Document:

Exhibit 10.3

 

AMENDMENT AGREEMENT

 

This Amendment Agreement (this “Agreement”)  is made April 15, 2013, among HPT TA Properties Trust (“HPT TA Trust”), HPT TA Properties LLC (“HPT TA LLC”), HPT PSC Properties Trust (“HPT PSC Trust”), HPT PSC Properties LLC (“HPT PSC LLC” and together with HPT TA Trust, HPT TA LLC, HPT PSC Trust, “Landlord”),  TA Leasing LLC (“TA Leasing”) and TA Operating LLC (as successor to Petro Stopping Centers, L.P.) (“TA Operating”, and together with TA Leasing, “Tenant”).

 

RECITALS

 

WHEREAS, HPT TA Trust, HPT TA LLC and TA Leasing are parties to a Lease Agreement dated January 31, 2007, as amended (the “TA Lease”), and HPT PSC Trust, HPT PSC LLC and TA Operating are parties to a Lease Agreement dated May 30, 2007, as amended (the ‘‘Petro Lease”, and together with the TA Lease, the “Leases”), and certain related and/or incidental documents and agreements (collectively, the “Lease Documents”); and

 

WHEREAS, Tenant and Equilon Enterprises LLC (d/b/a Shell Oil Products US) (“Shell”) are entering into a Liquefied Natural Gas Dispensing Site License and Sales Agreement (the “Shell Agreement”) and Tenant has requested that Landlord enter a Subordination and Non-Disturbance Agreement (“SNDA”).   Landlord has agreed to enter such SNDA conditioned upon certain changes under the Leases with respect to the calculation of Additional Rent and affording Landlord the right to cure a default of Tenant under the Shell Agreement; and

 

WHEREAS, Landlord and Tenant desire to clarify the audit requirements related to Additional Rent payable with respect to any Property subject to a TA Franchise Agreement;

 

NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

 

1.             Defined Terms.   Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Lease Documents.

 

2.             Additional Rent.  For purposes of determining Additional Rent, Tenant shall exclude from Gross Fuel Revenues and Gross Nonfuel Revenues all amounts recognized during the relevant period under GAAP that arise out of the Shell Agreement and shall add to Gross Fuel Revenues the product of (i) the average revenue per gallon for diesel fuel sold from such Property during the relevant period and (ii) the total number of gallons of liquid natural gas fuel sold by either Tenant or Shell at such Property during the relevant period, divided by a factor of 1.7.

 

3.             Landlord’s Right to Cure Tenant Defaults under the Shell Agreement.    The following new Section 12.6 is hereby added to the Leases:

 

 

“12.6.  Landlord’s Right to Cure Tenant Defaults under the Shell Agreement.  If a default by Tenant or any of its applicable affiliates shall have occurred and be continuing under that certain Liquefied Natural Gas Dispensing Site License and Sales Agreement, dated as of April 15, 2013, among TA Leasing LLC, TA Operating LLC and Equilon Enterprises LLC (d/b/a Shell Oil Products US), Landlord, after Notice to Tenant (which Notice shall not be required if Landlord shall reasonably determine immediate action is necessary to protect person or property), without waiving or releasing any obligation of Tenant and without waiving or releasing any default, may (but shall not be obligated to), at any time thereafter, make such payment or perform such act for the account and at the expense of Tenant, and may, to the maximum extent permitted by law, enter upon the Property, or any portion thereof, for such purpose and take all such action thereon as, in Landlord’s sole and absolute discretion, may be necessary or appropriate therefor.  No such entry shall be deemed an eviction of Tenant.  All reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees) incurred by Landlord in connection therewith, together with interest thereon (to the extent permitted by law) at the Overdue Rate from the date such sums are paid by Landlord until repaid, shall be paid by Tenant to Landlord, on demand.”

