FIRST AMENDMENT TO CONVERTIBLE NOTES AND WARRANTS
This First Amendment to Convertible Notes and Warrants ("Amendment") is
made as of January 28, 2006 by and among Composite Technology Corporation, a
Nevada corporation (the "Company") and the parties signatories to this Amendment
(each an "Investor," and collectively the "Investors," collectively with the
Company the "Parties") with reference to the following recitals:
RECITALS
Whereas, the Company and SRG Capital, LLC, Bushido Capital Master Fund,
LP, Gamma Opportunity Capital Partners LP Class A, Gamma Opportunity Capital
Partners LP Class C, Enable Growth Partners LP, Enable Opportunity Partners, LP
and Midsummer Investment, Ltd. entered into a Securities Purchase Agreement
dated as of September 23, 2005 (the "Convertible Note Purchase Agreement")
pursuant to which the Company issued a Senior Convertible Note dated October 13,
2005 (the "Convertible Note") and warrants to purchase the common stock of the
Company to each of the Investors (the "Convertible Note Warrants");
Whereas, the Company approached the Investors to enter into and the
Investors are entering into a settlement agreement to settle all of the
Company's obligations under the Convertible Note (the "Settlement");
Whereas, Section 17 of the Convertible Note and Section 9 of the
Convertible Note Warrants provide that a majority of the holders of the
Convertible Note and a majority of the holders of the Convertible Note Warrants
may amend the terms of the Convertible Note and the Convertible Note Warrants,
respectively, and that such amendment shall be applicable to all of the
Convertible Notes and Convertible Note Warrants;
Whereas, a majority of the holders of the Convertible Note and a
majority of the holders of the Convertible Note Warrants wish to amend the
Convertible Note and Convertible Note Warrants, respectively, as set forth in
this Amendment;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the Parties agree:
1. Amendment of Convertible Note. Section 29(p) of the Convertible Note
shall be amended by adding the following provision to the end of the first
paragraph:
"(vii) any shares issued to holders of the Convertible Note
pursuant to the Settlement Agreement entered into as of January 29, 2006 by and
between the Company and certain holders of the Convertible Note.."
2. Amendment of Convertible Note Warrants. Section 15(p) of the
Convertible Note Warrants shall be amended in its entirety to read as follows:
""SPA Securities" means the Notes, as amended, issued pursuant
to the Securities Purchase Agreement."
4. Consent. Each of the Investors hereby consents to the amendments to
the Convertible Note and the Convertible Note Warrants as set forth in this
Amendment.
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First Amendment to Convertible Notes And Warrants Page 1
5. Waiver. Each of the Investors hereby agrees that the provisions of
the Settlement Agreement and the consummation of the transactions set forth
herein shall not cause any default, price adjustments or other similar effects
in any other agreement or instrument (including, but not limited to the
Convertible Note Warrants) to which that Investor and the Company are parties,
and each of the Investors hereby waives any and all such effect to the extent
the provisions of the Settlement Agreement would cause such effect to which that
Investor and the Company are parties.
6. Condition to Amendment. This Amendment is conditioned upon and shall
be effective only upon the execution of this Amendment by holders of at least
two thirds (2/3) of the outstanding Convertible Notes.
7. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and which together shall constitute one
and the same instrument.
8. Facsimile Signatures. In the event that any signature is delivered
by facsimile transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page
were an original thereof. Signed Amendments sent to the Company by facsimile
must be sent to 0-000-000-0000.
[signature pages to follow]
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First Amendment to Convertible Notes And Warrants Page 2
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly
executed by their respective authorized signatories as of the date first
indicated above.
COMPANY:
COMPOSITE TECHNOLOGY CORPORATION
-----------------------------
By: Xxxxxx X Xxxxxxxx
Its: Chief Executive Officer
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
INVESTOR:
SRG CAPITAL, LLC
-----------------------------
By: Xxxx Xxxx
Its: Portfolio Manager
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
INVESTOR:
BUSHIDO CAPITAL MASTER FUND LP
-----------------------------
By: Xxxxxxxxxxx Xxxxxxx
Its: Managing Director
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
INVESTOR:
ENABLE GROWTH PARTNERS LP
-----------------------------
By: Xxxxxxx X'Xxxx
Its: Principal & Portfolio Manager
ENABLE OPPORTUNITY PARTNERS LP
-----------------------------
By: Xxxxxxx X'Xxxx
Its: Principal & Portfolio Manager
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
INVESTOR:
GAMMA OPPORTUNITY CAPITAL PARTNERS LP CLASS A
-----------------------------
By: Xxxxxxxxx X. Xxxxxx
Its: President/Director
GAMMA OPPORTUNITY CAPITAL PARTNERS LP CLASS C
-----------------------------
By: Xxxxxxxxx X. Xxxxxx
Its: President/Director
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
duly executed by their respective authorized signatories as of the date first
indicated above.
INVESTOR:
MIDSUMMER INVESTMENT, LTD
---------------------------------------
By: Midsummer Capital, its Investment Advisor
By: Xxxxx Xxxxxxx, Managing Director of
Midsummer Capital
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