Document:

Unassociated Document

    ESCROW
AND SECURITY AGREEMENT

     

    This
ESCROW AND SECURITY AGREEMENT (this “Agreement”) is made and
entered into as of September 4, 2009 (the “Effective Date”), by and among DeWind
Turbine, Co., a California corporation (“DeWind Turbine”), DeWind,
Inc., a Nevada corporation (“Seller”), and U.S. Bank
National Association, a national banking association, as Escrow Agent (the
“Escrow
Agent”).

     

    RECITALS

     

    A.           This
Agreement is entered into pursuant to that certain Asset Purchase Agreement,
dated as of August 10, 2009 (as amended, the “Purchase Agreement”) by and
among Daewoo Shipbuilding & Marine Engineering Co., Ltd. (“DSME”), Seller and Composite
Technology Corporation.  Capitalized terms used in this Agreement and
not otherwise defined herein shall have the meanings given to them in the
Purchase Agreement.

     

    B.           DeWind
Turbine, as an Affiliate of DSME, has assumed all of DSME’s rights and benefits
under the Purchase Agreement, pursuant to that Assignment of Agreement between
DSME and DeWind Turbine, dated August 31, 2009.

     

    C.           Section
3.3(a) of the Purchase Agreement provides that DSME or its Affiliates will be
entitled to withhold from the amounts payable to Seller at Closing cash in the
amount of Seventeen Million One Hundred Seventy-Five Thousand Dollars
($17,175,000) (the “Escrow Funds”).  The Escrow
Funds are to be placed in an escrow account (the “Escrow Account”) for the purpose of
reimbursing DSME or its Affiliates, at least in part, for any and all Losses
DSME or its Affiliates might incur related to the Purchase Agreement and the
transactions thereunder.

     

    D.           DeWind
Turbine and Seller are entering into this Agreement to consummate the
transactions contemplated in the Purchase Agreement and as a condition precedent
to consummation of the Closing, and the parties desire to set forth in this
Agreement the terms and conditions pursuant to which the Escrow Funds shall be
deposited, held in and disbursed from the Escrow Account.

     

    NOW,
THEREFORE, the parties hereby agree as follows:

     

    1.      Escrow.

     

    (a)           Escrow of
Funds.

     

    (i)           Escrow
Funds.  At the Closing, DeWind Turbine shall deposit the Escrow
Funds with the Escrow Agent in the manner contemplated by Section 2(a) of this
Agreement.

     

    (ii)           Agreement to Hold Escrow
Funds.  The Escrow Agent shall hold the Escrow Funds delivered
to it pursuant to Section 1(a)(i) above in escrow for the purpose of paying, at
least in part, any Claims (defined below) which might be made against the Escrow
Funds by DeWind Turbine, until the Escrow Agent is required to release such
Escrow Funds in accordance with the terms of this Agreement.  The
Escrow Agent agrees to accept delivery of such Escrow Funds and to hold such
Escrow Funds in escrow for the benefit of DeWind Turbine and Seller subject to
the terms and conditions of this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)              Notice of
Claim.  As used herein, the term “Claim” means a claim for any
Losses under Section 10.2 of the Purchase Agreement.  DeWind Turbine
shall deliver a written notice of the Claim (the “Notice of Claim”) to the Seller and the
Escrow Agent in compliance with Section 3 below.  Except as set forth
in Section 2(c)(i), DeWind Turbine will make a Claim against the Escrow Funds
only as contemplated by Section 10 of the Purchase Agreement.  DeWind
Turbine may give the Notice of Claim after the determination of any Claims in
accordance with Section 10 of the Purchase Agreement.

     

    (c)              Escrow
Period.  As used herein, the term “Escrow Period” means that time period
beginning on the Closing Date and ending on the third anniversary thereafter at
5:00 p.m. (Pacific Standard Time), unless and to the extent extended under
Section 2(c)(ii) below.

     

    2.      Deposit of Escrow Funds; Release from
Escrow.

     

    (a)              Delivery of Escrow
Funds.  On the Closing Date, the Escrow Funds shall be
delivered by DeWind Turbine to the Escrow Agent by wire transfer.

