exh10-6_creditagmt.htm


     

    
      

      

    

     

     

     

     

     

     

     

     

    EXHIBIT 10.6

     

    INDUSTRIAL DEVELOPMENT REVENUE BONDS,

    CREDIT AGREEMENT DATED FEBRUARY 28, 2007

    
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    


    CREDIT
AGREEMENT

     

    Dated as
of February 28, 2007

     

    By and
Between

     

    


     

    ADVANCED
FIBERGLASS TECHNOLOGIES, INC.,

     

     

     

    M
& W FIBERGLASS, LLC,

     

    JAMIE
L. MANCL AND JENNIFER MANCL

     

    AS
BORROWER

     

    And

     

    NEKOOSA
PORT EDWARDS STATE BANK

     

    Relating
to:

     

    $4,000,000

    City
of Wisconsin Rapids, Wisconsin

    Industrial
Development Revenue Bonds, Series 2007A, Series 2007B and Series
2007C

    (Advanced
Fiberglass Technologies Project)

     


    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


        
          


          TABLE OF CONTENTS


          Page

        

      

    

    
      
        	
                RECITALS

              	
                1

              
	 	 
	
                AGREEMENT

              	
                1

              
	 	 
	
                ARTICLE
      I DEFINITIONS

              	
                1

              
	 
      	
                1.01

              	
                Defined
      Terms

              	
                1

              
	 
      	
                1.02

              	
                Other
      Terms

              	
                7

              
	 	 
	
                ARTICLE
      II PURCHASE OF THE BONDS; REPAYMENT OF THE LOAN

              	
                7

              
	 
      	
                2.01

              	
                Purchase
      of the Bonds

              	
                7

              
	 
      	
                2.02

              	
                Repayment
      of the Loan

              	
                7

              
	 
      	
                2.03

              	
                Yield
      Protection

              	
                8

              
	 	 
	
                ARTICLE
      III REPRESENTATIONS AND WARRANTIES

              	
                8

              
	 
      	
                3.01

              	
                Organization,
      Etc.

              	
                9

              
	 
      	
                3.02

              	
                Authorization

              	
                9

              
	 
      	
                3.03

              	
                No
      Conflicting Obligations

              	
                9

              
	 
      	
                3.04

              	
                No
      Defaults

              	
                9

              
	 
      	
                3.05

              	
                No
      Litigation

              	
                9

              
	 
      	
                3.06

              	
                Financial
      Statements

              	
                9

              
	 
      	
                3.07

              	
                Accuracy
      of Information

              	
                9

              
	 
      	
                3.08

              	
                Taxes

              	
                10

              
	 
      	
                3.09

              	
                Property

              	
                10

              
	 
      	
                3.10

              	
                Licenses,
      Franchises

              	
                10

              
	 
      	
                3.11

              	
                Places
      of Business; Collateral

              	
                10

              
	 
      	
                3.12

              	
                Other
      Names

              	
                10

              
	 
      	
                3.13

              	
                Federal
      Reserve Regulations

              	
                10

              
	 
      	
                3.14

              	
                ERISA

              	
                11

              
	 
      	
                3.15

              	
                Investment
      Company Act; Public Utility Holding Company Act

              	
                11

              
	 
      	
                3.16

              	
                Environmental
      Laws

              	
                11

              
	 	 
	
                ARTICLE
      IV CONDITIONS PRECEDENT TO PURCHASE OF THE BONDS

              	
                11

              
	 
      	
                4.01

              	
                Certain
      Related Documents

              	
                11

              
	 
      	
                4.02

              	
                Bond
      Documents

              	
                11

              
	 
      	
                4.03

              	
                Closing
      Certificate

              	
                11

              
	 
      	
                4.04

              	
                UCC
      Searches

              	
                12

              
	 
      	
                4.05

              	
                Insurance
      Certificates

              	
                12

              
	 
      	
                4.06

              	
                Title
      Insurance

              	
                12

              
	 
      	
                4.07

              	
                Survey.  [Reserved]

              	
                12

              
	 
      	
                4.08

              	
                Environmental
      Reports

              	
                12

              
	 
      	
                4.09

              	
                Counsel
      Opinion

              	
                12

              
	 
      	
                4.10

              	
                Real
      Estate Appraisals

              	
                12

              
	 
      	
                4.11

              	
                Proceedings
      Satisfactory

              	
                13

              
	 
      	
                4.12

              	
                Project
      Compliance

              	
                13

              
	 
      	
                4.13

              	
                Supporting
      Documents

              	
                13

              


      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

      
        	 	 
	
                ARTICLE
      IVA CONDITIONS TO BANK'S AGREEMENT TO PURCHASE BONDS AND TO FUND
      BORROWER'S REQUISITIONS

              	
                13

              
	 
      	
                4A.1

              	
                Construction
      Contract

              	
                13

              
	 
      	
                4A.3

              	
                Title
      Endorsements

              	
                13

              
	 	 
	
                ARTICLE
      V AFFIRMATIVE COVENANTS

              	
                13

              
	 
      	
                5.01

              	
                Existence;
      Compliance With Laws; Maintenance of Business; Taxes

              	
                13

              
	 
      	
                5.02

              	
                Maintenance
      of Property; Insurance

              	
                14

              
	 
      	
                5.03

              	
                Financial
      Statements

              	
                14

              
	 
      	
                5.04

              	
                Inspection
      of Property and Records/Bank Audits

              	
                15

              
	 
      	
                5.05

              	
                Use
      of Proceeds

              	
                16

              
	 
      	
                5.06

              	
                Bank
      Accounts

              	
                16

              
	 
      	
                5.07

              	
                Compliance
      With Other Agreements

              	
                16

              
	 
      	
                5.08

              	
                Compliance
      With Laws

              	
                16

              
	 
      	
                5.09

              	
                Payment
      of Fees and Costs

              	
                17

              
	 
      	
                5.10

              	
                Project
      Disbursements

              	
                17

              
	 
      	
                5.11

              	
                No
      Liens; Plans; Covenants, Conditions and Restrictions

              	
                17

              
	 
      	
                5.12

              	
                Project
      Lease

              	
                17

              
	 
      	
                5.13

              	
                Key-Person
      Life Insurance

              	
                17

              
	 
      	
                5.14

              	
                Minimum
      Tangible Net Worth

              	
                18

              
	 
      	
                5.15

              	
                Debt
      Service Coverage Ratio

              	
                18

              
	 
      	
                5.16

              	
                Total
      Indebtedness to Tangible Net Worth Ratio

              	
                18

              
	 
      	
                5.17

              	
                Annual
      Resting of Line of Credit

              	 
      	
                18

              
	 
      	
                5.18

              	
                Mortgage
      on After-Acquired Real Estate

              	
                18

              
	 	 
	
                ARTICLE
      VI NEGATIVE COVENANTS

              	
                18

              
	 
      	
                6.01

              	
                Sale
      of Assets, Consolidation, Merger, Acquisitions, Etc.

              	
                18

              
	 
      	
                6.02

              	
                Indebtedness

              	
                19

              
	 
      	
                6.03

              	
                Liens

              	
                19

              
	 
      	
                6.04

              	
                Guaranty

              	
                19

              
	 
      	
                6.05

              	
                Loans,
      Investments

              	
                19

              
	 
      	
                6.06

              	
                Compliance
      with ERISA

              	
                19

              
	 
      	
                6.07

              	
                Restricted
      Payments

              	
                19

              
	 
      	
                6.08

              	
                Project
      Lease – No Modification

              	
                20

              
	 
      	
                6.09

              	
                Salaries

              	
                20

              
	 
      	
                6.10

              	
                Change
      In Control

              	
                20

              
	 	 
	
                ARTICLE
      VII EVENTS OF DEFAULT

              	
                20

              
	 
      	
                7.01

              	
                Events
      of Default Defined

              	
                20

              
	 
      	
                7.02

              	
                Remedies
      Upon Event of Default

              	
                21

              
	 	 
	
                ARTICLE
      VIII MISCELLANEOUS

              	
                22

              
	 
      	
                8.01

              	
                Indemnity

              	
                22

              
	 
      	
                8.02

              	
                Assignability;
      Successors

              	
                22

              
	 
      	
                8.03

              	
                Survival

              	
                22

              
	 
      	
                8.04

              	
                Counterparts;
      Headings

              	
                22

              
	 
      	
                8.05

              	
                Entire
      Agreement; Amendments

              	
                22

              


      

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	 
      	
                8.06

              	
                Notices

              	
                22

              
	 
      	
                8.07

              	
                No
      Waiver

              	
                24

              
	 
      	
                8.08

              	
                Severability

              	
                24

              
	 
      	
                8.09

              	
                Further
      Assurances

              	
                24

              
	 
      	
                8.10

              	
                Conflicts
      and Ambiguities

              	
                24

              
	 
      	
                8.11

              	
                Governing
      Law

              	
                24

              
	 
      	
                8.12

              	
                Consent
      to Jurisdiction

              	
                25

              
	 
      	
                8.13

              	
                Fees
      and Expenses

              	
                25

              
	 
      	
                8.14

              	
                Assignments;
      Participations

              	
                26

              
	 
      	
                8.15

              	
                WAIVER
      OF JURY TRIAL

              	
                26

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                SCHEDULE
      1.01(a) - Project Real Property

              
	 
	
                SCHEDULE
      3.11 - Places of Business/Locations of
  Collateral

              


      


      
        
           


        

        
          iii

          
            

          

        

        
           


        

      



    CREDIT
AGREEMENT

     

    THIS
CREDIT AGREEMENT, dated February 28, 2007 (this “Agreement”), is made
by and between ADVANCED FIBERGLASS TECHNOLOGIES, INC., a Wisconsin corporation
(the “Corporation”), M
& W FIBERGLASS, LLC, a Wisconsin limited liability company (the “LLC”), JAMIE L.
MANCL, an individual resident of the State of Wisconsin, and JENNIFER MANCL, an
individual resident of the State of Wisconsin (Jamie L. Mancl and Jennifer Mancl
being referred to herein as the “Individual
Borrowers”) (as used herein the term “Borrower” shall mean,
the Corporation, the LLC and the Individual Borrowers, individually or
collectively, as the context requires), and NEKOOSA PORT EDWARDS STATE BANK,
Nekoosa, Wisconsin, as lender and as agent for the financial institutions from
time to time parties hereto (the “Bank” or the “Original
Purchaser”).

