AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT between DAEWOO SHIPBUILDING & MARINE ENGINEERING CO., LTD. and DEWIND, INC. and COMPOSITE TECHNOLOGY CORPORATION
Exhibit
2.1
AMENDMENT
NO. 1
TO
between
DAEWOO
SHIPBUILDING & MARINE ENGINEERING CO., LTD.
and
▇▇▇▇▇▇,
INC.
and
COMPOSITE
TECHNOLOGY CORPORATION
This AMENDMENT NO. 1 TO ASSET PURCHASE
AGREEMENT, dated as of September 3, 2009 (this “Amendment”), is between Daewoo
Shipbuilding & Marine Engineering Co., Ltd., a Korean corporation (“Buyer”), ▇▇▇▇▇▇, Inc., a
Nevada Corporation (“Seller”), and Composite
Technology Corporation (“CTC”). Capitalized terms
used, but not defined, in this Amendment have the meanings given to such terms
in the Agreement (defined below).
WHEREAS,
the Buyer, Seller, and CTC (each a “Party” and, collectively, the
“Parties”) are parties
to that certain Asset Purchase Agreement dated as of August 10, 2009 (the “Agreement”); and
WHEREAS, the Parties desire to
amend the terms and conditions of the Agreement as more particularly set forth
herein.
NOW, THEREFORE, in consideration of the
respective representations, warranties and covenants contained in this
Amendment, and intending to be legally bound, the Parties agree as
follows:
Section
2.3 Assumed
Liabilities.
Section 2.3(b) of the Agreement is
hereby deleted in its entirety and amended and restated as follows:
“(b) all Liabilities that remain unpaid
or unperformed in respect of the Assigned Contracts (except to the extent set
forth in Section 2.4(c)) except for the account payables that are outstanding as
of the date hereof under the Assigned Contracts listed on Schedule 2.1(d) which
are either (i) listed on such schedule as “▇▇▇▇▇▇ Ltd. Contracts” or (ii) due as
a penalty or as a result of a breach of any such Assigned
Contracts;”
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Section
2.4 Excluded
Liabilities.
Section 2.4(k) of the Agreement is
hereby deleted in its entirety and amended and restated as follows:
“(k) all other Liabilities not
expressly assumed in Section 2.3 hereof, including without limitation those
excepted under Section 2.3(b).”
Section
3.3 Deliveries by Buyer at the
Closing.
Section 3.3(a) of the Agreement is
hereby deleted in its entirety and amended and restated as follows:
“(a) the
Cash Consideration, which Buyer shall deliver as follows: (i) an amount equal to
$29,325,000 by wire transfer(s) to an account (or accounts) of Seller designated
in writing by Seller to Buyer prior to the Closing Date, and (ii) an amount
equal to $17,175,000 to U.S. Bank National Association as escrow agent (the
“Escrow Agent”) pursuant
to the Escrow Agreement (the “Escrow Fund”) to secure
indemnification obligations of Seller set forth in this Agreement;”
Section
4.3 Subsidiaries and Related
Entities.
Section 4.3 of the Agreement is hereby amended
as follows:
(1) The
references to “SW1” in the third line of Section 4.3(b) are hereby deleted and
replaced by “SWI”.
(2) The
following shall be added as new Section 4.3(c):
