UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 26, 2007
 
TOWER TECH HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction
of incorporation)	 	 
0-31313
(Commission
File Number)	 	 
88-0409160
(IRS Employer
Identifica­tion No.)	

100 Maritime Drive, Suite 3C, Manitowoc, Wisconsin 54220
(Address of principal executive offices) (Zip Code)
 
(920) 684-5531
Registrant’s telephone number, including area code
 
Not applicable
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01	Entry into a Material Definitive Agreement	
 
On February 26, 2007, Tower Tech Holdings Inc. (“Tower Tech”) entered into an employment agreement with Raymond L. Brickner III, its President and Chief Operating Officer. The term of the agreement commences March 1, 2007 and terminates February 28, 2010, but may be terminated earlier (i) by Tower Tech upon 30 days’ notice, (ii) upon the mutual consent of Tower Tech and Mr. Brickner, or (iii) by either Tower Tech or Mr. Brickner upon the material breach or violation of the terms of the agreement. The agreement contains a covenant not to compete for two years after the termination of the agreement, but allows Mr. Brickner to participate in activities with his company, RBA, Inc., so long as such activities do not compete with Tower Tech. The agreement provides for an annual base salary of $150,000.
 
On March 1, 2007, Tower Tech entered into a Securities Purchase Agreement (the “Agreement”) with two accredited investors (the “Investors”) pursuant to which Tower Tech agreed to sell, and the Investors agreed to purchase 10,266,667 shares of Tower Tech common stock for a total investment of $15,400,000. Proceeds of the financing will be used to reduce debt, to purchase equipment, and for working capital and general corporate purposes.
 
Tower Tech has agreed to file a registration statement with the Securities and Exchange Commission in order to register the resale of the shares that were issued to the Investors, pursuant to the terms of a Registration Rights Agreement dated March 1, 2007.
 
In addition, Tower Tech agreed that (i) for so long as the Investors or their affiliates hold at least 10% of the issued and outstanding common stock, the Investors shall have the right to appoint two members of Tower Tech’s Board of Directors, and (ii) it would not revoke its approval of the acquisition of up to 35% of the common stock on a fully diluted basis by the Investors (the “Covenants”).
 
This summary description of the financing does not purport to be complete and is qualified in its entirety by reference to the Securities Purchase Agreement and Registration Rights Agreement, which are filed as exhibits hereto.
 
Item 1.02	Termination of a Material Definitive Agreement	
 
By letter agreement dated March 1, 2007, Tower Tech terminated the Investment Agreement dated as of June 27, 2006 with Dutchess Private Equities Fund, L.P. (“Dutchess”) and the Registration Agreement with Dutchess dated June 27, 2006. Under the Investment Agreement, Dutchess had committed to purchase up to $15,000,000 of Tower Tech’s common stock over the course of 24 months pursuant to requests made by Tower Tech based upon the trading price and trading volume of the common stock, once Tower Tech had filed a registration statement covering the shares of common stock underlying the Investment Agreement.
 
Since the registration statement had not been filed and Dutchess had not purchased any securities under the Investment Agreement, Tower Tech and Dutchess mutually agreed to terminate these agreements.
 
Item 3.02	Unregistered Sales of Equity Securities	
 
As disclosed above, Tower Tech sold 10,266,667 shares of its common stock for $15,400,000 to two accredited investors in reliance on the exemption from registration contained in Section 4(2) of the Securities Act of 1933. No underwriters, placement agents or finders were used in this transaction. The
 
2

Investors were accredited investors and deemed to be sophisticated with respect to the investment in the securities due to their financial condition and business experience. Restrictive legends were placed on the certificates evidencing the securities issued.
 
In addition, Tower Tech issued a total of 722,297 shares of its common stock as repayment of $1,083,447 of debt owed to its officers and directors as follows:
 
Name	Amount of Debt	Number of Shares	
Raymond L. Brickner III	$258,500	172,333	
Christopher C. Allie	$247,826	165,217	
Daniel P. Wergin	$325,608	217,072	
Terence P. Fox	$251,513	167,675	
TOTAL	$1,083,447	722,297	

Item 5.01	Changes in Control of Registrant	
 
Among the conditions to the closing of the stock purchase described in Item 1.01 above were the following:
 
 	•	Investors receiving irrevocable proxies from Christopher C. Allie, Raymond L. Brickner III, Terence P. Fox and Daniel P. Wergin (the “Founders”) with respect to enforcing the Investors’ rights under the Covenants described in Item 1.01 above; and	
 	•	Investors having entered into a securities purchase agreement with each of the Founders for the purchase of 600,000 shares from each of the Founders, for a total of 2,400,000 shares, at $1.50 per share.	
 
As a result of these transactions, the Investors, Tontine Capital Partners, L.P., a Delaware limited partnership, and its affiliate, Tontine Capital Overseas Master Fund, L.P., a Cayman Islands limited partnership, own 10,133,334 shares and 2,533,333 shares of record, respectively, which constitute 21.2% and 5.3%, respectively, of the issued and outstanding shares of common stock. The proxies give the Investors voting control over 30,738,964 shares, or 64.4% of Tower Tech’s issued and outstanding shares of common stock with respect to enforcing the Investors’ rights under the Covenants.
 
The Investors also entered into a letter agreement with each of the Founders, Samuel W. Fairchild, and Integritas Inc. (the “Stockholders”) which grants the Investors, with respect to the Tower Tech shares owned by the Stockholders and certain of their trusts, (i) a right of first offer in the event a Stockholder wishes to transfer such shares and (ii) a right of first refusal in the event a Stockholder receives an unsolicited offer from a third party to purchase any of such shares.
 
Item 5.02	Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers	
 
On February 26, 2007, Samuel W. Fairchild resigned as the Chief Executive Officer of Tower Tech effective as of that date and resigned as a director effective March 5, 2007.

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Item 9.01	Financial Statements and Exhibits	
 
Regulation
S-B Number	Document	
10.1	Employment Agreement with Raymond L. Brickner III dated February 26, 2007	
10.2	Securities Purchase Agreement dated March 1, 2007 between Tower Tech Holdings Inc. and the Buyers named therein	
10.3	Registration Rights Agreement dated March 1, 2007	
99.1	Press Release dated March 2, 2007	

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	TOWER TECH HOLDINGS INC.	

March 2, 2007	 
 
By:         /s/ Terence P. Fox  
Terence P. Fox, Secretary and General
Counsel	

 
4

 
EXHIBIT 10.1
EMPLOYMENT AGREEMENT WITH RAYMOND L. BRICKNER III
DATED FEBRUARY 26, 2007
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 26th day of February, 2007, by and between Tower Tech Holdings, Inc., a Nevada corporation ("TOWER TECH") and Raymond L. Brickner, III, President and Chief Operating Officer ("President").
RECITALS
TOWER TECH is a Nevada corporation which operates a wind support structure fabrication and production business in the City of Manitowoc, Wisconsin.
The President is qualified, among other things, to manage and control the business through supervising production, administration and management personnel; oversee the purchase and integration of additional machinery and equipment and increase production from current levels to four hundred and fifty
(450) or more wind support structures per year, President is also able to assist TOWER TECH to become more efficient in its operations through implementing new programs, improving production facilities and recruiting qualified personnel, and pursue and do those other things necessary as directed by TOWER TECH; and
It is the desire of the parties to enter into an employment agreement for the purpose of establishing the terms and conditions of the employment of President by TOWER TECH.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, the parties agree as follows:
I. EMPLOYMENT
1.1 OFFER AND ACCEPTANCE. TOWER TECH hereby offers to employ President and President hereby accepts employment to serve as a President in the business operated by TOWER TECH on an uninterrupted basis unless and until terminated as provided herein, subject to and in accordance with the terms and conditions set forth in this Agreement.
1.2 PRESIDENT'S DUTIES. President's principal duties are to provide the services to TOWER TECH as enumerated on exhibit "A" attached hereto, and as may be amended from time to time, and those duties as designated by TOWER TECH. President agrees to perform his services as directed by TOWER TECH. President will perform all duties required by the attached job description and advise to the administrative policies existing now or as amended from time to time.
1.3 PRESIDENT TO DEVOTE FULL-TIME AND BEST EFFORTS. President shall devote his time, attention, effort, skill and energies to the performance of the duties hereunder on a full-time and exclusive basis. It is the policy of TOWER TECH that any employee of TOWER TECH shall not engage in any outside activity which TOWER TECH determines reflects negatively on TOWER TECH or creates an appearance of a conflict of interest, without TOWER TECH's prior written consent. President acknowledges and agrees to comply with this policy.
1.4 CONDUCT. President shall exercise his own professional judgment in dispensing his duties provided, however, that TOWER TECH's Officers and/or Board of Directors may recommend, review, amend and revise policies and procedures for TOWER TECH personnel.
II. TERM.
2.1 The term of this Agreement shall commence on or about March 1, 2007. The length of said term shall terminate on or about February 28, 2010 subject to the provisions contained in Section VI hereof. In order for the President's term to commence March 1, 2007, President shall first comply with the provisions contained in Section III.
III. REQUIREMENTS
3.1 RESIDENCE REQUIREMENT. As an express condition of employment, President shall be a resident of Manitowoc County.
3.2 PRESIDENT REQUIREMENTS. Left blank to fill in with additional requirements for President to fulfill.
3.3 ADDITIONAL REQUIREMENTS. As an express condition of employment, President shall maintain certification in all disciplines and professional associations necessary to fulfill his duties. TOWER TECH will pay for all course fees and materials.
3.4 LICENSURE/BACKGROUND. As an express condition of employment, as and to the extent required by TOWER TECH and the State of Wisconsin, President shall meet all requirements of TOWER TECH and the State of Wisconsin for the position, submit education records as requested by TOWER TECH, results of a physical and/or psychological examination/evaluation, drug and/or alcohol testing as requested by TOWER TECH; cooperate with any person or entity performing a background check on President; or any other requirements as reasonably requested by TOWER TECH.
IV. COMPENSATION
4.1 COMPENSATION. For all services rendered by President pursuant to this Agreement, TOWER TECH shall pay President a base salary of One hundred fifty thousand and 00/100ths Dollars ($150,000.00) per year for one (1) year. TOWER TECH will pay supplemental and bonus compensation to the President as the parties may mutually agree and as may be commensurate with industry standards, including stock options, stock bonus plans and the like as may be offered by the company to its executives.
4.2 PROFESSIONAL DEVELOPMENT. TOWER TECH will provide President funds for professional development during the term of this agreement. The availability and use of said funds shall be upon request of President and approved at the sole discretion of the members and/or Board of Directors.
4.3 BENEFITS. President is entitled to receive benefits as follows:
4.3.1 Health insurance and associated benefits as offered by the company;
4.3.2 Vacation and personal leave time as may be mutually agreed and as is commensurate with industry standards.
4.3.3 Vehicle allowance as may be agreed upon by the parties, not to exceed $1,000.00 per month.
V. OBLIGATIONS OF PRESIDENT
5.1 STANDARD OF PERFORMANCE. President shall provide the services specified in Article I of this Agreement within the limits of his training and experience. President shall follow all procedures outlined in TOWER TECH EMPLOYEES MANUAL as amended by TOWER TECH, as well as Job Description.
5.2 PRESIDENT CONDUCT. President shall at all times during his employment by TOWER TECH: (1) comply with all TOWER TECH employment policies applicable to President; (2) comply with all reasonable directions and orders of TOWER TECH; and (3) not use or disclose, except at TOWER TECH's direction, any confidential information relating to TOWER TECH or any students of TOWER TECH, except that information that may be disclosed in accord with the provisions of the Wisconsin Statutes and Section 5.4 of this Agreement.
5.3 CONFIDENTIALITY. President acknowledges that in the course of his employment with TOWER TECH, President will regularly receive and assist in compiling valuable confidential information about TOWER TECH programs, business practices and plans ("Confidential Information"). President recognizes that all such Confidential Information is the property of TOWER TECH, and that during and for two (2) years after the termination of his employment, or for so long as the Confidential Information does not become public knowledge through no fault of President, whichever is shorter, President will not use, disclose or reproduce Confidential Information under circumstances that could forseeably result in use of the Confidential Information in competition with TOWER TECH in Manitowoc, Sheboygan, Brown, Kewaunee or Door Counties, Wisconsin. This provision does not restrict President's use of Confidential Information for the purpose of fulfilling President's obligations under this Agreement or as otherwise directed by TOWER TECH. President shall not have any rights to such Confidential Information or to copies thereof except as may be required by law or by contract.
5.4 RECORDS. President shall prepare all records in accordance with TOWER TECH procedures as amended from time to time. All TOWER TECH records are confidential and may not be disclosed by President without the appropriate authorization by TOWER TECH.
VI. TERMINATION
6.1 TERMINATION. This Agreement may terminate at the option of TOWER TECH if any of the following events occur:
6.1.1 By TOWER TECH or with TOWER TECH's consent by a majority vote of the members of TOWER TECH's or their Board of Directors, without cause, if it shall provide written notice to President at least thirty
(30) days prior to the date of termination.

