Document:

Exhibit 4.2

                                                                  EXECUTION COPY

                          REGISTRATION RIGHTS AGREEMENT

                            dated as of June 1, 2004

                                     between

                             HEADWATERS INCORPORATED

                                       and

                       MORGAN STANLEY & CO. INCORPORATED,

                   as representative of the Initial Purchasers

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         REGISTRATION RIGHTS AGREEMENT dated as of June 1, 2004 between
Headwaters Incorporated, a Delaware corporation (the "Company"), and Morgan
Stanley & Co. Incorporated, as representative of the several initial purchasers
listed on Schedule I (the "Initial Purchasers") to the Purchase Agreement dated
May 25, 2004 (the "Purchase Agreement") with the Company. In order to induce the
Initial Purchasers to enter into the Purchase Agreement, the Company has agreed
to provide the registration rights set forth in this Agreement. The execution of
this Agreement is a condition to the closing under the Purchase Agreement.

         The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the beneficial owners
(including the Initial Purchasers) from time to time of the Securities (as
defined herein) and the beneficial owners from time to time of the Underlying
Common Stock (as defined herein) issued upon conversion of the Securities (each
of the foregoing a "Holder" and together the "Holders"), as follows:

Section 1 . Definitions. Capitalized terms used herein without definition shall
have their respective meanings set forth in the Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:

         "Additional Interest Amount" has the meaning set forth in Section 2(e)
hereof.

         "Affiliate" means, with respect to any specified person, an
"affiliate," as defined in Rule 144, of such person.

         "Amendment Effectiveness Deadline" has the meaning set forth in Section
2(d) hereof.

         "Business Day" means any day, except a Saturday, Sunday or legal
holiday on which banking institutions in The City of New York are authorized or
obligated by law or executive order to close.

         "Common Stock" means the shares of common stock, $0.001 par value per
share, of the Company, and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, including the Underlying Common
Stock.

         "Conversion Price" has the meaning assigned such term in the Indenture.

         "Deferral Notice" has the meaning set forth in Section 3(h) hereof.

         "Deferral Period" has the meaning set forth in Section 3(h) hereof.

         "Effectiveness Deadline" has the meaning set forth in Section 2(a)
hereof.

         "Effectiveness Period" means the period commencing on the first date
that a Shelf Registration Statement is declared effective under the Securities
Act and ending on the date that all Securities and the Underlying Common Stock
have ceased to be Registrable Securities.

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         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

         "Filing Deadline" has the meaning set forth in Section 2(a) hereof.

         "Holder" has the meaning set forth in the second paragraph of this
Agreement.

         "Indenture" means the Indenture dated as of June 1, 2004 between the
Company and Wells Fargo Bank, N.A., as trustee, pursuant to which the Securities
are being issued.

         "Initial Purchasers" means the Initial Purchasers named in Schedule I
to the Purchase Agreement.

         "Interest Payment Date" means each June 1 and December 1.

         "Issue Date" means the first date of original issuance of the
Securities.

         "Liquidated Damages Amount" has the meaning set forth in Section 2(e)
hereof.

         "Material Event" has the meaning set forth in Section 3(h) hereof.

         "Notice and Questionnaire" means a written notice delivered to the
Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated May 25, 2004 relating to the Securities.

         "Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

         "Purchase Agreement" has the meaning set forth in the preamble hereof.

         "Prospectus" means a prospectus relating to a Shelf Registration
Statement, as amended or supplemented, and all materials incorporated by
reference in such Prospectus.

         "Record Holder" means with respect to any Interest Payment Date
relating to any Securities or Underlying Common Stock as to which any Additional
Interest Amount or Liquidated Damages Amount has accrued, the registered holder
of such Security or Underlying Common Stock on the May 15 or November 15
immediately preceding the Interest Payment Date.

         "Registrable Securities" means the Securities until such Securities
have been converted into or exchanged for the Underlying Common Stock and, at
all times subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with a Shelf Registration Statement, (ii) expiration of the holding
period that would be applicable thereto under Rule 144(k) to a sale by a
non-Affiliate of the Company or (iii) its sale to the public pursuant to Rule

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144 (or any similar provision then in force, but not Rule 144A) under the
Securities Act, and (B) as a result of the event or circumstance described in
any of the foregoing clauses (i) through (iii), the legend with respect to
transfer restrictions required under the Indenture is removed or removable in
accordance with the terms of the Indenture or such legend, as the case may be.

         "Registration Default" has the meaning set forth in Section 2(e)
hereof.

         "Registration Default Period" has the meaning set forth in Section 2(e)
hereof.

         "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

         "Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.

         "SEC" means the Securities and Exchange Commission.

         "Securities" means the 2?% Convertible Senior Subordinated Notes due
2016 of the Company to be purchased pursuant to the Purchase Agreement,
including any Securities purchased by the Initial Purchasers upon exercise of
their option to purchase additional Securities.

         "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.

         "Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof, including amendments to such registration statement, all exhibits
and all materials incorporated by reference in such registration statement.

         "Special Counsel" means Shearman & Sterling LLP or one such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, but which may, with the written consent of the Initial
Purchasers (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company. For purposes of determining Holders of a majority of the Registrable
Securities in this definition, Holders of Securities shall be deemed to be the
Holders of the number of shares of Underlying Common Stock into which such
Securities are or would be convertible as of the date the consent is requested.

         "Trustee" means Wells Fargo Bank, N.A., the Trustee under the
Indenture.

         "Underlying Common Stock" means the Common Stock into which the
Securities are convertible or issued upon any such conversion.

         Section 2 . Shelf Registration. The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "Filing Deadline") 90 days after the Issue Date, a
registration statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act registering the resale from

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time to time by Holders of the Registrable Securities (a "Shelf Registration
Statement"). The Shelf Registration Statement shall be on Form S-3 or another
appropriate form permitting registration of the Registrable Securities for
resale by the Holders in accordance with the methods of distribution elected by
the Holders and set forth in the Shelf Registration Statement. In no event will
such methods of distribution take the form of an underwritten offering of the
Registrable Securities without the prior agreement of the Company. The Company
shall use its reasonable best efforts to cause a Shelf Registration Statement to
be declared effective under the Securities Act as promptly as is practicable but
in any event by the date (the "Effectiveness Deadline") that is 180 days after
the Issue Date, and to keep a Shelf Registration Statement continuously
effective under the Securities Act until the expiration of the Effectiveness
Period. Each Holder that became a Notice Holder on or prior to the date ten
Business Days prior to the date the initial Shelf Registration Statement is
declared effective shall be named as a selling securityholder in the initial
Shelf Registration Statement and the related Prospectus in such a manner as to
permit such Holder to deliver the Prospectus to purchasers of Registrable
Securities in accordance with applicable law. None of the Company's
securityholders (other than the Holders) shall have the right to include any of
the Company's securities in a Shelf Registration Statement.

         (b) If a Shelf Registration Statement covering resales of the
Registrable Securities ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all securities registered
thereunder shall have been resold pursuant thereto or shall have otherwise
ceased to be Registrable Securities), the Company shall use its reasonable best
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 30 days of such cessation
of effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement so that all
Registrable Securities outstanding as of the date of such filing are covered by
a Shelf Registration Statement. If a new Shelf Registration Statement is filed,
the Company shall use its reasonable best efforts to cause the new Shelf
Registration Statement to become effective as promptly as is practicable after
such filing and to keep the new Shelf Registration Statement continuously
effective until the end of the Effectiveness Period.

         (c) The Company shall amend and supplement the Prospectus and amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or file a new Shelf Registration Statement, if
required by the Securities Act, or any other documents necessary to name a
Notice Holder as a selling securityholder pursuant to Section 2(d) below.

