Document:

Exhibit 10.37

 

	
  BORROWER NAME AND ADDRESS 

  	
  LENDER NAME AND ADDRESS 

  	
  LOAN DESCRIPTION 

  
	
   

  	
   

  	
   

  
	
  Tower Tech Systems Inc.

  101 S. 16th St., P.O. Box 1957

  Manitowoc, WI 54221-1957

  	
  Investors Community Bank

  860 N. Rapids Road

  P.O. Box 700

  Manitowoc, WI 54221-0700

  	
  Number 44938101       
  mas

  Amount $2,500,000.00

  Date 10-04-2007

  

 

o            Refer
to the attached Signature Addendum, incorporated herein, for additional
Borrowers and their signatures.

 

	
  COMMERCIAL LOAN AGREEMENT

  

 

LOAN STRUCTURE.  This Commercial Loan Agreement (Agreement)
contemplates o a single
advance term Loan o a multiple
advance draw Loan x a revolving
multiple advance draw Loan.  The principal
balance will not exceed $2,500,000.00. 
Borrower will pay down a revolving draw Loan’s outstanding Principal to
$                                    
(Pay Down Balance)                             
(Time Period).  This Loan is for o
agricultural x business
purposes.

 

o            Borrower
may not voluntarily prepay the Loan in full at any time.  x Borrower may
prepay the Loan under the following terms and conditions (Any partial
prepayment will not excuse any later scheduled payments until the Loan is paid
in full.):  None

 

x          LATE CHARGES.  If a
payment is made more than 10 days after it is due, Borrower will pay a late
charge of 5.000% of the late amount.

 

FEES.  Borrower agrees to pay the following fees in
connection with this Loan at closing or as otherwise requested by Lender:  

 

Maker agrees to pay a charge of $20.00 for
each check, automatic debit or ACH item presented for payment under this note
which is returned unsatisfied.

 

REQUESTS FOR ADVANCES.  Borrower authorizes Lender to honor a request
for an advance from Borrower or any person authorized by Borrower.  The requests for an advance must be in
writing, by telephone, or any other manner agreed upon by Borrower and Lender,
and must specify the requested amount and date and be accompanied with any
agreements, documents, and instruments that Lender requires for the Loan.  Lender will make same day advances, on any
day that Lender is open for business, when the request is received before
2:00 P.M. (Advance Cut-Off Time). 
Lender will disburse the advance into Borrower’s demand deposit account
(if any), account number
                                      ,
or in any other agreed upon manner.  All
advances will be made in United States dollars.

 

x          These requests must be made by at least 1 (Number
Required To Draw) persons, acting together, of those persons authorized to act
on Borrower’s behalf.

 

o            Advances
will be made in the amount of at least $                                                 
(Minimum Amount Of Advance).

 

o            Advances
will be made no more frequently than                                              
(Minimum Frequency Of Advance).

 

x          Discretionary Advances. 
Lender will make all Loan advances at Lender’s sole discretion.

 

o            Obligatory Advances. 
Lender will make all Loan advances subject to this Agreement’s terms and
conditions.

 

FINANCIAL INFORMATION.  Borrower will prepare and maintain Borrower’s
financial records using consistently applied generally accepted accounting
principles then in effect.  Borrower will
provide Lender with financial information in a form acceptable to Lender and
under the following terms.

 

A.            Frequency.  Annually, Borrower will provide to Lender
Borrower’s financial statements, tax returns, annual internal audit reports or
those prepared by independent accountants within 90 days after the close of
each fiscal year.  Any annual financial
statements that Borrower provides will be o
audited statements.  o
reviewed statements.  x
compiled statements.

 

o            Borrower will provide Lender with interim
financial reports on a                      
(Monthly, Quarterly) basis, and within                       
days after the close of this business period. 
Interim financial statements will be o
audited o reviewed o
compiled statements.

 

B.            Requested
Information.  Borrower will provide
Lender with any other information about Borrower’s operations, financial
affairs and condition within 30 days after Lender’s request.

 

o            C.    Leverage
Ratio.  Borrower will maintain at all
times a ratio of total liabilities to tangible net worth, determined under
consistently applied generally accepted accounting principles, of                   
(Total Liabilities to Tangible Net Worth Ratio) or less.

 

o            D.    Minimum
Tangible Net Worth.  Borrower will
maintain at all times a total tangible net worth, determined under consistently
applied generally accepted accounting principles, of $                            
(Minimum Tangible Net Worth) or more. 
Tangible net worth is the amount by which total assets exceed total
liabilities.  For determining tangible
net worth, total assets will exclude all intangible assets, including without
limitation goodwill, patents, trademarks, trade names, copyrights, and
franchises, and will also exclude any accounts receivable that do not provide
for a repayment schedule.

 

o            E.     Minimum
Current Ratio.  Borrower will
maintain at all times a ratio of current assets to current liabilities,
determined under consistently applied generally accepted accounting principles,
of                                     
(Minimum Current Ratio) or more.

 

o            F.     Minimum
Working Capital.  Borrower will
maintain at all times a working capital, determined under consistently applied
generally accepted accounting principles by subtracting current liabilities
from current assets, of $                        

(Minimum
Working Capital) or more.  For this
determination, current assets exclude                                             
(Excluded Current Assets).  Likewise,
current liabilities include (1) all obligations payable on demand or
within one year after the date on which the determination is made, and
(2) final maturities and sinking fund payments required to be made within
one year after the date on which the determination is made, but exclude all
liabilities or obligations that Borrower may renew or extend to a date more
than one year from the date of this determination.

