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CONTRIBUTION
AGREEMENT
CONTRIBUTION
AGREEMENT, dated as of May __, 2008, is entered into among
each of the Obligors referred to below.
WITNESSETH :
WHEREAS,
contemporaneously herewith, Composite Technology Corporation,
a Nevada corporation (the “
Borrower ”),
each subsidiary of the Borrower listed as a “Guarantor”
on the signature pages thereto (together with any other Person that
guarantees all or any part of the Obligations (as defined in the
Financing Agreement), each a “
Guarantor ”
and collectively, the “
Guarantors ”),
the lenders from time to time party thereto (each a “
Lender ”
and collectively, the “
Lenders ”),
and ACF CTC, L.L.C., a Delaware limited liability company, as agent
for the Lenders (the “
Agent ”),
have entered into a Financing Agreement, dated as of the date
hereof (such agreement, as amended, restated, supplemented or
otherwise modified from time to time, including any replacement
agreement therefor, being hereinafter referred to as the
“
Financing Agreement ”);
WHEREAS,
the Guarantors have guaranteed the repayment of the
Obligations owing by the Borrower to the Lenders under the
Financing Agreement and each of the other Loan Documents (as
defined in the Financing Agreement) pursuant to its Guaranty
made under Article XI of the Financing Agreement or under any
other Guaranty (as defined in the Financing Agreement) to
which it is a party; and
WHEREAS,
in order to induce the Lenders to enter into the Financing
Agreement and to effect an equitable sharing of the Obligors'
(as defined below) risks thereunder and to establish certain
rights and obligations of contribution among the Obligors with
respect to the Secured Obligations (as defined below), each of
the Obligors wishes to enter into this Agreement;
NOW,
THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1.
Defined Terms .
Any and all initially capitalized terms used herein shall have the
meanings ascribed thereto in the Financing Agreement, unless
specifically defined herein.
(a)
The
following terms, as used in this Agreement, shall have the
following meanings:
“
Agreement ”
means this Contribution Agreement, together with any and all future
additions, alterations, amendments, changes, extensions,
modifications, renewals, substitutions, or supplements hereto or
hereof.
“
Net Worth ”
has the meaning set forth in Section 2 hereof.
“
Obligors ”
means the Guarantors and the Borrower.
“
Payment Percentage ”
has the meaning set forth in Section 2 hereof.
“
Secured Obligations ”
shall mean all liabilities, obligations, or undertakings owing by
the Obligors to the Agent or the Lenders of any kind or description
arising out of or outstanding under, advanced or issued pursuant
to, or evidenced by the Financing Agreement or any of the other
Loan Documents irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to
become due, voluntary or involuntary, whether now existing or
hereafter arising, and including all interest (including any
interest that, but for the provisions of the Bankruptcy Code, would
have accrued) and any and all costs, fees (including reasonable
attorneys fees), and expenses (including any fees and expenses
that, but for the provisions of the Bankruptcy Code would have
accrued) which the Obligors are required to pay pursuant to any of
the foregoing, by law, or otherwise.
(b)
The
definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and
“including” shall be deemed to be followed by the
phrase “without limitation”. The word
“will” shall be construed to have the same meaning
and effect as the word “shall”. Unless the context
requires otherwise, (i) any definition of or reference to any
agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein),
(ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iii) the words
“herein”, “hereof” and
“hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not
to any particular provision hereof, (iv) all references herein
to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (v) the words
“asset” and “property” shall be
construed to have the same meaning and effect and to refer to
any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights. All
of the exhibits or schedules attached to this Agreement shall
be deemed incorporated herein by reference.
2.
Right of Contribution .
If any Obligor makes a payment in respect of the Secured
Obligations that is less than its Payment Percentage (as calculated
below) of the Secured Obligations, then, upon indefeasible payment
in full in cash of the Secured Obligations, the Obligor making such
proportionately smaller payment shall pay to the other Obligors
that amount which is necessary such that the net payments made by
all Obligors in respect of the Secured Obligations are shared among
Obligors pro rata according to their respective Payment
Percentages. If any Obligor receives any payment in respect of the
Secured Obligations that is greater than its Payment Percentage (as
calculated below) of the Secured Obligations, then the Obligor
receiving such proportionately greater payment shall pay to the
other Obligors that amount which is necessary such that the
payments received by all Obligors shall be shared among all
Obligors pro rata according to their respective Payment
Percentages.
Each
Obligor's “Payment Percentage” shall be the
percentage calculated by dividing (a) the Net Worth of
such Obligor by (b) the sum of the Net Worth of all of
the Obligors, which Payment Percentage is subject to
redetermination or adjustment as hereinafter set forth.
Notwithstanding anything to the contrary contained herein, (i)
the Guarantors shall have no contribution obligations under
this Section 2 unless a Guarantor makes a payment in respect
of the Secured Obligations, and (ii) the Net Worth of each
Guarantor shall be included in the calculation of each
Obligor's Payment Percentage only to the extent a Guarantor
makes a payment in respect of the Secured
Obligations.
For
purposes of the calculation (and any recalculation) of any
particular Obligor's Payment Percentage, such Obligor's
“Net Worth” shall mean the amount, calculated as
of the date such Obli
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