CONVERSION AGREEMENT
CONVERSION AGREEMENT (the "Agreement"), dated as of September 5, 2006, by
and among Composite Technology Corporation, a Nevada corporation, with
headquarters located at 0000 XxXxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000 (the
"Company"), and [Investor] (the "Buyer"). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the
Purchase Agreement (as defined below).
WHEREAS:
A. On or about March 3, 2006, the Company sold to the Buyer and to certain
other buyers party to the Purchase Agreement (the "Other Buyers" and together
with the Buyer, the "Buyers") certain senior secured convertible notes of the
Company, which notes (the "Notes") are convertible into the Company's common
stock, par value $0.001 per share (the "Common Stock"), at $1.55 per share in
accordance with the terms of the Notes, and certain warrants to purchase Common
Stock designated as "Series A Warrants" and "Series B Warrants" pursuant to a
Securities Purchase Agreement dated as of March 2, 2006 by the Company and the
Buyers ("Purchase Agreement").
B. The Notes provide that the conversion price may be decreased upon
issuances of Common Stock and other securities of the Company for a price less
than $1.55 per share.
C. Contemporaneously with the execution and delivery of the Purchase
Agreement, the parties executed a Registration Rights Agreement, (the
"Registration Rights Agreement") pursuant to which the Company provided certain
registration rights to the Buyers with respect to the securities issued pursuant
to the Purchase Agreement.
D. Contemporaneous with the execution and delivery of the Purchase
Agreement, the parties executed a Security Agreement (the "Security Agreement"),
pursuant to which the Company and each Company Subsidiary (as defined in below)
agreed to grant a security interest in the assets of the Company and such
Company Subsidiary (as defined below), to secure the obligations of the Company
to the Buyers.
E. Contemporaneous with the execution and delivery of the Purchase
Agreement, each of CTC Cable Corporation, a Nevada corporation, CTC Wind Systems
Corporation, a Nevada corporation, Transmission Technology Corporation, a Nevada
corporation, and CTC Towers & Poles Corporation, a Nevada corporation (each a
"Company Subsidiary" and collectively the "Company Subsidiaries") each a
wholly-owned Subsidiary (as defined in the Purchase Agreement) of the Company,
executed a Guaranty (each a "Guaranty"), guaranteeing the obligations of the
Company to the Buyers.
F. Contemporaneous with the execution and delivery of the Purchase
Agreement, the parties executed a Pledge Agreement (the "Pledge Agreement")
pursuant to which the Company has agreed to pledge all of the equity of each
Company Subsidiary.
G. Contemporaneous with the execution and delivery of the Purchase
Agreement, Xxxxxx Xxxxxxxx and the Buyers executed a letter agreement ("Wilcoxon
Letter Agreement") and Wilcoxon and the Collateral Agent executed a Pledge
Agreement with respect to shares of Common Stock owned by Xxxxxx Xxxxxxxx (the
"CEO Shares Pledge Agreement," and together with the Security Agreement, the
Guaranties, the Wilcoxon Letter Agreement and the Pledge Agreement, the
"Security Documents").
H. The Buyer intends to, in accordance with the terms specified herein:
(a) waive all accrued interest under the Notes, (b) waive certain price-based,
anti-dilution rights under Sections 6 and 7 of the Notes and waive certain
price-based, anti-dilution rights with respect to some or all of the Series A
Warrants, (c) waive any and all claims against the Company under the Transaction
Documents (as defined in the Purchase Agreement) for events or actions prior to
and including September 8, 2006, (d) release the Company's CEO, the Company, the
Company Subsidiaries and/or the applicable collateral under the CEO Share Pledge
Agreement and the Pledge Agreement and (e) release the Company, its CEO and/or
the Company Subsidiaries under the Security Agreement, Wilcoxon Letter
Agreement, and the Guaranty with respect to the Buyer's Notes.
I. In exchange for such actions, the Company intends to issue additional
shares of Common Stock as set forth in Schedule 1 of this Agreement.
J. The Buyer wishes to convert some or all of the Notes held by the Buyer
into shares of Common Stock pursuant to the terms of such Note.
