Common use of Inspections and Monitoring Clause in Contracts

Inspections and Monitoring. To monitor the collateral base and to assist in calculating the Maximum AlIowabIe Funding, Borrower shall provide to Bank monthly a report of construction completion status on the Bank's form, or other form approved by Bank, for all units financed under the Loans. Inspection fees under the Loans will be $125 per unit, irrespective of the number of times Bank elects to inspect. 7. Paragraph 5.9 of the Loan Agreement is amended as follows: Title insurance coverage for the Loan under a loan policy or policies of title insurance with revolving credit endorsement shall continue to insure advances under the Loan. 8. Paragraph 5.11 of the Loan Agreement is amended as follows: Borrower will provide Bank with (a) quarterly 10-Q filings for International American Homes, Inc., including internally prepared consolidating financial information for wholly-owned subsidiaries, within 90 days of the end of each quarter; (b) annual 10-K for International American Homes, Inc., including consolidating financial information for wholly-owned subsidiaries, within 120 days of fiscal year end, and (c) annual and quarterly inventory and sales reports. 9. Paragraph 5.18 of the Loan Agreement is amended as follows: (a) Bank will fund under the Loan up to but not in excess of an amount, referred to here as the Aggregate Maximum Allowable Funding, which is from time to time the aggregate sum of the Maximum Allowable Funding amount for all units and lots subject to the Loan. In calculating the Maximum Allowable Funding, the amount which has been advanced or which is eligible to be advanced on account of the underlying land lot is referred to herein as the Lot Advance. The Maximum Allowable Funding amount for a pre-sold unit will be the sum of (1) the Lot Advance, plus (2) the product of (a) the then current percentage of completion of the unit, times (b) an amount which does not exceed 100% of the unit cost breakdown (not including the Lot Advance) submitted by Borrower and approved by Bank, nor the lesser of 1) 80% of the completed value of each unit, which amount shall be determined by a valuation acceptable to Bank, less the Lot Advance, or 2) 80% of the contracted purchase price of the unit, less the Lot Advance. The Maximum Allowable Funding amount for a model or spec unit will be the sum of (1) the Lot Advance, plus (2) the product of (a) the then current percentage of completion of the unit, times (b) an amount which does not exceed 100% of the unit cost breakdown submitted by Borrower and approved by Bank, nor 80% of the completed value of each unit, less the Lot Advance. The Maximum Allowable Funding amount for a lot will be the lesser of 1) 75% of Borrower's cost, 2) 75% of the appraised value, or 3) not to exceed $35,000.00). (b) Units or lots may be released from the lien of the mortgage: (1) without a partial release payment if the Aggregate Maximum Allowable Funding after subtracting the released lot or unit's Maximum Allowable Funding from the collateral pool exceeds the then outstanding loan balance; (2) otherwise, upon payment of the difference between the Aggregate Maximum Allowable Funding after subtracting the released lot or unit's Maximum Allowable Funding from the collateral pool and the then outstanding loan balance. Spec units subject to the Loan shall be removed from the collateral pool after one year. Model units subject to the Loan shall be removed from the collateral pool after two years. 10. Paragraph 6.3 is hereby added to the Loan Agreement as follows: