Construction Loan Agreement

CONSTRUCTION LOAN AGREEMENT


THIS AGREEMENT, made and entered into November 30, 1998, by and between FEATHERLITE, INC., formerly known as FEATHERLITE MFG., INC., whose address, for purposes of this Agreement, is 1550 Dolgner Place, Sanford, Florida 32771 (hereinafter called "Owner"), and FIRST UNION NATIONAL BANK, whose address, for purposes of this Agreement, is Post Office Box 1000, Orlando, Florida 32802 (hereinafter called "Lender").


W I T N E S S E T H:


Owner has applied to Lender for a loan to aid in the construction of a sales and service facility on Owner's real property. Lender has agreed to make a construction loan to Owner, and Owner has agreed to accept such loan on the terms and conditions hereinafter set forth.


NOW, THEREFORE, in consideration of the execution and simultaneous delivery of the Loan Documents and of the mutual and separate agreements, conditions, covenants, representations and warranties of the parties hereto, it is agreed, covenanted, represented and warranted by and between the parties as follows:


ARTICLE 1
DEFINITIONS


1.01 As used in this Construction Loan Agreement, the following terms shall have the meanings indicated opposite each of them:


Property: See attached Exhibit "A".


Mortgage: The mortgage deed of even date herewith encumbering
the Property, given by Owner to Lender to secure the
Note.


Note: The promissory note of even date herewith in
the original principal amount of FOUR
MILLION AND NO/100 DOLLARS ($4,000,000.00)
given by the Owner to the Lender to
represent the Construction Loan.


Construction Loan: The loan contemplated by this Construction Loan Agreement.


Loan Documents: The Note, the Mortgage, the Construction Loan Agreement,
Financing Statements, and all other documents executed
by Owner in connection with the Construction Loan.


Plans: The final plans and specifications for construction
of the Improvements prepared by Owner's Architect
and heretofore approved by Lender and all amendments and
modifications thereto made with the approval of the
Lender.


Improvements: The Improvements described in the Plans and in the
Application for the Construction Loan. Without
limiting the foregoing, the term "Improvements" shall
include all landscaping, walls, drives, approaches,
sidewalks, curbs, paving, and all chattels, furniture,
furnishings, fixtures and equipment described in the
Plans or described in the application for the
Construction Loan, and all building materials,
machinery, appliances and equipment to be incorporated in
or affixed to the Improvements described in the Plans.


Owner's Contractor: Spolski General Contractor, Inc.


Owner's Architect: ________________________________________________________


ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE OWNER


2.01 The Owner is indefeasibly seized of the Property in fee simple and has full power and lawful right to convey and mortgage the same. The Property is free and clear of all encumbrances except current taxes which are not yet due and payable.


2.02 No materials of any kind have been placed on the Property, and no labor has been performed thereon incident to the Improvements within the next preceding ninety (90) days; there are no unpaid bills for labor, materials, supplies or services furnished upon the Property; and no Notice of Commencement or claim of lien affecting the Property or the Improvements has been filed in the Public Records of the County in which the Property is located, and no such Notice of Commencement or claim of lien will be so filed prior to the recording of the Mortgage.


2.03 The Plans shall not be deemed to be complete unless they shall include detailed provisions for convenient ways of access by either foot or vehicle to all proposed buildings included in the Improvements and also all necessary paving of private ways, curbs, sidewalks, gutters, landscaping, easements and utility connections, and all equipment necessary for the operation of the Improvements as a completed project. The master set of Plans shall be deposited with the Lender and, when so deposited, shall govern all matters that may arise with respect thereto. Before being so deposited, the Plans will be subject to approval by the Lender, and, to the extent required by applicable law or any effective restrictive covenant, by all governmental authorities and the beneficiary of any such covenant, respectively. Owner shall secure all such approvals.


2.04 All utilities services necessary and adequate for the construction of the Improvements and the operation thereof for their intended purpose are


available for the use of Owner at the boundaries of the Property, including water supply, storm and sanitary sewer facilities, electric, and telephone facilities, and evidence thereof satisfactory to Lender shall be submitted to Lender before closing of the Construction Loan. Applicable zoning regulations will permit the construction and use of the Improvements for a sales and service facility, and evidence thereof satisfactory to Lender shall be submitted to Lender before closing of the Construction Loan.


2.05 Representations made by the Owner in financial statements furnished to the Lender in connection with application for the Construction Loan, and all representations made in such application, are true as of the date hereof.


2.06 All necessary licenses and permits have been obtained to permit the completion of the Improvements.


2.07 All labor and materials contracted for or in connection with the construction of the Improvements shall be used and employed solely on the Property and in said construction, and only in accordance with the Plans.


2.08 The monies disbursed under this Construction Loan Agreement shall constitute a trust fund and shall be used solely for the payment of Owner's costs and for no other purpose unless another use is specifically provided for in this Construction Loan Agreement, or consented to in writing by Lender.


2.09 Each of the representations and warranties set forth in this Article will be true on the date of each advance hereunder and the acceptance of any advance hereunder by Owner shall be deemed to be a reaffirmation of each of said representations and warranties.


