Document:

Exhibit 4.9.7

 

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of December 13, 2012 is entered into by and among the Lenders signatory hereto, BANK OF AMERICA, N.A., as Agent for the Lenders (in such capacity, “Agent”), HEADWATERS CONSTRUCTION MATERIALS, INC., a Utah corporation (“HCM”), TAPCO INTERNATIONAL CORPORATION, a Michigan corporation (“Tapco”), HEADWATERS RESOURCES, INC., a Utah corporation (“HRI”, and together with HCM, Tapco, and each of HRI’s, HCM’s and Tapco’s subsidiaries identified on the signature pages hereof, each individually a “Borrower”, and collectively, the “Borrowers”), and the other Borrowers signatory hereto.

 

RECITALS

 

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

 

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

 

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

 

AGREEMENT

 

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

 

1.                                      Amendments to Loan Agreement.

 

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

 

“Kleer Acquisition: the acquisition of certain assets of Kleer Lumber, Inc., a Massachusetts corporation, pursuant to that certain Asset Purchase Agreement, dated on or about December 14, 2012, among Tapco, Kleer Lumber, Inc. and any other party identified on the signature pages thereto (the “Kleer Acquisition Agreement”).”

 

“Kleer Acquisition Loan:  Debt owing by Tapco to Parent in connection with the Kleer Acquisition that (a) is not secured by a Lien, (b) does not exceed $5,000,000, (c) is incurred prior to the Kleer Acquisition Payment Date, and (d) the proceeds of which are used solely to fund the purchase consideration payable by Tapco in connection with the Kleer Acquisition.”

 

“Kleer Acquisition Payment Date: two (2) Business Days prior to the Closing Date (as defined in the Kleer Acquisition Agreement) of the Kleer Acquisition.”

 

“Seventh Amendment Effective Date: December 13, 2012.”

 

 

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

 

“(e) as soon as available, but not less than 30 days (or 15 days in the case of the Kleer Acquisition) prior to such Acquisition, the Borrowers have provided Agent (i) notice of such Acquisition and (ii) a copy of all available business and financial information reasonably requested by Agent, including pro forma financial statements, statements of cash flow, financial covenant projections, and Availability projections;”

 

(c)                                  Clause (f)(i) of the definition of “Permitted Acquisition” in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:

 

“(i) 15 Business Days (or 10 Business Days in the case of the Kleer Acquisition) prior to the anticipated closing date of such Acquisition, Borrowers shall have provided the Agent with the then current drafts of the acquisition agreement and other material documents relative to such Acquisition, which agreement and documents must be reasonably acceptable to Agent and”

 

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

 

“(g) the aggregate purchase consideration payable (including deferred payment obligations) in respect of all Acquisitions made (i) during any calendar year shall not exceed $10,000,000 and (ii) during the term of this Agreement shall not exceed $30,000,000, provided, however, that the Kleer Acquisition shall not be subject to this clause (g) so long as: (A) the aggregate purchase consideration payable (including deferred payment obligations) in connection with the Kleer Acquisition shall not exceed $45,000,000, (B) the Kleer Acquisition is consummated prior to December 31, 2012 and (C) either (X) Parent between the Seventh Amendment Effective Date and the Kleer Acquisition Payment Date, (I) sells or issues any Equity Interests and (II) makes a capital contribution to Tapco with the proceeds of such sale or issuance of its Equity Interests in an aggregate amount of at least the aggregate purchase consideration payable (including deferred payment obligations) in respect of the Kleer Acquisition), which such proceeds are used by Tapco to fund the Kleer Acquisition in its entirety, or (Y) after giving effect to the Kleer Acquisition and the payment of all consideration in connection therewith, the aggregate amount of the unpaid balance of Revolver Loans outstanding does not exceed $15,000,000.”

 

(e)                                  The following is hereby added to the Loan Agreement as Section 10.1.10:

 

“10.1.10.  Kleer Acquisition Equity Interests.  If in connection with the consummation of the Kleer Acquisition, the conditions set forth in clause (g)(C)(X) of the definition of Permitted Acquisition have not been satisfied, Borrowers shall cause Parent to immediately make capital contributions to Borrowers using all proceeds received by Parent from any sales or issuances of its Equity Interests after the Kleer Acquisition Payment Date, until an aggregate amount of no less than an amount equal to the aggregate purchase consideration payable (including deferred payment obligations) in respect of the Kleer Acquisition has been contributed from Parent to Borrowers (it being understood that all such proceeds received by Parent shall be required to be immediately contributed to Borrowers until such minimum amount is met).”

