DATED MAY 8, 2008 CREDIT SUISSE SECURITIES (EUROPE) LIMITED AND COMPOSITE TECHNOLOGY CORPORATION
DATED
MAY 8,
2008
CREDIT
SUISSE SECURITIES (EUROPE) LIMITED
AND
COMPOSITE
TECHNOLOGY CORPORATION
THIS AGREEMENT
is made
on May 8, 2008 (the “Effective Date”).
BETWEEN:
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(1)
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CREDIT
SUISSE SECURITIES (EUROPE) LIMITED,
a
company incorporated under the laws of the United Kingdom whose registered
office is at 0 Xxxxx Xxxxxx, Xxxxxx X00 0XX ("CS");
and
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|
(2)
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COMPOSITE
TECHNOLOGY CORPORATION,
a
corporation incorporated under the laws of the state of Nevada whose
registered office is at 0000 XxXxx Xxx, Xxxxxx, Xxxxxxxxxx 00000
("CTC").
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NOW
IT IS HEREBY AGREED AS FOLLOWS:
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1.
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Interpretation
and Construction
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(a)
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In
this Deed, unless the context otherwise requires, the following
expressions shall have the following
meanings:
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Business
Day
means a
day in London on which banks are open for business (excluding Saturday, Sunday
and public holidays);
Call
Option
has the
meaning set out in Clause 2;
Delivery
Date
means
the day that is five Business Days following the Exercise Date;
Exercise
Date
means
the Business Day on which the Call Option is exercised;
Exercise
Period
means
any Business Day from and including the date of this Deed to and including
the
Expiration Date;
Expiration
Date means
June 30, 2008;
Issue
Price
means a
price of US$0.88 per Share;
Shares
means
common stock of CTC, par value US$0.001 per share; and
Subscription Date
means
the date on which the subscription agreement in the agreed form, a copy of
which
is appended to this Deed (the “Subscription Agreement”), is executed by CS
pursuant to which CS agrees to subscribe for and CTC agrees to issue 13,333,333
Shares in consideration for the payment of US$10 million to CTC.
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(b)
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In
this Agreement, references to times are to London times.
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2.
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Call
Option
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(a)
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CS
agrees to subscribe for and CTC agrees to issue 13,333,333 Shares
in
consideration for the payment of US$10 million by CS to CTC on or
before
the Effective Date. Subject to the full execution of the Subscription
Agreement and CTC’s receipt of such US$10 million, CTC agrees to xxxxx XX
an option (the "Call Option") to subscribe for up to 45,454,544 Shares
at
the Issue Price on the terms of this Clause 2.
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2
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(b)
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The
Call Option is exercisable in cash in whole or in part or a series
of
parts (no less than 11,363,636 Shares in each instance and not to
exceed
in aggregate 45,454,544 million Shares) by notice in writing from
CS to
CTC given at any time during the Exercise Period, setting out the
number
of Shares which CS wishes to subscribe for. If the notice of exercise
is
delivered after 5.00 pm on a Business Day, then that notice will
be deemed
delivered on the next following Business Day, if any, during the
Exercise
Period.
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(c)
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On
exercise of the Call Option, CTC shall issue, and CS shall subscribe
for,
the relevant number of Shares notified to CTC pursuant to Clause
2(b).
On or before the Delivery Date against payment of the Issue Price
by CS in
cleared funds into the account specified by CTC on a delivery versus
payment basis, CTC shall cause to be delivered to CS valid share
certificates or other documents of title in respect of the Shares
and
shall procure that CS' name is entered on the share register of CTC
in
respect of the Shares so issued.
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(d)
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On
exercise of the Call Option, CTC shall issue the Shares free from
all
encumbrances, charges, pledges or mortgages and with all rights then
or
subsequently attaching to them.
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(e)
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Within
60 days of full exercise of the Call Option, CS shall have the right
to
designate a person that CTC agrees will be appointed to its Board
of
Directors, subject to its Board of Directors approval. CS agrees
that the
designee shall satisfy the criteria of an “independent director” as
defined by NASDAQ Marketplace Rule
4350.
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(f)
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For
the avoidance of doubt, CS shall be under no obligation to exercise
the
Call Option or to subscribe for any Shares other than the 13,333,333
Shares pursuant to the first sentence of Clause 2(a), and CTC shall
have
no right to require CS to exercise the Call Option or otherwise subscribe
for any Shares other than the 13,333,333 Shares pursuant to the first
sentence of Clause 2(a).
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3.
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Due
diligence
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(a)
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During
the Exercise Period, CS shall, subject to Clause 3(b), be granted
access
to the properties, senior management, records, documents and papers
of CTC
("CTC Information") to the extent necessary to perform sufficient
due
diligence on CTC such that CS may to the extent reasonably practicable,
make a fully informed decision regarding whether or not to exercise
the
Call Option. CS agrees to enter into a confidentiality agreement
with CTC
with respect to non-public information concerning CTC.
