Document:

Exhibit 10.2

StarVox Communications, Inc.

U.S. Wireless Data, Inc,

2728 Orchard Parkway

San
Jose, California 95134-2012

August
16, 2007

Re:          Amendment of Debentures and Waiver
Agreement; Notice of name changes

Ladies
and Gentlemen:

Reference
is made to each of those certain Senior Secured Debentures issued by StarVox
Communications, Inc., a California corporation (the ”Company”),
and acknowledged by U.S. Wireless Data, Inc., a Delaware corporation (the “Parent”), to the order of DKR Soundshore Oasis Holding Fund
Ltd., SMH Capital Inc. or Trinad Capital Master Fund, Ltd., or their registered
assigns (collectively, “Holders”) in
the aggregate principal amount of $9,000,000 (the “Debentures”)
($6,000,000 of which was issued on June 1, 2007, and $3,000,000 of which was
issued on July 10, 2007).

Amendment of Debentures and Waiver

The
Company hereby confirms, and the Holders acknowledge, that the holders of $12.5
million in aggregate principal amount of the notes listed on Schedule 3(s) of
that certain Securities Purchase Agreement among Company, Parent and Holders
dated as June 1, 2007 (of which notes $14 million in aggregate principal amount
are outstanding as of the date hereof), have extended the maturity of all of
such notes to January 7, 2008, and a copy of the amendment effecting such
extension (the “Extension Amendment”) has been
provided to the Holders.

In
consideration of the foregoing, which is a condition precedent to the
agreements set forth herein, the Holders agree to the following:

1.
The definition of Maturity Date in the second sentence of Section (1) of the
Debentures is hereby replaced in its entirety with the following, and all other
provisions of the Debentures shall be unchanged and remain in full force and
effect:  “The “Maturity
Date” shall be October 1, 2007, or (a) such earlier date as may be
accelerated by the Required Holders upon an Event of Default in accordance with
the terms hereof, (b) such later date as may be extended at the option of the
Required Holders, or (c) such earlier date which is the third day following a
financing or refinancing (or related series thereof) of either debt or equity
by the Company and/or the Parent of at least Thirty Million Dollars
($30,000,000) in the aggregate.”

2. The Company agrees to use
its best efforts to obtain the agreement of Mr. Noam Gottesman and Weathervane
Partners to the Extension Amendment prior to August 22, 2007. Failure to obtain
such agreements shall be an Event of Default under the Debentures.

2.
The Company represents and warrants to each of the Holders that there is no
breach, default, Event of Default or other event or occurrence that with notice
or lapse of time could become a default or Event of Default under the
Transaction Documents, as defined in the Debentures, other than (i) Events of
Default arising from the Company’s failure to pay the amounts due under the
Debentures through the date hereof and (ii) Events of Default due to failure to
timely deliver the account control agreement, Pennsylvania counsel legal
opinion and a regulatory approval,  which have
been cured as of the date hereof.

3.
Holders hereby waive (i) any and all Events of Default, as defined in the
Debentures, arising from a failure to pay any amounts due under the Debentures
through the date hereof, and (ii) Events of Default due to failure to timely
deliver the account control agreement, Pennsylvania counsel legal opinion and a
regulatory approval,  which have
been cured as of the date hereof, and agree that any notices of redemption
given pursuant to the Debentures prior to the date hereof are hereby withdrawn
and of no effect. Other than the foregoing waiver, nothing contained herein
shall be deemed to evidence a waiver by the Holders with respect to (i) any
existing or future breach, Default or Event of Default (whether or not
specified herein) or any right or remedy with respect to any such breach,
Default or Event of Default, (ii) any provision of the Debentures or any other
Transaction Document or any other document or instrument executed in connection
therewith or (iii) any right or remedy to which the Holders may be entitled
under applicable law.  Nothing contained
herein shall be deemed to prejudice the exercise by the Holders of any or all
of their rights and remedies under the Debentures or any other Transaction
Document or any other document or instrument executed in connection therewith
or applicable law.

Notice of Name Change

4.
Pursuant to Section 3(s) of the Pledge and Security Agreement, dated as of June
1, 2007, by and among the Company, the Parent, and the Holders, the Company
hereby provides prior written notice to the Holders that the Parent will change
its name from “U.S. Wireless Data, Inc.” to “Starvox Communications, Inc.” and
the Company will change its name from “Starvox Communications, Inc.” to “Starvox,
Inc.”  Holders hereby agree to waive the
requirement in Section 3(s) that such notice be given 30 days prior to the date
of the name change, provided that the Company provide the financing statements
or other filings set forth in Section 3(s) to the Holders at least 10 days
prior to the foregoing name change.

GOVERNING
LAW.  This letter agreement shall be construed and
enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this letter agreement and all
disputes arising hereunder shall be governed by, the laws of the State of New
York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of
New York.

[Signature Pages Follow]

 

	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  DKR SOUNDSHORE OASIS HOLDING FUND 

  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ B. Caswell

  
	
   

  	
   

  	
  Name: Bradford L. Caswell

  
	
   

  	
   

  	
  Title:   Director

  

 

 

	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  SMH CAPITAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ B.T. Morris

  
	
   

  	
   

  	
  Name: Ben T. Morris

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  

 

 

	
  

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  TRINAD CAPITAL MASTER
  FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Jay Wolf

  
	
   

  	
   

  	
  Name: Jay Wolf

  
	
   

  	
   

  	
  Title:   Director

  

 

 

	
  

  	
  Agreed and acknowledged as
  of the date set 

  forth above by:

  
	
   

  	
   

  
	
   

  	
  STARVOX
  COMMUNICATIONS, INC., A 

  
	
   

  	
   

  	
  CALIFORNIA
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Thomas Rowley 

  
	
   

  	
  Name:  

  	
  Thomas Rowley

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S.
  WIRELESS DATA, INC., A DELAWARE 

  
	
   

  	
   

  	
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Thomas Rowley 

  
	
   

  	
  Name:  

  	
  Thomas Rowley

  
	
   

  	
  Title:

  	
  Chief Executive OfficerExhibit 10.1

August 23, 2007

Mr.
Daniel P. Mullin

21W741
Clifford Place

Glen Ellyn, IL 60137

Dear Dan:

Congratulations! I am pleased to confirm the terms of our offer of Chief
Accounting Officer reporting directly to Jim Bresingham, acting Chief Financial
Officer.

Salary Band:  Executive Band 17

Salary: $200,000. per year, payable in bi-weekly installments.  The salary is quoted on an annual basis for
convenience only and does not imply employment for a specific term, nor alter
the “at will” status of your employment.

Additional Executive Benefits:

	
  Annual Car Allowance ~

  	
   

  	
  $

  	
  13,440

  	
   

  
	
  Financial
  Planning ~

  	
   

  	
  $

  	
  4,200

  	
   

  
	
  Executive Physical ~

  	
   

  	
  $

  	
  1,000

  	
   

  

 

Annual Bonus: You will eligible to participate in SIRVA’s Management
Incentive Program, which at your position has an annualized bonus potential of 65%
of base salary, subject to terms of the program.  This payment will be subject to taxes and
other withholdings, which may be required. 
SIRVA will guarantee the 10% individual component of your bonus, in the
event you meet the specific goals, which will outlined for you.

Effective Date: 
August 19, 2007

I have enclosed a copy of this offer letter for your
records.  Please execute the original as
indicated below and return it to me.

We believe you will continue to be challenged by
this exciting opportunity.  SIRVA is
confident that your skills and knowledge will continue to be an asset to our
organization.  If you should have any
questions, please feel free to contact me.

	
  Sincerely,

  
	
   

  	
   

  
	
  /s/ René C.
  Gibson

  	
   

  
	
  Senior Vice
  President Human Resources

  
	
   

  
	
   

  
	
  Accepted and
  Agreed to this 24th day of August, 2007

  
	
   

  	
   

  
	
  /s/ Daniel P.
  MullinExhibit 10.2

SECURITIES PURCHASE AGREEMENT

BY AND AMONG

TONTINE CAPITAL PARTNERS, L.P.,

TONTINE CAPITAL OVERSEAS MASTER
FUND, L.P.,

AND

TOWER TECH HOLDINGS INC.

AUGUST 22, 2007

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE 1 Definitions

  	
   

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2 Purchase and Sale of Shares

  	
   

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Purchase of Shares

  	
   

  	
  5

  
	
  2.2

  	
   

  	
  Issuance of Notes

  	
   

  	
  5

  
	
  2.3

  	
   

  	
  Purchase Price for Shares and Notes and Form of
  Payment; Delivery

  	
   

  	
  6

  
	
  2.4

  	
   

  	
  Closing Date

  	
   

  	
  6

  
	
  2.5

  	
   

  	
  Additional Buyers

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3 Buyers’ Representations and Warranties

  	
   

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Organization and Qualification

  	
   

  	
  7

  
	
  3.2

  	
   

  	
  Authorization; Enforcement

  	
   

  	
  7

  
	
  3.3

  	
   

  	
  Securities Matters

  	
   

  	
  7

  
	
  3.4

  	
   

  	
  Information

  	
   

  	
  8

  
	
  3.5

  	
   

  	
  Restrictions on Transfer

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4 Representations and Warranties of the
  Company

  	
   

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Organization and Qualification

  	
   

  	
  10

  
	
  4.2

  	
   

  	
  Authorization; Enforcement

  	
   

  	
  10

  
	
  4.3

  	
   

  	
  Capitalization; Valid Issuance of Securities

  	
   

  	
  11

  
	
  4.4

  	
   

  	
  No Conflicts

  	
   

  	
  12

  
	
  4.5

  	
   

  	
  SEC Documents; Financial Statements

  	
   

  	
  13

  
	
  4.6

  	
   

  	
  Absence of Certain Changes

  	
   

  	
  15

  
	
  4.7

  	
   

  	
  Absence of Litigation

  	
   

  	
  15

  
	
  4.8

  	
   

  	
  Intellectual Property

  	
   

  	
  16

  
	
  4.9

  	
   

  	
  Tax Status

  	
   

  	
  16

  
	
  4.10

  	
   

  	
  Permits; Compliance

  	
   

  	
  17

  
	
  4.11

  	
   

  	
  Environmental Matters

  	
   

  	
  18

  
	
  4.12

  	
   

  	
  Title to Property

  	
   

  	
  19

  
	
  4.13

  	
   

  	
  No Investment Company or Real Property Holding
  Company

  	
   

  	
  20

  
	
  4.14

  	
   

  	
  No Brokers

  	
   

  	
  20

  
	
  4.15

  	
   

  	
  Registration Rights

  	
   

  	
  20

  
	
  4.16

  	
   

  	
  Exchange Act Registration

  	
   

  	
  20

  
	
  4.17

  	
   

  	
  Labor Relations

  	
   

  	
  20

  
	
  4.18

  	
   

  	
  Transactions with Affiliates and Employees

  	
   

  	
  21

  
	
  4.19

  	
   

  	
  Insurance

  	
   

  	
  21

  
	
  4.20

  	
   

  	
  Approved Acquisitions of Shares; No Anti-Takeover
  Provisions

  	
   

  	
  21

  
	
  4.21

  	
   

  	
  ERISA

  	
   

  	
  22

  
	
  4.22

  	
   

  	
  Disclosure

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5 Covenants

  	
   

  	
  23

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Form D; Blue Sky Laws

  	
   

  	
  23

  
	
  5.2

  	
   

  	
  Use of Proceeds

  	
   

  	
  23

  
							

 

 i
 

 

	
  5.3

  	
   

  	
  Expenses

  	
   

  	
  23

  
	
  5.4

  	
   

  	
  No Integration

  	
   

  	
  24

  
	
  5.5

  	
   

  	
  Board Designee(s)

  	
   

  	
  24

  
	
  5.6

  	
   

  	
  Observation Rights

  	
   

  	
  24

  
	
  5.7

  	
   

  	
  Future Acquisitions

  	
   

  	
  24

  
	
  5.8

  	
   

  	
  Announcement of Rights Offering

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6 Conditions To The Company’s Obligation

  	
   

  	
  25

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Delivery of Transaction Documents

  	
   

  	
  25

  
	
  6.2

  	
   

  	
  Payment of Purchase Price

  	
   

  	
  25

  
	
  6.3

  	
   

  	
  Representations and Warranties

  	
   

  	
  25

  
	
  6.4

  	
   

  	
  Litigation

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7 Conditions to The Buyers’ Obligation

  	
   

  	
  26

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Delivery of Transaction Documents; Issuance of
  Securities

  	
   

  	
  26

  
	
  7.2

  	
   

  	
  Representations and Warranties

  	
   

  	
  26

  
	
  7.3

  	
   

  	
  Consents

  	
   

  	
  27

  
	
  7.4

  	
   

  	
  Litigation

  	
   

  	
  27

  
	
