Document:

Exhibit 10.39

 

AGREEMENT GOVERNING EXTENSIONS OF CREDIT

 

This Agreement, dated March 21, 2008, is between Investors
Community Bank (the “Bank”) and Tower Tech Systems Inc. (the “Borrower”).

 

RECITALS

 

A.            Bank
and Borrower are parties to certain extensions of credit, which extensions of
credit are evidenced by loan documentation existing on the date hereof and may
be evidenced by additional loan documentation executed by one or both parties
from time to time; and

 

B.            Bank
and Borrower desire to enter into this Agreement relating to all such loan
documentation.

 

AGREEMENT

 

1.             Collateral.

 

i.              Debt
Documents; Obligations.  Bank and
Borrower have executed and anticipate that from time to time they may execute
loan agreements, notes, guaranties and other documentation evidencing a debt or
obligation of Borrower to Bank from time to time.  All documents at any time executed by
Borrower and evidencing a debt or obligation of Borrower to Bank are referred
to herein as “Debt Documents.”  All
obligations of Borrower to Bank under Debt Documents and all other obligations
of Borrower to Bank from time to time are referred to herein as “Obligations.”  Obligations include but are not limited to
obligations to repay loans, debts occurring by reason of overdrafts of checking
accounts, obligations to take action such as purchasing insurance or
maintaining property, and all other obligations of Borrower to Bank, including
those obligations that exist on the date hereof and those obligations that may
be incurred on or after the date hereof.

 

The following existing documents are Debt Documents:

 

Commercial Promissory Note and Commercial Loan Agreement dated
3/21/2008, Irrevocable Standby Letter of Credit dated 8/31/2007, Guaranty of R.
B. A. Inc. dated 3/21/2008, Guaranty of Tower Tech Holdings Inc. dated
3/21/2008

 

ii.             Security
Documents; Collateral.  Borrower has
granted to Bank certain collateral, and Bank and Borrower anticipate that
Borrower may grant to Bank additional collateral from time to time.  All documents at any time granting to Bank a
lien or security interest in any property are referred to herein as “Security
Documents.”  A document may be both a
Debt Document and a Security Document. 
All of Borrower’s property in which Bank has a lien or security interest
on the date hereof, and all property in which Bank may have a lien or security
interest in the future, including but not limited to real estate and personal
property, is referred to herein as “Collateral.”

 

The following existing documents are Security Documents:

 

Commercial Security Agreement dated 10/4/2007

 

1

 

iii.            Cross
Collateralization.  All Collateral
shall at all times be security for all Obligations.  If Borrower grants Bank a lien or security
interest at any time, such lien or security interest shall continue, and the
Borrower’s property shall continue to be collateral for all Obligations, until
all Obligations are paid in full and Bank and Borrower enter into a termination
or release of the applicable Security Document.

 

2.             Cross
Default.  Any time there is a default
under any Debt Document, any Security Document or this Agreement, such default
shall be a default under all Debt Documents, all Security Documents and this
Agreement.

 

3.             Covenants
and Agreements.  In addition to all
agreements contained in the Debt Documents and Security Documents, Borrower
agrees to comply with all of the following:

 

i.              Minimum Debt to Tangible Net Worth of
Tower Tech Systems Inc., 1 to 1 or greater based on year end financial statements.

ii.             Minimum Debt service coverage ratio of
1.25 to 1 tested annually at year end.

iii.            Minimum Tangible Net Worth of Tower Tech
Systems Inc., of $10 Million or greater at year end.

iv.            Primary Depository account kept at
Investors Community Bank.

v.             No loans or leases to be entered into
without the bank’s prior approval.

 

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.

 

4.             This
Agreement to Control.  The Bank and
Borrower intend for this Agreement to apply to all transactions between them,
and this Agreement shall continue in effect until the Borrower and Bank enter
into a termination agreement.  Even if a
particular Security Document ever describes certain Obligations without
describing all Obligations, that Security Document shall secure all
Obligations.

 

5.             Effect
of Agreement.  This Agreement applies
to all extensions of credit between Bank and Borrower.  This Agreement is not an agreement to extend
credit.  Bank shall not be obligated
under this Agreement to loan money to Borrower or otherwise extend credit to
Borrower.

 

6.             Participants;
Assigns; Guarantors; Disclosure.  The
Borrower agrees that the Bank may, at its option, sell to one or more other
financial institutions or other parties interests in the Obligations.  Bank may, at Bank’s sole option, disclose to
the purchaser of any such interest and to any guarantor of all or any part of
the Obligations financial and other information concerning the Borrower.

 

2

 

7.             Amendment.  This Agreement may be amended only by a
writing signed by the party to be bound thereby.

 

8.             Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Wisconsin without giving effect to applicable principles of conflict of laws to
the extent that the application of the laws of another jurisdiction would be
required thereby.

 

9.             Counterparts.  This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

10.           Severability.  In case any provision in this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year fast above written.

 

BORROWER:

	
  Tower Tech Systems Inc.

  
	
   

  
	
  a Wisconsin Corporation

  
	
   

  
	
  By:

  	
  /s/ Steven A. Huntington

  	
   

  
	
  Steven A. Huntington

  
	
  Title:  C.F.O.

  

 

 

BANK:

INVESTORS COMMUNITY BANK

 

 

	
  By:

  	
  /s/ Robert Boerger

  	
   

  
	
  Robert Boerger

  
	
  Title:  Sr. Commercial Lender

  

 

3

 

AGREEMENT OF GUARANTOR

 

The undersigned Guarantor has executed or may execute one or more
guaranties of the obligations of Borrower to Bank.  Each Guaranty executed by Guarantor shall
guaranty all of the Obligations described above.  Guarantor agrees to be bound by the foregoing
Agreement.  Guarantor guaranties all
Obligations described above, including Obligations that may be created in the
future if the Bank makes additional loans to the Borrower.  Bank may make additional loans and Bank may
agree to changes to the Debt Documents and Security Documents, all without
affecting the obligations of Guarantor to Bank. 
Guarantor shall be responsible for keeping informed as to the
transactions between Bank and Borrower, and Bank shall have no obligation to
provide any notices or other information to Guarantor.

