Document:

ex10_7.htm

Exhibit 10.7

Non-Employee Director

Nonqualified Stock Option Agreement under

the Orthofix International N.V.

Amended and Restated 2004 Long-Term Incentive Plan

This Option Agreement (the “ Agreement ”) is made this __ day of _________ 20__ (the “ Grant Date ”) between Orthofix International N.V., a Netherlands Antilles company
(the “ Company ”), and the person signing this Agreement adjacent to the caption “Optionee” on the signature page hereof (the “ Optionee ”), a non-employee member of the Board of Directors of the Company (the “Board”).  Capitalized terms used and not otherwise defined herein shall have the meanings attributed
thereto in the Orthofix International N.V.  Amended and Restated 2004 Long-Term Incentive Plan (the “ Plan ”).

WHEREAS, pursuant to the Plan, the Company desires to afford the Optionee the opportunity to purchase Common Shares on the terms and conditions set forth herein;

NOW, THEREFORE, in connection with the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

1.              Grant of Option.  Subject to the provisions of this Agreement and the Plan, the Company hereby grants to the Optionee the right and option (the “ Option ”)
to purchase ________ Common Shares at an exercise price of $__.__ per share (the “ Exercise Price ”).

2.              Incorporation of Plan.  The Optionee acknowledges receipt of the Plan, a copy of which is annexed hereto, and represents that he or she is familiar with its terms and provisions and hereby
accepts this Option subject to all of the terms and provisions of the Plan and all interpretations, amendments, rules and regulations which may, from time to time, be promulgated and adopted pursuant to the Plan.  The Plan is incorporated herein by reference.  In the event of any conflict or inconsistency between the Plan and this Agreement, the Plan shall govern and this Agreement shall be interpreted to minimize or eliminate any such conflict or inconsistency.

3.              Nature of the Option.  The Option shall be a Nonqualified Stock Option.

4.              Vesting.  Subject to earlier termination in accordance with the Plan or this Agreement and the terms and conditions herein or therein, the Option shall vest and become exercisable with
respect to 33 1/3% of the shares covered thereby on each of the first, second and third anniversaries of the Grant Date; provided, however, that the exercisability of any portion of the Option relating to a fractional share shall be deferred until such time, if any, that such portion can be exercised as a whole Common Share.

5.              Term.  The Option shall expire and no longer be exercisable 10 years from the Grant Date, subject to earlier termination in accordance with the Plan or this Agreement; provided, however:
(i) if the termination date falls on a date on which the exercise of the Option would violate any applicable federal, state, local or foreign law, such termination date shall be extended to 30 days after the first date that exercise of the Option would no longer violate any applicable federal, state, local or foreign law, and (ii) if the termination date falls on a date on which the Optionee is prohibited by Company policy in effect on such date from engaging in transactions in the Company’s securities,
such termination date shall be extended to the first date that the Optionee is permitted to engage in transaction in the Company’s securities under such Company policy so long as such extension does not cause the Option to become subject to Code Section 409A or violate any other applicable law.

 

6.              Termination of Service.

  

  

  

(a)            General.  A termination of service shall be deemed to have occurred if the Optionee is no longer serving as a member of the Board for any reason.

(b)            Termination of Service Other than for Cause, Death, or Permanent Disability.  If, prior to vesting, the Optionee terminates service as a result of a Voluntarily Resignation, the Option shall be considered
vested and be immediately exercisable as of the date of such termination of service with respect to the aggregate number of Common Shares as to which the Option would have been vested as of December 31 of the year in which such termination of service occurs.  The Optionee shall have the right, subject to the other terms and conditions set forth in this Agreement and the Plan, to exercise the Option, to the extent it has vested as of the date of such termination of service, at any time within two
years after the date of such termination of service, subject to the earlier expiration of the Option as provided in Section 5 hereof.  To the extent the vested portion of the Option is not exercised within such two-year period, the Option shall be cancelled and revert back to the Company and the Optionee shall have no further right or interest therein.  The unvested portion of any Option shall be cancelled and revert back to the
Company as of the date of the Optionee's termination of service and the Optionee shall have no further right or interest therein.  In no event shall this Section apply if termination is (i) for Cause, or (ii) by reason of death or Permanent Disability.

(c)            Termination of Service for Cause.  If, prior to vesting, the Optionee's service with the Company and its Subsidiaries is terminated by the Company or any of its Subsidiaries for Cause, the unvested
portion of the Option shall be cancelled and revert back to the Company as of the date of such termination of service, and the Optionee shall have no further right or interest therein unless the Committee in its sole discretion shall determine otherwise.  The Optionee shall have the right, subject to the other terms and conditions set forth in this Agreement and the Plan, to exercise the Option, to the extent it has vested as of the date of termination of service, at any time within three months after
the date of a termination for Cause, subject to the earlier expiration of the Option as provided in Section 5 hereof.

 

(d)            Termination of Service for Death or Permanent Disability.  If the Optionee's service with the Company and its Subsidiaries terminates by reason of death or Permanent Disability, the Option shall
automatically vest and become immediately exercisable in full as of the date of such termination of service.  The Option shall remain exercisable by the Optionee, a Permitted Transferee (as defined in Section 11 hereof), a transferee under a domestic relations order, or the Optionee's estate, personal representative or beneficiary, as applicable, at any time within two years after the date of such termination of service, subject to the earlier expiration of the Option as provided in Section 5 hereof.  To
the extent the Option is not exercised within such two-year period, the Option shall be cancelled and revert back to the Company and the Optionee, Permitted Transferee, transferee under a domestic relations order, or the Optionee’s estate, personal representative or beneficiary, as applicable, shall have no further right or interest therein.

7.              Change in Control.  Upon the occurrence of a Change in Control, the Option shall automatically vest and become immediately exercisable in full and shall remain exercisable in accordance
with the terms of Section 6 hereof, subject to the earlier expiration of the Option as provided in Section 5 hereof.

8.              Method of Exercising Option.

(a)            Notice of Exercise.  Subject to the terms and conditions of this Agreement, the Option may be exercised by written or electronic notice to the Company, from the Optionee, a Permitted Transferee,
a transferee pursuant to a domestic relations order, or following the Optionee’s death, the Optionee’s estate, personal representative, or beneficiary, as applicable, and stating the number of Common Shares in respect of which the Option is being exercised.  Such notice shall be accompanied by payment of the Exercise Price for all Common Shares purchased pursuant to the exercise of such Option.  The date of exercise of the Option shall be the later of (i) the date on which the
Company receives the notice of exercise or (ii) the date on which the conditions set forth in Sections 8(b) and 8(e) are satisfied.  Notwithstanding any other provision of this Agreement, the Optionee may not exercise the Option and no Common Shares will be issued by the Company with respect to any attempted exercise when such exercise is prohibited by law or any Company policy then in effect.  The Option may not be exercised at any one time as to less than 100 shares (or such number of shares
as to which the Option is then exercisable if less than 100).  In no event shall the Option be exercisable for a fractional share.

