Document:

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.

     

    
      
        
        

      

      
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    “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 

     

    
      
        
        

      

      
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      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:

     

    
      
        
        

      

      
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    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 

     

     

    
      
        
        

      

      
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      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
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      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.

     

    
      
        
        

      

      
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    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.

     

    
      
        
        

      

      
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    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;

     

    
      
        
        

      

      
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      (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 

     

    
      
        
        

      

      
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      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.

     

    
      
        
        

      

      
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    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  54495exh10-7_mortage.htm

     

    
      

      

    

     

     

     

     

     

     

     

     

    EXHIBIT 10.7

     

    INDUSTRIAL DEVELOPMENT REVENUE BONDS,

    CONSTRUCTION MORTGAGE, ASSIGNMENT OF LEASES
AND

    RENTS AND FIXTURE FILING DATED FEBRUARY 28,
2007

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      

    

    
      

    

    
      Document No.

    

    
 

    

    

    CONSTRUCTION
MORTGAGE,

    ASSIGNMENT
OF LEASES AND RENTS

    AND
FIXTURE FILING

     

    

     

    
      	 	 	
              Return
      to:    

            	
              Lisa R.
      Lange, Esq. 

            
	 	 	 	White Hirschboeck
      Dudek S.C.
	 	 	 	
              One Ease
      Main St., Suite 300

              Madison, WI 
53703

            

    

     

    Given By:

     

    M & W
FIBERGLASS, LLC,

    a
Wisconsin limited liability company

    

    In favor
of:

    

    NEKOOSA
PORT EDWARDS STATE BANK

    Dated as
of February 28, 2007

    

    Relating
to:

    

    $4,000,000

    City of
Wisconsin Rapids, Wisconsin

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

    (Advanced
Fiberglass Technologies Project)

    

    

    This Is A
Construction Mortgage Within The Meaning of Wis. Stats. §409.334(8) and
§706.11(1m)

    This
Mortgage Secures Future Advances

    This is
Non-Homestead Property

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    CONSTRUCTION MORTGAGE,
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING

     

    THIS CONSTRUCTION MORTGAGE, ASSIGNMENT
OF LEASES AND RENTS AND FIXTURE FILING (the “Mortgage”) is made
and entered into as of the 28th day of
February, 2007, by M & W FIBERGLASS, LLC, a Wisconsin limited liability
company (the “Mortgagor”), in favor
of NEKOOSA PORT EDWARDS STATE BANK, as Trustee and as Original Purchaser of the
Bonds (the “Bank”).

    

    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, Inc. 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 between the Issuer, the Mortgagor, Advanced Fiberglass Technologies, Inc., a
Wisconsin corporation (the “Corporation” and
together with the Mortgagor, Jamie L. Mancl and Jennifer Mancl, the “Borrower,”) Nekoosa
Port Edwards State Bank, as trustee (the “Trustee”) and Nekoosa
Port Edwards State Bank, as Original Purchaser (the “Original
Purchaser”).

     

    B.           The
proceeds derived from the issuance of the Bonds will be loaned to the Borrower
pursuant to the Bond Agreement, and used to finance a project consisting of (i)
the construction of an approximately 70,000 square foot manufacturing facility
located at 4400 Commerce Drive, in the City of Wisconsin Rapids, Wisconsin (the
“Facility”) to
be owned by Mortgagor and operated by the Corporation; and (ii) the acquisition
and installation of equipment at the Facility (collectively, the “Project”).

     

    C.           To
provide the funds to be loaned to the Borrower for payment of the costs of the
Project, the Issuer has contracted for the sale of the Bonds to the Original
Purchaser, and the Original Purchaser has agreed to purchase such Bonds in
reliance on Borrower’s agreement to the terms and conditions set forth in that
certain Credit Agreement dated as of February 28, 2007 by and between the
Borrower and the Original Purchaser (the “Credit
Agreement”).

     

    D.           It
is a condition precedent to the Original Purchaser’s obligation to purchase the
Bonds that the Mortgagor shall have executed and delivered this Mortgage to the
Bank to secure the Obligations (as defined in the Credit Agreement) and all
other indebtedness (whether presently existing or hereafter arising) of the
Mortgagor to the Bank.

    

    AGREEMENT

     

    In consideration of those obligations
as stated in the Recitals and to induce the Bank to enter into the Credit
Agreement and to purchase the Bonds, the Mortgagor hereby agrees with the Bank
as follows:

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
I

    DEFINITIONS

    

    1.01                      Definitions.  All
capitalized terms used herein and not otherwise defined herein shall have
meanings assigned to them in the Credit Agreement. The following terms used
herein have the meanings defined below:

     

                    (a)    Event of
Default:  shall have the same meaning assigned to such term in
Article V.

     

                    (b)    Insured
Casualty:  shall mean any insured damage to or destruction of
the Mortgaged Property or any part thereof.

     

                    (c)    Lease or Leases:
shall mean any lease of all or a portion of the Real Property.

     

                 (d)    Mortgaged
Property:  shall mean the Real Property together with all of
the other property and items described in Article II hereof, including the
Project.

     

                 (e)    Real
Property:  shall mean the land described in Exhibit A attached hereto and
made a part hereof, together with any and all easements, rights-of-way,
licenses, hereditaments, rights and privileges and appurtenances thereto,
together with any and all other land which may at any time hereafter be conveyed
by the Mortgagor to the Bank as security for the Secured
Obligations.

     

                    (f)    Secured Obligations:
shall have the meaning assigned to it in Article II.

     

     

    ARTICLE
II

    GRANTING
CLAUSE

     

    To secure the performance of all
covenants and agreements contained in this Mortgage, to secure the timely
payment and performance of the Obligations, to secure all other obligations and
indebtedness of the Borrower to the Bank, including without limitation all
obligations and indebtedness under the Bond Documents, the Credit Agreement and
the other Related Documents, together with all fees, charges, interest and other
amounts that may come due thereunder (all of the foregoing, the “Secured
Obligations”), the Mortgagor, by these presents does hereby mortgage,
grant, convey and assign to the Bank, its successors and assigns, with power of
sale, forever, all and singular their entire estate and interest, whether fee or
leasehold or otherwise, in the following described property,
to-wit:

    

    2.01                      Real
Property.  The Real Property.

     

    2.02                      Highways and
Thoroughfares.  All right, title and interest of Mortgagor, if
any, now or at any time hereafter existing, in and to all highways, roads,
streets, alleys and other public thoroughfares, bordering on or adjacent to the
Real Property, together with all right, title and interest 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    of
Mortgagor to the land making up such highways, roads, streets, alleys and other
public thoroughfares and all heretofore or hereafter vacated highways, roads,
streets, alleys and public thoroughfares adjoining or within the Real Property
or any part thereof.