         (d) Each Holder may sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus only in accordance with this
Section 2(d) and Section 3(h). Each Holder wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus
shall deliver a Notice and Questionnaire to the Company at least three Business
Days prior to any intended distribution of Registrable Securities under the
Shelf Registration Statement. From and after the date the initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered, and in any
event upon the later of (x) 15 Business Days after such date and (y) five

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Business Days after the expiration of any Deferral Period in effect when the
Notice and Questionnaire is delivered or put into effect within 15 Business Days
of such delivery date:

                  (i) if required by applicable law, file with the SEC a
         post-effective amendment to the Shelf Registration Statement or prepare
         and, if required by applicable law, file a supplement to the related
         Prospectus or a supplement or amendment to any document incorporated
         therein by reference or file a new Shelf Registration Statement or any
         other required document so that the Holder delivering such Notice and
         Questionnaire is named as a selling securityholder in a Shelf
         Registration Statement and the related Prospectus in such a manner as
         to permit such Holder to deliver such Prospectus to purchasers of the
         Registrable Securities in accordance with applicable law and, if the
         Company shall file a post-effective amendment to a Shelf Registration
         Statement or shall file a new Shelf Registration Statement, the Company
         shall use its reasonable best efforts to cause such post-effective
         amendment or new Shelf Registration Statement to be declared effective
         under the Securities Act as promptly as is practicable, but in any
         event by the date (the "Amendment Effectiveness Deadline") that is 45
         days after the date such post-effective amendment or new Shelf
         Registration Statement is required by this clause to be filed;

                  (ii) provide such Holder copies of any documents filed
         pursuant to Section 2(d)(i); and

                  (iii) notify such Holder as promptly as practicable after the
         effectiveness under the Securities Act of any new Shelf Registration
         Statement or post-effective amendment filed pursuant to Section
         2(d)(i);

provided that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with Section
3(h). Notwithstanding anything contained herein to the contrary, (i) the Company
shall be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Shelf Registration Statement or related Prospectus
and (ii) the Amendment Effectiveness Deadline shall be extended by up to ten
Business Days from the expiration of a Deferral Period.

         (e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if:

                  (i) a Shelf Registration Statement has not been filed on or
         prior to the Filing Deadline,

                  (ii) a Shelf Registration Statement has not been declared
         effective under the Securities Act on or prior to the Effectiveness
         Deadline,

                  (iii) the Company has failed to perform its obligations set
         forth in Section 2(d)(i) within the time period required therein,

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                  (iv) a new Shelf Registration Statement or a post-effective
         amendment to a Shelf Registration Statement filed pursuant to Section
         2(d)(i) has not become effective under the Securities Act on or prior
         to the Amendment Effectiveness Deadline,

                  (v) the aggregate duration of Deferral Periods in any period
         exceeds the number of days permitted in respect of such period pursuant
         to Section 3(h) hereof, or

                  (vi) the number of Deferral Periods in any period exceeds the
         number permitted in respect of such period pursuant to Section 3(h)
         hereof.

         Each event described in any of the foregoing clauses (i) through (vi)
is individually referred to herein as a "Registration Default." For purposes of
this Agreement, each Registration Default set forth above shall begin and end on
the dates set forth in the table set forth below:

     Type of
   Registration
Default by Clause        Beginning Date                      Ending Date
-----------------        --------------                      -----------

       (i)          Filing Deadline                the date a Shelf Registration
                                                   Statement is filed

       (ii)         Effectiveness Deadline         the date a Shelf Registration
                                                   Statement becomes effective
                                                   under the Securities Act

       (iii)        the date by which the Company  the date the Company performs
                    is required to perform its     its obligations set forth in
                    obligations under Section      Section 2(d)(i)
                    2(d)(i)

       (iv)         the Amendment Effectiveness    the date the applicable
                    Deadline                       post-effective amendment to a
                                                   Shelf Registration Statement
                                                   or a new Shelf Registration
                                                   Statement becomes effective
                                                   under the Securities Act

       (v)          the date on which the          termination of the Deferral
                    aggregate duration of Deferral Period that caused the limit
                    Periods in any period exceeds  on the aggregate duration of
                    the number of days permitted   Deferral Periods to be
                    by Section 3(h)                exceeded

       (vi)         the date of commencement of a  termination of the Deferral
                    Deferral Period that causes    Period that caused the number
                    the number of Deferral Periods of Deferral Periods to exceed
                    to exceed the number permitted the number permitted by
                    by Section 3(h)                Section 3(h)

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         For purposes of this Agreement, Registration Defaults shall begin on
the dates set forth in the table above and shall continue until the ending dates
set forth in the table above.

         Commencing on (and including) any date that a Registration Default has
begun and ending on (but excluding) the next date on which there are no
Registration Defaults that have occurred and are continuing (a "Registration
Default Period"), the Company shall pay to Record Holders of Registrable
Securities in respect of each day in the Registration Default Period (i)
additional interest in respect of any Security (the "Additional Interest
Amount"), at a rate per annum equal to 0.25% of the aggregate principal amount
of such Security for the first ninety (90) day period immediately following the
occurrence of such Registration Default, and such rate will increase to 0.50%
thereafter or during the additional period the Prospectus is unavailable and
(ii) liquidated damages in respect of each share of Underlying Common Stock that
has been issued on conversion of a Security (the "Liquidated Damages Amount") at
a rate per annum equal to 0.25% of the Conversion Price on such date for the
first ninety (90) day period immediately following the occurrence of such
Registration Default, and such rate will increase to 0.50% of the Conversion
Price thereafter or during the additional period the Prospectus is unavailable,
as the case may be; provided that in the case of a Registration Default Period
that is in effect solely as a result of a Registration Default of the type
described in clause (iii) or (iv) of the preceding paragraph, such Additional
Interest Amount or Liquidated Damages Amount, as applicable, shall be paid only
to the Holders (as set forth in the succeeding paragraph) that have delivered
Notices and Questionnaires that caused the Company to incur the obligations set
forth in Section 2(d), the non-performance of which is the basis of such
Registration Default. In calculating the Liquidated Damages Amount on shares of
Underlying Common Stock on any date on which no Securities are outstanding, the
Conversion Price used shall be based on the Conversion Price that would be in
effect if the Securities were still outstanding. Notwithstanding the foregoing,
no Additional Interest Amount or Liquidated Damages Amount shall accrue as to
any Registrable Security from and after the earlier of (x) the date such
security is no longer a Registrable Security and (y) expiration of the
Effectiveness Period. The rate of accrual of the Additional Interest Amount or
the Liquidated Damages Amount, as applicable, with respect to any period shall
not exceed the rate provided for in this paragraph notwithstanding the
occurrence of multiple concurrent Registration Defaults. In no event shall the
Additional Interest Amount or the Liquidated Damages Amount exceed a rate of
0.50% per annum.

         The Additional Interest Amount or the Liquidated Damages Amount, as
applicable, shall accrue from the first day of the applicable Registration
Default Period, and shall be payable on each Interest Payment Date during the
Registration Default Period (and on the Interest Payment Date next succeeding
the end of the Registration Default Period if the Registration Default Period
does not end on an Interest Payment Date) to the Record Holders of the
Registrable Securities entitled thereto; provided that any Additional Interest
Amount or Liquidated Damages Amount, as applicable, accrued with respect to any
Security or portion thereof redeemed by the Company on a redemption date,
purchased by the Company on a repurchase date or converted into Underlying
Common Stock on a conversion date prior to the Interest Payment Date, shall, in
any such event, be paid instead to the Holder who submitted such Security or
portion thereof for redemption, purchase or conversion on the applicable
redemption date, repurchase date or conversion date, as the case may be, on such
date (or promptly following the conversion date, in the case of conversion),

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unless the redemption date or the repurchase date, as the case may be, falls
after May 15 or November 15 and on or prior to the corresponding Interest
Payment Date; and provided further that, in the case of a Registration Default
of the type described in clause (iii) or (iv) of the first paragraph of this
Section 2(e), such Additional Interest Amount or Liquidated Damages Amount shall
be paid only to the Holders entitled thereto by check mailed to the address set
forth in the Notice and Questionnaire delivered by such Holder. The Trustee
shall be entitled, on behalf of registered holders of Securities or Underlying
Common Stock, to seek any available remedy for the enforcement of this
Agreement, including for the payment of such Additional Interest Amount or
Liquidated Damages Amount. Notwithstanding the foregoing, the parties agree that
the sole damages payable for a violation of the terms of this Agreement with
respect to which additional interest or liquidated damages are expressly
provided shall be such additional interest or liquidated damages. Nothing shall
preclude any Holder from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.