 

ATTACHMENTS.  The following documents are incorporated by
reference into this Agreement:  o
Asset Based Financing Agreement addendum dated
                                     
x Commercial Security Agreement addendum dated 10-04-2007
o Other.

 

ADDITIONAL TERMS:  This loan agreement
includes the Agreement Governing Extensions of Credit dated 10/4/2007.

 

x          ORAL AGREEMENTS OR
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE,
REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY
RELATED TO THE CREDIT AGREEMENT.  TO
PROTECT YOU (BORROWER) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT,
ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING,
WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US,
EXCEPT AS  WE MAY LATER AGREE IN
WRITING TO MODIFY IT.  BY SIGNING THIS
AGREEMENT, THE PARTIES AFFIRM THAT NO UNWRITTEN ORAL AGREEMENT EXISTS BETWEEN
THEM.

 

SIGNATURES. 
By signing under seal, I agree to all the terms and conditions beginning
on page 1 through the bottom of page 2 of this Agreement.  Borrower also acknowledges receipt of a copy
of this Agreement.

 

BORROWER:

 

	
  Tower Tech Systems Inc.

  	
   

  
	
  Entity Name

  
	
   

  
	
  /s/ Steven A. Huntington

  	
   (Seal)

  	
   

  	
   

  	
  (Seal)

  
	
  Signature Steven
  A. Huntington, C.F.O           Date

  	
   

  	
   

  	
  Signature                                                           Date

  	
   

  
	
   

  	
   (Seal)

  	
   

  	
   

  	
  (Seal)

  
	
  Signature                                                           Date

  	
   

  	
  Signature                                                           Date

  	
   

  
	
   

  
	
  LENDER:

  
	
   

  
	
  Investors
  Community Bank

  	
   

  
	
  Entity Name

  
	
   

  
	
  /s/ Robert Boerger

  	
   (Seal)

  	
   

  	
   

  
	
  Signature Robert
  Boerger, Senior Commercial Lender      Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  COMMERCIAL LOAN AGREEMENT:  to
  be used with Form COMM-NOTE

  	
  NOT TO BE USED FOR LOANS
  SUBJECT TO CONSUMER LENDING LAWS 

  
							

 

1

 

DEFINITIONS.  In this Agreement, the following terms have
the following meanings.

 

Accounting Terms.  Accounting terms that are not specifically
defined will have their customary meanings under consistently applied generally
accepted accounting principles.

 

Loan.  Loan refers to all advances made under the
terms of this Agreement.

 

Loan Documents.  Loan Documents include this Agreement and all
documents prepared pursuant to the terms of this Agreement including all
present and future promissory notes (Notes), security instruments, guaranties,
and supporting documentation as modified, amended or supplemented.

 

Property.  Property is any collateral, real, personal or
intangible, that secures Borrower’s performance of the obligations of this
Agreement.

 

ADVANCES.  To the extent permitted by law, Borrower will
indemnify Lender and hold Lender harmless for reliance on any request for
advance that Lender reasonably believes to be genuine.  Lender’s records are conclusive evidence as
to the number and amount of advances and the Loan’s unpaid principal and
interest.  If any advance results in an
overadvance (when the total amount of the Loan exceeds the principal balance)
Borrower will pay the overadvance, as requested by Lender.  Regarding Borrower’s demand deposit
account(s) with Lender, Lender may, at its option, consider presentation
for payment of a check or other charge exceeding available funds as a request
for an advance under this Agreement.  Any
such payment by Lender will constitute an advance on the Loan.

 

CONDITIONS.  Borrower will satisfy all of the following
conditions before Lender makes any advances under this Agreement.  If this Agreement provides for discretionary
advances, satisfaction of these conditions does not commit Lender to making
advances.

 

No Default.  There has not been a default under the Loan
Documents nor would a default result from making the advance.

 

Information.  Borrower has provided all required documents,
information, certifications and warranties, all properly executed on forms
acceptable to Lender.

 

Inspections.  Borrower has accommodated, to Lender’s
satisfaction, all inspections.

 

Conditions and Covenants.  Borrower has performed and
complied with all conditions required for an advance and all covenants in the
Loan Documents.

 

Warranties and Representations.  The
warranties and representations contained in this Agreement are true and correct
at the time of making the advance.

 

Financial Statements.  Borrower’s most recently
delivered financial statements and reports are current, complete, true and
accurate in all material respects and fairly represent Borrower’s financial
condition.

 

Bankruptcy Proceedings.  No proceeding under the United
States Bankruptcy Code has been commenced by or against Borrower or any of
Borrower’s affiliates.

 

WARRANTIES AND REPRESENTATIONS.  Borrower makes these warranties and
representations which will continue as long as this Agreement is in effect.

 

Power.  Borrower is duly organized, validly existing
and in good standing in all jurisdictions in which Borrower operates.  Borrower has the power and authority to enter
into this transaction and to carry on its business or activity as it is now
being conducted.  All persons who are
required by applicable law and the governing documents of Borrower have
executed and delivered to Lender this Agreement and other Loan Documents.

 

Authority.  The execution, delivery and performance of
this Agreement and the obligation evidenced by the Loan Documents are within
Borrower’s duly authorized powers, has received all necessary governmental
approval, will not violate any provision of law or order of court or
governmental agency, and will not violate any agreement to which Borrower is a
parry or to which Borrower or Borrower’s property is subject.