     

    2.03                      Buildings and
Fixtures.  All buildings, structures, improvements, plants,
works and fixtures now or at any time hereafter located on any portion of the
Real Property, including the Project, and, without any further act, all
extensions, additions, betterments, substitutions and replacements
thereof.

     

    2.04                      Intangible Rights,
Rents.  All rights, privileges, permits, licenses, easements,
consents, tenements, hereditaments and appurtenances now or at any time
hereafter belonging to or in any wise appertaining to the Real Property or to
any property now or at any time hereafter comprising a part of the property
subject to this Mortgage; and all right, title and interest of Mortgagor,
whether now or at any time hereafter existing, in all reversions and remainders
to the Real Property and such other property, and all rents, income, issues,
profits, royalties and revenues derived from or belonging to such Real Property
and other property subject to this Mortgage or any part thereof.

     

    2.05                      Proceeds.  Any
and all proceeds of the conversion, whether voluntary or involuntary, of all or
any part of the Real Property and other property and interests subject to this
Mortgage into cash or liquidated claims, including, without limitation by reason
of specification, proceeds of insurance and condemnation awards and any and all
other property of every name and nature from time to time by delivery or writing
of any kind conveyed, mortgaged, pledged, assigned or transferred for additional
security for this Mortgage.

     

    TO HAVE AND TO HOLD all of the
foregoing (the “Mortgaged Property”)
unto the Bank, its successors and assigns, forever; provided that if the
Borrower pay all amounts required to be paid to the Bank under the Bond
Documents, the Credit Agreement and other Related Documents according to their
terms, make all other required payments and perform all other terms, conditions,
covenants and agreements contained in the Bond Documents, the Credit Agreement
and the other Related Documents, then this Mortgage shall cease and be
void.  If any improvements or property become a part of the Mortgaged
Property after the date hereof by location or installation on the Real Property
or in the building or buildings now or in the future situated thereon or
otherwise, then this Mortgage shall immediately attach to and constitute a lien
or security interest against such additional items without further act or deed
of Mortgagor.

    

    

    ARTICLE
III

    ASSIGNMENT OF LEASES AND
RENTS

     

    3.01                      Collateral Assignment of
Leases and Rents.  The Mortgagor does hereby conditionally as
and for collateral and as security for the Secured Obligations sell, assign,
transfer and set over unto the Bank, its successors and assigns, all of the
right, title and interest of the Mortgagor in, to and under the Leases,
including all amendments and supplements to and renewals and extensions of the
Leases at any time made; together with all rents, earnings, income, issues and
profits arising from the Project or from said Leases and all other sums due or
to become due under 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    and
pursuant thereto; together with any and all guarantees under any of said Leases;
together with all proceeds payable under any policy of insurance covering loss
of rents for any cause; together with all rights, powers, privileges, options
and other benefits of the Mortgagor, as lessor or sublessor, under the Leases,
including, but not limited to:  (i) the immediate and continuing right
to receive and collect all rents, income, revenues, issues, profits,
condemnation awards, moneys and security payable or receivable under the Leases,
or pursuant to any of the provisions thereof, whether as rent or otherwise, and
(ii) the right to make all waivers and agreements, to give and to receive all
notices, consents and releases, to take such action upon the happening of a
default under any Lease, including the commencement, conduct and consummation of
proceedings at law or in equity as shall be permitted under any provision of any
Lease or by law, and to do any and all other things whatsoever which the
Mortgagor is or may become entitled to do under the Leases; and together with
all other rights, powers, privileges, options and benefits of the Mortgagor in
connection with the Real Property, including, but not by way of limitation,
building permits, zoning variances, plans, specifications and contracts with
architects.

     

    3.02                      Remedies.  If
an Event of Default shall occur, the Mortgagor consents to and irrevocably
authorizes and directs the tenants under the Leases and any successors to the
interest of the tenants, upon demand and notice from the Bank of the Bank’s
right to receive the rents and other amounts under such Leases, to pay to the
Bank the rents and other amounts due or to become due under the Leases, and the
tenants shall have the right to rely upon such demand and notice from the Bank
without any obligation or right to determine the actual existence of the Bank’s
right to receive such rents and other amounts, notwithstanding any notice from
or claim of the Mortgagor to the contrary.  The Mortgagor shall have
no right or claim against any tenant for any such rents and other amounts so
paid by the tenant to the Bank.

     

    If any such Event of Default shall
occur, the Bank shall, at its option, have the complete right, power and
authority, to (i) enter upon, take and maintain possession of and operate the
Mortgaged Property, or any part thereof, together with all documents, books,
records, papers, and accounts relating thereto; (ii) exclude the Mortgagor, its
agents and servants therefrom; and (iii) hold, operate, manage and control the
Mortgaged Property, or any part thereof, as fully and to the same extent as the
Mortgagor could do if in possession, and, in such event, without limitation and
at the Mortgagor’s expense from time to time:

     

        (a)    Rent or lease
the whole or any part of the Mortgaged Property for such term or terms and on
such conditions as may seem proper to the Bank, including entering into leases
for terms expiring beyond the maturity of the indebtedness secured by the
Mortgage, and cancel any lease or sublease for any cause or on any ground which
would entitle the Mortgagor to cancel it;

    
    (b)    Demand,
collect, and receive from the tenant or tenants now or hereafter in possession
of the Mortgaged Property, or any part thereof, or from other persons liable
therefor, all of the rents and revenues from such tenant or tenants or other
persons which may now be due and unpaid and which may hereafter become
due;

     

    
          (c)    Institute and
prosecute any and all suits for the collection of rents and all other revenues
from the Mortgaged Property which may now be due and unpaid and which