     

     

    RECITALS

     

    A.           The
City of Wisconsin Rapids, Wisconsin (the “Issuer”), will issue
its Industrial Development Revenue Bonds, Series 2007A, 2007B and 2007C
(Advanced Fiberglass Technologies Project) in the aggregate principal amount of
Four Million Dollars ($4,000,000) (the “Bonds”), pursuant to
a Bond Agreement dated as of February 28, 2007 (the “Bond Agreement”), by
and among the Issuer, the Borrower, Nekoosa Port Edwards State Bank, as trustee
(the “Trustee”)
and the Original Purchaser (the “Bond
Agreement”).

     

    B.           The
proceeds derived from the issuance of the Bonds will be loaned to the Borrowers
pursuant to the Bond Agreement, and used for (i) the construction of an
approximately 70,000 square foot manufacturing facility to be located at 4400
Commerce Drive in the City of Wisconsin Rapids, Wisconsin (the “Facility”) to be
owned by the LLC and leased to the Corporation and use in connection with the
Corporation’s manufacturing business; and (ii) the acquisition and
installation of equipment at the Facility (collectively (i) and (ii) are
referred to herein as the “Project”).

     

    C.           To
provide the funds to be loaned to the Borrowers for payment of the costs of the
Project, the Issuer has contracted for the sale of the Bonds to the Bank, and
the Bank has agreed to purchase such Bonds in reliance on Borrowers’ agreeing to
the terms and conditions set forth herein.

     

     

    AGREEMENT

     

    NOW,
THEREFORE in consideration of the premises and the mutual agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

     

     

    ARTICLE I

     

     

    DEFINITIONS

     

    1.01   Defined
Terms.  As
used herein, the following terms shall have the following meanings:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Agreement” shall mean
this Credit Agreement, as amended, restated, supplemented, modified or extended
from time to time.

     

    “Appraised Value”
shall have the meaning set forth in Section 4.10.

     

    “Bank” shall mean
Nekoosa Port Edwards State Bank, a Wisconsin banking corporation, and its
successors and assigns.

     

    “Bond Agreement” shall
mean the Bond Agreement dated as of February 28, 2007, by and among the Issuer,
the Trustee, the Borrower and the Bank pursuant to which the Bonds shall be
issued.

     

    “Bond Documents” shall
mean the Bonds, the Bond Agreement, the Promissory Note and all instruments, and
other agreements executed by the Borrower in connection with the
Bonds.

     

    “Bond Proceeds” the
proceeds of the sale of the Bonds such amount not to exceed $4,000,000 as may be
advanced by the Original Purchaser under the Bond Agreement.

     

    “Bond Rate” shall mean
the then-applicable interest rate on the Bonds.

     

    “Bond Year” shall
mean, commencing with the Closing Date, each year ending on February 28 or
February 29 (as applicable).

     

    “Bonds” shall mean the
Issuer’s Industrial Development Revenue Bonds, Series 2007A, Series 2007B and
Series 2007C (Advanced Fiberglass Technologies Project) issued on the Closing
Date, in the aggregate principal amount of Four Million Dollars
($4,000,000).

     

    “Borrower” shall mean
individually or collectively, as the context requires, the Corporation, the LLC,
and the Individual Borrowers.

     

    “Business Day” shall
mean a day other than a Saturday, Sunday or other day on which banks are
required or authorized to remain closed in the city in which the Bank’s
Principal Office is located.

     

    “Closing Date” shall
mean February 28, 2007.

     

    “Code” shall mean the
Internal Revenue Code of 1986, as amended and recodified from time to
time.

     

    “Collateral” shall
mean all of the rights, interest and Property of Borrower granted to the Bank as
collateral hereunder or to the Trustee as collateral under the Bond Documents
and under the Related Documents, and all other rights, interests and Property
from time to time granted to the Bank as collateral for the payment and
performance of the Obligations.

     

    “Collateral Assignment of
Construction Contracts” shall mean the Collateral Assignment of
Construction Contracts dated February 28, 2007 by Borrower in favor of the
Trustee and the Bank, as amended, restated, supplemented, modified or extended
from time to time.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Collateral Assignment of
Life Insurance” shall mean the Collateral Assignment of Life Insurance
dated February 28, 2007 by Borrower in favor of the Trustee and the Bank, as
amended, restated, supplemented, modified or extended from time to
time.

     

    “Corporation” shall
mean Advanced Fiberglass Technologies, Inc., a Wisconsin
corporation.

     

    “Debt Service Coverage
Ratio” of any entity or entities on any date shall mean the ratio of
(i) EBITDAR for the 12-month period ending on the measurement date to
(ii) interest expenses plus principal payments coming due during the
12-month period beginning on the day after the measurement date.

     

    “Default” shall mean
an event which with the giving of notice or the passage of time or both would
constitute an Event of Default.

     

    “Default Rate” shall
mean a rate equal to the Bond Rate plus 3%, per annum.

     

    “Disbursing Agreement”
shall mean the Disbursing Agreement dated as of February 28, 2007, among the
Borrower, the Bank, the Trustee and the Title Company, as amended, restated,
extended, supplemented or otherwise modified from time to time.

     

    “EBITDAR” means
earnings before interest, taxes, depreciation, amortization and rent
expense.

     

    “Employer Plan” shall
mean any pension or welfare benefit plan of Borrower.

     

    “Environmental Law” or
“Environmental Laws” shall mean any local, state or federal law or other
statute, law, ordinance, rule, code, regulation, decree or order governing,
regulating or imposing liability or standards of conduct concerning the use,
treatment, generation, storage, disposal or other handling or release of any
hazardous substance, including without limitation, any pollutant, contaminant,
waste or toxic or hazardous chemicals, wastes or substances, including, without
limitation, asbestos, urea formaldehyde insulation, petroleum, PCBs, air
pollutants, water pollutants, and other substances defined as hazardous
substances or toxic substances in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9061 et
seq., Hazardous Materials Transportation Act, 49 U.S.C. § 1802, the
Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Toxic
Substance Control Act of 1976, as amended, 15 U.S.C. § 2601 et seq., the
Solid Waste Disposal Act, 42 U.S.C. § 3251 et seq., the Clean Air Act, 42
U.S.C. § 1857 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq.,
Chapters 254, 281, 283, 285, 287, 289, 291, 292, 293, 295 and 299 of the
Wisconsin Statutes, or any other statute, rule, regulation or order of any
Government Authority having jurisdiction over the control of such wastes or
substances, including without limitation the United States Environmental
Protection Agency, the United States Nuclear Regulatory Commission, and the
State of Wisconsin.

     

    “Event of Default”
shall have the meaning assigned in Section 7.01 hereof.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended, and any successor
statute, together with the regulations and published interpretations thereunder,
in each case as in effect from time to time.

     

    “GAAP” shall mean
those generally accepted accounting principles and practices which are
recognized as such by the American Institute of Certified Public Accountants
acting through appropriate boards or committees thereof and which are
consistently applied for all periods so as to properly reflect the financial
condition, results of operations and cash flows of the Borrower.

     

    “Government Authority”
shall mean any nation or government, any state or other political subdivision
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, and any corporation
or other entity owned or controlled through stock or capital ownership or
otherwise, by any of the foregoing.

     

    “Guarantor” shall mean
Fiberglass Piping & Fitting Company, a Wisconsin corporation.

     

    “Guaranty” shall mean
that certain Guaranty dated as of February 28, 2007 given by Guarantor in favor
of the Trustee and the Bank.

     

    “Indebtedness” shall
mean all liabilities or obligations of Borrower, whether primary or secondary or
absolute or contingent or secured or unsecured:  (a) for borrowed
money or for the deferred purchase price of property or services (excluding
trade obligations incurred in the ordinary course of business, which are not the
result of any borrowing); (b) as lessee under leases that have been or
should be capitalized according to GAAP consistently applied; (c) evidenced
by notes, bonds, debentures or similar obligations; (d) under any guaranty
or endorsement (other than in connection with the deposit and collection of
checks in the ordinary course of business), and other contingent obligations to
purchase, provide funds for payment, supply funds to invest in any Person, or
otherwise assure a creditor against loss; or (e) secured by any Liens on
assets of Borrower, whether or not the obligations secured have been assumed by
Borrower.

     

    “Individual Borrowers”
shall mean Jamie Mancl and Jennifer Mancl, each an individual resident of the
State of Wisconsin.

     

    “Interest Payment
Date” shall mean each date on which a payment of interest is due on the
Bonds pursuant to Section 2.02 of the Bond Agreement.

     

    “Issuer” shall mean
the City of Wisconsin Rapids, a political subdivision of the State of
Wisconsin.

     

    “Lien” or “Liens”
shall mean any mortgage, pledge, assignment, deposit, encumbrance, lien
(statutory or other), deed of trust, security interest, or security agreement of
kind or nature whatsoever including, without limitation, any conditional sale or
other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction.