NOW, THEREFORE, the Company and the Buyer hereby agree as follows:
(1) WAIVER AND TERMINATION. Upon receipt of the securities set forth in Section
2 below, the Company and the Buyer, as applicable, hereby agree as follows:
(a) The Buyer waives all claims to accrued interest under the
Note held by the Buyer. Effective upon conversion and/or payment in full
of all obligations under all of the Notes held by the Buyers, the Buyer
hereby agrees that Section 6 and 7(a) of the Note held by the Buyer shall
immediately terminate. The Buyer hereby waives its rights under Section
2(a) of the Series A Warrants held by the Buyer in proportion to the
principal amount of Notes being converted under this Agreement compared to
the aggregate principal amount of Notes held by the Buyer, but solely with
respect to the transactions contemplated by this Agreement. For example,
if the Buyer holds Series A Warrants to purchase 100 shares of Common
Stock and converts 75% of the principal amount under the Note held by the
Buyer into Conversion Shares, then the Buyer will waive its rights under
Section 2(a) of the Buyer's Series A Warrants with respect to warrants to
purchase 75 shares of Common Stock. Notwithstanding the foregoing, nothing
in this Agreement shall in any way be deemed to be an amendment or waiver
with respect to Section 2(a) of the Series A Warrants for any future
transactions and nothing in this Agreement shall in any way be deemed to
amend or waive any other provision of the Series A Warrants or to amend or
waive any provisions of the Series B Warrants.
(b) Effective upon conversion and/or payment in full of all
obligations under all Notes, the Company and the Buyer hereby release: (i)
the Company's CEO from his obligations under the CEO Pledge Agreement and
(ii) the Company from its obligations under the Pledge Agreement.
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(c) Effective upon conversion and/or payment in full of all
obligations under all Notes, the Buyer shall release: (i) the Company's
collateral under the Security Agreement, (ii) the Company Subsidiaries
from all obligations under the Guaranty and (iii) the Company CEO and his
pledged stock under the Wilcoxon Letter Agreement.
(d) Effective upon conversion and/or payment in full of all
obligations under all Notes, the Buyer and the Company, as applicable,
agree to take all further actions reasonably necessary to cause the
release of any and all collateral under the Security Agreements, including
without limitation, (i) termination of UCC financing statements and (ii)
delivery of any stock certificates representing pledged securities of the
Company and any of its subsidiaries to the respective pledgor.
(e) For the avoidance of doubt, the Company hereby represents
and warrants to the Buyer that nothing contained herein shall amend or act
as a waiver as to any provisions of the Registration Rights Agreement,
except that Buyer hereby waives 75% of the Registration Delay Payments (as
defined in the Registration Rights Agreement) accrued prior to and
including September 8, 2006, and that any Conversion Shares issued
hereunder shall continue to be subject to the registration rights granted
by the Company pursuant to the terms of the Registration Rights Agreement
and that the registration statement previously filed by the Company, once
such registration statement is declared effective by the SEC, will
register such Conversion Shares.
(2) ISSUANCE OF SHARES.
(a) In consideration of the waiver of the rights set forth in
Section 1 above and the release of Company-affiliated parties' obligations
under the Security Agreements in accordance with the provisions specified
above, the Company shall issue at Closing to the Buyer that number of
shares of Common Stock ("Waiver Shares") set forth in Schedule 1 attached
hereto.
(b) The Buyer understands that until such time as the resale
of the Waiver Shares have been registered under the 1933 Act, the stock
certificates representing Waiver Shares, except as set forth below, shall
bear any legend as required by the "blue sky" laws of any state and a
restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock
certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.
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The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the securities upon which
it is stamped, if, unless otherwise required by state securities laws, (i)
such securities are registered for resale under the 1933 Act, (ii) in
connection with a sale, assignment or other transfer, such holder provides
the Company with an opinion of counsel, in a generally acceptable form, to
the effect that such sale, assignment or transfer of the Securities may be
made without registration under the applicable requirements of the 1933
Act, or (iii) such holder provides the Company with reasonable assurance
that the Securities can be sold, assigned or transferred pursuant to Rule
144 or Rule 144A.
(3) CONVERSION; REPAYMENT.
(a) Procedure. The Buyer shall convert the principal amount of
Notes held by the Buyer specified in Schedule 1 into shares of Common
Stock pursuant to Section 3 of the Note, by delivering the executed notice
of conversion to the Company at the Closing in the form attached to the
Note as Exhibit I thereto (the "Conversion Notice"). The Waiver Shares and
the applicable Conversion Shares shall be issued to the Buyer upon receipt
of the applicable notice of conversion from the Buyer. Upon receipt of the
notice of conversion, the Company shall deliver the converted shares of
Common Stock and the Waiver Shares to the Buyer at the address specified
in the conversion notice. Buyer acknowledges that the Conversion Shares
will bear a legend set forth in Section 2(g) of the Purchase Agreement
until such legend may be removed under the conditions set forth in said
section.
(b) Repayment. Any portion of the Notes that have not been
converted into shares of Common Stock shall be repaid in cash as per the
terms of the Note.
