Exhibit 10.5


 


This Mortgage was prepared by:


GREAT
WESTERN BANK


200 E 10th
Street


Sioux
Falls, SD 57104


(605) 334-2548


 


MORTGAGE - COLLATERAL REAL
ESTATE MORTGAGE


- 180 DAY REDEMPTION


 


RECORDATION REQUESTED BY:

GREAT WESTERN BANK

Sioux Falls 

200 E 10th Street 

Sioux Falls, SD 57104


 


WHEN
RECORDED MAIL TO: 


GREAT
WESTERN BANK


Sioux
Falls


200
E 10th Street


Sioux
Falls, SD 57104


 


SEND
TAX NOTICES TO: 


GREAT
WESTERN BANK


Sioux
Falls


200
E 10th Street


Sioux
Falls, SD 57104


 


THIS MORTGAGE
dated April 28, 2009, is made and executed between TOWER TECH SYSTEMS INC, A
WISCONSIN CORPORATION, whose address is 101 S 16TH ST PO BOX 1957, MANITOWOC, Wl
54221-1957 (“Mortgagor”, referred to below as “Grantor”) and GREAT WESTERN BANK,
whose address is 200 E 10th Street, Sioux Falls, SD 57104 (“Mortgagee”, referred
to below as “Lender”).


 


GRANT OF
MORTGAGE. For valuable consideration, Grantor mortgages and conveys to Lender all of Grantor’s right, title, and
interest in and to the following described real property, together with all
existing or subsequently erected or affixed buildings, improvements and
fixtures; all easements, rights of way, and appurtenances; all water, water
rights, watercourses and ditch rights (including stock in utilities with ditch
or irrigation rights); and all other rights, royalties, and profits relating to
the real property, including without limitation all minerals, oil, gas, geothermal


 

















 


MORTGAGE


(Continued)


 


and similar matters, (the “Real Property”) located
in MINNEHAHA County, State of South Dakota:


 


LOT
3 IN BLOCK 1 OF CORSON DEVELOPMENT PARK ADDITION TO THE CITY OF BRANDON, MINNEHAHA
COUNTY, SOUTH DAKOTA, ACCORDING TO THE RECORDED PLAT THEREOF.


 


The Real
Property or its address is commonly known as 1820 N TOWER TECH AVE, BRANDON, SD
57005. The Real Property tax identification number is 77217.


 


CROSS-COLLATERALIZATION.
In addition to the Note, this Mortgage secures all
obligations, debts and liabilities, plus interest thereon, of Grantor to Lender,
or any one or more of them, as well as all claims by Lender against Grantor or
any one or more of them, whether now existing or hereafter arising, whether
related or unrelated to the purpose of the Note, whether voluntary or otherwise,
whether due or not due, direct or indirect, determined or undetermined, absolute
or contingent, liquidated or unliquidated, whether Grantor may be liable
individually or jointly with others, whether obligated as guarantor, surety, accommodation
party or otherwise, and whether recovery upon such amounts may be or hereafter
may become barred by any statute of limitations, and whether the obligation to
repay such amounts may be or hereafter may become otherwise unenforceable.


 


Grantor presently assigns
to Lender all of Grantor’s right, title, and interest in and to all present and
future leases of the Property and all Rents from the Property. In addition, Grantor
grants to Lender a Uniform Commercial Code security interest in the Personal
Property and Rents.


 


THE
PARTIES AGREE THAT THIS MORTGAGE CONSTITUTES A COLLATERAL REAL ESTATE MORTGAGE
PURSUANT TO SDCL 44-8-26.


 


THIS
MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE
RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE
INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE,
THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE, INCLUDING THE
ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL
PROPERTY, IS ALSO GIVEN TO SECURE ANY AND ALL OF GRANTOR’S OBLIGATIONS UNDER
THAT CERTAIN CONSTRUCTION LOAN AGREEMENT BETWEEN GRANTOR AND LENDER OF EVEN
DATE HEREWITH. ANY EVENT OF DEFAULT UNDER THE CONSTRUCTION LOAN AGREEMENT, OR
ANY OF THE RELATED DOCUMENTS REFERRED TO THEREIN, SHALL ALSO BE AN EVENT OF
DEFAULT UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE
FOLLOWING TERMS:


 


MORTGAGE
TERM AND LIEN. This Mortgage shall, notwithstanding the fact
that from time to time during the term hereof no Indebtedness may be due from
Grantor to Lender, constitute a continuing lien against the Property for the
amount stated in this document. If at any time the Indebtedness due Lender is
zero dollars ($0.00), Lender shall, within ten (10) days after receipt of
written demand for satisfaction of this Mortgage by Grantor, execute and record
a satisfaction. The original term of this
Mortgage is five (5) years from the date of filing unless such term is
extended by the filing of an Addendum to this Mortgage. Any Addendum
to this Mortgage need be signed only by Lender. Upon the timely filing of such
an Addendum to this Mortgage, the effectiveness of this Mortgage shall be
continued for five (5) years after the date of filing. This Mortgage shall
lapse after the additional five (5) year period unless another Addendum to


 


2

















 


MORTGAGE


(Continued)


 


this Mortgage is filed
continuing the effectiveness of this Mortgage prior to such lapse. Succeeding
Addendums to this Mortgage may be filed in the same manner to continue the
effectiveness of the lien of this Mortgage.