  

  

  

(b)            Payment.  Prior to the issuance of the Common Shares pursuant to Section 8(e) hereof in respect of which all or a portion of the Option shall have been exercised, the Optionee shall have paid to
the Company the Exercise Price for all Common Shares purchased pursuant to the exercise of such Option.  Payment may be made by personal check, bank draft or postal or express money order (such modes of payment are collectively referred to as “cash”) payable to the order of the Company in U.S. dollars.  Payment may also be made in mature Common Shares owned by the Optionee, or in any combination of cash or such mature shares as the Committee in its sole discretion may approve.  The
Company may also permit the Optionee to pay for such Common Shares by directing the Company to withhold Common Shares that would otherwise be received by the Optionee, pursuant to such rules as the Committee may establish from time to time.  In the discretion of the Committee, and in accordance with rules and procedures established by the Committee, the Optionee may be permitted to make a “cashless” exercise of all or a portion of the Option.

(c)            Shareholder Rights.  The Optionee shall have no rights as a shareholder with respect to any Common Shares issuable upon exercise of the Option until the Optionee shall become the holder of record
thereof, and no adjustment shall be made for dividends or distributions or other rights in respect of any Common Shares for which the record date is prior to the date upon which the Optionee shall become the holder of record thereof.

(d)            Limitation on Exercise.  The Option shall not be exercisable unless the offer and sale of Common Shares pursuant thereto has been registered under the Securities Act of 1933, as amended (the “ 1933
Act ”), and qualified under applicable state “blue sky” laws or the Company has determined that an exemption from registration under the 1933 Act and from qualification under such state “blue sky” laws is available.

(e)            Issuance of Common Shares.  Subject to the foregoing conditions, as soon as is reasonably practicable after its receipt of a proper notice of exercise and payment of the Exercise Price for all Common
Shares purchased pursuant to the exercise of such Option, the Company shall either: (i) deliver or cause to be delivered to the Optionee (or a Permitted Transferee, a transferee under a domestic relations order, or following the Optionee's death, the Optionee's estate, personal representative or beneficiary, as applicable) one or more share certificates for the appropriate number of Common Shares issued in connection with such exercise (less any Common Shares withheld under Section 10 below), or (ii) cause its
third-party recordkeeper to credit an account established and maintained in the name of the Optionee (or a Permitted Transferee, a transferee under a domestic relations order, or following the Optionee's death, the Optionee's estate, personal representative or beneficiary, as applicable) with the number of Common Shares issued in connection with such exercise (less any Common Shares withheld under Section 10 below); provided, however, that an actual share certificate shall be delivered if requested by the Optionee
(or a Permitted Transferee, a transferee under a domestic relations order, or following the Optionee's death, the Optionee's estate, personal representative or beneficiary, as applicable).  Such Common Shares shall be fully paid and nonassessable and shall be issued in the name of the Optionee (or a Permitted Transferee, a transferee under a domestic relations order, or following the Optionee's death, the Optionee's estate, personal representative or beneficiary, as applicable).

9.              Adjustment of and Changes in Common Shares.  In the event of any merger, consolidation, recapitalization, reclassification, stock dividend, extraordinary dividend, or other event or change
in corporate structure affecting the Common Shares, the Committee shall make such adjustments, if any, as it deems appropriate in the number and class of shares subject to, and the exercise price of, the Option.  The foregoing adjustments shall be determined by the Committee in its sole discretion.

10.            Tax Withholding.  The Company shall have the right, prior to the issuance of any Common Shares upon full or partial exercise of the Option (whether by the Optionee or any Permitted Transferees, a
transferee under a domestic relations order, or following the Optionee’s death, the Optionee’s estate, personal representative, or beneficiary, as applicable), to require the Optionee to remit to the Company any amount sufficient to satisfy the minimum required federal, state or local tax withholding requirements, if any, as well as all applicable withholding tax requirements of any other country or jurisdiction.  The Company may permit the Optionee to satisfy, in whole or in part, such
obligation to remit taxes, by directing the Company to withhold Common Shares that would otherwise be received by the Optionee, pursuant to such rules as the Committee may establish from time to time.  The Company shall also have the right to deduct from all cash payments made pursuant to, or in connection with, the Option, the minimum federal, state or local taxes required to be withheld with respect to such payments.

  

  

  

11.            Transfers.  Unless the Committee determines otherwise after the Grant Date, the Option shall not be transferable other than by will or by the laws of descent and distribution or pursuant to a domestic
relations order; provided, however, the Option may be transferred to the Optionee's family members or to one or more trusts or partnerships established in whole or in part for the benefit of one or more of such family members (collectively, the “Permitted Transferees”).  Any Option transferred to a Permitted Transferee shall be further transferable only by will or the laws of descent and distribution or, for no consideration, to another Permitted Transferee of the Optionee.  The
Committee may in its discretion permit transfers of Options other than those contemplated by this Section 11.

12.            Option Exercisable Only by the Optionee.  During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or by a Permitted Transferee to whom such Option has been transferred
in accordance with Section 11.

13.            Prohibition on Repricing.  The Agreement may not be amended to (a) reduce the Exercise Price of the Option granted hereunder, nor (b) cancel or replace the Option  hereunder with an Option
having a lower exercise price.

14.            Miscellaneous Provisions.

(a)            Notices.  Any notice required by the terms of this Agreement shall be delivered or made electronically, over the Internet or otherwise (with request for assurance of receipt in a manner typical with
respect to communications of that type), or given in writing.  Any notice given in writing shall be deemed effective upon personal delivery or upon deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid, and shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she has most recently provided to the Company.   Any notice given electronically shall be deemed effective on the
date of transmission.

(b)            Headings.  The headings of sections and subsections are included solely for convenience of reference and shall not affect the meaning of the provisions of this Agreement.

(c)            Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

(d)            Entire Agreement.  This Agreement and the Plan constitute the entire agreement between the parties hereto with regard to the subject matter hereof.  They supersede all other agreements,
representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof.

 

(e)            Amendments.  The Board and the Committee shall have the power to alter or amend the terms of the Option as set forth herein from time to time, in any manner consistent with the provisions of Sections
16 and 19 of the Plan, and any alteration or amendment of the terms of the Option by the Board or the Committee shall, upon adoption, become and be binding on all persons affected thereby without requirement for consent or other action with respect thereto by any such person.  The Committee shall give notice to the Optionee of any such alteration or amendment as promptly as practicable after the adoption thereof.  The foregoing shall not restrict the ability of the Optionee and the Board or
the Committee by mutual written consent to alter or amend the terms of the Option in any manner which is consistent with the Plan.

  

  

  

(f)             Binding Effect.  This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties hereto and may only be amended by written agreement of the parties hereto.

 

(g)            Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the choice of law provisions thereof.

(h)            No Service or Other Rights.  This Option grant does not confer upon the Optionee any right to provide services to, the Company or any Subsidiary or other affiliate thereof, or interfere with or limit
in any way the right of the Company or any Subsidiary or other affiliate thereof to terminate such Optionee’s service at any time.

15.            Definitions.  For purposes of this Agreement, the following capitalized words shall have the meanings set forth below.

“ Cause ” shall mean termination of the Optionee's service because of the Optionee's (i) involvement in fraud, misappropriation or embezzlement related to the business or property of the Company, (ii) conviction for, or guilty plea to, a felony or crime
of similar gravity in the jurisdiction in which such conviction or guilty plea occurs, or (iii) unauthorized disclosure of any trade secrets or other confidential information relating to the Company's business and affairs (except to the extent such disclosure is required under applicable law).

