FIRST AMENDMENT TO5 LOAN AGREEMENT
This FIRST Amendment to Loan Agreement (the "Amendment") is executed
this 1ST day of FEBRUARY, 2001, by and between HEADWATERS INCORPORATED,
("Borrower") and ZIONS FIRST NATIONAL BANK (the "Lender").
WHEREAS, Borrower and Lender entered into that certain Loan Agreement
dated October 18, 2000, which provided, among other things, for Lender to extend
a Revolving Line of Credit in the maximum principal amount of EIGHT MILLION and
.00/100 Dollars ($8,000,000.00) (the "Loan Agreement"); and
WHEREAS, Borrower has requested Lender to renew and increase the
Revolving Line of Credit to TEN MILLION and 00/100 ($10,000,000.00) and amend
certain financial covenants, and;
WHEREAS, Lender has agreed to such request provided, among other
things, Borrower executes and delivers this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Loan Agreement is hereby amended as
follows:
1. The section entitled Borrowing Base is hereby deleted in its
entirety and replace with the following:
Borrowing Base. The words "Borrowing Base" mean, as determined
by Lender from time to time, the lesser of (a) $10,000,000.00;
or (b) 80.000% of the aggregate amount of royalties receivable
from license agreements, earned for the most recent month-end
times two; plus (ii) 80% of monthly accounts receivable earned
from sale of binder, plus (iii) 50% of the aggregate amount of
the outstanding principal balance of the Promissory Note
between Covol Technologies, Inc. and Birmingham Synfuel, LLC.
2. The section entitled Earnings, is hereby deleted in its
entirety.
3. A new section entitled Net Worth, is hereby added to the Loan
Agreement as follows:
Net Worth: Borrower shall maintain a ratio of total
liabilities divided by tangible net worth not to exceed 2:1,
measured quarterly.
4. A new paragraph entitled Loans, Acquisitions and Guaranties is
hereby added to the section entitle Negative Covenants as
follows:
Loans, Acquisitions and Guaranties. Following the date of this
amendment, (a) Loan, invest in or advance money or assets, (b)
purchase, create or acquire any interest in any other
enterprise or entity in aggregate amount of more than
$2,000,000.00, or (c) incur any obligation as surety or
guarantor in excess of $2,000,000.00 other than in the
ordinary course of business.
5. A new section entitled Account Debtor is hereby added to the
Loan Agreement as follows:
Account Debtor. Any bankruptcy from any account debtor, or
account debtor parent would result in the exclusion of
receivables or notes from the borrowing base described herein.
6. A new section entitled Additional Event of Default, is hereby
added to the Loan Agreement as follows
Additional Event of Default. Borrower acknowledges that an
additional event of default under this agreement shall occur
in the event that any change in Section 29 of the US Internal
Revenue Code that would result in a material adverse impact on
Borrower's business. Such determination shall be made by
Lender's sole discretion.
7. The section entitled Royalty Revenues is hereby deleted in its
entirety and replace with the following:
Royalty Revenues. Borrower shall maintain Royalty Revenue from
Licensees and Gross Binder Profit of not less than
$1,200,000.00 per month.
Except as amended herein, all other terms and conditions of the Loan
Agreement remain in full force and effect and are applicable to this Amendment.
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as
of the date and year first above written.
HEADWATERS INCORPORATED Zions First National Bank
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxx Xxxxx
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Xxxx X. Xxxxxx, Chairman & CEO Xxxxx Xxxxx, Vice President
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