 

(f)                                   Section 10.2.1 of the Loan Agreement is hereby amended by:

 

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(i)                                     deleting the “and” at the end of clause (p) of such section,

 

(ii)                                  replacing the “.” at the end of clause (q) of such section with “; and”, and

 

(iii)                               adding the following new clause (r) immediately following clause (q) of such section:

 

“(r)                              so long as between the Seventh Amendment Effective Date and the Kleer Acquisition Payment Date, Parent does not sell or issue any Equity Interests, the Kleer Acquisition Loan.”

 

(g)                                  Clause (d) of Section 10.2.8 of the Loan Agreement is hereby amended and restated in its entirety as follows:

 

“(d) payments (other than those set forth in clause (a) above) on intercompany loans, except (i) payments by an Obligor to a Borrower, and (ii) repayment by Tapco of the Kleer Acquisition Loan so long as (A) such repayment is made solely using proceeds of a substantially contemporaneous capital contribution from Parent and (B) Borrowers have received capital contributions from Parent in an amount no less than an amount equal to the aggregate purchase consideration payable (including deferred payment obligations) in respect of the Kleer Acquisition in accordance with Section 10.1.10; provided, however, that for purposes of the foregoing clause (c) of this Section 10.2.8, no mandatory prepayments shall be made to the extent such prepayments are required on account of sales of Revolver Priority Collateral.”

 

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

 

(a)                                 Amendment.  Agent shall have received this Amendment and the attached Acknowledgement by Guarantors, executed by Borrowers, Guarantors and the Required Lenders in a sufficient number of counterparts for distribution to all parties.

 

(b)                                 Amendment Fee.  Agent shall have received, for the ratable benefit of each Lender signatory hereto, a non-refundable amendment fee in an amount equal to 0.15% times the aggregate Revolver Commitments of all Lenders signatory hereto, which shall be fully earned and due and payable on the date of this Amendment.

 

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

 

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

 

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

 

3.                                      Representations and Warranties.  Each Borrower represents and warrants as follows:

 

(a)                                 Authority.  Each Borrower has the requisite power and authority to execute and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents (as amended or modified hereby) to which it is a party.  The execution, delivery and performance by each

 

3

 

Borrower of this Amendment have been duly approved by all necessary action and no other proceedings are necessary to consummate such transactions.

 

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

 

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

 

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

 

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

 

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

 

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

 

6.                                      Reference to and Effect on the Loan Documents.

 

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

 

(b)                                 Except as specifically amended above, the Loan Agreement and all other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and

 

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confirmed and shall constitute the legal, valid, binding and enforceable obligations of Guarantors and Borrowers, as applicable, to Agent and the Lenders.

 

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

 

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

 

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

 

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

 

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

 

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

 

[Remainder of Page Left Intentionally Blank]

 

5

 

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

 

	
BORROWERS:
    	
 
    
	
 
    	
 
    
	
HEADWATERS RESOURCES, INC.,  
    	
 
    
	
a Utah corporation 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman 
    	
 
    
	
Name:   
    	
Donald   P. Newman 
    	
 
    
	
Title:   
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
METAMORA PRODUCTS CORPORATION OF 
   ELKLAND,
    	
 
    
	
a Pennsylvania corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman
    	
 
    
	
Name:   
    	
Donald   P. Newman
    	
 
    
	
Title:   
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
HEADWATERS SERVICES CORPORATION,
    	
 
    
	
a Utah corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman
    	
 
    
	
Name:   
    	
Donald   P. Newman
    	
 
    
	
Title:   
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
HEADWATERS CONSTRUCTION MATERIALS, 
   INC.,
    	
 
    
	
a Utah corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman
    	
 
    
	
Name:   
    	
Donald   P. Newman
    	
 
    
	
Title:   
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
HCM UTAH, LLC,
    	
 
    
	
a Utah limited liability company
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman
    	
 
    
	
Name:   
    	
Donald   P. Newman
    	
 
    
	
Title:   
    	
CFO
    	
 
    

 

 

