Exhibit 10.20
June 12, 1998
Date
THE CIT GROUP/EQUIPMENT FINANCING, INC.
900 Ashwood Parkway
Address
At1anta
City
GA 30338
State Zip Code
Gentlemen
You are irrevocably instructed to disburse the proceeds of your loan to us,
evidenced by our Schedule of Indebtedness and Collateral No. 04 dated June 12,
1998 to Master Security Agreement dated October 31, 1997 between Tower Tech,
Inc. as Debtor and the CIT Group/Equipment Financing, as Secured Party, as
follows:
Payee Names and Addresses Amount
The CIT Group/Equipment Financing, Inc. Amount
$1,671,914.59
(payoff accts. 63403-67691 73100) $ --
Product Handling Design, Inc. $ 57,941.25
Rapid Granulator, Inc. $ 23,970.34
Tower Tech, Inc. $ 22,088.41
$ --
$ --
Total Proceeds $1,775,814.59
Very truly yours,
Tower Tech, Inc.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Title CFO
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Master Security Agreement
This Master Security Agreement provides a set of terms and conditions that the
parties hereto intend to be applicable to various loan transactions secured by
personal property. Each such loan and security agreement shall be evidenced by a
schedule of indebtedness and collateral ("Schedule") executed by Secured Party
and Debtor that explicitly incorporates the provisions of this Master Security
Agreement and that sets forth specific terms of that particular loan and
security contract. Where the provisions of a Schedule conflict with the terms
hereof, the provisions of the Schedule shall prevail. Each Schedule shall
constitute a complete and separate loan and security agreement, independent of
all other Schedules, and without any requirement of being accompanied by an
originally executed copy of this Master Security Agreement. The term Security
Agreement" when used herein shall refer to an individual Schedule.
One originally executed copy of the Schedule shall be denominated "Originally
Executed Copy No. of 1 originally executed copies" and such copy shall be
retained by Secured Party. If more than one copy of the Schedule is executed by
Secured Party and Debtor, all such other copies shall be numbered consecutively
with numbers greater than 1. Only transfer of possession by Secured Party of
Originally Executed Copy No.1 shall be effective for purposes of perfecting an
interest in such Schedule by possession.
1. Grant of Security Interest: Description of Collateral.
Debtor grants to Secured Party a security interest in the property described in
the Schedules now ~r hereafter executed by or pursuant to the authority of the
debtor and accepted by Secured Party in writing, along with all present and
future attachments and accessories thereto and replacements and proceeds
thereof, including amounts payable under any insurance policy, all hereinafter
referred to collectively as "Collateral." Each Schedule shall be serially
numbered. Unless and only to the extent otherwise expressly provided in a
Schedule, no Schedule shall replace any previous Schedule but shall be
supplementary to all previous Schedules.
2. What Obligations the Collateral Secures.
Each item of Collateral shall secure not only the specific amount which Debtor
promises to pay in each Schedule, but also all other present and future
indebtedness or obligations of Debtor to Secured Party of every kind and nature
whatsoever.
3. Promise to Pay; Terms and Place of Payment.
Debtor promises to pay Secured Party the amounts set forth on each Schedule at
the rate and upon such terms as provided therein.
4. Use and Location of Collateral.
Debtor warrants and agrees that the Collateral is to be used primarily for: X
business or commercial purposes (other than agricultural), _ agricultural
purposes (see definition on the final page), or _ both agricultural and business
or commercial purposes.
Location: ▇▇▇▇▇ ▇▇▇▇▇ ▇-44
----------------
Address
Oklahoma City
-------------
City
Cleveland
---------
County
OK 73170
----- -----
State Zip Code
Debtor and Secured Party agree that regardless of the manner of affixation, the
Collateral shall remain personal property and not become part of the real
estate. ▇▇▇▇▇▇ agrees to keep the Collateral at the location set forth above,
and will notify Secured Party promptly in writing of any change. If the location
of the Collateral within such State, but will not remove the collateral from
such State without the prior written consent of Secured Party (except that in
the State of Pennsylvania. the Collateral will not be moved from the above
location without such prior written consent.
