is subscribing pursuant to Article 1 for investment purposes only and not with a view to resale or in connection with any distribution of such Class B Membership Units to the public. Headwaters is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"). Section 3.7 Disclosure. Neither this Agreement, nor any schedules or attachments hereto or incorporated herein, nor any other documents delivered pursuant hereto, contains or will contain any untrue statement of material fact or omits or will omit to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances in which they were made, not misleading. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to Headwaters as follows: Section 4.1 Organization and Power. The Company is a limited liability company duly formed, validly existing and in good standing under the law of the State of California. The Company has full limited liability company power and authority to execute, deliver and perform this Agreement and the other agreements contemplated hereby to which it is a party. Section 4.2 Authorization. The execution, delivery and performance by the Company of this Agreement and the other agreements contemplated hereby to which it is a party have been duly authorized by the Company. This Agreement and the other agreements contemplated hereby to which it is a party constitute valid 4
and binding obligations of the Company, enforceable in accordance with their respective terms, except to the extent such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights generally. Section 4.3 No Violation. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby to which it is a party by the Company and the consummation of the transactions contemplated hereby or thereby do not and will not (a) conflict with or result in any breach of, (b) constitute a default under; (c) result in a violation of, (d) give any third party the right to accelerate any obligation or (e) require any authorization, consent, approval, exemption or other action by any court, other governmental body, or other third party under the provisions of, (x) the Company's Articles of Organization or Operating Agreement or (y) any indenture, mortgage, lease, loan agreement or other agreement or instrument to which the Company is bound, or any law, statute, rule, regulation, judgment or decree to which the Company or any of its assets is subject. Section 4.4 Litigation. There are no actions, suits, proceedings, orders or investigations pending or, to the best
and binding obligations of the Company, enforceable in accordance with their respective terms, except to the extent such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting the enforcement of creditors' rights generally. Section 4.3 No Violation. The execution, delivery and performance of this Agreement and the other agreements contemplated hereby to which it is a party by the Company and the consummation of the transactions contemplated hereby or thereby do not and will not (a) conflict with or result in any breach of, (b) constitute a default under; (c) result in a violation of, (d) give any third party the right to accelerate any obligation or (e) require any authorization, consent, approval, exemption or other action by any court, other governmental body, or other third party under the provisions of, (x) the Company's Articles of Organization or Operating Agreement or (y) any indenture, mortgage, lease, loan agreement or other agreement or instrument to which the Company is bound, or any law, statute, rule, regulation, judgment or decree to which the Company or any of its assets is subject. Section 4.4 Litigation. There are no actions, suits, proceedings, orders or investigations pending or, to the best knowledge of the Company, threatened against or affecting the Company at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which might adversely affect the Company's performance under this Agreement or the consummation of the transactions contemplated hereby. Section 4.5 Securities. The Class B Membership Units to be issued to Headwaters hereunder have been duly authorized by the Company and, when subscribed to and paid for by Headwaters in accordance with this Agreement, will be validly issued, fully paid and non-assessable. Except as specified in the Operating Agreement, the Class B Membership Units are free of preemptive rights. Section 4.6 Capitalization. The authorized, issued and outstanding membership interests of the Company are set forth in the Operating Agreement. Except as set forth in the Operating Agreement, no other person, firm, corporation or other entity has any option with respect to, or any other right to acquire or vote, any of the member interests or other securities of the Company. Section 4.7 Subscription for Investment. The Company is acquiring the Assets for investment purposes only and not with a view to resale or in connection with any distribution of the Assets to the public. The Company is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. ARTICLE 5 ADDITIONAL AGREEMENTS Section 5.1 Survival. To the extent set forth below, the representations, warranties, covenants and agreements set forth in this 5
Agreement, or in any writing delivered in connection with this Agreement, will survive the Closing Date and the consummation of the transactions contemplated hereby, notwithstanding any examination made for or on behalf of any party hereto, the knowledge of any party's officers, directors, managers, shareholders, members, employees or agents, or the acceptance of any certification or opinion: (a) The representations and warranties of Headwaters contained in Section 3.1 shall survive the Closing Date; (b) The representations and warranties contained elsewhere in Article 3 and Article 4 shall survive only until the second anniversary of the Closing Date. Other than claims with respect to willful misrepresentation or fraud, no claim for recovery of indemnifiable damages based upon the inaccuracy of such representations and warranties may be asserted by a party after such representations and warranties shall be thus extinguished; provided, however, that the claims first asserted in writing within the applicable period shall not thereafter be barred.