     

    (b)              Investment of Escrow
Funds.  The Escrow Funds shall be placed by the Escrow Agent
into a U.S. Bank Money Market Account as described in Exhibit A attached
hereto.  All interest or appreciation accrued on the Escrow Funds (the
“Additional Escrow Funds”) shall be deemed to be
Escrow Funds for the purposes contemplated in this Agreement.

     

    
      (c)              ***

    

     

    (d)              Release of Escrow
Funds.  The Escrow Funds shall be held by the Escrow Agent for
the benefit of DeWind Turbine and Seller until such Escrow Funds are required to
be released pursuant to either:  (i) Section 2(c) above; or (ii)
when required under applicable provisions of Section 4 below.  The
Escrow Agent shall deliver to Seller or to DeWind Turbine, as applicable
hereunder, the requisite amount of Escrow Funds to be released on such
applicable date(s) by wire transfer to such account(s) as have been designed in
writing to the Escrow Agent by Seller or DeWind Turbine,
respectively.

     

    (e)              Nature of Interest in Escrow
Funds.  The parties acknowledge and agree that DeWind Turbine’s
and Seller’s payment interests in the Escrow Funds are contingent rights to
payment from the Escrow Funds, and that neither a voluntary or involuntary case
under any applicable bankruptcy, insolvency or similar law, nor the appointment
of a receiver, trustee, custodian or similar official in respect of DeWind
Turbine or Seller shall increase its respective payment interest in the Escrow
Funds or affect, modify, convert or otherwise change any right it may have to
the Escrow Funds.

     

    (f)              No Transfer or Encumbrance
of Escrow Funds.  Both parties have not, and agree that they
will not, subject the Escrow Funds to a Lien or otherwise encumber the Escrow
Funds, except as permitted by this Agreement.

     

    *** This material has been omitted pursuant to a request for
confidential treatment and filed separately with the Securities and Exchange
Commission.

    
      
         

      

      
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    (g)              Grant of Security Interest
to DeWind Turbine.  In order to secure Seller’s obligations and
enhance DeWind Turbine’s rights and remedies under this Agreement and under the
Purchase Agreement, Seller hereby grants to DeWind Turbine, effective as of the
date hereof, a security interest in all of Seller’s right, title and interest in
and to the Escrow Account and the Escrow Funds, including, without limitation,
all accounts, certificates of deposit, cash, funds and investments established
or made with the Escrow Funds and any replacements or proceeds
thereof.  The Escrow Agent acknowledges that DeWind Turbine has a
security interest in the Escrow Account, the Escrow Funds and Additional Escrow
Funds, and all assets and investments which may be held in the Escrow Account
from time to time, and shall maintain and preserve such assets subject to this
security interest.  The parties hereto agree that this Agreement
including Section 2(g) shall establish “control,” as defined in
Sections 9-104 and 8-106 of the Uniform Commercial Code, as enacted in the
State of California, and as amended from time to time (the “UCC”), of the Escrow Funds,
which control is effective to perfect DeWind Turbine’s security interest in the
Escrow Funds.  The Escrow Agent and Seller shall take all actions as
may be reasonably requested in writing by DeWind Turbine to perfect or maintain
the security interest created by Seller hereunder in the Escrow
Funds.  DeWind Turbine is authorized by the other parties hereto to
file UCC financing statements naming Seller as “Debtor” and DeWind Turbine as
“Secured Party” and take such other and further actions as DeWind Turbine may
reasonably determine to perfect DeWind Turbine’s security interest granted
herein, with or without execution by the other parties hereto, to the extent
permitted by applicable law.  Such security interest shall
automatically be released solely with respect to any funds properly distributed
from the Escrow Funds pursuant to the terms of this Agreement.  DeWind
Turbine agrees to promptly execute such instruments of release and termination
of the security interest granted hereunder with respect to any Escrow Funds
properly received by or distributable to Seller pursuant to the terms of this
Agreement, and as may be reasonably requested in writing by
Seller.  Seller hereby represents and warrants to DeWind Turbine that
(1) its exact legal name is as set forth in the Preamble hereto, (2) it is
a Nevada corporation, (3) its organizational identification number issued by the
state of Nevada is E0851042006-3 and (4) its principal place of business is 2026
McGaw Ave., Irvine, California 93614

     

    (h)              Power to Transfer Escrow
Funds.  The Escrow Agent is hereby granted the power to effect
any transfer of Escrow Funds contemplated by this Agreement.