	
HEADWATERS CONSTRUCTION MATERIALS, 
   LLC,
    
	
a Texas limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
HCM STONE, LLC,
    
	
a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
DUTCH QUALITY STONE, INC.,
    
	
an Ohio corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
ELDORADO SC-ACQUISITION CO.,
    
	
a Utah corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
ELDORADO STONE LLC,
    
	
a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    

 

7

 

	
ELDORADO STONE ACQUISITION CO.,   LLC,
    
	
a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
ELDORADO STONE FUNDING CO., LLC,
    
	
a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
STONECRAFT MANUFACTURING, LLC,
    
	
an Ohio limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
CHIHUAHUA STONE, LLC,
    
	
a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
ELDORADO STONE OPERATIONS, LLC,
    
	
a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
L-B STONE, LLC,
    
	
a Utah limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    

 

8

 

	
TAPCO INTERNATIONAL CORPORATION,
    
	
a Michigan corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
METAMORA PRODUCTS CORPORATION,
    	
 
    
	
a Michigan corporation
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
MTP, INC.,
    	
 
    
	
an Ohio corporation
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
ATLANTIC SHUTTER   SYSTEMS, INC.,
    	
 
    
	
a South Carolina corporation
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
INSPIRE SERVICES, LLC,
    	
 
    
	
a Michigan limited liability company
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
STONECRAFT SALES, LLC,
    	
 
    
	
a Michigan limited liability company
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Donald P. Newman
    	
 
    
	
Name: 
    	
Donald P. Newman
    	
 
    
	
Title: 
    	
CFO
    	
 
    

 

9

 

	
AGENT AND LENDERS:
    	
 
    
	
 
    	
 
    
	
BANK OF AMERICA, N.A.,
    	
 
    
	
as Agent and as a Lender
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Monirah J. Masud
    	
 
    
	
Name: 
    	
Monirah J. Masud
    	
 
    
	
Title: 
    	
Senior Vice President
    	
 
    
	
 
    	
 
    	
 
    
	
U.S. BANK NATIONAL ASSOCIATION,
    	
 
    
	
as a Lender
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Meredith G. Gall
    	
 
    
	
Name: 
    	
Meredith G. Gall
    	
 
    
	
Title: 
    	
Vice President
    	
 
    
	
 
    	
 
    	
 
    
	
ZIONS FIRST NATIONAL BANK,
    	
 
    
	
as a Lender
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ Tracy A. Groll
    	
 
    
	
Name: 
    	
Tracy A. Groll
    	
 
    
	
Title: 
    	
Senior Vice President
    	
 
    

 

10

 

ACKNOWLEDGEMENT BY GUARANTORS

 

Dated as of December 13, 2012

 

Each of the undersigned, being a Guarantor (each a “Guarantor” and, collectively, the “Guarantors”) under that certain Guaranty and Security Agreement dated as of October 27, 2009 (as amended, supplemented or otherwise modified from time to time, the “Guaranty”), hereby acknowledges and agrees to the foregoing Seventh Amendment to Loan and Security Agreement (the “Amendment”) and confirms and agrees that the Guaranty is and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that, upon the effectiveness of, and on and after the date of the Amendment, each reference in such Guaranty to the Loan Agreement (as defined in the Amendment), “thereunder”, “thereof” or words of like import referring to the “Loan Agreement”, shall mean and be a reference to the Loan Agreement as amended or modified by the Amendment.  Although Agent has informed Guarantors of the matters set forth above, and each Guarantor has acknowledged the same, each Guarantor understands and agrees that Agent has no duty under the Loan Agreement, the Guaranty or any other agreement with any Guarantor to so notify any Guarantor or to seek such an acknowledgement, and nothing contained herein is intended to or shall create such a duty as to any advances or transaction hereafter.

 

	
GUARANTORS:
    	
 
    
	
 
    	
 
    	
 
    
	
HEADWATERS INCORPORATED,
    	
 
    
	
a Delaware corporation
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman
    	
 
    
	
Name:
    	
Donald   P. Newman
    	
 
    
	
Title:
    	
CFO
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
HEADWATERS PLANT SERVICES, INC.,
    	
 
    
	
a Utah corporation
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Donald P. Newman
    	
 
    
	
Name:
    	
Donald   P. Newman
    	
 
    
	
Title:
    	
CFO
    	
 
    

 

11Exhibit 10.1

 

Execution Version

 

AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT AND 
 SECOND AMENDMENT TO CREDIT AGREEMENT

 

This AMENDMENT NO. 2 TO FORBEARANCE AGREEMENT AND SECOND AMENDMENT TO CREDIT AGREEMENT (this “Agreement”), dated as of December 16, 2012, is entered into among LODGENET INTERACTIVE CORPORATION, a Delaware corporation (the “Borrower”), the other Loan Parties party hereto, the Lenders party hereto and GLEACHER PRODUCTS CORP., as administrative agent (in such capacity, the “Agent”).  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Forbearance Agreement (as defined below) or in the Credit Agreement (as defined below), as applicable.