“(c) The
Contribution Percentage and Voting Ratio (as such terms are defined in the SWI
LLC Agreement) of ▇▇▇▇▇▇ Energy Development Company LLC are each 51%; there has
been no Capital Call (as such term is defined in the SWI LLC Agreement); since
the Effective Date (as such term is defined in the SWI LLC Agreement) SWI Wind
Farms, LLC has not received any additional financing from sources other than the
existing members thereof and their affiliates; and no Flip Point (as such term
is defined in the SWI LLC Agreement) has occurred. For purposes of this
section, “SWI LLC
Agreement” means the Limited Liability Company Agreement of ▇▇▇▇▇▇ SWI
Wind Farms, LLC dated as of October 6, 2008, as amended ”+
Section
4.15 Intellectual Property.
Section 4.15(n) of the Agreement is
hereby deleted in its entirety and amended and restated as
follows:
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“(n) (1) The
transfers of the Intellectual Property and any other property from ▇▇▇▇▇▇, GmbH
to ▇▇▇▇▇▇ Ltd. (i) were conducted in full compliance with applicable laws, (ii)
were not conducted in order to defraud the creditors of either ▇▇▇▇▇▇ GmbH or
▇▇▇▇▇▇ Ltd., (iii) do not constitute transactions which could be adjusted under
applicable laws, (iv) were at the time thereof, currently, and will in the
future be valid and (v) are not, and will not be, subject to any rights
whatsoever (including, but not limited to, voidance of any such transfers) of
any Persons (for the avoidance of doubt including, but not limited to, ▇▇▇▇▇▇,
GmbH). (2) The transfers of the Intellectual Property from
▇▇▇▇▇▇ Ltd. to Seller (i) were conducted in full compliance with applicable
laws, (ii) were not conducted in order to defraud the creditors of either ▇▇▇▇▇▇
GmbH or ▇▇▇▇▇▇ Ltd., (iii) do not constitute transactions which could be
adjusted pursuant to the provisions of either section 238 and/or 239 of the
English Insolvency ▇▇▇ ▇▇▇▇, (iv) were at the time thereof, currently, and will
in the future be valid and (v) are not, and will not be, either in the event
that ▇▇▇▇▇▇ Ltd. goes into administration and/or liquidation under English Law
(or an analogous proceeding in another jurisdiction) or otherwise, subject to
any rights whatsoever (including, but not limited to, voidance of any such
transfers) of any Persons (for the avoidance of doubt including, but not limited
to, ▇▇▇▇▇▇ Ltd.).”
Section
7.7 Discharge of Business
Obligations After Closing.
Section 7.7(a) of the Agreement is
hereby amended by adding the following to the end thereof:
“Seller
and Buyer further agree to use commercially reasonable efforts, and cooperate in
good faith with each other, to cause to be settled and resolved as soon as
practicable, but in no event later than the date the Closing Net Assets
Statement is delivered by Buyer pursuant to Section 2.6(b), all Liabilities
referenced in clause (ii) of Section 2.3(b).”
Section
7.8 Access to Books and
Records.
Section 7.8 of the Agreement is hereby
amended by adding the following to the end thereof:
“Buyer
further agrees that: (a) Seller has Buyer's permission to produce certain
Books and Records relating to the Business (including electronically stored
information) in response to pending subpoenas related to pending litigation with
FKI Plc and FKI Engineering Ltd. (the “FKI Matter”); (b) Buyer will
provide Seller with access to Books and Records included in the Purchased Assets
(including electronically stored information) to the extent necessary to enable
Seller to comply with pending subpoenas related to the FKI Matter; and (c) Buyer
shall take all steps reasonably necessary to preserve such Books and Records
included in the Purchased Assets (including electronically stored information)
that could reasonably be related to the FKI Matter.”
Section
7.12 Qualified Lawsuits.
Section 7.12(a) of the Agreement is
hereby amended as follows:
(1) The
reference to clause “(b)” in the last sentence is hereby changed to clause
“(ii)”.
Section
8.2 Conditions to Obligations of
Buyer.
Section 8.2(j) of the Agreement is
hereby amended as follows:
(1) All
references to “SW1” are hereby deleted and replaced by “SWI”.
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Section
10.2 Indemnification by Seller and
CTC.
Section 10.2 of the Agreement is hereby
amended as follows:
(1) The
word “or” in Section 10.2(a) shall be deleted before the existing clause
“(iii)”.
(2) The
following new clause “(iv)” shall be inserted after the existing clause “(iii)”
at the end of “Section 10.2(a)”:
“; or
(iv) any Excluded Liability regarding the transfer of Intellectual Property or
other assets from any of the Affiliates of CTC to any of the Affiliates of CTC
including Seller regardless of whether or not the Seller Disclosure Schedule
discloses any such Excluded Liability.”
(3) Section
10.2(c) shall be deleted in its entirety and amended and restated as
follows:
“(c) Notwithstanding
anything to the contrary contained in this Section 10.2, the Buyer Indemnitees
shall not be entitled to aggregate Losses in excess of the amount of 35% of the
amount of the Adjusted Cash Consideration (the “Cap”), except with regard to
actual or constructive fraud and except for specific performance expressly
provided in Section 6.8(c); provided, however, that the
Buyer Indemnitees shall be entitled to Losses in excess of the Cap to the extent
that such Losses arise under Section 10.2(a)(i) solely with respect to a breach
of the representation made by Seller in Section 4.15(n) or to the extent that
such Losses arise under Section 10.2(a)(iv) (collectively, “4.15(n) Losses”), but in no
event shall the Buyer Indemnitees be entitled to aggregate Losses (including
4.15(n) Losses) in excess of 75% of the amount of the Adjusted Cash
Consideration.”