“ Change in Control ” shall mean:

(i)           the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “ Exchange Act ”)) (a “ Person ”)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (A) the then outstanding shares of the Company's common stock (the “ Outstanding Common Stock ”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “ Outstanding
Voting Securities ”); excluding, however, the following: (1) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company; (2) any acquisition by the Company; (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any entity controlled by the Company; or (4) any acquisition pursuant to a transaction
which complies with clauses (A), (B) and (C) of subsection (iii) of this definition of Change of Control; or

 

(ii)          a change in the composition of the Board such that the individuals who, as of the date hereof, constitute the Board (such Board shall be hereinafter referred to as the “ Incumbent Board ”)
cease for any reason to constitute at least a majority of the Board; provided,  however, for purposes of this paragraph, that any individual who becomes a member of the Board subsequent to the date hereof, whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but  provided further that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or

  

  

  

(iii)         consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (“ Corporate Transaction ”);  excluding,
however, such a Corporate Transaction pursuant to which all of the following conditions are met: (A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than 50% of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Common Stock and Outstanding Voting Securities, as the
case may be, (B) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such Corporate Transaction) will beneficially own, directly or indirectly, 50% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Transaction or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent
that such ownership existed prior to the Corporate Transaction, and (C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Transaction; or

 

(iv)        the approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

“ Committee ” shall mean the Compensation Committee of the Board or such other committee appointed by the Board to administer the Plan

“ Permanent Disability ” shall mean termination of the Optionee's service as a result of a physical or mental incapacity which substantially prevents the Optionee from performing his or her duties as a director and that has continued for at least 180
days and can reasonably be expected to continue indefinitely.  Any dispute as to whether or not the Optionee is disabled within the meaning of the preceding sentence shall be resolved by a physician selected by the Committee.

“ Voluntary Resignation ” shall occur when the Optionee voluntarily resigns from the Board for any reason or no reason, elects not to stand for re-election to the Board or is not re-elected to the Board by the shareholders of the Company.  For
the avoidance of doubt, a Voluntary Resignation shall not occur as a result of termination of service as a result of death or Permanent Disability (as provided hereunder).

  

  

  

EXECUTED as of the date first written above.

	  	
COMPANY:
	
ORTHOFIX INTERNATIONAL N.V.

	  	  	  	  
	  	  	
By:
	  
	  	  	
Name:
	
Alan W.  Milinazzo

	  	  	
Title:
	
Chief Executive Officer

	  	  	  	  
	  	
OPTIONEE:
	  	  
	  	  	
By:
	  
	  	  	
Name:
	
[        ]

	  	  	
Title:
	
[        ]Exhibit
10.1

    LOAN
AGREEMENT

     

    LOAN
AGREEMENT (this “Agreement”), dated as
of June 30, 2009, between COMPOSITE TECHNOLOGY CORPORATION, a Nevada corporation
(the “Borrower), and
NORTHLIGHT FINANCIAL LLC, a Delaware limited liability company (the “Lender” and, together
with the Borrower, the “Parties”).

     

    WITNESSETH

     

    WHEREAS,
the Borrower wishes to borrow from the Lender  five million Dollars
($5,000,000) for the purpose described in Section 2.1; and

     

    WHEREAS,
the Lender desires to make a loan to the Borrower for such purpose;

     

    NOW,
THEREFORE, in consideration of the mutual agreements set forth herein, the
Lender and the Borrower agree as follows:

     

    ARTICLE
I

     

    DEFINITIONS

     

    Section
1.1           General
Definitions.  Wherever used in this Agreement or the
Exhibits  attached hereto, unless the context otherwise requires, the
following terms have the following meanings:

     

    “Business Day” means a
day on which banks are open for business in The City of New York.

     

    “Code” means the
Internal Revenue Code of 1986, as amended, and any Treasury Regulations
promulgated thereunder.

     

    “Common Stock” means
the common stock of the Borrower.

     

    “Default” means any
event which, at the giving of notice, lapse of time or fulfillment of any other
applicable condition (or any combination of the foregoing), would constitute an
Event of Default.

     

    “DeWind Default” means
an Event of Default set forth in Sections 5.4(d) or (e) which occurs with
respect to DeWind, Inc.

     

    “DeWind Litigation
Matters” means (i) that certain action filed by Balfour Beatty
Construction, LLC against the Borrower, DeWind, Inc. and Andrew R. Lockhart in
the District Court of Dallas County, Texas on April 30, 2009 and (ii) that
certain action filed by Schaeffler Group USA, Inc. against DeWind, Inc. in the
U.S. District Court of the Central District of California, Southern Division on
April 3, 2009.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “DeWind Sale” means
the sale of any of the capital stock (or equivalent equity)  or any of
the assets of DeWind, Inc., DeWind Turbines, Ltd., DeWind Ltd., DeWind Holdings,
Ltd., DeWind GmbH or DeWind Purchasing GmbH.

     

     “Dollars” and the
“$” sign mean
the lawful currency of the United States of America.

     

    “Event of Default” has
the meaning given to it in Section 5.4.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.

     

    “Excluded Assets”
means (i) inventories and wind farm projects which are sold under commercial
sales in the ordinary course of business and (ii) the Cuxhaven D8.2 0 Hertz
prototype owned by the Borrower’s DeWind Ltd. Subsidiary.

     

    “Excluded Judgment”
means a judgment entered in connection with either of the DeWind Litigation
Matters.

     

    “Excluded Taxes” means
all income taxes, minimum or alternative minimum income taxes, withholding taxes
imposed on gross amounts, any tax determined based upon income, capital gains,
gross income, sales, net profits, windfall profits or similar items, franchise
taxes (or any other tax measured by capital, capital stock or net worth), gross
receipts taxes, branch profits taxes, margin taxes (or any other taxes imposed
on or measured by net income, or imposed in lieu of net income) payable by the
Lender in any jurisdiction to any Government Authority (or political subdivision
or taxing authority thereof) in connection with any payments received under this
Agreement by the Lender, or any such tax imposed in connection with the
execution and delivery of, and the performance of its obligations under, this
Agreement.

     

    “Final Payment” means
such amount as may be necessary to repay the Loan in full and any other amounts
owing by the Borrower to the Lender pursuant to the Financing
Documents

     

    “Final Payment Date”
means the earlier of (i) the date on which the Borrower repays the outstanding
principal of the Loan (together with any other amounts accrued and unpaid under
any  Financing Document) to the Lender pursuant to this Agreement and
(ii)
December 30, 2009.

     

    “Financing Documents”
means this Agreement, the Note, the Warrant, the Security Agreement, the
Guaranty  and any other document or instrument delivered in connection
with any of the foregoing whether or not specifically mentioned herein or
therein.

     

    “GAAP” means United
States generally accepted accounting principles, consistently
applied.

     

    “Government Authority”
means any government, governmental department, ministry, cabinet, commission,
board, bureau, agency, tribunal, regulatory authority, instrumentality,
judicial, legislative, fiscal, or administrative body or entity, domestic or
foreign, federal, state or local having jurisdiction over the matter or matters
and Person or Persons in question, including, without limitation, the
SEC.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Guaranty” means the
Subsidiary Guaranty, dated as of the date hereof, made by each of the Major
Subsidiaries in favor of the Lender.