 


PAYMENT
AND PERFORMANCE. Except as otherwise provided in this
Mortgage, Grantor shall pay to Lender all amounts secured by this Mortgage as
they become due and shall strictly perform all of Grantor’s obligations under
this Mortgage.


 


POSSESSION
AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor’s
possession and use of the Property shall be governed by the following
provisions:


 


Possession
and Use. Until the occurrence of an Event of Default, Grantor
may (1) remain in possession and control of the Property; (2) use, operate
or manage the Property; and (3) collect the Rents from the Property.


 


Duty to
Maintain. Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.


 


Compliance
With Environmental Laws. Grantor represents and warrants to
Lender that: (1) During the period of Grantor’s ownership of the Property,
there has been no use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any Hazardous Substance by any person on, under, about
or from the Property; (2) Grantor has no knowledge of, or reason to
believe that there has been, except as previously disclosed to and acknowledged
by Lender in writing, (a) any breach or violation of any Environmental
Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release
or threatened release of any Hazardous Substance on, under, about or from the
Property by any prior owners or occupants of the Property, or (c) any
actual or threatened litigation or claims of any kind by any person relating to
such matters; and (3) Except as previously disclosed to and acknowledged
by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent
or other authorized user of the Property shall use, generate, manufacture, store,
treat, dispose of or release any Hazardous Substance on, under, about or from
the Property; and (b) any such activity shall be conducted in compliance
with all applicable federal, state, and local laws, regulations and ordinances,
including without limitation all Environmental Laws. Grantor authorizes Lender and
its agents to enter upon the Property to make such inspections and tests, at
Grantor’s expense, as Lender may deem appropriate to determine compliance of
the Property with this section of the Mortgage. Any inspections or tests made
by Lender shall be for Lender’s purposes only and shall not be construed to
create any responsibility or liability on the part of Lender to Grantor or to
any other person. The representations and warranties contained herein are based
on Grantor’s due diligence in investigating the Property for Hazardous
Substances. Grantor hereby (1) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws; and (2) agrees to
indemnify, defend, and hold harmless Lender against any and all claims, losses,
liabilities, damages, penalties, and expenses which Lender may directly or
indirectly sustain or suffer resulting from a breach of this section of the
Mortgage or as a consequence of any use, generation, manufacture, storage, disposal,
release or threatened release occurring prior to Grantor’s ownership or
interest in the Property, whether or not the same was or should have been known
to Grantor. The provisions of this section of the Mortgage, including the
obligation to indemnify and defend, shall survive the payment of the
Indebtedness and the satisfaction and


 


3

















 


MORTGAGE 


(Continued)


 


reconveyance of the lien
of this Mortgage and shall not be affected by Lender’s acquisition of any
interest in the Property, whether by foreclosure or otherwise.


 


Nuisance,
Waste. Grantor shall not cause, conduct or permit any
nuisance nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of the
foregoing, Grantor will not remove, or grant to any other party the right to
remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil,
gravel or rock products without Lender’s prior written consent.


 


Removal
of Improvements. Grantor shall not demolish or remove any
Improvements from the Real Property without Lender’s prior written consent. As
a condition to the removal of any Improvements, Lender may require Grantor to
make arrangements satisfactory to Lender to replace such Improvements with
Improvements of at least equal value.


 


Lender’s
Right to Enter. Lender and Lender’s agents and
representatives may enter upon the Real Property at all reasonable times to
attend to Lender’s interests and to inspect the Real Property for purposes of
Grantor’s compliance with the terms and conditions of this Mortgage.


 


Compliance
with Governmental Requirements. Grantor shall promptly comply
with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental
authorities applicable to the use or occupancy of the Property, including without
limitation, the Americans With Disabilities Act. Grantor may contest in good
faith any such law, ordinance, or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Grantor has notified
Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s
interests in the Property are not jeopardized. Lender may require Grantor to
post adequate security or a surety bond, reasonably satisfactory to Lender, to
protect Lender’s interest.


 


Duty
to Protect. Grantor agrees neither to abandon or leave
unattended the Property. Grantor shall do all other acts, in addition to those
acts set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.


 


TAXES
AND LIENS. The following provisions relating to the taxes and
liens on the Property are part of this Mortgage:


 


Payment.
Grantor shall pay when due (and in all events prior to
delinquency) all taxes, payroll taxes, special taxes, assessments, water
charges and sewer service charges levied against or on account of the Property,
and shall pay when due all claims for work done on or for services rendered or
material furnished to the Property. Grantor shall maintain the Property free of
any liens having priority over or equal to the interest of Lender under this
Mortgage, except for those liens specifically agreed to in writing by Lender, and
except for the lien of taxes and assessments not due as further specified in
the Right to Contest paragraph.