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the Agent have entered into that certain Credit Agreement, dated as of April 4, 2007 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, the Borrower, the other Loan Parties, certain Lenders and the Agent are parties to that certain Forbearance Agreement and Second Amendment to Credit Agreement (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Forbearance Agreement”), dated as of October 15, 2012;

 

WHEREAS, the Borrower, the other Loan Parties, certain Lenders and the Agent are parties to that certain Consent to Forbearance Agreement and Second Amendment to Credit Agreement, dated as of November 9, 2012;

 

WHEREAS, the Borrower, the other Loan Parties, certain Lenders and the Agent are parties to that certain Amendment No. 1 to Forbearance Agreement and Second Amendment to Credit Agreement, dated as of November 16, 2012;

 

WHEREAS, DirecTV, LLC (“DirecTV”) and the Borrower entered into that certain Second Forbearance Agreement, dated as of November 6, 2012 (the “Second DirecTV Forbearance”) and that certain First Amendment to That SMATV Sales Agency and Transport Services Agreement, dated as of November 6, 2012 (the “DirecTV First Amendment”);

 

WHEREAS, DirecTV and the Borrower entered into that certain Third Forbearance Agreement, dated as of December 14, 2012 (the “Third DirecTV Forbearance”), an executed copy of which has been delivered to the Agent;

 

WHEREAS, Home Box Office, Inc. (“HBO”) and the Borrower entered into that certain Amendment to Letter Agreement, dated as of November 9, 2012 (the “HBO First Amendment”);

 

WHEREAS, HBO and the Borrower have agreed to amend the HBO Forbearance pursuant to that certain Second Amendment to Letter Agreement, dated as of December 16, 2012 (the “HBO Second Amendment”), a substantially final draft copy of which has been delivered to the Agent; and

 

 

WHEREAS,  the Borrower has requested and the Lenders party hereto (constituting the Required Lenders) and the Agent have, subject to the terms and conditions set forth herein, agreed to modify and amend certain provisions of the Forbearance Agreement as provided for herein.

 

NOW THEREFORE, in consideration of the foregoing, the terms, conditions and covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.             Amendment to Section 3.1 of the Forbearance Agreement.  Section 3.1(b) of the Forbearance Agreement is hereby amended, as of the Effective Date, by replacing it in its entirety with the following:

 

As used herein, the term “Forbearance Period” shall mean the period beginning on the Forbearance Effective Date and ending upon the occurrence of a Termination Event.  As used herein, “Termination Event” shall mean the earlier to occur of (i) December 31, 2012 and (ii) the occurrence of any Forbearance Default.  As used herein, the term “Forbearance Default” shall mean: (i) the occurrence of any Default or Event of Default (other than the Specified Defaults) under and as defined in the Credit Agreement (as amended hereby) or any other Loan Document; (ii) the failure of the Borrower or any other Loan Party to timely comply with any term, condition, covenant or agreement set forth in this Forbearance Agreement; (iii) subject to the exceptions in Section 7.1(b) below, the material breach of any representation or warranty made by the Borrower or any other Loan Party in this Forbearance Agreement; (iv) the failure of the Borrower to timely comply with each term, condition, covenant and agreement set forth in (A) that certain Forbearance Agreement to SMATV Sales Agency and Transport Services Agreement, dated as of September 19, 2012, between DirecTV, LLC (“DirecTV”) and the Borrower, as amended by that certain Second DirecTV Forbearance Agreement, dated as of November 6, 2012 between DirecTV and the Borrower, and as further amended by that certain Third Forbearance Agreement, dated as of December 14, 2012, between DirecTV and the Borrower (collectively, the “DirecTV Forbearance”), (B) that certain letter agreement, dated September 20, 2012, from Home Box Office, Inc. (“HBO”) to the Borrower, as amended by that certain Amendment to Letter Agreement, dated as of November 9, 2012, and as further amended by that certain Second Amendment to Letter Agreement, dated as of December 16, 2012 (the “HBO Forbearance”), (C) that certain SMATV Sales Agency and Transport Services Agreement, dated as of March 31, 2010, between DirecTV and the Borrower, as amended by that certain First Amendment to That SMATV Sales Agency and Transport Services Agreement, dated as of November 6, 2012 (the “DirecTV Agreement”) (other than the Specified Defaults, First Forbearance Default or Second Forbearance Default, as defined in the DirecTV Forbearance, as applicable) or (D) that certain HBO Services Affiliation Agreement for Lodging Industry Distributor, dated as of December 1, 2003, between HBO and the Borrower, (the “HBO Agreement”)  (other than the payment default(s)

