Exhibit 10.39
SECURITY AGREEMENT
This Security Agreement (the "Agreement") is made as of
December 2nd, 1999, by Xxxxxx Xxxxxx ("Pledgor") in favor of the City of
Oklahoma City ("Pledgee").
RECITALS
WHEREAS, at the time of execution of this Agreement, Pledgee loaned (the
"Loan") Tower Tech, Inc., an Oklahoma corporation ("Tower Tech Inc.), Two
Million Dollars ($2,000,000.00), as evidenced by Tower Tech's Promissory Note
for such amount;
WHEREAS, Pledgor has executed a non-recourse guaranty of the Loan and
intends for this Agreement to secure his non-recourse guaranty; and
WHEREAS, in order to induce Pledgee to make the Loan, Pledgor has
agreed to pledge certain of his common stock of Tower Tech as security for the
repayment of the Loan:
NOW, THEREFORE, it is agreed as follows:
1. Pledge. For value received, Pledgor hereby grants a security
interest to Pledgee in all common stock of Tower Tech currently owned by Pledgor
(the "Pledged Shares"). This pledge is given to secure only the current
obligations of Tower Tech under the Note.
2. Dividends. During the term of this pledge, all dividends and other
amounts received by Pledgee as a result of his record ownership of the Pledged
Shares may be retained by him.
3. Rights of Pledgor. Notwithstanding anything to the contrary herein,
Pledgor shall at all times retain and have the full and absolute right to
exercise all rights and indicia of ownership of, including, without limitation,
voting and consensual rights, including the right to receive dividends and other
distributions in respect of, and, upon approval of the Pledgee, the right to
transfer or otherwise dispose of, the Pledged Shares.
4. Representations. Pledgor warrants and represents that there are no other
restrictions upon the transfer of any Pledged Shares, other than under
applicable securities laws or as may appear on the face of the certificates, and
that Pledgor has the right to transfer the Pledged Shares without obtaining the
consent of the other Tower Tech shareholders
5. Adjustments. If, during the term of this pledge, any share dividend,
reclassification, readjustment, or other change is declared or made in the
capital structure of Tower Tech, all new, substituted, and additional shares, or
other securities, issued by reason of any such change shall be held by Pledgee
under the terms of this Agreement in the same manner as the Pledged Shares
originally pledged hereunder.
6. Payment of the Loan. Upon payment of the Loan, less amounts received
and applied by Pledgee in reduction thereof, Pledgee shall release its pledge
and transfer to Pledgor all of the Pledged Shares, free and clear of all liens,
encumbrances or other restrictions
7. Default. If Tower Tech defaults in the payment of any principal or
interest due under the Note, Pledgee shall have the tights and remedies provided
in the Uniform Commercial Code in force in the State of Oklahoma at the date of
this Agreement. Notwithstanding any other term or provision of this Agreement,
Pledgor shall not have any personal liability whatsoever for repayment of Tower
Tech's obligation under the Note, and Pledgee shall look solely to the Pledged
Shares for satisfaction of the obligations of Pledgor.
IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written
ss/XXXXXX XXXXXX
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