 


Right to
Contest. Grantor may withhold payment of any tax, assessment,
or claim in connection with a good faith dispute over the obligation to pay, so
long as Lender’s interest in the Property is not jeopardized. If a lien arises
or is filed as a result of nonpayment, Grantor shall within fifteen (15) days
after the lien arises or, if a lien is filed, within fifteen (15) days after
Grantor has notice of the filing, secure the discharge of the lien, or if
requested by


 


4

















 


MORTGAGE 


(Continued)


 


Lender, deposit with
Lender cash or a sufficient corporate surety bond or other security
satisfactory to Lender in an amount sufficient to discharge the lien plus any
costs and attorneys’ fees, or other charges that could accrue as a result of a
foreclosure or sale under the lien. In any contest, Grantor shall defend itself
and Lender and shall satisfy any adverse judgment before enforcement against
the Property. Grantor shall name Lender as an additional obligee under any
surety bond furnished in the contest proceedings.


 


Evidence
of Payment. Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.


 


Notice
of Construction. Grantor shall notify Lender at least fifteen
(15) days before any work is commenced, any services are furnished, or any
materials are supplied to the Property, if any mechanic’s lien, materialmen’s
lien, or other lien could be asserted on account of the work, services, or
materials. Grantor will upon request of Lender furnish to Lender advance
assurances satisfactory to Lender that Grantor can and will pay the cost of
such improvements.


 


PROPERTY
DAMAGE INSURANCE. The following provisions relating to
insuring the Property are a part of this Mortgage:


 


Maintenance
of Insurance. Grantor shall procure
and maintain policies of fire insurance with standard extended coverage
endorsements on a replacement basis for the full insurable value covering all
Improvements on the Real Property in an amount sufficient to avoid application
of any coinsurance clause, and with a standard mortgagee clause in favor of
Lender. Grantor shall also procure and maintain comprehensive general liability
insurance in such coverage amounts as Lender may request with Lender being
named as additional insureds in such liability insurance policies. Additionally,
Grantor shall maintain such other insurance, including but not limited to
hazard, business interruption and boiler insurance as Lender may require. Policies
shall be written by such insurance companies and in such form as may be
reasonably acceptable to Lender. Grantor shall deliver to Lender certificates
of coverage from each insurer containing a stipulation that coverage will not
be cancelled or diminished without a minimum of ten (10) days’ prior
written notice to Lender and not containing any disclaimer of the insurer’s
liability for failure to give such notice. Each insurance policy also shall
include an endorsement providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of Grantor or any other
person. Should the Real Property be located in an area designated by the
Director of the Federal Emergency Management Agency as a special flood hazard
area, Grantor agrees to obtain and maintain Federal Flood Insurance, if
available, within 45 days after notice is given by Lender that the Property is
located in a special flood hazard area, for the full unpaid principal balance
of the loan and any prior liens on the property securing the loan, up to the
maximum policy limits set under the National Flood Insurance Program, or as
otherwise required by Lender, and to maintain such insurance for the term of
the loan.


 


Application
of Proceeds. Grantor shall promptly notify Lender of any loss
or damage to the Property. Lender may make proof of loss if Grantor fails to do
so within fifteen (15) days of the casualty. Whether or not Lender’s security
is impaired, Lender may, at Lender’s election, receive and retain the proceeds
of any insurance and apply the proceeds to the reduction of


 


5

















 


MORTGAGE 


(Continued)


 


the Indebtedness, payment
of any lien affecting the Property, or the restoration and repair of the
Property. If Lender elects to apply the proceeds to restoration and repair, Grantor
shall repair or replace the damaged or destroyed Improvements in a manner
satisfactory to Lender. Lender shall, upon satisfactory proof of such
expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost
of repair or restoration if Grantor is not in default under this Mortgage. Any
proceeds which have not been disbursed within 180 days after their receipt and
which Lender has not committed to the repair or restoration of the Property
shall be used first to pay any amount owing to Lender under this Mortgage, then
to pay accrued interest, and the remainder, if any, shall be applied to the
principal balance of the Indebtedness. If Lender holds any proceeds after
payment in full of the Indebtedness, such proceeds shall be paid to Grantor as
Grantor’s interests may appear.


 


Grantor’s
Report on Insurance. Upon request of Lender, however not more
than once a year, Grantor shall furnish to Lender a report on each existing
policy of insurance showing: (1) the name of the insurer; (2) the
risks insured; (3) the amount of the policy; (4) the property insured,
the then current replacement value of such property, and the manner of
determining that value; and (5) the expiration date of the policy. Grantor
shall, upon request of Lender, have an independent appraiser satisfactory to
Lender determine the cash value replacement cost of the Property.


 


LENDER’S
EXPENDITURES. If any action or proceeding is commenced that
would materially affect Lender’s interest in the Property or if Grantor fails
to comply with any provision of this Mortgage or any Related Documents, including
but not limited to Grantor’s failure to discharge or pay when due any amounts
Grantor is required to discharge or pay under this Mortgage or any Related
Documents, Lender on Grantor’s behalf may (but shall not be obligated to) take any
action that Lender deems appropriate, including but not limited to discharging
or paying all taxes, liens, security interests, encumbrances and other claims, at
any time levied or placed on the Property and paying all costs for insuring, maintaining
and preserving the Property. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by Lender to the date of repayment by Grantor. All
such expenses will become a part of the Indebtedness and, at Lender’s option, will
(A) be payable on demand; (B) be added to the balance of the Note and
be apportioned among and be payable with any installment payments to become due
during either (1) the term of any applicable insurance policy; or
(2) the remaining term of the Note; or (C) be treated as a balloon
payment which will be due and payable at the Note’s maturity. The Mortgage also
will secure payment of these amounts. Such right shall be in addition to all
other rights and remedies to which Lender may be entitled upon Default.