                         6.1.2    At any time upon the mutual written agreement
of the parties.

                         6.1.3    By either party, upon the material breach or	

violation of the terms of this Agreement by the other party, provided the breaching party has been given written notice specifying the nature of the breach or violation and a period of thirty (30) days in which to cure such breach or violation, except that TOWER TECH may immediately terminate President (and/or exercise its rights under Section 6.1.1 hereof):
(a) Reserved;
(b) Except as permitted by law, if it is concluded that President has made any false and derogatory statements about or concerning TOWER TECH or any of their members or board members;
(c) Upon a finding by a court of law or the TOWER TECH Board of Directors or members that President is guilty of fraud, dishonesty or this acts of misconduct in the rendering of services for TOWER

TECH; or

                         6.1.4    Upon the death or permanent total disability
of President.

                         6.1.5    President shall not be entitled to payment for	

unused vacation time or sick leave in the event of termination.
VII. RESTRICTIVE COVENANT
7.1 COVENANT NOT TO COMPETE AND NOT TO SOLICIT. President recognizes that TOWER TECH has and is investing much time, effort and funds in helping President develop certain management and training programs as well as the growth and development of the business and that TOWER TECH would incur significant damage if President were allowed to compete with TOWER TECH after receiving such assistance and before TOWER TECH has a reasonable opportunity to recruit another President to develop a similar management and growth models and methods. Therefore, President agrees that upon termination of his employment with TOWER TECH for any reason, and for a period of two (2) years thereafter, he shall not:
(a) own, operate, finance, control consult or advise participate in the ownership, management or control of , work for or acquire any securities of any entity, firm,
business, activity or enterprise
which is engaged in the business of fabricating or producing wind energy support structures, both for himself and/or others, located anywhere within United States for two (2) years. President shall be permitted to participate in activities with RBA, Inc., so long as those activities do not interfere with his duties at Tower Tech, nor compete with Tower Tech's product lines, including manufacturing of wind towers, support structures and/or any other Tower Tech related components.. And
(b) solicit customers or clients within the United States, regardless of the location from which the President is soliciting, during such two (2) year period.
(c) Solicit or seek to cause any employee of TOWER TECH or any of its subsidiaries or affiliates, independent contractor contracted with TOWER TECH or such subsidiaries or affiliates, as President or President's assistant or otherwise modify his or his employment or contractual relationship with the TOWER TECH or such subsidiary or affiliate for the purpose of entering into an employment, contractual or other relationship with President or any entity, firm, business, activity or enterprise with which President is directly or indirectly affiliated.
7.2 In the event TOWER TECH is forced to employ legal counsel to enforce the obligations imposed on President under Section 7 in any court of law, President shall reimburse and indemnify TOWER TECH for the actual costs incurred by TOWER TECH in said enforcement, including but not limited to attorneys fees at the actual hourly rate customarily charged by TOWER TECH's counsel for the time reasonably spent in enforcement activity.
VIII. MISCELLANEOUS
8.1 ENTIRE AGREEMENT. This Agreement supersedes all prior agreements between or affecting President and President's relationship with TOWER TECH. Anything not set forth herein or specifically referenced herein shall have no force or effect.
8.2 WRITTEN SIGNED AGREEMENT. Presentation of this Agreement to President does not constitute an offer or commitment. There is only a commitment for employment if and when a written employment agreement is signed by TOWER TECH and President. President acknowledges there is no basis to rely on oral statements or an unsigned draft of a written document. President recognizes and agrees all agreements concerning employment of President by TOWER TECH are in writing, signed by the parties. This Agreement may only be amended in writing and in a document signed by both parties.
8.3 VENUE. Any controversy arising under, or relating to any matter under Section 7 shall be determined by the Wisconsin Circuit Court for Manitowoc County, or in the event of an appeal, or petition for review by certiorari, by such court having jurisdiction to review the decisions of the Wisconsin Circuit for Manitowoc County, and the parties agree not to present any such controversy to any other court or forum, or in any other venue. The parties consent to the jurisdiction of the Wisconsin Circuit Court for Manitowoc County, to the fullest extent permitted by law, President agrees to a trail by the court (with a judge as finder of fact) with respect to any dispute involving this Agreement.
IN WITNESS WHEREOF, this Employment Agreement, consisting of six (6) typewritten pages, has been executed by the parties as of the date first above recorded.
PRESIDENT

 /s/ RAYMOND L. BRICKNER, III
----------------------------------------
*RAYMOND L. BRICKNER, III	

TOWER TECH HOLDINGS, INC.

 /s/ SAMUEL FAIRCHILD
----------------------------------------
*SAMUEL FAIRCHILD
ITS: CHIEF EXECUTIVE OFFICER	

DRAFTED BY:
 Attorney Terence P. Fox
Kummer, Lambert & Fox, LLP
927-A South Eighth Street
Manitowoc, WI 54221-1180
(920) 683-5499
 
EXHIBIT 10.2
SECURITIES PURCHASE AGREEMENT DATED MARCH 1, 2007
BETWEEN TOWER TECH HOLDINGS INC. AND THE
BUYERS NAMED THEREIN
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
TONTINE CAPITAL PARTNERS, L.P.,
TONTINE CAPITAL OVERSEAS MASTER FUND, L.P.
AND
TOWER TECH HOLDINGS INC.
MARCH 1, 2007
TABLE OF CONTENTS

                                                                            PAGE

ARTICLE 1  Definitions.........................................................1

ARTICLE 2  Purchase and Sale of Shares.........................................3

  2.1   Purchase of Shares.....................................................3
  2.2   Purchase Price and Form of Payment; Delivery...........................3
  2.3   Closing Date...........................................................3

ARTICLE 3  Buyers' Representations and Warranties..............................3

  3.1   Organization and Qualification.........................................3
  3.2   Authorization; Enforcement.............................................3
  3.3   Securities Matters.....................................................4
  3.4   Information............................................................4
  3.5   Restrictions on Transfer...............................................4

ARTICLE 4  Representations and Warranties of the Company.......................5

  4.1   Organization and Qualification.........................................5
  4.2   Authorization; Enforcement.............................................5
  4.3   Capitalization; Valid Issuance of Shares...............................5
  4.4   No Conflicts...........................................................6
  4.5   SEC Documents; Financial Statements....................................7
  4.6   Absence of Certain Changes.............................................7
  4.7   Absence of Litigation..................................................8
  4.8   Patents, Copyrights....................................................8
  4.9   Tax Status.............................................................8
  4.10  Permits; Compliance....................................................8
  4.11  Environmental Matters..................................................9
  4.12  Title to Property.....................................................10
  4.13  No Investment Company or Real Property Holding Company................10
  4.14  No Brokers............................................................10
  4.15  Registration Rights...................................................10
  4.16  Exchange Act Registration.............................................10
  4.17  Labor Relations.......................................................10
  4.18  Transactions with Affiliates and Employees............................10
  4.19  Insurance.............................................................11
  4.20  Approved Acquisitions of Shares; No Anti-Takeover Provisions..........11
  4.21  ERISA.................................................................11
  4.22  Intentionally Omitted.................................................11
  4.23  Disclosure............................................................11

ARTICLE 5  Covenants..........................................................12

  5.1   Form D; Blue Sky Laws.................................................12
  5.2   Use of Proceeds.......................................................12
  5.3   Expenses..............................................................12
  5.4   No Integration........................................................12
  5.5   Board Designee(s).....................................................12