Agreement, or in any writing delivered in connection with this Agreement, will survive the Closing Date and the consummation of the transactions contemplated hereby, notwithstanding any examination made for or on behalf of any party hereto, the knowledge of any party's officers, directors, managers, shareholders, members, employees or agents, or the acceptance of any certification or opinion: (a) The representations and warranties of Headwaters contained in Section 3.1 shall survive the Closing Date; (b) The representations and warranties contained elsewhere in Article 3 and Article 4 shall survive only until the second anniversary of the Closing Date. Other than claims with respect to willful misrepresentation or fraud, no claim for recovery of indemnifiable damages based upon the inaccuracy of such representations and warranties may be asserted by a party after such representations and warranties shall be thus extinguished; provided, however, that the claims first asserted in writing within the applicable period shall not thereafter be barred. Section 5.2 Indemnification. (a) Headwaters shall indemnify and hold harmless the Company and its managers, members, affiliates, directors, officers and employees from and against any and all losses, liabilities (including punitive or exemplary damages and fines or penalties and any interest thereon), expenses (including, except as set forth in Section 5.3(a), reasonable fees and disbursements of counsel and expenses of investigation and defense), liens and other obligations (hereinafter individually, a "Loss" and collectively, "Losses") that the Company or any of its managers, members, affiliates (including, without limitations, Headwaters), directors, officers or employees may suffer or incur which arise out of or result from (i) any breach of any representation or warranty by Headwaters contained in this Agreement and (ii) any breach of any covenant or agreement of Headwaters contained in this Agreement (provided that in the case of (i) and (ii), pursuant to the terms hereof, such representation or warranty or covenant or agreement shall then be surviving). (b) The Company shall indemnify and hold harmless Headwaters and its shareholders, affiliates, directors, officers and employees from and against any and all Losses that Headwaters or any of its shareholders, affiliates (including, without limitations, the Company), directors, officers or employees may suffer or incur which arise out of or result from (i) any breach of any representation or warranty by the Company contained in this Agreement and (ii) any breach of any covenant or agreement of the Company contained in this Agreement (provided that in the case of (i) and (ii), pursuant to the terms hereof, such representation or warranty or covenant or agreement shall then be surviving). (c) A party making a claim under this Section 5.2 is referred to as an "Indemnified Party" and a party against whom such a claim is asserted under this 6
Section 5.2 is referred to as an "Indemnifying Party." Any Indemnified Party shall promptly notify the Indemnifying Party(ies) of any claim hereunder and shall provide to the Indemnifying Party(ies) as soon as practicable thereafter all information and documentation within its knowledge or possession, as the case may be, which is reasonably necessary to support and verify such claim, and the Indemnifying Party(ies) shall be given access to all books and records in possession or control of the Indemnified Party which the Indemnifying Party (ies) reasonably determines to be related to such claim. Section 5.3 Claims. (a) If any legal proceedings are instituted or demand or other claim is asserted by a third party in respect of which an Indemnified Party may seek indemnification from an Indemnifying Party pursuant to the provisions hereof, the Indemnified Party shall promptly cause written notice (the "Claim Notice") of the assertion of any such claim to be made to the Indemnifying Party(ies). The failure to give such Claim Notice with respect to any claim within sixty (60) days after an Indemnified Party has received notice thereof shall be deemed a waiver of an Indemnified
Section 5.2 is referred to as an "Indemnifying Party." Any Indemnified Party shall promptly notify the Indemnifying Party(ies) of any claim hereunder and shall provide to the Indemnifying Party(ies) as soon as practicable thereafter all information and documentation within its knowledge or possession, as the case may be, which is reasonably necessary to support and verify such claim, and the Indemnifying Party(ies) shall be given access to all books and records in possession or control of the Indemnified Party which the Indemnifying Party (ies) reasonably determines to be related to such claim. Section 5.3 Claims. (a) If any legal proceedings are instituted or demand or other claim is asserted by a third party in respect of which an Indemnified Party may seek indemnification from an Indemnifying Party pursuant to the provisions hereof, the Indemnified Party shall promptly cause written notice (the "Claim Notice") of the assertion of any such claim to be made to the Indemnifying Party(ies). The failure to give such Claim Notice with respect to any claim within sixty (60) days after an Indemnified Party has received notice thereof shall be deemed a waiver of an Indemnified Party's rights under Section 5.2 and Section 5.3 of this Agreement with respect to such claim to the extent that the Indemnifying Party's(ies') rights are prejudiced by such failure. The Indemnifying Party(ies), shall, at their expense, defend against, negotiate and settle any such claim and shall retain counsel (who shall be reasonably acceptable to the Indemnified Party and any other Indemnifying Party) and in such case the Indemnifying Party (ies) shall not be liable for the fees and expenses of any counsel employed by the Indemnified Party, unless (x) each Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (y) the