 

Name and Place of Business.  Other than previously disclosed
in writing to Lender, Borrower has not changed its name or principal place of
business within the last ten years and has not used any other trade or
fictitious name.  Without Lender’s prior
written consent, Borrower will not use any other name and will preserve
Borrower’s existing name, trade names and franchises.

 

No Other Liens.  Borrower owns or leases all property that is
required for its business and except as disclosed, the property is free and
clear of all liens, security interests, encumbrances and other adverse
interests.

 

Compliance With Laws.  Borrower is not violating any
laws, regulations, rules, orders, judgments or decrees applicable to Borrower
or its property, except as disclosed to Lender.

 

Financial Statements.  Borrower represents and warrants
that all financial statements Borrower provides fairly represent Borrower’s
financial condition for the stated periods, are current, complete, true and
accurate in all material respects, include all direct or contingent
liabilities, and that there has been no material adverse change in Borrower’s
financial condition, operations or business since the date the financial
information was prepared.

 

COVENANTS.  Until the Loan and all related debts,
liabilities and obligations under the Loan Documents are paid and discharged,
Borrower will comply with the following terms, unless Lender waives compliance
in writing.

 

Inspection and Disclosure.  Borrower will allow Lender or
its agents to enter any of Borrower’s premises during mutually agreed upon
times, to do the following: 
(1) inspect, audit, review and obtain copies from Borrower’s books,
records, orders, receipts, and other business related data; (2) discuss
Borrower’s finances and business with anyone who claims to be Borrower’s
creditor; (3) inspect Borrower’s Property, audit for the use and
disposition of the Property’s proceeds; or do whatever Lender decides is
necessary to preserve and protect the Property and Lender’s interest in the
Property.  As long as this Agreement is
in effect, Borrower will direct all of Borrower’s accountants and auditors to
permit Lender to examine and make copies of Borrower’s records in their
possession, and to disclose to Lender any other information that they know
about Borrower’s financial condition and business operations.  Lender may provide Lender’s regulator with
required information about Borrower’s financial condition, operation and
business or that of Borrower’s parent, subsidiaries or affiliates.

 

Business Requirements.  Borrower will preserve and
maintain its present existence and good standing in jurisdictions where
Borrower is organized and operates. 
Borrower will continue its business or activities as presently
conducted, by obtaining licenses, permits and bonds where needed.  Borrower will obtain Lender’s prior written
consent before ceasing business or engaging in any line of business that is
materially different from its present business.

 

Compliance with Laws.  Borrower will not violate any
laws, regulations, rules, orders, judgments or decrees applicable to Borrower
or Borrower’s property, except for those which Borrower challenges in good
faith through proper proceedings after providing adequate reserves to fully pay
the claim and its appeal should Borrower lose. 
On request, Borrower will provide Lender with written evidence that
Borrower has fully and timely paid taxes, assessments and other governmental
charges levied or imposed on Borrower and its income, profits and
property.  Borrower will adequately
provide for the payment of taxes, assessments and other charges that have
accrued but are not yet due and payable.

 

New Organizations.  Borrower will obtain Lender’s
written consent before organizing, merging into, or consolidating with an
entity; acquiring all or substantially all of the assets of another; or
materially changing legal structure, management, ownership or financial
condition.

 

Other Liabilities.  Borrower will not incur, assume
or permit any debt evidenced by notes, bonds or similar obligations except debt
in existence on the date of this Agreement and fully disclosed to Lender; debt
subordinated in payment to Lender on terms acceptable to Lender; accounts
payable incurred in the ordinary course of business and paid under customary
trade terms or contested in good faith with reserves satisfactory to Lender; or
as otherwise agreed to by Lender.

 

Notice.  Borrower will promptly notify Lender of any
material change in financial condition, a default under the Loan Documents, or
a default under any agreement with a third party which materially and adversely
affects Borrower’s property, operations or financial condition.

 

Dispose of No Assets.  Without Lender’s prior written
consent, Borrower will not sell, lease, assign, or otherwise distribute all or
substantially all of its assets.

 

Insurance.
Borrower will obtain and maintain insurance with insurers in amounts and
coverages that are acceptable to Lender and customary with industry
practice.  This may include without
limitation credit insurance, insurance policies for public liability, fire,
hazard and extended risk, workers compensation, and, at Lender’s request,
business interruption and/or rent loss insurance.  Borrower may obtain insurance from anyone
Borrower wants that is acceptable to Lender. 
Borrower’s choice of insurance provider will not affect the credit decision
or interest rate.  At Lender’s request,
Borrower will deliver to Lender certified copies of all of these insurance
policies, binders or certificates. 
Borrower will obtain and maintain a mortgagee or loss payee endorsement
for Lender when these endorsements are available.  Borrower will require all insurance policies
to provide at least 10 days prior written notice to Lender of cancellation or
modification.  Borrower consents to
Lender using or disclosing information relative to any contract of insurance
required for the Loan for the purpose of replacing this insurance.  Borrower also authorizes its insurer and
Lender to exchange all relevant information related to any contract of
insurance executed as required by any Loan Documents.

 

Property Maintenance.  Borrower will keep property that
is necessary or useful in its business in good working condition by making all
needed repairs, replacements and improvements and by making payments due on the
property.