 

4.             Reconciliation of Additional Rent.    Section 3.1.2(c) of the TA Lease is hereby amended by adding the following at the end of the first paragraph thereof:

 

“provided, however, that with respect to any Property subject to a TA Franchise Agreement, in lieu of an audit by independent certified public accounts, Tenant shall provide to Landlord a financial report setting forth the Gross Fuel Revenues and Gross Non-Fuel Revenues for each such Property for such preceding Lease Year, or portion thereof, together with an Officer’s Certificate from Tenant’s chief financial or accounting officer certifying that to the best of such person’s knowledge, such report is true and correct and consistent with reports of revenue provided to Tenant by its franchisees generally and further, provided, that (1) Tenant shall provide to Landlord copies of (y) all reports, memoranda and supporting work papers generated in connection with any Tenant internal audit department review of financial reports in connection with a Property subject to a TA Franchise Agreement and (z) any independent third party audit reports received by Tenant from the operator of a Property subject to a TA Franchise Agreement and (2) Tenant shall undertake and complete each Lease Year an internal audit department review of financial reports for least one Property subject to a TA Franchise Agreement.”

 

5.             Confirmation of Additional Rent.    Section 3.1.2(d) of the TA Lease is hereby amended by inserting the following prior to the last paragraph thereof:

 

“With respect to a Property subject to a TA Franchise Agreement, Landlord shall have the right, exercisable by Notice to Tenant, to require Tenant to engage, at Tenant’s cost and expense, an independent certified public accountant to audit the information set forth in the Officer’s Certificate referred to in subparagraph (c) above.  Tenant shall begin such audit as

 

 

soon as reasonably possible following its receipt of Landlord’s Notice and shall complete such audit as soon as reasonably possible thereafter.  If any such audit discloses a deficiency in the payment of Additional Rent, Tenant shall forthwith pay to Landlord the amount of the deficiency, as finally agreed or determined, together with interest at the Interest Rate, from the date such payment should have been made to the date of payment thereof.  If any such audit discloses that Tenant paid more Additional Rent for any Lease Year than was due hereunder, and either Landlord agrees with the result of such audit or the matter is otherwise determined, Landlord shall, at Landlord’s option, either grant Tenant a credit against Additional Rent next coming due in, or pay to Tenant an amount equal to, the amount of such overpayment, as finally agreed or determined, together with interest at the Interest Rate, which interest shall accrue from the time of payment by Tenant until the date such credit is applied or paid, as the case may be; provided, however, that, upon the expiration or sooner termination of the Term, Landlord shall pay the unapplied balance of such credit to Tenant, together with interest at the Interest Rate, which interest shall accrue from the date of payment by Tenant until the date of payment from Landlord.  In the event an audit demonstrates a variance of less than 1% from the information set forth in the Officer’s Certificate referred to in subparagraph (c) above, Landlord shall reimburse Tenant for the actual out of pocket audit costs incurred by Tenant.  Any dispute concerning the correctness of an audit shall be settled by arbitration pursuant to the provisions of Article 22.”

 

6.             Definition of Fuel Sales Cap.    Section 1.42 of the Petro Lease is hereby amended by deleting the phrase “2012 Lease Year” therefrom and inserting the phrase “2013 Lease Year” in its place.

 

7.             Arbitration.    Article 22 of both Lease Documents shall be replaced with the following:

 

Any disputes, claims or controversies arising out of or relating to this Agreement; (i) between the parties or (ii) brought by or on behalf of any shareholder of any party or a direct or indirect parent of a party (which, for purposes of this Article 22, shall mean any shareholder of record or any beneficial owner of shares of any party, or any former shareholder of record or beneficial owner of shares of any party), either on his, her or its own behalf, on behalf of any party or on behalf of any series or class of shares of any party or shareholders of any party against any party or any member, trustee, officer, manager (including Reit Management & Research LLC (“RMR”) or its successor), agent or employee of any party, including disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration provision, or the declarations of trust, limited liability company agreements or bylaws of any party hereto (all of which are referred to as “Disputes”), or relating in any way to such a Dispute or Disputes shall, on the demand of any party to such Dispute be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as those Rules may be modified in this Article 22.  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against trustees, officers or managers of any party and class actions by a shareholder against those

 

 

individuals or entities and any party.  For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party. For purposes of this Article 22, the term “party” shall include any direct or indirect parent of a party.