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      may
hereafter become due; institute and carry on all legal proceedings necessary for
the protection of the Mortgaged Property, including such proceedings as may be
necessary to recover the possession of the whole or of any part thereof;
institute and prosecute summary proceedings for the removal of any tenant or
tenants or other persons from the Mortgaged Property; and pay the costs and
expenses of all such suits and proceedings out of the rents and other revenues
received;

          (d)    Maintain the
Mortgaged Property and keep it in repair, and pay, out of the rentals and other
revenues received the costs of such maintenance and repairs, including the cost
and expenses of all services of all employees, including their equipment, and of
all expenses of maintaining and keeping the Mortgaged Property in repair and in
proper condition;

    

     

    
          (e)    Employ an
agent or agents to rent and manage the Mortgaged Property and to collect the
rents and other revenues thereof, and pay the reasonable value of its or their
services out of the rents and revenues received;

          (f)    Effect
general liability insurance, fire insurance, boiler insurance, rent insurance,
workers’ compensation law insurance, and generally such other insurance as is
customarily effected by an owner of property of a style and kind similar to the
Mortgaged Property, or as the Bank may deem advisable or necessary, and pay the
premiums and other charges out of the rents and other revenues
received;

       

      
            (g)    Pay, out of
the rents and other revenues received, all sums, and the interest thereon, now
due to the Bank under this Mortgage, the Credit Agreement or the other Related
Documents and hereafter to become due, and all taxes, assessments, and other
charges now due and unpaid and which may hereafter become due and a charge or
lien upon the Mortgaged Property;

      

       

    

        (h)    Execute and
comply with all applicable laws, rules, orders, ordinances, and requirements of
any and all governmental authorities affecting the Mortgaged Property, and pay
the costs thereof out of the rents and other revenues received;

     

    
          (i)    Act
exclusively and solely in the place and stead of the Mortgagor, and to have all
of the Mortgagor’s powers for the purposes stated above; and

    

    

        (j)    From time to
time determine to which one or more of the above purposes the rents and revenues
shall be applied and the amount to be applied thereto.

    
      After payment of all proper
charges and expenses, including the just and reasonable compensation for the
services of the Bank, its attorneys and agents and others employed by the Bank
in connection with the operation, management and control of the Mortgaged
Property, and such further sums as may be sufficient to indemnify the Bank from
and against any liability, loss or pursuance of its rights and powers under this
Section 3.02, the Bank may, at its option, credit the net amount of income which
the Bank may receive by virtue of this assignment and from the Mortgaged
Property to any and all amounts due or owing to the Bank from the Mortgagor
under the 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    terms and
provisions of the Bond Documents, the Credit Agreement, this Mortgage and the
other Related Documents.  The balance of the net income shall be
released to or upon the order of the Mortgagor.

     

    The Bank’s acceptance of this Mortgage,
with all the rights, powers, privileges and authority created under this
assignment, shall not, prior to entry upon and taking possession of the
Mortgaged Property by the Bank, be deemed or construed to constitute the Bank a
mortgagee in possession, or thereafter or at any time or in any event impose any
obligation whatsoever upon the Bank to appear in or defend any action or
proceeding relating to any Lease or the Mortgaged Property, or to take any
action hereunder, or to expend any money or incur any expenses, or to perform or
discharge any obligation, duty or liability under any Lease, or to assume any
obligation or responsibility for any security deposits or other deposits
delivered to Mortgagor by any tenant and not assigned and delivered to the Bank,
or render the Bank liable in any way for any injury or damage to person or
property sustained by any person or persons, firm or corporation in or about the
Mortgaged Property.

     

    The Mortgagor agrees that the
collection of rents and the application as stated above or the entry upon and
taking of possession of the Mortgaged Property, or any part thereof, by the Bank
shall not cure or waive any default or waive, modify or affect any notice of
default under the Bond Documents, the Credit Agreement or any other Related
Document, or invalidate any act done pursuant to such notice, and the
enforcement of such right or remedy by the Bank, once exercised, shall continue
for so long as the Bank elects so long as an Event of Default
exists.  If the Bank elects to discontinue the exercise of any such
right or remedy, the same or any other right or remedy under this Mortgage may
be reasserted at any time and from time to time following any subsequent
default.

     

    3.03                      Right of
Mortgagor.  Notwithstanding anything in this Mortgage, so long
as no Event of Default shall have occurred and continue uncured, the Mortgagor
shall have the right to occupy the Mortgaged Property as landlord or otherwise,
to collect, use, and enjoy the rents, issues, profits, and other sums payable
under and by virtue of all Leases and to enforce the covenants of all Leases, it
being agreed that the assignment made hereby is for collateral purposes only,
and is conditioned upon the occurrence and continuance of an Event of Default
hereunder or under the Bond Documents or the Credit Agreement.

     

    Mortgagor hereby covenants and agrees
that Mortgagor shall not, without Bank’s prior written consent:  (a)
accept any payment of any installment of rent more than two (2) months in
advance of the due date therefor; or (b) enter into any management
agreement.  Mortgagor further covenants and agrees that Mortgagor
shall, at its sole cost and expense:  (a) promptly abide by, discharge
and perform in all material respects all of the covenants, conditions and
agreements contained in all Leases, on the part of the landlord thereunder; (b)
enforce or secure the performance of all of the material covenants, conditions
and agreements contained in any Lease on the part of any tenant thereunder; and
(c) appear in and defend any action or proceeding arising out of or related to
such Leases or the obligations, duties or liabilities of the landlord or of any
tenants thereunder.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    3.04                      Bank Not to Become
Liable.  Prior to entry upon and taking possession of the
Mortgaged Property by the Bank, the Bank and its assigns shall not be obligated
to perform or discharge, nor do such parties hereby undertake to perform or
discharge, any obligation, duty, or liability of the Mortgagor under any
Lease.  Prior to entry upon and taking possession of the Mortgaged
Property by the Bank, this Article shall not operate to place upon the Bank or
its assigns responsibility for the control, care, management or repair of the
Mortgaged Property or for the performance of any of the terms and conditions of
any Lease.  The Bank and its assigns shall not be responsible or
liable for any waste committed on the Mortgaged Property, for any dangerous or
defective condition of the Mortgaged Property, for any negligence in the
management, upkeep, repair or control of the Mortgaged Property or for failure
to collect any rents or other payments under the Leases, except for such acts or
conditions as shall occur while the Mortgaged Property is in the control of the
Bank pursuant to Section 3.02 hereof.

