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                                                                   EXHIBIT 10.13





                           CONSTRUCTION LOAN AGREEMENT


                                                         DATE: December __, 1998

      THIS CONSTRUCTION LOAN AGREEMENT ("Agreement"), made by and between ORIOLE
HOMES CORP., a Florida corporation  (hereinafter  called the "Borrower"),  whose
address is 1690 South Congress Avenue,  Suite 200, Delray Beach,  Florida 33445,
and FIRST UNION  NATIONAL  BANK, a national  banking  association  organized and
existing under the laws of the United States of America, (hereinafter called the
"Lender"),  whose  address  is: 5581 West  Oakland  Park  Boulevard,  2nd Floor,
Lauderhill, Florida 33313.

                                   WITNESSETH:

      WHEREAS, Borrower is the fee simple owner of certain real property located
in Palm Beach  County,  Florida,  more  particularly  described  on Exhibit  "A"
attached hereto and made a part hereof (the "Land"); and

      WHEREAS,  Borrower  intends to construct  One Hundred  Thirty (130) single
family residential homes on the Land which is part of the development project to
be known as  Addison  Green of the  Aberdeen  PUD in Boynton  Beach,  Palm Beach
County, Florida 33437 (the "Project"); and

      WHEREAS, Borrower has requested of Lender and Lender is willing to lend to
Borrower,  upon  the  terms  and  conditions  contained  in the  Loan  Documents
(hereinafter  defined) and as hereinafter set forth,  the total aggregate sum of
SIX MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100 U.S. DOLLARS ($6,750,000.00)
(the "Loan")  evidenced by an Acquisition  Real Estate  Promissory  Note of even
date  herewith  (the  "Acquisition  Note") in the original  principal  sum THREE
MILLION SEVEN HUNDRED FIFTY THOUSAND AND 00/100 U.S. DOLLARS ($3,750,000.00) and
a Construction  Revolver Real Estate  Promissory Note  ("Construction  Note") of
even date herewith in the original  principal amount of THREE MILLION AND 00/100
U.S. DOLLARS  ($3,000,000.00)  (the  Acquisition Note and Construction  Note are
sometimes hereinafter collectively

                                   - - 175 - -


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referred to as the  "Note") and by a Letter of Credit  Facility in the amount of
Two Hundred Thousand and 00/100 U.S. Dollars ($200,000.00); and

      WHEREAS,  the Loan will be secured by that  certain  Mortgage and Security
Agreement of even date herewith (the "Mortgage") encumbering inter-alia the Land
and the Houses (hereinafter  defined) to be constructed  thereon, and by all the
Loan Documents associated with this Loan transaction (the "Loan Documents"); and

      WHEREAS,  the  Lender  has agreed to make the Loan only upon the terms and
conditions hereinafter stated and not otherwise.






      IT IS THEREFORE AGREED between the parties hereto as follows:


                                    ARTICLE I
                              DISBURSEMENT OF FUNDS

(A)   Purpose. The proceeds of the Loan shall be utilized for the acquisition of
      the Project, and for hard and soft construction costs and related interest
      carry relating to the construction of 130 single family  residential homes
      ("Houses"  or "Units")  all to be located  within the  Project.  The terms
      "Houses" and "Project"  shall include any and all  buildings,  structures,
      and improvements now or hereafter erected on or in the Project, including,
      but  not  limited  to,  fixtures,  attachments,   appliances,   equipment,
      machinery, and other articles attached to said buildings,  structures, and
      improvements and shall sometimes  hereinafter  collectively be referred to
      as the "Improvements".

(B)    Use of Proceeds. The Borrower shall use the Loan Proceeds as follows:

      (a) The proceeds  from the  Acquisition  Note shall be used to acquire the
      Land.  Borrower shall pay and deliver to Lender upon execution  hereof its
      own  equity  totaling  at least  One  Million  Seven  Hundred  Seventy-One
      Thousand  Eighty-Three and 32/100 U.S. Dollars  ($1,771,083.32) to pay for
      that  portion  of the  Project  Costs as shown on the  "Loan  Budget"  and
      defined as  "Borrower's  Equity," all defined and described in Exhibit "C"
      hereto; and