                                       i	

  5.6   Observation Rights....................................................12
  5.7   Participation in Future Issuances.....................................13
  5.8   Future Acquisitions...................................................13

ARTICLE 6  Conditions To The Company's Obligation.............................13

  6.1   Delivery of Transaction Documents.....................................14
  6.2   Payment of Purchase Price.............................................14
  6.3   Representations and Warranties........................................14
  6.4   Litigation............................................................14

ARTICLE 7  Conditions to The Buyers' Obligation...............................14

  7.1   Delivery of Transaction Documents; Issuance of Shares.................14
  7.2   Representations and Warranties........................................14
  7.3   Consents..............................................................14
  7.4   Litigation............................................................14
  7.5   Opinion...............................................................15
  7.6   No Material Adverse Change............................................15
  7.7   Intentionally Omitted.................................................15
  7.8   Irrevocable Proxy.....................................................15
  7.9   Additional Buyer Agreements...........................................15
  7.10  Brickner Employment Agreement.........................................15
  7.11  Conversion of Debt....................................................15

ARTICLE 8  Indemnification....................................................15

  8.1   Indemnification by the Company........................................15
  8.2   Notification..........................................................15

ARTICLE 9  Governing Law; Miscellaneous.......................................16

  9.1   Governing Law.........................................................16
  9.2   Counterparts; Electronic Signatures...................................16
  9.3   Headings..............................................................16
  9.4   Severability..........................................................16
  9.5   Entire Agreement; Amendments..........................................17
  9.6   Notices...............................................................17
  9.7   Successors and Assigns................................................18
  9.8   Third Party Beneficiaries.............................................18
  9.9   Publicity.............................................................18
  9.10  Further Assurances....................................................18
  9.11  No Strict Construction................................................18
  9.12  Rights Cumulative.....................................................19
  9.13  Survival..............................................................19
  9.14  Knowledge.............................................................19	

ii
SECURITIES PURCHASE AGREEMENT
This SECURITIES PURCHASE AGREEMENT, dated as of March 1, 2007, is entered into by and among TOWER TECH HOLDINGS INC., a Nevada corporation (the "COMPANY"), and the investors identified on the signature page hereto (each a "BUYER" and collectively, the "BUYERS").
RECITALS:
A. 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;

         B.       The Buyers desire to purchase and the Company desires to issue
and sell, upon the terms and conditions set forth in this Agreement,  10,266,667
shares of common stock, $0.001 par value per share of the Company; and	

C. Contemporaneous with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement, in the form attached hereto as EXHIBIT A, 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.
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 SEC DOCUMENTS" has the meaning set forth in SECTION 3.4.
"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 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.
"CLOSING" has the meaning set forth in SECTION 2.3.
"CLOSING DATE" has the meaning set forth in SECTION 2.3.
"COMMON STOCK" means the Company's common stock, $0.001 par value per share.
1
10.2-Securities Purchase Agreement (Tower Tech) (2).DOC
"COMPANY" has the meaning set forth in the preamble.
"ENVIRONMENTAL LAWS" has the meaning set forth in SECTION 4.11.
"ERISA" has the meaning set forth in SECTION 4.21.
"FOUNDERS" has the meaning set forth in SECTION 7.8.
"FOUNDERS SPA" has the meaning set forth in SECTION 7.9.
"FUTURE OFFERING" has the meaning set forth in SECTION 5.7.
"HAZARDOUS MATERIALS" has the meaning set forth in SECTION 4.11.
"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.
"LETTER AGREEMENT" has the meaning set forth in SECTION 7.9.
"MATERIAL ADVERSE EFFECT" means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company.
"NRS" has the meaning set forth in SECTION 4.20.
"OBSERVATION RIGHTS" has the meaning set forth in SECTION 5.6.
"OBSERVER" has the meaning set forth in SECTION 5.6.
"OFFERING NOTICE" has the meaning set forth in SECTION 5.7.
"PERMITS" has the meaning set forth in SECTION 4.10.
"PURCHASE PRICE" means a price of $1.50 per share for the Shares to be issued and sold to the Buyers at the Closing.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement executed and delivered contemporaneously with this Agreement 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.
"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.
2
10.2-Securities Purchase Agreement (Tower Tech) (2).DOC
"SHARES" means the 10,266,667 shares of Common Stock being issued and sold under this Agreement.
"SUBSIDIARIES" means with respect to the Company, Tower Tech Systems, Inc, a Wisconsin corporation.
"TRANSACTION DOCUMENTS" means this Agreement, the Registration Rights Agreement, and any other documents contemplated by this Agreement.
"TRANSFER INSTRUCTIONS" has the meaning set forth in SECTION 2.2.
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 each Buyer shall purchase from the Company the number of Shares as is set forth below such Buyer's name on the signature page hereto.
2.2 PURCHASE PRICE AND FORM OF PAYMENT; DELIVERY. On the Closing Date each Buyer shall pay $1.50 per share for the Shares to be issued and sold to it at the Closing, for a total price of $15,400,000. 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 therefore by the Buyers, 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.
2.3 CLOSING DATE. Subject to the satisfaction (or written waiver) of the conditions set forth in ARTICLE 6 and ARTICLE 7 below, the closing of the transactions contemplated by this Agreement shall be held on March 1, 2007, or such other time as may be mutually agreed upon by the parties to this Agreement (the "CLOSING DATE"), at the offices of Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP, 333 West Wacker Drive, Suite 2700, 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").
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 the signature page 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 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 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 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
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bankruptcy, insolvency, reorganization, 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 Shares 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 Shares.
b. Such Buyer is purchasing the Shares 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 Shares. Such Buyer understands that its investment in the Shares 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 Shares.
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 year ended December 31, 2005, the Company's quarterly reports on Form 10-QSB for the three most recently concluded interim periods and the Company's Current Reports on Form 8-K or Form 8-K/A filed in 2006 (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 SEC DOCUMENTS"), and (ii) 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 Shares, and (iii) 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 Shares.
3.5 RESTRICTIONS ON TRANSFER. Such Buyer understands that except as provided in the Registration Rights Agreement, the issuance of the Shares 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 Shares indefinitely and the Shares may not be transferred unless (i) the Shares 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 Shares 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 Shares has been registered under the 1933 Act as contemplated by the Registration Rights Agreement or otherwise may be sold pursuant to an exemption from registration, certificates evidencing the Shares may bear a restrictive
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legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates evidencing such Shares):
"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 Shares, 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 Shares) 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 SHARES. As of the date hereof, the authorized capital stock of the Company consists of 100,000,000 shares of Common Stock, of which 37,457,797 shares are issued and outstanding, and no shares are held by the Company as treasury shares, and 10,000,000 shares of preferred stock, of which no shares are issued and outstanding. All of such outstanding shares of
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Common Stock are duly authorized, validly issued, fully paid and nonassessable. The Shares 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 or any other similar 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) that will be triggered by the issuance of the Shares. 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 Shares) 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). 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 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.
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4.5 SEC DOCUMENTS; FINANCIAL STATEMENTS.
a. Except as set forth on SCHEDULE 4.5, since December 31, 2004, 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, 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 September 30, 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
4.6 ABSENCE OF CERTAIN CHANGES. Except with respect to the transactions contemplated hereby and by each of the other Transaction Documents, since December 31, 2005, (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
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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 PATENTS, COPYRIGHTS. 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 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
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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, 2005, 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 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
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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 Shares 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.
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, 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 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, terminating the registration of the Common Stock.
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 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.
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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. Subject to and contingent on the Buyer's covenant in SECTION 5.8, 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 Shares 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 35% of the then-outstanding Common Stock. 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 Shares and the Buyers' ownership of the Shares and Buyers' acquisition in the future of additional shares of Common Stock until such time as the Buyers own 35% of the then-outstanding Common Stock. 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 ss.78.411 through ss.78.444 of the NRS.
4.21 ERISA. Based upon the Employee Retirement Income Security Act of 1974 ("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, 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 INTENTIONALLY OMITTED.
4.23 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
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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 Shares 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 Shares to repay the Company's outstanding indebtedness as set forth in SCHEDULE 5.2. Any remaining proceeds from the sale of the Shares may be used by the Company to purchase equipment, as working capital and for general corporate purposes.
5.3 EXPENSES. At the Closing, the Company shall reimburse the Buyers for all reasonable expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other Transaction Documents and its due diligence review of the Company, 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 Shares) under circumstances that would require registration of the Shares being offered or sold hereunder under the 1933 Act or cause the offering of the Shares 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 Shares 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 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. Notwithstanding anything to the contrary contained in this Agreement, the Articles of Incorporation, as amended, of the Company, or the Bylaws of the Company, as amended, 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 seven directors.
5.6 OBSERVATION RIGHTS. In addition to the rights to nominate two directors provided in SECTION 5.5, for such time as the Buyers or their affiliates continue to hold at least 10% of the total issued and outstanding Common Stock, the Company and its Subsidiaries shall extend Observation Rights (as defined below) to Buyers or their affiliates. For purposes of this Section, the term "OBSERVATION RIGHTS" shall mean the right of Buyers or their affiliates to have a representative (an "OBSERVER") attend as an observer all meetings (including telephonic meetings) of the Boards of Directors of the Company and its Subsidiaries and their respective committees. The Observer shall receive prior written notice of all meetings of the Boards of Directors of the Company and its Subsidiaries and their respective committees at the same time that notice of such meetings is given to the directors and shall receive all materials and information provided from time to time to the members of the Boards of Directors of the Company and its Subsidiaries and their respective committees. Subject to ordinary and reasonable procedural rules, the Observer may participate in a meaningful manner in discussions of matters brought to the Board of
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Directors, and shall be permitted to pose questions and the Board of Directors shall provide complete responses to the questions posed. For the avoidance of doubt, the Observer shall not be deemed to be a member of the Board of Directors or any committee of the Company and its Subsidiaries. The Company shall reimburse the Observer for the out-of-pocket expenses of the Observer in attending such meetings on the same basis that the directors are reimbursed for their out-of-pocket expenses. Notwithstanding anything to the contrary contained herein, the Observation Rights shall be conditioned on the Observer maintaining the confidentiality of all material non-public material and information provided to the Observer and the Boards of Directors and committees of the Company and its Subsidiaries in accordance with procedures and policies established from time to time in writing by the Company and its Subsidiaries and provided to the Observer; however, notwithstanding any such procedures, the Observer shall be permitted to (A) provide, on a confidential basis, such material and information to the Buyers and their affiliates and their respective managers, partners, directors, officers, representatives, advisers, auditors, examiners and counsel who have agreed in writing to observe the confidentiality provisions of this
SECTION 5.6, and (B) provided the Observer gives prior written notice to the Company, disclose such material and information in accordance with applicable laws or legal process, in any litigation or other proceedings under this Agreement or in accordance with regulatory requirements.
5.7 PARTICIPATION IN FUTURE ISSUANCES. The Buyers shall have the right to participate in any future offerings, sales or exchanges by the Company of Common Stock or securities convertible into or exercisable for Common Stock (each, a "FUTURE OFFERING") so as to maintain each Buyer's percentage ownership, on a fully diluted basis, of the Common Stock immediately prior to such offerings. For purposes of this SECTION 5.7, however, a Future Offering shall not include the issuance of options, restricted stock or similar securities by the Company in accordance with the terms of any employee benefit or compensation plan adopted by the Company's Board of Directors. Each Buyer shall be entitled to receive written notice of any Future Offering (an "OFFERING NOTICE") at least 15 days prior to the proposed closing date of such Future Offering, which Offering Notice must include a description of the securities to be offered, sold or exchanged, including the price and other terms upon which they are to be issued, sold or exchanged, the parties to whom such securities are being offered, sold or exchanged and the number or amount of the offered securities to be issued, sold or exchanged. If either or both of the Buyers elect to participate in a Future Offering, such Buyer or Buyers must give written notice of such election to the Company within 7 days following the receipt by such Buyer or Buyers of the Offering Notice. Such participation by such Buyer or Buyers in any Future Offering shall be at the same price and otherwise on the same terms as those described in the Offering Notice.
5.8 FUTURE ACQUISITIONS. The Company shall not revoke its approval of the acquisition of up to 35% 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 35% 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.
ARTICLE 6
CONDITIONS TO THE COMPANY'S OBLIGATION
The obligation of the Company hereunder to issue and sell the Shares to the Buyers at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions thereto,
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10.2-Securities Purchase Agreement (Tower Tech) (2).DOC
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 the Company.
6.2 PAYMENT OF PURCHASE PRICE. The Buyers shall have delivered the Purchase Price in accordance with SECTION 2.2 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.
ARTICLE 7
CONDITIONS TO THE BUYERS' OBLIGATION
The obligation of the Buyers hereunder to purchase the Shares 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 SHARES. The Company shall have executed and delivered the Transaction Documents to the Buyers, 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
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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 B 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 INTENTIONALLY OMITTED.
7.8 IRREVOCABLE PROXY. The Buyers shall receive an irrevocable proxy from each of Christopher C. Allie, Raymond L. Brickner, III, Terence P. Fox and Daniel P. Wergin (collectively, the "FOUNDERS") in the form attached hereto as EXHIBIT C.
7.9 ADDITIONAL BUYER AGREEMENTS. The Buyers having entered into
(i) a right of first offer/refusal letter agreement with each of Christopher C. Allie, Raymond L. Brickner, III, Terence P. Fox, Samuel W. Fairchild, Daniel P. Wergin, Integritas, Inc. and certain of the Founders' related trusts in the form attached hereto as EXHIBIT D (the "LETTER AGREEMENT"); and (ii) a securities purchase agreement with each of the Founders for the aggregate purchase by the Buyers of 2,400,000 shares of Common Stock from the Founders at $1.50 per share, in the form attached hereto as EXHIBIT E (the "FOUNDERS SPA").
7.10 BRICKNER EMPLOYMENT AGREEMENT. The Company having entered into an employment agreement with Raymond L. Brickner, III to serve in the capacity of President and Chief Operating Officer of the Company in a form reasonably acceptable to the Buyer.
7.11 CONVERSION OF DEBT. The conversion of the Company's debt payable to the Founders as set forth in SCHEDULE 7.11 into Common Stock at a ratio of $1.50 per share at or prior to the Closing.
ARTICLE 8
INDEMNIFICATION
8.1 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).
8.2 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
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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 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 9
GOVERNING LAW; MISCELLANEOUS
9.1 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.
9.2 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.
9.3 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.
9.4 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
16
10.2-Securities Purchase Agreement (Tower Tech) (2).DOC
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.
9.5 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 be charged with enforcement. The provisions of this Agreement may be amended only by a written instrument signed by the Company and the Buyers.
9.6 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.
980 Maritime Drive, Suite 6
Manitowoc, Wisconsin 54220
Telephone: (920) 684-5531 Facsimile: (920) 682-0301 Attention: Mr. Raymond L. Brickner, III
With copy to:
Dill Dill Carr Stonbraker & Hutchings, P.C.
455 Sherman Street, Suite 300
Denver, Colorado 80203
Telephone: (303) 777-3737 Facsimile: (303) 777-3823 Attention: Fay M. Matsukage, Esq.
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
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With copy to:
Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLP
Until June 30, 2007:
333 W. Wacker Drive, Suite 2700
Chicago, Illinois 60606
After June 30, 2007:
200 W. Madison Street, Suite 3900
Chicago, Illinois 60606
Attention: John E. Freechack, Esq.
Telephone: (312) 984-3100
Facsimile: (312) 984-3150
Each party shall provide notice to the other party of any change in address.
9.7 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor any Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other parties hereto.
9.8 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.
9.9 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 to either such Form 8-K or the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006, and the Buyers may make such filings as may be required under Section 13 and Section 16 of the 1934 Act.
9.10 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.
9.11 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.
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9.12 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 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.
9.13 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) five 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..
9.14 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]
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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	