 

DEFAULT.  If the Loan is payable on demand, Lender may
demand payment at any time whether or not any of the following events have
occurred.  Borrower will be in default if
any one or more of the following occur. 
(1) Borrower fails to make a payment in full when due.  (2) Borrower makes an assignment for the
benefit of creditors or becomes insolvent, either because Borrower’s liabilities
exceed its assets or Borrower is unable to pay debts as they become due; or
Borrower petitions for protection under any bankruptcy, insolvency or debtor
relief laws, or is the subject of such a petition or action and fails to have
the petition or action dismissed within a reasonable period of time.  (3) Borrower fails to perform any
condition or to keep any promise or covenant on this Agreement or any debt or
agreement Borrower has with Lender. 
(4) A default occurs under the terms of any instrument evidencing
or pertaining to this Agreement. 
(5) If Borrower is a producer of crops, Borrower fails to plant,
cultivate and harvest crops in due season. 
(6) Any loan proceeds are used for a purpose that will contribute
to excessive erosion of highly erodible land or to the conversion of wetlands
to produce an agricultural commodity, as further explained by federal law.  (7) Anything else happens that either
significantly impairs the value of the Property or, unless controlled by the
New Jersey Banking Law, causes Lender to reasonably believe that Lender will
have difficulty collecting the Loan.

 

REMEDIES.  After Borrower defaults, and after Lender
gives any legally required notice and opportunity to cure, Lender may at its
option use any and all remedies Lender has under state or federal law or in any
of the Loan Documents, including, but not limited to, terminating any
commitment or obligation to make additional advances or making all or any part
of the amount owing immediately due. 
Lender may set-off any amount due and payable under the terms of the
Loan against Borrower’s right to receive money from Lender, unless prohibited
by applicable law.  Except as otherwise
required by law, by choosing any one or more of these remedies Lender does not
give up Lender’s right to use any other remedy. 
Lender does not waive a default if Lender chooses not to use a remedy,
and may later use any remedies if the default continues or occurs again.

 

COLLECTION EXPENSES AND ATTORNEYS’ FEES.  To the
extent permitted by law, Borrower agrees to pay all expenses of collection,
enforcement and protection of Lender’s rights and remedies under this
Agreement.  Expenses include, but are not
limited to, reasonable attorneys’ fees including attorney fees as permitted by
the United States Bankruptcy Code, court costs and other legal expenses.  These expenses will bear interest from the
date of payment until paid in full at the contract interest rate then in effect
for the Loan.  FL:  Attorneys’ fees will be 10 percent of the
principal sum due or a larger amount as the court judges as reasonable and
just.  GA:  Attorneys’ fees will be 15 percent of the
principal and interest owing.

 

GENERAL PROVISIONS.  This Agreement is governed by the
laws of the jurisdiction where Lender is located, the United States of America
and to the extent required, by the laws of the jurisdiction where the Property
is located.

 

Joint And Individual Liability And Successors.  Each
Borrower, individually, has the duty of fully performing the obligations on the
Loan.  Lender can sue all or any of the
Borrowers upon breach of performance. 
The duties and benefits of this Loan will bind and benefit the
successors and assigns of Borrower and Lender.

 

Amendment, Integration And Severability.  The
Loan Documents may not be amended or modified by oral agreement.  Borrower agrees that any party signing this
Agreement as Borrower is authorized to modify the terms of the Loan
Documents.  Borrower agrees that Lender
may inform any party who guarantees this Loan of any Loan accommodations,
renewals, extensions, modification, substitutions, or future advances.  The Loan Documents are the complete and final
expression of the understanding between Borrower and Lender.  If any provision of the Loan Documents is
unenforceable, then the unenforceable provision will be severed and the
remaining provisions will be enforceable.

 

Waivers And Consent.  Borrower, to the extent
permitted by law, consents to certain actions Lender may take, and generally
waives defenses that may be available based on these actions or based on the
status of a party to the Loan.  Lender
may renew or extend payments on the Loan. 
Lender may release any borrower, endorser, guarantor, surety, or any
other co-signer.  Lender may release,
substitute, or impair any Property securing the Loan.  Lender’s course of dealing, or Lender’s
forbearance from, or delay in, the exercise of any of Lender’s rights,
remedies, privileges, or right to insist upon Borrower’s strict performance of
any provisions contained in the Loan Documents, will not be construed as a
waiver by Lender, unless the waiver is in writing and signed by Lender.  Lender may participate or syndicate the Loan
and share any information that Lender decides is necessary about Borrower and
the Loan with the other participants.

 

Interpretation.  Whenever used, the singular includes the
plural and the plural includes the singular. 
The section headings are for convenience only and are not to be used to
interpret or define the terms of this Agreement.  Unless otherwise indicated, the terms of this
Agreement shall be construed in accordance with the Uniform Commercial Code.

 

Notice.  Unless otherwise required by law, any notice
will be given by delivering it or mailing it by first class mail to the
appropriate party’s address listed in this Agreement, or to any other address
designated in writing.  Notice to one
party will be deemed to be notice to all parties.  Time is of the essence.

 

2Exhibit 10.38

 

	
  DEBTOR
  NAME AND ADDRESS

  	
   

  	
  LENDER
  NAME AND ADDRESS

  	
   

  	
   

  	
  LOAN
  DESCRIPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tower Tech Holdings Inc.

