Exhibit 10.72.3
AMENDMENT #1 TO
SHARE EXCHANGE AGREEMENT
THIS AMENDMENT #1, made and entered into and effective as of August 21,
2001, amends the SHARE EXCHANGE AGREEMENT (the "Exchange Agreement") dated May
2, 2001, by and among HEADWATERS INCORPORATED, a Delaware corporation
("Headwaters"), HEADWATERS SUB CORPORATION, a New Jersey corporation and a
wholly-owned subsidiary of Headwaters ("Merger Sub"), HYDROCARBON TECHNOLOGIES,
INC., a New Jersey corporation ("HTI"), and each of the individuals listed on
the signature pages thereto (the "Transferors").
RECITALS
A. Headwaters, Merger Sub, HTI, and Xxxxxx X. Xxxxxxx, Lap-Xxxxx (Xxxx)
Xxx, Ph.D., Xxxxx X. Xxxxxx, and Xxxxxxx Xxxxxx (the "HTI Shareholders") entered
into the Exchange Agreement on May 2, 2001.
B. Headwaters, Merger Sub, HTI, and the HTI Shareholders wish to amend
Section 1.3(a)(vii) of the Exchange Agreement, which defines the term "2002
Projected EBITDA" and which constitutes the criterion for determining whether
HTI earns the Second Contingent Payment under the Exchange Agreement, to better
reflect the parties' agreement.
C. Section 9.1 of the Exchange Agreement provides that the Transferors
shall indemnify Headwaters for, among other things, any misrepresentation or
breach of the representations, warranties or covenants of HTI contained in the
Merger Agreement or made to Headwaters or Merger Sub in any exhibit,
certificate, or other instrument or document furnished or to be furnished by HTI
pursuant to the Merger Agreement or in connection with the transactions
contemplated therein, subject to the limitations contained in Section 9.1.
D. Section 2.8(h) of the Merger Agreement sets forth certain
representations and warranties of HTI with regard to intellectual property used
in the operation of its business, including HTI's design, development, use,
import, manufacture, and sale of the products, technology, or services
(including products, technology, or services currently under development) of
HTI.
E. Headwaters, Merger Sub, HTI, and the HTI Shareholders wish to amend
the Exchange Agreement as of this date so that HTI and the Transferors
specifically acknowledge and agree that if certain potential claims of IFP North
America, Inc., or any affiliates thereof, against Headwaters or the Surviving
Corporation, or other related parties, result in a breach of the representations
and warranties contained in Section 2.8(h) of the Merger Agreement, then Losses
incurred by Headwaters or the Surviving Corporation (or the related parties) in
connection with such breach of the representations and warranties shall be
subject to indemnification under Section 9.1 of the Exchange Agreement.
F. Section 11.3 of the Exchange Agreement provides that the Exchange
Agreement may be amended, at any time prior to the Closing, by a writing signed
by Headwaters, Merger Sub, HTI, and a majority in interests of the Transferors
who have signed the Exchange Agreement as of such time.
G. The HTI Shareholders constitute a majority in interests of the
Transferors as of the date of this Amendment #1.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein and in the Exchange Agreement, the Parties do hereby
agree as follows:
1. The Exchange Agreement is hereby amended by adding the following
clause to the end of Section 1.3(a)(vii) (containing the definition of the term
"2002 Projected EBITDA"):
"; and provided further that, for purposes of determining HTI's
qualification for the Second Contingent Payment,
(i) if the Shenhua license agreement discussed in Section 1.3(c)(ii)(y)
herein is executed between January 1, 2002, and March 31, 2002,
inclusive, 2002 Projected EBITDA will be increased by $1,521,000;
(ii) if the PetroChina license agreement discussed in Section
1.3(c)(ii)(z) herein is executed between January 1, 2002, and March 31,
2002, inclusive, 2002 Projected EBITDA will be increased by $75,000;
and
(iii) if either the Shenhua license agreement or the PetroChina license
agreement, or both, is executed between January 1, 2002, and March 31,
2002, inclusive, in addition to the adjustments described in
subsections (i) and (ii) above, 2002 Projected EBITDA will be increased
by the net loss, if any, before interest, taxes, depreciation, and
amortization incurred by HTI from the Closing Date through December 31,
2001."
2. Section 1.3(c)(ii)(z) of The Exchange Agreement is hereby amended by
replacing the phrase "("PetroChina")" with the phrase "or an equivalent company
(in either case, "PetroChina" for all purposes under this Exchange Agreement)".
3. The Exchange Agreement is hereby amended to add the following to the
end of Section 9.1:
"HTI and the Transferors hereby acknowledge and agree that the
indemnification provided for in this Section 9.1 applies to claims made
by or on behalf of IFP North America, Inc., or any affiliate thereof
(in either case, "IFP") against any Indemnified Persons alleging
infringement, misappropriation, or misuse of IFP's alleged intellectual
property rights or trade secrets and which claims result in a breach of
the representations, warranties and covenants made by HTI in the Merger
Agreement, including, without limitation, Section 2.8(h) of the Merger
Agreement. In the event that IFP makes any claim and such claim
proceeds to litigation, arbitration, or other dispute resolution forum
and (x) any Indemnified Person alleges any counterclaim for costs,
expenses, damages, or other relief against IFP, including claims,
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defenses, or motions for frivolous pleadings or under any similar law,
statute, or rule, and (y) a monetary award or settlement is paid or is
payable to Headwaters or the Surviving Corporation in such matter which
is in excess of the Losses, if any, incurred by Headwaters or the
Surviving Corporation in connection with the IFP claim, then the amount
of the award or settlement in excess of the Losses shall be payable to
the Representative for the benefit of the Transferors."
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment #1
to the Exchange Agreement as of the day and year first above written.
HEADWATERS INCORPORATED
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx, Chief Executive Officer
HYDROCARBON TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
HEADWATERS SUB CORPORATION
/s/ Xxxx X. Xxxxxx
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By: Xxxx X. Xxxxxx
Title: President
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
/s/ Lap-Keung (Theo) Xxx, Ph.D.
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Lap-Keung (Theo) Xxx, Ph.D.
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
/s/Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
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