         All of the Company's obligations set forth in this Section 2(e) that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

         The parties hereto agree that the additional interest or liquidated
damages provided for in this Section 2(e) constitute a reasonable estimate of
the damages that may be incurred by Holders of Registrable Securities by reason
of the failure of a Shelf Registration Statement to be filed or declared
effective or available for effecting resales of Registrable Securities in
accordance with the provisions hereof.

         Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

         (a) Before filing any Shelf Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, furnish to the Initial
Purchasers and the Special Counsel of such offering, if any, copies of all such
documents proposed to be filed at least three Business Days prior to the filing
of such Shelf Registration Statement or amendment thereto or Prospectus or
supplement thereto.

         (b) Subject to Section 3(h), prepare and file with the SEC such
amendments and post-effective amendments to each Shelf Registration Statement as
may be necessary to keep such Shelf Registration Statement continuously
effective during the Effectiveness Period; cause the related Prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and use its reasonable best efforts to comply with the
provisions of the Securities Act applicable to it with respect to the
disposition of all securities covered by such Shelf Registration Statement
during the Effectiveness Period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Shelf Registration
Statement as so amended or such Prospectus as so supplemented.

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         (c) As promptly as practicable give notice to the Notice Holders, the
Initial Purchasers and the Special Counsel, (i) when any Prospectus, prospectus
supplement, Shelf Registration Statement or post-effective amendment to a Shelf
Registration Statement has been filed with the SEC and, with respect to a Shelf
Registration Statement or any post-effective amendment, when the same has been
declared effective, (ii) of any request, following the effectiveness of the
initial Shelf Registration Statement under the Securities Act, by the SEC or any
other federal or state governmental authority for amendments or supplements to
any Shelf Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Shelf Registration Statement or the initiation or threatening of any proceedings
for that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (v) of the
occurrence of, but not the nature of or details concerning, a Material Event and
(vi) of the determination by the Company that a post-effective amendment to a
Shelf Registration Statement will be filed with the SEC, which notice may, at
the discretion of the Company (or as required pursuant to Section 3(h)), state
that it constitutes a Deferral Notice, in which event the provisions of Section
3(h) shall apply.

         (d) Use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Shelf Registration Statement or the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any jurisdiction in which they
have been qualified for sale, in either case as promptly as practicable, and
provide notice as promptly as practicable to each Notice Holder and the Initial
Purchasers of the withdrawal of any such order.

         (e) As promptly as practicable furnish to each Notice Holder, the
Special Counsel and the Initial Purchasers, upon request and without charge, at
least one conformed copy of each Shelf Registration Statement and any amendment
thereto, including exhibits and all documents incorporated or deemed to be
incorporated therein by reference.

         (f) During the Effectiveness Period, deliver to each Notice Holder, the
Special Counsel, if any, and the Initial Purchasers, in connection with any sale
of Registrable Securities pursuant to a Shelf Registration Statement, without
charge, as many copies of the Prospectus relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement thereto
as such Notice Holder may reasonably request; and the Company hereby consents
(except during such periods that a Deferral Notice is outstanding and has not
been revoked) to the use of such Prospectus or each amendment or supplement
thereto by each Notice Holder in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto in the manner set forth therein.

         (g) Prior to any public offering of the Registrable Securities pursuant
to a Shelf Registration Statement, use its reasonable best efforts to register
or qualify or cooperate with the Notice Holders and the Special Counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United

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States as any Notice Holder reasonably requests in writing (which request may be
included in the Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to a Shelf Registration Statement, use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the Shelf Registration Statement and the related Prospectus; provided that the
Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.

         (h) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of a Shelf Registration Statement or the initiation of proceedings
with respect to a Shelf Registration Statement under Section 8(d) or 8(e) of the
Securities Act, (B) the occurrence of any event or the existence of any fact (a
"Material Event") as a result of which a Shelf Registration Statement shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, or any Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the reasonable discretion of the
Company, makes it appropriate to suspend the availability of a Shelf
Registration Statement and the related Prospectus:

                  (i) in the case of clause (B) above, as promptly as
         practicable prepare and file, if necessary pursuant to applicable law,
         a post-effective amendment to such Shelf Registration Statement or a
         supplement to the related Prospectus or any document incorporated
         therein by reference or file any other required document that would be
         incorporated by reference into such Shelf Registration Statement and
         Prospectus so that such Shelf Registration Statement does not contain
         any untrue statement of a material fact or omit to state any material
         fact required to be stated therein or necessary to make the statements
         therein not misleading, and such Prospectus does not contain any untrue
         statement of a material fact or omit to state any material fact
         required to be stated therein or necessary to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading, as thereafter delivered to the purchasers of the
         Registrable Securities being sold thereunder, and, in the case of a
         post-effective amendment to a Shelf Registration Statement, use its
         reasonable best efforts to cause it to be declared effective as
         promptly as is practicable, and

                  (ii) give notice to the Notice Holders, and the Special
         Counsel, if any, that the availability of a Shelf Registration
         Statement is suspended (a "Deferral Notice").

         The Company will use its reasonable best efforts to ensure that the use
of the Prospectus may be resumed (x) in the case of clause (A) above, as
promptly as is practicable, (y) in the case of clause (B) above, as soon as, in
the sole judgment of the Company, public disclosure of such Material Event would

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not be prejudicial to or contrary to the interests of the Company or, if
necessary to avoid unreasonable burden or expense, as soon as practicable
thereafter and (z) in the case of clause (C) above, as soon as in the reasonable
discretion of the Company such suspension is no longer appropriate. The Company
shall be entitled to exercise its right under this Section 3(h) to suspend the
availability of a Shelf Registration Statement or any Prospectus, without
incurring or accruing any obligation to pay additional interest or liquidated
damages pursuant to Section 2(e), so long as the aggregate duration of any
periods during which the availability of the Shelf Registration Statement and
any Prospectus is suspended (each, a "Deferral Period") does not exceed 45 days
in any three-month period (or 60 days in any three-month period in the event of
a Material Event pursuant to which the Company has delivered a second notice as
required below) or 90 days in any 12-month period; provided that in the case of
a Material Event relating to an acquisition or a probable acquisition or
financing, recapitalization, business combination or other similar transaction,
the Company may, without incurring any obligation to pay additional interest or
liquidated damages pursuant to Section 2(e), deliver to Notice Holders a second
notice to the effect set forth above, which shall have the effect of extending
the Deferral Period by up to an additional 30 days, or such shorter period of
time as is specified in such second notice.

         (i) If requested in writing in connection with a disposition of
Registrable Securities pursuant to a Shelf Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Registrable Securities, any
broker-dealers, attorneys and accountants retained by such Notice Holders, and
any attorneys or other agents retained by a broker-dealer engaged by such Notice
Holders, all relevant financial and other records and pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
appropriate officers, directors and employees of the Company and its
subsidiaries to make reasonably available for inspection during normal business
hours on reasonable notice all relevant information reasonably requested by such
representative for the Notice Holders, or any such broker-dealers, attorneys or
accountants in connection with such disposition, in each case as is customary
for similar "due diligence" examinations; provided that such persons shall first
agree in writing with the Company that any nonpublic information shall be used
solely for the purposes of satisfying "due diligence" obligations under the
Securities Act and exercising rights under this Agreement and shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) in the opinion of Special Counsel,
disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing
of any Shelf Registration Statement or the use of any prospectus referred to in
this Agreement), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by any
such person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement, and provided further that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of
all the Notice Holders and the other parties entitled thereto by the Special
Counsel. Any person legally compelled to disclose any such confidential
information made available for inspection shall provide the Company with prompt
prior written notice of such requirement so that the Company may seek a
protective order or other appropriate remedy.

                                       11
<PAGE>

         (j) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements (which need
not be audited) satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) for a 12-month period commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a Shelf
Registration Statement, which statements shall be made available no later than
45 days after the end of the 12-month period or 90 days if the 12-month period
coincides with the fiscal year of the Company.

         (k) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold or to be sold pursuant to a Shelf Registration Statement, which
certificates shall not bear any restrictive legends, and cause such Registrable
Securities to be in such denominations as are permitted by the Indenture and
registered in such names as such Notice Holder may request in writing at least
one Business Day prior to any sale of such Registrable Securities.