  	
   

  	
  Investors Community Bank

  	
   

  	
  Number

  	
  44938101       mas

  	
   

  
	
  101 S. 16th St., P.O. Box
  1957

  	
   

  	
  860 N. Rapids Road

  	
   

  	
  Amount $

  	
  2,500,000.00

  	
   

  
	
  Manitowoc, WI 54221-1957

  	
   

  	
  P.O. Box 700

  	
   

  	
  Date

  	
  10-04-2007

  	
   

  
	
   

  	
   

  	
  Manitowoc,Wl 54221-0700

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o  Refer to the attached Signature Addendum,
  incorporated herein, for additional Debtors and their signatures.

  
											

 

COMMERCIAL SECURITY AGREEMENT

 

This
Commercial Security Agreement (Security Agreement) is an Addendum to a
Commercial Loan Agreement, dated  10-04-2007, (Loan Agreement) between Tower
Tech Systems Inc. (Borrower) and Lender.  This Security Agreement is further governed
by the terms of the Loan Agreement, where applicable.  References in this Addendum to terms defined
in the Loan Agreement shall have the definitions given to them in the Loan
Agreement, unless otherwise indicated. 
Debtor and Borrower may be the same. 
Where Borrower and Debtor are not the same, Debtor means the owner of
the Property subject to this Security Agreement and Borrower means the obligor
on the Loan Agreement.

 

SECURED
DEBTS.  This Security Agreement will secure the
following debts (Secured Debts), together with all extensions, renewals,
refinancings, modifications, and replacements of the Secured Debts:

 

	
    (1) 

  	
  Sums
  Advanced. All sums
  advanced and expenses incurred by Lender under the terms of the Loan
  Agreement or this Security Agreement.

  
	
    (2) 

  	
  Specific
  Debts. Debts created
  by the following instruments or agreements (include
  items such as borrowers’ names, note amounts, interest rates, maturity dates,
  etc.):

  

 

x                  (3)  All Debts.  Notice  - The Property may also serve as collateral for
future advances.  All present
and future debts from Borrower to Lender, even if this Security Agreement is
not specifically referenced, or if the future debt is unrelated to or of a
different type than this debt.  If more
than one person signs the Loan Agreement as Borrower, Debtor agrees that this
Security Agreement will secure debts incurred by any Borrower either
individually or with others who may not sign the Loan Agreement.  Nothing in this Security Agreement
constitutes a commitment to make additional or future loans or advances.  Any such commitment must be in writing
pursuant to the terms of the Loan Agreement.

 

SECURITY
INTEREST.  To secure the payment and performance of the
Secured Debts, Debtor gives Lender a security interest in all of the Property
described in this Security Agreement that Debtor owns or has sufficient rights
in which to transfer an interest, now or in the future, wherever the Property
is or will be located, and all proceeds and products of the Property.  “Property” includes all parts, accessories,
repairs, replacements, improvements, and accessions to the Property; any
original evidence of title or ownership; and all obligations that support the
payment or performance of the Property.  “Proceeds”
includes anything acquired upon the sale, lease, license, exchange, or other
disposition of the Property; any rights and claims arising from the Property;
and any collections and distributions on account of the Property.  This Security Agreement remains in effect
until terminated in writing, even if the Secured Debts are paid and Lender is no
longer obligated to advance funds to Debtor or Borrower.

 

PROPERTY
DESCRIPTION. The
Property is described as follows:

 

	
  x

  	
   

  	
  Accounts
  and Other Rights to Payment: All rights to payment, whether or not earned by performance,
  including, but not limited to, payment for property or services sold, leased,
  rented, licensed, or assigned. This includes any rights and interests
  (including all liens) which Debtor may have by law or agreement against any
  account debtor or obligor of Debtor.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Inventory: All inventory held for ultimate sale or
  lease, or which has been or will be supplied under contracts of service, or
  which are raw materials, work in process, or materials used or consumed in
  Debtor’s business.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Equipment: All equipment including, but not limited
  to, machinery, vehicles, furniture, fixtures, manufacturing equipment, farm
  machinery and equipment, shop equipment, office and record keeping equipment,
  parts, and tools. The Property includes any equipment described in a list or
  schedule Debtor gives to Lender, but such a list is not necessary to create a
  valid security interest in all of Debtor’s equipment.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Instruments
  and Chattel Paper:
  All instruments, including negotiable instruments and promissory notes and
  any other writings or records that evidence the right to payment of a
  monetary obligation, and tangible and electronic chattel paper.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  General
  Intangibles: All
  general intangibles including, but not limited to, tax refunds, patents and
  applications for patents, copyrights, trademarks, trade secrets, goodwill,
  trade names, customer lists, permits and franchises, payment intangibles,
  computer programs and all supporting information provided in connection with
  a transaction relating to computer programs, and the right to use Debtor’s
  name.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Documents: All documents of title including, but not
  limited to, bills of lading, dock warrants and receipts, and warehouse
  receipts.

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Farm
  Products and Supplies:
  All farm products including, but not limited to, all poultry and livestock
  and their young, along with their produce, products, and replacements; all
  crops, annual or perennial, and all products of the crops; and all feed,
  seed, fertilizer, medicines, and other supplies used or produced in Debtor’s
  farming operations. North Dakota only - This Security Agreement covers crops
  now growing. This Security Agreement also covers future crops to be grown in
  the current year or any year hereafter.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Government
  Payments and Programs:
  All payments, accounts, general intangibles, and benefits including, but not
  limited to, payments in kind, deficiency payments, letters of entitlement,
  warehouse receipts, storage payments, emergency assistance and diversion
  payments, production flexibility contracts, and conservation reserve payments
  under any preexisting, current, or future federal or state government
  program.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Investment
  Property: All
  investment property including, but not limited to, certificated securities,
  uncertificated securities, securities entitlements, securities accounts,
  commodity contracts, commodity accounts, and financial assets.

