Document:

Exhibit 10.38

 

Loan No. 000500642

 

PROMISSORY NOTE

 

	
  BORROWER:

  	
   

  	
  PAYEE:

  
	
   

  	
   

  	
   

  
	
  Ascent Solar Technologies, Inc., a Delaware

  	
   

  	
  Colorado Housing and Finance Authority

  
	
  corporation

  	
   

  	
   

  
	
  8120 Shaffer Parkway, Littleton, CO 80127-4107 

  	
   

  	
  1981 Blake Street, Denver, Colorado 80202

  

 

Note Date: February 8,
2008

Principal Amount:
Seven Million Five Hundred Thousand and No/100 Dollars ($7,500,000.00) 

Loan Rate: Six and
Sixty One-Hundredths Percent (6.60%) Per Annum

 

FOR VALUE RECEIVED,
Borrower promises to pay to the order of Payee, the principal sum of
Seven Million Five Hundred Thousand and
No/100 Dollars ($7,500,000.00) or so much thereof as shall have been
advanced by Payee, from time to time (the “Principal Amount”), in accordance
with the terms hereof and of that certain construction loan agreement between
Borrower and Payee of even date herewith (the “Loan Agreement”) as it relates
to the construction or rehabilitation of certain improvements (the “Improvements”)
on the real property (the “Property”) more particularly described in the Deed
of Trust (as defined below), together with interest on the outstanding unpaid
balance of such Principal Amount at the Loan Rate set forth above, together
with other amounts which may be due in accordance with the  provisions of
this Promissory Note (the “Note”).

 

The Borrower shall make payments of principal and
interest as follows: Borrower shall pay interest only, at the Loan Rate, on so
much of the Principal Amount as shall be outstanding from time to time (“Construction
Loan Interest”). Construction Loan Interest shall be computed on the basis of a three- hundred-sixty-five
(365) day year based upon the actual number of days elapsed. Construction Loan Interest shall be payable
each month, in arrears, on the first day of the month. All unpaid principal,
accrued and unpaid Construction Loan Interest, and all other sums due hereunder
shall be due and payable in full on  January 1, 2009 (the “Maturity Date”).

 

All payments of principal and interest shall be made at Payee’s
offices at the address shown above or at such other place as Payee shall designate to Borrower
in writing. For so long as there does not exist an Event of Default hereunder, as hereinafter defined, all
payments received hereunder, including prepayments, shall be applied in the following order
of priority: (i) to any amount required to be  paid into a tax
and insurance impound account in accordance with any of the Loan Documents, as
hereinafter defined; (ii) to reimburse Payee for advances made and expenses incurred,
including interest which has accrued on such advances or expenses, pursuant to the Loan
Documents, as hereinafter defined; (iii) to the Cost of Funds
Reimbursement due as described below, if any; (iv) to accrued and unpaid
interest; and (v) to the outstanding principal balance of this Note.

 

After an Event of Default hereunder which has not
been cured within any applicable cure period, all payments received by Payee on
this Note shall be applied by Payee to the impound account, advances, accrued
late charges, principal, interest and other charges due hereunder or under the
other Loan Documents, as hereinafter defined, in such order as Payee shall
determine in its sole subjective discretion.

 

In the event that Borrower shall fail to make any
monthly payment due hereunder within fifteen (15) days following the due date
thereof, Borrower shall pay to Payee a late charge in the amount of five
percent (5%) of said monthly payment.

 

1

 

Borrower acknowledges that Payee may pledge this
Note as security for bonds, including refunding bonds, issued by Payee (the “Bonds”).
This Note may not be prepaid in whole or in part before the Maturity Date.
Notwithstanding the foregoing, if this Note is prepaid prior to the Maturity
Date, whether because of the  acceleration of the Maturity Date by Payee
after an Event of Default or otherwise, Borrower agrees that it shall pay Payee
an amount (the “Cost of Funds Reimbursement”) equal to the actual costs
incurred by the Payee to cancel all or a portion of the financial instruments
purchased by the Payee in order to lock in the Loan Rate up to the amount of
$6,750,000 for the benefit of the Borrower. In addition, Borrower agrees to pay
the Cost of Funds Reimbursement to Payee if the Permanent Loan is not made by
Payee to Borrower in the amount of at least $6,750,000 as provided in that
certain Construction and Permanent Loan Commitment between Payee and Borrower
dated January 16, 2008.

 

This Note is secured by, and the holder of this Note
is entitled to the benefits of a Deed of Trust, Security Agreement, Financing
Statement and Assignment of Rents and Leases (the “Deed of Trust”) encumbering
certain real and personal property more particularly described therein (the “Property”).
This Note, the Loan Agreement and Deed of Trust, together with all other
instruments now or hereafter executed by Borrower or any related business
enterprise in favor of Payee, which in any manner evidence the indebtedness
represented by this Note or which constitute additional security for this Note,
are herein collectively referred to as the “Loan Documents”. Reference is made
to the Loan Documents for a description of the property covered thereby and the
rights, remedies and obligations of the holder hereof in respect thereto.