named parties of any such proceeding (including any impleaded parties) include both the Indemnifying Party(ies) and the Indemnified Party and the representation of both or all parties by the same counsel would be inappropriate due to actual or potential differing interest between them; provided, however, that the Indemnifying Party(ies) shall not be obligated to pay any expenses of an Indemnified Party (including fees and disbursements of counsel and expense of investigation and defense) to the extent such expenses are incurred in respect of any period commencing sixty (60) days after receipt by such Indemnified Party of actual notice of the institution of a proceeding or assertion of any demand or other claim and ending on the date the applicable Claim Notice is given in accordance with this Agreement. The parties agree to cooperate fully with each other in connection with the defense, negotiation and settlement of any such claim; provided, however, that notwithstanding anything contained herein to the contrary, a claim shall not be settled (i) by an Indemnifying Party if such settlement might have a material adverse effect on the business, operations or condition (financial or otherwise) of the Indemnified Party or (ii) by the Indemnified Party without the written consent of each Indemnifying Party which consent shall not be unreasonably withheld. An Indemnifying Party shall be subrogated to all rights and remedies of an Indemnified Party and Indemnifying Parties shall have rights of contribution as such parties' interests may appear. 7
(b) In the event any Indemnified Party shall have a claim against any Indemnifying Party hereunder which does not involve a claim or demand being asserted against or sought to be collected from it by a third party, the Indemnified Party shall send a Claim Notice with respect to such claim to the Indemnifying Party(ies). If the Indemnifying Party(ies) notifies the Indemnified Party within sixty (60) days of receipt of the Claim Notice that it does not dispute such claim, the amount of such claim shall be conclusively deemed a liability of such nondisputing Indemnifying Party hereunder. (c) So long as any right to indemnification exists pursuant to Section 5.2, the affected parties each agree to retain all books, records, accounts, instruments and documents reasonably related to the Claim Notice. In each instance the Indemnified Party shall have the right to be kept fully informed by the Indemnifying Party(ies) and its (their) legal counsel with respect to any legal proceedings, and vice versa. Any information or documents made available to any party hereunder which information is designated as confidential by the party providing such information and which is not otherwise generally available to the public and not already within the knowledge of the party to whom the information is provided (unless within the knowledge of such party on a confidential basis or otherwise covered by the confidentiality provisions of any other agreement among the parties hereto, or any of them) and, except as may be required by applicable law, shall not be disclosed to any third person (except for the representatives of the party being provided with the information, in which event the party being provided with the information shall request its representative not to disclose any such information which is otherwise required hereunder to be kept confidential).
(b) In the event any Indemnified Party shall have a claim against any Indemnifying Party hereunder which does not involve a claim or demand being asserted against or sought to be collected from it by a third party, the Indemnified Party shall send a Claim Notice with respect to such claim to the Indemnifying Party(ies). If the Indemnifying Party(ies) notifies the Indemnified Party within sixty (60) days of receipt of the Claim Notice that it does not dispute such claim, the amount of such claim shall be conclusively deemed a liability of such nondisputing Indemnifying Party hereunder. (c) So long as any right to indemnification exists pursuant to Section 5.2, the affected parties each agree to retain all books, records, accounts, instruments and documents reasonably related to the Claim Notice. In each instance the Indemnified Party shall have the right to be kept fully informed by the Indemnifying Party(ies) and its (their) legal counsel with respect to any legal proceedings, and vice versa. Any information or documents made available to any party hereunder which information is designated as confidential by the party providing such information and which is not otherwise generally available to the public and not already within the knowledge of the party to whom the information is provided (unless within the knowledge of such party on a confidential basis or otherwise covered by the confidentiality provisions of any other agreement among the parties hereto, or any of them) and, except as may be required by applicable law, shall not be disclosed to any third person (except for the representatives of the party being provided with the information, in which event the party being provided with the information shall request its representative not to disclose any such information which is otherwise required hereunder to be kept confidential). (d) Notwithstanding anything to the contrary in Section 5.2 above, the parties agree that any Losses arising out of a breach of Headwaters' representations and warranties set forth in Section 3.1(a) shall be satisfied first by offsetting such amounts from amounts payable to Headwaters or its assigns pursuant to the Note, and then, if such proceeds or offset amounts shall be insufficient to satisfy such claim or if claims shall arise subsequent to the satisfaction of the Note such claims shall be satisfied by Headwaters. (e) NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT, AND EXCEPT FOR LOSSES ARISING OUR OF FRAUD OR WILLFUL MISREPRESENTATION, NO PARTY WILL BE LIABLE OR OBLIGATED WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY AMOUNTS IN EXCESS IN THE AGGREGATE CONSIDERATION RECEIVED BY SUCH PARTY PURSUANT TO THIS AGREEMENT OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. Section 5.4 Tax Liability. Headwaters shall be responsible for and pay all transfer and sales taxes imposed on Headwaters or the Company as a result of the transfer of the Assets to the Company or the Class B Membership Units to Headwaters. Headwaters agrees and acknowledges that it may be subject to tax 8