  7.5

  	
   

  	
  Opinion

  	
   

  	
  27

  
	
  7.6

  	
   

  	
  No Material Adverse Change

  	
   

  	
  27

  
	
  7.7

  	
   

  	
  Project Wind

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8 Termination

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Termination Provisions

  	
   

  	
  27

  
	
  8.2

  	
   

  	
  Effect of Termination

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9 Indemnification

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Indemnification by the Company

  	
   

  	
  28

  
	
  9.2

  	
   

  	
  Notification

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10 Governing Law; Miscellaneous

  	
   

  	
  30

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Governing Law

  	
   

  	
  30

  
	
  10.2

  	
   

  	
  Counterparts; Electronic Signatures

  	
   

  	
  30

  
	
  10.3

  	
   

  	
  Headings

  	
   

  	
  31

  
	
  10.4

  	
   

  	
  Severability

  	
   

  	
  31

  
	
  10.5

  	
   

  	
  Entire Agreement; Amendments

  	
   

  	
  31

  
	
  10.6

  	
   

  	
  Notices

  	
   

  	
  31

  
	
  10.7

  	
   

  	
  Successors and Assigns

  	
   

  	
  33

  
	
  10.8

  	
   

  	
  Third Party Beneficiaries

  	
   

  	
  33

  
	
  10.9

  	
   

  	
  Publicity

  	
   

  	
  33

  
	
  10.10

  	
   

  	
  Further Assurances

  	
   

  	
  34

  
	
  10.11

  	
   

  	
  No Strict Construction

  	
   

  	
  34

  
	
  10.12

  	
   

  	
  Rights Cumulative

  	
   

  	
  34

  
	
  10.13

  	
   

  	
  Survival

  	
   

  	
  34

  
	
  10.14

  	
   

  	
  Knowledge

  	
   

  	
  34

  

 

 ii

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT, dated as of August 22, 2007, is
entered into by and among TOWER TECH HOLDINGS INC., a Nevada corporation (the “Company”), the investors identified
on the signature page hereto and the additional Tontine fund investors, if any,
that are identified on Schedule 1 hereto, pursuant to Section 2.5 (each
a “Buyer” and collectively, the “Buyers”).

RECITALS:

A.            The
Buyers desire to provide financing to the Company, and the Company desires to
obtain financing from the Buyers, upon the terms and conditions set forth in
this Agreement, in connection with the Company’s proposed acquisition of Brad
Foote Gear Works, Inc. (“Target”);

B.            The
total financing being provided by the Buyers to the Company hereunder shall
consist of the purchase by the Buyers of 12,500,000 shares (the “Shares”)
of common stock, $0.001 par value per share at $4.00  per share, for a total purchase price of $50,000,000, and the
provision by the Buyers of interim debt financing of $25,000,000, (the “Debt Financing”), in
exchange for Senior Subordinated Convertible Promissory Notes from the Company
in like principal amount, substantially in the form attached hereto as Exhibit
A (individually, a “Note”
and collectively, the “Notes”);

C.            The
Company and the Buyers are executing and delivering this Agreement in reliance
upon the exemptions from securities registration afforded by Section 4(2) of
the 1933 Act and Rule 506; and

D.            At
the Closing (as defined below), the parties hereto will execute and deliver an
amendment to the Registration Rights Agreement (as defined below), in the form
attached hereto as Exhibit B (the “RRA Amendment”).

AGREEMENT

NOW THEREFORE, the Company and the Buyers hereby agree as follows:

ARTICLE 1
 DEFINITIONS

“1933 Act”  means the Securities Act of 1933, as amended.

“1934 Act”  means the Securities Exchange Act of 1934, as amended.

“2006-2007 SEC Documents” has
the meaning set forth in Section 3.4.

“Acquisition”
means the proposed acquisition by the Company of the Target pursuant to that
certain Stock Purchase Agreement dated  August 22,
2007 among the Company, Target and the shareholders of the Target (the “Target SPA”).

“Action”  means any action, suit claim, inquiry, notice of violation, proceeding
(including any partial proceeding such as a deposition) or investigation
against or affecting the Company, any of its Subsidiaries or any of their
respective properties before or by any court, arbitrator, governmental or 

 1
 

administrative
agency, regulatory authority (federal, state, county, local or foreign), public
board, stock market, stock exchange or trading facility.

“Agreement”  means this Securities Purchase Agreement.

“Buyer”
and “Buyers” have the
meaning set forth in the preamble.

“Claim” has the meaning set forth in Section
9.2.

“Closing” has the meaning set forth in Section 2.4.

“Closing
Date” has
the meaning set forth in Section 2.4.

“Code” has the meaning set forth in Section 4.13.

“Common
Stock”  means the Company’s common stock, $0.001 par
value per share.

“Company”
has the meaning set forth in the preamble.

“Debt Financing” has the meaning
set forth in the Recitals.

“Environmental
Laws” has
the meaning set forth in Section 4.11.

“ERISA” has the meaning set
forth in Section 4.21.

“GAAP” has the meaning set forth in Section
4.5.

“Hazardous
Materials”
has the meaning set forth in Section 4.11.

“Indemnified Party” has
the meaning set forth in Section 9.2.

“Initial
Securities Purchase Agreement” means that certain Securities
Purchase Agreement dated March 1, 2007 by and among the Company, TCP and TCOMF.

“Intellectual
Property”  has the meaning set forth in Section 4.8.

“Investment
Company”  has the meaning set forth in Section 4.13.

“Legal
Requirement” means any federal, state, local, municipal,
foreign, international, multinational or other law, rule, regulation, order,
judgment, decree, ordinance, policy or directive, including those entered,
issued, made, rendered or required by any court, administrative or other
governmental body, agency or authority, or any arbitrator that has jurisdiction
over the Company.

“Material
Adverse Effect” means any material adverse effect on the business, operations, assets,
financial condition or prospects of the Company.

“Note and Notes” have
the meaning set forth in the Recitals

“NRS” has the meaning set
forth in Section 4.20.

 2
 

“Per Share Price” means $4.00 per
Share, which is equal to 80% of the of the average closing sale price of the
Common Stock for the thirty (30) trading days immediately preceding the date
hereof, provided that the price per
share shall not be less than $3.50 and not more than $4.00.

“Permits” has the meaning set forth in Section 4.10.

“Purchase
Price” has
the meaning set forth in  Section 2.3.

 “Registration Rights Agreement”  means the Registration Rights Agreement dated March 1, 2007 by and
among the Company, TCP and TCOMF, pursuant to which the Company has agreed
under certain circumstances to register the resale of the Shares under the 1933
Act and the rules and regulations promulgated thereunder, and applicable state securities
laws.

“RRA Amendment” has the meaning set forth in the Recitals.

“Rule 506” means Rule 506 of Regulation D promulgated
under the 1933 Act.

“SEC” means the United States Securities and
Exchange Commission.

“SEC
Documents”  has the meaning set forth in Section 4.5.

“Securities” means collectively the Shares and the Notes.

“Shares” has
the meaning set forth in the Recitals.

“Subsidiaries”
means with respect to the Company, Tower Tech Systems, Inc, a Wisconsin corporation.

“Target” has the meaning set forth in the Recitals.

“Target SPA” has the meaning set forth in the definition
of Acquisition.

“TCOMF” means Tontine Capital
Overseas Master Fund, L.P.

“TCP” means Tontine Capital
Partners, L.P.

“Transaction
Documents”
means this Agreement, the RRA Amendment, the Notes and any other documents
contemplated by this Agreement.

“Transfer
Instructions”
has the meaning set forth in Section 2.3.

ARTICLE 2
 PURCHASE AND SALE OF SHARES

2.1           Purchase
of Shares.  Subject to the terms and
conditions of this Agreement, on the Closing Date, the Company shall issue and
sell the Shares and the Buyers shall purchase the Shares.  The number of Shares to be purchased by each
Buyer shall be identified in Schedule 1 in accordance with Section
2.5.

2.2           Issuance
of Notes.  Subject to the terms and
conditions of this Agreement, on the Closing Date, each Buyer shall provide a
portion of the Debt Financing to the Company in the amount that is set 

 3
 

forth in Schedule 1 in accordance with Section 2.5, and
the Company shall issue a Note in like principal amount to each such Buyer.

2.3           Purchase
Price for Shares and Notes and Form of Payment; Delivery.  On the Closing Date each Buyer shall pay
the Per Share Price for the Shares and the amount of the Notes to be issued and
sold to it at the Closing, for a total price of $50,000,000 for the Shares, and
$25,000,000  for the Notes (the “Purchase Price”).  The
Purchase Price shall be paid by wire transfer of immediately available funds in
accordance with the Company’s written instructions.  At the Closing, upon payment of the Purchase
Price the Company shall issue and deliver to the appropriate Buyers the Notes
in the principal amount of the total Debt Financing, and the Company will
deliver irrevocable written instructions (“Transfer Instructions”) to the transfer agent
for the Company’s Common Stock to issue certificates representing the Shares
registered in the name of each Buyer and to deliver such certificates to or at
the direction of each Buyer.  The Company
shall not have the power to revoke or amend the Transfer Instructions without
the written consent of the Buyers.

2.4           Closing
Date.  Subject to the terms of this
agreement, the closing of the transactions contemplated by this Agreement shall
be held on or before the later of (i) the date that is three (3) business days
after the date that the last of the conditions in Article 6 and Article
7 have been satisfied, or such other time as may be mutually agreed upon by
the parties to this Agreement; or (ii) the closing date of the Acquisition so
long as all of conditions in Article 6 and Article 7 have been
satisfied (the “Closing
Date”), at the offices of Barack Ferrazzano Kirschbaum &
Nagelberg LLP, 200 West Madison Street, Suite 3900, Chicago, Illinois 60606  or at such other
location or by such other method (including exchange of signed documents) as
may be mutually agreed upon by the parties to this Agreement (“Closing”).

2.5           Additional
Buyers.  The Company acknowledges and
agrees that additional Tontine funds other than those identified on the signature
page hereto may participate in the purchase of Securities hereunder; provided
that each such additional Tontine fund shall execute and deliver a joinder to
this agreement in the form of Exhibit C attached hereto.  Prior to the Closing Date, the Buyers shall
provide the Company with a final version of Schedule 1 that includes the
following information for each Buyer hereunder: (a) such Buyer’s name and
jurisdiction of organization; (b) the number of Shares to be purchased by such
Buyer and the Purchase Price; and (c) the portion of the Debt Financing to be
provided by such Buyer.

ARTICLE 3
 BUYERS’ REPRESENTATIONS AND
WARRANTIES

Each Buyer represents and warrants to the Company that:

3.1           Organization
and Qualification.  Each of the
Buyers is an entity of the type identified on Schedule 1 attached
hereto, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with full power and authority to purchase
the Shares and provide the Debt Financing and otherwise perform its obligations
under this Agreement and the other Transaction Documents.

3.2           Authorization; Enforcement.  This
Agreement and each of the other Transaction Documents to be executed by the
Buyers and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by, and duly executed and delivered on
behalf of, such Buyer.  This Agreement
and each of the other Transaction Documents to be executed by the Buyers constitutes
the valid and binding agreement of such Buyer enforceable in accordance with
its terms, except as such enforceability may be limited by:  (i) applicable bankruptcy, insolvency,
reorganization, 

 4
 

moratorium or other similar laws in effect that limit creditors’ rights
generally; (ii) equitable limitations on the availability of specific remedies;
and (iii) principles of equity.

3.3           Securities
Matters.  In connection with the
Company’s compliance with applicable securities laws:

a.             Such Buyer understands that the Securities are being offered
and sold to it in reliance upon specific exemptions from the registration
requirements of United States and state securities laws and that the Company is
relying upon the truth and accuracy of, and such Buyer’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
such Buyer set forth herein in order to determine the availability of such
exemption and the eligibility of such Buyer to acquire the Securities.

b.             Such Buyer is purchasing the Securities for its own
account, not as a nominee or agent, for investment purposes and not with a
present view towards resale, except pursuant to sales exempted from
registration under the 1933 Act, or registered under the 1933 Act as
contemplated by the Registration Rights Agreement.

c.             Such Buyer is an “accredited investor” as that term is
defined in Rule 501(a) of Regulation D under the 1933 Act, and has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in the Securities.  Such Buyer understands that its investment in
the Securities involves a significant degree of risk.  Such Buyer understands that no United States
federal or state agency or any other government or governmental agency has passed
upon or made any recommendation or endorsement of the Securities.

