AGREEMENT
This Agreement made and entered into this 23rd day of September 2005, by
and between the City of Kingman, Kansas, a Municipal Corporation, party of the
First Part, sometimes hereinafter referred to as "First Party" and Composite
Technology Corporation, a Nevada Corporation, party of the Second Part,
sometimes hereinafter referred to as "Second Party".
WHEREAS, on or about November 11, 2003, First Party and Second Party
entered into an agreement, hereinafter referred to as "Kingman Agreement,"
whereby Second Party would provide various goods and services to First Party for
specified sums of money with said terms and conditions more fully set forth in
said agreement.
WHEREAS, on or about May 5, 2005, Second Party filed Chapter 11 bankruptcy
proceedings in the United States Bankruptcy Court, Central District of
California, Santa Xxx Division, Case No. 05-13107 JR.
WHEREAS, in said bankruptcy plan and subsequent amended plans filed in
said proceedings (collectively the "Plan), Second Party has proposed to reject
the Kingman Agreement entered into by Second Party with First Party.
WHEREAS, the parties desire to reach an agreement whereby certain goods
and services can be provided by Second Party and paid for by First Party in an
effort to maintain a business relationship between the parties.
WHEREAS, if said parties can reach such agreement, then First Party, upon
conditions set forth hereafter, will release any right, title, and interest to
pursue claims in said bankruptcy proceedings. The parties hereto do hereby agree
as set forth hereafter.
The parties, based upon the mutual covenants, consideration, and terms and
conditions hereinafter set forth, agree as follows:
1. The parties state and agree that all terms and conditions of this
Agreement shall be conditioned upon the signature of the parties hereto,
approval of this Agreement by the Bankruptcy Court, confirmation of the Chapter
11 Plan, and performance of the obligations by the parties stated herein. This
Agreement is void if not approved by the Bankruptcy Court on or before November
1, 2005.
2. Second Party agrees to supply First Party with 369,600 feet (70 lineal
miles) of Hawk size finished conductor for $883,334 less 5% = $839,167
(difference of $44,167) ("Cable"). The Cable shipping charges will be paid by
the Second Party and shipped to First Party by Second Party within ninety (90)
days of receipt of First Party's purchase order. First Party's purchase order
shall be prepared on Second Party's standard purchase order form for products of
this type. Second Party will also provide 240 dead-ends, 70 splices, and 1,368
FCI Armor-Rods (collectively "Hardware") at $350/each, $415/each, and $32/each,
respectively, for a total of $156,826 less 5% = $148,985 (difference of $7,841).
The charges for delivery of this Hardware will be paid by the Second Party. The
total amount of the purchase order from First Party to Second Party (for the
Cable $839,167 and Hardware $148,985) shall be credited by Second Party for the
amount of $14,750 for past considerations. The Hardware will be delivered no
later than ninety (90) days of the purchase order of the above-referenced Cable
with payment terms of net 10 days from date of delivery.
1
3. First Party will pay for Cable and Hardware above referenced upon
receipt of said Cable and Hardware from Second Party. The amount to be paid is
set forth in Paragraph 2 above.
4. Second Party will provide up to $30,000 in on-site engineering and
technical services and expenses during the installation period. These services
shall be supplied at Second Party's standard charges for its personnel and
actual costs incurred by the Second Party for sub-contract charges. Expenses
shall be actual expenses incurred by Second Party personnel and actual expenses
incurred by any sub-contractors selected by Second Party. First Party shall not
have any right to independently incur any charges at Second Party's liability.
Construction change orders are not included in this $30,000 amount, and any such
change orders will be at Kingman's sole expense.
5. Actual material requirements, as stated above, have already taken into
account an increase in quantities (including Hardware spares) which have all
been discounted by 5% to reflect Second Party's willingness to contribute up to
5% spare parts at no charge to First Party. The First Party is authorized to
purchase additional cable and products as a direct factory purchaser for its use
only.
6. Second Party shall warrant and defend First Party against any type of
defects or damages relating to the Cable or Hardware above referenced once said
Cable and Hardware are installed for a period of one year after the Cable is
energized.
7. The parties agree that this Agreement shall be controlled by Kansas
law.