     

    (i) 
             Tax
Reporting.  The parties hereto agree that, for tax reporting
purposes, all interest or other income, if any, attributable to the Escrow Funds
or any other amount held in escrow by the Escrow Agent pursuant to this
Agreement shall be allocable to Seller.

     

    (j)              
Certification of Tax
Identification Numbers.  DeWind Turbine and Seller agree to
provide the Escrow Agent with certified tax identification numbers for each of
them by signing and returning Forms W-8 or W-9 to the Escrow Agent at signing of
this Agreement.  The parties hereto understand that, if such tax
identification numbers are not so certified to the Escrow Agent, the Escrow
Agent may be required by the Internal Revenue Code, as it may be amended from
time to time, to withhold a portion of any interest or other income earned on
the investment of monies or other property held by the Escrow Agent pursuant to
this Agreement.

    
      
         

      

      
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    3.      Notice of Claim.

     

    (a)              Contents of
Notice.  The Notice of Claim given by DeWind Turbine pursuant
to Section 1(b) above shall be set forth in writing and shall contain the
following information to the extent it is reasonably available to DeWind
Turbine:

     

    (i)           The
amount, if known, or if not known, of an estimate of the foreseeable maximum
amount of claimed Losses (which estimate shall not be conclusive of the final
amount of such Losses) (the “Loss Amount”);
and

     

    (ii)           A
detailed description of the basis for such Claim, including the facts and
circumstances justifying DeWind Turbine’s entitlement to indemnification
pursuant to Section 10.2 of the Purchase Agreement with reference to the
specific breach alleged or other basis for such entitlement, and the application
(or inapplicability) of the threshold for a De Minimis Claim, the Deductible and
the Cap.

     

    (b)              No Release Until Resolved
Under Section 4.  The Escrow Agent shall not transfer any of
the Escrow Funds held in the Escrow Account to DeWind Turbine pursuant to a
Notice of Claim until such Notice of Claim has been resolved in accordance with
Section 4. Notwithstanding the foregoing and for the purpose of clarification,
this Section 3(b) shall not be applicable to any amount of Escrow Funds released
to Seller pursuant to Section 2(c) above.

     

    4.      Resolution
of Claims and Transfers of Escrow Funds.  The Notice of Claim
received by Seller and the Escrow Agent pursuant to Section 1(b) and Section 3
above shall be resolved as follows:  After the Notice of Claim has
been delivered by DeWind Turbine to Seller and the Escrow Agent pursuant to
Section 6(e), Seller will have 15 Business Days from receipt of such Notice of
Claim to dispute the Claim and shall reasonably cooperate and assist DeWind
Turbine in determining the validity of the Claim for indemnity.  If
Seller does not give notice to DeWind Turbine that it disputes the Claim within
15 Business Days after receipt of the Notice of Claim, the Claim shall be deemed
to be a Loss subject to indemnification under Section 10 of the Purchase
Agreement, and the Escrow Agent shall:  (a) as soon as is reasonably
practical release from escrow and transfer to DeWind Turbine an amount of the
Escrow Funds equal to (i) the amount of the Loss Amount specified in the Notice
of Claim if the Loss Amount is less than the amount of the Escrow Funds, or (ii)
the amount of the Escrow Funds if the Loss Amount exceeds the amount of the
Escrow Funds; and (b) notify Seller in writing of such transfer of Escrow Funds
as promptly thereafter.  Notwithstanding the foregoing, if Seller
gives notice to DeWind Turbine, with a copy to the Escrow Agent, that it
disputes the Claim, then the Escrow Agent shall not release any of the Escrow
Funds in favor of DeWind Turbine until such dispute is resolved pursuant to
Section 5(b).

