diff --git a/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java b/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java
index f6c25fe36dc..c1b7a2cccf8 100644
--- a/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java
+++ b/jps-plugin/src/org/jetbrains/jet/jps/build/KotlinBuilderModuleScriptGenerator.java
@@ -27,17 +27,13 @@ import org.jetbrains.jps.incremental.CompileContext;
 import org.jetbrains.jps.incremental.ModuleBuildTarget;
 import org.jetbrains.jps.incremental.messages.BuildMessage;
 import org.jetbrains.jps.incremental.messages.CompilerMessage;
-import org.jetbrains.jps.model.java.JpsAnnotationRootType;
-import org.jetbrains.jps.model.java.JpsJavaClasspathKind;
-import org.jetbrains.jps.model.java.JpsJavaDependenciesEnumerator;
-import org.jetbrains.jps.model.java.JpsJavaExtensionService;
+import org.jetbrains.jps.model.JpsDummyElement;
+import org.jetbrains.jps.model.java.*;
 import org.jetbrains.jps.model.library.JpsLibrary;
-import org.jetbrains.jps.model.library.JpsLibraryRoot;
+import org.jetbrains.jps.model.library.sdk.JpsSdk;
 import org.jetbrains.jps.model.module.JpsDependencyElement;
 import org.jetbrains.jps.model.module.JpsLibraryDependency;
-import org.jetbrains.jps.model.module.JpsModule;
 import org.jetbrains.jps.model.module.JpsSdkDependency;
-import org.jetbrains.jps.util.JpsPathUtil;
 
 import java.io.File;
 import java.io.IOException;
@@ -92,11 +88,8 @@ public class KotlinBuilderModuleScriptGenerator {
 
     @NotNull
     private static Collection<File> findClassPathRoots(@NotNull ModuleBuildTarget target) {
-        JpsModule module = target.getModule();
-        JpsJavaDependenciesEnumerator dependencies = JpsJavaExtensionService.dependencies(module).recursively().exportedOnly()
-                .includedIn(JpsJavaClasspathKind.compile(target.isTests()));
 
-        return dependencies.classes().getRoots();
+        return getAllDependencies(target).classes().getRoots();
     }
 
     @NotNull
@@ -114,20 +107,15 @@ public class KotlinBuilderModuleScriptGenerator {
 
     @NotNull
     private static List<File> findAnnotationRoots(@NotNull ModuleBuildTarget target) {
-        JpsModule module = target.getModule();
-        List<JpsDependencyElement> dependencies = module.getDependenciesList().getDependencies();
-
         List<File> annotationRootFiles = ContainerUtil.newArrayList();
-        for (JpsDependencyElement dependencyElement : dependencies) {
-            JpsLibrary library = getLibrary(dependencyElement);
-            if (library == null) continue;
 
-            List<JpsLibraryRoot> annotationRoots = library.getRoots(JpsAnnotationRootType.INSTANCE);
-            for (JpsLibraryRoot root : annotationRoots) {
-                File file = new File(JpsPathUtil.urlToPath(root.getUrl()));
+        JpsSdk<JpsDummyElement> sdk = target.getModule().getSdk(JpsJavaSdkType.INSTANCE);
+        if (sdk != null) {
+            annotationRootFiles.addAll(sdk.getParent().getFiles(JpsAnnotationRootType.INSTANCE));
+        }
 
-                annotationRootFiles.add(file);
-            }
+        for (JpsLibrary library : getAllDependencies(target).getLibraries()) {
+            annotationRootFiles.addAll(library.getFiles(JpsAnnotationRootType.INSTANCE));
         }
 
         // JDK is stored locally on user's machine, so its configuration, including external annotation paths
@@ -143,6 +131,12 @@ public class KotlinBuilderModuleScriptGenerator {
         return annotationRootFiles;
     }
 