         (l) Provide a CUSIP number for all Registrable Securities covered by
each Shelf Registration Statement not later than the effective date of such
Shelf Registration Statement and provide the Trustee and the transfer agent for
the Common Stock with printed certificates for the Registrable Securities that
are in a form eligible for deposit with The Depository Trust Company.

         (m) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

         (n) Upon (i) the filing of the initial Shelf Registration Statement and
(ii) the effectiveness of the initial Shelf Registration Statement, announce the
same, in each case by release to Business Wire.

         Section 4. Holder's Obligations. (a) Each Holder agrees, by acquisition
of the Registrable Securities, that no Holder shall be entitled to sell any of
such Registrable Securities pursuant to a Shelf Registration Statement or to
receive a Prospectus relating thereto, unless such Holder has furnished the
Company with a Notice and Questionnaire as required pursuant to Section 2(d)
hereof (including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each Notice
Holder agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Notice Holder not misleading and any other information regarding such
Notice Holder and the distribution of such Registrable Securities as the Company
may from time to time reasonably request. Any sale of any Registrable Securities
by any Holder shall constitute a representation and warranty by such Holder that
the information relating to such Holder and its plan of distribution is as set
forth in the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to or provided by such Holder
or relating to its plan of distribution and that such Prospectus does not as of
the time of such sale omit to state any material fact relating to or provided by
such Holder or relating to its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading. Each Holder further agrees not to sell any

                                       12
<PAGE>

Registrable Securities pursuant to a Shelf Registration Statement without
delivering to the purchaser thereof a Prospectus in accordance with the
requirements of all applicable securities laws.

         (b) Upon receipt of any Deferral Notice, each Notice Holder agrees not
to sell any Registrable Securities pursuant to any Shelf Registration Statement
until such Notice Holder's receipt of copies of the supplemented or amended
Prospectus provided for in Section 3(h)(i), or until it is advised in writing by
the Company that the Prospectus may be used.

         Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any Shelf
Registration Statement is declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel in
connection with Blue Sky qualifications of the Registrable Securities under the
laws of such jurisdictions as Notice Holders of a majority of the Registrable
Securities being sold pursuant to a Shelf Registration Statement may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company), (iii) duplication expenses relating to
copies of any Shelf Registration Statement or Prospectus delivered to any
Holders hereunder, (iv) fees and disbursements of counsel for the Company in
connection with any Shelf Registration Statement, (v) reasonable fees and
disbursements of the Trustee and its counsel and of the registrar and transfer
agent for the Common Stock, (vi) Securities Act liability insurance obtained by
the Company in its sole discretion and (vii) the fees and disbursements of
Special Counsel (other than fees and expenses in connection with any
underwritten offerings); provided, that, with respect to the fees and
disbursements of Special Counsel in clause (vii) hereof, if such Special Counsel
shall be a successor counsel to Shearman & Sterling LLP, then such fees and
disbursements shall not exceed $25,000. In addition, the Company shall pay the
internal expenses of the Company (including, without limitation, all salaries
and expenses of officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing by the Company of the Registrable Securities on any securities
exchange on which similar securities of the Company are then listed and the fees
and expenses of any person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 5, each seller of Registrable
Securities shall pay any broker's commission, agency fee or underwriter's
discount or commission in connection with the sale of the Registrable Securities
under a Shelf Registration Statement.

         Section 6. Indemnification and Contribution.

         (a) The Company agrees to indemnify and hold harmless each Notice
Holder, each person, if any, who controls any Notice Holder within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and each affiliate of any Notice Holder within the meaning of Rule 405 under the
Securities Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a

                                       13
<PAGE>

material fact contained in any Shelf Registration Statement or any amendment
thereof, any preliminary prospectus or any Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Holder furnished to the Company
in writing by or on behalf of such Holder expressly for use therein; provided
that the foregoing indemnity shall not inure to the benefit of any Holder (or to
the benefit of any person controlling such Holder) from whom the person
asserting such losses, claims or liabilities purchased the Registrable
Securities, if a copy of the Prospectus (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of such Holder to such person, if required by law so to
have been delivered at or prior to the written confirmation of the sale of the
Registrable Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company with Section 2(c) hereof.

         (b) Each Holder agrees severally and not jointly to indemnify and hold
harmless the Company and its directors, its officers who sign any Shelf
Registration Statement and each person, if any, who controls the Company (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) or any other Holder, to the same extent as the foregoing indemnity
from the Company to such Holder, but only with reference to information relating
to such Holder furnished to the Company in writing by or on behalf of such
Holder expressly for use in such Shelf Registration Statement or Prospectus or
amendment or supplement thereto. In no event shall the liability of any Holder
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities pursuant to the Shelf
Registration Statement giving rise to such indemnification obligation.

         (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 6(a) or 6(b) hereof, such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,

                                       14
<PAGE>

be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by, in the case of parties indemnified pursuant to Section
6(a), the Holders of a majority (with Holders of Securities deemed to be the
Holders, for purposes of determining such majority, of the number of shares of
Underlying Common Stock into which such Securities are or would be convertible
as of the date on which such designation is made) of the Registrable Securities
covered by the Shelf Registration Statement held by Holders that are indemnified
parties pursuant to Section 6(a) and, in the case of parties indemnified
pursuant to Section 6(b), the Company. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.

         (d) To the extent that the indemnification provided for in Section 6(a)
or 6(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the total net proceeds from the initial placement pursuant to the
Purchase Agreement (before deducting expenses) of the Registrable Securities to
which such losses, claims, damages or liabilities relate. The relative benefits
received by any Holder shall be deemed to be equal to the value of receiving
registration rights under this Agreement for the Registrable Securities. The
relative fault of the Holders on the one hand and the Company on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission

                                       15
<PAGE>

to state a material fact relates to information supplied by the Holders or by
the Company, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 6(d) are several
in proportion to the respective number of Registrable Securities they have sold
pursuant to a Shelf Registration Statement, and not joint.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
'allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 6(d), no indemnifying party that is a selling
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities sold by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

         (e) The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity, hereunder, under the Purchase Agreement
or otherwise.

         (f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder, any person controlling any Holder or any affiliate of any Holder or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.

         Section 7. Information Requirements. The Company covenants that, if at
any time before the end of the Effectiveness Period, the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further reasonable action as any Holder may reasonably
request in writing (including, without limitation, making such reasonable
representations as any such Holder may reasonably request), all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 and Rule 144A under the Securities Act and
customarily taken in connection with sales pursuant to such exemptions. Upon the
written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of the Exchange Act.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities (other than the Common
Stock) under the Exchange Act.

                                       16
<PAGE>

         Section 8. Miscellaneous.

         (a) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders in this Agreement. The Company represents and
warrants that the rights granted to the Holders hereunder do not in any way
conflict with the rights granted to the holders of the Company's securities
under any other agreements.

         (b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Securities deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Securities are or would be convertible as of the
date on which such consent is requested). Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose securities are being
sold pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders
pursuant to such Shelf Registration Statement; provided that the provisions of
this sentence may not be amended, modified or supplemented except in accordance
with the provisions of the immediately preceding sentence. Notwithstanding the
foregoing two sentences, this Agreement may be amended by written agreement
signed by the Company and the Initial Purchasers, without the consent of the
Holders of Registrable Securities, to cure any ambiguity or to correct or
supplement any provision contained herein that may be defective or inconsistent
with any other provision contained herein, or to make such other provisions in
regard to matters or questions arising under this Agreement that shall not
adversely affect the interests of the Holders of Registrable Securities. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b) whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

         (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier or by first-class mail, return receipt requested, and shall be deemed
given (i) when made, if made by hand delivery, (ii) upon confirmation, if made
by telecopier, (iii) one Business Day after being deposited with such courier,
if made by overnight courier, or (iv) on the date indicated on the notice of
receipt, if made by first-class mail, to the parties as follows:

                  (i) if to a Holder, at the most current address given by such
         Holder to the Company in a Notice and Questionnaire or any amendment
         thereto;

                                       17
<PAGE>

                  (ii) if to the Company, to:

                               Headwaters Incorporated
                               10653 South River Front Parkway, Suite 300
                               South Jordan, Utah 84095
                               Attention: Kirk A. Benson
                               Telecopy No.: (801) 984-9410

                               with a copy to:

                               Pillsbury Winthrop LLP
                               50 Fremont Street
                               San Francisco, California 94105
                               Attention: Linda C. Williams
                               Telecopy No.: (415) 983-1200

                  (iii) if to the Initial Purchasers, to:

                               Morgan Stanley & Co. Incorporated
                               1585 Broadway
                               New York, New York 10036
                               Attention:  Equity Capital Markets
                               Telecopy No.:  (212) 761-0538

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

         (d) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

         (e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchasers. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities, provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities,
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.