  
	
   

  	
   

  	
   

  
	
  x

  	
   

  	
  Deposit
  Accounts: All
  deposit accounts including, but not limited to, demand, time, savings,
  passbook, and similar accounts.

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Specific
  Property Description:
  The Property includes, but is not limited by, the following (if required,
  provide real estate description):

  

 

USE OF PROPERTY.  The Property will be used for  o  personal 
x 
business  o 
agricultural  o                               purposes.

	
  o

  	
   

  	
  ADDITIONAL
  TERMS:  (include additional
  Security Agreement terms and contract requirements).

  

 

Debtor
Type:  o Individual o
Partnership x Corporation o                                                                     State
of Registration (if applicable) NV                     

 

	
  SIGNATURES. By signing under seal, Debtor agrees to
  all the terms and conditions beginning on page 1 through the bottom of
  page 2 of this Agreement. Debtor acknowledges receipt of a copy of this
  Security Agreement.

  
	
   

  
	
  DEBTOR:

  	
   

  
	
   

  
	
  Tower
  Tech Holdings Inc.

  	
   

  
	
  Entity
  Name

  
	
   

  	
   

  
	
  /s/
  Steven A. Huntington

  	
    (Seal)

  	
   

  	
   

  	
    (Seal)

  
	
  Signature Steven A. Huntington, C.F.O            Date

  	
   

  	
   

  	
  Signature                                                           Date

  	
   

  
	
   

  	
    (Seal)

  	
   

  	
   

  	
    (Seal)

  
	
  Signature                                                            Date

  	
   

  	
  Signature                                                           Date

  	
   

  
	
   

  
	
  LENDER:

  
	
   

  
	
  Investors
  Community Bank

  	
   

  
	
  Entity
  Name

  
	
   

  
	
  /s/ Robert Boerger

  	
    (Seal)

  	
   

  	
   

  	
    (Seal)

  
	
  Signature
  Robert Boerger, Senior
  Commercial Lender

  	
  Date

  	
   

  	
  Signature                                                           Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  COMMERCIAL
  SECURITY AGREEMENT:  to be used with Form COMM-AGREE

  	
   

  	
  NOT TO BE USED FOR LOANS SUBJECT TO CONSUMER
  LENDING LAWS

  
									

 

1

 

GENERALLY.  This
Security Agreement is governed by the terms of the Loan Agreement and the laws
of the state in which Lender is located. 
In the event of a dispute, the exclusive forum, venue, and place of
jurisdiction will be the state in which Lender is located, unless otherwise required
by law.  Each Debtor’s obligations under
this Security Agreement are independent of the obligations of any other
Debtor.  Lender may sue each Debtor
individually or together with any other Debtor. 
Lender may release any part of the Property and Debtor will remain
obligated under this Security Agreement for the remaining Property.  The duties and benefits of this Security
Agreement will bind and benefit the successors and assigns of Debtor and
Lender.  No modification of this Security
Agreement is effective unless made in writing and signed by Debtor and
Lender.  If any provision of this
Security Agreement is unenforceable, then the unenforceable provision will be
severed and the remaining provisions will still be enforceable.  Whenever used, the plural includes the
singular and the singular includes the plural. 
Section headings are for convenience only and should not he used to
define or interpret the terms of this Security Agreement.  Time is of the essence.

 

NAME AND
LOCATION.  Debtor’s name indicated on page 1 is
Debtor’s exact legal name.  If Debtor is
an individual, Debtor’s address is Debtor’s principal residence.  If Debtor is not an individual, Debtor’s
address is the location of Debtor’s chief executive offices or sole place of
business.  If Debtor is an entity
organized and registered under state law, Debtor has provided Debtor’s state of
registration on page 1.  Debtor will
provide verification and registration and location upon Lender’s request.  Debtor will provide Lender with at least 30
days notice prior to any change in Debtor’s name, address, or state of
organization or registration.

 

WARRANTIES
AND REPRESENTATIONS.  Debtor owns the Property or, to the extent
that this is a purchase money loan, will purchase the Property with the
proceeds of the loan.  The Property is
free and clear of all liens, security interests, encumbrances, and other
adverse claims and interests, except those to Lender or to which Lender
consents in writing.

 

DUTIES
TOWARD PROPERTY.

 

Protection
of Lender’s Interest.  Debtor will defend the Property against any
other claim.  Debtor agrees to do
whatever Lender requires to protect Lender’s security interest and keep Lender’s
claim in the Property ahead of the claims of other creditors.  Debtor will not do anything to harm Lender’s
position.  Debtor will keep, and allow
Lender reasonable access to, books, records, and accounts about the Property
and Debtor’s business in general.  If
this Security Agreement covers chattel paper or instruments, either as original
collateral or proceeds of the Property, Debtor will note Lender’s interest on
the face of the chattel paper or instruments.