     

    “LLC” shall mean M
& W Fiberglass, LLC, a Wisconsin limited liability company.

     

    “Loan” shall mean the
loan by the Issuer to the Borrower of the Bond Proceeds.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Material Adverse
Effect” shall mean (a) an Event of Default, (b) a material
adverse change in the business, property, prospects, operations or condition
(financial or otherwise) of the Borrower, (c) the termination of any
material agreement to which the Borrower is a party which has a material adverse
effect on the operations or condition of the Borrower, (d) any material
impairment of the right to carry on the business as now or proposed to be
conducted by the Borrower, or (e) any material impairment of the ability of
the Borrower to perform the Obligations under this Agreement or the Related
Documents. A Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of an individual event and all other then existing events
would result in a Material Adverse Effect.

     

     “Mortgage” shall mean
that certain Construction Mortgage and Assignment of Leases and Rents dated as
of February 28, 2007 and executed pursuant to the requirements hereof by
Borrower in favor of the Trustee and the Bank which, among other things, grants
to the Trustee and the Bank a mortgage on the Project Real Property, as amended,
restated, supplemented, modified, or extended from time to time.

     

    “Net Income” shall
mean for any period, the net earnings of a Person as determined according to
GAAP consistently applied, excluding the effect of (a) gains from a write
up of assets, (b) gains from the acquisition of any securities,
(c) gains resulting from the sale of any investments or capital assets,
(d) amortization of any deferred credit arising from the acquisition of any
Person, and (e) proceeds of any life insurance payable to such
Person.

     

    “Obligations” shall
mean the obligation to make payments on the Promissory Note, and all mandatory
prepayments, all costs, fees and expenses, all liabilities of Borrower under the
Bond Documents, all liabilities of Borrower to the Bank, and all other
Indebtedness of Borrower to the Bank, whether or not evidenced by this
Agreement, including, without limitation, all liabilities under interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements designed to protect against fluctuations in
interest rates or currency exchange rates.

     

    “Outstanding Bonds”
shall mean, at any date, the aggregate principal amount of the Bonds on such
date.

     

    “PBGC” shall mean the
Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title
IV of ERISA.

     

    “Participants” shall
have the meaning in Section 8.14.

     

    “Payment Date” shall
mean monthly on the 28th day of
each month commencing March 28, 2007.

     

    “Permitted Liens”
shall mean, as to any Person: (a) Liens for taxes, assessments, or
governmental charges, carriers’, warehousemen’s, repairmen’s, mechanics’,
materialmen’s and other like Liens created by law, which are either not
delinquent or are being contested in good faith by appropriate proceedings which
will prevent foreclosure of such Liens, and against which adequate cash reserves
have been provided; (b) easements, restrictions, minor title irregularities
and similar matters which have no material adverse effect upon the ownership and
use of the affected Property; (c) Liens or deposits in connection with
worker’s compensation, 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

      unemployment
insurance, social security or other insurance or to secure customs duties,
public or statutory obligations in lieu of surety, stay or appeal bonds, or to
secure performance of contracts or bids, other than contracts for the payment of
money borrowed, or deposits required by law as a condition to the transaction of
business or other Liens or deposits of a like nature made in the ordinary course
of business; (d) Liens in favor of the Bank; and (e) Liens created by
sellers of goods sold to such Person on open account, which Liens attach solely
to the goods sold and secure solely the purchase price of said goods during the
period during which said goods are in the possession of such Person on a trial
or “approval” basis and before which the purchase price for said goods becomes
due and payable.

    

     

    “Person” shall mean an
individual, partnership, corporation, firm, enterprise, business trust, joint
stock company, trust, limited liability company, limited liability partnership
unincorporated association, joint venture, Government Authority or other entity
of whatever nature.

     

    “Project” shall have
the meaning assigned in Recital B.

     

    “Project Lease” shall
mean that certain Lease Agreement executed pursuant to the requirements hereof
by and between the LLC, as lessor, and the Corporation, as lessee, pursuant to
which Borrower leases the Project Real Estate to the Corporation, as amended,
restated, extended, supplemented or otherwise modified from time to
time.

     

    “Project Real
Property” shall mean the real property (including improvements and
accessions thereto) described on Schedule 1.01(a)
attached hereto.

     

    “Property” shall mean
any interest of a Person in property or assets, whether real, personal, mixed,
tangible or intangible, wherever located, and whether now owned or subsequently
acquired or arising and in the products, proceeds, additions and accessions
thereof or thereto.

     

    “Promissory Note”
shall mean the Promissory Notes dated as of February 28, 2007 in the principal
amounts of $3,000,000 (the “Series A Note”),
$500,000 (the “Series
B Note”), and $500,000 (the “Series C Note”), made
by Borrower in favor of the Issuer and assigned to the Bank, as original
purchaser of the Bonds.

     

    “Related Documents”
shall mean this Agreement, the Disbursing Agreement, the Mortgage, the Security
Agreement, the Collateral Assignment of Construction Contracts, the Collateral
Assignment of Life Insurance and all other certificates, resolutions, or other
documents required or contemplated hereunder.

     

    “Requirements of Law”
shall mean, as to any matter, Property or Person, the articles of incorporation
or organization and bylaws or operating agreement or other organizational or
governing documents of such Person, and any law (including, without limitation,
any zoning and Environmental Law), ordinance, treaty, rule, regulation, order,
decree, determination or other requirement having the force of law relating to
such matter or Person and, where applicable, any interpretation thereof by any
Government Authority.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    “Restricted Payments”
shall mean, as to any Person, (a) dividends, distributions, or other
payments by such Person based upon an ownership interest in said entity, or
(b) purchases, redemptions or other acquisitions, direct or indirect, by
such Person of an ownership interest in said entity, whether now or hereafter
outstanding.

     

    “Security Agreement”
shall mean the Security Agreement dated February 28, 2007, among the Borrower,
the Trustee and the Bank, all as amended, restated, supplemented, extended or
otherwise modified from time to time.

     

    “Subsidiary” shall
mean, as to any Person, a corporation of which shares of stock having voting
power (other than stock having such power only by reason of the happening of a
contingency that has not occurred) sufficient to elect a majority of the board
of directors or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by such Person.

     

    “Tangible Net Worth”
shall mean (1) the total of all of Corporation’s assets, excluding any
noncompetition agreements, capitalized acquisition costs, goodwill and other
intangibles, minus (2) the aggregate of all Corporation’s liabilities and
reserves of every kind and character, all determined in accordance with
generally accepted accounting principles consistent with those followed in
preparation of the financial statements described in Section 5.03
hereof.

     

    “Title Company” shall
mean Goetz Abstract & Title, Inc., as agent for Chicago Title Insurance
Company, 132 1st Street
North, Wisconsin Rapids, WI  54494, and its successors and
assigns.

     

    “Trustee” shall mean
any trustee under the Bond Agreement from time to time, initially Nekoosa Port
Edwards State Bank.

     

    “UCC” shall mean the
Uniform Commercial Code of the State of Wisconsin, as amended from time to
time.

     

    1.02  Other
Terms.  Any
capitalized terms used herein which are not defined shall have the meaning given
such terms in the Bond Agreement.  Terms defined in other Sections of
this Agreement shall have the meanings set forth therein.

     

     

    ARTICLE II

    PURCHASE OF THE BONDS;
REPAYMENT OF THE LOAN

     

    2.01  Purchase of the
Bonds.  On
the Closing Date, the Issuer will issue the Bonds and lend the Loan to the
Borrower and the Borrower will borrow the Loan from the Issuer, upon the terms
and conditions set forth in the Bond Documents the amount (not to exceed)
$4,000,000 of Bond Proceeds and cause such Bond Proceeds to be credited to the
Project Fund for disbursement by the Trustee in accordance with
Sections 3.01 and 4.02 of the Bond Agreement.  The Loan shall be
evidenced by the Promissory Note.  The outstanding principal amount of
the Loan shall at all times be equal to the principal amount of the Outstanding
Bonds.

     

    2.02  Repayment of the
Loan.  The
Borrower will pay to the Trustee at its Principal Office for the account of the
Issuer, and for deposit in the Bond Fund, in immediately available 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

      funds on
the last Business Day of each month the exact amount of interest and principal
payable on each Payment Date in accordance with the Promissory Note and those
provisions of Article IV of the Bond Agreement.  This section
shall be construed so that the Borrower’s obligation, pursuant to this section,
shall never be more than to have on deposit in the Bond Fund on any Payment Date
the exact amount of principal and interest due on the Bonds on that Payment Date
(except for the amount of additional payments required by Section 4.07 of
the Bond Agreement, amounts necessary to provide for the mandatory redemption of
Bonds at the time and in the manner provided in the Bond Agreement, including
upon acceleration of the Loan pursuant to Section 9.03 of the Bond
Agreement).  In the event that the Borrower should fail to make any of
the payments required in this subsection, the item so in default shall continue
as an obligation of the Borrower until the amount in default shall have been
fully paid, and the Borrower agrees to pay such amount with interest thereon
(including, to the extent permitted by law, interest on the overdue installments
of interest) at the Default Rate.

