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HW > SEC Filings for HW > Form 8-K on 12-Dec-2013All Recent SEC Filings

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Form 8-K for HEADWATERS INC


12-Dec-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligat


Item 1.01. Entry into a Material Definitive Agreement.

Offering of Notes. On December 5, 2013, Headwaters Incorporated (the "Company") entered into a purchase agreement (the "Purchase Agreement") under which we agreed to sell $150,000,000 aggregate principal amount of our 7% Senior Notes due 2019 (the "Notes") to Deutsche Bank Securities Inc., Citigroup Global Markets Inc., Avondale Partners, LLC, Canaccord Genuity Inc., Stifel, Nicolaus & Company, Incorporated and Wedbush Securities Inc. (collectively, the "Initial Purchasers"). The Notes are guaranteed (the "Guarantees") jointly and severally by substantially all of our domestic subsidiaries (the "Guarantors"). The net proceeds from the offering were approximately $146.2 million after deducting the Initial Purchasers' discount and the estimated offering expenses payable by us. A copy of the press release announcing the closing of the offering is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The closing of the sale of the Notes and the related Guarantees (collectively, the "Securities") occurred on December 10, 2013. The Securities have not been registered under the Securities Act of 1933, as amended (the "Securities Act"). We offered and sold the Securities to the Initial Purchasers in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act. The Initial Purchasers then sold the Securities to qualified institutional buyers pursuant to the exemption from registration provided by Rule 144A under the Securities Act and to persons outside the United States in compliance with Regulation S under the Securities Act. We relied on these exemptions from registration based in part on representations made by the Initial Purchasers in the Purchase Agreement.


The Notes and the related Guarantees are governed by an indenture, dated as of December 10, 2013 (the "Indenture"), between the Company, the Guarantors and Wilmington Trust, National Association as trustee (the "Trustee"). A copy of the Indenture is attached hereto as Exhibit 4.1, is incorporated herein by reference, and is hereby filed; the descriptions of the Indenture, the Notes and the Guarantees in this Current Report are summaries and are qualified in their entirety by the terms of the Indenture, Notes and the Guarantees, respectively.

The Notes bear interest at a rate of 7.25% per year, payable semi-annually in arrears in cash on January 15 and July 15 of each year, beginning on July 15, 2014. The Notes mature on January 15, 2019.

The Notes and Guarantees constitute senior debt of the Company and the Guarantors. They rank:

equally in right of payment with all of the Company's and the Guarantors' existing and future senior debt, including, with respect to the Company and the Guarantors party to the ABL Revolver (as defined below) and the 7-5/8% senior notes, amounts outstanding under the ABL Revolver and the 7-5/8% senior notes;

senior in right of payment to all of the Company's and the Guarantors' existing and future subordinated debt, including the existing convertible senior subordinated notes;

effectively subordinated to all of the Company's and the Guarantors' secured indebtedness, to the extent of the value of the collateral securing such indebtedness; and

structurally subordinated to all existing and future indebtedness and other liabilities of the Company's non-guarantor subsidiaries (other than indebtedness and liabilities owed to the Company or one of the Guarantors).

The Notes may be redeemed, in whole or in part, at any time prior to January 15, 2016, at our option at a redemption price equal to 100% of the principal amount of the Notes redeemed plus a make-whole premium determined as of the redemption date, plus accrued and unpaid interest, if any. On or after January 15, 2016, we may redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at redemption prices (expressed as percentages of principal amount) equal to 103.625%, 101.813% and 100.000% on the applicable redemption date for the twelve-month period beginning on January 15, 2016, 2017 and 2018 (and thereafter), respectively, plus accrued and unpaid interest, if any. At any time (which may be more than once) before January 15, 2016, we may redeem up to 35% of the aggregate principal amount of Notes issued at a redemption price of 107.250% of the principal amount thereof, plus accrued and unpaid interest, if any, with the net cash proceeds that we raise in one or more equity offerings, as long as: (a) we redeem the Notes within 90 days of completing the applicable equity offering; and (b) at least 65% of the aggregate principal amount of Notes originally issued remains outstanding afterwards.

If a change of control (as defined in the Indenture) occurs, we must give holders of the Notes the opportunity to sell us their Notes at 101% of their face amount, plus accrued and unpaid interest.

If we or our subsidiaries engage in asset sales, we generally must either invest the net cash proceeds from such asset sales in our business within a period of time, pre-pay senior debt or make an offer to purchase a principal amount of the Notes equal to the excess net cash proceeds. The purchase price of the Notes will be 100% of their principal amount, plus accrued and unpaid interest.

The Indenture, among other things, limits our ability and the ability of our . . .



Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure required by this Item 2.03 is contained in Item 1.01 and is incorporated herein by reference.



Item 3.03. Material Modification to Rights of Security Holders.

The disclosure required by this Item 3.03 is contained in Item 1.01 and is incorporated herein by reference.



Item 8.01. Other Events.

On December 12, 2013, Headwaters closed its acquisition of an 80% equity interest in the business of Entregra Roof Tile and a 40% equity interest in Tag & Stick. Entegra Roof Tile is a leading manufacturer of high quality concrete roof tiles and accessories under the Entegra brand that are sold primarily into the Florida market. Tag & Stick is an innovative roofing underlayment currently sold in Florida with plans to market throughout the United States.



Item 9.01. Financial Statements and Exhibits.

Exhibit No.                            Document Description
    4.1       Indenture related to the 7% Senior Notes due 2019, dated as of
              December 10, 2013, among Headwaters Incorporated, the guarantors named
              therein and Wilmington Trust, National Association as trustee
              (including forms of 7% Senior Notes due 2019).

    4.2       Registration Rights Agreement, dated as of December 10, 2013, among
              Headwaters Incorporated and certain of its subsidiaries named therein,
              and Deutsche Bank Securities Inc., for itself and as representative of
              the several Initial Purchasers.

   4.9.9      Ninth Amendment to Loan and Security Agreement and Sixth Amendment to
              Guaranty and Security Agreement, dated as of December 9, 2013 among
              Headwaters, certain Headwaters subsidiaries and certain lenders named
              therein.

   99.1       Press release of Headwaters Incorporated dated as of December 10, 2013.


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