                                   - - 176 - -


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      (b) The Proceeds of the  Construction  Note shall only be utilized to fund
      the Lender approved vertical hard and soft construction  costs.  Except as
      set forth  hereinbelow,  all  Houses  must be  "Pre-Sold"  as  hereinafter
      defined.  Pre-Sold  Houses  shall mean  Houses for which a fully  executed
      arms-length contract ("Contract") has been executed between Borrower and a
      third  party  purchaser   which  contain  no  unsatisfied   contingencies,
      including end-loan financing evidenced by a pre-qualification  letter, and
      which meet full conformity with Lender's standards, and for which at least
      a five percent (5%)  non-refundable  deposit has been given to Borrower or
      its escrow agent by a third party purchaser. All Contract deposits must be
      escrowed  with  Lender,  unless Buyer waives it rights to have its deposit
      escrowed.  All contracts  must be fully  subordinated  to the Loan and the
      Mortgage.  Notwithstanding the foregoing,  and upon the execution hereof ,
      Borrower  shall have the right to construct five (5) types of model Houses
      approved in advance by Lender (the  "Models")  and one  speculative  house
      ("Speculative  House").  After  the  Speculative  House is  Pre-Sold,  the
      Borrower shall only be permitted to have one (1)  Speculative  House under
      construction and/or unsold at any one time. A Speculative House is defined
      as a House  which is not  Pre-Sold.  The five (5) Models  and  Speculative
      House which may be  constructed  by Borrower with the use of proceeds from
      the  Construction  Note  shall be  referred  to herein as the  "Spec/Model
      Allowance." Upon the execution hereof, Borrower may construct two (2) more
      Houses in addition  to the  Spec/Model  Allowance  (the  "Additional  Spec
      Houses").  The  Additional  Spec Houses will be funded by Lender using the
      same formula as if each was a Speculative House.  However,  the Additional
      Spec Houses must be converted to Pre-Sold  Houses  within ninety (90) days
      of the date  hereof.  In the  event the  Additional  Spec  Houses  are not
      converted  to Pre-Sold  Houses  within  said  ninety  (90) days,  then any
      amounts funded under the Construction  Note for the Additional Spec Houses
      shall be immediately due and payable and failure to pay said amount within
      said ninety (90) days shall constitute an Event of Default under the Note,
      the  Mortgage  and the  terms  herein.  In  addition  to  construction  of
      individual   Houses  which  will  be  funded  from  the  proceeds  of  the
      Construction  Note,  portions of the Loan  proceeds  shall be utilized for
      amounts which may be set forth on the Loan Budget which must be acceptable
      to  Lender's  Inspector  and  will be  funded  from  the  proceeds  of the
      Construction Note.

(C)   Request for Disbursement.  No sums shall be due and payable until Borrower
      shall deliver a signed requisition to the Lender for payment,  in form and
      content previously approved by the Lender, and until and unless:

      (1)     Payroll and material  invoices  and/or  contracts  shall have been
              confirmed by the Borrower to the satisfaction of the Lender.

      (2)     Labor and materials  shall have been delivered to and used upon or
              incorporated in the  Improvements in a manner  satisfactory to the
              Lender  and in  compliance  with  the  plans,  specifications  and
              addenda aforesaid.

                                   - - 177 - -

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      (3)     Such payment shall be in accordance  with any  applicable  laws of
              Florida,  subject  to any  rights  of the  Lender  reserved  to it
              herein.

      (4)     Payment  shall be subject to and  contingent  upon receipt of such
              additional  documents  and/or  information as the title  insurance
              company which is insuring the lien of the Mortgage may  reasonably
              require.

      Notwithstanding  anything  herein to the contrary in this  Paragraph  (C),
      funds shall only be disbursed  by Lender to Borrower for work  actually in
      place.

(D)    Conditions to each Advance.  The proceeds of the Construction  Note shall
       be disbursed for the Models and the  Speculative  House on the basis of a
       draw schedule to be approved by Lender prior to the execution  hereof, up
       to certain maximum amounts per model type on a standard (non-premium) lot
       to be established by Lender prior to the execution hereof upon its review
       of plans and budgets  submitted to Lender by Borrower.  Funding under the
       Construction Note on a per House basis for a Speculative House and/or one
       of the five (5) Models shall, in no event, exceed the lesser of : (a) 65%
       of the appraised  value of a completed  House less the  Acquisition  Note
       basis per lot of $28,846.00; or (b) 65% of the sales price for the House,
       less the Acquisition Note basis per lot of $28,846.00; or (c) 100% of the
       approved  vertical hard and soft costs per House. For "Pre-Sold"  Houses,
       funding  under the  Construction  Note on a per House  basis  shall in no
       event exceed the lesser of: (a) 75% of the appraised  value of the House,
       less the  Acquisition  Note basis per lot of  $28,846.00;  (b) 75% of the
       sales price for the House, less the Acquisition Note basis of $28,846.00;
       or (c) 100% of the approved  vertical hard and soft costs per House.  All
       draw requests shall be subject to the review and approval of Lender,  and
       all draw requests shall be funded,  if possible,  within five (5) working
       days of  receipt  of all  required  information.  All  requests  shall be
       limited  to one (1) draw  per  month.  Lender  shall  make  disbursements
       through a disbursement  agent, such as a title company, at the expense of
       Borrower, which disbursement agent shall monitor project notices to owner
       and partial  releases.  No funds shall be disbursed by Lender to Borrower
       under the Construction Note for the construction of a House,  unless such
       House is the subject of a Contract, except with respect to Models and the
       Speculative Houses as set forth herein. The maximum number of Units which
       may be funded under the Construction Note at any one time (which includes
       the Models and Speculative  Houses) shall be based upon the combined cost
       of  completion  of such  Houses  then under  construction,  such that the
       combined  cost of  completion  thereof shall be equal to or less than the
       remaining  availability  under the Construction Note. Should any Contract
       be  canceled,  Borrower  shall  have  ninety  (90) days to  replace  such
       canceled  Contract with a new Contract or pay off the amount disbursed by
       Lender related to such Contract, unless considered one of the Models or a
       permitted  Speculative  House.  Should a Contract allow for a purchaser's
       funds  to  be  used  in   construction,   funding   available  under  the
       Construction  Note for the  particular  House  shall  be  correspondingly
       reduced. All advances shall be contingent upon compliance with the