Total Number of Shares: 8,213,334
Total Purchase Price: $12,320,001.00
Form of Entity and Jurisdiction of Organization:
Delaware Limited Partnership
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	

Total Number of Shares: 2,053,333
Total Purchase Price: $3,079,999.50
Form of Entity and Jurisdiction of Organization:
Cayman Islands Limited Partnership
 
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT DATED
 MARCH 1, 2007
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
TOWER TECH HOLDINGS INC.
TONTINE CAPITAL PARTNERS, L.P.
AND
TONTINE CAPITAL OVERSEAS MASTER FUND, L.P.
MARCH 1, 2007
10.3-Registration Rights Agreement (2).DOC
TABLE OF CONTENTS

                                                                            PAGE

ARTICLE 1  Definitions.........................................................1

ARTICLE 2  Registration Rights.................................................4

   2.1     Current Public Information..........................................4
   2.2     Registration........................................................4
   2.3     Demand Registration.................................................5
   2.4     Piggyback Registration..............................................7
   2.5     Underwriting; Holdback Agreements...................................8
   2.6     Registration Procedures.............................................9
   2.7     Conditions Precedent to Company's Obligations Pursuant to
           this Agreement.....................................................11
   2.8     Fees and Expenses..................................................11
   2.9     Indemnification....................................................12
   2.10    Participation in Registrations.....................................14
   2.11    Compliance.........................................................15

ARTICLE 3  Transfers of Certain Rights........................................15

   3.1     Transfer...........................................................15
   3.2     Transferees........................................................15
   3.3     Subsequent Transferees.............................................15

ARTICLE 4  Miscellaneous......................................................15

   4.1     Recapitalizations, Exchanges, etc..................................15
   4.2     No Inconsistent Agreements.........................................16
   4.3     Amendments and Waivers.............................................16
   4.4     Severability.......................................................16
   4.5     Counterparts.......................................................16
   4.6     Notices............................................................16
   4.7     Governing Law......................................................17
   4.8     Forum; Service of Process..........................................17
   4.9     Captions...........................................................17
   4.10    No Prejudice.......................................................17
   4.11    Words in Singular and Plural Form..................................17
   4.12    Remedy for Breach..................................................17
   4.13    Successors and Assigns, Third Party Beneficiaries..................18
   4.14    Entire Agreement...................................................18
   4.15    Attorneys' Fees....................................................18
   4.16    Termination of Rights..............................................18	

