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.
FORM OF SENIOR SUBORDINATED CONVERTIBLE PROMISSORY NOTE
Note #
$[
]
Manitowoc, Wisconsin
FOR VALUE RECEIVED, TOWER TECH HOLDINGS INC., a Nevada corporation (hereinafter
referred to as the "Borrower"), hereby promises to pay to the order of
,
and its successors and assigns (hereinafter referred to as "Holder"), in the
manner hereinafter provided, the principal sum of [
] DOLLARS
($[
]), 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 $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.
ARTICLE 11ACCRUAL 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.
ARTICLE 12PAYMENT 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 THE AMOUNT OF SUCH INTEREST PAYMENT ("PIK
INTEREST") ON SUCH INTEREST PAYMENT DATE AND INTEREST SHALL THEN ACCRUE ON THE
INCREASED PRINCIPAL AMOUNT.
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT,
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY CONTAINED IN THIS NOTE, INTEREST
PAYABLE ON