withholding by the United States Internal Revenue Services, the California Franchise Tax Board or other taxing authority with respect to distributions, or deemed distributions, from the Company pursuant to the Operating Agreement. Headwaters hereby expressly authorizes the Company to report and withhold such taxes in accordance with applicable law. Section 5.5 Continuing Assistance. At any time and from time to time after the Closing, at the Company's request and without further reconsideration or compensation whatsoever, Headwaters will execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation and take such action as the Company may reasonably deem necessary or desirable in order to more effectively transfer, convey and assign to the Company, and to confirm the Company's title to, the Assets to put the Company in actual possession and operating control of the Assets and to assist the Company in exercising all rights with respect thereto. Subsequent to the Closing, Headwaters will refer all inquiries relating to the Assets to the Company. Section 5.6 Expenses. Except as otherwise expressly provided herein, each party will pay all of its expense, including attorneys' and accountants' fees, in connection with the negotiation of this Agreement, the performance of its obligations hereunder, and the consummation of the transactions contemplated by this Agreement.
withholding by the United States Internal Revenue Services, the California Franchise Tax Board or other taxing authority with respect to distributions, or deemed distributions, from the Company pursuant to the Operating Agreement. Headwaters hereby expressly authorizes the Company to report and withhold such taxes in accordance with applicable law. Section 5.5 Continuing Assistance. At any time and from time to time after the Closing, at the Company's request and without further reconsideration or compensation whatsoever, Headwaters will execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation and take such action as the Company may reasonably deem necessary or desirable in order to more effectively transfer, convey and assign to the Company, and to confirm the Company's title to, the Assets to put the Company in actual possession and operating control of the Assets and to assist the Company in exercising all rights with respect thereto. Subsequent to the Closing, Headwaters will refer all inquiries relating to the Assets to the Company. Section 5.6 Expenses. Except as otherwise expressly provided herein, each party will pay all of its expense, including attorneys' and accountants' fees, in connection with the negotiation of this Agreement, the performance of its obligations hereunder, and the consummation of the transactions contemplated by this Agreement. Section 5.7 Press Releases and Announcements. No press releases or public announcements related to this Agreement or the transactions contemplated herein will be issued or made without the joint approval of the Company and Headwaters, except for any public disclosure which the Company and Headwaters in good faith believes is required by law (in which case the disclosing party will consult with the other party prior to making such disclosure). Section 5.8 Confidentiality. Each party will hold and will cause their respective affiliates, employees, consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of their respective counsel, by other requirements of law, all documents and information, in the case of each party, concerning the other parties, furnished to them in connection with the transactions contemplated by this Agreement, except to the extent that such information can be shown to have been (i) previously known by the party or parties to which it was furnished (provided that such information is not subject to another confidentiality agreement or other obligation of secrecy owed to the party or parties providing such information), (ii) in the public domain through no fault of the party or parties to whom it was furnished, or (iii) later lawfully acquired from other sources by the party or parties to whom it was furnished (provided that such sources are not known by such party or parties to be bound by a confidentiality agreement with or other obligation of secrecy to the disclosing party or parties or another party). No party will release or disclose information referred to herein to any other person, except their respective auditors, attorneys, financial advisors, bankers, lenders and other consultants and advisors in connection with this Agreement and the transactions contemplated hereby. Each party's respective covenants contained in this Section 5.8 shall continue until the day following the fifth anniversary of the Closing Date, except to the 9
extent of the information referred to herein comes into the public domain through no fault of the party or parties required to hold it in confidence, and all documents referred to herein (including copies thereof) shall be returned to a party immediately upon the written request of such party. ARTICLE 6 MISCELLANEOUS Section 6.1 Amendment and Waiver. (a) This Agreement may be amended, or any provisions of this Agreement may be waived, provided that any such amendment or waiver will be binding upon a party only if set forth in writing executed by such party. (b) No course of dealing between or among any persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any person under or arising out of this Agreement.