3.4           Information.  Such Buyer has conducted its own due diligence
examination of the Company’s business, financial condition, results of
operations, and prospects.  In connection
with such investigation, such Buyer and its representatives (i) have reviewed
the Company’s Form 10-KSB for the fiscal years ended December 31, 2005 and
December 31, 2006, the Company’s quarterly report on Form 10-QSB for the two
most recently concluded interim periods and the Company’s Current Reports on
Form 8-K or Form 8-K/A filed in 2006 and 2007 (and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such documents)
incorporated by reference therein, being hereinafter referred to herein as the “2006-2007 SEC Documents”),
(ii) have participated in board of director meetings of the Company pursuant to
its Observation Rights (as defined in the Initial Purchase Agreement)
(iii)  have been given an opportunity to
ask questions, to the extent such Buyer considered necessary, and have received
answers from, officers of the Company concerning the business, finances and
operations of the Company and information relating to the offer and sale of the
Securities, and (iv) have
received or had an opportunity to obtain such additional information as they
deem necessary to make an informed investment decision with respect to the
purchase of the Securities.

3.5           Restrictions on Transfer.  Such
Buyer understands that except as provided in the Registration Rights
Agreement, the issuance of the Securities has not been and is not being
registered under the 1933 Act or any applicable state securities laws. Such
Buyer may be required to hold the Securities indefinitely and the Securities
may not be transferred unless (i) the Securities are sold pursuant to an
effective registration statement under the 1933 Act, or (ii) such Buyer shall
have delivered to the Company an opinion of counsel to the effect that the
Securities to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration, which opinion shall be reasonably acceptable
to the Company. Such Buyer understands that until such time as the resale of
the Securities has been registered under the 1933 Act as contemplated by the
Registration Rights Agreement, as it may be amended by the RRA Amendment, or
otherwise may be sold pursuant to an exemption from registration, 

 5
 

certificates evidencing the Securities may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates evidencing such Securities):

“THE SHARES REPRESENTED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“ACT”).  THE SHARES MAY NOT BE OFFERED
FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE CORPORATION.”

ARTICLE 4
 REPRESENTATIONS AND WARRANTIES
OF THE COMPANY

Except as set forth in the Company’s Disclosure Schedule attached
hereto, the Company represents and warrants to the Buyers that:

4.1           Organization
and Qualification.  The Company has
no subsidiaries other than the Subsidiaries. 
The Company and each of its Subsidiaries is a corporation, limited
partnership, limited liability company, or joint venture as applicable, duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized, with corporate, limited
liability or limited partnership power and authority to own, lease, use and
operate its properties and to carry on its business as now operated and conducted.  The Company and each of its Subsidiaries is
duly qualified as a foreign corporation, limited liability company or limited
partnership to do business and is in good standing in each jurisdiction in
which its ownership or use of property or the nature of the business conducted
by it makes such qualification necessary, except where the failure to be so
qualified or in good standing would not have a Material Adverse Effect.  Neither the Company nor any Subsidiary is in
violation of any provision of its respective certificate or articles of
incorporation, partnership agreement, bylaws or other organizational or charter
documents, as the same may have been amended.

4.2           Authorization; Enforcement.  The
Company has all requisite corporate power and authority to enter into and
perform this Agreement and each of the other Transaction Documents and to
consummate the transactions contemplated hereby and thereby and to issue the
Securities, in accordance with the terms hereof and thereof.  The execution and delivery of this Agreement
and each of the other Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without
limitation, the issuance of the Securities) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its
Board of Directors, or its stockholders is required.  This Agreement and each of the other
Transaction Documents have been duly executed and delivered by the Company.  This Agreement and each of the other
Transaction Documents will constitute upon execution and delivery by the
Company, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by:  (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws in
effect that limit creditors’ rights generally; (ii) equitable limitations on
the availability of specific remedies; (iii) principles of equity (regardless
of whether such enforcement is considered in a proceeding in law or in equity);
and (iv) to the extent rights to indemnification and contribution may be
limited by federal securities laws or the public policy underlying such laws.

4.3           Capitalization; Valid Issuance of Securities .  As
of the date hereof, the authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, of which 47,724,464 shares are issued and
outstanding, and no shares are held by the Company as treasury shares, and
10,000,000 shares 

 6
 

of preferred stock, of which no shares are issued and outstanding.  All of such outstanding shares of Common
Stock are duly authorized, validly issued, fully paid and nonassessable.  The Securities have been duly authorized and
when issued pursuant to the terms hereof will be validly issued, fully paid and
nonassessable and will not be subject to any encumbrances, preemptive rights or
any other similar contractual rights of the stockholders of the Company or any
other person.  No shares of capital stock
of the Company are subject to preemptive rights of the stockholders of the
Company or any liens or encumbrances imposed through the actions or failure to
act of the Company.  As of the date of
this Agreement, except to the extent described in the preceding sentence and Schedule
4.3 attached hereto, (i) there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or any of its
Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock, (ii) there
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of its or their
securities under the 1933 Act (except the Registration Rights Agreement) and
(iii) there are no anti-dilution or price adjustment provisions contained in
any security issued by the Company (or in any agreement providing rights to
security holders other than the Initial Securities Purchase Agreement) that
will be triggered by the issuance of the Shares or the Notes.  Except as may be described in any documents
which have been publicly filed by any of the Company’s stockholders, to the
Company’s knowledge, there are no agreements between the Company’s stockholders
with respect to the voting or transfer of the Company’s capital stock or with
respect to any other aspect of the Company’s affairs.

4.4           No Conflicts.  The
execution, delivery and performance of this Agreement and each of the other
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation,
the issuance of Securities) will not (i) conflict with or result in a violation
of any provision of the Articles of Incorporation, as amended, of the Company
or the Bylaws, as amended, of the Company, (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default (or an event
which with notice or lapse of time or both could become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture, patent, patent license or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any Legal Requirement (including federal and state
securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect).  Except as set forth in Schedule
4.4, neither the Company nor any of its Subsidiaries is in violation of its
certificate or articles of incorporation, bylaws or other organizational
documents and neither the Company nor any of its Subsidiaries is in default
(and no event has occurred which with notice or lapse of time would result in a
default) under, and neither the Company nor any of its Subsidiaries has taken
any action or failed to take any action that would give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which any property or assets of the Company or any of its Subsidiaries is bound
or affected, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. 
Except with respect to any filings or notices related to the issuance of
the Shares to be filed with the OTC Bulletin Board, if any, and as required
under the 1933 Act and any applicable state securities laws, the Company is not
required to obtain any consent, authorization or order of, or make any filing
or registration with, any court, governmental agency, regulatory agency, self
regulatory organization or stock market or any third party in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents.  All consents, authorizations,
orders, filings and 

 7
 

registrations that the Company is required to effect or obtain pursuant
to the preceding sentence have been obtained or effected on or prior to the
date hereof.

4.5           SEC Documents; Financial Statements.

a.     Except
as set forth on Schedule 4.5, since December 31, 2005, the Company has
timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the 1933 Act and the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents (other than exhibits to such documents) incorporated by
reference therein, being hereinafter referred to herein as the “SEC Documents”), or has
timely filed for a valid extension of such time of filing and has filed any
such SEC Documents prior to the expiration of any such extension.  As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.

b.     As
of their respective dates, the financial statements of the Company included in
the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto.  Such financial
statements have been prepared in accordance with United States generally
accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes, year end adjustments or may be condensed or summary statements) and
fairly present in all material respects the consolidated financial position of
the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).  Except as set forth in the
financial statements of the Company included in the SEC Documents, the Company
has no liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to December 31, 2006,
and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, which, individually or
taken in the aggregate would not reasonably be expected to have a Material
Adverse Effect.

c.     The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act).  Such disclosure controls and procedures:  (A) are designed to ensure that material
information relating to the Company and its Subsidiaries is made known to the
Company’s chief executive officer, president, chief operating officer and its
chief financial officer by others within those entities, particularly during
the periods in which the Company’s reports and filings under the 1934 Act are
being prepared, (B) have been evaluated for effectiveness as of the end of the
most recent annual period reported to the SEC, and (C) are effective to perform
the functions for which they were established. 
Neither the auditors of the Company nor the Board of Directors of the
Company has been advised of: (x) any significant deficiencies or material
weaknesses in the design or operation of the internal controls over financial
reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) of the
Company that have materially affected the Company’s internal control over
financial reporting; or (y) any fraud, whether or not material, that involves
management or other employees who have a role in the internal controls over
financial reporting of the Company

 8
 

4.6           Absence of Certain Changes. 
Except with respect to the Acquisition, transactions disclosed in the
SEC Documents, and the transactions contemplated hereby and by each of the
other Transaction Documents, since December 31, 2006, (i) the Company and each
of its Subsidiaries has conducted its business only in the ordinary course,
consistent with past practice, and since that date, no changes have occurred
which would reasonably be expected to have a Material Adverse Effect; and (ii)
the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected on the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the SEC.

4.7           Absence of Litigation. 
Except as set forth in Schedule 4.7, there is no Action pending
or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company or any of its Subsidiaries that (i) adversely
affects or challenges the legality, validity or enforceability of this
Agreement, or (ii) would, if there were an unfavorable decision, have or
reasonably be expected to have a Material Adverse Effect.  Neither the Company nor any of its
Subsidiaries, nor any director or officer thereof (in his or her capacity as
such), is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty.  There has not been, and
to the knowledge of the Company, there is not pending any investigation by the
SEC involving the Company or any current or former director or officer of the
Company (in his or her capacity as such). 
The SEC has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the 1934
Act or the 1933 Act.

4.8           Intellectual Property.  The
Company and each of its Subsidiaries owns or possesses the requisite licenses
or rights to use all patents, patent applications, patent rights, inventions,
know-how, trade secrets, copyrights, trademarks, trademark applications,
service marks, service names, trade names and copyrights (“Intellectual Property”)
necessary to enable it to conduct its business as now operated (and, to the
Company’s knowledge, as presently contemplated to be operated in the future);
there is no claim or Action by any person pertaining to, or proceeding pending,
or to the Company’s knowledge threatened, which challenges the right of the
Company or of a Subsidiary with respect to any Intellectual Property necessary
to enable it to conduct its business as now operated and to the Company’s
knowledge, the Company’s or its Subsidiaries’ current products and processes do
not infringe on any Intellectual Property or other rights held by any person,
except where any such infringement would not reasonably be expected to have a
Material Adverse Effect.

4.9           Tax Status.  The Company and each of its
Subsidiaries has made or filed all federal, state and foreign income and all
other material tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply.  There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim.  The Company has not executed a waiver with
respect to the statute of limitations relating to the assessment or collection
of any foreign, federal, state or local tax.

4.10         Permits; Compliance.

a.     The
Company and each of its Subsidiaries is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and 

 9
 

orders necessary to own, lease and operate its properties and to carry
on its business as it is now being conducted (collectively, “Permits”), and there is no
Action pending or, to the knowledge of the Company, threatened regarding
suspension or cancellation of any of the Permits.  Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or violation of, any of the
Permits, except for any such conflicts, defaults or violations which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.

b.     Since
December 31, 2006, no event has occurred or, to the knowledge of the Company,
circumstance exists that (with or without notice or lapse of time): (a) would
reasonably be expected to constitute or result in a violation by the Company or
any of its Subsidiaries, or a failure on the part of the Company or its
Subsidiaries to comply with, any Legal Requirement; or (b) would reasonably be
expected to give rise to any obligation on the part of the Company or any of
its Subsidiaries to undertake, or to bear all or any portion of the cost of,
any remedial action of any nature in connection with a failure to comply with
any Legal Requirement, except in either case that would not reasonably be
expected to have a Material Adverse Effect. 
Neither the Company nor any of its Subsidiaries has received any notice
or other communication from any regulatory authority or any other person, nor does
the Company have any knowledge regarding: (x) any actual, alleged, possible or
potential violation of, or failure to comply with, any Legal Requirement, or
(y) any actual, alleged, possible or potential obligation on the part of the
Company or any of its Subsidiaries to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature in connection with a failure
to comply with any Legal Requirement, except in either case that would not
reasonably be expected to have a Material Adverse Effect.

c.     The
Company is in compliance in all material respects with the provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated thereunder
that are applicable to it and has taken reasonable steps such that the Company
expects to be in a position to comply with the requirements of Section 404 of
the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated
thereunder at such time as Section 404 becomes applicable to the Company.

d.     The
Company is, and has reason to believe that for the foreseeable future it will
continue to be, in compliance with all applicable rules of the OTC Bulletin
Board.  The Company has not received
notice from the OTC Bulletin Board that the Company is not in compliance with
the rules or requirements thereof.  The
issuance and sale of the Shares under this Agreement does not contravene the
rules and regulations of the OTC Bulletin Board, and no approval of the
stockholders of the Company is required for the Company to issue the Shares as
contemplated by this Agreement.