     

    5.      Limitation of Escrow Agent’s
Liability.

     

    (a)              Limitation of
Liability.  The Escrow Agent shall incur no liability with
respect to any action taken or suffered by it in good faith reliance upon any
notice, direction, instruction, consent, statement or other document believed by
it in good faith to be genuine and duly authorized, nor for any other action or
inaction, except its own willful misconduct, fraud or gross negligence or a
material breach of its obligations under this Agreement.  The Escrow
Agent shall have no duty to inquire into or investigate the validity, accuracy
or content of the Notice of Claim or any other document delivered to
it.  The Escrow Agent also need not inquire into or verify that any
Claim set forth in a Notice of Claim conforms to the requirements of Section
10.5 of the Purchase Agreement.  The Escrow Agent shall not be
responsible for the validity or sufficiency of this Agreement.  In all
questions arising under this Agreement, the Escrow Agent may rely on the advice
or opinion of counsel, and for anything done, omitted or suffered in good faith
by the Escrow Agent based on such advice, the Escrow Agent shall not be liable
to anyone.  The Escrow Agent shall not be required to take any action
hereunder involving any expense unless the payment of such expense is made or
provided for in a manner satisfactory to it.  The Escrow Agent shall
have no duties or responsibilities other than those expressly set forth in this
Agreement and the implied duty of good faith and fair dealing.

    
      
         

      

      
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    (b)              Resolution of Conflicting
Demands.  In the event conflicting demands are made or
conflicting notices are served upon the Escrow Agent with respect to the Escrow
Account, the Escrow Agent shall not release any of the Escrow Funds, but shall
have the absolute right, at the Escrow Agent’s election, to do any or all of the
following:  (i) resign so a successor Escrow Agent can be appointed
pursuant to Section 5(f); (ii) file a suit in interpleader and obtain an order
from a court of competent jurisdiction requiring the parties to interplead and
litigate in such court their several claims and rights among themselves; or
(iii) give written notice to the parties that it has received conflicting
instructions from the parties hereto and is refraining from taking action until
it receives Joint Instructions consented to in writing by both DeWind Turbine
and Seller.  In the event an interpleader suit as described in clause
(ii) above is brought, the Escrow Agent shall thereby be fully released and
discharged from all further obligations imposed upon it under this Agreement
with respect to the matters that are the subject of such interpleader suit, and
DeWind Turbine shall pay the Escrow Agent all costs, expenses and reasonable
attorneys’ fees expended or incurred by the Escrow Agent pursuant to the
exercise of the Escrow Agent’s rights under this Section 5(b) (such costs, fees
and expenses shall be treated as fees and expenses for the purposes of Section
5(g)).  The prevailing party shall be entitled to reimbursement from
the other party of any fees and expenses of the Escrow Agent in connection with
such interpleader.

     

    (c)           Indemnification.  Each
of DeWind Turbine on the one hand and Seller on the other (each an “Indemnifying Party” and together the “Indemnifying Parties”), hereby jointly and
severally covenants and agrees to reimburse, indemnify and hold harmless the
Escrow Agent, and the Escrow Agent’s officers, directors, employees, counsel and
agents (severally and collectively, “Escrow Agent”), from and
against any loss, damage or liability suffered, incurred by or asserted against
Escrow Agent (including amounts paid in settlement of any action, suit,
proceeding or claim brought or threatened to be brought and including reasonable
expenses of legal counsel) arising out of, in connection with or based upon, any
act or omission in good faith by Escrow Agent (not involving negligence, breach
of the terms of this Agreement, gross negligence, willful misconduct or fraud on
Escrow Agent’s part) relating in any way to this Agreement or the Escrow Agent’s
services hereunder.  Anything in this Agreement to the contrary
notwithstanding, in no event shall the Escrow Agent be liable for special,
indirect or consequential loss or damages of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damages and regardless of the form of
action.  Any Indemnifying Party who reimburses or indemnifies the
Escrow Agent pursuant to this Section 5(c) shall have a right to seek
contribution from any and all other Indemnifying Parties according to their
relative fault.