extent of the information referred to herein comes into the public domain through no fault of the party or parties required to hold it in confidence, and all documents referred to herein (including copies thereof) shall be returned to a party immediately upon the written request of such party. ARTICLE 6 MISCELLANEOUS Section 6.1 Amendment and Waiver. (a) This Agreement may be amended, or any provisions of this Agreement may be waived, provided that any such amendment or waiver will be binding upon a party only if set forth in writing executed by such party. (b) No course of dealing between or among any persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any person under or arising out of this Agreement. Section 6.2 Notices. Except as otherwise expressly set forth in this Agreement, all notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and will be deemed to have been given when delivered personally, or by documented overnight delivery service, or sent by telecopy, telefax, or other electronic transmission service, provided a confirmation copy is also sent no later than the next business day by first class mail, return receipt requested. Notices, demands and communications to each respective party will, unless another address is specified in a notice delivered to all other parties hereto, be sent to the address indicated in the books and records of the company from time to time. Section 6.3 Assignment. This Agreement and all of the provisions hereof will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned by Headwaters without prior written consent of the Company. Section 6.4 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provisions will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Section 6.5 No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any party. 10
Section 6.6 Captions. The captions used in this Agreement are for convenience of reference only and do not constitute a part of this Agreement and will not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement will be enforced and construed as if no caption had been used in this Agreement. Section 6.7 Complete Agreement. This Agreement and the documents referred to herein contain the complete agreement between the parties and supersede any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. Section 6.8 Governing Law. The substantive law (and not the law of conflicts) of the State of California will govern all questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement. Section 6.9 Counterparts. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same instrument.
Section 6.6 Captions. The captions used in this Agreement are for convenience of reference only and do not constitute a part of this Agreement and will not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement will be enforced and construed as if no caption had been used in this Agreement. Section 6.7 Complete Agreement. This Agreement and the documents referred to herein contain the complete agreement between the parties and supersede any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. Section 6.8 Governing Law. The substantive law (and not the law of conflicts) of the State of California will govern all questions concerning the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement. Section 6.9 Counterparts. This Agreement may be executed in one or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same instrument. Section 6.10 Brokers. No party has retained any broker or finder in connection with the transactions contemplated by this Agreement, and there are no claims for brokerage commissions, finders' fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement by or on behalf of any party. Each party will indemnify each other party for any breach of the indemnifying party's representations in this Section. [Signature page follows.] 11
IN WITNESS WHEREOF, each of the Company and Headwaters has duly executed or caused this Agreement to be duly executed by its officer thereunto duly authorized as of the date first above written. AVINTAQUIN CAPITAL, LLC a California limited liability company
/s/ Eric Richardson ---------------------------------Eric Richardson Manager
HEADWATERS INCORPORATED a Delaware corporation
/s/ Kirk A. Benson ---------------------------------Name: Kirk A. Benson Title: CEO
12
Schedule 1 Securities The "Securities" shall include all of Headwaters' right, title and interest in. to and under the following:
IN WITNESS WHEREOF, each of the Company and Headwaters has duly executed or caused this Agreement to be duly executed by its officer thereunto duly authorized as of the date first above written. AVINTAQUIN CAPITAL, LLC a California limited liability company
/s/ Eric Richardson ---------------------------------Eric Richardson Manager
HEADWATERS INCORPORATED a Delaware corporation
/s/ Kirk A. Benson ---------------------------------Name: Kirk A. Benson Title: CEO
12
Schedule 1 Securities The "Securities" shall include all of Headwaters' right, title and interest in. to and under the following: 1. Common stock and all other debt and equity securities of InterviewNow.com, LLC and any related entities, totaling 821,168 membership units (7.5% of the total units). 2. Common stock and all other debt and equity securities of e-Perception Technologies, Inc. and any related entities, totaling 800,000 shares of common stock or 13.5% of the company. 3. Common stock and all other debt and equity securities of NextStep Broadband Corporation, formerly known as Style U4EA.com, Inc., and any related entities, consisting of 2,957,000 shares of common stock or about 33% of the company. Note that NextStep Broadband currently owes approximately $70,000 to Headwaters for accounting services rendered, and this obligation will continue to be an ongoing debt owed by NextStep Broadband to Headwaters. 