                                       18
<PAGE>

         (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.

         (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         (i) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.

         (j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement.

         (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6, the confidentiality
obligations pursuant to Section 3(i) hereof, hereof and the obligations to make
payments of and provide for additional interest or liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                             HEADWATERS INCORPORATED

                                             By:  /s/ Kirk A. Benson
                                                --------------------------------
                                                Name:  Kirk A. Benson
                                                Title: Chief Executive Officer

Confirmed and accepted as of
the date first above written, for itself
and as representative of the several Initial Purchasers:

MORGAN STANLEY & CO. INCORPORATED

By: /s/ Bryan Andrzejewski
   --------------------------
   Name: Bryan Andrzejewski
   Title: Executive Director

                                       20<Page>

                                                                  Exhibit 10.1

     REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
_________________, 2004, between CODE, HENNESSY & SIMMONS III, L.P. a Delaware
limited partnership ("Code"), and BEACON ROOFING SUPPLY, INC., a Delaware
corporation (the "Company").

     WHEREAS, Code is the owner of ________ shares of the Company's issued and
outstanding shares of common stock, par value $.01 per share ("Common Stock") at
the date hereof, and Code and the Company have determined to offer to the public
(the "Public Offering") up to ____________ shares of the Common Stock, in a
primary and secondary offering.

     WHEREAS, following completion of the Public Offering, Code will own less
than 50% of the outstanding shares of Common Stock.

     WHEREAS, the parties hereto desire to enter into this Agreement which sets
forth the terms of certain registration rights applicable to the Registrable
Securities (as defined below)

     NOW, THEREFORE, upon the premises and the mutual promises herein contained,
and for good and valuable consideration, the receipt and adequacy of which are
acknowledged, the parties agree as follows:

     1. CERTAIN DEFINITIONS. As used in this Agreement, the following initially
capitalized terms shall have the following meanings:

        (a) "Affiliate" means, with respect to any person, any other person who,
directly or indirectly, is in control of, is controlled by or is under common
control with the former person.

        (b) "Holder" means Code and any "transferee" (as such term is defined in
Section 11 hereof) which is the beneficial holder of Registrable Securities.

        (c) "Registrable Securities" means the Common Stock (as presently
constituted), any stock or other securities into which or for which such Common
Stock may hereafter be changed, converted or exchanged, and any other securities
issued to holders of such Common Stock (or such shares into which or for which
such shares are so changed, converted or exchanged) upon any reclassification,
share combination, share subdivision, share dividend, merger, consolidation or
similar transactions or events, PROVIDED that any such securities shall cease to
be Registrable Securities (i) if a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with the plan of
distribution set forth in such registration statement, (ii) such securities
shall have been distributed pursuant to Rule 144, or (iii) subsequent to the
seventh anniversary of the closing of the Public Offering (subject to the
specific extensions specified herein).

        (d) "Registration Expenses" means the following reasonable expenses in
connection with any registration of securities pursuant to this Agreement: (i)
SEC filing fees; (ii) the fees, disbursements and expenses of the Company's
counsel(s) and accountants in connection with the registration of the
Registrable Securities to be disposed of under the

<Page>

Securities Act; (iii) all expenses in connection with the preparation, printing
and filing of the registration statement, any preliminary prospectus or final
prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to any Holders, underwriters and dealers and all expenses
incidental to delivery of the Registrable Securities; (iv) the cost of producing
blue sky or legal investment memoranda; (v) all expenses in connection with the
qualification of the Registrable Securities to be disposed of for offering and
sale under state securities laws, including the fees and disbursements of
counsel for the underwriters or Holders in connection with such qualification
and in connection with any blue sky and legal investments memoranda; (vi) the
filing fees incident to securing any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Registrable
Securities to be disposed of; (vii) transfer agents', depositaries' and
registrars' fees and the fees of any other agent appointed in connection with
such offering; (viii) all security engraving and security printing expenses;
(ix) all fees and expenses payable in connection with the listing of the
Registrable Securities on each securities exchange or quotation system on which
a class of common equity securities of the Company is then listed; and (x) any
one time payment for directors and officers insurance directly related to such
offering, PROVIDED the insurer provides a separate statement for such payment.

        (e) "Rule 144" means Rule 144 promulgated under the Securities Act, or
any successor rule to similar effect.

        (f) "SEC" means the United States Securities and Exchange Commission.

        (g) "Securities Act" means the Securities Act of 1933, as amended, or
any successor statute.

     2. DEMAND REGISTRATION.

        (a) At any time prior to the seventh anniversary of the closing date of
the Public Offering, upon written notice from a Holder in the manner set forth
in section 12(h) hereof requesting that the Company effect the registration
under the Securities Act of any or all of the Registrable Securities held by
such holder, which notice shall specify the intended method or methods of
disposition of such Registrable Securities, the Company shall use its best
efforts to effect, in the manner set forth in Section 5, the registration under
the Securities Act of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request,
PROVIDED that:

                (i) if, within 5 business days of receipt of a registration
        request pursuant to this Section 2 (a), the Company is advised in
        writing (with a copy to the Holder requesting registration) by the
        managing underwriter of the proposed offering described below that, in
        such firm's good faith opinion, a registration at the time and on the
        terms requested would materially and adversely affect any immediately
        planned offering of securities by the Company that had been contemplated
        by the Company prior to receipt of notice requesting registration
        pursuant to this Section 2(a) (a "Transaction Blackout"), the Company
        shall not be required to effect a registration pursuant to this Section
        2(a)

                                       2
<Page>

        until the earliest of (A) the abandonment of such offering, (B) 90 days
        after the completion of such offering, (C) the termination of any "hold
        back" period obtained by the underwriter(s) of such offering from any
        person in connection therewith or (D) 180 days after receipt by the
        Holder requesting registration of the managing underwriter's written
        opinion referred to above in this subsection (i));

                (ii) if, while a registration request is pending pursuant to
        this Section 2(a), the Company has determined in good faith that (A) the
        filing of a registration statement would require the disclosure of
        material information that the Company has a bona fide business purpose
        for preserving as confidential or (B) the Company then is unable to
        comply with SEC requirements applicable to the requested registration,
        the Company shall not be required to effect a registration pursuant to
        this Section 2(a) until the earlier of (1) the date upon which such
        material information is otherwise disclosed to the public or ceases to
        be material or the Company is able to so comply with applicable SEC
        requirements, as the case may be, and (2) 45 days after the Company
        makes such good-faith determination, PROVIDED that the Company shall not
        be permitted to delay a requested registration in reliance on this
        clause (ii) more than once in any 24 month period; and

                (iii) the Company shall not be obligated to file a registration
        statement relating to a registration request pursuant to this Section 2:
        (A) within a period of 6 months after the effective date of any other
        registration statement of the Company demanded pursuant to this Section
        2(a); (B) if such registration request is for a number of Registrable
        Securities less than 7.5% of the issued and outstanding common equity of
        the Company (unless the Holders making the demand own 5% or more of the
        issued and outstanding common equity of the Company in the aggregate and
        the demand is for all their outstanding Registrable Securities) or (C)
        if Holders in the aggregate own less than 5% of the issued and
        outstanding common equity of the Company.