    

     

    2.03  Yield
Protection.  If,
after the Closing Date, the adoption of or any change in any Requirement of Law
or the compliance of the Bank therewith:

     

    (a) subjects
the Bank to any tax, duty, charge or withholding on or from payments due from
the Borrower (excluding net income taxes and franchise taxes or any other tax
based upon income imposed upon the Bank by the jurisdiction in which the Bank is
incorporated or has its principal place of business), or changes the basis of
taxation of principal, interest, fees or any other payments to the Bank in
respect of this Agreement or any other Related Agreement, or

     

    (b) imposes
or increases or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Bank, or

     

    (c) imposes
any other condition the result of which is to increase the cost to the Bank of
holding and owning the Bonds and the extensions of credit and accommodations
contemplated by this Agreement or any Related Document, or reduces any amount
receivable by the Bank in connection therewith, or requires the Bank to make any
payment calculated by reference to the Outstanding Bonds, or amounts received by
the Bank, by an amount deemed material by the Bank, then, within ten (10) days
of demand by the Bank, the Borrower agrees that they shall pay the Bank that
portion of such increased expense incurred or resulting in an amount received
which the Bank determines is attributable to receiving any such payment or
holding or owning the Outstanding Bonds.

     

    ARTICLE III

    REPRESENTATIONS AND
WARRANTIES

     

    In order
to induce the Bank to purchase the Bonds as provided herein, Borrower represents
and warrants to the Bank that all of the matters set forth (or incorporated by
reference) in the Bond Agreement are true and correct, and further represents
and warrants to the Bank as follows:

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    3.01  Organization,
Etc.  The
Corporation is a corporation duly formed, and validly existing under the laws of
the State of Wisconsin.  The LLC is a limited liability company duly
organized, and validly existing under the laws of the State of
Wisconsin.  Each Borrower has the requisite power and authority and
all necessary licenses, permits and franchises to execute and deliver, and to
perform its obligations under, this Agreement and each of the Related Documents
and Bond Documents to which it is a party, and to grant the liens and security
interests provided for in this Agreement and the Related Documents and to own
its assets and conduct its business as presently conducted.

     

    3.02  Authorization. The
making, execution, delivery and performance of this Agreement the Related
Documents by each Borrower are within the powers of such Borrower, and have been
duly authorized by all necessary action on the part of such
Borrower.  The valid execution, delivery and performance of this
Agreement and the Related Documents by each Borrower and the consummation of the
transactions contemplated hereby and thereby:  (a) do not and
will not violate any term or provision of any Requirement of Law; and
(b) are not and will not be subject to any approval, consent or
authorization of any Person or Government Authority, other than those approvals,
consents or authorizations that have already been obtained and remain in full
force and effect.  This Agreement and the Related Documents are the
valid and binding obligations of each Borrower, enforceable against each
Borrower in accordance with their respective terms.

     

    3.03  No Conflicting
Obligations. The
making, execution, delivery and performance of this Agreement and the Related
Documents and compliance with their respective terms do not violate or
constitute a default, breach or violation under any Requirements of Law or any
covenant, Bond Agreement, deed, lease, contract, agreement, mortgage, deed of
trust, note or instrument to which any Borrower is a party or by which it or its
Property is bound.

     

    3.04  No
Defaults.  No
Borrower is in default under or in violation of (a) any Requirements of
Law, (b) any covenant, indenture, deed, lease, agreement, mortgage, deed of
trust, note or other instrument to which such Borrower is a party or by which
such Borrower or its Property is bound, or (c) any
Indebtedness.

     

    3.05  No
Litigation.  There
is no pending or, to the knowledge of any Borrower, threatened litigation or
administrative proceeding at law or in equity which would, if adversely
determined, result in a Material Adverse Effect, and, to the best of each
Borrower’s knowledge after diligent inquiry, there are no presently existing
facts or circumstances likely to give rise to any such litigation or
administrative proceeding.

     

    3.06  Financial
Statements.  The
tax returns and financial statements which each Borrower previously provided to
the Bank are accurate and complete.  There has been no Material
Adverse Effect since the date of the latest of such statements.  Each
entity Borrower’s Fiscal Year ends on December 31 of each year.

     

    3.07  Accuracy of
Information.  All
information, certificates, forecasts, or statements given by Borrower to the
Bank under this Agreement and the Related Documents were accurate, true and
complete in all material respects when given, continue to be accurate, true and
complete in all material respects as of the date hereof, and do not contain any
untrue statement or omission 

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

      of a
material fact necessary to make the statements herein or therein not
misleading.  There is no fact known to any Borrower which is not set
forth in this Agreement, the Related Documents, the Bond Documents or other
documents, certificates, forecasts, or statements furnished to the Bank by or on
behalf of any Borrower in connection with the transactions contemplated hereby
which will, or which in the future may (so far as any Borrower can reasonably
foresee), cause a Material Adverse Effect.

    

     

    3.08  Taxes.  Each
Borrower has filed all federal, state, foreign and local tax returns which were
required to be filed, except those returns for which the due date has been
validly extended.  Each Borrower has paid or made provisions for the
payment of all taxes, assessments, fees and other governmental charges owed, and
no tax deficiencies have been proposed, threatened or assessed against any
Borrower.  There is no pending or, to the best of each Borrower’s
knowledge, threatened tax controversy or dispute as of the date
hereof.

     

    3.09  Property.  Each
Borrower has good and marketable title to all of its Property, including without
limitation, the Property reflected in its balance sheets referred to in
Section 3.06.  There are no Liens of any nature on any of the
Property except Permitted Liens.  All Property useful or necessary in
each Borrower’s business, whether leased or owned, is in good condition, repair
(ordinary wear and tear excepted) and working order and, to the best of each
Borrower’s knowledge after diligent inquiry, conforms to all applicable
Requirements of Law.  Each Borrower owns (or is licensed to use) and
possesses all such patents, trademarks, trade names, service marks, copyrights
and rights with respect to the foregoing as are reasonably necessary for the
conduct of the business of such Borrower as now conducted and proposed to be
conducted without, individually or in the aggregate, any material infringement
upon rights of other Persons.

     

    3.10  Licenses,
Franchises.  Each
Borrower has all authorizations, licenses, permits and franchises of any
Governmental Authority which are necessary for the conduct of its business as
now conducted and as proposed to be conducted.  All of such
authorizations, licenses, permits and franchises are validly issued and in full
force and effect, and each Borrower has fulfilled and performed in all material
respects all of its obligations with respect thereto and has full power and
authority to operate thereunder.

     

    3.11  Places of Business;
Collateral.  The
principal places of business and chief executive offices of each Borrower are
located at the addresses specified on Schedule 3.11, and the books and
records of each Borrower and all records of account are located and hereafter
shall continue to be located at such principal place of business and chief
executive office.  All locations where collateral may be maintained
are set forth on Schedule 3.11.

     

    3.12  Other
Names.  No
Borrower has conducted business under any corporate, trade, “dba”, or fictitious
names.

     

    3.13  Federal Reserve
Regulations.  No
Borrower will directly or indirectly, use any proceeds of the Bonds to:
(a) purchase or carry any “margin stock” within the meaning of
Regulations U, G, T or X of the Board of Governors of the Federal Reserve
System (12 C.F.R. Parts 221 and 224, as amended); (b) extend credit to
other Persons for any such purpose or refund indebtedness originally incurred
for any such purpose; or (c) otherwise take or permit any 

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

      action
which would involve a violation of Section 7 of the Securities Exchange Act
of 1934, as amended, or any regulation of the Board of Governors of the Federal
Reserve System.

    

     

    3.14  ERISA.  Each
Borrower and anyone under common control with such Borrower under
Section 4001(b) of ERISA is in compliance in all respects with the
applicable provisions of ERISA and: (a) no “prohibited transaction” as
defined in Section 406 of ERISA or Section 4975 of the Code has
occurred; (b) no “reportable event” as defined in Section 4043 of
ERISA has occurred; (c) no “accumulated funding deficiency” as defined in
Section 302 of ERISA (whether or not waived) has occurred; (d) there
are no unfunded vested liabilities of any Employer Plan administered by any
Borrower; and (e) each Borrower or the plan sponsor has timely filed all
returns and reports required to be filed for each Employer Plan.

     

    3.15  Investment Company Act;
Public Utility Holding Company Act.  No
Borrower is:  (a) an “investment company” or a company
“controlled by an investment company” within the meaning of the Investment
Company Act of 1940, as amended; or (b) a “holding company” or a
“subsidiary” of a “holding company” or an “affiliate of a “holding company” or a
“subsidiary” of a “holding company” within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

     

    3.16  Environmental
Laws.  The
business of each Borrower has been operated in full compliance in all respects
with all Environmental Laws, and no Borrower is subject to liability under any
Environmental Law relating to the conduct of its business or the ownership of
its Property and no facts or circumstances exist which could give rise to such
liabilities.  No notice has been served on any Borrower claiming any
violation of Environmental Laws, asserting any liability under an Environmental
Law, or demanding payment or contribution for a liability under an Environmental
Law.

     

     

    ARTICLE IV

    CONDITIONS PRECEDENT TO
PURCHASE OF THE BONDS

     

    In
addition to the terms and conditions otherwise contained herein, the obligation
of the Bank to purchase the Bonds is conditioned upon the Bank receiving each of
the following items in form, detail and content satisfactory to the
Bank:

     

    4.01  Certain Related
Documents.  The
execution and delivery of this Agreement, the Security Agreement, the Guaranty,
the Mortgage, the Disbursing Agreement, the Collateral Assignment of
Construction Contracts, the Collateral Assignment of Life Insurance, and all
other certificates, resolutions, or other documents required or completed
hereunder.

     

    4.02  Bond
Documents. The
execution and delivery of the Bond Documents and the issuance and sale of the
Bonds.

     

    4.03  Closing
Certificate.  Closing
certificates from Borrower in form and substance acceptable to the
Bank.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    4.04  UCC
Searches. A UCC
report certified to by the Department of Financial Institutions of the State of
Wisconsin indicating that no Borrower’s Property is subject to any security
interest other than the Permitted Liens.