5. Late Charges and other Fees.
Any payment not made when due shall, at the option of Secured Party, bear late
charges thereon calculated at the rate of 1-1/2% per month, but in no event
greater than the highest rate permitted by relevant law. Debtor shall be
responsible for and pay to Secured Party a returned check fee, not to exceed the
maximum permitted by law, which fee will be equal to the sum of (i) the actual
bank charges incurred by Secured Party plus (ii) all other actual costs and
expenses incurred by Secured Party. The returned check fee is payable upon
demand as indebtedness secured by the Collateral under this Security Agreement.
6. Debtors Warranties and Representations.
Debtor warrants and represents:
(a) that Debtor is justly indebted to Secured Party for the full amount of the
indebtedness set forth on each Schedule
(b) that except for the security interest granted hereby, the Collateral is
free from and will be kept free from all liens claims, security interests
and encumbrances;
(c) that no financing statement covering the Collateral or any proceeds
thereof is on file in favor of anyone other than secured Party, but if
such other financing Statement is on file, it will be terminated or
subordinated;
(d) that all information supplied and Statements made by Debtor in any
financial, credit or accounting statement or application for credit prior
to, contemporaneously with or subsequent to the execution of this Security
Agreement with respect to this transaction are and shall be true, correct,
valid and genuine; and
(e) that Debtor has full authority to enter into this agreement and in so
doing it is not violating its charter or by-laws, any law or regulation or
agreement with third parties, and it has taken all such action as may be
necessary or appropriate to make this Security Agreement binding upon it.
7. Debtor's Agreements.
▇▇▇▇▇▇ agrees:
(a) to defend at ▇▇▇▇▇▇'s own cost any action, proceeding, or claim affecting
the Collateral;
(b) to pay reasonable attorneys' fees (at least 15% of the unpaid balance if
not prohibited by law) aid other expenses incurred by Secured party in
enforcing its rights against Debtor under this Security Agreement;
(c) to pay promptly all taxes, assessments, license fees and other public or
private charges when levied or assessed against the Collateral of this
Security Agreement, and this obligation shall survive the termination of
this Security Agreement;
(d) that if a certificate of title be required or permitted by law, Debtor
shall obtain such certificate with respect to the collateral, showing the
security interest of Secured Party thereon and in any event do everything
necessary or expedient to reserve or perfect the security interest of
Secured Party;
(e) that Debtor will not misuse, fail to keep in good repair, secrete or
without the prior written consent of Secured Party, sell, rent, lend,
encumber or transfer any of the Collateral notwithstanding Secured Party's
right to Proceeds;
(f) that Secured Party may enter upon ▇▇▇▇▇▇'s premises or wherever the
Collateral may be locate at any reasonable time to inspect the Collateral
and Debtor's books and records pertaining to the Collateral, and Debtor
shall assist Secured Party in making such inspection; and
(g) that the security interest granted by Debtor to Secured Party shall
continue effective irrespective of any retaking or redelivery of any
Collateral and irrespective of the payment of the amount described in any
Schedule so long as there are any obligations of any kind, including
obligations under guaranties or assignments, owed by Debtor to Secured
Party, provided,- however, upon any assignment of this Security Agreement
the Assignee- shall thereafter be deemed for the purpose of this Paragraph
the Secured Party under this Security Agreement.
8. Insurance and Risk of Loss.
All risk of loss, damage to or destruction of the Collateral shall at all times
be on Debtor. Debtor will procure forthwith and maintain at Debtor's expense
insurance against all risks of loss or physical damage to the Collateral for the
full insurable value thereof for the life of this Security Agreement and such
other insurance thereon in amounts and against such risks as Secured Party may
specify, and shall promptly deliver each policy to Secured Party with a standard
long-form mortgagee endorsement attached thereto showing loss payable to secured
Party; and providing Secured Party with not less than 30 days written notice of
cancellation; each such policy shall be in form, terms and amount and with
insurance carriers satisfactory to Secured Party; Secured Party's acceptance of
Policies in lesser amounts or risks shall not be a waiver of Debtor's I
foregoing obligations. As to Secured Party's interest in such policy no act or
omission of Debtor or any of its officers, agents, employees or representatives
shall affect the obligations of the insurer to pay the full amount of any loss.
Debtor hereby assigns to Secured Party any monies which may become payable under
any such policy of insurance and irrevocably constitutes and appoints Secured
Party as Debtor's attorney n fact (a) to hold each original insurance policy (b)
to make, settle and adjust claims under each policy of insurance, (c) to make
claims for any monies which may become payable under such and other insurance cm
the Collateral including returned or unearned premiums, and (d) to endorse
Debtor's name on any check, draft or other instrument received in payment of
claims or returned or unearned premiums under each policy and to apply the funds
to the payment of the indebtedness owing to Secured Party; provided, however,
Secured Party is under no obligation to do any of the forgoing.