4. All right, title and interest in Kwai Financial, Inc. ("Kwai"), represented by 100,000 shares of outstanding common stock, and (A) all of the loans (and related interest, warrants, rights and other dividends relating thereto) made by Kwai, including without limitation, the loans made to the following borrowers: a. Kore Partners, in the original principal amount of $300,000 (in addition to the principal and accrued interest there are warrants representing 165% of the original loan amount of $300,000). b. Voxxy, Inc., in the original principal amount of $250,000 (in addition to principal and accrued interest, Kwai has 150% warrant coverage on the origianal loan amount of $250,000). c. Enlink GeoThermal, Inc., in the original principal amount of $200,000 (in addition to the principal and accrued interest there are warrants to purchase $165,000 shares of common stock). d. Earthnoise, Inc., in the original principal amount of $200,000 (in addition to the principal and accrued interest there are warrants which represent 75% coverage of the loan amount); and (B) Kwai's investment of $65,530 in Venture Bridge, LP, consisting of 1.3 Limited Partnership units. The Securities also includes all of the instruments, documents, promissory notes, stock certificates, warrants, chattel paper, and agreements of every kind evidencing or related to the forgoing.
Schedule 1 Securities The "Securities" shall include all of Headwaters' right, title and interest in. to and under the following: 1. Common stock and all other debt and equity securities of InterviewNow.com, LLC and any related entities, totaling 821,168 membership units (7.5% of the total units). 2. Common stock and all other debt and equity securities of e-Perception Technologies, Inc. and any related entities, totaling 800,000 shares of common stock or 13.5% of the company. 3. Common stock and all other debt and equity securities of NextStep Broadband Corporation, formerly known as Style U4EA.com, Inc., and any related entities, consisting of 2,957,000 shares of common stock or about 33% of the company. Note that NextStep Broadband currently owes approximately $70,000 to Headwaters for accounting services rendered, and this obligation will continue to be an ongoing debt owed by NextStep Broadband to Headwaters. 4. All right, title and interest in Kwai Financial, Inc. ("Kwai"), represented by 100,000 shares of outstanding common stock, and (A) all of the loans (and related interest, warrants, rights and other dividends relating thereto) made by Kwai, including without limitation, the loans made to the following borrowers: a. Kore Partners, in the original principal amount of $300,000 (in addition to the principal and accrued interest there are warrants representing 165% of the original loan amount of $300,000). b. Voxxy, Inc., in the original principal amount of $250,000 (in addition to principal and accrued interest, Kwai has 150% warrant coverage on the origianal loan amount of $250,000). c. Enlink GeoThermal, Inc., in the original principal amount of $200,000 (in addition to the principal and accrued interest there are warrants to purchase $165,000 shares of common stock). d. Earthnoise, Inc., in the original principal amount of $200,000 (in addition to the principal and accrued interest there are warrants which represent 75% coverage of the loan amount); and (B) Kwai's investment of $65,530 in Venture Bridge, LP, consisting of 1.3 Limited Partnership units. The Securities also includes all of the instruments, documents, promissory notes, stock certificates, warrants, chattel paper, and agreements of every kind evidencing or related to the forgoing. 13
Exhibit 10.73.1 PROMISSORY NOTE September 24, 2001 $4,000,000 Corona Del Mar, California THIS PROMISSORY NOTE (the "Note") is a duly authorized and issued promissory note of AVINTAQUIN CAPITAL, LLC., a California limited liability company, having its principal place of business at 2333 East Pacific Coast Highway, Corona Del Mar, California 92625 (the "Company"), and is issued in the principal amount of U.S. $4,000,000 (the "Principal Amount"). For value received, the Company promises to pay to Headwaters Incorporated, a Delaware corporation having its principal place of business at 11778 Election Drive, Suite 210, Draper, Utah 84020 (the "Holder"), the Principal Amount or so much thereof as shall from time to time be unpaid hereunder, together with accrued interest from the date hereof on the unpaid Principal Amount at the Interest Rate (as defined below). This Note shall initially bear interest from the date hereof on the unpaid Principal Amount outstanding at a rate per annum equal to the one-year LIBOR rate plus 90 basis points as reported in the Wall Street Journal, and such interest rate shall be adjusted annually on the anniversary of the date of issuance (such interest rate, as adjusted, the "Interest Rate"). Interest shall be calculated in arrears through the last day of each month and shall be due and
Exhibit 10.73.1 PROMISSORY NOTE September 24, 2001 $4,000,000 Corona Del Mar, California THIS PROMISSORY NOTE (the "Note") is a duly authorized and issued promissory note of AVINTAQUIN CAPITAL, LLC., a California limited liability company, having its principal place of business at 2333 East Pacific Coast Highway, Corona Del Mar, California 92625 (the "Company"), and is issued in the principal amount of U.S. $4,000,000 (the "Principal Amount"). For value received, the Company promises to pay to Headwaters Incorporated, a Delaware corporation having its principal place of business at 11778 Election Drive, Suite 210, Draper, Utah 84020 (the "Holder"), the Principal Amount or so much thereof as shall from time to time be unpaid hereunder, together with accrued interest from the date hereof on the unpaid Principal Amount at the Interest Rate (as defined below). This Note shall initially bear interest from the date hereof on the unpaid Principal Amount outstanding at a rate per annum equal to the one-year LIBOR rate plus 90 basis points as reported in the Wall Street Journal, and such interest rate shall be adjusted annually on the anniversary of the date of issuance (such interest rate, as adjusted, the "Interest Rate"). Interest shall be calculated in arrears through the last day of each month and shall be due and payable quarterly on each December 1, March 1, June 1 and September 1 until the outstanding Principal Amount is paid in full. Interest shall be calculated on the basis of a 360 day year consisting of twelve (12) thirty (30) day periods. This Note is subject to the following terms and conditions: 1. Maturity. The Principal Amount to the extent not previously paid, together with all interest accrued but not previously paid, shall be due and payable in full on September 30, 2004. 