     

    “Indemnified Person”
has the meaning given to it in Section 6.11.

     

    “Indemnity” has the
meaning given to it in Section 6.11.

     

    “Interest Rate” means
10% per annum.

     

    “Lien” means any lien,
pledge, preferential arrangement, mortgage, security interest, deed of trust,
charge, assignment, hypothecation, title retention, privilege or other
encumbrance on or with respect to property or interest in property having the
practical effect of constituting a security interest, in each case with respect
to the payment of any obligation with, or from the proceeds of, any asset or
revenue of any kind.

     

    “Loan” means the loan
to be made available by the Lender to the Borrower pursuant to Section 2.2 in
the amount of five million Dollars ($5,000,000).

     

    “Loss” has the meaning
given to it in Section 6.11.

     

    “Major Subsidiary”
means CTC Cable Corporation and DeWind Inc.

     

    “Material Adverse
Effect” means a material adverse effect on (a) the business, operations,
prospects, condition (financial or otherwise) or property of the Borrower and
its Subsidiaries taken as a whole, (b) the validity or enforceability of any
provision of any Financing Document, (c) the ability of the Borrower to timely
perform the Obligations  or (d) the rights and remedies of the Lender
under any Financing Document provided, however, that none of the following shall
be deemed either alone or in combination to constitute, and none of the
following shall be taken into account in determining whether there has been or
would be, a Material Adverse Effect:  (A) any adverse effect that
results directly or indirectly from general economic, business, financial or
market conditions; and (B) any adverse effect arising directly or indirectly
from or otherwise relating to any of the industries or industry sectors in which
the Borrower operates.

     

    “Net Proceeds”
means  the gross proceeds received from a DeWind Sale less legal fees
and expenses and other expenses required by such Sale incurred by persons not
Affiliates (as such term is defined in the Security Agreement) with the
Borrower.

     

    “Note”  means
the note issued to the Lender evidencing the Loan in the form attached hereto as
Exhibit A

     

    “Obligations” means
all obligations (monetary or otherwise) of the Borrower arising under or in
connection with the Financing Documents.

     

    “Organizational
Documents” means the Articles of Incorporation (or Certificate of
Incorporation, as applicable) and Bylaws of the Borrower or Major Subsidiary, as
the case may be.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    “Permitted
Indebtedness” means: (a) indebtedness of Borrower in favor of the Lender
arising under this Agreement, (b) indebtedness existing as of the date hereof
and set forth in Exhibit B to this Agreement, (c) indebtedness to trade
creditors incurred in the ordinary course of business, and (d) indebtedness
incurred where the proceeds are used in full payment of any
Obligations.

     

    “Permitted Liens”
means: (a) Liens existing on the date hereof and set forth on Exhibit C to this
Agreement, (b) Liens in favor of the Lender, (c) Liens relating solely to leases
not prohibited under this Agreement, (d) statutory Liens created by operation of
applicable law, (e) any Lien for taxes not yet due or delinquent or being
contested in good faith by appropriate proceedings for which adequate reserves
have been established in accordance with GAAP, (f) Liens (A) upon or in any
equipment acquired or held by the Company or any of its Subsidiaries to secure
the purchase price of such equipment or indebtedness incurred solely for the
purpose of financing the acquisition or lease of such equipment, or (B) existing
on such equipment at the time of its acquisition, provided that the Lien is
confined solely to the property so acquired and improvements thereon, and the
proceeds of such equipment, (g) Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by Liens of the type
described in clauses (a) through (f) above, provided that the principal amount
and interest rate thereof is not increased, (h) leases or subleases and licenses
and sublicenses granted to others in the ordinary course of the Company’s
business, not interfering in any material respect with the business of the
Company and its Subsidiaries taken as a whole, (i) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payments of custom
duties in connection with the importation of goods and (j) Liens from judgments,
decrees or attachments in circumstances not constituting an Event of
Default.

     

    “Person” means and
includes any natural person, individual, partnership, joint venture,
corporation, trust, limited liability company, limited company, joint stock
company, unincorporated organization, government entity or any political
subdivision or agency thereof, or any other entity.

     

    “Security Agreement”
means the Security Agreement, dated as of  the date hereof, between
the Borrower, each Major Subsidiary  and the Lender.

     

    “Subsidiary” or “Subsidiaries” means,
as to the Borrower, any entity of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Borrower.

     

    “Taxes” means all
deductions or withholdings for any and all present and future taxes, levies,
imposts, stamp or other duties, fees, assessments, deductions, withholdings, all
other governmental charges, and all liabilities with respect
thereto.

     

    “Warrant” means the
warrant attached hereto as Exhibit D.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Section
1.2           Interpretation.  In
this Agreement, unless the context otherwise requires, all words and personal
pronouns relating thereto shall be read and construed as the number and gender
of the party or parties requires and the verb shall be read and construed as
agreeing with the required word and pronoun; the division of this Agreement into
Articles and Sections and the use of headings and captions is for convenience of
reference only and shall not modify or affect the interpretation or construction
of this Agreement or any of its provisions; the words “herein,” “hereof,”
“hereunder,” “hereinafter” and “hereto” and words of similar import refer to
this Agreement as a whole and not to any particular Article or Section hereof;
the words “include,” “including,” and derivations thereof shall be deemed to
have the phrase “without limitation” attached thereto unless otherwise expressly
stated; references to a specified Article, Exhibit or Section shall be construed
as a reference to that specified Article, Exhibit or Section of this Agreement;
and any reference to any of the Financing Documents means such agreement or
document as the same shall be amended, supplemented or modified and from time to
time in effect.

     

    Section
1.3           Business Day
Adjustment.  If the day by which a payment is due to be made is
not a Business Day, that payment shall be made by the next succeeding Business
Day unless that next succeeding Business Day falls in a different calendar
month, in which case that payment shall be made by the Business Day immediately
preceding the day by which such payment is due to be made.

     

    ARTICLE
II

     

    AGREEMENT
FOR THE LOAN

     

    Section
2.1           Use of
Proceeds.  The Borrower shall use the Loan for general
corporate purposes.

     

    Section
2.2           Disbursement. Subject to satisfaction
of the conditions contained in Article IV, the Lender agrees to disburse the
Loan on the date of this Agreement.

     

    Section
2.3           Repayment.  (a) The
Borrower shall remit the Final Payment to the Lender on the Final Payment Date.
Notwithstanding anything to the contrary herein, the Borrower may prepay all or
any portion of the Loan, including any accrued and unpaid interest, at any time
and from time to time on or prior to the Final Payment Date.

     

    
      	
               
      

            	
              (b)

            	
              The
      Borrower shall use all of the Net Proceeds to prepay the Loan concurrently
      with such Sale.

            

    

     

    
      	
               
      

            	
              (c)

            	
              If
      the Loan is not paid in full by [120 days from the date of this
      Agreement], the Borrower shall take such action as may be requested by the
      Lender to cause of all of the proceeds from the Borrower’s account
      receivables to be used to prepay the Loan commencing on such date;
      provided, however, that the proceeds so used shall be limited to $750,000
      during the first 30 day period after such date and $1,000,000 during each
      successive 30 day period.