 

There shall be three arbitrators.  If there are only two parties to the Dispute, each party shall select one arbitrator within fifteen days after receipt by respondent of a copy of the demand for arbitration.  Such arbitrators may be affiliated or interested persons of such parties.  If either party fails to timely select an arbitrator, the other party to the Dispute shall select the second arbitrator who shall be neutral and impartial and shall not be affiliated with or an interested person of either party.  If there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one arbitrator.  Such arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be.  If either all claimants or all respondents fail to timely select an arbitrator then such arbitrator (who shall be neutral, impartial and unaffiliated with any party) shall be appointed by the AAA.  The two arbitrators so appointed shall jointly appoint the third and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen days of the appointment of the second arbitrator.  If the third arbitrator has not been appointed within the time limit specified herein, then the AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by the AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.

 

The place of arbitration shall be at the office of the AAA in Boston, Massachusetts unless otherwise agreed by the parties and all parties waive all questions of personal jurisdiction and venue for the purpose of carrying out this paragraph.

 

There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators.

 

In rendering an award or decision (the “Arbitration Award”), the arbitrators shall be required to follow the laws of the State of Maryland.  Any arbitration proceedings or Arbitration Award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Arbitration Award shall be in writing and may, but shall not be required to, briefly state the findings of fact and conclusions of law on which it is based.

 

Except to the extent as otherwise agreed by the parties after the date of this Agreement, each party involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of a party’s award to the claimant or the claimant’s attorneys.  Each party (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third appointed arbitrator.

 

 

An Arbitration Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between such parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon the Arbitration Award may be entered in any court having jurisdiction.  To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

 

Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  Each party against which the Arbitration Award assesses a monetary obligation shall pay that obligation on or before the thirtieth day following the date of the Arbitration Award or such other date as the Arbitration Award may provide.

 

This Article 22 is intended to benefit and be enforceable by the shareholders, members, direct and indirect parents, trustees, directors, officers, managers (including RMR or its successor), agents or employees of any party and the parties and shall be binding on the shareholders of any party and the parties, as applicable, and shall be in addition to, and not in substitution for, any other rights to indemnification or contribution that such individuals or entities may have by contract or otherwise.

 

8.             Statement of Limited Liability (HPT TA Trust).  THE DECLARATION OF TRUST ESTABLISHING HPT TA TRUST, DATED NOVEMBER 29, 2006, AS AMENDED AND SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF HPT TA TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, HPT TA TRUST.  ALL PERSONS DEALING WITH HPT TA TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF HPT TA TRUST  FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

9.             Statement of Limited Liability (HPT PSC Trust).  THE DECLARATION OF TRUST ESTABLISHING HPT PSC TRUST, DATED MAY 23, 2007, AS AMENDED AND SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF HPT PSC TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, HPT PSC TRUST.  ALL PERSONS DEALING WITH HPT PSC TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF HPT PSC TRUST  FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

[Remainder of page intentionally left blank; signature page follows]

 

 

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

 

 

	
HPT   TA Properties Trust  
    	
 
    	
HPT   TA Properties LLC  
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Mark L. Kleifges 
    	
 
    	
By:   
    	
/s/   Mark L. Kleifges 
    
	
 
    	
Mark   L. Kleifges 
    	
 
    	
 
    	
Mark   L. Kleifges 
    
	
 
    	
Treasurer and Chief Financial Officer
    	
 
    	
 
    	
Treasurer and Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
HPT PSC Properties Trust 
    	
 
    	
HPT   PSC Properties LLC 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Mark L. Kleifges 
    	
 
    	
By:  
    	