2. Payment. All payments shall be made in lawful money of the United States of America at such place as the Holder hereof may from time to time designate in writing to the Company. Payment shall be credited first to the accrued interest then due and payable and the remainder applied to principal. Prepayment of this Note in full or in part may be made at any time without penalty. 3. Transfer; Successors and Assigns. The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Notwithstanding the foregoing, the Holder may not assign, pledge, or otherwise transfer this Note without the prior written consent of the Company, except for transfers to affiliates. Subject to the preceding sentence, this Note may be transferred only upon surrender of the original Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Holder. Thereupon, a new note for the same principal amount and interest will be issued to, and registered in the name of, the transferee. Interest and principal are payable only to the registered holder of this Note.
4. Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. 5. Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Note will be in writing and will be deemed to have been given when delivered personally, or by documented overnight delivery service, or sent by telecopy, telefax, or other electronic transmission service, provided a confirmation copy is also sent no later than the next business day by first class mail, return receipt requested. Notices, demands and communications to each respective party will, unless another address is specified in a notice delivered to all other parties hereto, be sent to the address indicated herein or in the books and records of the Company from time to time. 6. Amendments. Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment effected in accordance with this Section 6 shall be binding upon the Company, the Holder and each transferee of the Note.
4. Governing Law. This Note and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. 5. Notices. All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Note will be in writing and will be deemed to have been given when delivered personally, or by documented overnight delivery service, or sent by telecopy, telefax, or other electronic transmission service, provided a confirmation copy is also sent no later than the next business day by first class mail, return receipt requested. Notices, demands and communications to each respective party will, unless another address is specified in a notice delivered to all other parties hereto, be sent to the address indicated herein or in the books and records of the Company from time to time. 6. Amendments. Any term of this Note may be amended only with the written consent of the Company and the Holder. Any amendment effected in accordance with this Section 6 shall be binding upon the Company, the Holder and each transferee of the Note. 7. Security. This Note is secured by, and entitled to the benefits provided in, that certain Pledge Agreement (the "Pledge Agreement") executed concurrently herewith by the Company and the Holder. The Company shall deposit in an escrow account reasonably acceptable to the Holder funds sufficient to pay interest hereunder for a period of one year. Upon the termination of such one-year period the escrow account shall terminate and any funds therein shall be released to the Company. Notwithstanding any other provision contained in this Note or the Pledge Agreement, the personal liability of any member of the Company, to pay the principal of and interest on the indebtedness evidenced hereby shall be limited to the Pledged Collateral (as such term is defined in that certain Pledge Agreement) and the proceeds, profits, issues, products and income thereof, including any received or collected by or on behalf of the Company after an event of default, except to the extent that the Company did not have the legal right because of a bankruptcy, receivership or similar judicial proceeding, to direct the disbursement of such sums. Except as otherwise provided in this Note, Holder shall not seek (a) any judgment for a deficiency against any member of the Company, or their respective heirs, legal representatives, successors or assigns, in any action to enforce any right or remedy under this Note or the Pledge Agreement, or (b) any judgment on this Note except as may be necessary in any action brought under the Pledge Agreement to enforce the lien against the Pledged Collateral. 8. Members, Managers, Officers and Directors Not Liable. Except as provided otherwise in the Pledge Agreement, in no event shall any manager, member, officer or director of the Company be liable for any amounts due or payable pursuant to this Note. 9. Membership Rights. This Note shall not entitle the Holder to any of the rights of a member of the Company, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of members or any other proceedings of the Company. 2
IN WITNESS WHEREOF, the Company has executed this Note on the day and year first set forth above. COMPANY: AVINTAQUIN CAPITAL, LLC.
