Exhibit 10.98
EXCHANGE
AGREEMENT
This Exchange Agreement (this
“ Agreement ”) is made and entered into as of
March ,
2009, by and between
(the “ Holder ”), and Headwaters Incorporated, a
Delaware corporation (the “ Company
”).
RECITALS
WHEREAS, the Holder currently holds
that principal amount of the Company’s 2.50% Convertible
Senior Subordinated Notes due 2014 of the Company set forth on
Schedule A (the “ Old Notes
”);
WHEREAS, the Holder desires to
exchange the Old Notes for the Company’s 14.75% Convertible
Senior Subordinated Notes due 2014 (the “ New Notes
”), on the terms and conditions set forth in this Agreement
(the “ Exchange ”);
WHEREAS, the Company desires to
issue to the Holder that principal amount of New Notes in exchange
for the Old Notes in the Exchange in the amount set forth on
Schedule A ;
WHEREAS, the board of directors of
the Company has authorized the issuance of the New Notes to be
issued pursuant to the form of Indenture to be entered into by the
Company and the trustee (the “ Trustee ”) named
therein, substantially in the form of Exhibit A hereto
(the “ Indenture ”); and
WHEREAS, in connection with the
issuance of the New Notes the Company will agree to provide the
Holder registration rights pursuant to the Registration Rights
Agreement, to be entered into by the Company, the Holder and the
other holders of Old Notes exchanging such notes for New Notes,
substantially in the form of Exhibit B hereto (the
“ Registration Rights Agreement ”).
NOW, THEREFORE, in consideration of
the premises and the agreements set forth below, and for other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE 1
Exchange
Section 1.1 Exchange and Sale of
the New Notes . Upon the terms and subject to the conditions of
this Agreement, at the Closing (as defined herein), the Company
shall issue and exchange, subject to Section 1.2 hereof, to
the Holder, and the Holder agrees to accept from the Company, that
aggregate principal amount of New Notes set forth in Schedule
A in exchange for that aggregate principal amount of Old Notes
set forth in Schedule A .
Section 1.2 Cancellation of Old
Notes . Pursuant to the indenture (the “ Old
Indenture ”) relating to the Old Notes, Holder hereby
agrees that such Holder’s Old Notes shall be cancelled in
connection with the Exchange. All accrued unpaid interest on the
Old Notes as of the Closing Date (as defined below) shall be paid
by the Company to the Holder in cash. Holder acknowledges that the
cancellation of the Old Notes shall have the effects specified in
the Old Indenture governing the applicable Old Notes.
Section 1.3 Private Placement
. In consideration of and for the Exchange, the Company agrees to
issue Holder that aggregate principal amount of New Notes set forth
on Schedule A hereto. The issuance of the New Notes to
Holder will be made without registration of the New Notes under
the
Securities Act of 1933, as amended (together
with the rules and regulations thereunder, the “
Securities Act ”), in reliance upon the exemption
therefrom provided by Section 4(2) of the Securities Act
and/or Section 506 of Regulation D promulgated under the
Securities Act and in reliance on similar exemptions under state
securities or “blue sky” laws. Holder acknowledges that
the Company is relying upon the truth and accuracy of, and the
Holder’s compliance with, its representations, warranties,
agreements, acknowledgments and understandings set forth herein in
order to determine the availability of such exemptions and the
eligibility of the Holder for the Exchange.
Section 1.4 Closing Mechanics
. The closing of the transactions contemplated by this Agreement
shall occur at the offices of Pillsbury Winthrop Shaw Pittman LLP,
50 Fremont Street, San Francisco, California 94105, or such
other location as may be mutually acceptable in each case at
9:00 a.m., San Francisco time, on third business day after the
date of this Agreement or at such other time on the same date or
such other date as the parties may agree in writing (such time and
date, the “ Closing Date ”). Prior to the
Closing Date and pursuant to the terms of the Indenture the Company
shall cause the Trustee to register one or more global securities
representing the New Notes in the name of Cede & Co., the
nominee of the Depositary Trust Company (“DTC”), and
Holder shall instruct its broker or other participant in the DTC
Fast Automated Securities Transfer Program to transfer and deliver
the Old Notes to the Trustee. On the Closing Date, the Company
shall cause the Trustee to credit such aggregate amount of New
Notes to such Holder’s or its designee’s balance
account in the DTC system, in the amounts set forth on
Schedule A attached hereto.
Section 1.5 Conditions to
Closing .