     

    3.05                      Waiver of
Mortgagor.  To the fullest extent permitted by law, the
Mortgagor hereby waives any and all claims against the Bank and its assigns
arising out of or in any way related to any act or failure to act pursuant to
this assignment, it being expressly understood and agreed that this assignment
of leases is for collateral purposes only, imposes no obligation on the Bank or
its assigns to take any action whatsoever and any action to enforce this
assignment is in the sole discretion of the Bank or its assigns.

    

    

    ARTICLE
IV

    COVENANTS OF
MORTGAGOR

     

    So long as any of the Bonds remain
outstanding, and so long as any of the Secured Obligations remain outstanding,
the Mortgagor agrees that Mortgagor shall abide by each of the following
covenants:

     

    4.01                      Payment of Principal and
Interest.  Mortgagor shall duly and punctually pay or cause to
be paid all amounts under this Mortgage, the Bond Documents, the Credit
Agreement and any other Related Document when due, and promptly pay any
penalties or other assessments that may be made, and timely comply with and
carry out all of the covenants and agreements set forth in the Credit Agreement
and the other Related Documents.

     

    4.02                      Insurance; Damage or
Destruction.

    

    (a)           The
Mortgagor shall provide and maintain or cause to be maintained at all times the
insurance required under the Credit Agreement.  No insurance policy
shall be cancelable or subject to reduction of coverage or modification except
after thirty (30) days’ prior written notice to the Bank.  All
insurers providing such policies shall have an A. M.  Best’s
policyholder rating of at least B and a financial size rating of at least Class
X.  At least ten (10) days prior to the expiration of Mortgagor’s
policies, Mortgagor shall furnish the Bank with renewals or “binders” therefor
or the Bank may order such insurance and charge Mortgagor for the cost
thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
          (b)    Mortgagor
shall give the Bank prompt notice of any damage or destruction to the Mortgaged
Property.  All proceeds of insurance under such policies (except
liability insurance and except in the case of any particular casualty resulting
in a loss payment not exceeding $10,000 in the aggregate) shall be paid to the
Bank, and all such policies shall provide that the proceeds of such insurance
(except in the case of any particular casualty resulting in loss payment not
exceeding $10,000 in the aggregate) shall be paid to the Bank as its interest
may appear, by means of a standard mortgagee clause.  In case of loss
exceeding $10,000, the Bank (or after entry of judgment of foreclosure, the
purchaser at the sale) is hereby authorized, to either (i) settle or adjust any
claim under such insurance policies without the consent of Mortgagor or (ii)
allow Mortgagor to agree with the insurance company or companies on the amount
to be paid upon the loss.

    

    
(c)    In the event
of an Insured Casualty, and:

    

            (i)    If, (A) (1) the
Insured Casualty occurred prior to the final completion of the Project, or (2)
in the reasonable judgment of the Bank, the Mortgaged Property can be restored
to an economic unit not less valuable than the same was prior to the Insured
Casualty, and (B) the insurance proceeds are sufficient to adequately secure the
outstanding balance of the indebtedness hereby secured, then, if no Event of
Default as hereinafter defined shall have occurred and Mortgagor shall not be in
default hereunder, the proceeds of insurance shall be applied to reimburse
Mortgagor for the cost of restoring, repairing, replacing or rebuilding the
Mortgaged Property or part thereof subject to the Insured Casualty, as provided
for in Section 4.02(d) hereof; and Mortgagor hereby covenants and agrees,
not later than ninety (90) days after the date of the Insured Casualty, to
commence and to diligently prosecute such restoring, repairing, replacing or
rebuilding; provided, always, that Mortgagor shall pay all costs of such
restoring, repairing, replacing or rebuilding in excess of the proceeds of
insurance.

            (ii)    Except as provided in
Section 4.02(c)(i), the Bank may apply the proceeds of insurance consequent
upon any Insured Casualty upon the indebtedness hereby secured, in such order or
manner as the Bank may elect.  No prepayment penalty shall be due on
insurance proceeds applied to the indebtedness.

            (iii)    In the event that
proceeds of insurance, if any, shall be made available to Mortgagor for the
restoring, repairing, replacing or rebuilding of the Mortgaged Property,
Mortgagor hereby covenants to restore, repair, replace or rebuild the same to be
of at least equal value, and in the same character and of the same quality as
prior to such damage or destruction; all to be effected in accordance with plans
and specifications to be first submitted to and approved by the
Bank.

          (d)    In the event
Mortgagor is entitled to reimbursement out of insurance proceeds held by the
Bank, such proceeds shall be disbursed from time to time upon the Bank being
furnished with satisfactory evidence: of the estimated cost of completion of the
restoration, repair, replacement and rebuilding; that funds of Mortgagor (or
assurances satisfactory to the Bank that such funds are available) when combined
with the proceeds of 

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      insurance,
to complete the proposed restoration, repair, replacement and rebuilding; and
with such architect’s certificates, waivers of lien, contractor’s sworn
statements and such other evidences of cost and of payment as the Bank may
reasonably require and approve; and the Bank may, in any event, require that all
plans and specifications for such restoration, repair, replacement and
rebuilding be submitted to and approved by the Bank prior to the commencement of
work.  No payment made prior to the final completion of the restoration,
repair, replacement or rebuilding shall exceed ninety percent (90%) of the value
of the work performed from time to time; funds other than proceeds of insurance
shall be disbursed prior to disbursement of such proceeds; and at all times the
undisbursed balance of such proceeds remaining in the hands of the Bank,
together with funds deposited for the purpose of completing the restoration,
repair, replacement or rebuilding are irrevocably committed to the satisfaction
of the Bank by or on behalf of Mortgagor for the purpose, shall be at least
sufficient in the reasonable judgment of the Bank to pay for the cost of
completion of the restoration, repair, replacement or rebuilding, free and clear
of all liens or claims for lien.  Interest shall be allowed to
Mortgagor on account of any proceeds of insurance or other funds held by the
Bank at the same rate being paid on the Bank’s money market accounts and shall
be available for such restoration, repair, replacement or
rebuilding.  Notwithstanding anything contained herein to the
contrary, the Bank may, in its sole discretion, require that the administration
of the restoration, repair, replacement and rebuilding, and the distribution of
insurance proceeds be done pursuant to and in accordance with the Credit
Agreement and Related Documents.