    
      
         

      

      
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    (d)              Defense.  Each
Indemnifying Party may participate at its own expense in the defense of any
claim or action that may be asserted against Escrow Agent, and if the
Indemnifying Parties so elect, the Indemnifying Parties may assume the defense
of such claim or action; provided, however,
that if there exists a conflict of interest that would make it inappropriate, in
the sole discretion of the Escrow Agent, for the same counsel to represent both
Escrow Agent and the Indemnifying Parties, Escrow Agent’s retention of separate
counsel shall be reimbursable as hereinabove provided.  Escrow Agent’s
right to indemnification hereunder shall survive Escrow Agent’s resignation or
removal as Escrow Agent and shall survive the termination of this Agreement by
lapse of time or otherwise.

     

    (e)              Notice to Indemnifying
Parties.  The Escrow Agent shall notify each Indemnifying Party
by letter, or by telephone or telecopy confirmed by letter, of any receipt by
Escrow Agent of a written assertion of a claim against Escrow Agent, or any
action commenced against Escrow Agent, for which indemnification is required
under Section 5(c), within 10 Business Days after Escrow Agent’s receipt of
written notice of such claim.  The Indemnifying Parties will be
relieved of their indemnification obligations under this Section 5 if Escrow
Agent fails to timely give such notice and such failure adversely affects the
Indemnifying Parties’ ability to defend such claim.  However, Escrow
Agent’s failure to so notify each Indemnifying Party shall not operate in any
manner whatsoever to relieve an Indemnifying Party from any liability that it
may have otherwise than on account of this Section 5.

     

    (f)              Successor to Escrow
Agent.  The Escrow Agent may resign as Escrow Agent by giving
both DeWind Turbine and Seller 30 days written notice of its intention to
resign.  In the case of such a resignation, the Escrow Agent shall
cooperate fully with the other parties in the orderly transfer of the Escrow
Funds to a successor Escrow Agent and shall promptly refund the pro rata portion
of any unearned escrow fees which may have been paid.  If the Escrow
Agent resigns or is not available for any reason, DeWind Turbine and Seller
shall mutually appoint a successor to the Escrow Agent who (i) is a national
bank having assets of at least $10,000,000,000; and (ii) shall execute a copy of
this Escrow Agreement for delivery to DeWind Turbine and
Seller.  Until such time as the Escrow Agent’s successor is appointed,
the Escrow Agent shall retain the Escrow Funds.

     

    (g)              Fees.

     

    (i)           DeWind
Turbine on the one hand, and Seller on the other hand, shall each bear 50% of
the Escrow Agent’s fees and expenses and shall timely pay such fees and
expenses.  The Escrow Agent’s non-refundable Initial Setup fee in the
amount of $1,000 shall be paid at signing of this Agreement and an additional
fee for each transaction of funds or documents in or out of the escrow,
excluding the initially required documents, including this Agreement, to fully
effect the escrow (the “Transaction Fee”) will be
invoiced (the “Invoice”)
when a transaction occurs, and all fees shall be payable in U.S.
Dollars.

    
      
         

      

      
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    (ii)           In
the event of non-payment of any fees or charges invoiced by the Escrow Agent,
the Escrow Agent shall give notice of non-payment of any fee due and payable
hereunder to the non-paying party and, in such an event, such party shall have
the right to pay the unpaid fee within ten Business Days after receipt of notice
from the Escrow Agent or otherwise give notice of its good faith dispute
thereof.  If such party fails to pay in full all undisputed fees due
during such ten business day period, the Escrow Agent shall give notice of
non-payment of any undisputed fee due and payable hereunder to the other party
hereto and, in such event, such party shall have the right, but not the
obligation, to pay the unpaid fee within ten days of receipt of such notice from
the Escrow Agent.  A party who pays the other party’s portion of fees
pursuant to this Section 5(g)(ii) shall have a claim against the Escrow Funds
for such amounts.  Upon payment of the undisputed unpaid fee by either
DeWind Turbine or Seller, as the case may be, this Agreement shall continue in
full force and effect until the end of the applicable term. Failure to pay the
undisputed unpaid fee under this Section 5(g)(ii) by both DeWind Turbine and
Seller shall result in termination of this Agreement upon 30 days prior written
notice by the Escrow Agent to Seller and DeWind Turbine, unless the Escrow Agent
has been given notice of any good faith dispute of the unpaid fees.