        (b) Notwithstanding any other provision of this Agreement to the
contrary:

                (i) a registration requested by a Holder pursuant to this
        Section 2 shall not be deemed to have been effected (and, therefore, not
        requested for purposes of subsection 2(a)) (A) unless the registration
        statement filed in connection therewith has become effective, (B) if
        after it has become effective such registration is interfered with by
        any stop order, injunction or other order or requirement of the SEC or
        other governmental agency or court for any reason other than a
        misrepresentation or an omission by such Holder and, as a result
        thereof, 90% or more of the Registrable Securities requested to be
        registered cannot be completely distributed in accordance with the plan
        of distribution set forth in the related registration statement or (C)
        if the conditions to closing specified in the purchase agreement or
        underwriting agreement entered into in connection with such registration
        are not satisfied (other than by reason of some acts or omission by such
        Holder) or waived by the underwriters;

                                       3
<Page>

                (ii) a registration requested by a Holder pursuant to this
        Section 2 and later withdrawn at the request of such Holder shall be
        deemed to have been effected (and, therefore, requested for purposes of
        Section 2 (a)), whether withdrawn by the Holder prior to or after the
        effectiveness of such requested registration, except that if such
        request is withdrawn by a Holder prior to the filing of a registration
        statement with the SEC, such Holder can require the Company to disregard
        for purposes of Section 2 (a) (iii) one such requested registration in
        any six month period; and

                (iii) nothing herein shall modify Holder's obligation to pay the
        Registration Expenses incurred in connection with any withdrawn
        registration.

        (c) In the event that any registration pursuant to this Section 2 shall
involve, in whole or in part, an underwritten offering, a Holder shall have the
right to designate an underwriter reasonably satisfactory to the Company as the
lead managing underwriter of such underwritten offering and the Company shall
have the right to designate one underwriter reasonably satisfactory to the
Holder as a co-manager of such underwritten offering.

        (d) The Company shall have the right to cause the registration of
additional securities for sale for the account of any person (including the
Company) in any registration of Registrable Securities requested by a Holder
pursuant to Section 2(a); PROVIDED that the Company shall not have the right to
cause the registration of such additional securities if such Holder is advised
in writing (with a copy to the Company) by the managing underwriter that, in
such firm's good faith opinion, registration of such additional securities would
materially and adversely affect the offering and sale of the Registrable
Securities then contemplated by such Holder, except that Code shall be required
to include shares of Robert Buck or Andrew Logie to the extent required by their
Executive Securities Agreements as in effect on the date hereof.

     3. PIGGYBACK REGISTRATION. At any time prior to the seventh anniversary of
the closing of the Public Offering, if the Company at any time proposes to
register any of its Common Stock or any other of its common equity securities
(collectively, "Other Securities") under the Securities Act (other than a
registration on Form S-4 or S-8 or any successor form thereto), whether or not
for sale for its own account, in a manner which would permit registration of
Registrable Securities for sale for cash to the public under the Securities Act,
it will each such time give prompt written notice to each Holder of its
intention to do so at least 10 business days prior to the anticipated filing
date of the registration statement relating to such registration. Such notice
shall offer each such Holder the opportunity to include in such registration
statement such number of Registrable Securities as each such Holder may request.
Upon the written request of any such Holder made within 5 business days after
the receipt of the Company's notice (which request shall specify the number of
Registrable Securities intended to be disposed of and the intended method of
disposition thereof), the Company shall effect, in the manner set forth in
Section 5, in connection with the registration of the Other Securities, the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register, to the extent required to permit the
disposition (in accordance with such intended methods thereof) of the
Registrable Securities so requested to be registered, PROVIDED that:

                                       4
<Page>

        (a) if at any time after giving written notice of its intention to
register any securities and prior to the effective date of such registration,
the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to the Holder and, thereupon, (A) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration and
(B) in the case of a determination to delay such registration, the Company shall
be permitted to delay registration of any Registrable Securities requested to be
included in such registration for the same period as the delay in registering
such other securities.

        (b) (i) if the registration referred to in the first sentence of this
Section 3 is to be an underwritten primary registration on behalf of the
Company, and the managing underwriter advises the Company in writing that, in
such firm's opinion, such offering would be materially and adversely affected by
the inclusion therein of the Registrable Securities requested to be included
therein, the Company shall include in such registration: (1) first, all
securities the Company proposes to sell for its own account ("Company
Securities"), (2) second, up to the full number of Registrable Securities held
by Code and requested to be included in such registration by Code ("Code
Securities") and securities requested to be registered by Robert Buck and Andrew
Logie ("Management Securities") pursuant to the terms of the Executive
Securities Agreement as in effect on the date hereof in excess of the number or
dollar amount of securities the Company proposes to sell, which, in the good
faith opinion of such managing underwriter, can be so sold without so materially
and adversely affecting such offering, (and, if less than the full number of
securities, allocated among Code, Buck and Logie in accordance with the terms of
the Executive Securities Agreements as in effect on the date hereof), (3) third,
up to the full number of Registrable Securities (other than Code Securities) in
excess of the number or dollar amount of Company Securities, Code Securities and
Management Securities, which, in the good faith opinion of such managing
underwriter, can be so sold without materially and adversely affecting such
offering (and, if less than the full number of such Registrable Securities,
allocated PRO RATA among the Holders of such Registrable Securities (other than
Code Securities) on the basis of the number of securities requested to be
included therein by each such Holder) and (4) fourth, an amount of other
securities, if any, requested to be included therein in excess of the number or
dollar amount of Company Securities, Code Securities, Management Securities and
other Registrable Securities which, in the opinion of such underwriter(s) can be
so sold without materially and adversely affecting such offering (allocated
among the holders of such other securities in such proportions as such holders
and the Company may agree); and (ii) if the registration referred to in the
first sentence of this Section 3 is to be an underwritten secondary registration
on behalf of holders of securities (other than Registrable Securities) of the
Company (the "Other Holders"), and the managing underwriter advises the Company
in writing that in their good-faith opinion such offering would be materially
and adversely affected by the inclusion therein of the Registrable Securities
requested to be included therein, the Company shall include in such registration
the amount of securities (including Registrable Securities) that such managing
underwriter advises allocated PRO RATA among the Other Holders and the Holders
on the basis of the number of securities (including Registrable Securities)
requested to be included therein by each Other Holder and each Holder, subject
to the rights of Andrew Logie and Robert Buck under their respective Executive
Securities Agreement in effect on the date hereof;

                                       5
<Page>

        (c) the Company shall not be required to effect any registration of
Registrable Securities under this section 3 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange offers,
subscription offers, dividend reinvestment plans or stock option or other
executive or employee benefit or compensation plans; and

        (d) no registration of Registrable Securities effected under this
Section 3 shall relieve the Company of its obligation to effect a registration
of Registrable Securities pursuant to Section 2 hereof.

     4. EXPENSES. The Company shall pay all Registration Expenses with respect
to an offering by Code pursuant to Section 2 hereof. Each Holder (other than
Code), by accepting Registrable Securities, agrees to pay all Registration
Expenses with respect to an offering pursuant to Section 2 hereof, PRO RATA
based on the number of Registrable Securities included in such offering by each
Holder (excluding Code), except to the extent the Company causes shares to be
registered for itself or another party pursuant to Section 2(d), in which event
the Company or such other party shall pay the incremental expenses of including
such shares in the offering. The Company agrees to pay all Registration Expenses
with respect to an offering pursuant to Section 3 hereof, except for the
incremental expenses of including Registrable Securities of a Holder (other than
Code) in such offering, which incremental expenses shall be paid by such Holder.
All Registration Expenses to be paid by a Holder (other than Code) shall be paid
within 30 days of the delivery of a statement, such statements to be delivered
not more frequently than once every 60 days. In an underwritten offering, each
party hereto shall be responsible for underwriting discounts and commissions
with respect to shares held by such party.