       

    

        (e)    All policies
of insurance provided for in subsection (a) of this Section 4.02 shall be
effective under a valid and enforceable policy or policies issued by an insurer
of recognized responsibility licensed to do business in the State of Wisconsin,
and shall be written in the names of Mortgagor and the Bank as their respective
interests may appear. All casualty policies shall provide that the proceeds of
such insurance shall be payable to the Bank pursuant to a standard mortgage
clause to be attached to each such policy.  Mortgagor shall deposit
with the Bank policies evidencing all such insurance or a certificate or
certificates of the respective insurers stating that such insurance is in force
and effect.

     

    4.03                      Preservation and Maintenance
of Mortgaged Property.  Mortgagor (a) shall not commit
waste or permit impairment or deterioration of the Mortgaged Property, (b) shall
not abandon the Mortgaged Property, (c) shall restore or repair promptly
and in a good and workmanlike manner all or any part of the Mortgaged Property
to the equivalent of its original condition, or such other condition as the Bank
may approve in writing, in the event of any damage, injury or loss thereto,
whether or not insurance proceeds are available to cover in whole or in part the
costs of such restoration or repair, (d) shall keep the Mortgaged Property,
including improvements, fixtures, equipment, machinery and appliances thereon in
good repair and shall replace fixtures, equipment, machinery and appliances on
the Mortgaged Property when necessary to keep such items in good repair, (e)
shall comply with all laws, ordinances, regulations and requirements of any
governmental body applicable to the Mortgaged Property, (f) if the Mortgaged
Property is leased, shall generally operate and maintain the Mortgaged Property
in a manner to ensure maximum rentals, and (g) shall give notice in writing to
the Bank of and, unless otherwise directed in writing by the Bank, appear in and
defend any action or proceeding purporting to affect the Mortgaged Property, the
security of this Mortgage or the rights or powers of the
Bank.  

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Neither
Mortgagor nor any other person shall remove, demolish or alter any improvement
now existing or hereafter erected on the Mortgaged Property or any fixture,
equipment, machinery or appliance in or on the Mortgaged Property except when
incident to the replacement of fixtures, equipment, machinery and appliances
with items of like kind.

     

    4.04                      Condemnation
Proceeds.  Mortgagor shall give the Bank prompt notice of any
pending or threatened eminent domain proceeding of any part or all of the
Mortgaged Property, including any damages to grade, and Mortgagor hereby
assigns, transfers and sets over unto the Bank the entire proceeds of any award
or claim for damages for any of the Mortgaged Property taken or damaged under
the power of eminent domain.  If any such proceeding occurs prior to
the final completion of the Project, the Bank shall, and in any event the Bank
may elect to, apply (or hold for application when due) the proceeds of the award
upon or in reduction of the indebtedness hereby secured then most remotely to be
paid, whether due or not, or to require Mortgagor to restore or rebuild the
Mortgaged Property in which event the proceeds shall be held by the Bank and
used to reimburse Mortgagor for the cost of such rebuilding and
restoring.  If Mortgagor is required or permitted to rebuild or
restore the Mortgaged Property as aforesaid, such rebuilding or restoration
shall be effected solely in accordance with plans and specifications previously
submitted to and approved by the Bank, and proceeds of the award shall be paid
out in the same manner as is provided in Section 4.02 for the payment of
insurance proceeds towards the costs of rebuilding or restoration.  If
the amount of such award is insufficient to cover the cost of rebuilding or
restoration, Mortgagor shall pay such costs in excess of the award, before being
entitled to reimbursement out of the award.  Any surplus which may
remain out of the award after payment of such costs of rebuilding or restoration
shall, at the option of the Bank, be applied (or held for application when due)
on account of the indebtedness hereby secured, then most remotely to be paid or
be paid to any other party entitled thereto.  Notwithstanding any
taking by eminent domain, Mortgagor shall continue to pay interest on the entire
principal sum secured until any such award or payment shall have been actually
received by the Bank and any reduction in the principal sum resulting from the
application by the Bank of such award or payment as hereinafter set forth shall
be deemed to take effect only on the date of such receipt.  If, prior
to the receipt by the Bank of such award or payment, the Mortgaged Property
shall have been sold on foreclosure of this Mortgage, the Bank shall have the
right to receive such award or payment to the extent of any deficiency found to
be due upon such sale, with interest thereon at the then-applicable rate on the
Bonds, whether or not a deficiency judgment on this Mortgage shall have been
sought or recovered or denied, and of the reasonable attorneys’ fees, costs and
disbursements incurred by the Bank in connection with the collection of such
award or payment.  No prepayment penalty shall be charged on amounts
received by the Bank pursuant to an award under the power of eminent
domain.

     

    4.05                      Expenses of
Litigation.  If any action or proceeding be commenced, to which
action or proceeding the Bank is or becomes a party or in which it becomes
necessary to defend or uphold the lien of this Mortgage or the efficacy of any
other Related Document, all sums paid by the Bank for the expenses of any
litigation (including reasonable attorneys’ fees) to prosecute or defend the
rights and lien created by this Mortgage or said Related Documents shall, on
notice and demand, be paid by Mortgagor, together with the interest thereon at
the rate on the Bonds and shall be a lien on the Mortgaged Property, prior to
any right or title to, interest in or claim upon the Mortgaged Property
subordinate to the lien of this Mortgage, and shall be deemed to be secured by
this Mortgage.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.06                      Compliance with
Laws.  Mortgagor covenants, warrants and represents that the
Mortgaged Property complies with the covenants and restrictions affecting the
Mortgaged Property, with all applicable building and zoning laws, and Mortgagor
shall at all times so own and use the same and take all steps necessary to
assure such compliance at all times.  Mortgagor shall not initiate or
acquiesce in any zoning reclassification, or seek any conditional use permit,
without the Bank’s written consent.