+    @NotNull
+    private static JpsJavaDependenciesEnumerator getAllDependencies(@NotNull ModuleBuildTarget target) {
+        return JpsJavaExtensionService.dependencies(target.getModule()).recursively().exportedOnly()
+                    .includedIn(JpsJavaClasspathKind.compile(target.isTests()));
+    }
+
     @Nullable
     private static JpsLibrary getLibrary(@NotNull JpsDependencyElement dependencyElement) {
         if (dependencyElement instanceof JpsSdkDependency) {
diff --git a/jps-plugin/testData/ReexportedDependency/kotlinProject.iml b/jps-plugin/testData/ReexportedDependency/kotlinProject.iml
index 96db211cad3..d0e6f385eb5 100644
--- a/jps-plugin/testData/ReexportedDependency/kotlinProject.iml
+++ b/jps-plugin/testData/ReexportedDependency/kotlinProject.iml
@@ -5,7 +5,7 @@
     <content url="file://$MODULE_DIR$">
       <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
     </content>
-    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="inheritedJdk" />
     <orderEntry type="sourceFolder" forTests="false" />
     <orderEntry type="module" module-name="module3" />
   </component>
diff --git a/jps-plugin/testData/ReexportedDependency/kotlinProject.ipr b/jps-plugin/testData/ReexportedDependency/kotlinProject.ipr
index 15ec79bc197..79176c748e4 100644
--- a/jps-plugin/testData/ReexportedDependency/kotlinProject.ipr
+++ b/jps-plugin/testData/ReexportedDependency/kotlinProject.ipr
@@ -13,4 +13,19 @@
   <component name="ProjectRootManager" version="2" languageLevel="JDK_1_6" assert-keyword="true" jdk-15="true" project-jdk-name="IDEA_JDK" project-jdk-type="JavaSDK">
     <output url="file://$PROJECT_DIR$/out" />
   </component>
+  <component name="libraryTable">
+    <library name="lib">
+      <ANNOTATIONS>
+        <root url="file://$PROJECT_DIR$/module2/lib" />
+      </ANNOTATIONS>
+      <CLASSES>
+        <root url="file://$PROJECT_DIR$/module2/lib" />
+      </CLASSES>
+      <JAVADOC />
+      <SOURCES>
+        <root url="file://$PROJECT_DIR$/module2/lib" />
+      </SOURCES>
+    </library>
+  </component>
 </project>
+
diff --git a/jps-plugin/testData/ReexportedDependency/module2/lib/j/J.class b/jps-plugin/testData/ReexportedDependency/module2/lib/j/J.class
new file mode 100644
index 00000000000..7acb6f1e525
Binary files /dev/null and b/jps-plugin/testData/ReexportedDependency/module2/lib/j/J.class differ
diff --git a/jps-plugin/testData/ReexportedDependency/module2/lib/j/J.java b/jps-plugin/testData/ReexportedDependency/module2/lib/j/J.java
new file mode 100644
index 00000000000..bfa3c7fce0e
--- /dev/null
+++ b/jps-plugin/testData/ReexportedDependency/module2/lib/j/J.java
@@ -0,0 +1,9 @@
+package j;
+
+import java.lang.String;
+
+public class J {
+    public String foo() {
+        return "";
+    }
+}
\ No newline at end of file
diff --git a/jps-plugin/testData/ReexportedDependency/module2/lib/j/annotations.xml b/jps-plugin/testData/ReexportedDependency/module2/lib/j/annotations.xml
new file mode 100644
index 00000000000..fed8e0dba5a
--- /dev/null
+++ b/jps-plugin/testData/ReexportedDependency/module2/lib/j/annotations.xml
@@ -0,0 +1,5 @@
+<root>
+    <item name='j.J java.lang.String foo()'>
+        <annotation name='org.jetbrains.annotations.NotNull'/>
+    </item>
+</root>
\ No newline at end of file
diff --git a/jps-plugin/testData/ReexportedDependency/module2/module2.iml b/jps-plugin/testData/ReexportedDependency/module2/module2.iml
index cb508e885e9..053fd136108 100644
--- a/jps-plugin/testData/ReexportedDependency/module2/module2.iml
+++ b/jps-plugin/testData/ReexportedDependency/module2/module2.iml
@@ -5,9 +5,10 @@
     <content url="file://$MODULE_DIR$">
       <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
     </content>
-    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="inheritedJdk" />
     <orderEntry type="sourceFolder" forTests="false" />
-    <orderEntry type="library" name="KotlinRuntime" level="project" exported="" />
+    <orderEntry type="library" exported="" name="KotlinRuntime" level="project" />
+    <orderEntry type="library" exported="" name="lib" level="project" />
   </component>
 </module>
 
diff --git a/jps-plugin/testData/ReexportedDependency/module3/module3.iml b/jps-plugin/testData/ReexportedDependency/module3/module3.iml
index f15211f1c99..ec820d23084 100644
--- a/jps-plugin/testData/ReexportedDependency/module3/module3.iml
+++ b/jps-plugin/testData/ReexportedDependency/module3/module3.iml
@@ -5,7 +5,7 @@
     <content url="file://$MODULE_DIR$">
       <sourceFolder url="file://$MODULE_DIR$/src" isTestSource="false" />
     </content>
-    <orderEntry type="jdk" jdkName="IDEA_JDK" jdkType="JavaSDK" />
+    <orderEntry type="inheritedJdk" />
     <orderEntry type="sourceFolder" forTests="false" />
     <orderEntry type="module" module-name="module2" exported="" />
   </component>
diff --git a/jps-plugin/testData/ReexportedDependency/module3/src/m3.kt b/jps-plugin/testData/ReexportedDependency/module3/src/m3.kt
index 71200d6e0df..3310c2c0f0f 100644
--- a/jps-plugin/testData/ReexportedDependency/module3/src/m3.kt
+++ b/jps-plugin/testData/ReexportedDependency/module3/src/m3.kt
@@ -2,4 +2,7 @@ fun f() {
   JSecond()
   K2()
   println("Hi")
-}
\ No newline at end of file
+  takeNN(j.J().foo())
+}
+
+fun takeNN(a: Any) {}
\ No newline at end of file
diff --git a/jps-plugin/testData/ReexportedDependency/src/main.kt b/jps-plugin/testData/ReexportedDependency/src/main.kt
index 62660cffa29..da493d01c7d 100644
--- a/jps-plugin/testData/ReexportedDependency/src/main.kt
+++ b/jps-plugin/testData/ReexportedDependency/src/main.kt
@@ -3,4 +3,5 @@ fun main() {
   JSecond()
   K2()
   println("Hi")
+  takeNN(j.J().foo())
 }
\ No newline at end of file