Note: _________ percent maximum payout to builder prior to sale and qualification of buyer.

1. Construction. Owner agrees to construct, or (where applicable) to cause to be constructed by the undersigned contractor, on the above premises certain improvements consisting of a _________ family dwelling, more particularly described in those detailed drawings, plans and specifications which have been placed on file with association and signed by owner and contractor. Owner or contractor agrees to commence the actual construction of the improvements within _________ days after the recording of the mortgage and to complete, free of liens, or rights of liens of contractor, mechanics, material suppliers, laborers or any governmental agency the improvements in accordance with the detailed drawings, plans and specifications within _________ months after the recording of such mortgage plus the period of any excusable delays, including strikes, acts of God, or other reasons beyond control of owner or contractor. Owner and (where applicable) contractor further agree that no materials, fixtures, or any other part of the improvements shall be purchased or installed under conditional sales agreements or under any other arrangements where the right is reserved or accrues to anyone to remove or to repossess any such items, or to consider them as personal property.

2. Recording of Mortgage. Contemporaneously with the execution of this agreement, owner has executed and delivered the mortgage on the premises referred to above. Owner agrees that no work whatsoever shall be commenced on, or materials delivered to, the premises until after the mortgage is recorded. Should any work be commenced or materials delivered to the premises before such recording, association may at its option cancel this agreement.

3. Title Insurance. The owner agrees to furnish to association, before any work is commenced or materials delivered to the premises, a commitment in form acceptable to association issued by _________ agreeing to issue full coverage mortgagee title insurance policy in the full amount of the loan insuring that the mortgage is an absolute first lien on the marketable fee simple title of owner to the premises. Owner shall furnish the title company with satisfactory evidence that no work of any kind has commenced on, nor have any materials been delivered to, the premises prior to the recordation of the mortgage. After completion of the improvements, owner agrees to furnish such title insurance policy issued by the title company as of the date of making the loan for the full amount of it.

4. Construction Loan Account. Upon recordation of the mortgage, the proceeds of this loan shall be transferred on the books of association, together with the sum of $_____ to be deposited by owner, to a special noninterest-bearing account entitled, "loans in process construction loan account," and owner agrees that such transfer shall be conclusively deemed a full and complete consideration for the note and mortgage and that such consideration shall be deemed to have been paid to owner. The amount so transferred and deposited shall be disbursed and used for the purpose provided here.

5. Assignment of Account. Subject to the provisions of this agreement, owner irrevocably assigns to association as security for the note and the performance of this agreement all of the right, title and interest of owner in and to the account and all moneys to be transferred to it and placed in it. Owner has no right to the moneys in the account except to have them disbursed by association in accordance with this agreement, which disbursement association agrees to make upon the conditions and in the manner provided here. Owner agrees that except as previously provided, any assignment or transfer, voluntary or involuntary, of this agreement or any rights under it, shall not be binding upon or in any way affect association without its written consent and association may pay out moneys in the account as provided here, notwithstanding any such assignment or transfer.

6. Disbursement. All of the moneys transferred to, or deposited in, the account, except as may otherwise be provided, shall be disbursed by association as follows, subject to the provisions of this agreement:

7. Inspection Reports and Fees. Compliance inspection reports shall be made by a representative of association after each inspection of the improvements. A charge of $_____ shall be made by association for each inspection or for each visit made to the premises by such representative at the instance and request of owner or contractor if, through no fault of such representative or association, the improvements are not ready for the requested inspection. Such amounts may be disbursed by association from the account mentioned above.

8. Compliance with Restrictions, Ordinances, etc. Owner and contractor agree that the improvements shall be constructed strictly in accordance with all applicable ordinances and statutes, including zoning laws and covenants and restrictions running with the land; that the requirements of all regulatory authorities and the board of fire underwriters or similar boards shall be complied with; and that the improvements shall be constructed entirely upon the premises within building restriction or setback lines.

9. Right to Inspect Construction. Association shall have the right at all times during construction to inspect the progress of the work done. If in association's opinion the work is not being done in accordance with the plans or specifications or is not otherwise satisfactory, association shall have the right to require compliance therewith and the remedying of all defects. Association shall also have the right to withhold all disbursements from the account until the work is satisfactory to it and if the work is not made satisfactory to the association within _________ days after notice by association, such failure shall constitute a default under this agreement.