(4) The
following new Section 10.2(d) shall be inserted after Section
10.2(c):
“(d) Notwithstanding
anything to the contrary contained in this Section 10.2, in the event of a
breach of Section 4.3(c), Buyer shall promptly notify Seller of such default and
grant Seller a reasonable opportunity to cure such default on behalf of ▇▇▇▇▇▇
Energy Development Company LLC in accordance with the terms of the SWI LLC
Agreement. In the event Seller shall fail to cure such default, Buyer
shall be entitled to liquidated damages in the amount of $1,000,000 as Buyer's
sole and exclusive remedy for such breach. Buyer shall have no further
right whatsoever to any additional remedy, at law or in equity, for such
breach. The parties hereto acknowledge that under the circumstances
existing as of the date of this Agreement, the liquidated damages provided for
in this Section 10.2(d) represent a reasonable estimate of the damages that
Buyer will incur as a result of any such breach, since the actual damages will
be both impractical and extremely difficult to determine following any such
breach. The parties further acknowledge that the payment of such
liquidated damages is intended to comply with California Civil Code Section
1671.”
Section
10.3 Indemnification by Buyer.
Section 10.3 of the Agreement is hereby
amended as follows:
(1) The
reference to “Seller” in the fourth line of Section 10.3(b)(ii) is hereby deleted and
replaced by “Buyer”.
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(2) The
reference to “10.2(a)” in Section 10.3(b)(iii) is hereby deleted and replaced by
“10.3(a)”.
(3) Section
10.3(c) of the Agreement is hereby deleted in its entirety and amended and
restated as follows:
“(c) Notwithstanding
anything to the contrary contained in this Section 10.3 or elsewhere in this
Agreement, the Seller Indemnitees shall not be entitled to aggregate Losses in
excess of the Cap, except with regard to actual or constructive
fraud.”
Section
10.4 Indemnification Procedures for Third
Party Claims.
Section 10.4 of the Agreement is hereby
amended by the addition of the following new clause “(c)”, and the existing
clause “(c)” shall be the new clause “(d)”:
“(c) Notwithstanding
anything to the contrary in this Agreement, in the case of any Third Party
Claims which may become a 4.15(n) Loss, Buyer Indemnitees shall be entitled to
all reasonable costs and attorneys fees to (1) monitor the status of such
claims, stay informed regarding such claims and coordinate with Seller and
Seller’s counsel in connection with the defense of such claims and (2) to file,
prosecute or pursue any action in order to dismiss any actions filed against
Buyer Indemnitees.”
Section
10.7 General.
Section 10.7(d) of the Agreement is
hereby deleted in its entirety and amended and restated as follows:
“(d) The
indemnification provided in this Article X shall be the exclusive post-Closing
remedy available to any Party hereto with respect to any breach of any
representation, warranty, covenant or agreement in this Agreement, or otherwise
in respect of the transactions contemplated by this Agreement, except with
regard to actual or constructive fraud and except as otherwise expressly
provided in Section 6.8(c). Without limiting the foregoing, the rights and
remedies of Buyer with respect to any Pre-Closing Environmental Liability or any
other matter arising under or relating to Environmental Laws shall be governed
exclusively by Article X, and Buyer hereby waives and releases any and all
claims at Law or in equity it may have with respect to any Pre-Closing
Environmental Liability or any other matter arising under or relating to
Environmental Laws.”
Other Amendments.
(1) Schedule
2.1(c) to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 2.1(c) attached hereto as Exhibit A.
(2) Schedule
2.1(d) to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 2.1(d) attached hereto as Exhibit B.
(3) Schedule
4.6 to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 4.6 attached hereto as Exhibit C.
(3) Schedule
4.15(b) to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 4.15(b) attached hereto as Exhibit D.
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(4) Schedule
4.15(g) to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 4.15(g) attached hereto as Exhibit E.
(5) Schedule
4.17(a) to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 4.17(a) attached hereto as Exhibit F.
(6) Schedule
7.9 to the Agreement is hereby deleted in its entirety and replaced with the
amended and restated Schedule 7.9 attached hereto as Exhibit G.
Miscellaneous.
Except as
specifically amended hereby, the Agreement shall continue in full force and
effect in accordance with its terms. This Amendment 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.
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IN
WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed by
their respective authorized officers as of the date first written
above.
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DAEWOO
SHIPBUILDING & MARINE
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ENGINEERING
CO., LTD.
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By:
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/s/
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Name:
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Title:
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▇▇▇▇▇▇,
INC.
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By:
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/s/
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Name:
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Title:
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COMPOSITE
TECHNOLOGY CORPORATION
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By:
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/s/
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Name:
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Title:
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