4.11         Environmental
Matters.  “Environmental Laws”
shall mean, collectively, all Legal Requirements, including any federal, state,
local or foreign statute, laws, rule, regulation, ordinance, code, policy or
rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to pollution or protection of human health, the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, “Hazardous Materials”) or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials. 
Except for such matters as could not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect or as set forth
on Schedule 4.11: (i) the Company and its Subsidiaries have complied and
are in compliance with all applicable Environmental Laws; (ii) without limiting
the generality of the foregoing, the Company and its Subsidiaries have
obtained, have complied, and are in compliance with all Permits that are
required pursuant to Environmental Laws for the occupation of their respective
facilities and the operation of their respective businesses; (iii) none of the
Company or its Subsidiaries has received any written notice, report or other
information regarding any 

 10
 

actual or alleged violation of Environmental Laws, or any liabilities
or potential liabilities (including fines, penalties, costs and expenses),
including any investigatory, remedial or corrective obligations, relating to
any of them or their respective facilities arising under Environmental Laws,
nor, to the knowledge of the Company is there any factual basis therefore; (iv)
there are no underground storage tanks, polychlorinated biphenyls, urea
formaldehyde or other hazardous substances (other than small quantities of
hazardous substances for use in the ordinary course of the operation of the
Company’s and its Subsidiaries’ respective businesses, which are stored and
maintained in accordance and in compliance with all applicable Environmental
Laws), in, on, over, under or at any real property owned or operated by the
Company and/or its Subsidiaries; (v) there are no conditions existing at any
real property or with respect to the Company or any of its Subsidiaries that
require remedial or corrective action, removal, monitoring or closure pursuant
to the Environmental Laws and (vi) to the knowledge of the Company, neither the
Company nor any of its Subsidiaries has contractually, by operation of law, or
otherwise amended or succeeded to any liabilities arising under any
Environmental Laws of any predecessors or any other Person.

4.12         Title to Property. 
Except for any lien for current taxes not yet delinquent or which are
being contested in good faith and by appropriate proceedings, the Company and
its Subsidiaries have good and marketable title to all real property and all
personal property owned by them which is material to the business of the
Company and its Subsidiaries.  Any leases
of real property and facilities of the Company and its Subsidiaries are valid
and effective in accordance with their respective terms, except as would not
have a Material Adverse Effect.

4.13         No
Investment Company or Real Property Holding Company.  The Company is not, and upon the issuance and
sale of the Securities as contemplated by this Agreement will not be, an “investment
company” as defined under the Investment Company Act of 1940 (“Investment Company”).  The Company is not controlled by an
Investment Company.  The Company is not a
United States real property holding company, as defined under the Internal
Revenue Code of 1986, as amended (the “Code”).

4.14         No
Brokers.  The Company has taken no
action which would give rise to any claim by any person for brokerage
commissions, transaction fees or similar payments relating to this Agreement or
the transactions contemplated hereby.

4.15         Registration
Rights.  Except pursuant to the
Registration Rights Agreement, as it may be amended by the RRA Amendment, and
as otherwise set forth in Schedule 4.15 effective upon the Closing,
neither the Company nor any Subsidiary is currently subject to any agreement
providing any person or entity any rights (including piggyback registration
rights) to have any securities of the Company or any Subsidiary registered with
the SEC or registered or qualified with any other governmental authority.

4.16         Exchange
Act Registration.  The Common Stock
is registered pursuant to Section 12(b) of the 1934 Act, and the Company has
taken no action designed to, or which, to the knowledge of the Company, is
likely to have the effect of, delisting the registration of the Common Stock
under the 1934 Act.

4.17         Labor
Relations.  No labor or employment
dispute exists or, to the knowledge of the Company, is imminent or threatened,
with respect to any of the employees of the Company that has, or could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

4.18         Transactions
with Affiliates and Employees. 
Except as set forth in the SEC Documents, and Schedule 4.18, none
of the officers or directors of the Company, and to the knowledge of the 

 11
 

Company, none of the employees of the Company, is presently a party to
any transaction or agreement with the Company (other than for services as
employees, officers and directors) exceeding $60,000, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or
partner.

4.19         Insurance.  The Company and its Subsidiaries have
insurance policies in full force and effect of a type, covering such risks and
in such amounts, and having such deductibles and exclusions as are customary
for conducting businesses and owning assets similar in nature and scope to
those of the Company and its Subsidiaries. 
The amounts of all such insurance policies and the risks covered thereby
are in accordance in all material respects with all material contracts and
agreements to which the Company and/or its Subsidiaries is a party and with all
applicable Legal Requirements.  With
respect to each such insurance policy:  (i)
the policy is valid, outstanding and enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws in effect that
limit creditors’ rights generally, equitable limitations on the availability of
specific remedies and principles of equity (regardless of whether such
enforcement is considered in a proceeding in law or in equity); (ii) neither
the Company nor any of its Subsidiaries is in breach or default with respect to
its obligations thereunder in any material respect; and (iii) no party to the
policy has repudiated, or given notice of an intent to repudiate, any provision
thereof.

4.20         Approved Acquisitions of Shares; No Anti-Takeover
Provisions.  Except as otherwise set
forth in Schedule 4.2, and subject to and contingent on the Buyer’s
covenant in Section 5.7, the Company has taken all necessary
action, if any, required under the laws of the State of Nevada or otherwise to
allow the Buyer to acquire the Securities pursuant to this Agreement and further to allow the
Buyer to, without further approval of the Company’s Board of Directors, acquire
in the future additional shares of Common Stock, until such time as the Buyer
owns 40% of the then-outstanding Common Stock on a fully diluted basis.  The Company has no control share acquisition,
business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s
Articles of Incorporation or Bylaws, each as amended (or similar charter
documents), that is or could become applicable to the Buyers as a result of the
Buyers and the Company fulfilling their obligations or exercising their rights
under this Agreement, including without limitation the Company’s issuance of
the Securities and the Buyers’
ownership of the Securities and
Buyers’ acquisition in the future of additional shares of Common Stock until
such time as the Buyers own 40% of the then-outstanding Common Stock on a fully
diluted basis.  In addition, the Company
has opted out of the provisions of the Nevada Revised Statutes (“NRS”) pertaining to the acquisition of a
controlling interest (NRS 78.378 through 78.3793).  As of the date hereof, the Company had less
than 200 “stockholders of record” and is not considered a “resident domestic
corporation” for purposes of §78.411 through §78.444 of the NRS.

4.21         ERISA.  Based
upon the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and the
regulations and published interpretations thereunder: (i) neither the Company
nor any of its Subsidiaries has engaged in any Prohibited Transactions (as
defined in Section 406 of ERISA and Section 4975 of the Code); (ii) the Company
and each of its Subsidiaries has met all applicable minimum funding
requirements under Section 302 of ERISA in respect to its plans; (iii) neither
the Company nor any of its Subsidiaries has any knowledge of any event or
occurrence which would cause the Pension Benefit Guaranty Corporation to
institute proceedings under Title IV of ERISA to terminate any employee benefit
plan(s); neither the Company nor any of its Subsidiaries has any fiduciary
responsibility for investments with respect to any plan existing for the
benefit of persons other than its or such Subsidiary’s employees; and (v)
neither the Company nor any of its Subsidiaries has withdrawn, 

 12
 

completely or partially, from any
multi-employer pension plan so as to incur liability under the Multiemployer
Pension Plan Amendments Act of 1980.

4.22         Disclosure.  The Company understands and confirms that the
Buyers will rely on the representations and covenants contained herein in
effecting the transactions contemplated by this Agreement and the other
Transaction Documents.  All
representations and warranties provided to the Buyers including the disclosures
in the Company’s disclosure schedules attached hereto furnished by or on behalf
of the Company, taken as a whole are true and correct and do not contain any
untrue statement of material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. 
No event or circumstance has occurred or information exists with respect
to the Company or its Subsidiaries or its or their businesses, properties,
prospects, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed.

ARTICLE 5
 COVENANTS

5.1           Form
D; Blue Sky Laws.  Upon completion of
the Closing, the Company shall file with the SEC a Form D with respect to the
Securities as required under Regulation D and each applicable state securities
commission and will provide a copy thereof to the Buyers promptly after such
filing.

5.2           Use
of Proceeds.  The Company shall use
the proceeds from the sale of the Securities to complete the Acquisition.

5.3           Expenses.  The Company shall reimburse
the Buyers for all reasonable expenses incurred by them in connection with
their due diligence review of the Company and the Target, and the negotiation,
preparation, execution, delivery and performance of this Agreement and the
other Transaction Documents and the transactions hereunder and thereunder, and
any transaction, the proceeds of which are used to repay the Debt Financing,
including, without limitation, reasonable attorneys’ fees and expenses, and
out-of-pocket travel costs and expenses.

5.4           No
Integration.  The Company shall not
make any offers or sales of any security (other than the Securities) under
circumstances that would require registration of the Securities being offered
or sold hereunder under the 1933 Act or cause the offering of the Securities to
be integrated with any other offering of securities by the Company in such a
manner as would require the Company to seek the approval of its stockholders
for the issuance of the Securities under any stockholder approval provision
applicable to the Company or its securities.

5.5           Board
Designee(s).  For as long as the
Buyers or their affiliates hold (i) at least 10% of the then issued and
outstanding Common Stock, the Buyers shall have the right to appoint two
members of the Company’s Board of Directors; and (ii) at least 20% of the then
issued and outstanding Common Stock, the Buyers shall have the right to appoint
three members of the Company’s Board of Directors.  Notwithstanding anything to the contrary
contained in this Agreement, the Articles of Incorporation, as amended, of the
Company, or the Bylaws, as amended, of the Company, following the Closing and
thereafter for as long as the Buyers have the right to appoint directors
pursuant to this Section 5.5, the Company’s Board of Directors
shall be comprised of no more than nine directors.  The parties agree that the provisions of this
Section 5.5 shall supersede the provisions of Section 5.5 of the Initial
Securities Purchase Agreement.

 13
 

5.6           Observation
Rights.  The parties hereto
acknowledge and affirm that the Buyers shall have Observation Rights (as
defined in the Initial Securities Purchase Agreement) as set forth in Section
5.6 of the Initial Securities Purchase Agreement.

5.7           Future Acquisitions.  The Company shall not revoke its approval of
the acquisition of up to 40%  of
the Common Stock on a fully diluted basis by the Buyers.  The Company shall use its best efforts to
ensure that any future acquisitions of the Common Stock by the Buyers (up to
40% of the of the outstanding Common Stock on a fully diluted basis) shall not
be made subject to the provisions of any anti-takeover laws and regulations of
any governmental authority, including without limitation, the applicable
provisions of the Nevada Revised Statutes, and any provisions of an
anti-takeover nature adopted by the Company or any of its Subsidiaries or
contained in the Company’s Articles of Incorporation, Bylaws, or the
organizational documents of any of its Subsidiaries, each as amended.

5.8           Announcement of Rights Offering.  The Company shall publicly announce,
concurrent with the announcement of the execution of this Agreement and the
Target SPA, that the Company intends to conduct a registered rights offering to
its stockholders at the Per Share Price following the consummation of the
transactions contemplated under the Target SPA.

ARTICLE 6

CONDITIONS TO THE COMPANY’S OBLIGATION

The obligation of the Company hereunder to issue and sell the
Securities to the Buyers at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by
the Company at any time in its sole discretion:

6.1           Delivery of Transaction Documents.  The
Buyers shall have executed and delivered the Transaction Documents to which
they are a party to the Company.

6.2           Payment of Purchase Price.  The
Buyers shall have delivered the Purchase Price in accordance with Section
2.3 above.

6.3           Representations and Warranties.  The
representations and warranties of the Buyers shall be true and correct in all
material respects (provided, however, that such qualification shall only apply
to representations or warranties not otherwise qualified by materiality) as of
the date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific date),
and the applicable Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or complied with by the applicable Buyer
at or prior to the Closing Date.

6.4           Litigation.  No litigation, statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation
of any of the transactions contemplated by this Agreement.

 14
 

ARTICLE 7

CONDITIONS TO THE BUYERS’ OBLIGATION

The obligation of
the Buyers hereunder to purchase the Securities at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for the Buyers’ sole benefit and
may be waived by the Buyers at any time in its sole discretion:

7.1           Delivery of Transaction Documents;
Issuance of Securities.  The Company
shall have executed and delivered the Transaction Documents to the Buyers,
including the Notes and shall deliver the Transfer Instructions to the transfer
agent for the Company’s Common Stock to issue certificates in the name of each
Buyer representing the Shares being purchased by such Buyer.  The Company shall deliver a copy of the
Transfer Instructions to the Buyers at the Closing.

7.2           Representations
and Warranties.  The representations and warranties of the
Company shall be true and correct in all material respects (provided, however,
that such qualification shall only apply to representations or warranties not
otherwise qualified by materiality) as of the date when made and as of the
Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date.

7.3           Consents.  Any consents or approvals required to be
secured by the Company for the consummation of the transactions contemplated by
the Transaction Documents shall have been obtained and shall be reasonably
satisfactory to the Buyers.