i
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of March 1, 2007 (the "AGREEMENT"), 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" or a "PURCHASER") and TONTINE CAPITAL OVERSEAS MASTER FUND, L.P., a Cayman Islands limited partnership (a "PURCHASER" and together with TCP, the "PURCHASERS").
RECITALS:
A. The Company desires to issue and sell 10,266,667 shares of its Common Stock to the Purchasers as set forth in the Securities Purchase Agreement, dated as of March 1, 2007, entered into by and between the Company and the Purchasers (the "SECURITIES PURCHASE AGREEMENT");
B. It is a condition precedent to the consummation of the transactions contemplated by the Securities Purchase Agreement that the Company provide for the rights set forth in this Agreement; and
C. Certain terms used in this Agreement are defined in ARTICLE 1 hereof.
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 1
DEFINITIONS
"AFFILIATE" means any Person that directly or indirectly controls, or is under control with, or is controlled by such Person. As used in this definition, "control" (including with its correlative meanings, "controlled by" and "under common control with") shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise).
"BUSINESS DAY" means any day excluding Saturday, Sunday or any other day which is a legal holiday under the laws of the State of Wisconsin or is a day on which banking institutions therein located are authorized or required by law or other governmental action to close.
"CLOSING DATE" has the meaning ascribed to such term in the Securities Purchase Agreement.
"COMMON STOCK" means the common stock, par value $0.001 per share, of the Company.
"COMPANY" has the meaning set forth in the preamble.
"DEMAND NOTICE" has the meaning set forth in SECTION 2.3.
"DESIGNATED HOLDERS" means the Purchasers and any qualifying transferees of the Purchasers under SECTION 3.1 hereof who hold Registrable Securities.
10.3-Registration Rights Agreement (2).DOC
"EFFECTIVENESS DATE" means (a) with respect to the initial Registration Statement required to be filed under SECTION 2.2(A), the earlier of: (i) the 300th day following the Closing Date, and (ii) the fifth trading day following the date on which the Company is notified by the SEC that the initial Registration Statement will not be reviewed or is no longer subject to further review and comments, and (b) with respect to any additional Registration Statements that may be required pursuant to SECTION 2.2(B), the earlier of (i) the 120th day following (x) if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, the date or time on which the SEC shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required for a reason other than as described in (x) above, the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required, and (ii) the fifth trading day following the date on which the Company is notified by the SEC that such additional Registration Statement will not be reviewed or is no longer subject to further review and comment.
"EFFECTIVENESS PERIOD" has the meaning set forth in SECTION 2.2(A).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.
"FILING DATE" means (a) with respect to the initial Registration Statement required to be filed under SECTION 2.2(A), the date which is 180 days following the Closing Date, and (b) with respect to any additional Registration Statements that may be required pursuant to SECTION 2.2(B), the 45th day following (x) if such Registration Statement is required because the SEC shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, the date or time on which the SEC shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required for a reason other than as described in (x) above, the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required.
"FOUNDERS SECURITIES PURCHASE AGREEMENT" means that certain Securities Purchase Agreement among the Purchasers, Christopher C. Allie, Raymond L. Brickner III, Terence P. Fox and Daniel P. Wergin of even date herewith.
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 2.9.
"LOSSES" has the meaning set forth in SECTION 2.9.
"MAJORITY HOLDERS" means those Designated Holders holding a majority of the Registrable Securities.
"PERSON" means any individual, company, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental body or other entity.
"PIGGYBACK REGISTRATION" has the meaning set forth in SECTION 2.4.
"PURCHASERS" has the meaning set forth in the preamble.
"PURCHASE PRICE" has the meaning ascribed to such term in the Securities Purchase Agreement.
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"REGISTRABLE SECURITIES" means, subject to the immediately following sentences, (i) 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, and so long as this Agreement is still in effect, any other shares of Common Stock acquired by the Purchasers on or after the Closing Date, and (ii) any shares of Common Stock issued or issuable, directly or indirectly, with respect to the securities referred to in clause (i) by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. In addition, any particular shares of Common Stock constituting Registrable Securities will cease to be Registrable Securities when they (x) have been effectively registered under the Securities Act and disposed of in accordance with a Registration Statement covering them, (y) have been sold to the public pursuant to Rule 144 (or by similar provision under the Securities Act), or (z) are eligible for resale under Rule 144(k) (or by similar provision under the Securities Act) without any limitation on the amount of securities that may be sold under paragraph (e) thereof.
"REGISTRATION STATEMENT" means a registration statement on Form S-3 (or, if the Company is not eligible to use Form S-3, such other appropriate registration form of the SEC pursuant to which the Company is eligible to register the resale of Registrable Securities) filed by the Company under the Securities Act which covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference in such registration statement, which shall permit the Purchasers to offer and sell, on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, the Registrable Securities.
"REGISTER," "REGISTERED" and "REGISTRATION" each shall refer to a registration effected by preparing and filing a registration statement or statements or similar documents in compliance with the Securities Act and the declaration or ordering of effectiveness of such registration statement(s) or documents by the SEC.
"REPRESENTATIVES" has the meaning set forth in SECTION 2.9.
"RULE 144" means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same effect as such Rule.
"SEC" means the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.
"SECURITIES PURCHASE AGREEMENT" has the meaning set forth in the recitals.
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ARTICLE 2
REGISTRATION RIGHTS
2.1 CURRENT PUBLIC INFORMATION. The Company covenants that it will use its best efforts to file all reports required to be filed by it under the Exchange Act and the rules and regulations adopted by the SEC thereunder, and will use its reasonable best efforts to take such further action as the Designated Holders may reasonably request, all to the extent required to enable the Designated Holders to sell Registrable Securities pursuant to Rule 144 or Rule 144A adopted by the SEC under the Securities Act or any similar rule or regulation hereafter adopted by the SEC. The Company shall, upon the request of a Designated Holder, deliver to such Designated Holder a written statement as to whether it has complied with such requirements during the twelve month period immediately preceding the date of such request.
2.2 REGISTRATION.
(a) On or prior to each Filing Date, the Company shall prepare and file with the SEC a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available by the Designated Holders of any and all Registrable Securities. The Company shall use its reasonable best efforts to cause the Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to keep the Registration Statement continuously effective, supplemented and amended to the extent necessary to ensure that is available for the resale of all Registrable Securities by the Designated Holders and that it conforms in all material respects to the requirements of the Securities Act during the entire period beginning on the Effectiveness Date and ending on the date on which all Registrable Securities have ceased to be Registrable Securities. (the "EFFECTIVENESS PERIOD").
(b) If for any reason the SEC does not permit all of the Registrable Securities to be included in a Registration Statement filed pursuant to SECTION 2.2(A) or for any other reason all Registrable Securities then outstanding are not then included in such an effective Registration Statement, then the Company shall prepare and file as soon as reasonably possible after the date on which the SEC shall indicate as being the first date or time that such filing may be made, but in any event by the Filing Date therefore, an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each such Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available by the Designated Holders of any and all Registrable Securities. The Company shall use its reasonable best efforts to cause each such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its reasonable best efforts to keep such Registration Statement continuously effective under the Securities Act during the entire Effectiveness Period.
(c) The Company may, at any time it is eligible to do so, file a post-effective amendment on Form S-3 to any Registration Statement on Form S-1 for the resale of any then existing Registrable Securities or in any such other manner as is preferred or permitted by the SEC to convert such Registration Statement to a Form S-3 Registration Statement. Upon the effectiveness of such Form S-3 Registration Statement, all references to a Registration Statement in this Agreement shall then automatically be deemed to be a reference to the Form S-3 Registration Statement.
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2.3 DEMAND REGISTRATION. In addition to the registration obligations of the Company set forth in Section 2.2 herein, the following provisions shall apply:
(a) Subject to SECTION 2.3(H), upon the written request of the Majority Holders, requesting that the Company effect the registration under the Securities Act of all or part of such Designated Holders' Registrable Securities and specifying the intended method of disposition thereof (the "DEMAND NOTICE"), the Company will promptly give written notice of such requested registration to all Designated Holders, and thereupon the Company will use its reasonable best efforts to file with the SEC as soon as reasonably practicable following the Demand Notice (but in no event later than the date that is 90 days after the Demand Notice) a Registration Statement. The Company shall use its reasonable best efforts to cause such Registration Statement to be declared effective by the SEC within 90 days after the initial filing of the Registration Statement. The Company shall include in such Registration Statement:
(i) the Registrable Securities which the Company has been so requested to be registered by such Designated Holders for disposition in accordance with the intended method of disposition stated in such request;
(ii) all other Registrable Securities the holders of which shall have made a written request to the Company for registration thereof within 30 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Securities); and
(iii) all shares of Common Stock which the Company or Persons entitled to exercise "piggy-back" registration rights pursuant to contractual commitments of the Company may elect to register in connection with the offering of Registrable Securities pursuant to this
SECTION 2.3;
all to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities and the additional shares of Common Stock, if any, so to be registered; provided, that, the provisions of this SECTION 2.3 shall not require the Company to effect more than two registrations of Registrable Securities.
(b) Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be required to effect a registration pursuant to this SECTION 2.3 within 180 days following the effective date of a registration statement filed by the Company in accordance with SECTIONS 2.2, 2.3 or 2.4 for the account of another Designated Holder of Registrable Securities if the Designated Holders were afforded the opportunity to include the Registrable Securities in such registration.
(c) The registrations under this SECTION 2.3 shall be on an appropriate Registration Statement that permits the disposition of such Registrable Securities in accordance with the intended methods of distribution specified by the Majority Holders in their request for registration. The Company agrees to include in any such Registration Statement all information which Designated Holders of Registrable Securities being registered shall reasonably request to effect the registration.
(d) A registration requested pursuant to this SECTION 2.3 shall not be deemed to have been effected (i) unless a Registration Statement with respect thereto has become effective; provided, that a Registration Statement which does not become effective after the Company has filed a Registration Statement with respect thereto solely by reason of the refusal to proceed of the Majority Holders (other than a refusal to proceed based upon the advice of counsel relating to a matter with respect to the Company) or because of a breach of this Agreement by any Designated Holder shall be deemed to have been effected by the Company at the request of the Majority Holders unless the Designated Holders
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electing to have Registrable Securities registered pursuant to such Registration Statement shall have elected to pay all fees and expenses otherwise payable by the Company in connection with such registration pursuant to SECTION 2.8, (ii) if, after it has become effective, such registration is withdrawn by the Company (other than at the request of the Majority Holders) or interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court for any reason prior to the expiration of a 180 day period following such Registration Statement's effectiveness, or (iii) if the conditions to closing specified in any purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than due solely to some act or omission by the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement.
(e) If a requested registration pursuant to this SECTION 2.3 involves an underwritten offering, and the managing underwriter shall advise the Company in writing (with a copy to each Designated Holder of Registrable Securities requesting registration) that, in its opinion, the number of securities requested to be included in such registration (including securities of the Company which are not Registrable Securities) exceeds the number which can be sold in such offering within a price range reasonably acceptable to the Company and to the holders of a majority (by number of shares) of the Registrable Securities requested to be included in such Registration Statement, the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in such offering, (i) first, the Registrable Securities which have been requested to be included in such registration by the Designated Holders pursuant to this Agreement (pro rata based on the amount of Registrable Securities sought to be registered by such Persons), (ii) second, provided that no securities sought to be included by the Designated Holders have been excluded from such registration, the securities of other Persons entitled to exercise "piggy-back" registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by such Persons) and (iii) third, securities the Company proposes to register.
(f) The Company shall use its reasonable best efforts to keep any Registration Statement filed pursuant to this SECTION 2.3 continuously effective
(i) for a period of two years after the Registration Statement first becomes effective, plus the number of days during which such Registration Statement was not effective or usable pursuant to SECTIONS 2.6(E) or 2.6(I); or (ii) if such Registration Statement related to an underwritten offering, for such period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer. In the event the Company shall give any notice pursuant to SECTIONS 2.6(E) or (I), the additional time period mentioned in SECTION 2.3(F)(I) during which the Registration Statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to SECTIONS 2.6(E) or (I) to and including the date when each seller of a Registrable Security covered by the Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by SECTIONS 2.6(E) or (I).
(g) The Company shall have the right at any time, to suspend the filing of a Registration Statement under this SECTION 2.3 or require that the Designated Holders of Registrable Securities suspend further open market offers and sales of Registrable Securities pursuant to a Registration Statement filed hereunder for a period not to exceed an aggregate of 30 days in any six month period or an aggregate of 60 days in any twelve-month period for valid business reasons (not including avoidance of their obligations hereunder) (i) to avoid premature public disclosure of a pending corporate transaction, including pending acquisitions or divestitures of assets, mergers and combinations and similar events; (ii) upon the occurrence of any of the events specified in
SECTION 2.6(E), until the time that the Designated Holders receive copies of a supplement or amendment to the prospectus included in the applicable Registration Statement as contemplated in SECTION 2.6(E); and (iii) upon the occurrence of any of the
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events specified in SECTION 2.6(I), until the time the Company notifies the Designated Holders in writing that such suspension is no longer effective.
(h) The right of Designated Holders to register Registrable Securities pursuant to this SECTION 2.3 is only exercisable if, prior to the expiration of the Effectiveness Period, the Company becomes ineligible to register the Registrable Securities on the Registration Statement contemplated by SECTION 2.2 or such Registration Statement otherwise becomes unusable (other than due solely to some act or omission by the Designated Holders electing to have Registrable Securities registered pursuant to such Registration Statement) or ineffective and the Company is not able to correct the misstatements, have the applicable stop order rescinded or otherwise restore the effectiveness of the Registration Statement as contemplated by this Agreement.