     

    4.05  Insurance
Certificates.
Certificates of Borrower’s insurance coverages, showing insurance protection as
required by this Agreement and the Related Documents.

     

    4.06  Title
Insurance.  Delivery
to the Bank of commitments for mortgage title insurance issued by a title
insurance company acceptable to the Bank under a current ALTA
form:  (i) insuring that the LLC has a fee simple estate in the
Project Real Property, subject to the Mortgage; (ii) insuring that the
Mortgage is a valid paramount lien on the Project Real Property in an amount of
$4,000,000, subject only to Permitted Liens; (iii) insuring against loss or
damage incurred by reason of construction liens which are or may be prior to the
lien of the Mortgage; (iv) excluding any exceptions for rights of parties
in possession or matters which would be disclosed by surveys of the Project Real
Property; and (v) containing gap and such other endorsements as the Bank
may request.

     

    4.07  Survey.  [Reserved].

     

    4.08  Environmental
Reports.  Receipt
by the Bank of such environmental reports and site assessments with respect to
the Project Real Property (including, without limitation, Phase I and other
environmental inspections and soil tests) as the Bank may request, and receipt
by the Bank of a completed environmental questionnaire with respect to the
Project Real Property in such form as the Bank may request and satisfactory to
the Bank in all respects.

     

    4.09  Counsel
Opinion.  Receipt
by the Bank, from Haferman & Ilten, Stevens Point, Wisconsin, counsel to the
Borrower, of satisfactory opinions as to (a) the due authorization,
execution and delivery of this Agreement; (b) the other matters referred to
in Sections 3.01, 3.02 and 3.03; and (c) such other matters relating
to each Borrower and the validity and enforceability of this Agreement and the
Related Documents as the Bank shall reasonably require; and the Bank shall have
received from Whyte Hirschboeck Dudek S.C., Milwaukee, Wisconsin, bond counsel;
(x) an approving opinion regarding the Bonds, including an opinion
confirming the tax exempt status of interest on the Bonds; and (y) an
opinion that the Bonds are exempt from registration under the Securities Act of
1933, as amended.

     

    4.10  Real Estate
Appraisals.  Receipt
by the Bank of an as-built appraisal of the Project Real Property, prepared by
an appraiser licensed in the State of Wisconsin selected by the Bank, which
appraisal shall be addressed to the Bank, conform with applicable Requirements
of Law as to form and content, be in form and substance satisfactory to the
Bank, and reflect an appraised value of the Project Real Property equal to or
more than $4,000,000 (the “Appraised
Value”).   Bank acknowledges
receipt of an appraisal acceptable to it in form and content.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    4.11  Proceedings
Satisfactory. All
proceedings taken in connection with the transactions contemplated by this
Agreement, the applicable Related Documents and the Bond Documents, and all
instruments, authorizations and other documents applicable thereto, shall be
satisfactory in form and substance to the Bank and its counsel.

     

    4.12  Project
Compliance.  Borrower
providing Bank evidence in form satisfactory to Bank the following:
(i) proof the Project is in compliance with all applicable zoning laws,
regulations and ordinances; (ii) a complete set of final working plans and
specifications of the Project indicating conformance with all current state,
federal, and local laws, codes, regulations, and ordinances (including handicap
access regulations), and indicating a level of quality of the Project acceptable
to Bank; and (iii) a complete cost breakdown of the Project on standard
breakdown sheets, along with a copy of the major contracts and subcontracts for
the Project.

     

    4.13  Supporting
Documents. Such
additional supporting documents and materials as the Bank may request from the
Borrower.

     

    ARTICLE IVA

    CONDITIONS TO BANK’S
AGREEMENT TO PURCHASE BONDS

    AND TO FUND BORROWER’S
REQUISITIONS

     

    In
addition to the conditions otherwise contained herein, in the Bond Agreement and
in the Disbursing Agreement, provided no Default or Event of Default exists
hereunder and the representations and warranties of the Borrower hereunder and
under the Related Documents shall be true and correct in all material respects
at the time of such Requisition, the obligation of the Bank to purchase Bonds,
and to fund Borrower’s Requisitions, is conditioned upon the Bank receiving each
of the following items in form, detail and content satisfactory to the Bank, on
or prior to the times indicated in the following:

     

    4A.1     Construction
Contract. Prior to disbursements for construction of the Project, the
Bank shall receive a Collateral Assignment of Construction Contract acknowledged
by the contractor, in form and content satisfactory to the Bank in its sole
discretion.

     

    4A.2     Title Endorsements.
Prior to disbursements for construction of the Project, the Bank shall receive
such additional endorsements to the title insurance commitment, including,
access, contiguity, comprehensive Form 9 endorsements, and such other
endorsements as the Bank may request, which endorsements may require an ALTA
certified survey.

     

     

    ARTICLE V

    AFFIRMATIVE
COVENANTS

     

    While any
Bonds or Obligations remain outstanding, each Borrower (as applicable) covenants
that it shall, unless otherwise waived or consented to in writing by the
Bank:

     

    5.01  Existence; Compliance With
Laws; Maintenance of Business; Taxes.

     

    (a)  Maintain
its existence;

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

       

      (b)  Maintain
all licenses, permits, rights and franchises reasonably necessary for the
current and planned conduct of its business;

    

     

    (c)  Comply in
all respects with all Requirements of Law;

     

    (d)  Conduct
its business substantially as now conducted and proposed to be conducted;
and

     

    (e)  Pay
before the same become delinquent and before penalties accrue thereon, all
taxes, assessments and other government charges against it and its Property, and
all other liabilities except to the extent and so long as the same are being
contested in good faith by appropriate proceedings, with adequate reserves
having been provided.

     

    5.02  Maintenance of Property;
Insurance.

     

         
(a) 
Keep all
Property useful and necessary in its business, whether leased or owned, in good
condition, repair and working order (ordinary wear and tear excepted) and from
time to time make or cause to be made all needed and proper repairs, renewals,
replacements, additions and improvements so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times.

     

         
(b) 
Maintain
with good, reputable and financially sound insurance underwriters insurance of
such nature and in such amounts as is customarily maintained by Persons engaged
in the same or similar business of comparable size to Borrower and such other
insurance as may be required by law or as may be reasonably required in writing
by the Bank.  Without limiting the foregoing, Borrower shall obtain
and provide to Bank a current builder’s risk insurance policy in an amount equal
to the total construction cost of the Project Real Property (naming Bank as
mortgagee), comprehensive general liability insurance, and workers compensation
insurance covering all personnel working on the Project, hazard insurance
insuring the Project Real Property against loss by fire, lightning, vandalism,
malicious mischief and other risks customarily covered by a standard extended
coverage endorsement, in an amount not less than the full insurable value of the
Project and naming Bank as mortgagee and lender’s loss payee.  Unless
otherwise indicated above, each policy providing liability coverage to the
Borrower shall name the Bank as an additional insured, and each property
insurance policy insuring the Project Real Property and any business
interruption insurance shall name the Bank as an additional loss payee, as its
interest appears.  All policies shall require the insurer to give the
Bank 30 days’ prior written notice of the modification, cancellation or
nonrenewal of the policy and contain a lender’s loss payable endorsement in
favor of Bank satisfactory to Bank.  The Borrower shall furnish copies
of all such insurance policies or a certificate evidencing that the Borrower
have complied with the requirements of this paragraph on the date hereof and on
each renewal date of such policies.

     

    5.03  Financial
Statements.  Maintain
a standard and modern system of accounting in accordance with sound accounting
practice, and furnish to the Bank such information respecting 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

      the
business, assets and financial condition of each Borrower, as Bank may
reasonably request and, without request furnish to Bank:

    

     

        (a)  as soon
as available, and in any event within 120 days after the close of each fiscal
year, each Borrower shall provide Bank a copy of the tax return for such year as
of the end of such fiscal year for such Borrower;

     

        (b)  as soon
as available, and in any event within 120 days after the end of each fiscal
year, consolidated and consolidating financial statements for the Corporation
for each fiscal year, prepared in accordance with GAAP, and compiled by
independent accountants acceptable to bank;

     

        (c)  as soon
as available, and in any event within 120 days after the end of each fiscal
year, internally prepared financial statements for the LLC for such fiscal
year;

     

          
(d) 
as soon
as available, and in any event within 30 days after the end of each fiscal
quarter, consolidated and consolidating financial statements for the Corporation
for each fiscal quarter, prepared in accordance with GAAP, all in reasonable
detail and certified as true and correct, subject to review and normal year end
adjustments, by the chief financial officer of Corporation;

     

          
(e)  as soon
as available, and in any event within 120 days after the end of each calendar
year, a personal financial statement and tax return for the Individual
Borrowers;

     

          
(f) 
as soon
as available, and in any event within 120 days after the end of each fiscal
year, internally prepared financial statements for the Guarantor;

     

        (g)  promptly
upon learning of the occurrence of any of the following, written notice thereof
to Bank, describing the same and the steps being taken with respect thereto:
(i) the occurrence of any Default, (ii) the institution of, or any
materially adverse determination or development in, any material litigation,
arbitration proceeding or governmental proceeding, (iii) the occurrence of
a “reportable event” under, or the institution of steps by any Borrower to
withdraw from, or the institution of any steps to terminate, any Employer Plan
as to which a Borrower may have liability, (iv) the commencement of any
dispute with a third party which might lead to the modification, transfer,
revocation, suspension or termination of this Agreement or any Related Document,
or (v) any event which would have a Material Adverse Effect.