7.4           Litigation.  No Action shall have been
enacted, entered, promulgated or endorsed by or in any court or governmental
authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation
of any of the transactions contemplated by this Agreement.

7.5           Opinion.  The Buyers shall have received an opinion of
the Company’s counsel, dated as of the Closing Date, in form, scope and
substance reasonably satisfactory to the Buyers with respect to the matters set
forth in Exhibit D attached hereto.

7.6           No
Material Adverse Change.  There shall
have been no material adverse change in the assets, liabilities (contingent or
otherwise), affairs, business, operations, prospects or condition (financial or
otherwise) of the Company prior to the Closing Date.

7.7           Project
Wind.  All of the conditions
necessary for the Acquisition to be consummated shall have been satisfied and
the Company and the parties to the Target SPA are proceeding to closing
thereunder, subject to the provision of the Debt Financing and the purchase of
the Shares under this Agreement.

ARTICLE 8

TERMINATION

8.1           Termination Provisions.  This
Agreement may be terminated at any time before the Closing Date:

a.     By mutual consent of the Company
and the Buyers;

 15
 

b.     By either the Company or the
Buyers as applicable, in the event that any of the conditions precedent to
their respective obligations to consummate the transactions contemplated hereby
as set forth in Article 6 or Article 7, through no fault of the
terminating party, have not been met and satisfied and have become impossible
of fulfillment;

c.     By either the Company or the
Buyers if the Closing Date does not occur within one hundred twenty (120) days
after the date hereof, or such later date as the parties may mutually agree
upon (provided that the terminating party is not then in material breach of any
representation, warranty, covenant or other agreement contained herein);

d.     By the Buyers if there has been
any material breach of any representation, warranty, agreement or covenant in
this Agreement by the Company, which breach cannot be or has not been cured
within thirty (30) days after giving written notice thereof to the Company; and

e.     By the Company if there has been
any material breach of any representation, warranty, agreement or covenant in
this Agreement by the Buyers, which breach cannot be or has not been cured
within thirty (30) days after giving written notice thereof to the Buyers.

8.2           Effect of Termination.  Upon the
termination of this Agreement pursuant to the terms hereof, this Agreement will
be void and neither party will have any further liability obligations with
respect hereof, except as otherwise provided in this Agreement or except and to
the extent termination results from the intentional breach by a party of any of
its representations, warranties or covenants hereunder.

ARTICLE 9

INDEMNIFICATION

9.1           Indemnification
by the Company.  The Company agrees
to indemnify each Buyer and its affiliates and hold each Buyer and its
affiliates harmless from and against any and all liabilities, losses, damages,
costs and expenses of any kind (including, without limitation, the reasonable
fees and disbursements of such Buyer’s counsel in connection with any
investigative, administrative or judicial proceeding), which may be incurred by
such Buyer or such affiliates as a result of any claims made against such Buyer
or such affiliates by any person that relate to or arise out of (i) any breach
by the Company of any of its representations, warranties or covenants contained
in this Agreement or in the Transaction Documents (other than the Registration
Rights Agreement, which contains separate indemnification provisions), or (ii)
any litigation, investigation or proceeding instituted by any person with
respect to this Agreement or the Shares (excluding, however, any such litigation,
investigation or proceeding which arises solely from the acts or omissions of
such Buyer or its affiliates).

9.2           Notification.  Any
person entitled to indemnification hereunder (“Indemnified Party”) will (i) give prompt
notice to the Company, of any third party claim, action or suit with respect to
which it seeks indemnification (the “Claim”) (but omission of such notice shall
not relieve the Company from liability hereunder except to the extent it is
actually prejudiced by such failure to give notice), specifying in reasonable
detail the factual basis for the Claim, the amount thereof, estimated in good
faith, and the method of computation of the Claim, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such indemnification is sought with respect to the Claim, and
(ii) unless in such Indemnified Party’s reasonable judgment a conflict of
interest may exist between such Indemnified Party and the Company with respect
to such claim, permit the Company to assume the defense of the Claim with
counsel reasonably satisfactory to the Indemnified Party.  The Indemnified Party shall cooperate fully
with the Company with respect to the defense of the Claim and, if 

 16
 

the Company elects to assume control of the
defense of the Claim, the Indemnified Party shall have the right to participate
in the defense of the Claim at its own expense. 
If the Company does not elect to assume control or otherwise participate
in the defense of the Claim, then the Indemnified Party may defend through
counsel of its own choosing.  If such
defense is not assumed by the Company, the Company will not be subject to any
liability under this Agreement or otherwise for any settlement made without its
consent (but such consent will not be unreasonably withheld or delayed). If the
Company elects not to or is not entitled to assume the defense of a Claim, it
will not be obligated to pay the fees and expenses of more than one counsel for
all Indemnified Parties with respect to the Claim, unless an actual conflict of
interest exists between such Indemnified Party and any other of such
Indemnified Parties with respect to the Claim, in which event the Company will
be obligated to pay the fees and expenses of such additional counsel or
counsels.

ARTICLE 10

GOVERNING LAW; MISCELLANEOUS

10.1         Governing
Law.  This Agreement shall be
enforced, governed by and construed in accordance with the laws of the State of
Wisconsin applicable to agreements made and to be performed entirely within such
state, without regard to the principles of conflict of laws.  The parties hereto hereby submit to the
exclusive jurisdiction of the United States Federal Courts located in the State
of Wisconsin  with respect to any
dispute arising under this Agreement, the agreements entered into in connection
herewith or the transactions contemplated hereby or thereby.  All parties irrevocably waive the defense of
an inconvenient forum to the maintenance of such suit or proceeding.  All parties further agree that service of
process upon a party mailed by first class mail shall be deemed in every
respect effective service of process upon the party in any such suit or
proceeding.  Nothing herein shall affect
any party’s right to serve process in any other manner permitted by law. All
parties agree that a final non-appealable judgment in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.  The party which does not prevail in any dispute
arising under this Agreement shall be responsible for all reasonable fees and
expenses, including reasonable attorneys’ fees, incurred by the prevailing
party in connection with such dispute.

10.2         Counterparts; Electronic Signatures.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party.  This
Agreement, once executed by a party, may be delivered to the other party hereto
by electronic transmission of a copy of this Agreement bearing the signature of
the party so delivering this Agreement.

10.3         Headings.  The headings of this Agreement are for
convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.

10.4         Severability.  In
the event that any provision of this Agreement is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be
deemed modified to conform to such statute or rule of law.  Any provision hereof which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability
of any other provision hereof.

10.5         Entire Agreement; Amendments.  This
Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and supersede all previous understandings or agreements between the
parties with respect to such matters.  No
provision of this Agreement may be waived other than by an instrument in
writing signed by the party to 

 17
 

be charged with enforcement.  The
provisions of this Agreement may be amended only by a written instrument signed
by the Company and the Buyers.

10.6         Notices.  Any notices required or
permitted to be given under the terms of this Agreement shall be sent by
certified or registered mail (return receipt requested) or delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile and shall be effective five days after being placed in the mail, if
mailed by regular United States mail, or upon receipt, if delivered personally
or by courier (including a recognized overnight delivery service) or by
facsimile, in each case addressed to a party. 
The addresses for such communications shall be:

If to the Company:

Tower
Tech Holdings, Inc.

100
Maritime Drive, Suite 3C

Manitowoc,
Wisconsin 54220

Telephone:
(920) 684-5531

Facsimile:  (920) 684-5579

Attention: 
Mr. Raymond L. Brickner, III

With copy to:

Fredrikson & Byron, P.A.

4000 U.S. Bank Plaza

200 South Sixth Street

Minneapolis, MN  55402-1425

Telephone: (312) 492-7000

Facsimile:  (612) 492-7077

Attention:  Daniel A. Yarano

If to the Buyers:

Tontine
Capital Partners, L.P.

55
Railroad Avenue, 1st Floor

Greenwich,
Connecticut 06830

Attention:
Mr. Jeffrey L. Gendell

Telephone:
(203) 769-2000

Facsimile: (203) 769-2010

With copy to:

Barack
Ferrazzano Kirschbaum & Nagelberg LLP

200 W. Madison Street, Suite 3900

Chicago, Illinois  60606

Attention: Sarah M. Bernstein, Esq.

Telephone: (312) 984-3100

Facsimile: (312) 984-3150

Each
party shall provide notice to the other party of any change in address.

 18
 

10.7         Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns.  The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the other Buyers.

10.8         Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.

10.9         Publicity.  The Company and the Buyers
shall have the right to review a reasonable period of time before issuing any
press releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of the Buyers, to make any press release with
respect to such transactions as is required by applicable law and regulations
(although the Buyers shall be consulted by the Company in connection with any
such press release prior to its release and shall be provided with a copy
thereof and be given an opportunity to comment thereon).  Notwithstanding the foregoing, the Company
shall file with the SEC a Form 8-K disclosing the transactions herein within
four (4) business days of the Closing Date and attach the relevant agreements
and instruments thereto, and the Buyers may make such filings as may be
required under Section 13 and Section 16 of the 1934 Act.

10.10       Further
Assurances.  Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order
to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

10.11       No
Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be
applied against any party.

10.12       Rights
Cumulative.  Each and all of the
various rights, powers and remedies of the parties shall be considered
cumulative with and in addition to any other rights, powers and remedies which
or the Transaction Documents such parties may have at law or in equity in the
event of the breach of any of the terms of this Agreement.  The exercise or partial exercise of any
right, power or remedy shall neither constitute the exclusive election thereof
nor the waiver of any other right, power or remedy available to such party.

10.13       Survival.  Any covenant or agreement in this Agreement
required to be performed following the Closing Date, shall survive the Closing
Date. Without limitation of the foregoing, the respective representations and
warranties given by the parties hereto shall survive the Closing Date and the
consummation of the transactions contemplated herein, but only for a period of
the earlier of (i) three (3) years following the Closing Date and (ii) the
applicable statute of limitations with respect to each representation and
warranty, and thereafter shall expire and have no further force and effect..

10.14       Knowledge.  The term “knowledge of the Company” or
any similar formulation of knowledge shall mean, the actual knowledge after due inquiry of an executive officer of the
Company.

 [Signature
Page Follows]

 19

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date first above written.

	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TOWER TECH HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Raymond L. Brickner, III

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Raymond L. Brickner, III

  	
   

  
	
   

  	
   

  	
  Title:

  	
   President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUYERS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TONTINE CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Tontine Capital Management, LLC, its general

  partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey L. Gendell

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffrey L. Gendell, as managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TONTINE CAPITAL OVERSEAS MASTER FUND, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Tontine Capital Overseas GP, L.L.C., its general

  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jeffrey L. Gendell

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffrey L. Gendell, as managing member

  
										

 

 S-1

SCHEDULE 1

	
  Name

  	
   

  	
  Jurisdiction of 

  Organization and Form of 

  Entity

  	
   

  	
  Number of 

  Shares and 

  Purchase 

  Price

  	
   

  	
  Portion of 

  Debt Financing

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tontine Capital Partners,
  L.P.

  	
   

  	
  Delaware Limited Partnership

  	
   

  	
  TBD

  	
   

  	
  TBD

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tontine Capital Overseas
  Master Fund, L.P.

  	
   

  	
  Cayman Islands
  Limited Partnership

  	
   

  	
  TBD

  	
   

  	
  TBD

  

 

Exhibit A

NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
BORROWER.

THE
INDEBTEDNESS REPRESENTED BY THIS INSTRUMENT IS SUBORDINATED TO THE PAYMENT OF
SENIOR INDEBTEDNESS IN ACCORDANCE WITH AND TO THE EXTENT PROVIDED HEREIN.

FORM OF SENIOR
SUBORDINATED CONVERTIBLE PROMISSORY NOTE

Note #                          

	
  $[      ]

  	
  Manitowoc, Wisconsin

  

 

FOR VALUE RECEIVED, TOWER
TECH HOLDINGS INC., a Nevada corporation (hereinafter referred to as the “Borrower”), hereby promises to pay to the
order of                                                                                                   ,
and its successors and assigns (hereinafter referred to as “Holder”), in the manner hereinafter
provided, the principal sum of [        ]
DOLLARS ($[      ]), as it may be increased
herein, in immediately available funds and in lawful money of the United States
of America, together with interest thereon, all in accordance with the
provisions hereinafter specified.  This
Note is one of $25,000,000 in aggregate principal amount of Senior Subordinated
Convertible Promissory Notes (each a “Note” and
collectively, the “Notes”) issued
pursuant to the Securities Purchase Agreement dated August 22, 2007, by and
among the Borrower and the original purchasers of the Notes (the “Purchase Agreement”), and is subject to the provisions set
forth therein.