8. Pending Bankruptcy Court Approval of this Agreement, confirmation of
the Chapter 11 Plan, and performance of the obligations by the parties stated
herein, the First Party reserves its right under the Bankruptcy Code to file a
proof of claim for damages allegedly arising from rejection of the Kingman
Contract (`Rejection Claim") and the First Party reserves all defenses it has to
defend against such Rejection Claim. The Rejection Claim is conditioned upon the
signature of the parties hereto, approval of this Agreement by the Bankruptcy
Court, confirmation of the Chapter 11 Plan, and performance of the obligations
by the parties stated herein. In the event that the Rejection Claim is filed,
upon Bankruptcy Court approval of this Agreement and confirmation of the Plan,
such Rejection Claim shall be automatically deemed withdrawn and waived without
any further action on any of the parties to this Agreement and without further
notice, hearing or Bankruptcy Court order. In other words, in the event the
Rejection Claim is filed, upon Bankruptcy Court Approval of this Agreement and
confirmation of the Plan, the First Party acknowledges and understands that it
shall not be entitled to payment or a distribution from the Second Party's
Bankruptcy Estate on account of the Rejection Claim.
9. Except as otherwise expressly stated or reserved in this Agreement and
conditioned upon performance of the obligations stated herein, the First Party
and their officers, directors, agents, employees, attorneys or representatives,
and their predecessors and successors, in law or in equity, (collectively, the
"Kingman Parties"), hereby release and forever discharge the Second Party and
the Second Party's Bankruptcy Estate and their officers, directors, agents,
employees, attorneys, insurers, representatives, and their predecessors and
successors, in law or in equity (collectively, the "Debtor Parties"), from any
and all actions, proceedings, obligations, liabilities, claims for relief,
prayers for relief, demands, causes of action, damages, liabilities, damages,
losses, costs and expenses and other claims (collectively "Claims") which the
Kingman Parties might or could assert against the Debtor Parties, or any member
thereof, which arise out of, are connected with, or are incidental to the
Kingman Agreement.
2
The Kingman Parties hereby acknowledge the provisions of California Civil
Code section 1542, which states: A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. With respect to the
general releases of Claims, the Kingman Parties hereby waive any and all
rights which may be conferred upon them by virtue of Civil Code section
1542 or any similar provision or body of law. In this regard, the Kingman
Parties acknowledge that facts in addition to or different from those
which are now known or believed to exist may hereafter be discovered with
respect to the subject matter of the Claims and that the releases of
Claims will remain fully enforceable notwithstanding such discovery.
10. Except as otherwise expressly stated or reserved in this Agreement and
conditioned upon performance of the obligations stated herein, the Debtor
Parties hereby release and forever discharge the Kingman Parties from any and
all actions, proceedings, obligations, liabilities, claims for relief, prayers
for relief, demands, causes of action, damages, liabilities, damages, losses,
costs and expenses and other claims (collectively "Claims") which the Debtor
Parties might or could assert against the Kingman Parties, or any of them, which
arise out of, are connected with, or are incidental to the Kingman Agreement.
The Debtor Parties hereby acknowledge the provisions of California Civil
Code section 1542, which states: A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. The Debtor Parties
hereby waive any and all rights which may be conferred upon them by virtue
of Civil Code section 1542 or any similar provision or body of law. In
this regard, the Debtor Parties acknowledge that facts in addition to or
different from those which are now known or believed to exist may
hereafter be discovered with respect to the subject matter of the Claims,
and that the releases of Claims hereof will remain fully enforceable
notwithstanding such discovery.
11. This Agreement contains the sole, complete and entire agreement and
understanding of the parties concerning the matters contained herein and may not
be altered, modified, or changed in any manner except by a writing duly executed
by the parties. No party is relying on any representations other than those
expressly set forth herein. No conditions precedent to the effectiveness of this
Agreement exists, other than as expressly provided for herein. There are no oral
or written collateral agreements. All prior discussions and negotiations have
been and are merged, integrated into and superseded by this Agreement.
12. The parties, and each of them, warrant: (i) that no other person or
entity had or has or claims, any interest in any of the claims, demands, causes
of action, or damages covered in this Agreement; (ii) that they, and each of
them, have the sole right and exclusive authority to execute this Agreement; and
(iii) that they have not sold, assigned, transferred, conveyed or otherwise
disposed of any claim, demand, cause of action, obligation, damage or liability
covered in this Agreement.
13. This and any documents relating to it may be executed and transmitted
to any other party by telefacsimile, which telefacsimile shall be deemed to be,
and utilized in all respects as, an original, wet-inked document.