 

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referenced in the HBO Forbearance) or (v) the receipt of any notice of default or event of default (howsoever described or defined) in respect of any material contract from the counterparty to such material contract.

 

2.             Amendment to Annex A to the Forbearance Agreement.  Item 2 on Annex A to the Forbearance Agreement, title “Specified Defaults” is hereby amended, as of the Effective Date, by replacing it in its entirety with the following:

 

2.             An Event of Default occurring under Section 9(d) of the Credit Agreement as a result of the Borrower’s failure to comply with Section 7.3 of the Credit Agreement solely in connection with the defaults under the DirecTV Agreement or the HBO Agreement, in each case, as specified in the DirecTV Forbearance or the HBO Forbearance, as applicable

 

3.             Closing Conditions.  This Agreement shall become effective (the “Effective Date”) when the Agent shall have received a copy of this Agreement duly executed by each of the Borrower, the other Loan Parties listed on the signature pages hereto, the Agent, and the  Lenders party hereto constituting Required Lenders.

 

4.             Representations and Warranties of the Loan Parties.  In order to induce the Agent and the Lenders party hereto to execute and deliver this Agreement, each Loan Party hereby represents and warrants as follows:

 

(i)            except for the Specified Defaults or as otherwise expressly provided in the Forbearance Agreement (as amended hereby) (including the following paragraph (ii)), after giving effect to this Agreement, each of the Borrower and the other Loan Parties is in compliance with all of the terms and provisions set forth in the Credit Agreement and the other Loan Documents on its part to be observed or performed, and no Default or Event of Default has occurred and is continuing;

 

(ii)           except with respect to the Specified Defaults, each of the representations and warranties in Section 5 of the Credit Agreement shall be true and correct in all material respects on and as of the date hereof, except to the extent any such representation and warranty expressly relates to an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date;

 

(iii)          it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

 

(iv)          this Agreement has been duly executed and delivered by such Loan Party and constitutes, a legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as such enforceability may be limited by the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, concepts of reasonableness,  general equitable principles (whether considered in a proceeding in equity or at law) and by general principles of equity, good faith and fair dealing;

 

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(v)           no consent, approval, authorization or order of, or filing, registration or qualification with, any Governmental Authority or any other Person is required in connection with the execution, delivery or performance by such Loan Party of this Agreement; and

 

(vi)          the Liens granted to the Agent, for the benefit of itself and the other Secured Parties, to secure any of the Obligations under the Credit Agreement remain in full force and effect and continue to constitute first priority perfected liens therein, subject only to Liens permitted pursuant to Section 8.3 of the Credit Agreement.

 

5.             General Release; Reaffirmation of Indemnity

 