2.4 PIGGYBACK REGISTRATION.
(a) Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a registration pursuant to
SECTION 2.2 or SECTION 2.3 or a registration on Form S-4 or S-8 or any successor or similar forms) and the registration form to be used may be used for the registration of Registrable Securities, whether or not for sale for its own account, the Company will give prompt written notice (but in no event less than 30 days before the anticipated filing date) to all Designated Holders (other than Designated Holders all of whose Registrable Securities are then covered by an effective Registration Statement), and such notice shall describe the proposed registration and distribution and offer to all such Designated Holders the opportunity to register the number of Registrable Securities as each such Designated Holder may request. The Company will include in such registration statement all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 15 days after the Designated Holders' receipt of the Company's notice (a "PIGGYBACK REGISTRATION").
(b) The Company shall use its reasonable best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering involving a Piggyback Registration to permit the Registrable Securities requested to be included in a Piggyback Registration to be included on the same terms and conditions as any similar securities of the Company or any other security holder included therein and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method of distribution thereof.
(c) Any Designated Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any Registration Statement pursuant to this SECTION 2.4 by giving written notice to the Company of its request to withdraw; provided, that in the event of such withdrawal (other than pursuant to SECTION 2.4(E) hereof), the Company shall not be required to reimburse such Designated Holder for the fees and expenses referred to in SECTION 2.8 hereof incurred by such Designated Holder prior to such withdrawal, unless such withdrawal was due to a material adverse change to the Company. The Company may withdraw a Piggyback Registration at any time prior to the time it becomes effective.
(d) If (i) a Piggyback Registration involves an underwritten offering of the securities being registered, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, and (ii) the managing underwriter of such underwritten offering shall inform the Company and Designated Holders requesting such registration by letter of its belief that the distribution of all or a specified number of such Registrable Securities concurrently with the securities being distributed by such underwriters would interfere with the successful marketing of the securities being distributed by such underwriters (such writing to state the basis of such belief and the approximate number of such Registrable Securities which may be distributed without such effect), then the Company
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will be required to include in such registration only the amount of securities which it is so advised should be included in such registration. In such event:
(x) in cases initially involving the registration for sale of securities for the Company's own account, securities shall be registered in such offering in the following order of priority: (i) first, the securities which the Company proposes to register, and (ii) second, Registrable Securities and securities which have been requested to be included in such registration by Persons entitled to exercise "piggy-back" registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by Designated Holders and such other Persons); and (y) in cases not initially involving the registration for sale of securities for the Company's own account, securities shall be registered in such offering in the following order of priority: (i) first, the securities of any Person whose exercise of a "demand" registration right pursuant to a contractual commitment of the Company is the basis for the registration, (ii) second, Registrable Securities and securities which have been requested to be included in such registration by Persons entitled to exercise "piggy-back" registration rights pursuant to contractual commitments of the Company (pro rata based on the amount of securities sought to be registered by Designated Holders and such other Persons), and (iii) third, the securities which the Company proposes to register.
(e) If, as a result of the proration provisions of this SECTION 2.4, any Designated Holder shall not be entitled to include all Registrable Securities in a Piggyback Registration that such Designated Holder has requested to be included, such holder may elect to withdraw his request to include Registrable Securities in such registration.
(f) The right of the Designated Holders to register Registrable Securities pursuant to this SECTION 2.4 is only exercisable with respect to Registrable Securities not then covered by an effective Registration Statement.
2.5 UNDERWRITING; HOLDBACK AGREEMENTS.
(a) In the event that one or more Designated Holders elect to dispose of Registrable Securities under a Registration Statement pursuant to an underwritten offering or a requested registration pursuant to SECTION 2.3 involves an underwritten offering, the managing underwriter or underwriters shall be selected by the holders of a majority (by number of shares) of the Registrable Securities to be sold in the underwritten offering or requested to be included in such Registration Statement and shall be reasonably acceptable to the Company. In connection with any such underwritten offering, the Company shall take all such reasonable actions as are required by the managing underwriters in order to expedite and facilitate the registration and disposition of the Registrable Securities, including the Company causing appropriate officers of the Company or its Affiliates to participate in a "road show" or similar marketing effort being conducted by such managing underwriters with respect to such underwritten offering.
(b) All Designated Holders proposing to distribute their Registrable Securities through an underwritten offering shall enter into an underwriting agreement in customary form with the managing underwriters selected for such underwritten offering.
(c) To the extent not inconsistent with applicable law, in connection with a public offering of securities of the Company, upon the request of the Company or, in the case of an underwritten public offering of the Company's securities, the managing underwriters, each Designated Holder who beneficially owns (as defined in Rule 13d-3 adopted by the SEC under the Exchange Act) at least 5% of the outstanding capital stock of the Company will not effect any sale or distribution (other than those included in the registration statement being filed with respect to such public offering) of, or any short sale of, or any grant of option to purchase, or any hedging or similar transaction with respect to, any securities of the Company, or any securities, options or rights convertible into or exchangeable or exercisable for such securities during the 14 days prior to and the 90-day period beginning on the effective date of such
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public offering, unless the Company, or in the case of an underwritten public offering, the managing underwriters otherwise agree to a shorter period of time. At the request of the Company or the managing underwriters, each such Designated Holder shall execute a customary "lock-up" agreement consistent with the provisions of this SECTION 2.5; provided, however, that no Designated Holder shall be required to enter into any such "lock up" agreement unless and until all of the Company's executive officers and directors execute substantially similar "lock up" agreements and the Company uses commercially reasonable efforts to cause each holder of more than 5% of its outstanding capital stock to execute substantially similar "lock up" agreements. Neither the Company nor the underwriter shall terminate, materially amend or waive the enforcement of any material provision under a "lock up" agreement unless each "lock up" agreement with a Designated Holder is also amended or waived in a similar manner or terminated, as the case may be. The Company may impose stop-transfer instructions to enforce the restrictions imposed by this SECTION 2.5.
2.6 REGISTRATION PROCEDURES. The Company will use its reasonable best efforts to effect the registration of Registrable Securities pursuant to this Agreement in accordance with the intended methods of disposition thereof, and pursuant thereto the Company will as expeditiously as possible:
(a) before filing the Registration Statement, the Company will furnish to any counsel selected by the holders of a majority of the Registrable Securities a copy of such Registration Statement, and will provide such counsel with all written correspondence with the SEC regarding the Registration Statement;
(b) prepare and file with the SEC such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the periods provided for in SECTION 2.2 and SECTION 2.3, or the periods contemplated by the Company or the Persons requesting any Registration Statement filed pursuant to SECTION 2.4;
(c) furnish to each Designated Holder selling such Registrable Securities such number of copies of such Registration Statement, each amendment and supplement thereto, the prospectus included in the Registration Statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Designated Holder;
(d) use its reasonable best efforts to register or qualify such Registrable Securities under such other state securities or blue sky laws as the selling Designated Holders selling such Registrable Securities reasonably requests and do any and all other acts and things which may be reasonably necessary or reasonably advisable to enable such Designated Holder to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Designated Holder and to keep each such registration or qualification (or exemption therefrom) effective during the period which the Registration Statement is required to be kept effective (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);
(e) notify each Designated Holder selling such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in the Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and, at the request of any such Designated Holder, the Company will as soon as possible prepare and furnish to such Designated Holder a reasonable
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number of copies of a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made;
(f) cause all such Registrable Securities to be listed or quoted on each securities exchange or quotation service on which similar securities issued by the Company are then listed or quoted and, if not so listed, to be approved for trading on any automated quotation system of a national securities association on which similar securities of the Company are quoted;
(g) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such Registration Statement;
(h) enter into such customary agreements (including underwriting agreements containing customary representations and warranties) and take all other customary and appropriate actions as the holders of a majority of the Registrable Securities being sold or the managing underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(i) notify each Designated Holder of any stop order issued or threatened by the SEC;
(j) otherwise comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the Company's first full calendar quarter after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(k) in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such Registration Statement for sale in any jurisdiction, the Company will use its reasonable best efforts to promptly obtain the withdrawal of such order;
(l) with respect to an underwritten offering pursuant to any Registration Statement filed under SECTION 2.2 or SECTION 2.3, obtain one or more comfort letters, dated the effective date of the Registration Statement and, if required by the managing underwriters, dated the date of the closing under the underwriting agreement, signed by the Company's independent public accountants in customary form and covering such matter of the type customarily covered by comfort letters in similar transactions;
(m) with respect to an underwritten offering pursuant to any Registration Statement filed under SECTION 2.2 or SECTION 2.3, obtain a legal opinion of the Company's outside counsel, dated the effective date of such Registration Statement and, if required by the managing underwriters, dated the date of the closing under the underwriting agreement, with respect to the Registration Statement, each amendment and supplement thereto, the prospectus included therein (including the preliminary prospectus) and such other documents relating thereto in customary form and covering such matters of the type customarily covered by legal opinions in similar transactions;
(n) subject to execution and delivery of mutually satisfactory confidentiality agreements, make available at reasonable times for inspection by each Designated Holder selling such Registrable Securities, any managing underwriter participating in any disposition of such Registrable Securities pursuant to the Registration Statement, and any attorney, accountant or other agent retained by such Designated Holder or any such managing underwriter, during normal business hours of the Company at
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the Company's corporate office in Manitowoc, Wisconsin and without unreasonable disruption of the Company's business or unreasonable expense to Company and solely for the purpose of due diligence with respect to the Registration Statement, legally disclosable, financial and other records and pertinent corporate documents of the Company and its subsidiaries reasonable requested by such Persons, and cause the Company's employees to, and request its independent accountants to, supply all similar information reasonably requested by any such Person, as shall be reasonably necessary to enable them to exercise their due diligence responsibility;
(o) cooperate with each seller of Registrable Securities and each underwriter participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the OTC Bulletin Board or the National Association of Securities Dealers; and
(p) take all other steps reasonably necessary to effect the registration of the Registrable Securities contemplated hereby.
2.7 CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS PURSUANT TO THIS AGREEMENT. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this ARTICLE 2 with respect to the Registrable Securities of any Designated Holder that such Designated Holder shall timely furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of distribution of such securities as shall reasonably be required to effect the registration of such Designated Holder's Registrable Securities.
2.8 FEES AND EXPENSES. All expenses incident to the Company's performance of or compliance with this Agreement including, without limitation, all registration and filing fees payable by the Company, fees and expenses of compliance by the Company with securities or blue sky laws, printing expenses of the Company, messenger and delivery expenses of the Company, and fees and disbursements of counsel for the Company and all independent certified public accountants of the Company, and other Persons retained by the Company will be borne by the Company, and the Company will pay its internal expenses (including, without limitation, all salaries and expenses of the Company's employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance of the Company and the expenses and fees for listing or approval for trading of the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed or on any automated quotation system of a national securities association on which similar securities of the Company are quoted. In connection with any Registration Statement filed hereunder, the Company will pay the reasonable fees and expenses of a single counsel retained by the Designated Holders of a majority (by number of shares) of the Registrable Securities requested to be included in such Registration Statement. The Company shall have no obligation to pay any underwriting discounts or commissions attributable to the sale of Registrable Securities and any of the expenses incurred by any Designated Holder which are not payable by the Company, such costs to be borne by such Designated Holder or Holders, including, without limitation, underwriting fees, discounts and expenses, if any, applicable to any Designated Holder's Registrable Securities; fees and disbursements of counsel or other professionals that any Designated Holder may choose to retain in connection with a Registration Statement filed pursuant to this Agreement (except as otherwise provided herein); selling commissions or stock transfer taxes applicable to the Registrable Securities registered on behalf of any Designated Holder; any other expenses incurred by or on behalf of such Designated Holder in connection with the offer and sale of such Designated Holder's Registrable Securities other than expenses which the Company is expressly obligated to pay pursuant to this Agreement.
