CONTRIBUTION AND SUBSCRIPTION AGREEMENT



                                      AMONG



                             HEADWATERS INCORPORATED



                                       AND



                             AVINTAQUIN CAPITAL, LLC









                               September 24, 2001





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                     CONTRIBUTION AND SUBSCRIPTION AGREEMENT



         This CONTRIBUTION AND SUBSCRIPTION AGREEMENT, dated as of September 24,

2001, is made among Headwaters Incorporated, a Delaware corporation

("Headwaters") and Avintaquin Capital, LLC, a California limited liability

company (the "Company").



                                 R E C I T A L S



         WHEREAS Headwaters will contribute $400,000 in cash (the "Cash") and

transfer certain assets of Headwaters (the "Assets") as set forth in and

pursuant to the General Assignment and Bill of Sale (the "Bill of Sale") in the

form of Exhibit A hereto, in consideration for (i) 600 Class B Membership Units

of the Company (the "Class B Membership Units"), to be subscribed to by

Headwaters herein and (ii) a promissory note (the "Note") of the Company in the

principal amount of $4,000,000 substantially in the form attached hereto as

Exhibit B.



         WHEREAS the Company is willing to accept the Assets and issue the Units

and the Note to Headwaters as provided herein.



         NOW, THEREFORE, in consideration of the foregoing, the Company and

Headwaters hereby agree as follows:



                                    ARTICLE I

                           TRANSFER OF ASSETS AND CASH

                         AND SUBSCRIPTION FOR SECURITIES



         Section 1.1 Transfer of Assets. Headwaters hereby contributes the Cash

and transfers, assigns, conveys and sets over to and vests in the Company, and

the Company hereby accepts from Headwaters, as of the date hereof, all of the

right, title and interest of Headwaters in the Assets. Headwaters agrees to

execute and deliver to the Company on the Closing Date (as defined below) the

Bill of Sale.



         Section 1.2 Delivery of Note and Units. The Company agrees to deliver

the Note, a pledge agreement with respect to the Assets in the form attached

hereto as Exhibit C (the "Pledge Agreement") and the Class B Membership Units to

Headwaters on the Closing Date.



         Section 1.3 Closing. Upon the terms and subject to the conditions of

this Agreement, the closing of the transfer of the Assets, and the issuance of

the Class B Membership Units and the Note hereunder (the "Closing") shall take

place at the principal executive office of the Company within five (5) business

days following the execution and delivery of this Agreement by all of the

parties hereto (the date of the Closing hereunder being referred to as the

"Closing Date").



{PAGE}



         Section 1.4 Subscription to Securities. For the consideration set forth

in Article 2 hereof, Headwaters hereby subscribes to 600 Class B Membership

Units, with such rights and benefits as are set forth in the Operating Agreement

of the Company (the "Operating Agreement"), a copy of which is attached as

Exhibit D hereto.



         Section 1.5 Deliveries at Closing. At the Closing:



         (a)  Headwaters will deliver to the Company:



                  (i) the Bill of Sale, duly executed, transferring the Assets,

together with the original copies of all promissory notes, agreements, stock

certificates, warrants, documents and other instruments representing or relating

to the Assets;



                  (ii) certified copies of the resolutions duly adopted by the

board of directors of Headwaters authorizing on behalf of Headwaters the

execution, delivery and performance of this Agreement and the other agreements

contemplated hereby;



                  (iii) the duly executed Pledge Agreement;



                  (iv) a copy of the Operating Agreement duly executed by

Headwaters;



                  (v) such other instruments of sale, transfer, conveyance and

assignment as reasonably requested by the Company in connection with transfer to

the Company of good title to the Assets; and



                  (vi)  the Cash in immediately available U.S. funds.



         (b)  The Company will deliver to Headwaters:



                  (i) a duly executed certificate or certificates representing

the Class B Membership Units;



                  (ii) the duly executed Note;



                  (iii)  the duly executed Pledge Agreement; and



                  (iv) a copy of the Operating Agreement duly executed by the

members and managers of the Company.



                                    ARTICLE 2

                                  CONSIDERATION



         Section 2.1 Consideration. The Cash and the Assets transferred to and

accepted by the Company pursuant to Section 1.1 hereof shall be consideration

for the issuance by the Company to Headwaters, of the Class B Membership Units

and the Note.

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