 


WARRANTY;
DEFENSE OF TITLE. The following provisions relating to
ownership of the Property are a part of this Mortgage:


 


Title. Grantor warrants that: (a) Grantor
holds good and marketable title of record to the Property in fee simple, free
and clear of all liens and encumbrances other than those set forth in the Real
Property description or in any title insurance policy, title report, or final
title opinion issued in favor of, and accepted by, Lender in connection with
this Mortgage, and (b) Grantor has the full right, power, and authority to
execute and deliver this Mortgage to Lender.


 


Defense
of Title. Subject to the exception in the paragraph above, Grantor
warrants and will


 


6

















 


MORTGAGE 


(Continued)


 


forever defend the title
to the Property against the lawful claims of all persons. In the event any
action or proceeding is commenced that questions Grantor’s title or the
interest of Lender under this Mortgage, Grantor shall defend the action at
Grantor’s expense. Grantor may be the nominal party in such proceeding, but
Lender shall be entitled to participate in the proceeding and to be represented
in the proceeding by counsel of Lender’s own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request from
time to time to permit such participation.


 


Compliance
With Laws. Grantor warrants that the Property and Grantor’s
use of the Property complies with all existing applicable laws, ordinances, and
regulations of governmental authorities.


 


Survival
of Representations and Warranties. All representations, warranties,
and agreements made by Grantor in this Mortgage shall survive the execution and
delivery of this Mortgage, shall be continuing in nature, and shall remain in
full force and effect until such time as Grantor’s Indebtedness shall be paid
in full.


 


CONDEMNATION.
The following provisions relating to condemnation proceedings
are a part of this Mortgage:


 


Proceedings.
If any proceeding in condemnation is filed, Grantor shall
promptly notify Lender in writing, and Grantor shall promptly take such steps
as may be necessary to defend the action and obtain the award. Grantor may be
the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by
counsel of its own choice, and Grantor will deliver or cause to be delivered to
Lender such instruments and documentation as may be requested by Lender from
time to time to permit such participation.


 


Application
of Net Proceeds. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the Indebtedness or the
repair or restoration of the Property. The net proceeds of the award shall mean
the award after payment of all reasonable costs, expenses, and attorneys’ fees
incurred by Lender in connection with the condemnation.


 


IMPOSITION
OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The
following provisions relating to governmental taxes, fees and charges are a
part of this Mortgage:


 


Current
Taxes, Fees and Charges. Upon request by Lender, Grantor
shall execute such documents in addition to this Mortgage and take whatever
other action is requested by Lender to perfect and continue Lender’s lien on
the Real Property. Grantor shall reimburse Lender for all taxes, as described
below, together with all expenses incurred in recording, perfecting or
continuing this Mortgage, including without limitation all taxes, fees, documentary
stamps, and other charges for recording or registering this Mortgage.


 


Taxes.
The following shall constitute taxes to which this section
applies: (1) a specific tax upon this type of Mortgage or upon all or any
part of the Indebtedness secured by this Mortgage; (2) a specific tax on
Grantor which Grantor is authorized or required to deduct from payments on the
Indebtedness secured by this type of Mortgage; (3) a tax on this type of
Mortgage chargeable against the Lender or the holder of the Note; and (4) a
specific tax on all or any portion of the Indebtedness or on payments of
principal and interest made by


 


7

















 


MORTGAGE 


(Continued)


 


Grantor.


 


Subsequent
Taxes. If any
tax to which this section applies is enacted subsequent to the date of this
Mortgage, this event shall have the same effect as an Event of Default, and
Lender may exercise any or all of its available remedies for an Event of
Default as provided below unless Grantor either (1) pays the tax before it
becomes delinquent, or (2) contests the tax as provided above in the Taxes
and Liens section and deposits with Lender cash or a sufficient corporate
surety bond or other security satisfactory to Lender.


 


SECURITY
AGREEMENT; FINANCING STATEMENTS. The following provisions
relating to this Mortgage as a security agreement are a part of this Mortgage:


 


Security
Agreement. This instrument shall constitute a Security
Agreement to the extent any of the Property constitutes fixtures, and Lender
shall have all of the rights of a secured party under the Uniform Commercial
Code as amended from time to time.


 


Security
Interest. Upon request by Lender, Grantor shall take whatever
action is requested by Lender to perfect and continue Lender’s security
interest in the Rents and Personal Property. In addition to recording this
Mortgage in the real property records, Lender may, at any time and without
further authorization from Grantor, file executed counterparts, copies or
reproductions of this Mortgage as a financing statement. Grantor shall
reimburse Lender for all expenses incurred in perfecting or continuing this
security interest. Upon default, Grantor shall not remove, sever or detach the
Personal Property from the Property. Upon default, Grantor shall assemble any
Personal Property not affixed to the Property in a manner and at a place
reasonably convenient to Grantor and Lender and make it available to Lender
within three (3) days after receipt of written demand from Lender to the
extent permitted by applicable law.