     

    5.04  Inspection of Property and
Records/Bank Audits.  At
any reasonable time following reasonable notice (and as often as may be
reasonably desired), permit representatives of Bank to visit the Project Real
Property, examine its Property, books and records and discuss its affairs,
finances and accounts with its officers or members (as applicable) and
independent certified public accountants (who shall be instructed by the
Borrower to make available to Bank the work papers of such accountants) and
Borrower shall facilitate such inspections and examinations.

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    5.05  Use of
Proceeds.  Use
the entire proceeds of the Bonds solely for the purposes set forth in Recital B
hereto and within three (3) years of the date hereof.  The amount used
for the Project shall not exceed the lesser of (i) $4,000,000, or
(iii) 100% of the construction cost of the Project plus the acquisition
cost of the Project for equipment at the Facility.  The amount used
for issuance and other eligible costs shall not exceed $80,000.

     

    5.06  Bank
Accounts.  Maintain
its primary deposit and operating accounts with Bank.

     

    5.07  Compliance With Other
Agreements.  Comply
with, pay and discharge all existing notes, mortgages, deeds of trust, leases,
indentures and any other contractual arrangements to which such Borrower is a
party (including, without limitation, all Indebtedness) in accordance with the
respective terms of such instruments so as to prevent any default
thereunder.

     

    5.08  Compliance With
Laws.

     

    (a)  Comply in
all respects with all Requirements of Law.

     

    (b)  Maintain
at all times all permits, licenses and other authorizations required under
Environmental Laws, and comply in all respects with all terms and conditions of
the required permits, licenses and authorizations and all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws.

     

    (c)  Notify
the Bank promptly upon obtaining knowledge that (i) any Property previously
or presently owned or operated is the subject of an environmental investigation
by any Government Authority having jurisdiction over the enforcement of
Environmental Laws or other potential claim or notice of threatened litigation
or violation of a Requirement of Law, (ii) any Borrower has been or may be
named as a responsible party subject to liability under any Environmental Laws,
or (iii) any hazardous substance is located on any Property except in
compliance with all Requirements of Law.

     

    (d)  At any
reasonable time following reasonable notice and as often as may be reasonably
desired, permit the Bank or an independent consultant selected by the Bank to
conduct an environmental audit satisfactory to the Bank for the purpose of
determining whether Borrower and its Property comply with Environmental Laws and
whether there exists any condition or circumstance which may require a cleanup,
removal or other remedial action by Borrower with respect to any hazardous
substance.  Borrower shall facilitate such environmental
audit.  The Bank shall provide Borrower, at the request of the
Borrower, with all reports and findings but the Borrower may not rely on such
environmental audit for any purpose.  Any such environmental audit of
the Borrower’s Property shall be at the expense of the Borrower at any time
following an Event of Default or upon the occurrence of an event described in
Section 5.08(c); provided, however, that the
Bank’s environmental audit shall not be at the Borrower’s expense if (i) a
Government Authority or a firm or firms of geotechnical engineers and/or
environmental consultants hired by Borrower and reasonably acceptable to the
Bank shall undertake to make an environmental audit, and (ii) the Borrower
shall provide the Bank 

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

      at the
Borrower’s expense with, and the Bank shall be entitled to rely on, all reports
and findings of such Government Authority or geotechnical engineers as soon as
such reports and findings are made available to the Borrower.

    

     

    5.09  Payment of Fees and
Costs.

     

    (a)  Pay the
Bank all additional costs including, without limitation, wire transfer or other
charges pertaining to the transfer of funds.

     

    (b)  Pay
immediately upon receipt of an invoice all reasonable fees and expenses incurred
by the Bank with respect to negotiation, preparation and execution of this
Agreement and the Related Documents, and any amendments thereof and supplements
thereto, including, without limitation, appraisal fees, environmental inspection
fees, and the reasonable fees of in-house and outside counsel.

     

    (c)  Pay
immediately upon receipt of an invoice all reasonable fees and expenses incurred
by the Bank with respect to protection or enforcement (including collection and
disposition of Collateral) of the Bank’s rights under this Agreement and the
Related Documents, and all costs and expenses which may be incurred by the Bank
with respect to an Event of Default as provided in Section 7.02, including,
without limitation, reasonable fees of in-house and outside legal
counsel.

     

    5.10  Project
Disbursements.  Assure
that all disbursements for the Project are submitted and made through the Title
Company in accordance with the Disbursing Agreement with construction
endorsements satisfactory to Bank, and that all progress payments requested will
be on forms satisfactory to Bank, and that prior to disbursement, construction
progress will be verified to satisfy Bank that costs are and will be within
budget.

     

    5.11  No Liens; Plans; Covenants,
Conditions and Restrictions.  Complete
the Project so that the Project is free from Liens (except for Permitted Liens),
built in accordance with the plans and specifications approved by Bank, and if
requested by Bank, pay for and consent to Bank retaining an inspecting engineer
to review the plans and specifications of the Project and to review and approve
all draws, and completed in compliance with all covenants, conditions and
restrictions on the Property.

     

    5.12  Project
Lease.  Upon
the receipt of the certificate of occupancy for the Project, the LLC, as
landlord, and the Corporation, as tenant, shall execute the Project Lease, which
lease shall be in form and substance satisfactory to Bank.

     

    5.13  Key-Person Life
Insurance.  Maintain
Key Person life insurance on the life of Jamie L. Mancl in an amount not less
than $4,000,000 good, reputable and financially sound insurance underwriters
insurance of such nature.  Such policy shall name Bank as mortgagee
and lender’s loss payee and shall require the insurer to give the Bank 30 days’
prior written notice of the modification, cancellation or nonrenewal of the
policy.  The Borrower shall furnish copies of such insurance policy or
a certificate evidencing that the Borrower has complied with the requirements of
this paragraph on the date hereof and on each renewal date of such
policies.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    5.14  Minimum Tangible Net
Worth.  Commencing
for the fiscal year ended December 31, 2007 and each fiscal year
thereafter, the Corporation shall maintain a Tangible Net Worth of not less than
$600,000 for 2007, and increasing annually by an amount equal to sixty percent
(60%) of the Corporation’s Net Income, tested at the end of each fiscal
year.

     

    5.15  Debt Service Coverage
Ratio.  The
Corporation shall at all times maintain a Debt Service Coverage Ratio measured
as of the last day of each fiscal quarter of not less than
1.25:1.0.

     

    5.16  Total Indebtedness to
Tangible Net Worth Ratio.  The
Corporation shall at all times maintain a total Indebtedness to Tangible Net
Worth Ratio measured as of the last day of each fiscal quarter of not more than
3.50:1.0.

     

    5.17  Annual Resting of Line of
Credit.  As
a condition for Borrower’s line of credit facility with Lender, Borrower agrees
to rest the line of credit and leave at zero (0) dollars the balance owing
thereunder for a period of not less than thirty (30) consecutive days
annually.

     

    5.18  Mortgage on After-Acquired
Real Estate.  The
Borrower shall grant a first priority mortgage in favor of Trustee and Original
Purchaser on any real estate acquired after the Closing Date, including Lot 2 of
CSM 8590, City of Wisconsin Rapids, Wood County, Wisconsin, upon the acquisition
of such real estate.

     

     

    ARTICLE VI

    NEGATIVE
COVENANTS

     

    Each
Borrower covenants and agrees that, from and after the date of this Agreement
and until the entire amount of the Obligations are paid in full and satisfied
and no Bonds remain Outstanding, such Borrower shall not take any of the
following actions:

     

    6.01  Sale of Assets,
Consolidation, Merger, Acquisitions, Etc.  (a) Except
for sales of inventory in the ordinary course of business, sell, transfer,
convey, or lease all or substantially all of its Property; (b) except for
the Project Lease with the Corporation for sales of obsolete or worn out
equipment in the ordinary course of business, sell, transfer, lease all or any
part of the Project Real Property; (c) consolidate or merge with or into
any other Person; (d) directly or indirectly, sell or transfer any
Property, used or useful in its business, and thereafter lease such Property or
other Property which it intends to use for substantially the same purposes;
(e) create a Subsidiary; (f) purchase or otherwise acquire all or
substantially all of the assets or stock of any Person; (g) enter into any
joint venture; or (h) amend its articles of organization or operating
agreement.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    6.02  Indebtedness.  Issue,
create, incur, assume, guaranty or otherwise become liable with respect to (or
agree to issue, create, incur, assume, guaranty or otherwise become liable with
respect to), or permit to remain outstanding, any Indebtedness
except:  (a) the Obligations; (b) current liabilities (other
than for borrowed money) of Borrower incurred in the ordinary course of business
which are not more than ninety (90) days overdue, unless being contested in good
faith and with due diligence; (c) Indebtedness to the Issuer related to the
Bonds; and (d) purchase money Indebtedness secured by Permitted
Liens.

     

    6.03  Liens.  Create
or permit to be created or allow to exist any Lien upon or interest in any
Property of Borrower except Permitted Liens.

     

    6.04  Guaranty.  Guaranty
or otherwise in any way become or be responsible for obligations of any other
Person, directly or indirectly, including any agreement to purchase the
indebtedness of any other Person, agreement for the furnishing of funds to any
other Person through the purchase of goods, supplies or services, an agreement
for stock purchase or capital contribution or any other agreement or undertaking
to pay or discharge the indebtedness of any Person, or otherwise, except for the
endorsement of negotiable instruments by Borrower for deposit or collection or
similar transactions in the ordinary course of business.