            

    

     

    
      	
               
      

            	
              (d)

            	
              Within
      one Business Day of the Borrower’s receipt of any proceeds from (i) the
      sale of any of its assets that are not Excluded Assets for a gross sale
      price of $100,000 or more, (ii) claims made under its insurance policies,
      (iii) litigation or other proceedings, (iv) commercial settlements, or
      other sources not in the ordinary course of its business, the Borrower
      shall prepay the Loan in the amount of such
  proceeds.

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

     

    
      	
               
      

            	
              (e)

            	
              All
      amounts used to prepay the Loan shall be applied first, to accrued and
      unpaid interest and second, to the outstanding principal
      amount.

            

    

     

    Section
2.4           Closing Fee.  On the
date hereof, the Borrower has paid to the Lender a closing fee of
$200,000.

     

    Section
2.5          Payments.  Payments
of any amounts due to the Lender under this Agreement shall be made in Dollars
in immediately available funds prior to 4:00 p.m. New York City time on such
date that any such payment is due, at such bank or places, as the Lender shall
from time to time designate in writing.  The Borrower shall pay all
and any costs (administrative or otherwise) imposed by banks, clearing houses,
or any other financial institution, in connection with making any payments under
any of the Financing Documents, except for any costs imposed by the Lender’s
banking institutions.

     

    Section
2.6           Taxes, Duties and
Fees.

     

    (a)         The
Borrower shall pay or cause to be paid all present and future Taxes (other than
Excluded Taxes, if any), duties, fees and other charges of whatsoever nature, if
any, now or at any time hereafter levied or /imposed by any Government Authority
by any department, agency, political subdivision or taxing or other authority
thereof or therein, by any organization of which the applicable Government
Authority is a member, or by any jurisdiction through which the Borrower makes
payments hereunder, on or in connection with the payment of any and all amounts
due under this Agreement, and all payments of principal and other amounts due
under this Agreement shall be made without deduction for or on account of any
such Taxes, duties, fees and other charges, except for Excluded Taxes, which may
be deducted or withheld from payments made by the Borrower only if such
deduction or withholding is required by applicable law.

     

    (b)         If
the Borrower is required to withhold any such amount or is prevented by
operation of law or otherwise from paying or causing to be paid such Taxes,
duties, fees or other charges as aforesaid except for Excluded Taxes, the
principal or other amounts due under this Agreement (as applicable) shall be
increased to such amount as shall be necessary to yield and remit to the Lender
the full amount it would have received taking into account any such Taxes
(except for Excluded Taxes), duties, fees or other charges payable on amounts
payable by the Borrower under this Section 2.6(b) had such payment been made
without deduction of such Taxes, duties, fees or other charges (all and any of
such additional amounts, herein referred to as the “Additional
Amounts”).

     

    (c)         If
Section 2.6(b) above applies and the Lender so requires, the Borrower shall
deliver to the Lender official tax receipts evidencing payment or a copy of the
filed Tax return reporting such payment (or certified copies thereof) of the
Additional Amounts as soon as practicable.

     

    (d)         If
the Lender receives a refund from a Government Authority to which the Borrower
has paid withholding Taxes pursuant to this Section 2.6, or relating to Taxes in
respect of which the Borrower paid Additional Amounts, the Lender shall promptly
pay such refund to the Borrower.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Section
2.7           Costs, Expenses and
Losses.  If, as a result of any failure by the Borrower to pay
any sums due under this Agreement on the due date therefor, the Lender shall
incur costs, expenses and/or losses, by reason of the liquidation or
redeployment of deposits from third parties or in connection with obtaining
funds to maintain the Loan, the Borrower shall pay to the Lender upon request by
the Lender, the amount of such costs, expenses and/or losses within fifteen (15)
days after receipt by it of a certificate from the Lender setting forth in
reasonable detail such costs, expenses and/or losses.  For the
purposes of the preceding sentence, “costs, expenses and/or losses” shall
include, without limitation, any interest paid or payable to carry any unpaid
amount and any loss, premium, penalty or expense which may be incurred in
obtaining, liquidating or employing deposits of or borrowings from third parties
in order to make, maintain or fund the Loan or any portion thereof.

     

    Section
2.8        
   Interest
Rate.  The outstanding principal amount of the Loan shall bear
interest at the Interest Rate (calculated on the basis of the actual number of
days elapsed), payable in arrears monthly commencing on the last Business Day of
each month.

     

    Section
2.9     
      Interest on Late
Payments.  Without limiting the remedies available to the
Lender under the Financing Documents or otherwise, to the maximum extent
permitted by applicable law, if the Borrower fails to make any payment of
principal with respect to the Loan when due, the Borrower shall pay, in respect
of the outstanding principal amount and interest of the Loan, interest at the
rate per annum equal to the Interest Rate plus four hundred (400) basis points
for so long as such payment remains outstanding.  Such interest shall
be payable on demand.

     

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
3.1     
      Representations and Warranties of the
Borrower.  Except as otherwise disclosed on a schedule attached
hereto, the Borrower represents and warrant as of the date hereof  as
follows:

     

    (a)          The
Borrower is a corporation duly organized and validly existing under the laws of
the State of Nevada.

     

    (b)         The
Borrower and each Major Subsidiary is conducting its business in compliance with
its Organizational Documents.  The Organizational Documents of the
Borrower and each Major Subsidiary (including all amendments thereto) as
currently in effect have been made available to the Lender and remain in full
force and effect with no defaults outstanding thereunder.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    

     

    (c)          The
Borrower has full power and authority to enter into each of the Financing
Documents and to make the borrowings and the other transactions contemplated
thereby.

     

    (d)            All
authorizations, consents, approvals, registrations, exemptions and licenses that
are necessary for the borrowing hereunder, the execution and delivery of the
Financing Documents and the performance by the Borrower of its obligations
thereunder have been obtained and are in full force and effect, except for such
registrations and filings in connection with the issuance of the Warrant and
shares of Common Stock pursuant the Financing Documents and filings necessary to
comply with laws, rules, regulations and orders required in the ordinary course
of business.

     

    (e)            All
authorizations, consents, approvals, registrations, exemptions and licenses with
or from Government Authorities that are necessary for the conduct of the
business of the Borrower and each Major Subsidiary as currently conducted and as
proposed to be conducted have been obtained and are in full force and
effect.

     

    (f)          No
Default or Event of Default (or any other default or event of default, however
described) has occurred under any of the Financing Documents.

     

    (g)            Neither
the entering into any of the Financing Documents nor the compliance with any of
its terms conflicts with, violates or results in a breach of any of the terms
of, or constitutes a default or event of default (however described) or requires
any consent under, to the extent applicable, (i) any agreement to which the
Borrower is a party or by which it is bound, (ii) any of the terms of the
Organizational Documents or (iii) any judgment, decree, resolution, award or
order or any statute, rule or regulation applicable to the Borrower or its
assets.

     

    (h)          Neither
the Borrower nor any Major Subsidiary is engaged in or the subject of any
litigation, arbitration, administrative regulatory compliance proceeding, or
investigation, nor are there any litigation, arbitration, administrative,
regulatory, compliance proceedings or investigations pending or, to the
knowledge of the Borrower, threatened before any court or arbitrator or before
or by any Government Authority against the Borrower or a Major Subsidiary and
the Borrower is not aware of any facts reasonably likely to give rise to any
such proceeding.