Should Debtor fail to furnish such insurance policy to Secured Party, or to
maintain such policy in full force, or to pay any premium in whole or in part
re1ating thereto, then Secured Party, without waiving or releasing any default
or obligation by Debtor, may (but shall be under no obligation to) obtain and
maintain insurance and pay the premium therefor on behalf of Debtor and charge
the premium to Debtor's indebtedness under this Security Agreement. The full
amount of any such premium paid by Secured Party shall be payable by Debtor upon
demand, and failure to pay same shall constitute an event of default under this
Security Agreement.
A very important element of this Security Agreement is that Debtor make all its
payments promptly as agreed upon. It is essential that the Collateral remain in
good condition and adequate security for the indebtedness. The following are
events of default under this Security Agreement which will allow Secured Party
to take such action under this Paragraph and under Paragraph 10 as it deems
necessary:
(a) any of Debtor's obligations to Secured Party under any agreement with
Secured Party is not paid promptly when due;
(b) Debtor breaches any warranty or provision hereof, or of any note or of any
other instrument or agreement de1ivered by Debtor to Secured Party in
connection with this or any other transaction;
(C) ▇▇▇▇▇▇ dies, becomes insolvent or ceases to do business as a going concern:
(d) It is determined that Debtor has given Secured Party materially misleading
information regarding its financial condition;
(e) any of the Collateral is lost or destroyed;
(f) a complaint in bankruptcy or for arrangement or reorganization or for
relief under any insolvency law is filed by or against Debtor or Debtor
admits its inability to pay its debts as they mature
(g) property of Debtor is attached or a receiver is appointed for Debtor;
(h) whenever Secured Party in good faith believes the prospect of payment or
performance is impaired or in good faith believes the Collateral is
insecure;.
(i) any guarantor surety or endorser for Debtor dies or defaults in any
obligation or liability to Secured Party or any guaranty contained in
connection with this transaction is terminated or breached; or
(j) if a default, event of default or breach by Debtor shall occur, or any
event occurs which with the giving of notice or passage of time or both
would constitute a default or event of default, under any loan agreement,
security agreement, financing arrangement, lease agreement, indenture,
promissory note, guaranty, or any other document, agreement or instrument
evidencing or securing a debt or obligation of Debtor (each individually a
"Loan Agreement" and collectively "Loan Agreements") with or to Finova
Capital, or any affiliate, subsidiary or parent of Finova Capital, or any
successors and assigns thereto or under a Loan Agreement which refinances
the indebtedness or obligations evidenced by the Finova Capital Loan
Agreement or replaces the Finova Capital Loan Agreement.
CDW
_________
Initials
If Debtor shall be in default hereunder, the indebtedness described in each
Schedule and all other indebtedness then owing by Debtor to Secured Party under
this or any other present or future agreement (collectively, the "Indebtedness")
shall, if Secured Party shall so elect, become immediately due and payable.
After acceleration;
(a) the unpaid principal balance of the indebtedness described in any Schedule
in which interest has been precomputed shall bear interest at the rate of
18% per annum (or, if less, the maximum rate permitted by law) until paid
in full; arid
(b) the unpaid principal balance of the indebtedness described in any Schedule
in which interest has not been precomputed shall bear interest at the same
rate as before acceleration until paid in full.
In no event shall the Debtor upon demand by Secured Party for payment of the
Indebtedness, by acceleration of the maturity thereof or otherwise, be obligated
to pay any interest in excess of the amount permitted by law Any acceleration of
the Indebtedness, if elected by Secured Party, shall be subject to all
applicable laws, including laws relating to rebates and refunds of unearned
charges.