     5. REGISTRATION AND QUALIFICATION. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in section 2 or 3 hereof, the Company,
subject to Section 4 hereof, shall:

        (a) prepare and file a registration statement under the Securities Act
relating to the Registrable Securities to be offered as soon as practicable, but
in no event later than 45 days (60 days if the applicable registration form is
other than Form S-3) after the date notice is given, and use its best efforts to
cause the same to become effective within 90 days after the date notice is given
(120 days if the applicable registration form is other than Form S-3);

        (b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for 60 days (or,
in the case of an underwritten offering, such shorter time period as the
underwriters may require);

        (c) furnish to the Holders and to any underwriter of such Registrable
Securities such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, and such other
documents, as the Holders or such underwriter may reasonably request in order to

                                       6
<Page>

facilitate the public sale of the Registrable Securities, and a copy of any and
all transmittal letters or other correspondence to, or received from, the SEC or
any other governmental agency or self-regulatory body or other body having
jurisdiction (including any domestic or foreign securities exchange) relating to
such offering;

        (d) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the Holders or any underwriter of such
Registrable Securities shall request, and use its best efforts to obtain all
appropriate registrations, permits and consents required in connection
therewith, and do any and all other acts and things which may be necessary or
advisable to enable the Holders or any such underwriter to consummate the
disposition in such jurisdictions of its Registrable securities covered by such
registration statement; PROVIDED that the Company shall not for any such purpose
be required to register or qualify generally to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified, or to subject
itself to taxation in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;

        (e) (i) use its best efforts to furnish an opinion of counsel for the
Company addressed to the underwriters and dated the date of the closing under
the underwriting agreement (if any), and (ii) use its best efforts to furnish a
"comfort" letter addressed to the underwriters, and signed by the independent
public accountants who have audited the Company's financial statements included
in such registration statement, in each such case covering substantially the
same matters with respect to such registration statement (and the prospectus
included therein) as are customarily covered in opinions of issuer's counsel and
in accountants' letters delivered to underwriters in underwritten public
offerings of securities;

        (f) immediately notify each Holder of Registrable Securities included in
such registration (each a "Selling Holder") in writing (i) at any time when a
prospectus relating to a registration pursuant to Section 2 or 3 hereof is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) of any request by the SEC or any other regulatory body
or other body having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such offering, and in
either such case (i) or (ii) at the request of the Selling Holders, subject to
Section 4 hereof, prepare and furnish to the Selling Holders a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
are made, not misleading;

        (g) use its best efforts to list all such Registrable Securities covered
by such registration on each securities exchange and quotation system on which a
class of common equity securities of the Company is then listed, with expenses
in connection therewith (not

                                       7
<Page>

including any future periodic assessments or fees for such additional listing)
to be paid in accordance with Section 4 hereof; and

        (h) furnish unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested by
the Selling Holders or the underwriters with expenses therewith to be paid in
accordance with Section 4 hereof.

     6. CONVERSION OF OTHER SECURITIES, ETC. If Code offers any options, rights,
warrants or other securities issued by it or any other person that are offered
with, convertible into or exercisable or exchangeable for any Registrable
Securities, the Registrable Securities underlying such options, rights, warrants
or other securities shall be eligible for registration pursuant to Section 2 and
Section 3 of this Agreement.

     7. UNDERWRITING; DUE DILIGENCE.

        (a) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under this
Agreement, the Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution
substantially to the effect and to the extent provided in Section 8 hereof and
the provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 5(e) hereof. The Selling Holders on whose
behalf the Registrable Securities are to be distributed by such underwriters
shall be parties to any such underwriting agreement. Such underwriting agreement
shall also contain such representations and warranties by the Selling Holders on
whose behalf the Registrable Securities are to be distributed as are customarily
contained in underwriting agreements with respect to secondary distributions.
Selling Holders may require that any additional securities included in an
offering proposed by a Holder be included on the same terms and conditions as
the Registrable Securities that are included therein.

        (b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the Company may require
the Registrable Securities requested to be registered pursuant to Section 3 to
be included in such underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through underwriters under such
registration. If requested by the underwriters for such underwritten offering,
the Selling Holders on whose behalf the Registrable Securities are to be
distributed shall enter into an underwriting agreement with such underwriters,
such agreement to contain such representations and warranties by the Selling
Holders and such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions, including,
without limitation, indemnities and contribution substantially to the effect and
to the extent provided in Section 8 hereof. Such underwriting agreement shall
also contain such representations and warranties by the Company and such other
person or entity for whose account securities are being sold in such offering as
are customarily contained in underwriting agreements with respect to secondary
distributions.

                                       8
<Page>

        (c) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Company shall give the Holders of such Registrable Securities and the
underwriters, if any, and their respective counsel and accountants, such
reasonable and customary access to its books and records and such opportunities
to discuss the business of the Company with its officers and the independent
public accountants who have certified the Company's financial statements as
shall be necessary, in the opinion of such Holder and such underwriters or their
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.

     8. INDEMNIFICATION AND CONTRIBUTION.

        (a) In the case of each offering of Registrable Securities made pursuant
to this Agreement, the Company agrees to indemnify and hold harmless each
Holder, its officers and directors, each underwriter of Registrable Securities
so offered and each person, if any, who controls any of the foregoing persons
within the meaning of the Securities Act, from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or several, to which
they or any of them may become subject, under the Securities Act or otherwise,
including any amount paid in settlement of any litigation commenced or
threatened, and shall promptly reimburse them, as and when incurred, for any
reasonable legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement thereto, or
in any document incorporated by reference therein, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that
the Company shall not be liable to a particular Holder in any such case to the
extent that any such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information relating to such Holder furnished to the
Company in writing by or on behalf of such Holder specifically for use in the
preparation of the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement thereto.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of a Holder and shall survive the transfer of
such securities. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to each Holder, its officers and
directors, underwriters of the Registrable Securities or any controlling person
of the foregoing; PROVIDED FURTHER, that, as to any underwriter or any person
controlling any underwriter, this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus if a copy of a prospectus was not sent or given by or on
behalf of an underwriter to such person asserting such loss, claim, damage,
liability or action at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such untrue
statement or omission had been corrected in such prospectus.

        (b) In the case of each offering made pursuant to this Agreement, each
Holder of Registrable Securities included in such offering, by exercising its
registration rights

                                       9
<Page>

hereunder, agrees to indemnify and hold harmless the Company, its officers and
directors and each person, if any, who controls any of the foregoing within the
meaning of the Securities Act (and if requested by the underwriters, each
underwriter who participates in the offering and each person, if any, who
controls any such underwriter within the meaning of the Securities Act), from
and against any and all claims, liabilities, losses, damages, expenses and
judgments, joint or several, to which they or any of them may become subject,
under the Securities Act or otherwise, including any amount paid in settlement
of any litigation commenced or threatened, and shall promptly reimburse them, as
and when incurred, for any legal or other expenses incurred by them in
connection with investigating any claims and defending any actions, insofar as
any such losses, claims, damages, liabilities or actions shall arise out of, or
shall be based upon, any untrue statement or alleged untrue statement of a
material fact contained in the registration statement (or in any preliminary or
final prospectus included therein) or any amendment thereof or supplement
thereto, or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement of a
material fact is contained in, or such material fact is omitted from,
information relating to such Holder furnished in writing to the Company by or on
behalf of such Holder specifically for use in the preparation of such
registration statement (or in any preliminary or final prospectus included
therein). The foregoing indemnity is in addition to any liability which such
Holder may otherwise have to the Company, or any of its directors, officers or
controlling persons; PROVIDED, HOWEVER, that, as to any underwriter or any
person controlling any underwriter, this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary prospectus if a copy of a prospectus was not sent or given by or on
behalf of an underwriter to such person asserting such loss, claim, damage,
liability or action at or prior to the written confirmation of the sale of the
Registrable Securities as required by the Securities Act and such untrue
statement or omission had been corrected in such prospectus.

        (c) Each party indemnified under paragraph (a) or (b) of this Section 8
shall, promptly after receipt of notice of any claim or the commencement of any
action against such indemnified party in respect of which indemnity may be
sought, notify the indemnifying party in writing of the claim or the
commencement thereof; PROVIDED that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to an indemnified
party on account of the indemnity agreement contained in paragraph (a) or (b) of
this Section 8, except to the extent the indemnifying party was prejudiced by
such failure, and in no event shall relieve the indemnifying party from any
other liability which it may have to such indemnified party. If any such claim
or action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; PROVIDED that each
indemnified party, its officers and directors, if any, and each person, if any,
who controls such indemnified party within the meaning of the Securities Act,
shall have the right to employ separate counsel reasonably approved by the
indemnifying party to

                                       10
<Page>

represent them if the named parties to any action (including any impleaded
parties) include both such indemnified party and an indemnifying party or an
affiliate of an indemnifying party, and such indemnified party shall have been
advised by counsel either (i) that there may be one or more legal defenses
available to such indemnified party that are different from or additional to
those available to such indemnifying party or such affiliate or (ii) a conflict
may exist between such indemnified party and such indemnifying party or such
affiliate, and in that event the fees and expenses of one such separate counsel
for all such indemnified parties shall be paid by the indemnifying party. An
indemnified party will not enter into any settlement agreement which is not
approved by the indemnifying party, such approval not to be unreasonably
withheld. The indemnifying party may not agree to any settlement of any such
claim or action which provides for any remedy or relief other than monetary
damages for which the indemnifying party shall be responsible hereunder, without
the prior written consent of the indemnified party, which consent shall not be
unreasonably withheld. In any action hereunder as to which the indemnifying
party has assumed the defense thereof with counsel reasonably satisfactory to
the indemnified party, the indemnified party shall continue to be entitled to
participate in the defense thereof, with counsel of its own choice, but, except
as set forth above, the indemnifying party shall not be obligated hereunder to
reimburse the indemnified party for the costs thereof. In all instances, the
indemnified party shall cooperate fully with the indemnifying party or its
counsel in the defense of each claim or action.

