Exhibit 10.4
COMMERCIAL SECURITY
AGREEMENT
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Principal
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Loan Date
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Maturity
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Loan No
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Call / Coll 1
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Account
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Officer
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Initials
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$ 10,000,000.00
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04-28-2009
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01-05-2010
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15525078252
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1A2 /101
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Krugeg
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References in the boxes above are
for Lender’s use only and do not limit the applicability of
this document to any particular loan or item. Any item above
containing “***” has been omitted due to text length
limitations.
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Grantor:
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TOWER TECH SYSTEMS
INC
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Lender:
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GREAT WESTERN BANK
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101 S 16TH ST PO BOX
1957
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Sioux Falls
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MANITOWOC,
Wl 54221-1957
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200 E 10th Street
Sioux Falls, SD 57104
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THIS COMMERCIAL SECURITY
AGREEMENT dated April 28, 2009, is made and executed between
TOWER TECH SYSTEMS INC (“Grantor”) and GREAT WESTERN
BANK (“Lender”).
GRANT OF SECURITY INTEREST. For
valuable consideration, Grantor grants to Lender a security
interest in the Collateral to secure the Indebtedness and agrees
that Lender shall have the rights stated in this Agreement with
respect to the Collateral, in addition to all other rights which
Lender may have by law.
COLLATERAL
DESCRIPTION. The word
“Collateral” as used in this Agreement means the
following described property, whether now owned or hereafter
acquired, whether now existing or hereafter arising, and wherever
located, in which Grantor is giving to Lender a security interest
for the payment of the Indebtedness and performance of all other
obligations under the Note and this Agreement:
All Fixtures
In addition, the word
“Collateral” also includes all the following, whether
now owned or hereafter acquired, whether now existing or hereafter
arising, and wherever located:
(A) All accessions,
attachments, accessories, tools, parts, supplies, replacements of
and additions to any of the collateral described herein, whether
added now or later.
(B) All products and
produce of any of the property described in this Collateral
section.
(C) All accounts, general
intangibles, instruments, rents, monies, payments, and all other
rights, arising out of a sale, lease, consignment or other
disposition of any of the property described in this Collateral
section.
(D) All proceeds
(including insurance proceeds) from the sale, destruction, loss, or
other disposition of any of the property described in this
Collateral section, and sums due from a third party who has damaged
or destroyed the Collateral or from that party’s insurer,
whether due to judgment, settlement or other process.
(E) All records and data
relating to any of the property described in this Collateral
section, whether in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of
Grantor’s right, title, and interest in and to all computer
software required to utilize, create, maintain, and process any
such records or data on electronic media.
Some or all of the Collateral may be
located on the following described real estate:
LOT 3 IN BLOCK 1 OF CORSON
DEVELOPMENT PARK ADDITION TO THE CITY OF BRANDON, MINNEHAHA COUNTY,
SOUTH DAKOTA, ACCORDING TO THE RECORDED PLAT
THEREOF.
CROSS-COLLATERALIZATION. In addition to the Note, this Agreement secures
all obligations, debts and liabilities, plus interest thereon, of
Grantor to Lender, or any one or more of them, as well as all
claims by Lender against Grantor or any one or more of them,
whether now existing or hereafter arising, whether related or
unrelated to the purpose of the Note, whether voluntary or
otherwise, whether due or not due, direct or indirect, determined
or undetermined, absolute or contingent, liquidated or
unliquidated, whether Grantor may be liable individually or jointly
with others, whether obligated as guarantor, surety, accommodation
party or otherwise, and whether recovery upon such amounts may be
or hereafter may become barred by any statute of limitations, and
whether the obligation to repay such amounts may be or hereafter
may become otherwise unenforceable.
FUTURE ADVANCES.
In addition to the Note, this
Agreement secures all future advances made by Lender to Grantor
regardless of whether the advances are made a) pursuant to a
commitment or b) for the same purposes.
RIGHT OF SETOFF.
To the extent permitted by
applicable law, Lender reserves a right of setoff in all
Grantor’s accounts with Lender (whether checking, savings, or
some other account). This includes all accounts Grantor holds
jointly with someone else and all accounts Grantor may open in the
future. However, this does not include any IRA or Keogh accounts,
or any trust accounts for which setoff would be prohibited by law.