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(b)
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CTC
agrees that any CTC Information it provides to CS shall (i) be such
information as is already in the public domain prior to the Effective
Date
or (ii) be information that CTC can and does release into the public
domain following the Effective Date and in any event by no later
than one
(1) year following the Effective Date or (iii) is non-public information
which is not material to the business of CTC.
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3
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4.
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Time
of the essence
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Any
time,
date or period referred to in any provision of this Deed may be extended by
mutual agreement between the parties but as regards any time, date or period
originally fixed or any time, date or period so extended, time shall be of
the
essence.
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5.
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Interest
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If
CS or
CTC defaults in the payment when due of any sum payable under this Deed (whether
determined by agreement or pursuant to an order of a court or otherwise) the
liability of CS or CTC (as the case may be) shall be increased to include
interest on such sum from the date when such payment is due until the date
of
actual payment (as well after as before judgment) at a rate per annum of 2
per
cent. above the base rate from time to time of Barclays Bank plc. Such interest
shall accrue from day to day.
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6.
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Costs
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Each
party shall bear all legal and other costs or expenses incurred by it in
connection with the preparation of this Deed or the issue and subscription
for
the Shares.
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7.
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Confidentiality
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CS
and
CTC agree to keep confidential the terms of this Deed and agree that no public
announcement or communication relating to the matters the subject of this Deed
which contains a reference to CS and CTC or their affiliates shall be issued
or
dispatched without prior approval of the other party; provided that the
foregoing provisions shall not apply to any disclosure, announcement or
communication required by laws, regulations, any court of competent jurisdiction
or regulatory body lawfully entitled to require such disclosure, including
without limitation the United States Securities and Exchange Commission. The
parties will agree to the content of any press releases consistent with the
above confidentiality requirements.
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8.
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Notices
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(a)
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Any
notice served hereunder shall be in writing and in the English language
and shall be sufficiently served
if:
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(i)
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delivered
by hand or sent by pre-paid registered mail or courier addressed
to the
other party concerned at the address of the relevant party as set
out in
this Deed or to such other address as any party may from time to
time
notify to the other party for this purpose, and any such notice shall
be
deemed to be received at the time of delivery (if delivered by hand
or
courier) or at the expiry of three clear days after the day of posting
(if
sent by pre-paid registered mail or courier);
or
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(ii)
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sent
by facsimile transmission to the other party concerned at the facsimile
number of the relevant party as set out in this Deed or to such other
facsimile number as any party may from time to time notify to the
other
party for this purpose, and a notice so sent by facsimile transmission
during normal business hours shall be deemed to be received upon
receipt
of the appropriate confirmation at the end of such
transmission.
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4
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(b)
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For
the purpose of giving notice the addresses and facsimile numbers
of the
respective parties are as follows:
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In
the
case of CTC to it at:
Address:
0000
XxXxx Xxx, Xxxxxx, Xxxxxxxxxx 00000
Facsimile
number:
(000)
000-0000
marked
for the attention of Xxxxxx X Xxxxxxxx, Chief Executive Officer.
In
the
case of CS to it at:
Address:
0
Xxxxx
Xxxxxx, Xxxxxx X00 0XX
Facsimile
number:
x00
(0)00 0000 0000
marked
for the attention of Xxxxx Xxxxxxxx/Xxxxxxx Xxxx.
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9.
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Assignment
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The
benefit of this Deed may not be assigned by either party hereto without the
consent of the other party.
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10.
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Miscellaneous
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This
Deed
may be executed in any number of counterparts and by the parties hereto on
separate counterparts, each of which when so executed and delivered shall be
an
original, but all the counterparts shall together constitute one and the same
instrument.
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(a)
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No
failure on the part of any party to exercise, and no delay on its
part in
exercising, any right or remedy under this Deed will operate as a
waiver
thereof nor will any single or partial exercise of any right or remedy
preclude any other or further exercise thereof or the exercise of
any
other right or remedy. The rights and remedies provided in this Deed
are
cumulative and not exclusive of any rights or remedies provided by
law.
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(b)
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Any
variation of this Deed is only valid if in writing and signed by
or on
behalf of each party.
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11.
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Third
Parties
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No
term
of this Deed is enforceable under the Contracts (Rights of Third Parties) Xxx
0000 by a person who is not a party to this Deed.
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12.
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Governing
Law and Jurisdiction
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This
Deed
shall be governed by, and construed in accordance with, the laws of England
and
the parties hereby agree to submit to the non-exclusive jurisdiction of the
English courts.
5
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Signed
by CREDIT
SUISSE SECURITIES
(EUROPE)
LIMITED acting
by
____________________
a director,
in
the presence of:
Name:
______________________
Address:
__________________________
_________________________________
Occupation:
____________________
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…………………………..
(Director)
..........................................
(Witness)
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Signed
by COMPOSITE
TECHNOLOGY
CORPORATION
acting by
Xxxxxx
X Xxxxxxxx
Chief
Executive Officer
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…………………………..
(Chief
Executive Officer)
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6
APPENDIX
FINAL
FORM SUBSCRIPTION AGREEMENT
7