     

    6.05  Loans,
Investments.  Make
or commit to make advances, loans, extensions of credit or capital contributions
to, or purchases of any stock, bonds, notes, debentures or other securities of,
or make any other investment in, any Person
except:  (a) accounts, chattel paper, and notes receivable
created by Borrower in the ordinary course of business; (b) extensions of
credit to customers of Borrower in the ordinary course of business and
consistent with past practice, (c) investments in bank certificates of
deposit (but only with FDIC-insured commercial banks having a combined capital
and surplus in excess of $20,000,000), open market commercial paper maturing
within one year having the highest rating of either Standard & Poors Rating
Service or Moody’s Investors Services, Inc., U.S. Treasury Bills subject to
repurchase agreements and short-term obligations issued or guaranteed by the
U.S. Government or any agency thereof; and (d) investments in open-end
diversified investment companies of recognized financial standing investing
solely in short-term money market instruments consisting of securities issued or
guaranteed by the United States government, its agencies or instrumentalities,
time deposits and certificates of deposit issued by domestic banks or London
branches of domestic banks, bankers acceptances, repurchase agreements, high
grade commercial paper and the like.

     

    6.06  Compliance with
ERISA. 
(a) Terminate
any Employer Plan so as to result in any material liability to PBGC;
(b) engage in any “prohibited transaction” (as defined in Section 4975
of the Code) involving any Employer Plan which would result in a material
liability for an excise tax or civil penalty in connection therewith; or
(c) incur or suffer to exist any material “accumulated funding deficiency”
(as defined in Section 302 of ERISA), whether or not waived, involving any
condition, which presents a risk of incurring a material liability to PBGC by
reason of termination of any such Employer Plan.

     

    6.07  Restricted
Payments.  Without
the Bank’s consent, make any Restricted Payments; provided, however, that, so
long as no Default has occurred and is continuing or will occur as a result of
any such payment, each Borrower may pay distributions to its members or


     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

      shareholders
(as applicable) for each member’s or shareholder’s state and federal tax
liability for such member’s interest in such Borrower.

    

     

    6.08  Project Lease – No
Modification.  Modify
or amend the Project Lease, after the same has been approved by the Bank and
executed by the Corporation and the LLC.

     

    6.09  Salaries.  Pay
officer compensation in excess of $90,000 annually or otherwise excessive or
unreasonable salaries, bonuses, commissions, consultant fees, or other
compensation.

     

    6.10  Change In
Control.  Make
no changes in the current ownership structure or management of either entity
Borrower, without Bank’s consent.

     

     

    ARTICLE VII

    EVENTS OF
DEFAULT

     

    7.01  Events of Default
Defined.  The
occurrence of any one or more of the following shall constitute an “Event of
Default”:

     

    (a)  Failure
to pay any of the Obligations when and as the same shall become due and payable,
whether upon demand, at maturity, by acceleration or otherwise;

     

    (b)  Any
Borrower fails to observe or perform any of the covenants, agreements or
conditions contained in Article VI;

     

    (c)  Any
Borrower fails to observe or perform any of the other covenants, agreements or
conditions contained in Article V which failure continues for a period of
thirty (30) days following the delivery of written notice by the Bank specifying
the existence of the default;

     

    (d)  Any
representation or warranty made by a Borrower herein or in any Related Document,
or in any certificate, document or financial statement delivered to the Bank
pursuant hereto or thereto shall prove to have been incorrect in any material
respect as of the time when made or given;

     

    (e)  This
Agreement or any of the Related Documents shall at any time cease to be in full
force and effect, or any Borrower attempts to revoke or terminate this Agreement
or any Related Document;

     

    (f)  A final
judgment (or judgments) shall be entered against any Borrower which singularly
or when added to any other outstanding final judgment (or judgments) against
such Borrower exceeds the aggregate amount of $10,000, and such judgment (or
judgments) shall remain outstanding and unsatisfied, unbonded, uninsured or
unstayed after thirty days from the date of entry thereof;

     

    (g)  Any
Borrower:  (i) becomes insolvent; or (ii) is unable, or
admits in writing its, his or her inability, to pay its, his or her debts as
they mature; or (iii) makes a general assignment for the benefit of
creditors or to an agent authorized to liquidate any 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

      substantial
amount of its Property; or (iv) becomes the subject of an “Order for
Relief’ as said term is defined under the United States Bankruptcy Code; or
(v) files an answer to a creditor’s petition admitting the material
allegations thereof for reorganization or to effect a plan or other arrangement
with creditors; or (vi) apply to a court for the appointment of a receiver
for any assets; or (vii) has a receiver appointed for any of its, his or
her assets (with or without the consent of such Borrower) and such receiver
shall not be discharged within ninety (90) days after the appointment; or
(viii) otherwise becomes the subject of any insolvency proceeding or an
out-of-court settlement with its creditors, not in the ordinary course of
business;

    

     

    (h)  Either
Borrower (that is an entity) is dissolved or gives notice of dissolution to any
claimant;

     

    (i)  Any
Borrower defaults (as principal or guarantor or otherwise) either in the payment
of the principal of or interest on any other Indebtedness, or with respect to
any of the provisions of any evidence of such Indebtedness or any agreement
under which such evidence of Indebtedness may have been issued or secured, and
such default shall continue for more than any period of grace, if any, specified
in such instrument;

     

    (j)  This
Agreement or any of the Related Documents shall at any time cease to be in full
force and effect, or any Borrower attempts to revoke or terminate this Agreement
or any Related Document;

     

    (k)  There
occurs an event of default under any of the Related Documents;

     

    (l)  Any
Borrower defaults (as principal or guarantor or otherwise) either in the payment
of the principal of or interest on any other Indebtedness to the Bank, or with
respect to any of the provisions of any evidence of such Indebtedness or any
agreement under which such evidence of Indebtedness may have been issued or
secured, and such default continues for more than any period of grace, if any,
specified in such instrument; or

     

    (m)  An event
of default (as defined in the Bond Agreement) occurs and is continuing under the
Bond Agreement.

     

    7.02  Remedies Upon Event of
Default.

     

    (a)  Upon the
occurrence of an Event of Default, all Obligations shall become immediately due
and payable without demand, notice, presentment, protest or other action by the
Bank, all of which are hereby waived by each Borrower.  The Bank shall
have the right to notify the Trustee of said Event of Default, pursuant to
Section 7.01(h) of the Bond Agreement, and to cause the acceleration of the
payment of interest and principal on the Bonds.  The Bank shall have
all of the rights and remedies provided to the Bank by the Related Documents, at
law or in equity, and no remedy herein conferred upon the Bank is intended to be
exclusive of any other remedy.  Upon the occurrence of an Event of
Default, Borrower shall pay all costs and expenses which may be incurred by the
Bank with respect thereto, including reasonable attorneys’ fees, and all such
sums shall be and become a part of the Indebtedness of Borrower to the
Bank.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (b)  The Bank
may at any time without prior notice or demand set off against any credit
balance or other money now or hereafter owed to Borrower all or any part of the
Obligations.  Each Borrower hereby grants to the Bank a security
interest in and Lien on any such credit balance or other money.  The
Bank shall give notice of its exercise of this remedy to the Borrower as soon as
practicable.

     

     

    ARTICLE VIII

    MISCELLANEOUS

     

    8.01  Indemnity.  Each
Borrower shall defend, indemnify and hold harmless the Bank, and its directors,
officers, employees and agents from and against any and all loss, cost, expense,
damage or liability (including reasonable attorneys’ fees) incurred in
connection with any claim, counterclaim or proceeding brought as a result of,
arising out of or relating to any transaction financed or to be financed, in
whole or in part, directly or indirectly, with the proceeds of the Bonds or the
entering into and performance of this Agreement, any Bond Document, any Related
Document or any agreement, document or instrument related to any of the
foregoing by the Bank, or the activities of any Borrower.  This
indemnification will survive termination of this Agreement and the discharge and
release of any Bond Documents and Related Documents.

     

    8.02  Assignability;
Successors.  No
Borrower’s rights and liabilities under this Agreement are assignable in whole
or in part without the prior written consent of the Bank.  The
provisions of this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Bank and the successors and permitted assigns
of the Borrowers.

     

    8.03  Survival.  All
agreements and representations and warranties made herein and in the Related
Documents shall survive the execution and delivery of this Agreement and the
Related Documents.

     

    8.04  Counterparts;
Headings.  This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but such counterparts shall together constitute but one and the
same agreement.  The section headings in this Agreement are inserted
for convenience of reference only and shall not constitute a part
hereof.

     

    8.05  Entire Agreement;
Amendments.  This
Agreement and the Related Documents contain the entire understanding of the
parties with respect to the subject matter hereof, and supersede all other
understandings, oral or written, with respect to the subject matter
hereof.  No statement or writing subsequent to the date hereof
purporting to modify, alter or amend any portion hereof, including Borrower’s
obligation to pay the amount due hereunder (whether at maturity, by reason of
acceleration or otherwise), shall be effective unless consented to in a writing,
which makes specific reference to this Agreement, and which has been signed by
the party against which enforcement thereof is sought.  Any amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

     

    8.06  Notices.  All
communications, consents and notices required or permitted by this Agreement
shall be in writing and shall be deemed to have been given or made (a) when
delivered in hand or by courier, or (b) three days after being deposited in
the mail (including 

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

      private
mail service), postage prepaid.  Communications, consents and notices
shall be delivered personally or by certified or registered mail, postage
prepaid, and addressed as follows, unless and until either of such parties
notifies the other in accordance with this section of a change of
address:

    

     

    
      	
              (i)           If
      to Corporation:

            	
              Advanced
      Fiberglass Technologies, Inc.

              2330
      South 16th
      Street

              Wisconsin
      Rapids, WI  54495

              Attn:               Jamie
      L. Mancl

              Phone:            (715)
      421-2060

              Fax:                 (715)
      421-2048

            
	
              with copies to:

            	
              Haferman
      & Ilten

              1525
      Main Street

              Stevens
      Point, WI  54481-2836

              Attn:                Mark
      O. Ilten, Esq.