(c) Closing. The date and time of the closing (the
"Closing")of the transactions specified in Sections 1 through 3 above (the
"Closing Date") shall be 1:00 p.m., New York City Time, on September 6,
2006 (or such later date as is mutually agreed to by the Company and the
Buyer) after notification of satisfaction (or waiver) at the offices of
Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. At
Closing, (i) the Buyer shall deliver to the Company the Conversion Notice
electing to convert the principal amount of Notes held by the Buyer
specified in Schedule 1 attached hereto, and (ii) the Company shall
simultaneously cause to be delivered to the Buyer facsimile copies of the
stock certificates representing the Conversion Shares and Waiver Shares.
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(4) REGISTRATION RIGHTS.
(a) Piggyback Registration. After the date hereof, if the
Company proposes to register (including for this purpose a registration
statement effected by the Company for shareholders) any of its stock or
other securities under the 1933 Act (other than a registration relating
solely to the sale of securities to participants in a Company employee
stock or similar plan on Form S-8 and an exchange registration on Form
S-4) the Company shall, cause in such registration to be registered under
the 1933 Act all of the securities issued pursuant to Section 2
("Registrable Settlement Securities").
(b) Demand Registration. In the event that the Company does
not file a registration statement registering the Registrable Securities
under Section 2 within 180 days of this Agreement, the Company and the
Buyer shall promptly execute and deliver a registration rights agreement
with respect to the Registrable Settlement Securities in substantially the
same form as the Registration Rights Agreement, which such registration
rights agreement shall require the Company to file with the SEC a
registration statement on Form S-1 or Form S-3 covering the resale of all
of the Registrable Settlement Securities (or such other appropriate form
if Form S-1 or Form S-3 is unavailable for such a registration) on the
terms specified in the Registration Rights Agreement.
(5) REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Buyer Bring Down. The Buyer hereby represents and warrants
to the Company with respect to itself only as set forth in Section 2 of
the Purchase Agreement as to this Agreement as if such representations and
warranties were made as of the date hereof and set forth in their entirety
in this Agreement, except with respect to the representation set forth in
Section 2(k) of the Purchase Agreement, the Buyer is making such
representation hereby from the time the Buyer was approached with the
prospect of this Agreement and the transactions contemplated hereby until
the Conversion Agreement 8-K Filing (as defined below) and not for any
other time periods. Such representations and warranties in the Purchase
Agreement to the transactions thereunder and the securities issued thereby
are hereby deemed for purposes of this Agreement to be references to the
transactions hereunder and the issuance of the Conversion Shares and
Registrable Settlement Securities hereby.
(b) Company Representations and Warranties.
i) Organization and Qualification. The Company and its
"Subsidiaries" (which for purposes of this Agreement means any
entity in which the Company, directly or indirectly, owns capital
stock or holds an equity or similar interest) are entities duly
organized and validly existing in good standing under the laws of
the jurisdiction in which they are formed, and have the requisite
power and authority to own their properties and to carry on their
business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign entity to do business
and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Agreement, "Material Adverse Effect"
means any material adverse effect on the business, properties,
assets, operations, results of operations, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken
as a whole, or on the transactions contemplated hereby and the other
Transaction Documents or by the agreements and instruments to be
entered into in connection herewith or therewith, or on the
authority or ability of the Company to perform its obligations under
the Transaction Documents (as defined below). The Company has no
Subsidiaries except as set forth on Schedule 3(a).
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ii) Authorization; Enforcement; Validity. The Company
has the requisite power and authority to enter into and perform its
obligations under this Agreement and to issue the Conversion Shares
and Registrable Settlement Securities in accordance with the terms
hereof. The execution and delivery of the Agreement by the Company
and the consummation by the Company of the transactions contemplated
hereby, including, without limitation, the issuance of the
Conversion Shares and Registrable Settlement Securities, have been
duly authorized by the Company's Board of Directors and no further
filing, consent, or authorization is required by the Company, its
Board of Directors or its stockholders, except for the filing of the
Conversion Agreement 8-K Filing and the registration statement(s)
contemplated by Section 4 hereunder. This Agreement has been duly
executed and delivered by the Company, and shall constitute the
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of applicable creditors' rights and
remedies.
iii) Issuance of Securities. The issuance of the
Conversion Shares and Registrable Settlement Securities are duly
authorized and are free from all taxes, liens and charges with
respect to the issue hereof. Subject to the accuracy of the Buyer's
representations and warranties in Section 2 of this Agreement, the
offer and issuance by the Company of the Conversion Shares and
Registrable Settlement Securities in conformity with the terms of
this Agreement constitute transactions is exempt from registration
under the 1933 Act.