 

The occurrence of any one or more of the following
events shall constitute a default under this Note (an “Event of Default”):

 

	
  (a)

  	
   

  	
  Borrower shall fail to pay on or before the
  Maturity Date all amounts due and payable under this 

  
	
  Note; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Borrower shall fail to make any monthly interest
  payment on the date such payment is due in 

  
	
  accordance with the provisions of this Note
  (whether due on the date provided herein or by acceleration
  or otherwise); or

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Borrower shall fail to complete construction of
  the Renovations to the improvements not later than 

  
	
  the Construction Completion Date as defined in the
  Loan Agreement; or

  
	
   

  
	
  (d)

  	
   

  	
  There shall occur a non-monetary default under the
  terms of this Note; or

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  There shall occur a default under the terms of any
  Loan Document.

  

 

Upon the occurrence of an Event of
Default, the entire principal balance and accrued interest, irrespective of the
Maturity
Date specified herein, shall become immediately due and payable at the option of Payee, subject
only to the giving of prior notice and the rights of cure as set forth below,
to the extent applicable and shall thereafter bear interest until paid in full
at the rate of four percent (4%) above the Loan Rate.

 

Upon the occurrence of an Event of Default (except
as otherwise stated below), Payee shall not accelerate this debt, make any
payments for which Borrower is primarily liable or foreclose upon or attach any
assets of Borrower unless it first mails to Borrower at Borrower’s address
listed in the Deed of Trust, written notice of such default and such default is
not fully cured within the following periods:

 

(a)          ten (10) days after such notice is so
deposited in the U.S. mail in the event of any failure to make a monetary
payment to any person;

 

(b)         thirty (30) days after such notice is so
deposited in the U.S. mail in the event of nonmonetary defaults not subject to
other provisions of this paragraph, provided (i) within ten (10) days
after the mailing of the notice of default Borrower commences its cure and
submits to Payee in writing its plan to cure; and (ii) said cure is
continuously pursued by Borrower with due diligence. If said default is 

 

2

 

not reasonably capable of being cured within thirty
(30) days, Borrower shall have such additional time as is reasonably necessary
to complete the cure, but in no event for more than ninety (90) days after the
mailing of the notice of default, all provided (x) said default is in
Payee’s reasonable judgment curable within said period, (y) Borrower
provides Payee with written, detailed progress reports at least every  thirty (30) days until the cure is complete,
and (z) Borrower continuously and diligently pursues said cure; or

 

(c)           sixty (60) days after the filing of any involuntary petition
in bankruptcy against or for the appointment of a receiver for Borrower (except
for petitions for receivership filed by Payee), with the dismissal of such
petitions by the court within such period being deemed to cure such default.

 

Notwithstanding the above provisions, none of the
cure periods provided for in this paragraph shall apply in the following
circumstances:

 

(i)            if Borrower
transfers or encumbers all or any portion of its interest in the Property
without the required consent of Payee; or

 

(ii)           in any circumstance when a delay in effecting
a cure is, in the reasonable judgment of Payee, likely to result in any
security being damaged, becoming uninsured or rendered unavailable to Payee or
the value thereof being materially and adversely affected; or

 

(iii)          any default of the same type or nature which
occurs more than twice in any one (1) calendar year; or

 

(iv)          any failure to proceed with or complete the
construction, renovation or repair of the Improvements as required by the Loan
Agreement or Deed of Trust; or

 

(v)           any filing of a voluntary petition in
bankruptcy by Borrower; or

 

(vi)          any assignment for the benefit of creditors,
fraudulent conveyance, or other plan or action instituted by Borrower or any
general partner of Borrower, in any attempt to avoid the satisfaction of any lawful indebtedness; or

 

(vii)         any waste committed to the Property or Improvements, or any demolition or removal of any Improvements except as permitted
by the Loan Agreement without Payee’s consent (other than the exercise by any
proper authority of the right of eminent domain); or

 

(viii)        any non-monetary default which Payee
reasonably determines is not capable of being cured within the requisite
period.

 

The provisions of this paragraph shall apply to
defaults under all the Loan Documents, and unless expressly stated to the
contrary in such documents any cure period referred to therein shall be deemed
to incorporate said provisions. If any of said documents are inconsistent
with this paragraph the latter shall be controlling, unless said other document
expressly provides otherwise. Where additional notice or cure periods are
provided in this or any other such documents or are required by any other contract or by law,
said periods and those contained in this paragraph shall run  concurrently.