/s/ Mark L. Kleifges 
    
	
 
    	
Mark   L. Kleifges 
    	
 
    	
 
    	
Mark   L. Kleifges 
    
	
 
    	
Treasurer and Chief Financial Officer
    	
 
    	
 
    	
Treasurer and Chief Financial Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TA Leasing LLC 
    	
 
    	
TA   Operating LLC
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/ Mark R. Young 
    	
 
    	
By:   
    	
/s/ Mark R. Young
    
	
 
    	
Mark   R. Young 
    	
 
    	
 
    	
Mark   R. Young
    
	
 
    	
Executive   Vice President and General Counsel
    	
 
    	
 
    	
Executive   Vice President and General CounselExhibit 10.104

 

NOTE PURCHASE AGREEMENT

 

This Note Purchase Agreement (this “Agreement”) is made and entered into as of May       , 2013, by and between the Holders listed on Schedule A (each a “Holder”, and collectively, the “Holders”), and Headwaters Incorporated, a Delaware corporation (the “Company”).

 

RECITALS

 

WHEREAS, each Holder currently holds that principal amount of the 2.5% Convertible Senior Subordinated Notes due 2014 of the Company set forth on Schedule A (the “Notes”);

 

WHEREAS, the Holders, severally and not jointly, desire to sell the Notes to the Company on the terms and conditions set forth in this Agreement (the “Sale”);

 

WHEREAS, the Company desires to purchase the Notes from the Holders on the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE 1
 Sale of the Notes

 

Section 1.1                                      Sale of the Notes  .  Upon the terms and subject to the conditions of this Agreement, at the Closing (as defined herein), the Holders, severally and not jointly, shall sell to the Company and the Company shall purchase from each Holder that aggregate principal amount of Notes set forth opposite such Holder’s name on Schedule A in exchange for $1,010 per $1,000 in principal amount of the Notes, for an aggregate purchase price set forth opposite such Holder’s name (the “Purchase Price”).

 

Section 1.2                                      Cancellation of Notes.  Holder hereby agrees that the Notes shall be cancelled in connection with the Sale.  The Purchase Price and accrued but unpaid interest on the Notes (“Accrued Interest”) as of the Closing Date (as defined below) shall be paid by the Company to the Holder in cash.  Holder acknowledges that the cancellation of the Notes shall have the effects specified in the Indenture governing the Notes.

 

Section 1.3                                      Closing Mechanics.  The closing (the “Closing”) of the transactions contemplated by this Agreement shall occur at the offices of Pillsbury Winthrop Shaw Pittman LLP, 50 Fremont Street, San Francisco, California 94105, or such other location as may be mutually acceptable in each case at 9:00 a.m., San Francisco time, on third business day after the date of this Agreement or at such other time on the same date or such other date as the parties may agree in writing (such time and date, the “Closing Date”).

 

 

Section 1.4                                      Conditions to Closing.

 

(a)                                  The obligation of each Holder hereunder to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing Date, of the following condition, provided that the condition is for each Holder’s sole benefit and may be waived by each Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i)                                     The representations and warranties of the Company in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date; and

 

(ii)                                  Each Holder shall have received the Purchase Price and Accrued Interest (the Purchase Price and Accrued Interest being the “Total Wire Amount”).

 

(b)                                 The obligation of the Company hereunder to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice thereof:

 

(i)                                     Upon confirmation of the receipt of the Total Wire Amount, each Holder shall have delivered, or caused to be delivered, to the Company (i) the Notes being sold pursuant to this Agreement in accordance with the delivery instructions provided by the Company and (ii) all other documentation reasonably requested by the Company relating to the right, title and interest in and to all of the Notes, and whatever documents of conveyance or transfer that may reasonably be necessary or desirable to transfer to and confirm in the Company all right, title and interest in and to (free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance, title retention agreement, option, equity or other adverse claim thereto) the Notes; and

 

(ii)                                  The representations and warranties of each Holder in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and that each Holder shall have complied in all material respects with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

 

ARTICLE 2
 Representations and Warranties of the Holder

 

Each Holder hereby makes the following representations and warranties, each of which is true and correct on the date hereof and the Closing Date and shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein.