Association by inspecting the premises assumes no responsibility to the owner for defective material or work in the improvements or any breach of contract by contractor. Owner agrees that the inspection by association of the improvements to be constructed on the premises is for the sole purpose of protecting the security of association and that such inspection is not to be construed as a representation that there will be a strict compliance on the part of contractor with the plans and specifications or that the construction will be free from faulty material or workmanship. Owner has accepted, and accepts the sole responsibility for the selection of contractor, all materials, supplies and equipment to be used in the construction of the improvements, and association assumes no responsibility for the completion of the improvements according to the plans and specifications and for the contract price. In the event that the funds on hand are found to be insufficient to erect the improvements and to complete the same in accordance with the plans and specifications and any agreed extras, owner agrees to place such additional funds in the construction loan account as may be necessary to complete the improvements according to the plans and specifications, plus any extras authorized by owner.

10. Association may, at any time, without the consent of owner, if in its opinion it becomes necessary so to do, pay bills and complete the improvements in accordance with plans and specifications on file with it, using for such purpose the unexpended net proceeds of this loan, upon which funds association shall have a first lien for any one or more of such purposes but nothing contained here shall be in any way construed as a covenant on association's part to so pay or complete.

11. Insurance. Owner agrees to submit to association prior to the commencement of the construction of the improvements a fire and extended coverage hazard insurance policy, which shall be acceptable to association and in compliance with the requirements of the mortgage.

12. Construction Changes. No changes in the plans or specifications shall be made after the same have been approved by association without first obtaining the written consent of association to such changes; and all contracts let by owner or contractor in connection with the construction shall contain this provision.

13. Association shall have the right and option to declare the entire amount of the loan provided for here, evidenced by the note and secured by the mortgage, immediately due and payable in the event that construction of the improvements for which this loan is made ceases, or in the sole discretion of the association, substantially ceases, for a period of _________ days, or in the event that a notice and claim of laborer's, mechanic's or material supplier's lien is filed with respect to the above described property and is not released within _________ days after filing, and, in the event of such acceleration, association shall have no further obligation or liability to lend, or make available, funds under this agreement, and monies deposited under this agreement in "loan in process construction loan account" shall immediately be released. Association shall in addition have the right, in such events, to use monies deposited under this agreement in such account, to advance, to complete, or partially to complete such improvements, or to pay amounts necessary to obtain the release of any such lien, as may be necessary, in its discretion, to protect its security interest in the property, and all monies so used or advanced shall be secured by the lien of the mortgage.

14. Default. In the event of a default by the undersigned or any of them in the performance of any of the terms, covenants or conditions set forth here, all sums disbursed or advanced by association under this agreement shall immediately become due and payable and association shall withdraw any sum on deposit with it under the terms of this agreement and credit the same upon any indebtedness of owner under this agreement, and be released from any and all obligations to the undersigned or any of them under the terms of this agreement. It is further understood and agreed that in the event such sums are so credited on the note, the same shall not in any respect cure or waive any default under the note or the mortgage, and such credit on the note shall not change, alter or prejudice any rights of the mortgagee given by the mortgage.

15. No Waiver. No delay by association in exercising any option or default shall operate as a waiver of such default or preclude the exercise of such option at any time during the continuance of any such or any later default.

16. It is specifically agreed that the association may place on the property, a sign which indicates that financing is provided by association, such sign to be removed at the time of the final inspection and remain the property of the association.

17. This agreement is made for the sole protection of the undersigned and association and no other person or persons shall have any right of action on it.

18. Time is expressly made of the essence of this agreement.

19. This agreement is binding upon the undersigned, their heirs, legal representatives, successors and assigns.

20. Qualified Buyer. This paragraph shall be applicable only if owner will not occupy or operate the premises or if the premises are being improved for resale. Anything to the contrary notwithstanding, association's obligation under this agreement to pay out and to disburse that part of the monies, transferred under this agreement to the construction loan account, disbursement of which is provided for in subpart (5) of subparagraph B of paragraph 6, above, is expressly conditioned and made contingent upon owner first having procured a buyer of the above described property who is willing and, in the sole opinion and discretion of association, qualified, to assume and to pay the indebtedness of owner evidenced by the note and secured by the mortgage and to assume and to perform owner's obligations under this agreement and under the mortgage. Upon acceptance of such buyer by association, appropriate instruments will be prepared and executed releasing owner from further liability on account of the note, the mortgage and this agreement.