 

Upon the occurrence of an Event of Default, Borrower
agrees to pay on demand all of Payee’s costs and expenses incurred for the
recovery of all or any part of or for protection of the indebtedness or to
enforce Payee’s rights under the Loan Documents including, without limitation,
reasonable attorneys’ fees.

 

The Deed of Trust includes certain limitations on
the right of Borrower to sell, convey, contract to sell or convey, assign or
encumber the Property. Reference to the Deed of Trust must be made for the text
of these provisions. Such provisions are incorporated herein by this reference.

 

3

 

Borrower waives presentment, notice of dishonor,
notice of acceleration and protest, and assents to any extensions of time with
respect to any payment due under this Note, to any substitution or release of
collateral and to the addition or release of any party. No waiver of any
payment or other right under this Note shall operate as a waiver of any other
payment or right.

 

This Note is made and dated as of the date above
written and is to be governed by and construed according to the laws of the
State of Colorado.

 

Notices which are given pursuant to this Note shall
be given as set forth in the Deed of Trust.

 

IN CONSIDERATION OF PAYEE MAKING THE LOAN EVIDENCED
BY THIS NOTE AND AS A SPECIFIC CONDITION OF THE MAKING OF SAID LOAN BY PAYEE,
PAYEE AND BORROWER DO EACH HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS NOTE, ANY OTHER LOAN DOCUMENT, THE LETTER OF COMMITMENT WHEREBY PAYEE
AGREED TO MAKE THE LOAN AND ANY MODIFICATION OR AMENDMENT TO ANY ONE OR ALL OF
THEM, OR ARISING OUT OF OR RELATING TO THE ACTIONS OF PAYEE IN THE ENFORCEMENT
THEREOF. BORROWER DOES HEREBY ACKNOWLEDGE THAT IT HAS DISCUSSED AND REVIEWED
THE LOAN DOCUMENTS WITH ITS LEGAL COUNSEL AND UNDERSTANDS THE PROVISIONS
THEREOF, INCLUDING SPECIFICALLY, BUT WITHOUT LIMITATION, THIS WAIVER OF JURY
TRIAL. BORROWER ACKNOWLEDGES THAT IT HAS EXERCISED ITS INDEPENDENT JUDGMENT TO
ACT IN EXECUTING THIS NOTE AND THE OTHER LOAN DOCUMENTS, AND IS ACTING UPON ITS
OWN FREE WILL, WITHOUT DURESS, COERCION OR COMPULSION OF ANY NATURE WHATSOEVER.

 

 

	
   

  	
   

  	
  BORROWER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ascent Solar Technologies, Inc., a Delaware

  
	
   

  	
   

  	
  corporation

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ R.Scott Burrows

  	
   

  	
  By:

  	
  /s/ Matthew B. Foster

  
	
   

  	
  R.Scott Burrows, Secretary

  	
   

  	
   

  	
  Matthew B. Foster, President

  
						

 

 

	
  STATE OF COLORADO

  	
  )

  
	
   

  	
  )ss.

  
	
  COUNTY OF DENVER

  	
  )

  

 

The foregoing instrument was acknowledged before me
this 8th, day of February, 2008, by Matthew B. Foster as President and R. Scott Burrows as
Secretary of Ascent Solar Technologies, Inc., a Delaware corporation.

 

	
  My commission expires:

  	
   

  	
  .

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (SEAL)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
  MIKE HEATH

  NOTARY PUBLIC 

  STATE
  OF COLORADO

  	
   

  	
  Notary Public

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  My Commission Expires Oct. 11, 2010

  	
   

  	
   

  	
   

  
								

 

4Exhibit 10.39

 

colorado housing and finance
authority

 

	
  

  	
  CONSTRUCTION AND PERMANENT LOAN COMMITMENT

  
	
  financing
  the places where

  	
   

  	
   

  
	
  people live and work

  	
   

  
	
   

  	
   

  	
  January 16, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ashutosh Misra

  
	
   

  	
   

  	
  Ascent Solar
  Technologies, Inc.

  
	
  1981 Blake Street

  	
   

  	
  8120 Shaffer Parkway

  
	
   

  	
   

  	
  Littleton, CO 80127

  
	
  Denver, Colorado 80202

  	
   

  	
   

  
	
   

  	
   

  	
  Re:    Construction
  and Permanent Loans to Ascent Solar Technologies, Inc. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dear Mr. Misra:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The
  Colorado Housing and Finance Authority (the “Authority”) hereby notifies you
  of the Authority’s approval of your request for a short term construction
  loan (the “Construction Loan”) to finance the acquisition and renovation of a
  commercial facility located at 12300 Grant Street, Thornton, Colorado, 80241
  (the “Project”) and a long term permanent loan (the “Permanent Loan”) to
  finance the Project after the renovations are completed, subject to the
  following terms and conditions:

  
	
  303.297.chfa (2432)

  	
   

  	
   

  
	
   

  	
   

  	
  1.             Borrower.  Ascent Solar
  Technologies, Inc., a Delaware corporation.

  
	
  800.877.chfa (2432)

  	
   

  	
   

  
	
  toll free

  	
   

  	
  2.             Loan Amounts.  The
  Construction Loan shall be disbursed in increments up to an amount not to
  exceed Seven Million Five Hundred Thousand Dollars ($7,500,000). The
  Permanent Loan shall equal the amount disbursed under the Construction Loan.