 


Addresses.
The mailing addresses of Grantor (debtor) and Lender (secured
party) from which information concerning the security interest granted by this
Mortgage may be obtained (each as required by the Uniform Commercial Code) are
as stated on the first page of this Mortgage.


 


FURTHER
ASSURANCES; ATTORNEY-IN-FACT. The following provisions
relating to further assurances and attorney-in-fact are a part of this
Mortgage:


 


Further
Assurances. At any time, and from time to time, upon request
of Lender, Grantor will make, execute and deliver, or will cause to be made, executed
or delivered, to Lender or to Lender’s designee, and when requested by Lender, cause
to be filed, recorded, refiled, or rerecorded, as the case may be, at such
times and in such offices and places as Lender may deem appropriate, any and
all such mortgages, deeds of trust, security deeds, security agreements, financing
statements, continuation statements, instruments of further assurance, certificates,
and other documents as may, in the sole opinion of Lender, be necessary or
desirable in order to effectuate, complete, perfect, continue, or preserve
(1) Grantor’s obligations under the Note, this Mortgage, and the Related
Documents, and (2) the liens and security interests created by this
Mortgage as first and prior liens on the Property, whether now owned or
hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the
contrary in writing, Grantor shall reimburse Lender for all costs and expenses
incurred in connection with the matters referred to in this paragraph.


 


Attorney-in-Fact.
If Grantor fails to do any of the things referred to in the
preceding


 


8

















 


MORTGAGE 


(Continued)


 


paragraph, Lender may do
so for and in the name of Grantor and at Grantor’s expense. For such purposes, Grantor
hereby irrevocably appoints Lender as Grantor’s attorney-in-fact for the
purpose of making, executing, delivering, filing, recording, and doing all
other things as may be necessary or desirable, in Lender’s sole opinion, to
accomplish the matters referred to in the preceding paragraph.


 


FULL
PERFORMANCE. If Grantor pays all the Indebtedness when due, and
otherwise performs all the obligations imposed upon Grantor under this Mortgage,
Lender shall execute and deliver to Grantor a suitable satisfaction of this
Mortgage and suitable statements of termination of any financing statement on
file evidencing Lender’s security interest in the Rents and the Personal
Property. Grantor will pay, if permitted by applicable law, any reasonable
termination fee as determined by Lender from time to time.


 


EVENTS
OF DEFAULT. Each of the following, at Lender’s option, shall
constitute an Event of Default under this Mortgage:


 


Payment
Default. Grantor fails to make any payment when due under the
Indebtedness.


 


Default
on Other Payments. Failure of Grantor within the time
required by this Mortgage to make any payment for taxes or insurance, or any
other payment necessary to prevent filing of or to effect discharge of any
lien.


 


Other
Defaults. Grantor fails to comply with or to perform any
other term, obligation, covenant or condition contained in this Mortgage or in
any of the Related Documents or to comply with or to perform any term, obligation,
covenant or condition contained in any other agreement between Lender and
Grantor.


 


False
Statements. Any warranty, representation or statement made or
furnished to Lender by Grantor or on Grantor’s behalf under this Mortgage or
the Related Documents is false or misleading in any material respect, either
now or at the time made or furnished or becomes false or misleading at any time
thereafter.


 


Defective
Collateralization. This Mortgage or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) at
any time and for any reason.


 


Insolvency.
The dissolution or termination of Grantor’s existence as a
going business, the insolvency of Grantor, the appointment of a receiver for
any part of Grantor’s property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Grantor.


 


Creditor
or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Grantor or by any governmental agency
against any property securing the Indebtedness. This includes a garnishment of
any of Grantor’s accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Grantor as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Grantor gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.


 


9

















 


MORTGAGE 


(Continued)


 


Breach
of Other Agreement. Any breach by Grantor under the terms of
any other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender, whether
existing now or later.


 


Events
Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness.


 


Adverse
Change. A material adverse change occurs in Grantor’s
financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired.


 


Right
to Cure. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of a breach of the same
provision of this Mortgage within the preceding twelve (12) months, it may be
cured if Grantor, after receiving written notice from Lender demanding cure of
such default: (1) cures the default within fifteen (15) days; or (2) if
the cure requires more than fifteen (15) days, immediately initiates steps
which Lender deems in Lender’s sole discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.


 


RIGHTS
AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of
Default and at any time thereafter, Lender, at Lender’s option, may exercise
any one or more of the following rights and remedies, in addition to any other
rights or remedies provided by law:


 


Accelerate
Indebtedness. Lender shall have the right at its option
without notice to Grantor to declare the entire Indebtedness immediately due
and payable, including any prepayment penalty that Grantor would be required to
pay.


 


UCC
Remedies. With respect to all or any part of the Personal
Property, Lender shall have all the rights and remedies of a secured party
under the Uniform Commercial Code.