     

    4.07                      No Further
Encumbrances.  Mortgagor represents and warrants to and
covenants with the Bank, its successors and assigns that: (a) Mortgagor is the
owner of a fee simple interest in the Mortgaged Property, subject only to the
Permitted Liens; (b) this Mortgage is and shall remain a valid and
enforceable lien on the Mortgaged Property to secure the performance
of  the Secured Obligations, subject only to the Permitted Liens; and
(c) it will forever warrant and defend to the Bank, its successors and
assigns, the Mortgaged Property against all claims and demands whatsoever not
specifically excepted in this Mortgage.  The Mortgagor will keep the
Mortgaged Property free from all liens and encumbrances, whether inferior or
superior to the lien of this Mortgage, except for the Permitted
Liens.  Any person, firm or corporation taking a mortgage, lien or
other encumbrance against the Mortgaged Property (except for those that are
Permitted Liens) shall take the said lien subject to the rights of the Bank
herein and the right of the Bank to amend, modify and supplement this Mortgage
and the Related Documents and to extend the maturity of any indebtedness hereby
secured, in each and every case without obtaining the consent of the holder of
any such liens and without the lien of this Mortgage losing its priority over
the rights of any such liens.

     

    4.08                      Transfers.  Mortgagor
may not transfer all or any part of its interest in the Mortgaged Property
without the prior approval of the Bank.

     

    4.09                      Leases.  Except
for the lease of the Mortgaged Property to the Corporation, Mortgagor shall not
lease any portion of the Mortgaged Property, except with the prior written
approval of the Bank.  Mortgagor, at the Bank’s request and expense,
shall furnish the Bank with copies of all executed leases now existing or
hereafter made of all or any part of the Mortgaged Property.

     

    4.10                      Use of Mortgaged
Property.  Unless required by applicable law or unless the Bank
otherwise agrees in writing, Mortgagor shall not allow changes in the use for
which all or any part of the Mortgaged Property was intended at the time this
Mortgage was executed.

     

    4.11                      Protection of the Bank’s
Security.  If Mortgagor fails to perform the covenants and
agreements contained in this Mortgage, or if any action or proceeding is
commenced which affects the Mortgaged Property or title thereto or the interest
of the Bank therein, including, but not limited to, eminent domain, insolvency,
code enforcement or arrangements or proceedings involving a bankrupt or
decedent, then the Bank, at its option, may upon ten (10) days’ notice to
Mortgagor (except where such notice would be extremely impractical) make such
appearances, disburse such sums and take such action as the Bank deems
necessary, in its sole discretion, to protect the Bank’s interest, including,
but not limited to: (i) disbursement of attorneys’ fees; (ii) entry
upon the Mortgaged Property to make repairs; or (iii) procurement of
satisfactory insurance as provided in 

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section 4.02
hereof.  Any amounts disbursed by the Bank pursuant to this
Section 4.11, with interest thereon, shall become additional indebtedness
of Mortgagor secured by this Mortgage.  Unless Mortgagor and the Bank
agree to other terms of payment, such amounts shall be immediately due and
payable and shall bear interest from the date of disbursement at the Default
Rate unless such rate of interest exceeds applicable law, in which event such
amounts shall bear interest at the highest rate which may be collected from
Mortgagor under applicable law.  Mortgagor hereby covenants and agrees
that the Bank shall be subrogated to the lien of any mortgage or other lien
discharged, in whole or in part, by the indebtedness secured
hereby.  Nothing contained in this Section 4.11 shall require the
Bank to incur any expense or take any action hereunder.

     

    4.12                      Inspection.  Mortgagor
shall permit the Bank, and its duly authorized agents, experts, engineers and
representatives, upon at least 24 hours’ prior notice, to make or cause to be
made entries upon and inspections of the Mortgaged Property during normal
business hours at all times during the term hereof.  Mortgagor shall
assist the Bank in conducting all inspections and shall make access available to
the Bank to all areas.

     

    4.13                      Books and
Records.  Mortgagor shall keep and maintain at all times at
Mortgagor’s address stated in Section 8.06 of the Credit Agreement or upon ten
(10) days’ prior notice to the Bank, at such other place as designated by
Mortgagor within the State of Wisconsin, complete and accurate books of accounts
and records adequate to reflect correctly the results of the operation of the
Mortgaged Property and copies of all written contracts, leases and other
instruments which affect the Mortgaged Property, including without limitation
copies of all quotations, purchase orders and contracts obtained by Mortgagor in
the course of designing and constructing the Project.  Such books,
records, contracts, leases and other instruments shall be subject to examination
and inspection at any reasonable time by the Bank, and the Bank may copy the
same at the Bank’s expense, provided that the Bank may use and/or release such
information only in connection with the administration or enforcement of this
mortgage or the other Related Documents.  During the course of
construction of the Project, Mortgagor shall furnish to the Bank, at the Bank’s
request, written status reports detailing the progress of
construction.

     

    4.14                      Payment of Taxes and
Assessments.  Mortgagor shall pay, before the same become
delinquent, all real and personal property taxes, assessments (whether general
or special), gas, electric, light, power, water and sewer charges, business,
sales, use and occupation taxes, all permit and inspection fees, all license and
occupation fees, and such other charges now or hereafter levied or assessed
against the Mortgaged Property or any part thereof and, upon request, shall
exhibit to the Bank receipts for the payment of such items, 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.

     

    4.15                      Valid and Binding
Agreement.  Mortgagor covenants and warrants that this Mortgage
is a valid and enforceable obligation of Mortgagor in accordance with its terms
and that the performance by Mortgagor of the terms hereof does not contravene
any covenant in any agreement, indenture or other document affecting
Mortgagor.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
V

    DEFAULT;
ACCELERATION

    

    If any one or more of the following
events (herein designated as “Events of Default”)
shall occur:

     

    
          (a)    Occurrence of
an “Event of Default” (as therein defined) under any Bond Document, the Credit
Agreement or any of the Related Documents or if a default occurs under any other
agreement, document or instrument evidencing indebtedness of Mortgagor or any
guarantor to the Bank;

    

    

              (b)    Violation by any
Mortgagor of the covenants contained in Sections 4.07 and 4.08 hereof;
or

          (c)    Default by
Mortgagor in due observance or performance of any other covenant, condition or
agreement on its part to be observed or performed pursuant to the terms and
provisions of this Mortgage, if such default remains uncured upon a
date  thirty (30) days following the mailing or delivery of notice
thereof to Mortgagor;

then, and
upon the happening of any such event, Mortgagor shall be deemed to have
materially breached this Mortgage and the Bank may, at its option and without
notice, notice being hereby waived by Mortgagor, declare the Secured Obligations
to be forthwith due and payable, and upon such declaration all such amounts,
together with interest accrued thereon, if any, shall become and be due and
payable forthwith; and the Bank may thereupon proceed to protect and enforce its
rights hereunder, under the Bond Documents, the Credit Agreement and other
Related Documents by foreclosure proceedings or by other suit in equity, action
at law, or other appropriate proceedings.