  
	
  303.297.7305

  	
   

  	
   

  
	
  tdd

  	
   

  	
  3.             Interest Rates.  Six
  and Sixty One-hundredths percent (6.60%) per annum fixed for both loans.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.             Loan Terms.  The
  maturity date of the Construction Loan will be December 1, 2008. The
  maturity date of the Permanent Loan will be Twenty (20) years after the
  commencement of the term of the Construction Loan.

  
					

 

www.chfainfo.com

 

5.          Repayment.  The Construction Loan shall be
paid in monthly installments of interest only based on the amount of principal
disbursed. The Permanent Loan shall be paid in monthly installments of
principal and interest sufficient to amortize the Loan over its term.

 

6.          Loan Fees.  A non-refundable commitment fee
equal to 1% of the principal amount of the Construction Loan (the “Commitment
Fee”), payable to the Authority upon acceptance of this Commitment. The
Borrower also shall pay the Authority’s third party costs, including title
insurance premiums, appraisal fees, survey fees, title company’s closing and
disbursement fees, environmental search charges, recording costs, and attorneys
fees and costs, as applicable (the “Closing Costs”).

 

7.          Commitment Expiration Dates.  This
commitment shall expire as to the Construction Loan on March 15, 2008.
This commitment shall expire as to the Permanent Loan on December 15,
2008.

 

8.          Security.  The Construction Loan and Permanent
Loan shall be secured by the following, all in form and substance satisfactory
to the Authority, and by such other arrangements as the Authority reasonably
may require:

 

a.          A first deed of trust encumbering the land,
improvements and fixtures comprising the Project.

 

Borrower,
by execution of this Commitment, authorizes the Authority to file a financing
statement evidencing the Authority’s security interest in the personal property
and fixtures comprising the Project prior to the Loan closing and prior to
Borrower’s execution of a Security Agreement with respect to such personal
property.

 

9.          Reimbursement of Rate Lock Costs. If for any reason (a) the Construction
Loan is prepaid prior to maturity; (b) the conditions to closing the
Permanent Loan are not satisfied by Borrower prior to the Commitment Expiration
Date therefor; or (c) the amount of the Permanent Loan is reduced below
the principal amount of $6,750,000 pursuant to the terms of this Commitment,
the Borrower shall pay the Authority an amount equal to the actual costs
incurred by the Authority to cancel all or a portion of the financial
instruments purchased by the Authority in order to lock in the interest rate on
the Permanent Loan up to the amount of $6,750,000 for the benefit of the
Borrower.

 

2

 

10.        Prepayment of Permanent Loan.  The
Permanent Loan may not be prepaid in whole or in part during the first seven (7) loan
years. Notwithstanding the foregoing, if the Permanent Loan is prepaid for any
reason a “yield maintenance” prepayment premium shall be due to the Authority.
No prepayment fee shall be due after the end of the seventh (7th)
loan year.

 

11.        Documents.  The Authority will prepare the
closing documents and coordinate the closing with Borrower as follows. Exhibit A
to this commitment lists all applicable documents that: (i) must be
provided by the Borrower to the Authority prior to closing of each loan (the “Pre-closing
Documents”); and (ii) must be signed and delivered by the Borrower to the
Authority at closing of each loan (the “Closing Documents”). The Pre-Closing
Documents must be delivered to the Authority by the Borrower in form
satisfactory to the Authority.

 

When
the Pre-Closing Documents have been received and approved by the Authority, the
Authority will prepare the Closing Documents for review by the Borrower and
schedule a closing date,
which will be no sooner than seven (7) business days after receipt of
complete and satisfactory Pre-Closing Documents and satisfaction of all closing
conditions to be completed prior to Closing.

 

12.        Closing.  As a condition precedent to the
closing of the Construction Loan and Permanent Loan, the conditions of
paragraphs 13 and 14 below, respectively, shall have been met and each of the
applicable Closing Documents listed in Exhibit A, in form and substance
satisfactory to the Authority, shall be executed and delivered to the
Authority. In addition, at the closing of each loan, the Borrower shall pay
Closing Costs by certified or cashier’s check. The Authority reserves the
right at all times to decline to close the Construction Loan and Permanent Loan
if the Authority determines, in its sole judgment, that the Borrower or the
Loan does  not strictly conform to the
requirements of this Commitment, the Authority’s  Business Finance Credit Policy (the “Policy”),
and the Authority’s Direct Loan Program Guidelines (the “Guidelines”).