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2.9 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each Designated Holder and its general or limited partners, officers, directors, members, managers, employees, advisors, representatives, agents and Affiliates (collectively, the "REPRESENTATIVES"), and each underwriter, if any, and any Person who controls such underwriter (within the meaning of Section 15 of the Securities Act), from and against any loss, claim, damage, liability, reasonable attorney's fees, cost or expense and costs and expenses of investigating and defending any such claim (collectively, the "LOSSES"), joint or several, and any action in respect thereof to which such Designated Holder or its Representatives may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereto) arise out of or are based upon (i) any breach by the Company of any of its representations, warranties or covenants contained in this Agreement, (ii) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, prospectus or preliminary or summary prospectus or any amendment or supplement thereto or (iii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company shall reimburse each such Designated Holder and its Representatives for any reasonable legal or any other expenses incurred by them in connection with investigating or defending or preparing to defend against any such Loss, action or proceeding; provided, however, that the Company shall not be liable to any such Designated Holder or other indemnitee in any such case to the extent that any such Loss (or action or proceeding, whether commenced or threatened, in respect thereof) arises out of or is based upon (x) an untrue statement or alleged untrue statement or omission or alleged omission, made in such Registration Statement, any such prospectus or preliminary or summary prospectus or any amendment or supplement thereto, in reliance upon, and in conformity with, written information prepared and furnished to the Company by any Designated Holder or its Representatives expressly for use therein and, with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to the Registration Statement, to the extent that a prospectus relating to the Registrable Securities was required to be delivered by such Designated Holder under the Securities Act in connection with such purchase, there was not sent or given to such Person, at or prior to the written confirmation of the sale of such Registrable Securities to such Person, a copy of the final prospectus that corrects such untrue statement or alleged untrue statement or omission or alleged omission if the Company had previously furnished copies thereof to such Designated Holder or (y) use of a Registration Statement or the related prospectus during a period when a stop order has been issued in respect of such Registration Statement or any proceedings for that purpose have been initiated or use of a prospectus when use of such prospectus has been suspended pursuant to SECTIONS 2.6(E) or (i); provided that in each case, that such Holder received prior written notice of such stop order, initiation of proceedings or suspension from the Company. In no event, however, shall the Company be liable for indirect, incidental or consequential or special damages of any kind.
(b) In connection with the filing of the Registration Statement by the Company pursuant to this Agreement, the Designated Holders will furnish to the Company in writing such information as the Company reasonably requests for use in connection with such Registration Statement and the related prospectus and, to the fullest extent permitted by law, each such Designated Holder will indemnify and hold harmless the Company and its Representatives, and each underwriter, if any, and any Person who controls such underwriter (within the meaning of Section 15 of the Securities Act), from and against any Losses, severally but not jointly, and any action in respect thereof to which the Company and its Representatives may become subject under the Securities Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) the purchase or sale of Registrable Securities during a suspension as set forth in
SECTION 2.6(E) or SECTION 2.6(I) in each case after receipt of written notice of such suspension, (ii) any untrue or alleged untrue statement of a material fact contained in the Registration Statement, prospectus or preliminary or
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summary prospectus or any amendment or supplement thereto, or (iii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but, with respect to clauses (ii) and (iii) above, only to the extent that such untrue statement or omission is made in such Registration Statement, any such prospectus or preliminary or summary prospectus or any amendment or supplement thereto, in reliance upon and in conformity with written information prepared and furnished to the Company by such Designated Holder expressly for use therein or by failure of such Designated Holder to deliver a copy of the Registration Statement or prospectus or any amendments or supplements thereto, and such Designated Holder will reimburse the Company and each Representative for any reasonable legal or any other expenses incurred by them in connection with investigating or defending or preparing to defend against any such Loss, action or proceeding; provided, however, that such Designated Holder shall not be liable in any such case to the extent that prior to the filing of any such Registration Statement or prospectus or amendment or supplement thereto, such Designated Holder has furnished in writing to the Company information expressly for use in such Registration Statement or prospectus or any amendment or supplement thereto which corrected or made not misleading information previously furnished to the Company. The obligation of each Designated Holder to indemnify the Company and its Representatives shall be limited to the net proceeds received by such Designated Holder from the sale of Registrable Securities under such Registration Statement. In no event, however, shall any Designated Holder be liable for indirect, incidental or consequential or special damages of any kind.
(c) Promptly after receipt by any Person in respect of which indemnity may be sought pursuant to SECTION 2.9(A) or 2.9(B) (an "INDEMNIFIED PARTY") of notice of any claim or the commencement of any action, the Indemnified Party shall, if a claim in respect thereof is to be made against the Person against whom such indemnity may be sought (an "INDEMNIFYING PARTY"), promptly notify the Indemnifying Party in writing of the claim or the commencement of such action; provided, that the failure to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which it may have to an Indemnified Party under SECTION 2.9(A) or 2.9(b) except to the extent of any actual prejudice resulting therefrom. If any such claim or action shall be brought against an Indemnified Party, and it shall notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled to participate therein, and, to the extent that it wishes, jointly with any other similarly notified Indemnifying Party, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, that the Indemnified Party shall have the right to employ separate counsel to represent the Indemnified Party and its Representatives who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, but the fees and expenses of such counsel shall be for the account of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or
(ii) in the written opinion of counsel to such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential conflicts of interest between them, it being understood, however, that the Indemnifying Party shall not, in connection with any one such claim or action or separate but substantially similar or related claims or actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (together with appropriate local counsel) at any time for all Indemnified Parties. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding other than the payment of monetary damages by the Indemnifying Party on behalf of the Indemnified Party. Whether or not the defense of any claim or action is assumed by the Indemnifying Party, such Indemnifying Party will not be
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subject to any liability for any settlement made without its written consent, which consent will not be unreasonably withheld.
(d) If the indemnification provided for in this SECTION 2.9 is unavailable to the Indemnified Parties in respect of any Losses referred to herein notwithstanding that this SECTION 2.9 by its terms provides for indemnification in such case, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Designated Holders on the other from the offering of the Registrable Securities, or if such allocation is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits but also the relative fault of the Company on the one hand and the Designated Holders on the other in connection with the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and of each Designated Holder on the other shall be determined by reference to, among other things, whether any action taken, including any untrue or alleged untrue statement of a material fact, or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Designated Holders agree that it would not be just and equitable if contribution pursuant to this SECTION 2.9(D) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Party as a result of the Losses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this SECTION 2.9, no Designated Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities of such Designated Holder were offered to the public exceeds the amount of any Losses which such Designated Holder has otherwise paid by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Designated Holder's obligations to contribute pursuant to this SECTION 2.9 is several in the proportion that the proceeds of the offering received by such Designated Holder bears to the total proceeds of the offering received by all the Designated Holders. The indemnification provided by this SECTION 2.9 shall be a continuing right to indemnification with respect to sales of Registrable Securities and shall survive the registration and sale of any Registrable Securities by any Designated Holder and the expiration or termination of this Agreement. The indemnity and contribution agreements contained herein are in addition to any liability that any Indemnifying Party might have to any Indemnified Party.
2.10 PARTICIPATION IN REGISTRATIONS.
(a) No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements and this Agreement.
(b) Each Person that is participating in any registration under this Agreement agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in
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SECTION 2.6(E) or SECTION 2.6(I) above, such Person will forthwith discontinue the disposition of its Registrable Securities pursuant to the Registration Statement and all use of the Registration Statement or any prospectus or related document until such Person's receipt of the copies of a supplemented or amended prospectus as contemplated by such SECTION 2.6(E) or SECTION 2.6(I) and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Designated Holder's possession of such documents at the time of receipt of such notice. Furthermore, each Designated Holder agrees that if such Designated Holder uses a prospectus in connection with the offering and sale of any of the Registrable Securities, the Designated Holder will use only the latest version of such prospectus provided by Company.
2.11 COMPLIANCE. With respect to any registration under this Agreement, each Designated Holder shall comply in all material respects with all applicable securities and other laws, rules and regulations, including but not limited to all rules and regulations of the SEC, the National Association of Securities Dealers and any securities exchange or quotation service on which the Company's securities are listed or quoted.
ARTICLE 3
TRANSFERS OF CERTAIN RIGHTS
3.1 TRANSFER. The rights granted to the Purchasers under this Agreement may be transferred, subject to the provisions of SECTIONS 3.2 and 3.3; provided that nothing contained herein shall be deemed to permit an assignment, transfer or disposition of the Registrable Securities in violation of the terms and conditions of the Securities Purchase Agreement or applicable law.
3.2 TRANSFEREES. Any transferee to whom rights under this Agreement are transferred shall, before and as a condition to such transfer, deliver to the Company a written instrument (i) stating the name and address of the transferor and the transferee and the number of Registrable Securities with respect to which the rights are intended to be transferred, and (ii) by which such transferee agrees to be bound by the obligations imposed upon the Purchasers under this Agreement to the same extent as if such transferee were a Purchaser hereunder.
3.3 SUBSEQUENT TRANSFEREES. A transferee to whom rights are transferred pursuant to this SECTION 3 may not again transfer such rights to any other Person, other than as provided in SECTIONS 3.1 or 3.2 above.
ARTICLE 4
MISCELLANEOUS
4.1 RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this Agreement shall apply to the full extent set forth herein with respect to (i) the Registrable Securities, (ii) any and all shares of Common Stock into which the Registrable Securities are converted, exchanged or substituted in any recapitalization or other capital reorganization by the Company and (iii) any and all equity securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, the Registrable Securities and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof. The Company shall cause any successor or assign (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Designated Holders on terms substantially the same as this Agreement as a condition of any such transaction.
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4.2 NO INCONSISTENT AGREEMENTS. The Company has not and shall not enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Purchasers in this Agreement. The parties acknowledge and agree that the Company may grant registration rights hereafter, which shall be pari passu with the registration rights of the Purchasers, and shall not be deemed to conflict with this covenant.
4.3 AMENDMENTS AND WAIVERS. The provisions of this Agreement may be amended and the Company may take action herein prohibited, or omit to perform any act herein required to be performed by it, if, but only if, the Company has obtained the written consent of Designated Holders of at least a majority of the Registrable Securities then in existence.
4.4 SEVERABILITY. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under 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 Agreement.
4.5 COUNTERPARTS. This Agreement 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.
4.6 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.
980 Maritime Drive, Suite 6
Manitowoc, Wisconsin 54220
Attention: Mr. Raymond L. Brickner, III Telephone: (920) 684-5531 Facsimile: (920) 682-0301
With copy to:
Dill Dill Carr Stonbraker & Hutchings, P.C.
455 Sherman Street, Suite 300
Denver, Colorado 80203
Telephone: (303) 777-3737 Facsimile: (303) 777-3823 Attention: Fay M. Matsukage, Esq.
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If to the Purchaser:
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 Perlman & Nagelberg LLP
Until June 30, 2007 to:
333 W. Wacker Drive, Suite 2700
Chicago, Illinois 60606
After June 30, 2007 to:
200 West Madison Street, Suite 3900
Chicago, Illinois 60606
Attention: John E. Freechack, Esq.
Telephone: (312) 984-3100
Facsimile: (312) 984-3150
Each party shall provide notice to the other party of any change in address.
4.7 GOVERNING LAW. This Agreement 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.
4.8 FORUM; SERVICE OF PROCESS. Any legal suit, action or proceeding brought by the Company, Purchasers, any other Designated Holders, any Person entitled to indemnification or contribution hereunder, or any of their respective Affiliates arising out of or based upon this Agreement shall be instituted exclusively in any federal or state court in the State of Wisconsin, and each such Person irrevocably waives any objection which it may now or hereafter have to the laying of venue or any such proceeding, and irrevocably submits to the jurisdiction of such courts in any such suit, action or proceeding.
4.9 CAPTIONS. The captions, headings and arrangements used in this Agreement are for convenience only and do not in any way limit or amplify the terms and provisions hereof.
4.10 NO PREJUDICE. The terms of this Agreement shall not be construed in favor of or against any party on account of its participation in the preparation hereof.
4.11 WORDS IN SINGULAR AND PLURAL FORM. Words used in the singular form in this Agreement shall be deemed to import the plural, and vice versa, as the sense may require.
4.12 REMEDY FOR BREACH. The Company hereby acknowledges that in the event of any breach or threatened breach by the Company of any of the provisions of this Agreement, the Designated Holders would have no adequate remedy at law and could suffer substantial and irreparable damage. Accordingly, the Company hereby agrees that, in such event, the Designated Holders shall be entitled, and
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10.3-Registration Rights Agreement (2).DOC
notwithstanding any election by any Designated Holder to claim damages, to obtain a temporary and/or permanent injunction to restrain any such breach or threatened breach or to obtain specific performance of any such provisions, all without prejudice to any and all other remedies which any Designated Holders may have at law or in equity.
4.13 SUCCESSORS AND ASSIGNS, THIRD PARTY BENEFICIARIES. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto, each assignee of the Designated Holders pursuant to ARTICLE 3 and their respective successors and assigns and executors, administrators and heirs. Designated Holders are intended third party beneficiaries of this Agreement and this Agreement may be enforced by such Designated Holders.
4.14 ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges and supersedes all prior discussions, agreements and understandings of any and every nature among them.
4.15 ATTORNEYS' FEES. In the event of any action or suit based upon or arising out of any actual or alleged breach by any party of any representation, warranty, covenant or agreement in this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and expenses of such action or suit from the other party in addition to any other relief ordered by any court.
4.16 TERMINATION OF RIGHTS. All rights under this Agreement will terminate as to a Designated Holder when that Designated Holders no longer holds any Registrable Securities.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights Agreement to be duly executed as of the date and year first written above.
COMPANY:
TOWER TECH HOLDINGS INC.

