Construction Loan Agreement

CONSTRUCTION LOAN AGREEMENT

Parties and Contact Information

Recitals

This Construction Loan Agreement (the Agreement) is made as of between Lender and Borrower listed above. Lender agrees to make and Borrower agrees to borrow a loan in the original principal amount of $ (the Loan) to finance construction of the Project described below, subject to the terms and conditions set forth in this Agreement and the Loan Documents.

Project and Loan Identification

Loan Terms

Principal: Lender will advance to Borrower the principal sum of $ subject to the conditions herein. Interest shall accrue on outstanding principal at a rate of per annum, computed on the basis of a 365-day year and actual days elapsed, payable as set forth below.

Loan Term / Maturity Date: The Loan shall mature on at which time all outstanding principal, accrued interest, and fees shall be due and payable in full unless earlier accelerated in accordance with this Agreement.

Fees: Borrower shall pay an origination fee of $ and a commitment fee of $ to be assessed in accordance with the Loan Documents.

Disbursement and Draw Procedures

Advances shall be made by Lender to Borrower in accordance with the Draw Schedule below and only upon satisfaction of Lender's disbursement conditions, which include: (a) receipt of completed draw request on lender's form; (b) evidence of payment of prior draws to subcontractors and suppliers or satisfactory waivers; (c) satisfactory inspection by Lender or its designee; and (d) compliance with the Construction Budget and all applicable permits.

Construction Budget

Contingency Reserve: $ to be held and released at Lender's sole discretion upon evidence of unforeseen costs. Borrower represents that the Budget reasonably estimates all costs necessary to complete the Project.

Repayment; Interest; Taxes

Interest shall accrue from the date of each advance and be payable monthly in arrears. Principal and accrued interest shall be due and payable at maturity unless otherwise converted or refinanced in writing. Borrower shall pay or timely cause to be paid all taxes, assessments, and other governmental charges related to the Project and shall provide evidence of payment upon Lender's request.

Security; Loan Documents

As security for the obligations under this Agreement, Borrower shall execute and deliver (as applicable) a mortgage or deed of trust granting Lender a first priority lien on the Project property, assignments of construction contracts and proceeds, security agreements, and such UCC-1 financing statements, guaranties, estoppel certificates, and other documents as Lender reasonably requires (collectively, the Loan Documents). All such security shall secure payment of principal, interest, fees, costs, and other Obligations.

Mechanic's Liens: Borrower shall keep the Project free of mechanic's and materialmen's liens. Promptly upon Lender's request, Borrower shall obtain lien waivers and releases and shall cause contested liens to be bonded off or otherwise removed at Borrower's expense.

Insurance; Risk of Loss; Indemnity

Borrower shall maintain builders' all-risk insurance, general liability insurance, and such other policies as Lender reasonably requires, naming Lender as loss payee and additional insured as applicable. Borrower bears risk of loss; proceeds of any insurance shall be applied to repair or completion of the Project or to satisfy outstanding Obligations as determined by Lender.

Representations, Warranties and Covenants

Borrower represents and warrants to Lender that: (a) Borrower has full power and authority to enter into and perform this Agreement and the Loan Documents; (b) no filings, judgments, or other matters exist which would materially impair the value of the Project or Lender's security; and (c) all information delivered to Lender in connection with the Loan is true and complete in all material respects. Borrower covenants to maintain compliance with building permits, licensing, and all applicable laws throughout construction.

Events of Default; Remedies

Each of the following shall constitute an Event of Default: (a) Borrower's failure to pay any principal, interest, or fee when due; (b) any material inaccuracy in Borrower's representations or warranties; (c) failure to perform covenants required by this Agreement; (d) filing by or against Borrower of a petition in bankruptcy or insolvency; or (e) any material voluntary or involuntary encumbrance of Lender's collateral not approved in writing by Lender. Upon Event of Default, Lender may, at its option, declare all Obligations immediately due and payable and exercise all rights and remedies provided in the Loan Documents and at law or in equity, including foreclosure.

Notices

All notices required or permitted hereunder shall be in writing and delivered by hand, nationally recognized overnight courier, or certified mail, return receipt requested, to the addresses set forth above (or to such other address as a party may designate by notice to the other). Notices are effective upon receipt.

Governing Law; Miscellaneous

This Agreement and the Loan Documents shall be governed by and construed in accordance with the laws of the state of without regard to conflicts of law principles. Borrower may not assign its obligations under this Agreement without Lender's prior written consent. Lender may assign its rights and obligations without Borrower's consent except as limited by applicable law.

Acknowledgment

By signing below, each party acknowledges and agrees that it has read and understands this Agreement, that the persons signing on behalf of each party are duly authorized, and that this Agreement, together with the Loan Documents identified herein, constitute the entire agreement between the parties with respect to the Loan.

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