 

The
Closing Documents shall include, without limitation the following provisions:

 

a.          Each loan shall bear interest after default at a rate equal to four
percent (4%) per annum above the Interest Rate stated above.

 

b.          A late charge will be assessed on all monthly installments of principal
and interest on the Loan which are paid more than fifteen (15) days late equal
to five (5%) percent of such late installment.

 

3

 

c.          Borrower shall provide the Authority copies of the annual
financial statements (balance sheet and income statement) filed by it with the
United States Securities and Exchange Commission and copies of federal income
tax returns annually to the Authority which financials shall show in sufficient
detail the revenues and expenses related to the operations of Borrower’s
business enterprise. In the event of any default under the Loan, the Authority
may require that the Borrower provide audited
financial statements. The Authority shall file such annual financial
statements, and Borrower shall promptly provide to the Authority for filing
such additional financial information and operating data and shall execute such
continuing disclosure undertaking within ten (10) business days after a
request by the Authority, as is deemed necessary for the Authority to comply
with Rule 15c2-12 adopted by the Securities and Exchange Commission under
the Securities Exchange Act of 1934 or as is deemed desirable by the Authority
in its sole discretion.

 

d.          The Borrower must occupy a minimum of fifty-one percent (51%) of the Project.

 

13.        Construction
Loan Conditions.  The closing
of the Construction Loan shall be subject to the provisions of the Colorado
Housing and Finance Authority Act (the “Act”), the Policy, the Guidelines, and
to the following conditions:

 

a.          Approval by the Authority of the preliminary
budget and plans and specifications for the proposed renovations to be done to
the building comprising a portion of the Project.

 

b.          The Construction Loan shall be disbursed
pursuant to a Construction Loan Agreement between the Authority and Borrower
and a Disbursement Agreement between the Authority, Borrower and title company
insuring the Construction Loan, both in form and substance satisfactory to the
Authority. The Construction Loan Agreement will provide, among other things,
that before any disbursements are made from the Construction Loan other than
for the acquisition of the Project at Closing and prior to the commencement of
any renovation work on the Project, the Authority shall have approved the final
budget and completion schedule, schedule of values, plans and specifications,
all governmental permits and approvals, and the general contractor’s and
principal subcontractor’s contracts relating to the renovation work. The
contracts with Borrower’s general contractor and principal subcontractor’s
shall contain a one-year warranty of all work and against latent defects. In
addition, the contracts with the

 

4

 

Borrower’s
architect, general contractor and principal subcontractor’s shall be
collaterally assigned to the Authority.

 

c.          Evidence satisfactory to the Authority that
the total projected “as completed” costs of the Project will be at least
$8,823,500 and that fifteen percent (15%) of such amount, being the required
Borrower’s equity, has been expended by Borrower at Closing for acquisition of
the Project.

 

d.          An “as is” appraisal of the real property
securing the Construction Loan satisfactory to the Authority showing that the
ratio of the first disbursement to be made under the Construction Loan at
closing for the acquisition of the Project to the lesser of cost or “as is”
appraised value does not exceed eighty-five percent (85%). Prior to the
commencement of any renovation work on the Project and further disbursements
under the Construction Loan, the Authority shall receive an “as completed”
appraisal of the real property securing the Construction Loan satisfactory to
the Authority showing that the ratio of the entire Construction Loan amount to
the lesser of cost or “as completed” appraised value does not exceed
eighty-five percent (85%).

 

e.          Evidence satisfactory to the Authority that
the Project is and will be in compliance with applicable zoning, planning and
land use laws and regulations.

 

f.           Evidence satisfactory to the Authority that
the Borrower and the Project are and will be in compliance with applicable
environmental laws, regulations, permits, orders or other environmental
requirements and that the real and personal property comprising the Project do
not contain hazardous wastes or other adverse environmental conditions.

 

g.          All representations made by or on behalf of
Borrower to the Authority in connection with the Application shall be true and
correct as of the date of funding of the Loan.

 

h.          As of the date of funding of the Construction
Loan, no change shall have occurred in the financial condition of the Borrower
or in any other aspect of the financing proposal of which the Loan is a part
which, in the judgment of the Authority, materially adversely affects the
Borrower’s ability to repay the Loan or makes unreasonable or unreliable any of
the financing assumptions upon which such repayment is predicated.