     

    6.      General Terms.

     

    (a)              Termination; Successors and
Assigns.  Upon the release of all Escrow Funds to Seller and/or
to DeWind Turbine pursuant to the terms and conditions of this Agreement, this
Agreement shall terminate and be of no further force and
effect.  Until such time, this Agreement shall bind and inure to the
benefit of Seller, DeWind Turbine, the Escrow Agent and their respective
successors and permitted assigns.  Neither Seller nor DeWind Turbine
may assign any of its rights or obligations hereunder without the prior written
consent of the other party, provided that either may assign or delegate any of
its rights and obligations under this Agreement to an Affiliate upon notice to
the other parties hereto at any time without requiring the consent of any
party.

     

    (b)              Governing
Law.  This Agreement shall be governed by and interpreted and
enforced in accordance with the Laws of the State of California, without giving
effect to any choice of Law or conflict of Laws rules or provisions (whether of
the State of California or any other jurisdiction) that would cause the
application of the Laws of any jurisdiction other than the State of
California.

     

    (c)              Severability.  Any
provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
provisions hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

     

    (d)              Amendment and Waivers;
Rights Non-Exclusive.  Any term or provision of this Agreement
may be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only by a writing signed by the party to be bound
thereby.  The waiver by a party of any breach hereof or default in the
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default.  The rights and remedies
of the parties under this Agreement are cumulative and not exclusive of any
rights or remedies which such party would otherwise have.

    
      
         

      

      
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    (e)              Notices.  Any
notice, request, demand, waiver, consent, approval or other communication which
is required or permitted hereunder shall be in writing and shall be deemed given
(i) on the date established by the sender as having been delivered personally,
(ii) on the date delivered by a private courier as established by the sender by
evidence obtained from the courier, (iii) on the date sent by facsimile, with
confirmation of transmission, if sent during normal business hours of the
recipient, if not, then on the next business day, or (iv) on the fifth day after
the date mailed, by certified or registered mail, return receipt requested,
postage prepaid.  Such communications, to be valid, must be addressed
as follows:

     

    If to DeWind Turbine, to:

     

    DeWind Turbine Co.

    3 Park Plaza, Jamboree Center Building,
Suite 1920

    Irvine, CA 92614

    Attention:  Hyun Ho
Seo

    Phone:  [+82-2-2129-0153]

    Facsimile:  [+82-2-2129-0079]

    

    With a
required copy to:

    

    Reed Smith LLP

    1510 Page Mill Road, Suite
110

    Palo Alto, CA 94304

    Attention:  Catharina Y.
Min

    Phone:  (650)
352-0526

    Facsimile:  (650)
352-0699

     

    If to
Seller, to:

     

    Composite
Technology Corporation

    2026
McGaw Ave.

    Irvine,
CA 92614

    Attention:  Michael
McIntosh

    Phone:   (949)
428-8500

    Facsimile:  (949)
660-1533

     

    With a
required copy to:

     

    Milbank,
Tweed, Hadley & McCloy LLP

    601 S.
Figueroa St., 30th
Floor

    Los
Angeles, CA 90017

    Attention:  Neil
Wertlieb

    Phone:   (213)
892-4410

    Facsimile:  (213)
892-4710

    
      
         

      

      
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    If to
Escrow Agent, to:

     

    U.S. Bank
National Association

    Corporate
Trust Services

    One
California Street, Suite 1000

    San
Francisco, CA 94111

    Attention:  Alan
Maravilla

    Phone:  (415)
273-4512

    Facsimile:  (415)
273-4590

    

    or to
such other address or to the attention of such person or persons as the
recipient party has specified by prior written notice to the sending party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain).  If more than one method for
sending notice as set forth above is used, the earliest notice date established
as set forth above shall control.