 


Collect
Rents. Grantor shall have the right, prior to default or
abandonment of the Property, to collect and retain the Rents as they become due
and payable. The assignment of Rents contained in this Mortgage shall be
effective until the payment of all Indebtedness secured by this Mortgage, or in
the event of foreclosure, until the period of redemption expires. Regardless of
the extinguishment of the Indebtedness by a foreclosure sale, this benefit
shall continue for the benefit of the purchaser at the foreclosure sale.


 


Appoint
Receiver. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with the power
to protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the Indebtedness.
The receiver may serve without bond if permitted by law. Lender’s right to the
appointment of a receiver shall exist whether or not the apparent value of the
Property exceeds the Indebtedness by a substantial amount. Employment by Lender
shall not disqualify a person from serving as a receiver.


 


Judicial
Foreclosure. Lender may obtain a judicial decree foreclosing
Grantor’s interest in all or any part of the Property.


 


Nonjudicial
Sale. If permitted by applicable law, Lender may foreclose
Grantor’s interest in


 


10

















 


MORTGAGE 


(Continued)


 


all or in any part of the
Personal Property or the Real Property by non-judicial sale.


 


Deficiency
Judgment. If permitted by applicable law, Lender may obtain a
judgment for any deficiency remaining in the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights provided in
this section.


 


Redemption.
THE PARTIES AGREE THAT THE PROVISIONS OF THE 180-DAY REDEMPTION MORTGAGE ACT
GOVERN THIS MORTGAGE. THIS SHALL CONSTITUTE AND AUTHORIZE A POWER OF SALE UNDER
THE PROVISIONS OF SUCH ACT. Grantor agrees that, in the event of a foreclosure of this
Mortgage by action, the holder of the certificate of sale conducted as a result
of the foreclosure may apply to the appropriate court for a reduction of the
redemption period if Grantor has abandoned the Property. Grantor agrees that if,
after notice to the parties as the court may direct, the court finds that the
Property has been abandoned, then the redemption period may be reduced to a
period of not less than sixty (60) days from the date of recording of the
certificate of sale issued as a result of the foreclosure of this Mortgage.


 


Tenancy
at Sufferance. If Grantor remains in possession of the
Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor, Grantor
shall become a tenant at sufferance of Lender or the purchaser of the Property
and shall, at Lender’s option, either (1) pay a reasonable rental for the
use of the Property, or (2) vacate the Property immediately upon the
demand of Lender.


 


Other
Remedies. Lender shall have all other rights and remedies
provided in this Mortgage or the Note or available at law or in equity.


 


Sale of
the Property. To the extent permitted by applicable law, Grantor
hereby waives any and all right to have the Property marshalled. In exercising
its rights and remedies, Lender shall be free to sell all or any part of the
Property together or separately, in one sale or by separate sales. Lender shall
be entitled to bid at any public sale on all or any portion of the Property.


 


Notice
of Sale. Lender shall give Grantor reasonable notice of the
time and place of any public sale of the Personal Property or of the time after
which any private sale or other intended disposition of the Personal Property
is to be made. Reasonable notice shall mean notice given at least ten
(10) days before the time of the sale or disposition. Any sale of the
Personal Property may be made in conjunction with any sale of the Real
Property.


 


Election
of Remedies. Election by Lender to pursue any remedy shall
not exclude pursuit of any other remedy, and an election to make expenditures
or to take action to perform an obligation of Grantor under this Mortgage, after
Grantor’s failure to perform, shall not affect Lender’s right to declare a
default and exercise its remedies. Nothing under this Mortgage or otherwise
shall be construed so as to limit or restrict the rights and remedies available
to Lender following an Event of Default, or in any way to limit or restrict the
rights and ability of Lender to proceed directly against Grantor and/or against
any other co-maker, guarantor, surety or endorser and/or to proceed against any
other collateral directly or indirectly securing the Indebtedness.


 


Attorneys’
Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Mortgage, Lender shall be entitled to recover
such sum as the court may


 


11
















 


MORTGAGE 


(Continued)


 


adjudge reasonable as
attorneys’ fees at trial and upon any appeal. Whether or not any court action
is involved, and to the extent not prohibited by law, all reasonable expenses
Lender incurs that in Lender’s opinion are necessary at any time for the
protection of its interest or the enforcement of its rights shall become a part
of the Indebtedness payable on demand and shall bear interest at the Note rate
from the date of the expenditure until repaid. Expenses covered by this paragraph
include, without limitation, however subject to any limits under applicable
law, Lender’s attorneys’ fees and Lender’s legal expenses, whether or not there
is a lawsuit,  including attorneys’ fees
and expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), appeals, and any anticipated post-judgment
collection  services,  the cost of searching  records, 
obtaining title reports (including foreclosure reports), surveyors’
reports, and appraisal fees and title insurance, to the extent permitted by
applicable law.  Grantor also will pay
any court costs, in addition to all other sums provided by law.