 

Section 2.1                                      Existence and Power.

 

(a)                                  Each Holder is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the power, authority and capacity to execute

 

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and deliver this Agreement and the Letter of Transmittal, to perform its obligations hereunder and thereunder, and to consummate the transactions contemplated hereby.

 

(b)                                 The execution of this Agreement by each Holder and the consummation by each Holder of the transactions contemplated hereby do not and will not constitute or result in a breach, violation, conflict or default under any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license to which each Holder is a party, whether written or oral, express or implied, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of each Holder or on the part of any other party thereto or cause the acceleration or termination of any obligation or right of each Holder, except for such breaches, conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of each Holder to perform its obligations hereunder.

 

Section 2.2                                      Valid and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by each Holder and constitutes a legal, valid and binding obligation of the Holder, enforceable against each Holder in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

 

Section 2.3                                      Title to Notes.  Each Holder has good and valid title to the Notes in the aggregate principal amount set forth on Schedule A, free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance, title retention agreement, option, equity or other adverse claim thereto.  The Holder has not, in whole or in part, (i) assigned, transferred, hypothecated, pledged or otherwise disposed of the Notes or its rights in such Notes, or (ii) given any person or entity (“Person”) any transfer order, power of attorney or other authority of any nature whatsoever with respect to such Notes which upon the Closing Date would limit the Holder’s power to transfer the Notes hereunder.

 

Section 2.4                                      Investment Decision.  Each Holder (or its authorized representative) has had the opportunity to review the Company’s filings with the Securities and Exchange Commission (the “Commission”), including, without limitation, the Company’s Annual Report on Form 10-K for the year ended September 30, 2012, the Company’s Quarterly Reports on Form 10-Q for the quarters ended December 31, 2012 and March 31, 2013, the Company’s Proxy Statement filed January 7, 2013, and the Company’s Current Reports on Form 8-K filed on December 26, 2012, January 29, 2013, February 22, 2013, and April 30, 2013.  The Holder has had such opportunity to ask questions of the Company and its representatives and to obtain from representatives of the Company such information as is necessary to permit it to evaluate the merits and risks of selling the Notes and has independently, without reliance upon any representatives of the Company and based on such information as the Holder deemed appropriate, made its own analysis and decision to enter into this Agreement.

 

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Section 2.5                                      Professional Advice.  Each Holder is knowledgeable, sophisticated and experienced in business and financial matters and has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Sale and to make an informed investment decision with respect to the Sale.  With respect to the tax, accounting and other economic considerations involved in the Sale, the Holder is not relying on the Company or any of its affiliates, and the Holder has carefully considered and has, to the extent the Holder believes such discussion is necessary, discussed with the Holder’s professional legal, tax, accounting and financial advisors the implications of the Sale for the Holder’s particular tax, accounting and financial situation.

 

ARTICLE 3
 Representations, Warranties and Covenants of the Company

 

The Company hereby makes the following representations, warranties, and covenants each of which is true and correct on the date hereof and the Closing Date and shall survive the date of the Closing and the transactions contemplated hereby to the extent set forth herein.

 

Section 3.1                                      Existence and Power.

 

(a)                                  The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  The Company has the requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated hereby.

 

(b)                                 The execution of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not constitute or result in a breach, violation, conflict or default under any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license to which the Company is a party, whether written or oral, express or implied, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of the Company or on the part of any other party thereto or cause the acceleration or termination of any obligation or right of the Company, except for such breaches, conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company.  As used in this Agreement, the term “Material Adverse Effect” shall mean a material adverse effect on the business, operations, condition (financial or otherwise), properties or results of operations of the Company, or an event, change or occurrence that would materially adversely affect the ability of the Company to perform its obligations under this Agreement.