     

    (i)            Neither
the Borrower nor any Major Subsidiary (i) is incapable of paying its debts as
they fall due, is unable and has  admitted its inability to pay debts
as they fall due, (ii) is  bankrupt or insolvent or (iii) has taken
action, and no such action has been taken by a third party, for the winding up,
dissolution, or liquidation or similar executory or judicial proceeding or for
the appointment of a liquidator, custodian, receiver, trustee, administrator or
other similar officer, in each case for the Borrower or any Major Subsidiary or
any or all of their respective assets or revenues.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    (j)            No
Lien exists on the property of the Borrower or any Major Subsidiary, except for
Permitted Liens.

     

    (k)          The
obligation of the Borrower to make any payment under this Agreement (together
with all charges in connection therewith) is absolute and unconditional, and
there exists no right of setoff or recoupment, counterclaim, cross-claim or
defense of any nature whatsoever to any such payment.

     

    Section
3.2           Borrower
Acknowledgment.  The Borrower acknowledges that it has made the
representations and warranties referred to in Section 3.1 with the intention of
persuading the Lender to enter into the Financing Documents and that the Lender
has entered into this Financing Document on the basis of, and in full reliance
on, each of such representations and warranties.

     

    ARTICLE
IV

     

    CONDITIONS
OF DISBURSEMENT

     

    Section
4.1           Conditions to Disbursement of the
Loan.  The obligation of the Lender to make the Loan shall be
subject to the fulfillment of the following conditions.  The Lender
shall have received a copy of customary closing documents evidencing the
authorization of the Borrower to execute, deliver and perform each of the
Financing Documents and to engage in the transactions contemplated thereby and
an opinion of Borrower’s counsel reasonably satisfactory to the
Lender.

     

    ARTICLE
V

     

    PARTICULAR
COVENANTS AND EVENTS OF DEFAULT

     

    Section
5.1           Affirmative
Covenants.  Unless the Lender shall otherwise
agree:

     

    (a)          The
Borrower and each Major Subsidiary shall (i) maintain its existence and
qualification to do business in such jurisdictions as may be required to conduct
its business, except where the failure to so maintain such qualification would
not reasonably be expected to have a Material Adverse Effect and (ii) maintain
all approvals necessary for the Financing Documents to be in
effect.

     

    (b)         The
Borrower and each Major Subsidiary shall comply in all material respects with
all applicable laws, rules, regulations and orders of any Government
Authority.

     

    (c)         The
Borrower and each Major Subsidiary shall obtain, make and keep in full force and
effect all licenses, contracts, consents, approvals and authorizations from and
registrations with Government Authorities that may be required to conduct its
business

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (d)         The
Borrower shall promptly notify the Lender of the occurrence of (i) any Default
or Event of Default, (ii) any claims, litigation, arbitration, mediation or
administrative or regulatory proceedings that are instituted or threatened
against the Borrower or any Major Subsidiary and (iii) each event which, at the
giving of notice, lapse of time, determination of materiality or fulfillment of
any other applicable condition (or any combination of the foregoing), would
constitute an event of default (however described) under any of the Financing
Documents.

     

    (e)         (i)
If the Borrower is not required to file reports pursuant to Sections 13 or 15(d)
of the Securities Exchange Act, the Borrower will provide consolidated quarterly
financial statements for itself and its Subsidiaries within 45 days after the
end of each quarter, and annual financial statements within 120 days after the
end of each year, and (ii) the Borrower and its Subsidiaries will provide to the
Lender copies of all documents, reports, financial data and other information as
the Lender may reasonably request, and permit the Lender to visit and inspect
any of the properties of the Borrower and its Subsidiaries, and to discuss its
and their affairs, finances and accounts with its and their officers, all at
such times during regular business hours as the Lender may reasonably
request.

     

    (f)          The
Borrower shall provide to the Lender evidence of the good standing of CTC Cable
Corporation in the State of California within 15 days of the date of this
Agreement.

     

    (g)       
    The Borrower shall promptly provide to the Lender all
documents filed or received by the Borrower or any Subsidiary thereof in
connection with, and during the course of, the DeWind Litigation Matters,
including, without limitation, in connection with an Attempted Attachment (as
defined in the Security Agreement).

     

    Section
5.2           Negative
Covenants.  Unless the Lender shall otherwise
agree:

     

    (a)            Neither
the Borrower nor any Subsidiary shall (i) liquidate or dissolve, (ii) enter into
any consolidation, merger or reorganize, unless the Borrower or such Subsidiary
is the surviving corporation or (iii) sell all or substantially all of its
assets or the equity interests in any of its Subsidiaries; provided, however, that this
Section 5.2(a) shall not apply to the DeWind Sale.

     

    (b)          Neither
the Borrower nor any of its Subsidiaries shall create, incur, assume, guarantee,
suffer to exist or become liable with respect to any indebtedness, other than
Permitted Indebtedness, or voluntarily prepay any indebtedness.

     

    (c)          Neither
the Borrower nor any of its Subsidiaries shall incur or permit to exist any Lien
on its assets other than Permitted Liens.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    (d)          Neither
the Borrower nor any of its Subsidiaries shall distribute any of its assets to
any holder of an equity interest in the Borrower or any of its Subsidiaries,
including, but not limited to, by way of dividend.

     

    Section
5.3           Reimbursement of
Taxes.  The Borrower shall pay all Taxes, duties, fees or other
charges payable on or in connection with the execution, issue, delivery,
registration, notarization or enforcement of the Financing Documents and shall,
upon notice from the Lender, reimburse the Lender for any such Taxes, duties,
fees or other charges paid by the Lender thereon; provided, however, that
notwithstanding the foregoing, under no circumstances shall the Borrower have
any obligation to reimburse the Lender for Excluded Taxes.

     

    Section
5.4           General Acceleration Provision upon
Events of Default.  If one or more of the events specified in
this Section 5.4 (each an “Event of Default”)
shall have happened other than a DeWind Default, the Lender, by written notice
to the Borrower, (any such notice, an “Acceleration
Notice”), may declare the principal of, accrued interest on, the Loan or
any part thereof (together with any other amounts accrued or payable under this
Agreement) to be, and the same shall thereupon become, immediately due and
payable, without any further notice and without any presentment, demand, or
protest of any kind, all of which are hereby expressly waived by the Borrower,
and take any further action available at law or in equity, including, without
limitation, the sale of the Loan and all other rights acquired in connection
with the Loan:

     

    (a)          A
Lender shall have failed to receive payment of (i) principal when due under the
Note, or (ii) any other amounts due under and Facility Document within five (5)
Business Days of their due date.

     

    (b)          The
Borrower shall have failed to comply with the due observance or performance of
any other covenant contained in any Financing Document and such failure shall
not have been cured by Borrower within 30 days after notice of such failure by
Lender.

     

    (c)            Any
representation or warranty made by the Borrower in any Financing Document shall
have been incorrect, false or misleading in any material respect as of the date
it was made, deemed made, reaffirmed or confirmed.