    

    

    ARTICLE
VI

    REMEDIES

    

    Upon the happening of an Event of
Default, then and in every such case:

     

    6.01                      Action or
Suit.  The Bank may proceed to protect and enforce its rights
by an action or actions at law or by a suit or suits in equity, either for the
specific performance of any covenant or agreement contained herein, or for the
foreclosure of this Mortgage, or for monetary damages, or for the enforcement of
any other appropriate legal or equitable remedy.

     

    6.02                      Receiver.  The
Bank shall be entitled as a matter of right, without notice and without giving
bond to Mortgagor, or anyone claiming under it, to have a receiver appointed for
the Bank’s benefit of all of the Mortgaged Property and of the earnings, income,
rents, issues and profits thereof, pending such proceedings, with the powers
(without limitation) to collect such earnings, income, rents, issues and
profits; to rent and remodel the rentable areas; to perform and pay any
obligations of Mortgagor under the Bond Documents, the Credit Agreement and the
other Related Documents; together with such other powers as the court making
such appointment shall confer; and Mortgagor hereby irrevocably consents to such
appointment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.03                      Entry Upon the Mortgaged
Property.  The Bank, either itself or by its agents or
attorneys, may, in its discretion, enter upon and take complete and peaceful
possession of the Mortgaged Property, or any part or parts thereof, and may
exclude Mortgagor and its agents and servants wholly therefrom, in which case
Mortgagor covenants peacefully and quietly to yield up possession, and having
and holding the Mortgaged Property or portion thereof, the Bank may use,
operate, manage and control the Mortgaged Property, or any part thereof, and
conduct the business thereof (either itself or by its attorneys and agents), and
may collect any and all rents, issues and profits due or to become due without
prejudice to its rights to foreclosure, to appointment of a receiver and other
rights and from time to time, either by purchase, repair or construction may
maintain, restore and insure and keep insured, the buildings, structures,
improvements, fixtures, machinery, equipment and other property constituting a
part of or used in connection with the Mortgaged Property; and after paying all
of the expenses of operating the Mortgaged Property, the Bank shall apply the
monies arising therefrom to the payment of the Secured Obligations.

     

    6.04                      Foreclosure.  The
Bank may cause the Mortgaged Property to be sold at one or more foreclosure
sales, all in such manner and upon such notice as provided by
law.  All proceeds of any such sale or sales, remaining after payment
of: (a) the costs and expenses of such sale or sales (including attorneys’
fees of the Bank); and (b) the Secured Obligations, shall be paid to
Mortgagor, their respective successors and assigns, or to whomsoever may be
lawfully entitled to receive the same.  Notwithstanding anything
contained herein to the contrary, it is understood and agreed that the Bank may
foreclose this Mortgage without declaring the whole indebtedness evidenced by
the Bond Documents, the Credit Agreement and the other Related Documents and
intended to be secured hereby due; and, if any foreclosure sale is made because
of an Event of Default for less than the full amount which may become due under
the Bond Documents, the Credit Agreement and the other Related Documents, such
sale may be made subject to the unmatured portion of the indebtedness secured by
this Mortgage and such sale, if so made, shall not in any manner affect the
unmatured portion of the indebtedness intended to be secured by this Mortgage
but as to such unmatured portion of the debt to be secured, several sales may be
made for any other portion of the indebtedness to be secured, whether matured at
the time or subsequently occurring.

     

    6.05                      Costs of
Foreclosure.  If it becomes necessary for the Bank to commence
proceedings to foreclose this Mortgage or to commence any other suit in equity,
action at law or other appropriate proceedings, to enforce its rights under this
Mortgage, the Bond Documents, the Credit Agreement, or any of the other Related
Documents, Mortgagor agrees to pay to the Bank all costs of such suit, action or
proceeding as well as all expenses incurred in procuring title insurance and the
reasonable fees of the Bank’s attorneys in connection therewith, which costs and
fees shall be included in the judgment in any such suit, action or
proceeding.

     

    6.06                      Remedies
Cumulative.  No remedy herein conferred upon or otherwise
available to the Bank is intended to be or shall be construed to be exclusive of
any other remedy or remedies; but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder, or now or
hereafter existing at law or in equity or by statute.  No delay or
omission to exercise any right or power accruing upon any default shall impair
any such right or power, or shall be construed to be a waiver of any such
default or an acquiescence therein.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
VII

    SECURITY AGREEMENT; FIXTURE
FILING

     

    7.01                      Security Agreement; Fixture
Filing.  This Mortgage shall create a security interest in, and
the Mortgagor hereby grants to the Bank a security interest in, the Mortgaged
Property in favor of the Bank and shall constitute a Security Agreement under
the Uniform Commercial Code of Wisconsin with respect to all of the Mortgaged
Property, and the Bank shall be entitled to all of the rights of a secured
party.  This Mortgage is a financing statement covering the Fixtures,
and it is intended that as to those goods and the proceeds thereof, this
Mortgage shall be effective as a financing statement filed as a fixture filing
from the date of its filing for record in the real estate records for the county
in which the Mortgaged Property is located.  It is expressly agreed
that during the continuance of an Event of Default the Bank shall proceed to
dispose of any portion of the Property in accordance with the provisions of the
Uniform Commercial Code, ten (10) days’ notice by the Bank to the Mortgagor
shall be deemed to be reasonable notice under any provision of the Uniform
Commercial Code requiring such notice; provided, however, that the Bank may, at
its option, dispose of the Property in accordance with the Bank’s rights and
remedies in respect to the real estate pursuant to the provisions of this
Mortgage in lieu of proceeding under the Uniform Commercial Code.  The
Mortgagor will, from time to time and as often as requested by the Bank, execute
and deliver to the Bank such financing statements, renewal affidavits,
continuation statements, inventories or other similar documents as the Bank may
reasonably request to perfect the security interest created hereby, and
Mortgagor authorizes Bank to make such filings.  No failure or
omission of the Bank to request any financing statement, renewal affidavit,
continuation statement, inventory, or the like, and no failure or omission of
the Mortgagor to execute or deliver any thereof, will impair the effectiveness
of or priority of the security interest created by this Mortgage.  The
Mortgagor will pay all costs of filing and/or recording of this Mortgage and any
financing statements, continuation or termination statements with respect
thereto, and any affidavits or other instruments executed, or to be executed, to
perfect, renew, continue or maintain the lien and security interest created
hereby.  The Mortgagor hereby appoints the Bank, or any officer of the
Bank, as the agent and attorney-in-fact of the Mortgagor to do, at the Bank’s
option and the Mortgagor’s expense, all acts and things reasonably necessary to
perfect, and continue perfected, the lien and security interest created
hereby.  In the event of foreclosure sale of personal property in
which the Bank holds a security interest granted herein, whether such sale be
held by the Bank or otherwise, such sale may be of the whole of such property or
any portion thereof and may be held together with or separately from any
foreclosure sale of the real property securing said
indebtedness.  Such personal property need not be present at the place
of sale.