 

5

 

i.           No litigation shall be
pending or threatened calling into question or which, if adversely determined,
would affect (i) the creation, organization or existence of the Borrower, (ii) the
validity of the Construction Loan documents or (iii) the authority of the
Borrower to grant a mortgage on the Project’s real property or a security
interest in the Project’s personal property or to make or perform the Loan
documents. No proceedings shall be pending or threatened against or affecting
the Borrower which involve the possibility of materially and adversely
affecting the properties, business, prospects, profits or condition (financial
or otherwise) of the Borrower, nor shall the Borrower be in default with
respect to any order of any court, governmental authority or arbitration board
or tribunal.

 

j.           Such
other conditions as the Authority may deem necessary or prudent to assure
repayment of the Loan or compliance with the Act, the Policy or the Guidelines.

 

14.        Permanent
Loan Conditions.  Closing of the Permanent Loan shall be
subject to the provisions of the Colorado Housing and Finance Authority Act
(the “Act”), the Policy, the Guidelines, and to the following conditions:

 

a.          Completion
of the renovations to the Project free and clear of mechanics’ liens and claims
which could give rise to such liens, and issuance of a certificate of occupancy
and/or other applicable governmental approval with respect thereto. A temporary
certificate of occupancy may be acceptable in lieu of a certificate of
occupancy in the sole discretion of the Authority.

 

b.          Evidence
satisfactory to the Authority that the total actual costs of the Project are at
least $8,823,500 and that fifteen percent (15%) of such amount, being the
required Borrower’s equity, has been expended by Borrower.

 

c.          Evidence
satisfactory to the Authority that the Project will be in compliance with
applicable zoning, planning and land use laws and regulations.

 

d.          Evidence
satisfactory to the Authority that the Borrower and the Project are and will be
in compliance with applicable environmental laws, regulations, permits, orders
or other environmental requirements and that the real and personal property
comprising the Project do not contain hazardous wastes or other adverse
environmental conditions.

 

6

 

e.          All
representations made by or on behalf of Borrower to the Authority in connection
with the Application shall be true and correct as of the date of funding of the
Loan.

 

f.           As
of the date of funding of the Permanent Loan, no change shall have occurred in
the financial condition of the Borrower or in any other aspect of the financing
proposal of which the Permanent Loan is a part which, in the judgment of the
Authority, materially adversely affects the Borrower’s ability to repay the
Permanent Loan or makes unreasonable or unreliable any of the financing
assumptions upon which such repayment is predicated.

 

h.          No
litigation shall be pending or threatened calling into question or which, if
adversely determined, would affect (i) the creation, organization or existence
of the Borrower, (ii) the validity of the Permanent Loan documents or (iii) the
authority of the Borrower to grant a mortgage on the Project’s real property or
a security interest in the Project’s personal property or to make or perform
the Loan documents. No proceedings shall be pending or threatened against or
affecting the Borrower which involve the possibility of materially and
adversely affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Borrower, nor shall the Borrower be in default
with respect to any order of any court, governmental authority or arbitration
board or tribunal.

 

i.           Such other conditions as the Authority may
deem necessary or prudent to assure repayment of the Loan or compliance with
the Act, the Policy or the Guidelines.

 

15.        Assignment.  This Commitment
shall not be assignable or transferable without the prior written consent of
the Authority.

 

16.        Environmental.  The Authority will order a Phase I Environmental to assist it in making a
determination of environmental risks in connection with this Project.

 

17.        Survey.  The Authority will order a survey as provided
in Exhibit A to assist it
in due diligence in connection with this Project. Borrower will be provided
with a copy of the survey.

 

18.        Reliance by Borrower and Third Parties.  This
Commitment is not intended to benefit any person or entity other than the
Borrower and no other person or entity may rely on the terms hereof. Further,
the Borrower acknowledges and agrees that (a) any survey, environmental
report, inspection, review, acceptance or other

 

7

 

due diligence
activity regarding the Project, Borrower or other matters performed by or at
the direction of the Authority, its legal counsel or consultants shall be
solely for the purpose of satisfying the Authority’s investment criteria and
may not be relied on by the Borrower or any other party in making decisions
regarding the Project or for any other reason; and (b) the Authority, its
legal counsel and consultants shall have no responsibility or liability for the
sufficiency, accuracy completeness of the items or information so inspected,
reviewed or accepted or for the environmental condition or structural soundness
of the Project.

 

19.        Advice to Seek Legal Counsel. The Authority has advised the Borrower to obtain legal
counsel in connection with the Construction Loan and Permanent Loan.

 

20.        Effectiveness of Commitment. This Commitment shall not become
effective unless the accompanying duplicate copy hereof is returned to the
Authority by January 18, 2008 with acceptance endorsed thereon by the
signature of an authorized representative of the Borrower, together with a
check for the Commitment Fee of $75,000, $6,600 for appraisal costs and $2,200
for environmental report costs.