     

    (d)          (i)
The Borrower or a Major Subsidiary shall generally be unable to pay its debts as
such debts become due, or shall admit in writing its inability to pay its debts
as they come due or shall make a general assignment for the benefit of
creditors; (ii) the Borrower or a Major Subsidiary shall declare a moratorium on
the payment of its debts; (iii) the commencement by the Borrower or a Major
Subsidiary of proceedings to be adjudicated bankrupt or insolvent, or the
consent by it to the commencement of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent seeking
reorganization, intervention or other similar relief under any applicable law,
or the consent by it to the filing of any such petition or to the appointment of
an intervenor, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) or of any substantial part of their respective assets; (iv)
the commencement against the Borrower or a Major Subsidiary or any substantial
part of its assets of a proceeding in any court of competent jurisdiction under
any bankruptcy or other applicable law (as now or hereafter in effect) seeking
its liquidation, winding up, dissolution, reorganization, arrangement,
adjustment, or the appointment of an intervenor, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official), and any such proceeding shall
continue undismissed, or any order, judgment or decree approving or ordering any
of the foregoing shall continue unstayed or otherwise in effect, for a period of
ninety (90) days; or (v) any other event shall have occurred which under any
applicable law would have an effect analogous to any of those events listed
above in this subsection.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (e)          One
or more judgments other than an Excluded Judgment against the Borrower or a
Major Subsidiary or attachments against any of their respective property, which
in the aggregate exceed $100,000 prior to the DeWind Sale and $200,000
thereafter, is unstayed on appeal, undischarged, unbonded or undismissed for a
period of thirty (30) days from the date of entry of such judgment.

     

    (f)          The
Borrower repudiates any of the Financing Documents or challenges the validity or
enforceability of Financing Documents.

     

    (g)          The
Borrower repudiates any of the Financing Documents or challenges the validity or
enforceability of Financing Documents.  The validity of any Financing
Document shall be contested by any legislative, executive or judicial body of
any jurisdiction, or any treaty, law, regulation, communiqué, decree, ordinance
or policy of any jurisdiction shall purport to render any material provision of
any Financing Document invalid or unenforceable or shall purport to prevent or
materially delay the performance or observance by the Borrower of the
Obligations.

     

    (h)          There
is a failure to perform in any agreement to which the Borrower is a party with a
third party or parties resulting in the acceleration of the maturity of any
indebtedness for borrowed money in an amount in excess of $100,000 prior to the
DeWind Sale and $200,000 thereafter.

     

    (i)          If
the Borrower breaches any of the terms of the Warrant.

     

    Section
5.5           Automatic Acceleration on Dissolution
or Bankruptcy.  Notwithstanding any other provisions of this
Agreement, if an Event of Default under Section 5.4(d) shall occur other
than a DeWind Default, the principal of the Loan (together with any other
amounts accrued or payable under this Agreement) shall thereupon become
immediately due and payable without any presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived by the
Borrower.

     

    Section
5.6           Recovery of Amounts
Due.  If any amount payable hereunder is not paid as and when
due, the Borrower hereby authorizes the Lender to proceed, to the fullest extent
permitted by applicable law, without prior notice, by right of set-off, banker’s
lien or counterclaim, against any moneys or other assets of the Borrower to the
full extent of all amounts payable to the Lender.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    ARTICLE
VI

     

    MISCELLANEOUS

     

    Section
6.1           Notices.  Any
notice, request or other communication to be given or made under this Agreement
shall be in writing.  Such notice, request or other communication
shall be deemed to have been duly given or made when it shall be delivered by
hand, international courier (confirmed by facsimile), or facsimile (with a hard
copy delivered within two (2) Business Days) to the Party to which it
is required or permitted to be given or made at such Party’s address specified
below or at such other address as such Party shall have designated by notice to
the other Parties.

     

    
      	
               
      

            	
              For
      the Borrower:

            

    

    

    
      	
               
      

            	
              Composite
      Technology Corporation

            

    

    
      	
               
      

            	
              2026
      McGaw Avenue

            

    

    
      	
               
      

            	
              Irvine,
      California 92614

            

    

    
      	
               
      

            	
              Attention:  Benton
      Wilcoxon

            

    

    
      	
               
      

            	
              Facsimile:  (949)
      428-8500

            

    

    

    with a
courtesy copy to:

    

    Richardson
& Patel, LLP

    10900
Wilshire Boulevard, Suite 500

    Los
Angeles, California 90024

    Attention:  Ryan
Hong, Esq.

    Facsimile:  (310)
208-1154

    

    
      	
               
      

            	
              For
      the Lender:

            

    

    

    Northlight
Financial LLC

    24 West
40th
Street, 12th
Floor

    
      	
               
      

            	
              New
      York, New York  10018

            

    

    
      	
               
      

            	
              Attention:  Robert
      B. Woods

            

    

    
      	
               
      

            	
              Facsimile:  (212)
      247-0002

            

    

    

    with a
courtesy copy to:

    

    
      	
               
      

            	
              Katten
      Muchin Rosenman LLP

            

    

    
      	
               
      

            	
              575
      Madison Avenue

            

    

    
      	
               
      

            	
              New
      York, New York 10022-2585

            

    

    
      	
               
      

            	
              Facsimile:  (212)
      894-5505

            

    

    
      	
               
      

            	
              Attention:  Howard
      S. Jacobs, Esq.

            

    

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    Section
6.2           Waiver of
Notice.  Whenever any notice is required to be given to the
Lender or the Borrower under any of the Financing Documents, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.

     

    Section
6.3           Reimbursement of Legal and Other
Expenses. On the date hereof, the Borrower has reimbursed the Lender for
the fees and expenses incurred by the Lender’s counsel in the preparation of the
Financing Documents.  If any amount owing to the Lender under any
Financing Document shall be collected through enforcement of this Agreement, any
refinancing or restructuring of the Loan in the nature of a work-out,
settlement, negotiation, or any process of law, or shall be placed in the hands
of third Persons for collection, the Borrower shall pay (in addition to all
monies then due in respect of the Loan or otherwise payable under any Financing
Document) attorneys’ and other fees and expenses incurred in respect of such
collection.

     

    Section
6.4           Applicable Law and Consent to
Non-Exclusive New York Jurisdiction.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof other than
Sections 5-1401 and 5-1402 of the General Obligations Law of such
State.

     

    (a)       
    Each party hereby irrevocably submits to the
jurisdiction of the state and federal courts sitting in The City of New York,
borough of Manhattan or the City of [San Francisco] for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or other proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, or that such
court, action or other proceeding is improper.  Final, non-appealable
judgment against any party in any such action, suit or other proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the
judgment.  Nothing contained in any Financing Document shall affect
the right of the Lender to commence legal proceedings in any court having
jurisdiction, or concurrently in more than one jurisdiction, or to serve
process, pleadings and other legal papers upon the Borrower in any manner
authorized by the laws of any such jurisdiction.  The Borrower
irrevocably waives, to the fullest extent permitted by applicable law, any
objection which it may now or hereafter have to the laying of venue of any such
action, suit or other proceeding brought in the courts of the State of New York
or in the United States District Court for the Southern District of New York,
and any claim that any such action, suit or other proceeding brought in any such
court has been brought in an inconvenient forum.

     

    (b)       
    The Borrower hereby waives any and all rights to demand
a trial by jury in any action, suit or other proceeding arising out of any
Financing Document or the transactions contemplated by any Financing
Document.