              Phone:             (715)
      342-4700

              Fax:                  (715)
      342-9974

            
	
              (ii)           if
      to LLC:

            	
              M
      & W Fiberglass, LLC

              2330
      South 16th
      Street

              Wisconsin
      Rapids, WI  54495

              Attn:                 Jamie
      L. Mancl

              Phone:              (715)
      421-2060

              Fax:                   (715)
      421-2048

            
	
              with copies to:

            	
              Haferman
      & Ilten

              1525
      Main Street

              Stevens
      Point, WI  54481-2836

              Attn:                  Mark
      O. Ilten, Esq.

              Phone:               (715)
      342-4700

              Fax:                    (715)
      342-9974

            
	
                             (iii)   
      if to the Individual Borrowers:

            	
              Advanced
      Fiberglass Technologies, Inc.

              2330
      South 16th
      Street

              Wisconsin
      Rapids, WI  54495

              Attn:                   Jamie
      L. Mancl

              Phone:                (715)
      421-2060

              Fax:                     (715)
      421-2048

            


    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    
      	
              with copies to:

            	
              Haferman
      & Ilten

              1525
      Main Street

              Stevens
      Point, WI  54481-2836

              Attn:                    Mark
      O. Ilten, Esq.

              Phone:                 (715)
      342-4700

              Fax:                      (715)
      342-9974

            
	
              (iv)    if
      to the Bank:

            	
              Nekoosa
      Port Edwards State Bank

              405
      Market Street

              P.O.
      Box 9

              Nekoosa,
      WI  54457

              Attn:                     Robb
      N. Sigler

              Phone:                  (715)
      886-3104

              Fax:                      
      (715) 886-3310

            
	
              with copies to:

            	
              Whyte
      Hirschboeck Dudek S.C.

              555
      East Wells Street

              Suite
      1900

              Milwaukee,
      Wisconsin  53202-3819

              Attn:                      Andrew
      J. Guzikowski, Esq.

              Phone:                  (414) 273-2100

              Fax:                      
      (414) 223-5000

            


    

     

    8.07  No Waiver.  Any
action or inaction by the Bank, taken in the absence of the satisfaction of any
condition imposed upon Borrower by the Related Documents, including those
imposed by Sections 4.01 and 4.02 of this Agreement, shall not be deemed to
constitute a waiver of any such condition by the Bank.

     

    8.08  Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

     

    8.09  Further
Assurances.
Borrower agrees to do such further acts and things, and to execute and deliver
such additional conveyances, assignments, agreements and instruments, as the
Bank may at any time reasonably request in connection with the administration or
enforcement of this Agreement or the Related Documents or in order better to
assure and confirm unto the Bank its rights, powers and remedies
hereunder.

     

    8.10  Conflicts and
Ambiguities. In the
event of any ambiguity or conflict as between the terms of this Agreement, the
Related Documents or any other document executed and delivered pursuant to this
Agreement, the terms of this Agreement shall control.

     

    8.11  Governing
Law.  The
validity, construction, enforcement and performance of this Agreement shall be
governed by the internal laws of the State of Wisconsin.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    8.12  Consent to
Jurisdiction.
Borrower hereby irrevocably submits to the exclusive jurisdiction of any United
States federal or Wisconsin state court sitting in Milwaukee, Wisconsin, in any
action or proceeding arising out of or relating to this Agreement or any related
documents, and Borrower hereby irrevocably agrees that all claims in respect of
such action or proceeding may be heard and determined in any such court and
irrevocably waives any objection it may now or hereafter have as to the venue of
any such suit, action or proceeding brought in such a court or that such court
is an inconvenient forum.  Nothing herein shall limit the right of the
Bank to bring proceedings against the Borrower in the courts of any other
jurisdiction.  Any judicial proceeding by Borrower against the Bank,
or any affiliate of the Bank involving, directly or indirectly, any matter in
any way arising out of, related to, or connected with this Agreement or any
Related Documents shall be brought only in a United States federal or Wisconsin
state court sitting in Milwaukee, Wisconsin.

     

    8.13  Fees and
Expenses.  Borrower
shall reimburse the Bank for all out-of-pocket expenses incurred in connection
with the preparation of this Agreement and the Related Documents (including,
without limitation, filing and recording fees, appraisal expenses, survey
expenses, hazard and title insurance premiums, inspections fees, and the
reasonable fees and expenses of all of its counsel, advisors, consultants and
auditors retained in connection with this Agreement and the Related Documents
and the transactions contemplated thereby and advice in connection
therewith).  Borrower hereby shall reimburse the Bank for all fees,
costs and expenses, including the fees, costs and expenses of counsel or other
advisors (including environmental and management consultants) for advice,
assistance, or other representation in connection with:

     

    (i) the
purchase and holding by Bank of the Bonds;

     

    (ii) any
amendment, modification or waiver of, or consent with respect to, this
Agreement, any of the Related Documents or any of the Bond Documents or advice
in connection with the administration of the extensions of credit made pursuant
hereto or its rights hereunder or thereunder;

     

    (iii) any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
the Bank, Borrower, or any other Person) in any way relating to the Collateral,
this Agreement, any of the Bond Documents, any of the Related Documents or any
other agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against Borrower or any other Person that
may be obligated to the Bank by virtue of this Agreement, any of the Bond
Documents or any of the Related Documents;

     

    (iv) any
attempt to enforce any rights of the Bank against Borrower, or any other Person
that may be obligated to the Bank by virtue of this Agreement or any of the
Related Documents;

     

    (v) efforts
to (A) monitor any of the Obligations, (B) evaluate, observe, assess
Borrower or its affairs, and (C) verify, protect, evaluate, assess,
appraise, 

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

      collect,
sell, liquidate or otherwise dispose of any of the Collateral; including,
without limitation, all the attorneys’ and other professional and service
providers’ fees arising from such services, including those in connection with
any appellate proceedings; and all expenses, costs, charges and other fees
incurred by such counsel and others in any way or respect arising in connection
with or relating to any of the events or actions described in this
Section 8.13 shall be payable, on demand by Borrower to the
Bank.  Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, attorneys, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.

    

     

    8.14  Assignments;
Participations.  The
Bank may at any time sell, assign or transfer to one or more banks or other
entities (“Participants”) interests in this Agreement and the other Related
Documents or any other interest of the Bank or extension of credit
hereunder.  Borrower authorizes the Bank to disclose to any
Participant and any such prospective Participants any and all financial
information in the Bank’s possession concerning Borrower, and its affiliates
which has been delivered to the Bank by or on behalf of Borrower pursuant to
this Agreement or any Related Document or which has been delivered to the Bank
by or on behalf of the Borrower in connection with the Bank’s credit evaluation
of Borrower, and its affiliates prior to becoming a party to this
Agreement.  Each Borrower agrees that if amounts outstanding under
this Agreement or any Related Document are due and unpaid, or shall have been
declared to be or shall have become due and payable upon the occurrence of any
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this Agreement
or such Related Document to the same extent as if the amount of its
participating interest were owing directly to it as a lender under this
Agreement or any Related Document.

     

    8.15  WAIVER OF JURY
TRIAL.  EACH
BORROWER AND THE BANK HEREBY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE RELATED DOCUMENTS, THE
OBLIGATIONS HEREUNDER AND THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS,
OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO.  BORROWER
AND THE BANK REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY GIVEN.

     

    


    


    [SIGNATURE
PAGE FOLLOWS]

     


    
      
        
           

        

         


      

      
        26

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

     

    
      
        	 	ADVANCED FIBERGLASS TECHOLOGIES, INC., a
      Wisconsin corporation	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Jamie
      L. Mancl	 
	 	 	Jamie
      L. Mancl, President	 


      

       

      
         

        
          
            	 	M & W FIBERGLASS, LLC, a
      Wisconsin limited liability company	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ Jamie
      L. Mancl	 
	 	 	Jamie
      L. Mancl, its sole member	 


          

           

        

      

    

    
       

      
        
          	 	 	 	 
	
                   

                	
                   

                	/s/ Jamie
      L. Mancl	 
	 	 	JAMIE L. MANCL, an individual
      resident of the State of Wisconsin	 


        

         

        
           

          
            
              	 	 	 	 
	
                       

                    	
                       

                    	/s/ Jennifer
      Mancl	 
	 	 	JENNIFER MANCL, an individual resident of
      the State of Wisconsin	 


            

          

        

        
           

          
            
               

              
                
                  	 	NEKOOSA PORT EDWARDS STATE BANK, a
      Wisconsin banking corporation	 
	 	 	 	 
	
                           

                        	
                          By:
      

                        	/s/ Robb
      N. Sigler	 
	 	 	Robb
      N. Sigler, President	 


                

              

            

          

        

      

    

    


    



    
      
        
          [Signature
Page of Credit Agreement]  

        

         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE 1.01(A)

     

    PROJECT
REAL PROPERTY

     

    Lot 1 of
Wood County Certified Survey Map No. 8590 recorded in Volume 29 of Survey Maps
at Page 190, being part of the SE 1⁄4 of the NE 1⁄4 of Section 10, Township 22
North, Range 6 East, City of Wisconsin Rapids, Wood County,
Wisconsin.

    


    Tax Key
No.:  Part of 34-09841 and Part of 34-09852


    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


      

    


    SCHEDULE 3.11

     

    PLACES OF
BUSINESS/LOCATIONS OF COLLATERAL

     

    2330
South 16th
Street

    Wisconsin
Rapids, WI  54495

    


    4400
Commerce Drive

    Wisconsin
Rapids, WI  54495