iv) No Conflicts. The execution, delivery and
performance of the Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance of the Conversion
Shares and Registrable Settlement Securities) will not (i) result in
a violation of the Articles of Incorporation of the Company or any
of its Subsidiaries or Bylaws of the Company or any of its
Subsidiaries or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a
default) under, or result in termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and the
rules and regulations of the NASD's OTC Bulletin Board (the
"Principal Market") applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any
of its Subsidiaries is bound or affected, except in the case of
clauses (ii) and (iii) for any such conflicts, violations or
defaults which are reasonably likely to have a Material Adverse
Effect.
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v) Consents. The Company is not required to obtain any
consent, authorization or order of, or make any filing or
registration with, any court, governmental agency or any regulatory
or self-regulatory agency or any other Person in order for it to
execute, deliver or perform any of its obligations under or
contemplated by the Agreement, in each case in accordance with the
terms hereof, except for post closing securities filings or
notifications to be made under federal or state securities laws. All
consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence
have been obtained or effected on or prior to the Closing Date,
except for the filing with the SEC of one or more Registration
Statements in accordance with the requirements of the Registration
Rights Agreement. The Company and its Subsidiaries are unaware of
any facts or circumstances which might prevent the Company from
obtaining or effecting any of the registration, application or
filings pursuant to the preceding sentence. The Company is not in
violation of the applicable listing requirements of the Principal
Market and has no knowledge of any facts which would reasonably lead
to delisting or suspension of the Common Stock. The issuance by the
Company of the Conversion Shares and Registrable Settlement
Securities shall not have the effect of delisting or suspending the
Common Stock from the Principal Market. SEC Documents; Financial
Statements.
vi) SEC Documents; Financial Statements. During the two
(2) years prior to the date hereof, the Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial
statements, notes and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the "SEC
Documents"). The Company has delivered to the Buyers or their
respective representatives true, correct and complete copies of the
SEC Documents not available on the XXXXX system. As of their
respective filing dates, the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were
filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading. As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as
to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the
extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the
financial position of the Company as of the dates thereof and the
results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end
audit adjustments). No other information provided by or on behalf of
the Company to the Buyers in connection with the transactions
contemplated hereby which is not included in the SEC Documents,
contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein,
in the light of the circumstance under which they are or were made,
not misleading.
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(c) Disclosure of Transactions and Other Material Information.
On or before 2:00 p.m., New York Time, on September 6, 2006, the Company
shall file a Current Report on Form 8-K describing the terms of the
transactions contemplated by this Agreement in the form required by the
1934 Act and attaching this Agreement (including, without limitation, all
schedules and exhibits to this Agreement), (including all attachments, the
"Conversion Agreement 8-K Filing"). From and after the filing of the
Conversion Agreement 8-K Filing with the SEC, the Buyer shall not be in
possession of any material, nonpublic information received from the
Company or any of its Subsidiaries, or any of its respective officers,
directors, employees or agents, that is not disclosed in the Conversion
Agreement 8-K Filing. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors,
employees and agents, not to, provide the Buyer with any material,
nonpublic information regarding the Company or any of its Subsidiaries
from and after the filing of the Conversion Agreement 8-K Filing with the
SEC without the express prior written consent of the Buyer. In the event
of a breach of the foregoing covenant by the Company or any of its
Subsidiaries, or any of its or their respective officers, directors,
employees and agents, in addition to any other remedy provided herein, a
Buyer shall have the right to make a public disclosure, in the form of a
press release, public advertisement or otherwise, of such material,
nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors,
employees or agents. No Buyer shall have any liability to the Company, its
Subsidiaries, or any of its or their respective officers, directors,
employees, stockholders or agents, for any such disclosure. Subject to the
foregoing, neither the Company, its Subsidiaries nor the Buyer shall issue
any press releases or any other public statements with respect to the
transactions contemplated hereby; provided, however, that the Company
shall be entitled, without the prior approval of the Buyer, to make any
press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the Conversion Agreement 8-K Filing and
contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) the Buyer shall be
consulted by the Company in connection with any such press release or
other public disclosure prior to its release).
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(6) CONDITIONS TO COMPANY'S OBLIGATIONS HEREUNDER.
The obligations of the Company to the Buyer hereunder are subject to
the satisfaction of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing the Buyer with prior written
notice thereof:
(a) The Buyer shall have executed this Agreement and delivered
the same to the Company.
(b) The Buyer shall have delivered to the Company the
Conversion Notice.