Grantor authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.
GRANTOR’S REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With respect to the Collateral,
Grantor represents and promises to Lender that:
Perfection of Security
Interest. Grantor agrees
to take whatever actions are requested by Lender to perfect and
continue Lender’s security interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of
the documents evidencing or constituting the Collateral, and
Grantor will note Lender’s interest upon any and all chattel
paper and instruments if not delivered to Lender for possession by
Lender. This is a continuing Security Agreement and will
continue in effect even though all or any part of the Indebtedness
is paid in full and even though for a period of time Grantor may
not be indebted to Lender.
Notices to Lender.
Grantor will promptly notify Lender
in writing at Lender’s address shown above (or such other
addresses as Lender ma designate from time to time) prior to any
(1) change in Grantor’s name; (2) change in
Grantor’s assumed business name(s); (3) change in
the management of the Corporation Grantor; (4) change in
the authorized signer(s); (5) change in Grantor’s
principal office address; (6) change in Grantor’s
state of organization; (7) conversion of Grantor to a new
or different type of business entity; or (8) change
in any other aspect of Grantor that directly or indirectly relates
to any agreements between Grantor and Lender. No change in
Grantor’s name or state of organization will take effect
until after Lender has received notice.
No Violation.
The execution and delivery of this
Agreement will not violate any law or agreement governing Grantor
or to which Grantor is a party, and its certificate or articles of
incorporation and bylaws do not prohibit any term or condition of
this Agreement.
Enforceability of
Collateral. To the extent
the Collateral consists of accounts, chattel paper, or general
intangibles, as defined by the Uniform Commercial Code, the
Collateral is enforceable in accordance with its terms, is genuine,
and fully complies with all applicable laws and regulations
concerning form, content and manner of preparation and execution,
and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as
they appear to be on the Collateral. There shall be no setoffs or
counterclaims against any of the Collateral, and no agreement shall
have been made under which any deductions or discounts may be
claimed concerning the Collateral except those disclosed to Lender
in writing.
Location of the
Collateral. Except in the
ordinary course of Grantor’s business, Grantor agrees to keep
the Collateral at Grantor’s address shown above or at such
other locations as are acceptable to Lender. Upon Lender’s
request, Grantor will deliver to Lender in form satisfactory to
Lender a schedule of real properties and Collateral locations
relating to Grantor’s operations, including without
limitation the following: (1) all real property Grantor owns
or is purchasing; (2) all real property Grantor is renting or
leasing; (3) all storage facilities Grantor owns, rents, leases, or
uses; and (4) all other properties where Collateral is or may
be located.
Removal of the
Collateral. Except in the
ordinary course of Grantor’s business, Grantor shall not
remove the Collateral from its existing location without
Lender’s prior written consent. Grantor shall, whenever
requested, advise Lender of the exact location of the
Collateral.
Transactions Involving
Collateral. Except for
inventory sold or accounts collected in the ordinary course of
Grantor’s business, or as otherwise provided for in this
Agreement, Grantor shall not sell, offer to sell, or otherwise
transfer or dispose of the Collateral. Grantor shall not pledge,
mortgage, encumber or otherwise permit the Collateral to be subject
to any lien, security interest, encumbrance, or charge, other than
the security interest provided for in this Agreement, without the
prior written consent of Lender. This includes security interests
even if junior in right to the security interests granted under
this Agreement. Unless waived by Lender, all proceeds from any
disposition of the Collateral (for whatever . reason)
shall be held in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall not
constitute consent by Lender to any sale or other disposition. Upon
receipt, Grantor shall immediately deliver any such proceeds to
Lender.
Title. Grantor represents and warrants to Lender that
Grantor holds good and marketable title to the Collateral, free and
clear of all liens and encumbrances except for the lien of this
Agreement. No financing statement covering any of the Collateral is
on file in any public office other than those which reflect the
security interest created by this Agreement or to which Lender has
specifically consented. Grantor shall defend Lender’s rights
in the Collateral against the claims and demands of all other
persons.
Repairs and
Maintenance. Grantor
agrees to keep and maintain, and to cause others to keep and
maintain, the Collateral in good order, repair