    

    ARTICLE
VIII

    GENERAL

     

    8.01                      Notices.  Any
notice required or permitted to be delivered hereunder by either party to the
other shall be governed by, and delivered in accordance with Section 8.06 of the
Credit Agreement.

     

    8.02                      Governing
Law.  This Mortgage shall be construed and enforced according
to the internal laws of the State of Wisconsin.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    8.03                      Successors and Assigns;
Partial Invalidity.  All covenants and agreements in this
Mortgage contained by or on behalf of either of the parties hereto shall be
binding upon and shall inure to the benefit of the respective successors and
assigns of Mortgagor and the Bank.  Invalidation of part or all of any
one of the covenants herein contained by judgment or court order shall not
affect any of the other provisions, which shall remain in full force and
effect.

     

    8.04                      Mortgagor and Lien Not
Released.  From time to time, the Bank may, at its option,
without giving notice to or obtaining the consent of Mortgagor, Mortgagor’s
successors or assigns or of any junior lienholder or guarantors, without
liability on the Bank’s part and notwithstanding Mortgagor’s breach of any
covenant or agreement of Mortgagor in this Mortgage, extend the time for payment
of the indebtedness evidenced by the Bond Documents, the Credit Agreement and
any of the other Related Documents or any part thereof, reduce the payments
thereon, release anyone liable on any of said indebtedness, modify the terms and
time of payment of said indebtedness, release from the lien of this Mortgage any
part of the Mortgaged Property, take or release other or additional security,
reconvey any part of the Mortgaged Property, consent to any plat or plan of the
Mortgaged Property, consent to the granting of any easement, join in any
extension or subordination agreement and agree in writing with Mortgagor to
modify the terms or conditions of Bond Documents, Credit Agreement and any of
the other Related Documents or change the amounts payable
thereunder.  Any actions taken by the Bank pursuant to the terms of
this Section 8.04 shall not affect the obligation of Mortgagor or
Mortgagor’s successors or assigns to pay the sums secured by this Mortgage and
to observe the covenants of Mortgagor contained herein, shall not affect the
guaranty of any person, corporation, partnership or other entity for payment of
the indebtedness secured hereby and shall not affect the lien or priority of
lien hereof on the Mortgaged Property.  Mortgagor shall pay the Bank a
reasonable service charge, together with such title insurance premiums and
attorneys’ fees as may be incurred at the Bank’s option, for any such action if
taken at Mortgagor’s request.

     

    8.05                      Forbearance by the Bank Not
a Waiver.  Any forbearance by the Bank in exercising any right
or remedy hereunder, or otherwise afforded by applicable law, shall not be a
waiver of or preclude the exercise of any right or remedy.  The
acceptance by the Bank of payment of any sum secured by this Mortgage after the
due date of such payment shall not be a waiver of the Bank’s rights to either
require prompt payment when due or all other sums so secured or to declare a
default for failure to make prompt payment.  The procurement of
insurance or the payment of taxes or other liens or charges by the Bank shall
not be a waiver of the Bank’s right to accelerate the maturity of the
indebtedness secured by this Mortgage, nor shall the Bank’s receipt of any
awards, proceeds or damages under Section 4.02 or 4.04 hereof operate to
cure or waive Mortgagor’s default in payment of sums secured by this
Mortgage.

     

    8.06                      Future Advances;
Cross-Collateralization. This Mortgage shall also secure all present and
future indebtedness and obligations of the Borrower to the Bank, and shall fully
and completely cross-collateralize all such indebtedness and
obligations.  This Mortgage shall also secure any and all future
advances made by the Bank to Borrower, including all costs, taxes, assessments,
insurance, expenses, and reasonable attorneys’ fees, together with interest
thereon at the Default Rate set forth in the Credit Agreement, that the Bank may
make, pay or incur under this Mortgage for the protection of the Bank or any of
its rights in connection with the Property.  All of 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    the
foregoing sums so secured shall be superior to the rights of the holder of any
lien or encumbrance placed on the Mortgaged Property after the recording of this
Mortgage.

    

    

    

    [Signature
Page Follows]

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the Mortgagor has
executed this Mortgage as of the date and year first above written.

    

    M
& W FIBERGLASS, LLC,

    a
Wisconsin limited liability company

    

    

    By:    /s/ Jamie L.
Mancl                                          

    Jamie L. Mancl, its sole
member

    

    ACKNOWLEDGMENT

    

    

    
    

     

    
      	STATE OF
      WISCONSIN	)	 
	 	) 	ss. 
	_____________COUNTY	)	 

    

     

    This instrument was acknowledged before
me on the _____ day of February, 2007, by Jamie L. Mancl, known to me as its
sole member of M & W Fiberglass, LLC, a Wisconsin limited liability
company.

    
 

    
                                                                                   ______________________________________________
                                                                                         
Notary Public, State of Wisconsin

    My
commission: _________________________________

    

    

    

    

    This
document was drafted by

    and
should be returned to:

    Lisa R.
Lange

    Whyte
Hirschboeck Dudek S.C.

    One East
Main St., Suite 300

    Madison,
WI 53703

    

    

    

    
      
        
          [Signature
Page of Mortgage] 

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    DESCRIPTION
OF 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

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    A-1

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