(a)           In consideration of, among other things, the Agent’s and the Lenders’ execution and delivery of this Agreement, each of the Borrower or any other Loan Parties, on behalf of itself and on behalf of its agents, representatives, officers, directors, advisors, employees, affiliates, Subsidiaries, successors, assigns, legal representatives and financial advisors (the “LodgeNet Parties”), hereby jointly and severally releases, acquits and forever discharges (collectively, the “Releases”) the Agent and each Lender (collectively, the “Lender Parties”), and their respective subsidiaries, parents, affiliates, officers, directors, employees, agents, attorneys, financial advisors, successors and assigns, both present and former (collectively, the “Lenders’ Affiliates” and together with the Lender Parties, the “Releasees”) from any and all manner of actions, causes of action, suits, debts, controversies, damages, judgments, executions, claims and demands whatsoever, asserted or unasserted, in contract, tort, law or equity which the Borrower or any other LodgeNet Party has or may have against any of the Lender Parties and/or the Lenders’ Affiliates by reason of any action, failure to act, matter or thing whatsoever arising from or based on facts occurring prior to the date of this Agreement in respect of the Loan Documents, including but not limited to, any claim or defense that relates to, in whole or in part, directly or indirectly, (i) the making or administration of the Loans and Letters of Credit, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability theories”, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents or Forbearance Agreement (as amended hereby), (iii) any actions or omissions of any of the Lender Parties and/or the Lenders’ Affiliates in connections with the initiation or continuing exercise of any right or remedy contained in the Loan Documents  or at law or in equity, (iv) lost profits, (v) loss of business opportunity, (vi) increased financing costs, (vii) increased legal or other administrative fees or (viii) damages to business reputation (collectively, the “Claims”).  In entering into this Agreement, each of the Borrower and the other Loan Parties party hereto consulted with, and has been represented by, legal counsel and expressly disclaims any reliance on any representations, acts or omissions by any of the Releasees and each hereby agrees and acknowledges that the validity and effectiveness of the releases set forth herein do not depend in any way on any such representations, acts and/or omissions or the accuracy, completeness or validity hereof.  The provisions of this Section 5(a) shall survive the expiration of the Forbearance Period and the termination of the Forbearance Agreement, the Credit Agreement, the other Loan Documents and payment in full of the Obligations.

 

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(b)           Without in any way limiting their reaffirmations and acknowledgements set forth in Article IX of the Forbearance Agreement, the Borrower hereby expressly acknowledges, agrees and reaffirms its reimbursement, indemnification and other obligations to and agreements set forth in Section 11.5 of the Credit Agreement.  The Borrower further acknowledges, agrees and reaffirms that all of such reimbursement, indemnification and other obligations and agreements set forth in Section 11.5 of the Credit Agreement shall survive the expiration of the Forbearance Period and the termination of the Forbearance Agreement, the Credit Agreement, the other Loan Documents and the payment in full of the Obligations.

 

(c)           The Borrower and each other Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby unconditionally and irrevocably agrees that it will not sue any Releasee on the basis of any Claim released, remised and discharged by the Borrower or any other Loan Party pursuant to Section 5(a).  If the Borrower, any other Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrower and each other Loan Party, for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees and costs incurred by any Releasee as a result of such violation.

 

6.             Miscellaneous.

 

(a)           Entirety.  This Agreement embodies the entire agreement among the parties hereto and supersedes all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof.

 

(b)           Severability of Provisions.  If any provision of this Agreement is held to be illegal, invalid or unenforceable, (i) the legality, validity and enforceability of the remaining provisions of this Agreement shall not be affected or impaired thereby and (ii) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.  The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(c)           Counterparts; Electronic Signatures.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.  Delivery of an executed counterpart to this Agreement by telecopy, e-mail or other electronic means (e.g., “pdf” or “rtf”) shall be effective as an original and shall constitute a representation that an original will be delivered.

 

(d)           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

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(e)           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of each Lender and the other parties hereto and their respective successors and permitted assigns.

 

[Signature pages to follow.]

 

6

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

	
BORROWER:
    	
 
    	
LODGENET   INTERACTIVE CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
LODGENET   STAYONLINE, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ON   COMMAND CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
THE   HOTEL NETWORKS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
LODGENET   INTERNATIONAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ON   COMMAND VIDEO CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    

 

 

[Signature Page to Amendment No. 2 to Forbearance Agreement and
 Second Amendment to Credit Agreement]

 

 

	
 
    	
 
    	
PUERTO   RICO VIDEO ENTERTAINMENT CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
VIRGIN   ISLAND VIDEO ENTERTAINMENT CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
SPECTRADYNE   INTERNATIONAL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
HOTEL   DIGITAL NETWORK, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
LODGENET   HEALTHCARE INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   James G. Naro
    
	
 
    	
 
    	
Name:
    	
James   G. Naro
    
	
 
    	
 
    	
Title:
    	
Secretary
    

 

 

[Signature Page to Amendment No. 2 to Forbearance Agreement and
 Second Amendment to Credit Agreement]

 

 

	
AGENT:
    	
 
    	
GLEACHER   PRODUCTS CORP.

as   Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Joanna Anderson
    
	
 
    	
 
    	
Name:
    	
Joanna   Anderson
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

 

[Signature Page to Amendment No. 2 to Forbearance Agreement and
 Second Amendment to Credit Agreement]

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