 

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
  /s/ Cris White

  
	
   

  	
   

  	
  Cris White

  
	
   

  	
   

  	
  Chief
  Operating Officer

  
	
   

  	
   

  	
   

  
	
  ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Ascent Solar
  Technologies, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ashutosh
  Misra 

  	
   

  	
  Date:

  	
  Jan 18th,
  2008

  
	
   

  	
  Ashutosh
  Misra 

  	
   

  	
   

  
	
   

  	
  Senior Vice
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Enclosures

  	
   

  	
   

  

 

8

 

EXHIBIT A

 

COLORADO HOUSING AND FINANCE AUTHORITY

 

A.            CONSTRUCTION LOAN
PRE-CLOSING DOCUMENTS.  The
Borrower must provide the following Construction Loan Pre-Closing Documents to
the Authority:

 

1.             Evidence of hazard and liability insurance
coverage for the Borrower and Project in form and substance acceptable to the
Authority. The hazard insurance coverage must be at least in an amount equal to
the lesser of the principal amount of the Construction Loan or the full
replacement cost of the improvements as of Closing and the full value of the
personal property owned by the Borrower. The Authority reserves the right to
require specific endorsements to the hazard policy, including, but not limited
to an agreed value endorsement and non-contributory mortgagee endorsement. If
the Project is located in a government designated flood plain, flood insurance
coverage must also be acquired. Flood insurance must be in an amount at least
equal to the lesser of the principal amount of the Loan or the maximum limit of
coverage available under applicable law. The hazard insurance policy and flood
insurance policy must contain standard “non-contributory mortgagee”
endorsements naming the Authority as a mortgagee with respect to real property
and as a loss payee with respect to personal property. The liability insurance
policy must name the Authority as an additional named insured. Both the hazard
policy and liability policy must provide that such insurance shall not be
canceled or materially amended without 30 days prior written notice to the
Authority. Generally, evidence of insurance must be a binder on ACORD Form 75.
If an insurance policy has been issued, a copy of the policy together with a
certificate of insurance on ACORD Form 28 naming the Authority as a
mortgagee may be provided.

 

Prior to the
commencement of any renovation work on the Project, Borrower shall also furnish
the Authority evidence in accordance with the foregoing requirements that the
following additional insurance is in effect in form and substance satisfactory
to the Authority:

 

Builder’s All Risk Insurance.  Evidence of Borrower’s builder’s all risk
insurance including a Completed Value Form in the amount of the renovation
work and should include Permission to Occupy Upon Completion coverage and
should not exclude risk of collapse or loss of items in transit or
stored off-site. The builder’s all risk policy must contain standard “non-contributory
mortgagee” endorsements naming the Authority as a mortgagee with respect to
real property and as a loss payee with respect to personal property.

 

Commercial General Liability Insurance.  Evidence of the general contractor’s general
liability insurance naming the Authority as an additional named insured.

 

1

 

2.             Evidence that the current years insurance is
paid as of the date of closing and a paid tax certificate evidencing no unpaid
taxes due for the real property.

 

3.             Evidence of Borrower’s equity.

 

4.             A Commitment for a mortgagee’s policy of
title insurance from a title company acceptable to the Authority to be ordered
by the Authority. The title commitment shall obligate the title company to
issue a standard form ALTA Mortgagee Policy in the amount of the Loan free of
encumbrances or other exceptions to title other than those approved by the
Authority. The commitment must provide for the issuance of an ALTA Form 9
endorsement and the deletion of printed exceptions except for the mechanic’s
lien exception as it relates to the renovation work which will be covered by
additional endorsements as the funds are disbursed under the Construction Loan.
The exception for taxes shall be limited to taxes for the year of closing and
future years and any exception for leases and tenancies shall be limited to
leases set forth on a rent roll certified by the Borrower. The Authority may
require additional endorsements in certain circumstances.

 

5.             ALTA/ASCM Land Title Survey of the real property
meeting the following criteria: The survey must be dated within six months of
Closing. The survey must be satisfactory to the Authority and certified to the
Authority and the title company. The legal description on the survey must be
identical to the legal description in the title commitment and all recorded
easements or encroachments reflected in the title commitment must be reflected
by book and page or reception number on the survey. (To be ordered by the Authority unless agreed otherwise.)

 

6.             Evidence that the real property is not
located in a special flood hazard area. (To be ordered by the Authority.)

 

7.             Copies of the Articles of Incorporation of Borrower filed with the Delaware Secretary of State
and Statement of Foreign Entity Authority of Borrower filed with the Colorado
Secretary of State; a copy of the Bylaws of Borrower; a current (within 90
days) Certificate of Good Standing from the Delaware Secretary of State and
Colorado Secretary of State; and a Borrower’s Resolution. The Borrower’s
Resolution shall be certified as true and correct by the corporate secretary if
a meeting was held or shall be executed by all of the directors if no meeting
was held and shall designate the name and title of persons authorized to sign
the loan documents.