 

Use,
Location, and Protection of the Property. 
Debtor will keep the Property in Debtor’s possession and in good
repair.  Debtor will use the Property
only for commercial or agricultural purposes and will not change this specified
use without Lender’s prior written consent. 
Lender has the right of reasonable access to inspect the Property and
Debtor will immediately inform Lender of any loss or damage to the
Property.  Debtor will not cause or
permit waste to the Property.  Debtor
will keep the Property at Debtor’s address unless Lender and Debtor agree that
it may be kept at another location.  If
the Property is to be used in other states, Debtor will give Lender a list of
those states.  Debtor will notify Lender
in writing and obtain Lender’s prior written consent to any change in location
of any of the Property.  The location of
the Property is given to aid in the identification of the Property and does not
in any way limit the scope of the security interest granted to Lender.  Debtor will not use the Property in violation
of any law.  Debtor will notify Lender in
writing prior to any change in Debtor’s address, name or, if an organization,
any change in Debtor’s identity or structure. 
Debtor will pay all taxes and assessments levied or assessed against
Debtor or the Property and provide timely proof of payment of these taxes and
assessments upon request.

 

Selling,
Leasing, or Encumbering the Property.  Debtor will not sell, offer to
sell, lease, grant a security interest in, or otherwise transfer or encumber
the Property without Lender’s prior written permission, except for Inventory
sold in the ordinary course of business at fair market value, or at a minimum
price established between Debtor and Lender. 
If Debtor is in default under this Security Agreement, Debtor may not
sell the Inventory portion of the Property even in the ordinary course of
business.  Lender’s permission to sell
the Property may be reasonably withheld without regard to the creditworthiness
of any buyer or transferee.  Debtor will
not permit the Property to be the subject of any court order affecting Debtor’s
rights to the Property in any action by anyone other than Lender.

 

Insurance. 
Debtor will keep the tangible Property insured against risks reasonably
associated with the Property.  This
insurance will last until the Property is released from this Security
Agreement.  Lender may apply insurance
proceeds toward what is owed on the Secured Debts.  Lender may require added security as a
condition of permitting any insurance proceeds to be used to repair or replace
the Property.  If Lender acquires the
Property in damaged condition, Debtor’s right to any insurance policies and
proceeds will pass to Lender to the extent of the Secured Debts.  If Debtor fails to keep the Property insured,
Lender may obtain insurance to protect Lender’s interest in the Property and
may include coverages not originally required of Debtor, may be written by a
company other than one Debtor would choose, and may incur a higher rate than
Debtor could obtain if Debtor purchased the insurance.

 

Additional
Duties Specific to Accounts.  If the Property includes
Accounts, Debtor will not settle any Account for less than its full value
without Lender’s written permission. 
Debtor will collect all Accounts in the ordinary course of
business.  Debtor will not dispose of the
Accounts by assignment without Lender’s prior written consent.  Debtor will keep the proceeds from all the
Accounts and any goods which are returned to Debtor or which Debtor takes back
and will not commingle them with any of Debtor’s other property.  At Lender’s request, Debtor will notify
account debtors that their Accounts have been assigned to Lender and should be
paid directly to Lender.  Debtor will
deliver the Accounts to Lender at Lender’s request.  If Lender asks Debtor to pay Lender the full
price on any returned items or items retaken by Debtor, Debtor will do so.  Debtor will make no material change in the terms
of any Account, and Debtor will give Lender any statements, reports,
certificates, lists of account debtors, invoices applicable to each Account,
and other data pertaining to the Accounts as Lender may request.

 

Additional
Duties Specific to Farm Products.  If the Property includes farm
products, Debtor will provide Lender, at Lender’s request, a written list of
the buyers, commission merchants, or selling agents to or through whom Debtor
may sell Debtor’s farm products.  Debtor
remains subject to all applicable penalties for selling Debtor’s farm products
in violation of this Security Agreement and the Food Security Act of 1985.  If the Property includes crops growing or to
be grown, Debtor agrees to plant, cultivate, and harvest the crops in due season.  Debtor will be in default if any loan
proceeds are used for a purpose that will contribute to excessive erosion of
highly erodible land or to the conversion of wetland to produce or to make
possible the production of an agricultural commodity, further explained in 7
CFR Part 1940, Subpart G, Exhibit M.

 

AUTHORITY
TO PERFORM.  Debtor authorizes Leader to do anything
Lender deems reasonably necessary to protect the Property and Lender’s interest
in the Property.  If Debtor fails to
perform any of Debtor’s duties under this Security Agreement, Lender is
authorized, without notice to Debtor, to perform the duties or cause them to be
performed.  These authorizations include,
but are not limited to, permission to pay for the repair, maintenance, and
preservation of the Property and take any action to realize the value of the
Property.  Lender’s authority to perform
for Debtor does not create an obligation to perform, and Lender’s failure to
perform will not preclude Lender from exercising any other rights under the law
or this Security Agreement.  If Lender
performs for Debtor, Lender will use reasonable care.  Reasonable care will not include any steps
necessary to preserve rights against prior parties or any duty to take action
in connection with the management of the Property.

 

If
Lender comes into possession of the Property, Lender will preserve and protect
the Property to the extent required by law. 
Lender’s duty of care with respect to the Property will be satisfied if
Lender exercises reasonable care in the safekeeping of the Property or in the
selection of a third party in possession of the Property.  Lender may enforce the obligations of an
account debtor or other person obligated on the Property.  Lender may exercise Debtor’s rights with
respect to the account debtor’s or other person’s obligations to make payment
or otherwise render performance to Debtor, and enforce any security interest
that secures such obligations.

