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Exhibit 10.97
EXCHANGE AGREEMENT
This Exchange Agreement (this " Agreement ") is made and
entered into as of December __, 2008, 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- 7
/ 8 %
Convertible Senior Subordinated Notes due 2016 of the Company set
forth on Schedule A (the " Old Notes
");
WHEREAS, the Holder desires to exchange the Old Notes for the
Company’s 16% Convertible Senior Subordinated Notes due 2016
(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 ");
(viii) The New Notes shall have been approved for trading on The
PORTAL Market; and
(ix) The Company shall have received irrevocable commitments
from holders of $50 million in principal amount of the Old Notes to
engage in the Exchange on substantially the same terms and
conditions as set forth in this Agreement.
(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;
(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; and
(iv) The Company shall have received irrevocable commitments
from holders of $50 million in principal amount of the Old Notes to
engage in the Exchange on substantially the same terms and
conditions as set forth in this Agreement.
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;
provided that the aggregate principal amount of New Notes that may
be issued by the Company in exchange for Old Notes shall not exceed
$64,000,000.
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.
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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,
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 or 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 law
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