     If the indemnification provided for in this Section 8 shall for any reason
be unavailable to an indemnified party in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to herein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
indemnifying party on the one hand or the indemnified party on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission, but not by
reference to any indemnified party's stock ownership in the Company. In no
event, however, shall a Holder be required to contribute in excess of the amount
of the net proceeds received by such Holder in connection with the sale of
Registrable Securities in the offering which is the subject of such loss, claim,
damage or liability. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this paragraph shall be deemed to include, for purposes of
this paragraph, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

     9. RULE 144. The Company shall take such measures and file such
information, documents and reports as shall be required by the SEC as a
condition to the availability of Rule 144 (or any successor provision.)

                                       11
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     10. HOLDBACK.

         (a) Each Holder agrees by acquisition of Registrable Securities, if so
required by the managing underwriter, not to sell, make any short sale of, loan,
grant any option for the purchase of, effect any public sale or distribution of
or otherwise dispose of any securities of the Company, during the 30 days prior
to and the 90 days after any underwritten registration pursuant to Section 2 or
3 hereof has become effective (or such shorter period as may be required by the
underwriter) except as part of such underwritten registration. Notwithstanding
the foregoing sentence, each Holder subject to the foregoing sentence shall be
entitled to sell during the foregoing period securities in a private sale. The
Company may legend and may impose stop transfer instructions on any certificate
evidencing Registrable Securities relating to the restrictions provided for in
this Section 10.

         (b) The Company agrees, if so required by the managing underwriter, not
to sell, make any short sale of, loan, grant any option for the purchase of
(other than pursuant to employee benefit plans) effect any public sale or
distribution of or otherwise dispose of its equity securities or securities
convertible into or exchangeable or exercisable for any such securities during
the 30 days prior to and the 90 days after any underwritten registration
pursuant to Section 2 or 3 hereof has become effective, except as part of such
underwritten registration and except pursuant to registrations on Form S-4, S-8
or any successor or similar forms thereto.

     11. TRANSFER OF REGISTRATION RIGHTS.

         (a) Code may transfer all or any portion of its rights under this
Agreement to any transferee of the lesser of (i) at least 20% of Code's initial
holdings of Registrable Securities and (ii) all of Code's remaining Registrable
Securities (each, a "transferee"). No transfer of registration rights pursuant
to this Section shall be effective unless the Company has received written
notice from Code of an intention to transfer such registration rights at least
15 days prior to the transfer thereof. Such notice, if sent prior to the date of
transfer of the underlying Registrable Securities, need not contain the name a
proposed transferee. On or before the later of (i) the transfer of the
registration rights or (ii) the transfer of the underlying Registrable
Securities, the Company shall receive a written notice stating (to the extent
not included in the notice of transfer of registration rights) the name and
address of any transferee of the registration rights and identifying the amount
of Registrable Securities with respect to which the rights under this Agreement
are being transferred and the nature of the rights so transferred. In connection
with any such transfer, the term "Code" as used in this Agreement (other than in
this Section 11, Section 3(b) (i) (2), Section 4 and Section 1(c) (iii)) shall,
where appropriate to assign the rights and obligations of Code hereunder to such
direct transferee, be deemed to refer to the transferee holder of such
Registrable Securities. Code and such transferees may exercise the registration
rights hereunder in such proportion and upon the demand of such Holder as they
shall agree among themselves, PROVIDED that in no event shall the Company be
required to effect more than one registration pursuant to Section 2 of this
Agreement in any 6 month period and that each such registration shall be at the
request of not more than one Holder.

         (b) After any such transfer, Code shall retain its rights under this
Agreement with respect to all other Registrable Securities owned by Code.

                                       12
<Page>

         (c) Upon the request of Code, the Company shall execute a Registration
Rights Agreement with such transferee or a proposed transferee substantially
similar to this Agreement, and any demand registrations granted to such
transferee shall limit the demand registrations to which Code is entitled under
Section 2(a) hereof.

     12. MISCELLANEOUS.

         (a) INJUNCTIONS. Each party acknowledges and agrees that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
Therefore, each party shall be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
the terms and provisions hereof in any court having jurisdiction, such remedy
being in addition to any other remedy to which such party may be entitled at law
or in equity.

         (b) SEVERABILITY. If any term or provision of this Agreement is held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
each of the parties shall use its best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term or provision.

         (c) FURTHER ASSURANCES. Subject to the specific terms of this
Agreement, each of the parties hereto shall make, execute, acknowledge and
deliver such other instruments and documents, and take all such other actions,
as may be reasonably required in order to effectuate the purposes of this
Agreement and to consummate the transactions contemplated hereby.

         (d) WAIVERS. ETC. No failure or delay on the part of either party (or
the intended third-party beneficiaries referred to herein) in exercising any
power or right hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. No
modification or waiver of any provision of this Agreement nor consent to any
departure therefrom shall in any event be effective unless the same shall be in
writing and signed by an authorized officer of each of the parties, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.

         (e) ENTIRE AGREEMENT. This Agreement contains the final and complete
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties, whether
written or oral, with respect to the subject matter hereof. The paragraph
headings contained in this Agreement are for reference purposes only, and shall
not affect in any manner the meaning or interpretation of this Agreement.

                                       13
<Page>

         (f) COUNTERPARTS. For the convenience of the parties, this Agreement
may be executed in any number of counterparts, each of which shall be deemed to
be an original but all of which together shall be one and the same instrument.

         (g) AMENDMENT. This Agreement may be amended only by a written
instrument duly executed by an authorized officer of each of the parties.

         (h) NOTICES. Unless expressly provided herein, all notices, claims,
certificates, requests, demands and other communications hereunder shall be in
writing and shall be deemed to be duly given (i) when personally delivered or
(ii) if mailed registered or certified mail, postage prepaid, return receipt
requested , on the date the return receipt is executed or the letter refused by
the addressee or its agent or (iii) if sent by overnight courier which delivers
upon the signed receipt of the addressee, on the date the receipt acknowledgment
is executed or refused by the addressee or its agent:

                (i)  if to Code, to

                     Code, Hennessy & Simmons III, L.P.
                     c/o Code Hennessy & Simmons, LLC
                     10 South Wacker Drive
                     Chicago, Illinois  60606
                     Attention:  Peter Gotsch

               (ii)  if to the Company, to

                     Beacon Roofing Supply, Inc.
                     1 Lakeland Park Drive
                     Peabody, Massachusetts  01960
                     Attention:   Chief Financial Officer

               (iii) if to a Holder of Registrable Securities, to the name
                     and address as the same appear in the security transfer
                     books of the Company or such other address as either
                     party (or other Holders of Registrable Securities) may,
                     from time to time, designate in a written notice in a
                     like manner.

         (i) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF ILLINOIS.

         (j) ASSIGNMENT. Except as provided herein, the parties may not assign
their rights under this Agreement. The Company may not delegate its obligations
under this Agreement.

                                       14
<Page>

     IN WITNESS WHEREOF, Code and the Company have caused this Agreement to be
duly executed by their authorized representative as of the date first above
written.

                                    CODE, HENNESSEY & SIMMONS III, L.P.

                                    By
                                       -----------------------------------------

                                    BEACON ROOFING SUPPLY, INC.

                                    By
                                       -----------------------------------------

                                       15

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