 

PURCHASE
MONEY SECURITY INTEREST.  This Security Agreement creates a Purchase
Money Security Interest to the extent the Secured Debts are used to purchase or
acquire rights in the Property.  The
portion of the Property purchased with loan proceeds will remain subject to the
Purchase Money Security Interest until the Secured Debts are paid in full.  Debtor authorizes Lender, at Lender’s option,
to disburse the loan proceeds directly to the seller of the Property.  Payments on any non-purchase money loan also
secured by this Security Agreement will not be applied to the purchase money
loan.  Payments on the purchase money
loan will be applied first to the non-purchase money portion of the loan, if
any, and then to the purchase money portion in the order in which the purchase
money Property was acquired.  If the purchase
money Property was acquired at the same time, then payments will be applied in
the order Lender selects.  No security
interest will be terminated by application of this formula.

 

COLLATERAL
ACCOUNT.  If required by Lender, Debtor will establish
a Collateral Account, and will immediately deposit all payments from account
debtors and other proceeds from the Property, referred to as Funds, in payment
of and as security for the Secured Debts. 
Debtor will continue to deposit these Funds in this Collateral Account
until Lender informs Debtor in writing that it is no longer necessary to do
so.  Debtor may withdraw from this
Collateral Account only upon Lender’s prior written consent.  Lender has the right at any time, without
notice, to withdraw Funds from the Collateral Account and apply those Funds to
the Secured Debts or release any of the Funds to Debtor.

 

DEFAULT. Debtor will be in default if Debtor or
Borrower (if not the same) fails to perform any condition, covenant, or make
required payments under the Loan Agreement or Debtor fails to perform under
this Security Agreement.

 

REMEDIES.  If
Debtor is in default, Lender has the option to do any one or more of the
following in addition to the remedies provided in the Loan Agreement and other
remedies provided by law.

 

(1) Assembly
of Property.  Lender may require Debtor
to gather the Property and make it available to Lender in a reasonable fashion
if allowed by law.

 

(2) Repossession.  Lender may repossess (unless prohibited by
law) or otherwise seize the Property as provided by law.  Lender may hold, use, and operate Debtor’s
property as necessary to preserve the Property or its value without
compensation to Debtor.

 

(3) Sale
of Property.  Lender may sell the
Property as provided by law.  Lender may
apply the proceeds of the Property to Lender’s expenses, attorneys’ fees and
legal expenses (to the extent allowed by law), and any remaining Secured
Debt.  If what Lender receives from the
sale of the Property does not satisfy the Secured Debt, Debtor will be liable
for the remaining balance (where permitted by law).

 

WAIVER. 
Debtor waives all claims for loss and damage caused by Lender’s acts or
omissions where Lender acted reasonably and in good faith.  Except to the extent prohibited by law,
Debtor waives all rights Debtor has now or in the future as a homestead
exemption in the Property.

 

Connecticut
only.  Debtor voluntarily and knowingly waives all
rights to notice and hearing as allowed under Chapter 903A of the Connecticut
General Statutes, as amended, or otherwise allowed by any state or federal law
with respect to any prejudgment remedy which Lender may desire to use.

 

South
Carolina only.  Lender may immediately seize the Property
upon Debtor’s default.  Debtor agrees to
waive the right to five days’ notice and a preseizure hearing prior to seizure
of the Property.

 

PERFECTION
OF SECURITY INTEREST.  Debtor authorizes Lender to file a financing
statement covering the Property.  Debtor
will comply with, facilitate, and otherwise assist Lender in connection with
obtaining possession or control over the Property for purposes of perfecting
Lender’s interest under the Uniform Commercial Code.

 

ADDITIONAL
DOCUMENTS.  Debtor will provide any additional
information Lender requests, including financial statements and documents
relating to the Property.  Debtor
represents that all documents and information submitted to Lender will be true,
correct, and complete as of the date submitted and will update the documents or
information as necessary to give Lender a current and accurate assessment of
Debtor’s affairs.  Debtor agrees to sign,
deliver, and file any additional documents, certifications, or records that
Lender requires to perfect, continue, and preserve Debtor’s obligations and
Lender’s rights under this Security Agreement and to verify Lender’s lien
status on the Property.  Debtor
authorizes Lender to sign, authorize, and execute any documents on Debtor’s
behalf in order to preserve or protect Lender’s interest in the Property.

 

NOTICES. 
Unless otherwise required by law, any notice will be given by delivering
it or mailing it by first class mail to the appropriate party’s address as
indicated in this Security Agreement, or any other address designated in
writing.  Notice to one party is notice
to all parties.

 

WAIVER/CONFESSION
(LOUISIANA ONLY).  Debtor waives the benefit of appraisal as
provided in the Louisiana Code of Civil Procedure and all other laws with
regard to

 

2

 

appraisal
upon sales.  For purposes of foreclosure
under Louisiana executory process procedures, Debtor confesses judgment in
Lender’s favor up to the full amount of the Secured Debts including collection
costs and attorneys’ fees.

 

NOTICE
(Arizona only):  It is unlawful to fail to return a motor
vehicle subject to a security interest within thirty days after receiving
notice of default.  Any notice of default
Lender sends will be mailed to Debtor’s address as indicated in this
agreement.  It is Debtor’s responsibility
to tell Lender if Debtor’s address changes. 
Unlawful failure to return a motor vehicle subject to a security
interest is a class 6 felony which for a first offense carries a maximum jail
sentence of 1.5 years.  The maximum jail
sentence may be greater if the defendant has a prior criminal record.  The court also may impose a fine of no more
than $150,000.

 

3

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