By:/s/ Eric Richardson ---------------------Eric Richardson Manager
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IN WITNESS WHEREOF, the Company has executed this Note on the day and year first set forth above. COMPANY: AVINTAQUIN CAPITAL, LLC.
By:/s/ Eric Richardson ---------------------Eric Richardson Manager
3
Exhibit 21.1 Subsidiaries Headwaters acquired a 100% interest in Hydrocarbon Technologies, Inc. in August 2001. Headwaters also owns the following entities: X Alabama Synfuel #1 Ltd., a Delaware limited partnership of which Headwaters serves as general partner and owns 100% X Utah Synfuel #1 Ltd., a Delaware limited partnership of which Headwaters serves as general partner and owns 100%
Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement File Nos. 333-67371, 333-85753, 33379385, 333-34488, 333-36872, 333-39678, 333-39676 and 333-39674.
/s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Salt Lake City, Utah December 14, 2001
Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No.'s 333-67371, 333-34488, 333-36872, 333-79385 and 333-85753) and on Form S-8 (File No.'s 333-39674, 333-39676 and 333-39678) of Headwaters Incorporated of our report dated January 13, 2000, which appears in this Form 10-K. We also consent to the reference to us under the heading "Selected Financial Data" in this Form 10-K, which is incorporated by reference in such Registration Statements.
/s/ PricewaterhouseCoopers LLP
Exhibit 21.1 Subsidiaries Headwaters acquired a 100% interest in Hydrocarbon Technologies, Inc. in August 2001. Headwaters also owns the following entities: X Alabama Synfuel #1 Ltd., a Delaware limited partnership of which Headwaters serves as general partner and owns 100% X Utah Synfuel #1 Ltd., a Delaware limited partnership of which Headwaters serves as general partner and owns 100%
Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement File Nos. 333-67371, 333-85753, 33379385, 333-34488, 333-36872, 333-39678, 333-39676 and 333-39674.
/s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Salt Lake City, Utah December 14, 2001
Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No.'s 333-67371, 333-34488, 333-36872, 333-79385 and 333-85753) and on Form S-8 (File No.'s 333-39674, 333-39676 and 333-39678) of Headwaters Incorporated of our report dated January 13, 2000, which appears in this Form 10-K. We also consent to the reference to us under the heading "Selected Financial Data" in this Form 10-K, which is incorporated by reference in such Registration Statements.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Salt Lake City, Utah December 14, 2001
Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our report included in this Form 10-K, into the Company's previously filed Registration Statement File Nos. 333-67371, 333-85753, 33379385, 333-34488, 333-36872, 333-39678, 333-39676 and 333-39674.
/s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Salt Lake City, Utah December 14, 2001
Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No.'s 333-67371, 333-34488, 333-36872, 333-79385 and 333-85753) and on Form S-8 (File No.'s 333-39674, 333-39676 and 333-39678) of Headwaters Incorporated of our report dated January 13, 2000, which appears in this Form 10-K. We also consent to the reference to us under the heading "Selected Financial Data" in this Form 10-K, which is incorporated by reference in such Registration Statements.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Salt Lake City, Utah December 14, 2001
Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (File No.'s 333-67371, 333-34488, 333-36872, 333-79385 and 333-85753) and on Form S-8 (File No.'s 333-39674, 333-39676 and 333-39678) of Headwaters Incorporated of our report dated January 13, 2000, which appears in this Form 10-K. We also consent to the reference to us under the heading "Selected Financial Data" in this Form 10-K, which is incorporated by reference in such Registration Statements.
/s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Salt Lake City, Utah December 14, 2001