 


NOTICES. Any notice required to be given under
this Mortgage, including without limitation any notice of default and any
notice of sale shall be given in writing, and shall be effective when actually
delivered, when actually received by telefacsimile (unless otherwise required
by law), when deposited with a nationally recognized overnight courier, or, if
mailed, when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the
beginning of this Mortgage. All copies of notices of foreclosure from the
holder of any lien which has priority over this Mortgage shall be sent to
Lender’s address, as shown near the beginning of this Mortgage. Any party may
change its address for notices under this Mortgage by giving formal written
notice to the other parties, specifying that the purpose of the notice is to
change the party’s address. For notice purposes, Grantor agrees to keep Lender
informed at all times of Grantor’s current address. Unless otherwise provided
or required by law, if there is more than one Grantor, any notice given by
Lender to any Grantor is deemed to be notice given to all Grantors.


 


MISCELLANEOUS  PROVISIONS.  The
following miscellaneous provisions are a part of this Mortgage:


 


Amendments. This Mortgage, together with any
Related Documents, constitutes the entire understanding and agreement of the
parties as to the matters set forth in this Mortgage. No alteration of or
amendment to this Mortgage shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the alteration
or amendment.


 


Annual
Reports. If
the Property is used for purposes other than Grantor’s residence, Grantor shall
furnish to Lender, upon request, a certified statement of net operating income
received from the Property during Grantor’s previous fiscal year in such form
and detail as Lender shall require. “Net operating income” shall mean all cash
receipts from the Property less all cash expenditures made in connection with
the operation of the Property.


 


Caption
Headings. Caption
headings in this Mortgage are for convenience purposes only and are not to be
used to interpret or define the provisions of this Mortgage.


 


Governing
Law.  This Mortgage will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of South Dakota without regard to its conflicts of law provisions.
This Mortgage has been accepted by Lender in the State of South Dakota.


 


12

















 


MORTGAGE 


(Continued)


 


Choice
of Venue. If
there is a lawsuit, Grantor agrees upon Lender’s request to submit to the
jurisdiction of the courts of Minnehaha County, State of South Dakota.


 


No
Waiver by Lender. Lender
shall not be deemed to have waived any rights under this Mortgage unless such
waiver is given in writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a waiver of such right
or any other right. A waiver by Lender of a provision of this Mortgage shall
not prejudice or constitute a waiver of Lender’s right otherwise to demand
strict compliance with that provision or any other provision of this Mortgage.
No prior waiver by Lender, nor any course of dealing between Lender and
Grantor, shall constitute a waiver of any of Lender’s rights or of any of
Grantor’s obligations as to any future transactions. Whenever the consent of
Lender is required under this Mortgage, the granting of such consent by Lender
in any instance shall not constitute continuing consent to subsequent instances
where such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.


 


Severability. If a court of competent jurisdiction
finds any provision of this Mortgage to be illegal, invalid, or unenforceable
as to any circumstance, that finding shall not make the offending provision
illegal, invalid, or unenforceable as to any other circumstance. If feasible,
the offending provision shall be considered modified so that it becomes legal,
valid and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Mortgage. Unless otherwise required by
law, the illegality, invalidity, or unenforceability of any provision of this
Mortgage shall not affect the legality, validity or enforceability of any other
provision of this Mortgage.


 


Merger. There shall be no merger of the
interest or estate created by this Mortgage with any other interest or estate
in the Property at any time held by or for the benefit of Lender in any
capacity, without the written consent of Lender.


 


Successors
and Assigns. Subject
to any limitations stated in this Mortgage on transfer of Grantor’s interest,
this Mortgage shall be binding upon and inure to the benefit of the parties,
their successors and assigns. If ownership of the Property becomes vested in a
person other than Grantor, Lender, without notice to Grantor, may deal with
Grantor’s successors with reference to this Mortgage and the Indebtedness by
way of forbearance or extension without releasing Grantor from the obligations
of this Mortgage or liability under the Indebtedness.


 


Time
is of the Essence. Time is of the essence in the
performance of this Mortgage.


 


Waiver
of Homestead  Exemption.   Grantor
hereby releases and waives all  rights
and benefits of the homestead exemption laws of the State of South Dakota as to
all Indebtedness secured by this Mortgage.


 


DEFINITIONS. The following capitalized words and
terms shall have the following meanings when used in this Mortgage. Unless
specifically stated to the contrary, all references to dollar amounts shall
mean amounts in lawful money of the United States of America. Words and terms
used in the singular shall include the plural, and the plural shall include the
singular, as the context may require. Words and terms not otherwise defined in
this Mortgage shall have the meanings attributed to such terms in the Uniform
Commercial Code:


 


Borrower. The word “Borrower” means TOWER TECH
SYSTEMS INC and includes all co-signers and co-makers signing the Note and all
their successors and assigns.


 


13

















 


MORTGAGE 


(Continued)


 


Default.  The
word “Default” means the Default set forth in this Mortgage in the section
titled “Default”.


 


Environmental
Laws. The
words “Environmental Laws” mean any and all state, federal and local statutes,
regulations and ordinances relating to the protection of human health or the
environment, including without limitation the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq. (“CERCLA”), the Superfund Amendments and
Reauthorization Act of 1986,  Pub.
L.  No. 99-499 (“SARA”), the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et
seq., or other applicable state or federal laws, rules, or regulations adopted
pursuant thereto.