     

    (f)              Further
Assurances.  DeWind Turbine and Seller each agrees to cooperate
fully with the other parties and to execute such further instruments, documents
and agreements and to give such further written assurances as may be reasonably
requested by the other parties to evidence and reflect the transactions provided
for herein and to carry into effect the intent of this Agreement.

     

    (g)              Entire
Agreement.  This Agreement, any agreements referenced herein,
and any exhibits and schedules hereto constitute the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect to the subject matter hereof.  Any and all
previous agreements and understandings between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by this
Agreement.

     

    (h)   
         Escrow
Agent.  U.S. Bank National Association is acting solely as
Escrow Agent and is not a party to, nor has it reviewed or approved the Purchase
Agreement or any other matter of background related to this Escrow Agreement,
other than this Agreement itself, and has assumed without investigation, the
authority of the individuals executing this Escrow Agreement to be authorized to
do so on behalf of the party or parties involved.

     

    (i)         
     USA Patriot Act
Compliance.  To help the government fight the funding of
terrorism and money laundering activities, federal law requires all financial
institutions to obtain, verify and record information that identifies each
person who opens an account.  For a non-individual person such as a
business entity, a charity, a trust or other legal entity the Escrow Agent will
ask for documentation to verify its formation and existence as a legal
entity.  The Escrow Agent may also ask to see financial statements,
licenses, identification and authorization documents from individuals claiming
authority to represent the entity or other relevant
documentation.  The parties each agree to provide all such information
and documentation as to themselves as requested by Escrow Agent to ensure
compliance with federal law.

    
      
         

      

      
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    (j)         
     Consent to
Jurisdiction.  Each party irrevocably submits to the exclusive
jurisdiction of (i) Los Angeles County, California, and (ii) the United States
District Court for the District of Central California, for the purposes of any
Action arising out of this Agreement or any transaction contemplated
hereby.  EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND THE ANCILLARY AGREEMENTS OR THE ACTIONS OF
SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
HEREOF AND THEREOF.

       

    (k)           
  Counterparts.  This
Agreement may be executed in any number of counterparts, and any party hereto
may execute any such counterpart, each of which when executed and delivered
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument.  This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.

     

    [Signature
Pages Follow]

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

     

    
      
        
          
            
              
                
                  
                    
                      	
                              DEWIND
      TURBINE:

                            
	 
      
	
                              DEWIND
      TURBINE CO.

                            
	 
      	 
      
	
                              By:

                            	
                              /s/
        

                            
	
                              Name: 

                            	 
      
	
                              Title:

                            	 
      
	 
      
	
                              SELLER:

                            
	 
      
	
                              DEWIND
      INC.

                            
	 
      
	
                              By:

                            	      
                              /s/   
      

                            
	
                              Name: 

                            	 
      
	
                              Title:

                            	 
      
	 
      
	
                              ESCROW
      AGENT:

                            
	 
      
	
                              U.S.
      BANK, NATIONAL ASSOCIATION

                            
	 
      
	
                              By:

                            	      
                              /s/       
      

                            
	
                              Name:

                            	
                              Alan Maravilla

                            
	
                              Title:

                            	
                              Vice
President

                            

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    EXHIBIT
A

    U. S.
BANK MONEY MARKET ACCOUNTS

    ACCOUNT
DESCRIPTION AND TERMS

    

    U.S. Bank
money market accounts are U.S. Bank National Association (“U.S. Bank”) deposit
accounts designed to meet the needs of Corporate Escrow and other Corporate
Trust customers of U. S. Bank.  Accounts pay competitive variable
interest rates, which are determined upon the customer’s aggregated
balance.  Customer deposits are insured up to $250,000 per
depositor  pursuant to the Federal Deposit Insurance Corporation’s
insurance rules.

    

    Interest
rates currently offered on the accounts are determined at U. S. Bank’s
discretion and may change daily.  U. S. Bank National Association uses
the daily balance method to calculate interest on these
accounts.  This method applies a daily periodic rate to the principal
in the accounts each day of the month and divides that figure by the number of
days in the period.  Interest on customer deposits begins to accrue on
the business day funds are credited to a U.S. Bank deposit
account.  Interest is compounded on a monthly basis.