(a) The obligation of the Holder
hereunder to consummate the transactions contemplated hereby at the
Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these
conditions are for the Holder’s sole benefit and may be
waived by the Holder at any time in its sole discretion by
providing the Company with prior written notice thereof:
(i) The Company and the Trustee
shall have executed and delivered the Indenture;
(ii) The Company shall have executed
and delivered the New Notes in the aggregate principal amount set
forth in Schedule A;
(iii) The Company shall have
executed and delivered the Registration Rights
Agreement;
(iv) The Company shall have
submitted an additional share listing application for the shares of
common stock of the Company (the “ Common Stock
”), issuable upon conversion of the New Notes with the New
York Stock Exchange and shall cause the shares of Common Stock
issuable upon conversion of the New Notes to be approved by the New
York Stock Exchange for listing as soon as practicable after the
Closing;
(v) The Company shall have obtained
a Committee on Uniform Securities Identification Procedures number
(“ CUSIP number ”) for the New Notes;
(vi) The representations and
warranties of the Company in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and the Company has
complied in all material respects with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
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(vii) The New Notes satisfy the
requirements set forth in Rule 144A(d)(3) under the Securities Act
of 1933 (the “ Securities Act ”); and
(viii) The New Notes shall have been
approved for trading on The PORTAL Market.
(b) The obligation of the Company
hereunder to consummate the transactions contemplated hereby at the
Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these
conditions are for the Company’s sole benefit and may be
waived by the Company at any time in its sole discretion by
providing the Holder with prior written notice thereof:
(i) Holder shall have executed and
delivered to the Company the Registration Rights
Agreement;
(ii) The Holder shall have
delivered, or caused to be delivered, to the Company (i) the
Old Notes being exchanged pursuant to this Agreement in accordance
with the written instructions of the Company and (ii) all
documentation related to the right, title and interest in and to
all of the Old Notes, and whatever documents of conveyance or
transfer may be necessary or reasonably desirable to transfer to
and confirm in the Company all right, title and interest in and to
(free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity or
other adverse claim thereto) the Old Notes, including the delivery
to the Company at or prior to the execution of this Agreement of a
properly completed Letter of Transmittal in the form provided to
the Holder; and
(iii) The representations and
warranties of the Holder in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date and that the Holder
shall have complied in all material respects with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
Section 1.6 Exchange of
Additional Notes . Simultaneously with or after the Closing,
the Company may issue, to one or more other holders of Old Notes
(the “ Other Holders ”), subject to the terms of
the Indenture, New Notes on substantially the same terms and
conditions offered to the Holder.
ARTICLE 2
Representations and Warranties of
the Holder
The Holder hereby makes the
following representations and warranties, each of which is true and
correct on the date hereof and the Closing Date and shall survive
the Closing Date and the transactions contemplated hereby to the
extent set forth herein.
Section 2.1 Existence and
Power .
(a) The Holder is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization and has the power, authority and
capacity to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions
contemplated hereby.
(b) The execution of this Agreement
by the Holder and the consummation by the Holder of the
transactions contemplated hereby do not and will not constitute or
result in a breach, violation, conflict or default under any note,
bond, mortgage, deed, indenture, lien, instrument, contract,
agreement, lease or license to which the Holder is a party, whether
written or oral, express or implied, or any statute, law,
ordinance, decree, order, injunction, rule, directive, judgment or
regulation of any court,
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administrative or regulatory body, governmental
authority, arbitrator, mediator or similar body on the part of the
Holder or on the part of any other party thereto or cause the
acceleration or termination of any obligation or right of the
Holder, except for such breaches, conflicts, defaults, rights or
violations which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the
ability of the Holder to perform its obligations hereunder. As used
in this Agreement, the term “ Material Adverse Effect
” shall mean a material adverse effect on the business,
condition (financial or otherwise), properties or results of
operations of the party, or an event, change or occurrence that
would materially adversely affect the ability of the party to
perform its obligations under this Agreement, the Indenture, the
Registration Rights Agreement and the New Notes which would limit
the Holder’s power to transfer the Old Notes
hereunder.
Section 2.2 Valid and Enforceable
Agreement; Authorization . This Agreement has been duly
executed and delivered by the Holder and constitutes a legal, valid
and binding obligation of the Holder, enforceable against the
Holder in accordance with its terms, except that such enforcement
may be subject to (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting or relating to
enforcement of creditors’ rights generally, and
(b) general principles of equity.
Section 2.3 Title to Old
Notes . The Holder has good and valid title to the Old Notes in
the aggregate principal amount set forth on Schedule A ,
free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity or
other adverse claim thereto. The Holder has not, in whole or in
part, (i) assigned, transferred, hypothecated, pledged or
otherwise disposed of the Old Notes or its rights in such Old
Notes, or (ii) given any person or entity any transfer order,
power of attorney or other authority of any nature whatsoever with
respect to such Old Notes which would limit the Holder’s
power to transfer the Old Notes hereunder.
Section 2.4 Investment
Decision . The Holder is a “qualified institutional
buyer” within the meaning of Rule 144A under the Securities
Act, and was not organized for the purpose of acquiring the New
Notes or the shares of the Common Stock, into which the New Notes
may be converted (the “ Underlying Common Stock
”). The Holder is knowledgeable, sophisticated and
experienced in business and financial matters and has previously
invested in securities similar to the New Notes. The Holder is able
to bear the economic ris