3
14. Except as set forth herein, the parties hereto acknowledge that they
have relied solely upon their own judgment, belief and knowledge of the
existence, nature and extent of each claim, demand, or cause of action that each
party may have against the other, and that each such party has not been
influenced to any extent in entering into this Agreement by any representation
or statement regarding any such claim, demand, or cause of action made by any
other party hereto.
15. All parties hereto shall bear their own attorneys' fees, expenses, and
costs incurred in connection with the disputes between the parties hereto and in
the preparation of this Agreement. In the event of any action or proceeding
brought by any party against another based on or under this Agreement, the
prevailing party(s) shall be entitled to recover attorneys' fees necessarily and
actually incurred by said party(s) in such action or proceeding, including costs
of appeal, if any, in such amount as the court of competent jurisdiction
adjudging said matter may determine.
16. The parties agree that they will execute any and all additional
documents and take all additional steps and perform such additional acts as may
be necessary or appropriate to consummate this settlement and accomplish the
purposes thereof.
17. The Debtor Parties shall cause appropriate notice of this Agreement to
be given to parties entitled to such notice under the United States Bankruptcy
Code and Rules and pursuant to Bankruptcy Court Order.
18. Nothing set forth or contained in this Agreement or in the
negotiations and communications leading to its completion shall be construed or
used by any one as admissions against the interest of any of the parties hereto.
Except to enforce, collect upon and/or to seek judicial interpretation
(collectively "Enforce") of this Agreement, the terms of this Agreement
including, without limitation, the recitals, representations and releases made
by any party shall have no force or effect and will not be binding upon,
enforceable against or deemed an admission or acknowledgment of any fact by any
party except upon this Agreement becoming effective and then only in completion
of the actions contemplated in this Agreement. This Agreement shall not be
admissible as evidence in any action or proceeding except one to enforce this
Agreement, or to carry forward the actions contemplated herein.
19. This Agreement may be executed in any number of original, fax, or
copied counterparts, and all counterparts shall be considered together as one
agreement. A faxed or copied counterpart shall have the same force and effect as
an original signed counterpart. Each of the parties hereby expressly forever
waives any and all rights to raise the use of a fax machine to deliver a
signature, or the fact that any signature or agreement or instrument was
transmitted or communicated through the use of a fax machine, as a defense to
the formation of a contract.
20. Each of the parties to this Agreement expressly warrants and
represents that it is the sole and lawful owner of all right, title, and
interest in and to every claim and other matter which it purports to release
herein, and it has not assigned or transferred, or purported to assign or
transfer to any person or entity any claims or other matters herein released.
21. The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective parties and their heirs, beneficiaries, devisees,
trustees, executors, administrators, agents, representatives, successors and
assigns.
22. Should any dispute or issue, including to Enforce this Agreement,
arise regarding this Agreement, the Bankruptcy Court shall have exclusive
jurisdiction to determine any such disputes or issues arising under or which
invoke Bankruptcy Law.
4
23. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or illegal, the remaining provisions of
this Agreement shall remain effective and enforceable unless the invalidated
provisions are material or necessary to effectuate the purposes and essence of
this Agreement.
24. Time is of the essence with respect to performance of the terms of
this Agreement.
25. This Agreement is made by the parties solely for the benefit of
themselves and the other persons and entities affiliated with one or more
parties who are described in this Agreement. No other person or entity may claim
any rights or benefits under this Agreement, and no third party benefits are
conferred by or arise from the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have hereunto set their hands the day and year
first above written.
CITY OF KINGMAN, KANSAS
("First Party")
By:
----------------------------------
COMPOSITE TECHNOLOGY CORPORATION,
a Nevada Corporation ("Second Party")
By:
----------------------------------
Xxxxxx Xxxxxxxx, CEO
APPROVED AS TO FORM:
XXXXXXX & XXXXXXXX LLP
--------------------------------------------------------------
Xxxxxxx X. Xxxxxxx
Xxxxx Xxxx
Attorneys for City of Kingman, Kansas, a Municipal Corporation
XXXXXXX XXXXXX & XXXXXXX LLP
-------------------------------------------------
Xxxxxxx X. Xxxxxxx
Xxxx Xxxxxxxx
Attorneys for the Debtor and Debtor in Possession
Composite Technology Corporation
5