 

Section 3.2                                      Valid and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

 

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Section 3.3                                      Professional Advice.  The Company is knowledgeable, sophisticated and experienced in business and financial matters and has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Sale and to make an informed investment decision with respect to the Sale.  With respect to the tax, accounting and other economic considerations involved in the Sale, the Company is not relying on the Holder or any of its affiliates, and the Company has carefully considered and has, to the extent the Holder believes such discussion is necessary, discussed with the Company’s professional legal, tax, accounting and financial advisors the implications of the Sale for the Company’s particular tax, accounting and financial situation.

 

Section 3.4                                      No Event of Default.  The Company represents and warrants to the Holder that after giving effect to the terms of this Agreement and any other similar agreement with other holders of 2.5% Convertible Senior Subordinated Notes due 2014 of the Company, no default or event of default shall have occurred and be continuing as of the date hereof with respect to the Notes or any other indebtedness of the Company.

 

Section 3.5                                      Consents.  Neither the Company nor any of its subsidiaries is required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement, in each case in accordance with the terms hereof or thereof.

 

Section 3.6                                      Insolvency.  Neither the Company nor any of its subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.  The Company and its subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below).  For purposes of this Section 3.6, “Insolvent” means, with respect to any Person (i) the present fair saleable value of such Person’s assets is less than the amount required to pay such Person’s total indebtedness, (ii) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

 

Section 3.7                                      Securities Law Disclosure; Publicity.  On or before 9:00 a.m., New York local time, on the trading day immediately following the date hereof, the Company shall issue a press release or file a Report on Form 8-k announcing the signing of this Agreement and describing the terms of the transactions contemplated by this Agreement.  Promptly after such announcement, the Company shall file a Report on Form 8-k with the SEC describing the terms of the transactions contemplated by this Agreement and including as an exhibit to such Current Report on Form 8-k this Agreement, in the form required by the Exchange Act.  Form and after the issuance of the press release (or, pursuant to the first sentence of this section, a Form 8-k), no Holder shall be in possession of any material, non-public information received from the Company or any of its officers, directors, employees or agents, that is not disclosed in the press

 

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release or Form 8-k.  The Company shall not otherwise publicly disclose the name of any Holder, or include the name of any Holder in any filing with the SEC (other than in any exhibits to filings made in respect of this transaction in accordance with filing requirements under the Exchange Act) or any regulatory agency, without the prior written consent of such Holder, except to the extent such disclosure is required by law or regulations, in which case the Company shall provide the Holders with prior notice of such disclosure.

 

ARTICLE 4
 Miscellaneous Provisions

 

Section 4.1                                      Survival of Representations and Warranties.  The agreements of the Company, as set forth herein, and the respective representations and warranties of Holder and the Company as set forth herein in Sections 2 and 3, respectively, shall survive the Closing Date.

 

Section 4.2                                      Notice.  Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail (postage prepaid) with return receipt requested or sent by reputable overnight courier service (charges prepaid):

 

(a)                                  if to the Holder, at the most current address given by such Holder to the Company; and

 

(b)                                 if to the Company, at its address, as follows:

 

Headwaters Incorporated
 10653 South River Front Parkway, Suite 300
 South Jordan, UT 80495
 Attention:  General Counsel

 

with a copy to:

 

Pillsbury Winthrop Shaw Pittman LLP
 50 Fremont Street
 San Francisco, CA 94105
 Attention:  Linda C. Williams, Esq.

 

The Company by notice to the Sale may designate additional or different addresses for subsequent notices or communications.  Notices will be deemed to have been given hereunder when delivered personally, three business days after deposit in the U.S. mail postage prepaid with return receipt requested and two business days after deposit postage prepaid with a reputable overnight courier service for delivery on the next business day.

 

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Section 4.3                                      Entire Agreement.  This Agreement and the other documents and agreements executed in connection with the Sale embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents.