 

 

GUARANTOR:

 

	
  R. B. A Inc.

  	
  Tower Tech Holdings Inc.

  
	
   

  	
   

  
	
  a Wisconsin Corporation

  	
  a Wisconsin Corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Steven A. Huntington

  	
   

  	
  By:

  	
  /s/ Steven A. Huntington

  
	
  Steven A. Huntington

  	
  Steven A. Huntington

  
	
  Title:  C.F.O.

  	
  Title:  C.F.O.

  
					

 

4Exhibit 10.40

 

	
  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 44938102    mab

  Amount $5,500,000.00

  Date 03-21-2008

  
	
   

  	
   

  	
   

  	
   

  	
   

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

   

  
	
  COMMERCIAL PROMISSORY NOTE

  

 

DATE.  The date of this Promissory Note (Note)
is  03-21-2008.

 

GOVERNING AGREEMENT.  This Note is further governed by the
Commercial Loan Agreement between Lender and Borrower dated 03-21-2008, as
modified, amended, or supplemented.  All
definitions of terms in the Commercial Loan Agreement apply to this Note as
well.  Upon execution of this Note,
Borrower represents that Borrower has reviewed and is in compliance with all
Loan Documents and the Commercial Loan Agreement.

 

PROMISE TO PAY.  For value received, Borrower promises to pay
Lender or Lender’s order, at Lender’s address, x $5,500,000.00 (Principal).

 

o  $                  (Principal)
or the Borrowing Base, whichever is less.

 

o      Single Advance.  Borrower will receive all of this Principal
in one advance.  No additional advances
are contemplated under this Note.

 

x     Multiple Advances.  The Principal amount stated above is the
maximum amount of Principal that Borrower may borrow under this Note.  On  03-21-2008

 

Borrower will receive $  0.00 and future advances are
contemplated.  The conditions for future
advances are stated in the Commercial Loan Agreement.

 

INTEREST.  Borrower agrees to pay interest on the
outstanding Principal balance of this Note at the rate of 4.348 percent per
year until 04-01-2008.

 

x   Variable Rate.
This rate may then change as follows. The future rate will be
1.750% above The Previous Month Average 30 Day Libor Rate published in the Wall
Street Journal.  The rate may change as
often as every month.  The rate may never
be higher than N/A or less than 4.250%. 
A change in the interest rate will affect the amount of each payment and
the amount due at maturity.

 

x   Post Maturity/Default
Interest.  Borrower agrees to
pay interest on the unpaid balance of this Note owing after maturity at the
applicable rate plus 3.00%.

 

MATURITY/DEMAND.  This Note is due on 09-21-2008.

 

PAYMENT.  Borrower agrees to pay this Note as follows
unless and until demand is made (if applicable):

 

Monthly payments of accrued
interest calculated on the amount of credit outstanding beginning on 04-21-2008
and principal due on 09-21-2008.  This is
a variable rate loan and the payment amounts may change.  The final payment may also change.

 

All payments must be made in United States
dollars.  Each payment Borrower makes on
this Note will be applied first to any charges Borrower owes other than
Principal and interest, then to interest that is due, and finally to Principal
that is due.  If Lender and Borrower
agree to a different application of payments, that application will be described
on this Note.  The actual amount of
Borrower’s final payment will depend upon Borrower’s payment record.

 

USE OF PROCEEDS:  This loan is for business purposes.

 

WAIVERS AND CONSENT.  Borrower waives protest, presentment for
payment, demand, and notices of acceleration, intent to accelerate, and
dishonor (if allowed by law).

 

x  ADDITIONAL TERMS.  Each payment Borrower
makes on this note will be applied first to interest that is due; then to
principal that is due, then to any charges borrower owes; Interest is computed
for the actual number of days principal is unpaid on the basis of a 360 day
year.  This note is secured by all
mortgages, security agreements and other documents granting a lien or a
security interest in the borrower’s property to the bank and all guaranties of
borrower’s obligations to bank.

 

	
  o   Married Borrower.  If checked, the obligation evidenced by
  this note and any agreement securing this note is incurred in the interest of
  my marriage or family.

  
	
  x

  	
   

  	
  (Seal)

  	
  x

  	
   

  	
  (Seal)

  
	
   

  
	
  Non-Signing Spouse.  The undersigned is married to the borrower
  signing this note, actually knows of the credit extended under this note, and
  waives any notice of this extension of credit.

  
	
  x

  	
   

  	
  (Seal)

  	
  x

  	
   

  	
  (Seal)

  
									

 

SIGNATURES.  By signing under seal, Borrower agrees to the
terms contained in this Note. Borrower also acknowledges receipt of a copy of
this Note.

 

	
  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)

  	
   

  	
   

  	
   

  	
  (Seal)

  
	
  Signature: Robert Boerger, Senior
  Commercial Lender  

  	
  Date

  	
   

  	
  Signature

  	
  Date

  	
   

  

 

	
  Commercial Promissory Note-WI

  	
   

  	
  COMM-NOTE-WI

  	
  8/27/2007

  
	
  Bankers SystemsTM

  	
   

  	
   

  	
   

  
	
  Wolters Kluwer Financial Services © 1998, 2007

  	
  Initials

  	
   

  
					

 

1

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