    

    The owner
of the accounts is U. S. Bank National Association as agent for its
customers.  All account deposits and withdrawals are performed by U.S.
Bank National Association.Unassociated Document

     

    TRADEMARK

    ASSIGNMENT
AGREEMENT

     

    This Trademark Assignment Agreement
("Agreement") is by and between Composite Technology Corporation, a Nevada
corporation (“CTC”), and DeWind Turbine Co., a California corporation (“DeWind
Turbine”).

     

    WITNESSETH
THAT

     

    WHEREAS, CTC owns certain
rights in the design mark set forth in Schedule A, attached hereto and
incorporated herein by reference (hereinafter the "Mark");

     

    WHEREAS, CTC desires to
assign, transfer and set over to DeWind Turbine all of CTC's right,
title and interest in and to the Mark in conjunction with its wind turbine
business and any and all goodwill associated therewith, and DeWind Turbine desires to acquire all
of CTC’s right, title and interest in and to the Mark and any and all goodwill
associated therewith; and

     

    WHEREAS, CTC desires to
continue to use the Mark for a limited period of time in conjunction with its
cable business and products, and further intends to transition to a new logo in
a period of time not to exceed nine (9) months.

     

    NOW, THEREFORE, in
consideration of the foregoing premises and for valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, CTC and DeWind
Turbine, intending to be legally bound hereby agree as follows:

     

    1.           CTC
hereby conveys, assigns and transfers unto DeWind Turbine all right, title and
interest in and to the Mark and any and all derivatives thereof, together with
any and all goodwill associated therewith, and the right to sue and recover
damages and profits for past, present, and future infringement, if any, related
to the Mark, in each case, in conjunction with its wind turbine business. Upon
request, CTC agrees to execute any additional documents as may be reasonably
required to effect and/or record the assignment set forth herein.

     

    2.           CTC
hereby agrees to discontinue use of the Mark in connection with its cable
business and products and any and all other uses within a period of nine (9)
months from the Effective Date of this Agreement (the "Phase-Out Period"). Upon
written notice to DeWind Turbine before the end of the Phase-Out Period, CTC and
its affiliates shall have an additional grace period of three (3) months (the
“Grace Period”) to complete the transition to a new logo for materials and items
in which CTC and its affiliates reasonably require additional time. On or before
the end of the Grace Period, CTC and its affiliates shall cease any and all use
of the Mark and any and all other trademark and/or service mark designs
confusingly similar thereto and shall provide DeWind Turbine with written
confirmation of such cessation of use. In no event shall CTC and/or its
affiliates have the right to use the Mark, or any version confusingly similar
thereto, for any purpose after the end of the Grace Period.  DeWind
Turbine agrees not to use the Mark, or any version confusingly similar thereto,
in conjunction with cable products anywhere in the world for a period of five
(5) years from the Effective Date of this Agreement.

     

    
      Trademark
Assignment Agreement

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           This
Agreement may be executed in multiple counterparts by the different parties
hereto, each of which counterpart when so executed and delivered, shall be
deemed to be an original, and all of which counterparts, taken together, shall
constitute one and the same Agreement.

     

    IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized
representatives as of the date last set forth below (the “Effective
Date”).

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  COMPOSITE TECHNOLOGY

                                	 
      	
                                  DEWIND
      TURBINE CO.

                                
	
                                  CORPORATION

                                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                  By:

                                	 
      /s/ 	 
      	
                                  By:

                                	 
      /s/ 
	 
      	
                                  Name:

                                	 
      	 
      	
                                  Name:

                                
	 
      	
                                  Title:

                                	 
      	 
      	
                                  Title:

                                
	 
      	 
      	 
      	 
      	 
      
	
                                  Date:

                                	 
      	 
      	
                                  Date:

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      Trademark
Assignment Agreement

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
A

     

    [image]

     

    
      Trademark
Assignment Agreement

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