 

8.              “As Is”
Appraisal. (The Authority will order an appraisal of the Project at Borrower’s expense in accordance with the Authority’s
appraisal guidelines.)

 

9.             A Phase I Environmental. (To be ordered by
the Authority.)

 

2

 

10.           Zoning letter from the appropriate
governmental agency evidencing that the real property is appropriately zoned
for its intended use. (To be ordered by the Authority.)

 

B.            CONSTRUCTION LOAN CLOSING
DOCUMENTS.  The Authority will provide the following
Closing Documents to the Borrower for review prior to closing of the
Construction Loan and for execution, attestation, sealing and notarization, as
appropriate, at closing:

 

1.             Settlement Statement

2.             Promissory Note

3.             Deed of Trust, Security Agreement,
Financing Statement and Assignment of Rents and Leases

4.             UCC-1 Financing Statement(s)

5.             Borrower’s Resolution

6.             Construction Loan Agreement

7.             Disbursement
Agreement

 

C.            PERMANENT
LOAN PRE-CLOSING DOCUMENTS.  The Borrower must
provide the following Permanent Loan 

Pre-Closing Documents to the
Authority:

 

1.             Evidence
of hazard and liability insurance coverage for the Borrower. The hazard insurance
coverage must be at least in an amount equal to the lesser of the principal
amount of the Loan or the full replacement cost of the improvements and the
full value of the personal property owned by the Borrower and Operating
Company. The Authority reserves the right to require specific endorsements to
the hazard policy, including, but not limited to an agreed value endorsement
and non-contributory mortgagee endorsement. If the Project is located in a
government designated flood plain, flood insurance coverage must also be
acquired. Flood insurance must be in an amount at least equal to the lesser of
the principal amount of the Loan or the maximum limit of coverage available
under applicable law. The hazard insurance policy and flood insurance policy
must contain standard “non-contributory mortgagee” endorsements naming the
Authority as a mortgagee with respect to real property and as a loss payee with
respect to personal property. The liability insurance policy must name the
Authority as an additional named insured. Both the hazard policy and liability
policy must provide that such insurance shall not be canceled or materially
amended without 30 days prior written notice to the Authority. Generally,
evidence of insurance must be a binder on ACORD Form 75. If an insurance
policy has been issued, a copy of the policy together with a certificate of insurance
on ACORD Form 28 naming the Authority as a mortgagee may be provided.

 

2.             Evidence that the current years insurance is
paid as of the date of closing and a paid tax certificate evidencing no unpaid
taxes due for the real property.

 

3

 

3.               Certificate
of Occupancy and/or other necessary governmental approvals for the completion
of renovations in the Project and occupancy of the Project.

 

4.               Evidence
of Borrower’s equity.

 

5.               A
Commitment for a mortgagee’s policy of title insurance from a title company
acceptable to the Authority. The Authority will order the title insurance
commitment if requested by the Borrower. The title commitment shall obligate
the title company to issue a standard form ALTA Mortgagee Policy in the amount
of the Loan free of encumbrances or other exceptions to title other than those
approved by the Authority. The commitment must provide for the issuance of an
ALTA Form 9 endorsement and the deletion of printed exceptions. The
exception for taxes shall be limited to taxes for the year of closing and
future years and any exception for leases and tenancies shall be limited to
leases set forth on a rent roll certified by the Borrower. The Authority may
require additional endorsements in certain circumstances.

 

6.               Update
of the ALTA/ASCM Land Title Survey Improvement Survey provided obtained prior
to closing the Construction Loan if it is determined necessary by the Authority
to show any renovations made to the Project outside of the footprint of the
building comprising part of the Project. (To be ordered by the Authority unless
agreed otherwise.)

 

8.               Copies
of the Articles of Incorporation of Borrower filed with the Delaware Secretary
of State and Statement of Foreign Entity Authority of Borrower filed with the
Colorado Secretary of State; a copy of the Bylaws of Borrower; a current
(within 90 days) Certificate of Good Standing from the Delaware Secretary of
State and Colorado Secretary of State; and a Borrower’s Resolution. The
Borrower’s Resolution shall be certified as true and correct by the corporate
secretary if a meeting was held or shall be executed by all of the directors if
no meeting was held and shall designate the name and title of persons
authorized to sign the loan documents.

 

D.            PERMANENT LOAN CLOSING DOCUMENTS.
The Authority will provide the following Closing Documents to the Borrower for
review prior to closing and for execution, attestation, sealing and
notarization, as appropriate, at closing:

 

1.             Settlement Statement

2.             Promissory Note

3.               Deed
of Trust, Security Agreement, Financing Statement and Assignment of Rents and
Leases

4.               UCC-1
Financing Statement(s)

5.               Borrower’s
Resolution

 

4

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