ARTICLE 11ACCRUAL
OF INTEREST.  INTEREST SHALL ACCRUE
ON THE OUTSTANDING PRINCIPAL AMOUNT HEREOF (INCLUDING ANY PIK INTEREST, AS
HEREAFTER DEFINED) AT (I) A RATE EQUAL TO NINE AND ONE-HALF PERCENT (9.50%) PER
ANNUM FOR THE PERIOD BEGINNING ON THE DATE HEREOF AND ENDING ON THE DATE THAT
IS NINE MONTHS FROM THE DATE HEREOF (THE “INITIAL PERIOD”)
AND (II) A RATE EQUAL TO THIRTEEN AND ONE-HALF PERCENT (13.50%) PER ANNUM FOR
THE PERIOD FOLLOWING THE INITIAL PERIOD. 
INTEREST SHALL BE CALCULATED HEREUNDER ON THE BASIS OF THE ACTUAL NUMBER
OF DAYS ELAPSED.

ARTICLE
12PAYMENT OF INTEREST. 
COMMENCING ON DECEMBER 31, 2007, THE BORROWER SHALL PAY INTEREST ON THIS
NOTE SEMI-ANNUALLY IN ARREARS ON EACH JUNE 30 AND DECEMBER 31 OF EACH CALENDAR
YEAR AND ON THE MATURITY DATE (AS HEREAFTER DEFINED), OR IF ANY 

SUCH DAY IS NOT A
BUSINESS DAY, ON THE NEXT SUCCEEDING BUSINESS DAY (EACH AN “INTEREST PAYMENT DATE”), TO HOLDER.  INTEREST PAYABLE ON THIS NOTE SHALL BE PAID
ON EACH INTEREST PAYMENT DATE, AT THE ELECTION OF THE BORROWER, (I) IN CASH OR
(II) IN KIND, IN WHICH EVENT, THE AMOUNT OF THE PRINCIPAL OUTSTANDING UNDER
THIS NOTE SHALL BE INCREASED BY THE AMOUNT OF SUCH INTEREST PAYMENT (“PIK INTEREST”) ON SUCH INTEREST PAYMENT DATE AND INTEREST
SHALL THEN ACCRUE ON THE INCREASED PRINCIPAL AMOUNT.  DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT, NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY CONTAINED IN THIS NOTE,
INTEREST PAYABLE ON THE OUTSTANDING PRINCIPAL HEREUNDER, INCLUDING ANY PIK INTEREST,
SHALL BEAR INTEREST AT THE THEN APPLICABLE INTEREST RATE SET FORTH IN SECTION 1
PLUS TWO PERCENT (2%) PER ANNUM AND SUCH INTEREST SHALL BE PAYABLE UPON DEMAND.

ARTICLE
13SCHEDULED PRINCIPAL PAYMENTS.  THE BORROWER SHALL MAKE PAYMENTS OF PRINCIPAL
TO HOLDER AS FOLLOWS: (I) ON THE FIRST ANNIVERSARY OF THIS NOTE, THE SUM OF [$              ],
WHICH REPRESENTS 10% OF ORIGINAL PRINCIPAL AMOUNT OF THIS NOTE, (II) ON THE
SECOND ANNIVERSARY OF THIS NOTE, THE SUM OF [$              ],
WHICH REPRESENTS 40% OF ORIGINAL PRINCIPAL AMOUNT OF THIS NOTE, AND (III) ON
THE THIRD ANNIVERSARY OF THIS NOTE (THE “MATURITY DATE”),
A FINAL PAYMENT OF THE SUM OF THE OUTSTANDING PRINCIPAL BALANCE OF THIS NOTE,
INCLUDING THE AMOUNT OF ANY PIK INTEREST, TOGETHER WITH ACCRUED AND UNPAID
INTEREST THEREON, AND ALL OTHER OBLIGATIONS AND INDEBTEDNESS OWING HEREUNDER,
IF NOT SOONER PAID.

ARTICLE
14PREPAYMENT. 
THIS NOTE MAY BE PREPAID IN WHOLE OR IN PART AT ANY TIME WITHOUT PREMIUM
OR PENALTY; PROVIDED, HOWEVER,
THAT THE BORROWER MAY NOT PREPAY THE NOTE OR ANY PORTION OF THE OUTSTANDING
PRINCIPAL BALANCE OF THE NOTE IF HOLDER HAS SURRENDERED THE NOTE TO THE
BORROWER AND PROVIDED WRITTEN NOTICE TO THE BORROWER OF ITS ELECTION TO CONVERT
THE NOTE OR SUCH PORTION OF THE OUTSTANDING PRINCIPAL BALANCE OF THE NOTE INTO
CONVERSION SHARES PURSUANT TO SECTION 6. 
ANY PREPAYMENT OF PRINCIPAL SHALL BE ACCOMPANIED BY PAYMENT OF ANY
INTEREST, IF ANY, ACCRUED AND UNPAID THROUGH THE DATE OF SUCH PREPAYMENT.

ARTICLE
15MANNER AND APPLICATION OF PAYMENTS.  ALL
AMOUNTS PAYABLE HEREUNDER SHALL BE PAYABLE TO HOLDER BY WIRE TRANSFER OF
IMMEDIATELY AVAILABLE FUNDS.  PAYMENTS HEREUNDER SHALL BE APPLIED FIRST TO
INTEREST AND THEN TO PRINCIPAL OUTSTANDING HEREUNDER, EXCEPT THAT IF HOLDER HAS
INCURRED ANY COST OR EXPENSE IN CONNECTION WITH THE ENFORCEMENT OR COLLECTION
OF THE OBLIGATIONS OF THE BORROWER HEREUNDER, HOLDER SHALL HAVE THE OPTION OF
APPLYING ANY MONIES RECEIVED FROM THE BORROWER TO PAYMENT OF SUCH COSTS OR
EXPENSES PLUS INTEREST THEREON BEFORE APPLYING ANY OF SUCH MONIES TO ANY
INTEREST OR PRINCIPAL THEN DUE.

ARTICLE
16CONVERSION. 
THIS NOTE IS CONVERTIBLE INTO COMMON STOCK, $0.001 PAR VALUE PER SHARE
OF THE BORROWER (“COMMON STOCK”)
IN ACCORDANCE WITH THIS SECTION 6.

16.1     Except as
set forth below, Holder has the unrestricted right, at Holder’s option, to
convert, in whole or in part, the outstanding principal balance of this Note,
including the amount of any PIK Interest, together with accrued and unpaid
interest thereon (the “Conversion Principal”),
into fully paid and nonassessable shares of Common Stock.  The right to convert may be exercised by
Holder at any time after three (3) months following the date hereof; provided, however, that Holder’s right to
convert may not be exercised for the six (6) month period (the “Non-Conversion Period”) following the date
on which the Borrower files a registration statement with the Securities and
Exchange Commission for the purpose of 

 23
 

registering shares to be offered by the
Borrower in a rights offering to its stockholders, so long as at all times
during the Non-Conversion Period, the Borrower is taking all reasonable steps
to effectuate the consummation of the rights offering.  The number of shares of Common Stock into
which this Note may be converted (the “Conversion
Shares”) shall be determined by dividing the Conversion Principal
(as determined on the date that Holder exercises this conversion right) by the
Conversion Price.  The initial Conversion
Price shall be $7.50.

16.2     Holder
shall be entitled to convert this Note by surrendering this Note at the office
of the Borrower and shall give written notice to the Borrower of the election
to convert this Note and shall state therein the name or names in which the
certificate or certificates for Conversion Shares are to be issued.

16.3     Such
certificate or certificates shall bear such legends as are required, in the
opinion of counsel to the Borrower, by applicable state and federal securities
laws.  The Borrower shall, as soon as
practicable thereafter, but no later than seven (7) business days, issue and
deliver to Holder a certificate or certificates for the number of Conversion
Shares to which Holder shall be entitled as aforesaid.  Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of surrender of
this Note, and the person or persons entitled to receive the Conversion Shares
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Conversion Shares as of such date.

16.4     No
fractional shares of Common Stock shall be issued on conversion of this Note.

16.5     In the
event the Borrower should at any time or from time to time after the date
hereof fix a record date for the split or subdivision of the outstanding shares
of Common Stock or the determination of holders of Common Stock to receive
dividends or other distributions payable in additional shares of Common Stock
or other securities or rights convertible into, or entitling the holder thereof
to receive directly or indirectly, additional shares of Common Stock (“Common
Stock Equivalents”) without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents, then, as of
such record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Conversion Price of this Note
shall be appropriately decreased so that the number of Conversion Shares
issuable upon conversion of this Note shall be increased in proportion to such
increase or potential increase of outstanding shares of Common Stock.

16.6     If the
number of shares of Common Stock outstanding at any time after the date hereof
is decreased by a combination of the outstanding shares of Common Stock, then,
following the record date of such combination, the Conversion Price for this
Note shall be appropriately increased so that the number of shares of Common
Stock issuable on conversion hereof shall be decreased in proportion to such
decrease in outstanding shares of Common Stock.

16.7     The
Borrower shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of this Note, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of this Note; and if
at any time the number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of the entire current Conversion
Principal of this Note, in addition to such other remedies as shall be
available to Holder, the Borrower will use its best efforts to take such
corporate action as may, in the 

 24
 

opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.

16.8     The
Borrower shall use its best efforts to ensure that any future acquisitions of
Common Stock by Holder upon the conversion, in whole or in part, of the
outstanding principal balance of this Note shall not be subject to the
provisions of any anti-takeover laws and regulations of any governmental
authority, including without limitation, the applicable provisions of the
Nevada Revised Statutes, and any provisions of an anti-takeover nature adopted
by the Borrower or any of its subsidiaries or contained in the Borrower’s
Articles of Incorporation, Bylaws, or the organizational documents of any of
its subsidiaries, each as amended.

ARTICLE
17NO SECURITY.  THIS NOTE IS AN UNSECURED
OBLIGATION OF THE BORROWER AND NO COLLATERAL ACCOMPANIES THE OBLIGATIONS
HEREUNDER.

ARTICLE
18SUBORDINATION. 
THE INDEBTEDNESS OF THE BORROWER EVIDENCED BY THIS NOTE, INCLUDING THE
PRINCIPAL AND INTEREST, IS SUBORDINATED AND JUNIOR IN RIGHT OF PAYMENT TO THE
SENIOR INDEBTEDNESS (AS HEREAFTER DEFINED), WHETHER SUCH OBLIGATIONS ARE
OUTSTANDING AT THIS DATE OR ARE HEREAFTER INCURRED, BUT WILL BE SENIOR IN RIGHT
OF PAYMENT TO ANY ADDITIONAL INDEBTEDNESS OF THE BORROWER.  FOR PURPOSES OF THIS NOTE, “SENIOR
INDEBTEDNESS”  SHALL MEAN
[DEFINE].  [SENIOR DEBTHOLDER WILL
REQUIRE SPECIFIC SUBORDINATION LANGUAGE]

ARTICLE
19TREATMENT OF NOTES. 
EACH NOTE ISSUED PURSUANT TO THE PURCHASE AGREEMENT OR SUBSEQUENTLY
ISSUED IN REPLACEMENT THEREOF SHALL RANK PARI
PASSU WITH EACH OTHER AS TO THE PAYMENT OF PRINCIPAL AND
INTEREST.]  FURTHER, THE NOTES AND ANY
NOTES SUBSEQUENTLY ISSUED IN REPLACEMENT THEREOF SHALL RANK SENIOR AS TO THE
PAYMENT OF PRINCIPAL AND INTEREST WITH ALL PRESENT AND FUTURE INDEBTEDNESS FOR
MONEY BORROWED OF THE BORROWER OTHER THAN THE SENIOR INDEBTEDNESS.

ARTICLE
20EVENTS OF DEFAULT. 
EACH OF THE FOLLOWING ACTS, EVENTS OR CIRCUMSTANCES SHALL CONSTITUTE AN
EVENT OF DEFAULT (EACH AN “EVENT OF DEFAULT”)
HEREUNDER:

20.1     the
Borrower shall default in the payment when due (in accordance with the terms of
the Notes) of any principal, including PIK Interest, interest or other amounts
owing hereunder or under any other Note, and such default is not cured within
three (3) business days of the due date;

20.2     any
representation or warranty made by the Borrower in the Purchase Agreement shall
have been false or misleading in any material respect on the date as of which
such representation or warranty was made;

20.3     the
Borrower shall fail to perform or observe any material agreement, covenant or
obligation arising under any provision hereof, under any other Note or the
Purchase Agreement for more than thirty (30) days following receipt by the
Borrower of a notice from Holder indicating any such violation;

20.4     the
Borrower’s failure to deliver certificates for the Conversion Shares in
accordance with Section 6(iii)

 25
 

20.5     any default
by the Borrower under the terms of any other indebtedness of the Borrower or
any subsidiary of the Borrower that is not cured or waived within any grace
period applicable thereto;

20.6     the
Borrower shall commence a voluntary case concerning itself under any
bankruptcy, insolvency or similar laws or statutes (including Title 11 of
the United States Code, as amended, supplemented or replaced) (collectively,
the “Bankruptcy Code”); or (b) an
involuntary case is commenced against the Borrower and is not dismissed within
ninety (90) days; or (c) a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or the Borrower commences any other proceedings under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or there is
commenced against the Borrower any such proceeding; or (d) any order of relief
or other order approving any such case or proceeding is entered; or (e) the
Borrower is adjudicated insolvent or bankrupt; or (f) the Borrower makes a
general assignment for the benefit of creditors; or (g) the Borrower shall call
a meeting of its creditors with a view to arranging a composition or adjustment
of its debts; or (h) the Borrower shall by any act or failure to act consent
to, approve of or acquiesce in any of the foregoing; and

20.7     this Note
or any other Note shall cease to be in full force and effect, or shall cease to
provide the rights, powers and privileges purported to be created hereby.