(c) The representations and warranties of the Buyer shall be
true and correct in all material respects (except for those
representations and warranties that are qualified by materiality or
Material Adverse Effect, which shall be true and correct in all respects)
as of the date when made and as of the Closing Date as though made at that
time (except for representations and warranties that speak as of a
specific date).
(7) CONDITIONS TO BUYER'S OBLIGATIONS HEREUNDER.
The obligations of the Buyer hereunder are subject to the
satisfaction of each of the following conditions, provided that these conditions
are for the Buyer's sole benefit and may be waived by the Buyer at any time in
its sole discretion by providing the Company with prior written notice thereof:
(a) The Company shall have executed this Agreement and
delivered the same to the Buyer.
(b) The Company shall have, contemporaneously with the
Closing, delivered (or shall have its transfer agent deliver) to the Buyer
a facsimile copy of the Waiver Shares and Conversion Shares that will be
delivered to the Buyer within 48 hours after Closing.
(c) The representations and warranties of the Company under
this Agreement shall be true and correct in all material respects (except
for those representations and warranties that are qualified by materiality
or Material Adverse Effect, which shall be true and correct in all
respects) as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as
of a specific date) and the Company shall have performed, satisfied and
complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or
complied with by the Company at or prior to the Closing Date and no
Default or Event of Default shall have occurred and be continuing on the
date hereof either immediately before or after giving effect to this
Agreement in accordance with its terms.
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(d) The Common Stock (I) shall be designated for quotation or
listed on the Principal Market (as defined in the Purchase Agreement) and
(II) shall not have been suspended, as of the Closing Date, by the SEC or
the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened, as of
the Closing Date, either (A) in writing by the SEC or the Principal Market
or (B) by falling below the minimum listing maintenance requirements of
the Principal Market.
(8) TERMINATION.
In the event that the Closing does not occur by September 7, 2006,
due to the Company's or the Buyer's failure to satisfy the conditions set forth
in Sections 6 and 7 hereof (and the nonbreaching party's failure to waive such
unsatisfied conditions(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party. Upon
such termination, the terms hereof shall be null and void and the parties shall
continue to comply with all terms and conditions of the Transaction Documents,
as in effect prior to the execution of this Agreement.
(9) MISCELLANEOUS.
(a) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New
York.
(b) Counterparts. This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party; provided that a
facsimile signature shall be considered due execution and shall be binding
upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire Agreement; Amendments. This Agreement shall
supersede all other prior oral or written agreements among the Buyer, the
Company, their affiliates and persons acting on their behalf with respect
to the matters discussed herein and therein, and this Agreement, and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein. No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Buyer, and any amendment to this
Agreement made in conformity with the provisions of this Section 5(e)
shall be binding on the Buyer and the Company. No provision hereof may be
waived other than by an instrument in writing signed by the party against
whom enforcement is sought.
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(f) Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii)
one Business Day after deposit with an overnight courier service, in each
case properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:
If to the Company:
Composite Technology Corporation
0000 XxXxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
If to the Buyer, to its address and facsimile number set forth on the
Schedule of Buyers attached to the Purchase Agreement, with copies to the
Buyer's representatives as set forth in the Purchase Agreement, or to such
other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by
the recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the
first page of such transmission or (C) provided by an overnight courier
service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with
clause (i), (ii) or (iii) above, respectively.
(g) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of the Notes or the
Warrants.
(h) No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
(i) Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates,
instruments and documents, as any other party may reasonably request in
order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby,
including without limitation, delivery of any stock certificates of any
pledged securities to the pledgor.
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(j) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be
applied against any party.
(k) Independent Nature of Buyer's Obligations and Rights.
Nothing contained herein, and no action taken by the Buyer pursuant hereto
or thereto, shall be deemed to constitute the Buyer and any Other Buyer as
a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Buyer is in any way acting in
concert or as a group with any Other Buyer with respect to such
obligations. The Buyer confirms that it has independently participated in
the negotiation of the transaction contemplated hereby with the advice of
its own counsel and advisors. The Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement, and it shall not be necessary for any Other
Buyer to be joined as an additional party in any proceeding for such
purpose.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Conversion Agreement to be duly executed as of the date
first written above.
COMPANY:
COMPOSITE TECHNOLOGY CORPORATION
By:
------------------------------
Name:
Title:
IN WITNESS WHEREOF, the Buyer and the Company have caused their
respective signature page to this Conversion Agreement to be duly executed as of
the date first written above.
BUYER:
[INVESTOR]
By:
------------------------------
Name:
Title:
