Exhibit 10.4
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
BORROWER.
THE INDEBTEDNESS REPRESENTED BY THIS INSTRUMENT IS SUBORDINATED TO THE PAYMENT
OF SENIOR INDEBTEDNESS IN ACCORDANCE WITH AND TO THE EXTENT PROVIDED HEREIN.
SENIOR SUBORDINATED CONVERTIBLE PROMISSORY NOTE
$12,397,475.41
Manitowoc, Wisconsin
FOR VALUE RECEIVED, TOWER TECH HOLDINGS INC., a Nevada corporation (hereinafter
referred to as the "Borrower"), hereby promises to pay to the order of TONTINE
PARTNERS, L.P., and its successors and assigns (hereinafter referred to as
"Holder"), in the manner hereinafter provided, the principal sum of TWELVE
MILLION, THREE HUNDRED NINETY-SEVEN THOUSAND, FOUR HUNDRED SEVENTY-FIVE DOLLARS
AND FORTY-ONE CENTS ($12,397,475.41), as it may be increased herein, in
immediately available funds and in lawful money of the United States of America,
together with interest thereon, all in accordance with the provisions
hereinafter specified.
This Note is one of approximately $25,000,000 in
aggregate principal amount of Senior Subordinated Convertible Promissory Notes
(each a "Note" and collectively, the "Notes") issued pursuant to the Securities
Purchase Agreement dated August 22, 2007, by and among the Borrower and the
original purchasers of the Notes (the "Purchase Agreement"), and is subject to
the provisions set forth therein.
1.
ACCRUAL OF INTEREST.
INTEREST SHALL
ACCRUE ON THE OUTSTANDING PRINCIPAL AMOUNT HEREOF (INCLUDING ANY PIK INTEREST,
AS HEREAFTER DEFINED) AT (I) A RATE EQUAL TO NINE AND ONE-HALF PERCENT (9.50%)
PER ANNUM FOR THE PERIOD BEGINNING ON THE DATE HEREOF AND ENDING ON THE DATE
THAT IS NINE MONTHS FROM THE DATE HEREOF (THE "INITIAL PERIOD") AND (II) A RATE
EQUAL TO THIRTEEN AND ONE-HALF PERCENT (13.50%) PER ANNUM FOR THE PERIOD
FOLLOWING THE INITIAL PERIOD.
INTEREST SHALL BE CALCULATED HEREUNDER ON THE
BASIS OF THE ACTUAL NUMBER OF DAYS ELAPSED.
2.
PAYMENT OF INTEREST.
COMMENCING ON
DECEMBER 31, 2007, THE BORROWER SHALL PAY INTEREST ON THIS NOTE SEMI-ANNUALLY IN
ARREARS ON EACH JUNE 30 AND DECEMBER 31 OF EACH CALENDAR YEAR AND ON THE
MATURITY DATE (AS HEREAFTER DEFINED), OR IF ANY SUCH DAY
IS NOT A BUSINESS DAY, ON THE
NEXT SUCCEEDING BUSINESS DAY (EACH AN "INTEREST PAYMENT DATE"), TO HOLDER.
INTEREST PAYABLE ON THIS NOTE SHALL BE PAID ON EACH INTEREST PAYMENT DATE, AT
THE ELECTION OF THE BORROWER, (I) IN CASH OR (II) IN KIND, IN WHICH EVENT, THE
AMOUNT OF THE PRINCIPAL OUTSTANDING UNDER THIS NOTE SHALL BE INCREASED BY