10. Secured Party's Remedies After Default; Consent to Enter Premises.
Upon ▇▇▇▇▇▇'s default and at any time thereafter, subject to ▇▇▇▇▇▇'s right to a
30 day cure period (referencing item 9(a) only), Secured Party shall have all
the rights and remedies of a secured party under the Uniform Commercial Code and
any other applicable laws, including the right to any deficiency remaining after
disposition of the Collateral for which Debtor hereby agrees to remain fully
liable. Debtor agrees that Secured Party, by itself or its agent, may without
notice to any person and without judicial process of any kind, enter into any
premises or upon any land owned, leased or otherwise under the real or apparent
control of Debtor or any agent of Debtor where the Collateral may be or where
Secured Party believes the Collateral may be, and disassemble, render unusable
and or repossess all or any item of the Collateral, disconnecting and separating
all Collateral from any other property and using all force necessary. Debtor
expressly waives all further rights to possession of the Collateral after
default. Secured Party may require Debtor to assemble the Collateral and return
it to Secured Party at a place to be designated by Secured Party which is
reasonably convenient to both parties.
Secured Party may sell or lease the Collateral at a time and location of its
choosing provided that the Secured Party acts in good faith and in a
commercially reasonable manner. Secured Party will give Debtor reasonable notice
of the time and place of any public sale of the Collateral or of the time after
which any private sale or any other intended disposition of the Collateral is to
be the outstanding principal balance If not prohibited by law) and other legal
expenses. Debtor under' tends that Secured Party's rights are cumulative and not
alternative.
11. Waiver of Defaults; Agreement Inclusive.
Secured Party may in its sole discretion waive a default, or cure, at Debtor's
expense, a default. Any such waiver in a particular Instance or of a particular
default shall not be a waiver of other defaults or the same kind of default at
another time. No modification or change in this Security Agreement or any
related note instrument or agreement shall bind Secured Party unless in writing
signed by Secured Party. No oral agreement shall be binding.
12. Financing Statements; Certain Expenses.
If permitted by law, ▇▇▇▇▇▇ authorizes Secured Party to file a financing
statement with respect to the Collateral signed only by Secured Party, and to
file a carbon, photograph or other reproduction of this Security Agreement or of
a financing statement. At the request of Secured Party, Debtor will execute any
financing statements, agreements or documents, in form satisfactory to Secured
Party which Secured Party may deem necessary or advisable to establish and
maintain a perfected security interest in the Collateral and will pay the cost
of filing or recording the same in all public offices deemed necessary or
advisable by Secured Party. ▇▇▇▇▇▇ also agrees to pay all costs and expenses
incurred by Secured Party in conducting UCC, tax or other lien searches against
the debtor or the Collateral and such other fees as may be agreed.
13. Waiver of Defenses Acknowledgement.
If Secured Party assigns this Security Agreement to a third party ("Assignee")
and Secured Party Uses its best efforts to notify Debtor of such Assignment.,
then after such assignment:
(a) Debtor will make all payments directly to such Assignee at such place as
Assignee may from time to time designate in writing:
(b) ▇▇▇▇▇▇ agrees that it will settle all claims, defenses, setoffs and
counterclaims occurring prior to the date of assignment it may have
against Secured Party directly with Secured Party and will not set up any
such claim, defense, setoff or counterclaim against Assignee, Secured
Party hereby agreeing to remain responsible therefor;
(c) Secured Party shall not be Assignee's agent for any purpose and shall have
no authority to change or modify this Security Agreement or any related
document or instrument; and
(d) Assignee shall have all of the rights and remedies of Secured Party
hereunder but none of Secured Party's obligations arising prior to the
date of Assignment
14. Miscellaneous.
Debtor waives all exemptions. Secured Party may correct patent errors herein and
fill in such blanks as serial numbers, date of first payment and the like. Any
Provisions hereof contrary to, prohibited by or invalid under applicable laws or
regulations shall be inapplicable and deemed omitted therefrom, but shall not
invalidate the remaining provisions hereof.
Debtor and Secured Party each: hereby waive any right to a trial by jury in any
action or proceeding with respect to, in connection with, or arising out of this
Security Agreement, or any note or document delivered pursuant to this Security
Agreement. Except as otherwise provided herein or by applicable law, the Debtor
shall have no right to prepay the indebtedness described in any Schedule.
Debtor acknowledges receipt of a true copy and waives acceptance hereof.
If Debtor is a corporation, this Security Agreement is executed pursuant to
authority of its Board of Directors. Except where the context otherwise
requires, "Debtor" and "Secured Party" include the heirs, executors or
administrators, successors or assigns of those parties; nothing herein shall
authorize Debtor to assign this Security Agreement, or its rights in and to the
Collateral. If more than one Debtor executes this Security Agreement, their
obligations under this Security Agreement shall be joint and several.