IF AN
EVENT OF DEFAULT, OTHER THAN AN EVENT OF DEFAULT DESCRIBED IN SECTION 10(VI),
OCCURS, HOLDER BY WRITTEN NOTICE TO THE BORROWER MAY DECLARE THE PRINCIPAL OF
AND ACCRUED INTEREST ON THIS NOTE TO BE IMMEDIATELY DUE AND PAYABLE.  UPON A DECLARATION OF ACCELERATION, SUCH
PRINCIPAL AND INTEREST WILL BECOME IMMEDIATELY DUE AND PAYABLE.  IF AN EVENT OF DEFAULT DESCRIBED IN SECTION
10(VI) OCCURS, THE PRINCIPAL OF AND ACCRUED INTEREST ON THIS NOTE THEN
OUTSTANDING WILL BECOME IMMEDIATELY DUE AND PAYABLE WITHOUT ANY DECLARATION OR
OTHER ACT ON THE PART OF HOLDER.

ARTICLE
21REMEDIES; CUMULATIVE
RIGHTS.  IN ADDITION TO THE RIGHTS PROVIDED UNDER
SECTION 9, HOLDER SHALL ALSO HAVE ANY OTHER RIGHTS THAT HOLDER MAY HAVE BEEN
AFFORDED UNDER ANY CONTRACT OR AGREEMENT AT ANY TIME, INCLUDING THE PURCHASE
AGREEMENT, AND ANY OTHER RIGHTS THAT HOLDER MAY HAVE PURSUANT TO APPLICABLE
LAW.  NO DELAY ON THE PART OF HOLDER IN
THE EXERCISE OF ANY POWER OR RIGHT UNDER THIS NOTE OR UNDER ANY OTHER
INSTRUMENT EXECUTED PURSUANT HERETO SHALL OPERATE AS A WAIVER THEREOF, NOR
SHALL A SINGLE OR PARTIAL EXERCISE OF ANY POWER OR RIGHT PRECLUDE OTHER OR
FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY OTHER POWER OR RIGHT.

 26
 

NO
EXTENSIONS OF TIME OF THE PAYMENT OF THIS NOTE OR ANY OTHER MODIFICATION,
AMENDMENT OR FORBEARANCE MADE BY AGREEMENT WITH ANY PERSON NOW OR HEREAFTER
LIABLE FOR THE PAYMENT OF THIS NOTE SHALL OPERATE TO RELEASE, DISCHARGE,
MODIFY, CHANGE OR AFFECT THE LIABILITY OF ANY CO-BORROWER, ENDORSER, GUARANTOR
OR ANY OTHER PERSON WITH REGARD TO THIS NOTE, EITHER IN PART OR IN WHOLE.  NO FAILURE ON THE PART OF HOLDER OR ANY
HOLDER HEREOF TO EXERCISE ANY RIGHT OR REMEDY HEREUNDER, WHETHER BEFORE OR
AFTER THE OCCURRENCE OF A DEFAULT, SHALL CONSTITUTE A WAIVER THEREOF, AND NO
WAIVER OF ANY PAST DEFAULT SHALL CONSTITUTE A WAIVER OF ANY FUTURE DEFAULT OR
OF ANY OTHER DEFAULT.  NO FAILURE TO
ACCELERATE THE DEBT EVIDENCED HEREBY BY REASON OF AN EVENT OF DEFAULT HEREUNDER
OR ACCEPTANCE OF A PAST DUE INSTALLMENT, OR INDULGENCE GRANTED FROM TIME TO
TIME SHALL BE CONSTRUED TO BE A WAIVER OF THE RIGHT TO INSIST UPON PROMPT
PAYMENT THEREAFTER, OR TO IMPOSE LATE PAYMENT CHARGES, OR SHALL BE DEEMED TO BE
A NOVATION OF THIS NOTE OR ANY REINSTATEMENT OF THE DEBT EVIDENCED HEREBY, OR A
WAIVER OF SUCH RIGHT OF ACCELERATION OR ANY OTHER RIGHT, OR BE CONSTRUED SO AS
TO PRECLUDE THE EXERCISE OF ANY RIGHT WHICH HOLDER OR ANY HOLDER HEREOF MAY
HAVE, WHETHER BY THE LAWS OF THE STATE OF WISCONSIN, BY AGREEMENT OR OTHERWISE,
AND NONE OF THE FOREGOING SHALL OPERATE TO RELEASE, CHANGE OR AFFECT THE
LIABILITY OF THE BORROWER OF THIS NOTE, AND THE BORROWER HEREBY EXPRESSLY
WAIVES (TO THE EXTENT ALLOWED BY LAW) THE BENEFIT OF ANY STATUTE OR RULE OF LAW
OR EQUITY WHICH WOULD PRODUCE A RESULT CONTRARY TO OR IN CONFLICT WITH THE
FOREGOING.

ARTICLE
22WAIVERS. 
EXCEPT FOR THE NOTICES EXPRESSLY REQUIRED BY THE TERMS OF THIS NOTE
(WHICH RIGHTS TO NOTICE ARE NOT WAIVED BY THE BORROWER), THE BORROWER, FOR
ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY FOREVER WAIVES PRESENTMENT,
PROTEST AND DEMAND, NOTICE OF PROTEST, DEMAND, DISHONOR AND NON-PAYMENT OF THIS
NOTE, AND ALL OTHER NOTICES IN CONNECTION WITH THE DELIVERY, ACCEPTANCE,
PERFORMANCE, DEFAULT OR ENFORCEMENT OF THE PAYMENT OF THIS NOTE, AND WAIVES AND
RENOUNCES (TO THE EXTENT ALLOWED BY LAW), ALL RIGHTS TO THE BENEFITS OF ANY
STATUTE OF LIMITATIONS AND ANY MORATORIUM, APPRAISEMENT, AND EXEMPTION NOW
ALLOWED OR WHICH MAY HEREBY BE PROVIDED BY ANY FEDERAL OR STATE STATUTE OR
DECISIONS AGAINST THE ENFORCEMENT AND COLLECTION OF THE OBLIGATIONS EVIDENCED
BY THIS NOTE AND ANY AND ALL AMENDMENTS, SUBSTITUTIONS, EXTENSIONS, RENEWALS,
INCREASES, AND MODIFICATIONS HEREOF.

ARTICLE
23ATTORNEYS’ FEES. 
THE BORROWER AGREES TO PAY ALL REASONABLE COSTS AND EXPENSES OF
COLLECTION AND ENFORCEMENT OF THIS NOTE WHEN INCURRED, INCLUDING HOLDER’S
REASONABLE ATTORNEYS’ FEES AND LEGAL AND COURT COSTS, INCLUDING ANY INCURRED ON
APPEAL OR IN CONNECTION WITH BANKRUPTCY OR INSOLVENCY, WHETHER OR NOT ANY
LAWSUIT OR PROCEEDING IS EVER FILED WITH RESPECT HERETO.

ARTICLE
24SEVERABILITY; INVALIDITY.  THE BORROWER AND HOLDER INTEND AND BELIEVE
THAT EACH PROVISION IN THIS NOTE COMPORTS WITH ALL APPLICABLE LOCAL, STATE AND
FEDERAL LAWS AND JUDICIAL DECISIONS. 
HOWEVER, IF ANY PROVISIONS, PROVISION, OR PORTION OF ANY PROVISION IN
THIS NOTE IS FOUND BY A COURT OF COMPETENT JURISDICTION TO BE IN VIOLATION OF
ANY APPLICABLE LOCAL, STATE OR FEDERAL ORDINANCE, STATUTE, LAW, OR
ADMINISTRATIVE OR JUDICIAL DECISION, OR PUBLIC POLICY, AND IF SUCH COURT WOULD
DECLARE SUCH PORTION, PROVISION OR PROVISIONS OF THIS NOTE TO BE ILLEGAL,
INVALID, UNLAWFUL, 

 27
 

VOID OR
UNENFORCEABLE AS WRITTEN, THEN IT IS THE INTENT OF ALL PARTIES HERETO THAT SUCH
PORTION, PROVISION OR PROVISIONS SHALL BE GIVEN FORCE AND EFFECT TO THE FULLEST
POSSIBLE EXTENT THEY ARE LEGAL, VALID AND ENFORCEABLE, AND THE REMAINDER OF
THIS NOTE SHALL BE CONSTRUED AS IF SUCH ILLEGAL, INVALID, UNLAWFUL, VOID OR
UNENFORCEABLE PORTION, PROVISION OR PROVISIONS WERE SEVERABLE AND NOT CONTAINED
HEREIN, AND THE RIGHTS, OBLIGATIONS AND INTEREST OF THE BORROWER AND HOLDER
HEREOF UNDER THE REMAINDER OF THIS NOTE SHALL CONTINUE IN FULL FORCE AND
EFFECT.

ARTICLE
25USURY.  ALL
TERMS, CONDITIONS AND AGREEMENTS HEREIN ARE EXPRESSLY LIMITED SO THAT IN NO
CONTINGENCY OR EVENT WHATSOEVER, WHETHER BY ACCELERATION OF MATURITY OF THE
UNPAID PRINCIPAL BALANCE HEREOF, OR OTHERWISE, SHALL THE AMOUNT PAID OR AGREED
TO BE PAID TO THE HOLDERS HEREOF FOR THE USE, FORBEARANCE OR DETENTION OF THE
MONEY ADVANCED HEREUNDER EXCEED THE HIGHEST LAWFUL RATE PERMISSIBLE UNDER
APPLICABLE LAWS.  IF, FROM ANY
CIRCUMSTANCES WHATSOEVER, FULFILLMENT OF ANY PROVISION HEREOF SHALL INVOLVE
TRANSCENDING THE LIMIT OF VALIDITY PRESCRIBED BY LAW WHICH A COURT OF COMPETENT
JURISDICTION MAY DEEM APPLICABLE HERETO, THEN IPSO
FACTO, THE OBLIGATION TO BE FULFILLED SHALL BE REDUCED TO THE LIMIT
OF SUCH VALIDITY, AND IF UNDER ANY CIRCUMSTANCES THE HOLDER HEREOF SHALL EVER
RECEIVE AS INTEREST AN AMOUNT WHICH WOULD EXCEED THE HIGHEST LAWFUL RATE, SUCH
AMOUNT WHICH WOULD BE EXCESSIVE INTEREST SHALL BE APPLIED TO REDUCTION OF THE
UNPAID PRINCIPAL BALANCE DUE HEREUNDER AND NOT TO THE PAYMENT OF INTEREST.

ARTICLE
26ASSIGNMENT. 
THE BORROWER MAY NOT TRANSFER, ASSIGN OR DELEGATE ANY OF ITS RIGHTS OR
OBLIGATIONS HEREUNDER.  THIS NOTE SHALL
ACCRUE TO THE BENEFIT OF HOLDER AND ITS SUCCESSORS AND SHALL BE BINDING UPON
THE UNDERSIGNED AND ITS SUCCESSORS. 
HOLDER SHALL HAVE THE RIGHT, WITHOUT THE CONSENT OF THE BORROWER, TO
TRANSFER OR ASSIGN, IN WHOLE OR IN PART, ITS RIGHTS AND INTERESTS IN AND TO
THIS NOTE, PROVIDED SUCH TRANSFER COMPLIES WITH ALL APPLICABLE STATE AND
FEDERAL SECURITIES LAWS.  AS USED HEREIN,
THE TERM “HOLDER” SHALL MEAN AND INCLUDE SUCH
SUCCESSORS AND ASSIGNS.