     

    (c)       
    To the extent that the Parties may, in any suit, action
or other proceeding brought in any court arising out of or in connection with
any Financing Document, be entitled to the benefit of any provision of law
requiring the Borrower or the Lender, as applicable, in such suit, action or
other proceeding to post security for the costs of the Borrower or the Lender,
as applicable, or to post a bond or to take similar action, the Parties hereby
irrevocably waive such benefit, in each case to the fullest extent now or
hereafter permitted under any applicable laws.

     

    
      
         

      

      
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    Section
6.5           Successor and
Assigns. This Agreement shall bind and inure to the respective
successors and assigns of the Parties, except that the Borrower may not assign
or otherwise transfer all or any part of its rights under this Agreement or the
Obligations without the prior written consent of the Lender.

     

    Section
6.6           Entire
Agreement.  The Financing Documents contain the entire
understanding of the Parties with respect to the matters covered thereby and
supersede any and all other written and oral communications, negotiations,
commitments and writings with respect thereto.  The provisions of this
Agreement may be waived, modified, supplemented or amended only by an instrument
in writing signed by the authorized officer of each Party.

     

    Section
6.7           Severability.  If
any provision contained in this Agreement shall be invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.  The Parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provision.

     

    Section
6.8           Counterparts.  This
Agreement may be executed in several counterparts, and by each Party on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.

     

    Section
6.9         
  Survival.

     

    (a)           This
Agreement and all agreements, representations and warranties made in the
Financing Documents, and in any document, certificate or statement delivered
pursuant thereto or in connection therewith shall be considered to have been
relied upon by the Parties and shall survive the execution and delivery of this
Agreement and the making of the Loan regardless of any investigation made by any
other Party or on its behalf, and shall continue in force until all amounts
payable under the Financing Documents shall have been fully paid in accordance
with the provisions hereof and thereof, and the Lender shall not be deemed to
have waived, by reason of making the Loan, any Default that may arise by reason
of such representation or warranty proving to have been false or misleading,
notwithstanding that the Lender may have had notice or knowledge of any such
Default or may have had notice or knowledge that such representation or warranty
was false or misleading at the time made hereunder.

     

    (b)          The
obligations of the Borrower under Section 2.6 and the obligations of the
Borrower and the Lender under this Section 6.9 hereof shall survive and remain
in full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loan, or the termination of this
Agreement or any provision hereof.

    
      
         

      

      
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    Section
6.10         Waiver.  Neither the
failure of, nor any delay on the part of, any Party in exercising any right,
power or privilege hereunder, or under any agreement, document or instrument
mentioned herein, shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder, or under any
agreement, document or instrument mentioned herein, preclude other or further
exercise thereof or the exercise of any other right, power or privilege; nor
shall any waiver of any right, power, privilege or default hereunder, or under
any agreement, document or instrument mentioned herein, constitute a waiver of
any other right, power, privilege or default or constitute a waiver of any
default of the same or of any other term or provision.  No course of
dealing and no delay in exercising, or omission to exercise, any right, power or
remedy accruing to the Lender upon any default under this Agreement or any other
agreement shall impair any such right, power or remedy or be construed to be a
waiver thereof or an acquiescence therein; nor shall the action of the Lender in
respect of any such default, or any acquiescence by it therein, affect or impair
any right, power or remedy of the Lender in respect of any other
default.  All rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies otherwise provided by law.

     

    Section
6.11          Indemnity.

     

    (a)           The
Parties shall, at all times, indemnify and hold each other harmless (the “Indemnity”) and each
of their respective directors, partners, officers, employees, agents, counsel
and advisors (each, an “Indemnified Person”)
in connection with any losses, claims (including the cost of defending against
such claims), damages, liabilities, penalties, or other expenses which may be
incurred by or asserted against an Indemnified Person arising out of, any
investigation, litigation or proceeding relating to the Financing Documents
(each, a “Loss”), the extension
of credit hereunder or the Loan or the use or intended use of the Loan, which an
Indemnified Person may incur or to which an Indemnified Person may become
subject.  The Indemnity shall not apply to the extent that a court or
arbitral tribunal with jurisdiction over the subject matter of the Loss, and
over the Lender or the Borrower, as applicable, and such other Indemnified
Person that had an adequate opportunity to defend its interests, determines that
such Loss resulted from the gross negligence or willful misconduct of the
Indemnified Person, which determination results in a final, non-appealable
judgment or decision of a court or tribunal of competent
jurisdiction.  The Indemnity is independent of and in addition to any
other agreement of any Party under any Financing Document to pay any amount to
the Lender or the Borrower, as applicable, and any exclusion of any obligation
to pay any amount under this subsection shall not affect the requirement to pay
such amount under any other section hereof or under any other
agreement.

     

    (b)           Without
prejudice to the survival of any other agreement of any of the Parties
hereunder, this Agreement and the obligations of the Parties contained in this
Section 6.11 shall survive the termination of each other provision hereof and
the payment of all amounts payable to the Lender hereunder.

    
      
         

      

      
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    Section
6.12        No Usury.  The
Financing Documents are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration or otherwise, shall the
amount paid or agreed to be paid to the Lender for the Loan exceed the maximum
amount permissible under applicable law.  If from any circumstance
whatsoever fulfillment of any provision hereof, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
prescribed by law, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any such circumstance the
Lender shall ever receive anything which might be deemed interest under
applicable law, that would exceed the highest lawful rate, such amount that
would be deemed excessive interest shall be applied to the reduction of the
principal amount owing on account of the Loan, or if such deemed excessive
interest exceeds the unpaid balance of principal of the Loan, such deemed excess
shall be refunded to the Borrower.  All sums paid or agreed to be paid
to the Lender for the Loan shall, to the extent permitted by applicable law, be
deemed to be amortized, prorated, allocated and spread throughout the full term
of the Loan until payment in full so that the deemed rate of interest on account
of the Loan is uniform throughout the term thereof.  The terms and
provisions of this paragraph shall control and supersede every other provision
of this Agreement and the Note.

     

    Section
6.13        Further
Assurances.  From time to time, the Borrower shall perform any
and all acts and execute and deliver to the Lender such additional documents as
may be necessary or as requested by the Lender to carry out the purposes of any
Financing Document or to preserve and protect the Lender’ rights as contemplated
therein.

     

    [SIGNATURE
PAGE FOLLOWS]

    
      
         

      

      
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    IN
WITNESS WHEREOF, the Parties, acting through their duly authorized
representatives, have caused this Agreement to be signed in their respective
names as of the date first above written.

     

    
      
        
          
            
              	
                      LENDER:

                    
	 
      
	
                      NORTHLIGHT
      FINANCIAL LLC

                    
	 
      	 
      
	
                      By:

                    	
                        

                    
	 
      	
                      Name:

                    	
                      Mark
      P. Hirschhorn

                    
	 
      	
                      Title:

                    	
                      Managing
      Member

                    
	 
      	 
      
	
                      BORROWER:

                    
	 
      
	
                      COMPOSITE
      TECHNOLOGY CORPORATION

                    
	 
      	
                        

                    
	
                      By:

                    	 
      
	 
      	
                      Name:

                    
	 
      	
                      Title:

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