By:    /s/ RAYMOND L. BRICKNER, III
   ---------------------------------------------
Title:   PRESIDENT
      ------------------------------------------	

PURCHASER:
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, LLC,
its general partner

By: /s/ JEFFREY L. GENDELL
   ----------------------------------------
   Jeffrey L. Gendell, as managing member	

Exhibit 99.1
 
PRESS RELEASE DATED MARCH 2, 2007

Tower Tech Holdings, Inc. Announces $15.4 Million Private Placement for Debt Reduction and Expansion to Support New Contract with Clipper Windpower
 
-Raymond Brickner named President and Chief Operating Officer-
 
-Tontine Capital Partners to Invest $15.4 million-
 
March 2, 2007; Manitowoc, Wisconsin: Tower Tech Holdings, Inc. (OTCBB: TWRT), a supplier of fabricated towers to the wind turbine industry, is pleased to announce that it has signed a supply agreement with Clipper Windpower, Inc. for the production of wind towers.
 
In addition, the Board of Directors has appointed Director and Co-founder, Raymond Brickner, as President and Chief Operating Officer of the Company to replace Samuel Fairchild, who has resigned from the Board of Directors and as Chief Executive Officer of the Company.
 
Raymond Bricker of Tower Tech said, “We are pleased to announce our partnership with Clipper Windpower, a leader in the wind industry. Between this new relationship and our previously announced agreement, we have positioned ourselves to be a leader in the supply of structures and components to the wind industry. I attribute this success to our employees and our unique manufacturing facility in Manitowoc, Wisconsin.” Raymond Brickner went on to say that, “the Company would like to thank Sam for his effort in leading the Company in its early stages. We wish him well in his future endeavors.”
 
The Company also announced a $15.4 million private placement of 10.26 million shares of its common stock to Tontine Capital Partners and its affiliates for $1.50 per share. Additionally, Tontine Capital Partners is purchasing 2.4 million shares from the founders of Tower Tech.
 
Jeffrey Gendell of Tontine Capital Partners said, “We are extremely pleased to become a partner with Tower Tech. We look forward to the production increase at the Company’s Manitowoc site and the expansion of the Company’s capabilities to further assist its wind turbine customers in the pursuit of their growth plans.”
 
The proceeds from the sale of stock will be used to purchase additional equipment to expand the current manufacturing capacity, modernize the plant, significantly reduce existing debt and provide the necessary working capital to meet the demand of the Company’s major customers.
 
Tower Tech Holdings, Inc (TWRT); Headquartered in Manitowoc, Wisconsin, TWRT is dedicated exclusively to the mass-production of large wind tower support structures for the multi-billion dollar wind power industry. Located on a 46-acre peninsula with deep water access to the Great Lakes, Tower Tech leases or has options to lease more than 700,000 square feet of heavy manufacturing under roof. Tower Tech believes it has one

of the largest production capacities of any wind tower manufacturer in North America, and its ability to integrate the entire manufacturing process at its facility sets Tower Tech apart from other manufacturers in the United States. For additional information visit the company website at: www.towertechsystems.com or call Brian Neary at 800-787-5439.
 
Forward Looking Statement:
Certain statements contained in this press release are forward-looking statements that involve risks and uncertainties. The statements contained herein that are not purely historical are forward looking statements. Forward-looking statements deal with Tower Tech Holding’s Inc. (TWRT) current plans, intentions, beliefs and expectations and statements of future economic performance. Statements containing terms like “believes,” “does not believe,” “plans,” “expects,” “intends,” “estimates,” “anticipates” and other phrases of similar meaning are considered to imply uncertainty and are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause TWRT actual results in future periods to differ materially from what is currently anticipated. Factors that could cause or contribute to such differences include those discussed from time to time in reports filed by TWRT with the Securities and Exchange Commission. TWRT cannot guarantee its future results, levels of activity, performance or achievements.
Tower Tech Holdings, Inc
800-787-5439