ARTICLE 3
OWNER'S COVENANTS


The Owner covenants and agrees with Lender as follows:


3.01 The Owner will cause to be furnished to the Lender at Owner's expense, forthwith and prior to the disbursement of any funds hereunder, a policy of title insurance covering the Property in the aggregate sum of the Mortgage, in a company acceptable to Lender. Said policy shall show the party named as Owner to be vested with a valid insurable fee simple title, free and clear of all exceptions and encumbrances whatsoever except the Mortgage, current taxes not yet due and payable, and covenants and restrictions without right of reverter or forfeiture of title in case of violation thereof, and which do not prohibit or limit construction or operation of the Improvements, and shall insure the Lender and its nominee or assigns that the Mortgage is a valid first lien on the Property subject only to the exceptions expressly permitted in this Agreement. Such title insurance policy shall be effective from the time of the recording of the Mortgage.


3.02 The Owner shall, forthwith and prior to the disbursement of any funds hereunder, furnish to Lender at Owner's expense a current print of survey showing the Property to be free from encroachments and encumbrances, which survey shall meet all the requirements of the title insurer to enable the title insurer to eliminate any exception for survey matters from the title insurance policy. At request of Lender, Owner shall furnish a supplemental survey or surveys showing all foundations of the Improvements to be in place, properly located on the Property and not in violation of any covenant or restriction or zoning ordinance affecting the Property. Upon completion of the Improvements, Owner shall furnish to Lender at least two prints of survey showing the Improvements to be complete and properly located on the Property. Such surveys shall be made by a civil engineer or surveyor acceptable to the Lender and shall be paid for by Owner. All required surveys shall be certified to the Lender and the title insurance company insuring the lien of the Mortgage.


3.03 Owner shall furnish and pay the premiums for fire and extended coverage insurance (including Builder's Risk Insurance) and insurance against such other hazards as may be required by Lender, in a company or companies acceptable to the Lender, for the full insurable value of the Improvements, and covering the same, said policies to be in amount and form acceptable to Lender. Loss under such insurance policies shall be payable first to the Lender to the extent of its interest or lien, and shall not be cancellable without at least ten (10) days' written notice by insurer to Lender. Owner shall also furnish, at Owner's expense, general comprehensive liability insurance required by Lender.


3.04 Owner shall construct the Improvements on the Property in a true, thorough, workmanlike and substantial manner and in accordance with the Plans. Owner shall provide, at Owner's cost, all manner of materials, labor, scaffolding, implements and cartage of every description for the due performance of the several works and complete construction of the Improvements. Owner shall not make any changes in the Plans or deviate therefrom except with the written consent of the Lender.


3.05 Owner shall take all necessary steps to assure that construction and installation of the Improvements shall commence not later than thirty (30) days from the date of this Construction Loan Agreement, shall proceed continuously and diligently, and shall be completed within twelve (12) months from the date hereof.


3.06 Owner shall furnish, before each advance herein agreed to be made and on completion of construction, all receipted bills, certificates, affidavits, releases of lien and other documents which may be required by the lien laws of the State of Florida, or which may be required by the Lender or the title insurance company providing the title insurance coverage described in Section 3.01, as evidence of full payment for all labor and materials incident to the construction of the Improvements for which prior advances of Construction Loan proceeds have been requested and made, and the Owner will, at the same time, furnish partial releases from all persons receiving payment from Construction Loan proceeds for the amount of payments received. Prior to the final payment of the remaining Construction Loan proceeds to or for the account of the Owner, the Owner shall furnish satisfactory proof of payment of all accounts and claims for labor, material and services furnished in connection with the Improvements.


3.07 If the Owner at any time prior to the completion of the Improvements abandons the same or ceases work thereon for a period of more than twenty (20) days or fails to complete the Improvements substantially in accordance with the Plans, except as to changes approved as herein provided by the Lender or makes material changes in the Plans without first securing written approval of the Lender or otherwise fails to comply with the terms hereof, any such failure shall be a default hereunder, at the option of the Lender, and the Lender may terminate this Agreement, or the Lender, at its option, at any time thereafter may enter into possession of the premises and perform any and all work and labor necessary to complete the Improvements substantially according to the Plans and employ watchmen to protect the Property from injury. All sums so expended by the Lender shall be deemed paid to Owner and secured by the Mortgage. For this purpose, the Owner hereby constitutes and appoints the Lender as true and lawful attorney-in-fact with full power of substitution in the premises, to complete the Improvements in the name of the Owner, and hereby empowers said attorney or attorneys as follows: to use any funds of the Owner, including any balance which may be held in escrow and any funds which may remain unadvanced under the Mortgage, for the purpose of completing the Improvements in the manner called for by the Plans; to make such additions and changes or corrections in the Plans as shall be necessary or desirable to complete the Improvements in substantially the manner contemplated by the Plans; to employ such contractors, subcontractors and agents, architects and inspectors as shall be required for said purposes; to pay, settle or compromise all existing bills and claims which may be liens against the Property, or as may be necessary or desirable for the completion of the job, or for clearance of ...