 


Event of
Default.  The words “Event of Default” mean any
of the events of default set forth in this Mortgage in the events of default
section of this Mortgage.


 


Grantor. The word “Grantor” means TOWER TECH
SYSTEMS INC.


 


Guarantor. The word “Guarantor” means any
guarantor, surety, or accommodation party of any or all of the Indebtedness.


 


Guaranty. The word “Guaranty” means the
guaranty from Guarantor to Lender, including without limitation a guaranty of
all or part of the Note.


 


Hazardous
Substances. The
words “Hazardous Substances” mean materials that, because of their quantity,
concentration or physical, chemical or infectious characteristics, may cause or
pose a present or potential hazard to human health or the environment when
improperly used, treated, stored, disposed of, generated, manufactured,
transported or otherwise handled. The words “Hazardous Substances” are used in
their very broadest sense and include without limitation any and all hazardous
or toxic substances, materials or waste as defined by or listed under the
Environmental Laws. The term “Hazardous Substances” also includes, without
limitation, petroleum and petroleum by-products or any fraction thereof and
asbestos.


 


Improvements. The word “Improvements” means all
existing and future improvements, buildings, structures, mobile homes affixed
on the Real Property, facilities, additions, replacements and other construction
on the Real Property.


 


Indebtedness. The word “Indebtedness” means all
principal, interest, and other amounts, costs and expenses payable under the
Note or Related Documents, together with all renewals of, extensions of,
modifications of, consolidations of and substitutions for the Note or Related
Documents and any amounts expended or advanced by Lender to discharge Grantor’s
obligations or expenses incurred by Lender to enforce Grantor’s obligations
under this Mortgage, together with interest on such amounts as provided in this
Mortgage. Specifically, without limitation, Indebtedness includes all amounts
that may be indirectly secured by the Cross-Collateralization provision of this
Mortgage.


 


Lender. The word “Lender” means GREAT WESTERN
BANK, its successors and assigns.


 


Mortgage. The word “Mortgage” means this
Mortgage between Grantor and Lender.


 


Note.  The
word “Note” means the promissory note dated April 28, 2009, in the original principal amount of $10,000,000.00 from Grantor to Lender, together with
all renewals of,


 


14

















 


MORTGAGE 


(Continued)


 


extensions of,
modifications of, refinancings of, consolidations of, and substitutions for the
promissory note or agreement.


 


Personal
Property. The
words “Personal Property” mean all equipment, fixtures, and other articles of
personal property now or hereafter owned by Grantor, and now or hereafter
attached or affixed to the Real Property; together with all accessions, parts,
and additions to, all replacements of, and all substitutions for, any of such
property; and together with all proceeds (including without limitation all
insurance proceeds and refunds of premiums) from any sale or other disposition
of the Property.


 


Property.  The
word “Property” means collectively the Real Property and the Personal Property.


 


Real
Property. The
words “Real Property” mean the real property, interests and rights, as further
described in this Mortgage.


 


Related
Documents.  The words “Related Documents” mean all
promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the Indebtedness.


 


Rents.  The
word “Rents” means all present and future rents, revenues, income, issues,
royalties, profits, and other benefits derived from the Property.


 


GRANTOR
ACKNOWLEDGES HAVING  READ ALL THE
PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS.


 


	
  GRANTOR:

  	
   

  
	
   

  	
   

  
	
  TOWER TECH SYSTEMS INC

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Steve Huntington

  	
   

  
	
   

  	
  STEVE HUNTINGTON, CHIEF FINANCIAL
  OFFICER of

  	
   

  
	
   

  	
  TOWER TECH SYSTEMS INC

  	
   

  



 


15

















 


MORTGAGE 


(Continued)


 


CORPORATE ACKNOWLEDGMENT


 


	
  STATE OF South Dakota

  	
   

  	
  )

  
	
   

  	
   

  	
  ) SS

  
	
  COUNTY OF Minnehaha

  	
   

  	
  )

  



 


On this 28th
day of April, 2009, before me, the undersigned Notary Public,
personally appeared STEVE HUNTINGTON, CHIEF
FINANCIAL OFFICER of TOWER TECH SYSTEMS INC, and known to me to be an authorized agent of the corporation that
executed the Mortgage and acknowledged the Mortgage to be the free and
voluntary act and deed of the corporation, by authority of its Bylaws or by
resolution of its board of directors, for the uses and purposes therein
mentioned, and on oath stated that he or she is authorized to execute this
Mortgage and in fact executed the Mortgage on behalf of the corporation.


 


	
  By

  	
  /s/ Gerald E. Kruger

  	
   

  	
  Residing at Sioux Falls

  
	
   

  	
   

  
	
  Notary Public in and for the State
  of South Dakota

  	
  My commission expires Feb. 12, 2010

  



 


LASER PRO Lending, Ver. 5.43.00.003 Copr. Harland
Financial Solutions, Inc. 1997, 2009. All Rights Reserved.

- SD o:\officers\apps\CFI\LPL\G03.FC TR-14464 
PR-34


 


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