ARTICLE 27NOTICES.  ANY NOTICES REQUIRED OR PERMITTED TO BE GIVEN
UNDER THE TERMS OF THIS NOTE SHALL BE SENT OR DELIVERED PERSONALLY OR BY
COURIER (INCLUDING A RECOGNIZED, RECEIPTED OVERNIGHT DELIVERY SERVICE) OR BY
FACSIMILE (WITH A COPY SENT BY A RECOGNIZED, RECEIPTED OVERNIGHT DELIVERY
SERVICE) AND SHALL BE EFFECTIVE UPON RECEIPT, IF DELIVERED PERSONALLY OR BY
COURIER (INCLUDING A RECOGNIZED OVERNIGHT DELIVERY SERVICE) OR BY FACSIMILE, IN
EACH CASE ADDRESSED TO A PARTY.  THE
ADDRESSES FOR SUCH COMMUNICATIONS SHALL BE:

If to the Borrower:

Tower Tech Holdings Inc.

100 Maritime Drive, Suite 3C

Manitowoc, Wisconsin 54220

Telephone: (920) 684-5531

Facsimile:  (920)
684-5579

Attention:  Mr. Raymond L. Brickner, III

If to Holder:

Tontine Capital Partners, L.P.

55 Railroad Avenue, 1st Floor

 28
 

Greenwich, Connecticut 06830

Attention: Mr. Jeffrey L. Gendell

Telephone: (203) 769-2000

Facsimile: (203) 769-2010

EACH
PARTY SHALL PROVIDE NOTICE TO THE OTHER PARTY OF ANY CHANGE IN ADDRESS.

ARTICLE
28AMENDMENT. 
THE PROVISIONS OF THIS NOTE MAY BE AMENDED ONLY BY A WRITTEN INSTRUMENT
SIGNED BY THE BORROWER AND HOLDER.

ARTICLE
29GOVERNING LAW. 
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF ALL PARTIES HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF WISCONSIN.

ARTICLE
30JURISDICTION; WAIVER OF JURY TRIAL.  ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS NOTE SHALL BE FILED, TRIED AND LITIGATED IN THE STATE AND
FEDERAL COURTS LOCATED IN WISCONSIN.  THE
BORROWER WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS NOTE, INCLUDING CONTRACT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  THE BORROWER HAS REVIEWED THIS WAIVER AND
KNOWINGLY AND VOLUNTARILY WAIVES THE AFORESAID TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  IN THE
EVENT OF LITIGATION, A COPY OF THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

[Signature page follows]

 29

EXECUTED
AND DELIVERED at Manitowoc, Wisconsin as of the date written below.

	
  

  	
   

  	
  TOWER TECH HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated as of
  [                ],
  2007

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						

 

 A-1

Exhibit B

FORM OF AMENDMENT TO REGISTRATION
RIGHTS AGREEMENT

This AMENDMENT TO REGISTRATION
RIGHTS AGREEMENT (this “Amendment”),
dated as of                   ,
2007, is entered into by and among TOWER TECH HOLDINGS INC., a Nevada
corporation (the “Company”), TONTINE CAPITAL PARTNERS,
L.P., a Delaware limited partnership (“TCP”),
TONTINE CAPITAL OVERSEAS MASTER FUND, L.P., a Cayman Islands Limited
Partnership (“TCOMF”) and [INSERT ADDITIONAL TONTINE PARTIES TO AGREEMENT]
(collectively, the “New  Stockholders”
and together with TCP and TCOMF, the “Stockholders”)).

RECITALS:

A.            The Registration
Rights Agreement dated as of March 1, 2007 (the “Registration
Rights Agreement”), by and among the Company, TCP and TCOMF
provides that pursuant to Section 4.3, it may be amended only with the written
consent of the Company and the Designated Holders of a majority of the
Registrable Securities.

B.            The Company has
agreed to sell 12,500,000 shares of the Company’s Common Stock to the
Stockholders, which sale is being made pursuant to a Securities Purchase
Agreement dated as of August 22, 2007, by and between the Company and the
Stockholders (the “Securities Purchase Agreement”).

C.            It is a condition
precedent to the consummation of the transactions contemplated by the Securities
Purchase Agreement that the Registration Rights Agreement be amended as
provided in this Amendment to (i) extend the period of time that must pass
before the Company must file its initial Registration Statement; and (ii) add
the New Stockholders as parties to the Registration Rights Agreement.

D.            The Company, TCP and
TCOMF desire to amend the Registration Rights Agreement as set forth herein and
the New Stockholders desire to become parties to the Agreement, subject to the
terms of this Amendment.

E.             Capitalized terms
used and not defined in this Amendment are defined in the Registration Rights
Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants and agreements hereinafter contained, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, intending to be legally bound, the parties hereto hereby
agree as follows:

ARTICLE 31

AMENDMENTS TO THE REGISTRATION RIGHTS AGREEMENT

31.1         Amendments
to Registration Rights Agreement.

a.     Article I of the
Registration Rights Agreement is amended by adding at the beginning thereof a
new definition as follows:  “‘Additional Purchasers’ means [Insert New Stockholders], which 

 1
 

purchased shares of
Common Stock pursuant to that certain Securities Purchase Agreement with the
Company dated as of August 22, 2007 (the “Additional SPA”).”.

b.     The definition of “Designated
Holders” set forth in Article I of the Registration Rights Agreement is hereby
amended by deleting it in its entirety and replacing it with the
following:  “‘Designated Holders’ means the Purchasers, the Additional
Purchasers and any qualifying transferees of the Designated Holders under
Section 3.1 hereof who hold Registrable Securities.”.

c.     Clause (a) (i) of the
definition of “Effectiveness Date” set forth in Article I of the Registration
Rights Agreement is hereby amended by deleting he reference to “the 300th day following the Closing Date” and replacing
it with a reference to “180 days from the Filing Date”.

d.     Clause (a) of the
definition of “Filing Date” set forth in Article I of the Registration Rights
Agreement is hereby amended by deleting the reference to “180 days following
the Closing Date” and replacing it with “no later than
                      ,
2007 [NINE MONTHS FOLLOWING CLOSING DATE];
provided that if prior to                       ,
2007 [SAME DATE], the Company
shall file a registration statement for the purpose of registering shares to be
offered in a rights offering, the Company shall file the initial Registration
Statement prior to or contemporaneously with the filing of such rights offering
registration statement”.

e.     Clause (i) of the
definition of “Registrable Securities” is hereby amended by deleting it in its
entirety and replacing it with the following: “shares of Common Stock acquired by the
Purchasers from the Company pursuant to the Securities Purchase Agreement,
shares of Common Stock purchased on the Closing Date from certain stockholders
of the Company pursuant to the Founders Securities Purchase Agreement, shares
of Common Stock acquired by the Purchasers and the Additional Purchasers
pursuant to the Additional SPA and so long as this Agreement is still in
effect, any other shares of Common Stock acquired by the Purchasers and the
Additional Purchasers on or after the Closing Date, including, without
limitation, any shares of Common Stock acquired upon the conversion of the
senior subordinated promissory notes purchased pursuant to the Additional SPA
and any shares of Common Stock acquired pursuant to any rights offering
conducted by the Company.”.

f.      The Registration Rights Agreement is hereby
amended by deleting the reference to “Purchasers” in the definition of “Registration
Statement” and Sections 3.1, 3.2 and 4.2 thereof and replacing it with a
reference to “Designated Holders”.

g.     Section 4.6 of the Registration Rights
Agreement is hereby amended by deleting the reference there to “Purchaser” and
replacing it with “Purchasers and Additional Purchasers”.

31.2         Joinder of New Stockholders.  By execution of this Amendment,
each of the New Stockholders hereby confirms its agreement to be bound by the
Registration Rights Agreement, as amended hereby, and as may be subsequently
amended, restated, revised, supplemented or otherwise modified from time to
time.

ARTICLE 32

MISCELLANEOUS

32.1         Effectiveness.  This Amendment shall be deemed effective as
of the date first written above, as if executed by all parties hereto on such
date.  Except as specifically modified by
the terms set forth herein, the parties hereto acknowledge and agree that the
Registration Rights Agreement is in full force and effect.  All references in the Registration Rights
Agreement to the “Agreement” shall be deemed to refer to the Registration
Rights Agreement as amended by this Amendment.

 2
 

32.2         Further
Assurances.  Each party agrees that,
from time to time upon the written request of the other party, it will execute
and deliver such further documents and do such other acts and things as the
other party may reasonably request to effect the purposes of this Amendment.

32.3         Severability.  Whenever possible, each provision of this
Amendment shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment shall be held to
be prohibited by or invalid wider applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Amendment.

32.4         Counterparts.  This Amendment may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

32.5         Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of
Wisconsin, without regard to the conflicts of laws rules or provisions.

32.6         Captions.  The captions, headings and arrangements used
in this Amendment are for convenience only and do not in any way limit or amplify
the terms and provisions hereof.

32.7         No
Prejudice.  The terms of this
Amendment shall not be construed in favor of or against any party on account of
its participation in the preparation hereof.

32.8         Words
in Singular and Plural Form.  Words
used in the singular form in this Amendment shall be deemed to import the
plural, and vice versa, as the sense may require.

[Signature Page Follows]

 3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Registration Rights Agreement to be duly executed as of the date and year first
written above.

	
   

  	
   

  	
  COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TOWER TECH HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TONTINE CAPITAL PARTNERS, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Tontine Capital Management, LLC, its general

  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffrey L. Gendell, as managing member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TONTINE CAPITAL OVERSEAS MASTER FUND,

  L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Tontine Capital Overseas GP, LLC, its general

  partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Jeffrey L. Gendell, as managing member

  
							

 

 B-1

EXHIBIT C

FORM OF JOINDER TO SECURITIES
PURCHASE AGREEMENT

The undersigned,                                                             , hereby agrees to become a party to, and be bound by, that
certain Securities Purchase Agreement, dated
                ,
2007, among Tower Tech Holdings Inc. (the “Company”)
and the additional signatories thereto (as amended, restated, revised,
supplemented or otherwise modified from time to time, the “Securities Purchase Agreement”),
and the Company agrees to accept the undersigned, as though the undersigned
were a “Buyer” under the Securities
Purchase Agreement.  Upon the execution
of this Joinder by both the undersigned and the Company, the Company and the
undersigned each agree that the undersigned shall be entitled to the rights and
privileges, and be bound by the obligations and shall make the representations
and warranties, of a Buyer under the Securities Purchase Agreement.  This Joinder shall take effect and shall
become an integral part of the Securities Purchase Agreement immediately upon
execution and delivery by both parties hereto. 
This Joinder may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Instrument.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
  TOWER TECH HOLDINGS INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BUYER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [Signature Block]

  
								

 

 C-1

EXHIBIT D

FORM OF LEGAL OPINION

1.  The
Company and each of its Subsidiaries is a corporation, validly existing and in
good standing under the laws of the state of the jurisdiction in which it is
incorporated.  The Company and each of
its Subsidiaries are duly qualified as a foreign corporation to do business and
are in good standing in the State of Wisconsin.

2.  The
Company has all necessary corporate power and authority to execute, deliver and
perform its obligations under each of the Transaction Documents. The execution,
delivery and performance of each of the Transaction Documents have been duly
authorized by all necessary corporate action on the part of the Company.

3.  The
Company has all requisite corporate power and authority to own and operate its property
and to conduct the business in which it is currently engaged.

4.  Each
of the Transaction Documents has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.

5.  Except as
set forth in Section [    ] of the Disclosure Schedules,
the issuance, sale and delivery of the Securities and the execution, delivery
and performance by the Company of the Transaction Documents and the consummation
by the Company of the transactions contemplated thereby do not violate or
result in a breach of or default under the Articles of Incorporation, as
amended, or the Bylaws or any requirement of law that to our knowledge, is
applicable to the performance by the Company of the transactions contemplated
by the Transaction Documents.

6.  To our
knowledge, there are no legal actions, suits, proceedings, or disputes pending
or threatened against, or affecting, the Company, at law, in equity, in arbitration
or before any governmental authority that contest the execution, validity or
performance of the Transaction Documents.

7.  Except for
filings, authorizations or approvals contemplated by the Agreement, to our
knowledge no authorizations or approvals of, and no filings with, any
governmental authority are necessary or required for the execution, delivery or
performance by, or enforcement against, the Company of any of the Transaction
Documents.

8.  The
Securities are duly authorized and, when issued and sold to the Buyers after
payment therefor in accordance with the terms of the Transaction Documents,
will be validly issued, fully paid and non-assessable.

9.  To our knowledge, there are no contractual
preemptive rights, rights of first refusal or similar rights with respect to
the issuance and sale of the Securities.

10.  Assuming
that the representations made by the Buyers in the Agreement are true and
correct and that any required filings are made pursuant to Rule 503 of
Regulation D as promulgated under the Securities Act of 1933, the offering,
sale and issuance of the Securities pursuant to the Agreement
do not require registration under the Securities Act of 1933, as amended and
the rules promulgated thereunder as they currently exist or registration or
qualification under any state securities laws.

 D-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]