 

Section 4.4                                      Assignment; Binding Agreement.  This Agreement and the various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the parties hereto and their successors and assigns.

 

Section 4.5                                      Counterparts.  This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.  Any counterpart or other signature hereupon delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.

 

Section 4.6                                      Remedies Cumulative.  Except as otherwise provided herein, all rights and remedies of the parties under this Agreement are cumulative and without prejudice to any other rights or remedies available at law.

 

Section 4.7                                      Governing Law.  This Agreement shall in all respects be construed in accordance with and governed by the substantive laws of the State of New York, without reference to its conflicts of law rules.

 

Section 4.8                                      No Third Party Beneficiaries or Other Rights.  Nothing herein shall grant to or create in any person not a party hereto, or any such person’s dependents or heirs, any right to any benefits hereunder, and no such party shall be entitled to sue any party to this Agreement with respect thereto.

 

Section 4.9                                      Waiver; Consent.  This Agreement may not be changed, amended, terminated, augmented, rescinded or discharged (other than in accordance with its terms), in whole or in part, except by a writing executed by the parties hereto.  No waiver of any of the provisions or conditions of this Agreement or any of the rights of a party hereto shall be effective or binding unless such waiver shall be in writing and signed by the party claimed to have given or consented thereto.  Except to the extent otherwise agreed in writing, no waiver of any term, condition or other provision of this Agreement, or any breach thereof shall be deemed to be a waiver of any other term, condition or provision or any breach thereof, or any subsequent breach of the same term, condition or provision, nor shall any forbearance to seek a remedy for any noncompliance or breach be deemed to be a waiver of a party’s rights and remedies with respect to such noncompliance or breach.

 

Section 4.10                                Word Meanings.  The words such as “herein”, “hereinafter”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.  The singular shall include the plural, and

 

7

 

vice versa, unless the context otherwise requires.  The masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires.

 

Section 4.11                                No Broker.  Neither party has engaged any third party as broker or finder or incurred or become obligated to pay any broker’s commission or finder’s fee in connection with the transactions contemplated by this Agreement other than such fees and expenses for which it shall be solely responsible.

 

Section 4.12                                Further Assurances.  The Holder and the Company each hereby agree to execute and deliver, or cause to be executed and delivered, such other documents, instruments and agreements, and take such other actions, as either party may reasonably request in connection with the transactions contemplated by this Agreement.

 

Section 4.13                                Costs and Expenses.  The Holder and the Company shall each pay their own respective costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Agreement, including, but not limited to, attorneys’ fees.

 

Section 4.14                                Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 4.15                                Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 4.16                                Most Favored Nation. The Company hereby represents and warrants as of the date hereof, and covenants and agrees from and after the date hereof until 90 days after the date hereof, that none of the terms offered by the Company to any Person with respect to any purchase, transfer or redemption (each a “Purchase Document”) relating to the Company’s 2.5% Convertible Senior Subordinated Notes due 2014, is or will be more favorable to such Person than those of the Holder, and this Agreement shall be, without any further action by the Holder or the Company, deemed amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms contained in such Purchase Document. Notwithstanding the foregoing, the Company agrees, at its expense, to take such other actions (such as entering into amendments to this Agreement) as the Holder may reasonably request to further effectuate the foregoing.

 

8

 

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

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Note Purchase Agreement

 

9

 

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

 

	
 
    	
HEADWATERS INCORPORATED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

Signature Page to Note Purchase Agreement

 

10

 

Schedule A

 

	
Holder
    	
 
    	
Notes Held
    	
 
    	
Purchase Price
    	
 
    	
Accrued
   Interest as of
   May 10, 2013
    	
 
    	
Total Wire
   Amount
    	
 
    
	
TOTAL
    	
 
    	
24,259,000
    	
 
    	
$
    	
24,501,590.00
    	
 
    	
$
    	
166,780.63
    	
 
    	
$
    	
24,668,370.63

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