If at any time this transaction would be usurious under applicable law, then
regardless of any provision contained in this Security Agreement or In any other
agreement made in connection with this transaction, it is agreed that:
(a) the total of all consideration which constitutes interest under applicable
law that is contracted to; charged or received upon this Security
Agreement or any such other agreement shall under no circumstances exceed
the maximum rate of interest authorized by applicable law and any excess
shall be credited to the Debtor; and
(b) If Secured Party elects to accelerate the maturity of, or if Secured Party
permits Debtor to prepay the indebtedness described in Paragraph 3, any
amounts which because of such action would constitute interest may never
include more than the maximum rate of interest authorized by applicable
law and any excess interest, if any, provided for in this Security
Agreement or otherwise, shall be credited to Debtor automatically as of
the date of acceleration or prepayment.
15. Special Provisions.
See Special Provisions Instructions.
Dated: 10/31/97
Debtor:
Tower Tech, Inc.
Name of individual, corporation or partnership
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Title: Treasurer
____________________
If corporation, have signed by President, Vice President or Treasurer, and
give official title. If owner or partner, state which.
11935 South I-44
Address
Oklahoma City OK 73173
City State Zip Code
Secured Party:
THE CIT GROUP / EQUIPMENT FINANCING, INC.
Name of individual, corporation or partnership
By: ______________________ Title: ___________________
If corporation, give official title. If owner or partner, state which.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Ste. 600
Address
Atlanta GA 30338
City State Zip Code
If Debtor is a partnership, enter:
Partners' names Home addresses
N/A
NOTICE: Do not use this form for transactions for personal, family or household
purposes. For agricultural and other transactions subject to Federal or State
regulations, Consult legal counsel to determine documentation requirements.
Agricultural purposes generally mean: farming, including dairy farming, but it
also includes thee transportation, harvesting, and processing of farm, dairy. or
forest products if what is transported, harvested, or processed is farm, dairy,
or forest products grown or bred by the user of the equipment itself. It does
not apply, for instance, to a logger who harvests someone else's forest, or a
contractor who prepares land or harvests products on someone else's farm.
SPECIAL PROVISIONS INSTRUCTIONS - The notations to be entered in the Special
Provisions Section of this document for use in ALABAMA, FLORIDA, GEORGIA, IDAHO,
NEVADA, NEW HAMPSHIRE, OREGON, SOUTH DAKOTA AND WISCONSIN are shown in the
applicable State pages of the Loans and Motor Vehicles Manual.
Schedule No.04
Schedule of Indebtedness and Collateral
To Master Security Agreement dated October 31, 1997 between the undersigned
Secured Party and Debtor.
This Schedule of Indebtedness and Collateral incorporates the terms and
conditions of the above-referenced Master Security Agreement.
This is Originally Executed Copy No. 1 of 1 originally executed copies. Only
transfer of possession by Secured Party of Originally Executed Copy No.1 shall
be effective for purposes of perfecting an interest in this Schedule by
possession.
The equipment listed on this Schedule will be located at:
11935 S. 1-44
Address
Oklahoma City
City
OK
State
73170
Zip Code
Debtor grants to Secured Party a security interest in the property described
below, along with all present and future attachments and accessories thereto and
replacements and proceeds thereof, including amounts payable under any insurance
policy all hereinafter referred to collectively as "Collateral".
Collateral Description (Describe Collateral fully including make kind of unit
model and serial numbers and any other pertinent information)
All presently owned machinery and equipment including fixtures and all
additions, substitutions and replacements thereof located at 11935 5. I-44,
Oklahoma City, OK together with all attachments, component parts, equipment and
accessories installed thereon or affixed thereto and all proceeds thereof,
including without limitation the collateral described on the attached Exhibit A.
Page 1
of 2
Debtor promises to pay Secured Party the total sum of $2,320,616.96 which
represents principal and interest precomputed over the term hereof, payable in
72 (total number) combined principal and interest payments of $32,230.79 each
commencing on _______________________ and a like sum on a like date each month
thereafter until fully paid, provided however that the final payment shall be in
the amount of the unpaid balance and interest.
Payment shall be made at the address of Secured Party shown on the Master
Security Agreement or such other place as Secured Party may designate from time
to time.
See Special Provisions Instructions below
Accepted
Secured Party:
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By: _________________________ Title: _____________________
Executed on 6/16/98
Debtor:
Tower Tech, Inc.
Name of individual corporation or partnership
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Title: CFO
___________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