                                   - - 178 - -


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      following  conditions  precedent  which  shall  be in form  and  substance
      satisfactory to Lender, in its sole discretion:

              (a)                Building  Permit:  Borrower  must have obtained
                                 and  delivered  to Lender and its  Inspector an
                                 unconditional,   irrevocable   building  permit
                                 fully approved by all governmental  authorities
                                 covering the  Improvements  for which Lender is
                                 advancing funds.

              (b)                No Default:  The warranties and representations
                                 contained  in this  Agreement  shall be correct
                                 and  true,   all  the   covenants,   terms  and
                                 conditions  of  this  Agreement   shall  remain
                                 satisfied,  and no Event of Default  (after all
                                 grace periods have expire), or circumstances or
                                 events  which,  upon the  lapse  of  time,  the
                                 giving  of  notice,  or both,  could  become an
                                 Event of Default, shall have occurred as of the
                                 date of the Advance.

              (c)                Borrower's Request and Evidence of Construction
                                 and  Payment:  Within  five (5)  business  days
                                 prior to each  Advance,  Borrower  shall supply
                                 Lender  with a written  request for an Advance,
                                 which  request  shall  set  forth  the  amounts
                                 sought,   and  shall  be   accompanied  by  the
                                 application  form  required  by  Lender,  fully
                                 executed, and a certificate signed by Borrower,
                                 the Lender's  Inspector (the  "Inspector")  and
                                 the   Contractor   ("Borrower's   Certificate")
                                 certifying  that (1) the work for which payment
                                 is requested  has been  completed in accordance
                                 with the final plans and specifications for the
                                 Project  and  the  Houses  to  be   constructed
                                 thereon  submitted to Lender by Borrower  prior
                                 to the execution  hereof and approved by Lender
                                 ("Final  Plans  and  Specifications"),  (2) the
                                 said work has been  fully paid or will be fully
                                 paid for with the proceeds of the Advance,  (3)
                                 the  work  completed  to date is in  conformity
                                 with  the   schedule  of   completion   of  the
                                 Improvements previously provided to Lender, and
                                 (4) states the  anticipated  completion date of
                                 the

                                   - - 179 - -


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                                 Improvements,   and   discloses  all  known  or
                                 anticipated  change  orders in the  Contract or
                                 the  Final  Plans  and   Specifications.   Each
                                 Borrower's   Certificate   shall  constitute  a
                                 representation by Borrower that it reaffirms as
                                 true all representations  made to Lender herein
                                 or  herewith;   that  all  conditions  to  such
                                 disbursement  have  been  fulfilled;  that  any
                                 materials  to be paid for have been  physically
                                 incorporated  into  the  Improvements,  free of
                                 liens  and  encumbrances;  and  that  the  work
                                 conforms  to  the  approved   Final  Plans  and
                                 Specifications.  Each  request  for an  Advance
                                 shall be  accompanied by such other evidence as
                                 may, from time to time, be requested by Lender,
                                 including,  but not limited  to,  applications,
                                 certificates,   and   affidavits  of  Borrower,
                                 Inspector,  Architect,  Contractor,  Disbursing
                                 Agent and Title Company, showing:


      (i)     the percentage of completion of the  Improvements and the value of
              that portion of the Improvements completed at that time;
              
      (ii)    that all  outstanding  claims for labor,  materials,  and fixtures
              through  the date of the last  Advance  have been paid,  and liens
              therefore  waived in writing,  except for non-paid claims approved
              in writing by Lender;

      (iii)   that there are no liens outstanding  against the premises,  except
              for Lender's lien and security interest,  liens for property taxes
              not yet payable and other liens approved in writing by Lender;

      (iv)    that  Borrower has  complied  with all of  Borrower's  obligations
              under  the Loan  Documents  as of the date of the  request  for an
              Advance;

      (v)     that all work prior to the date of the  request for an Advance has
              been  done  in a  workmanlike  manner  by the  Contractor  and all
              Subcontractors,  and  in  accordance  with  the  Final  Plans  and
              Specifications;

      (vi)    copies  of all  bills or  statements  for  expenses  for which the
              Advance is  required  (paid bills are  required  only for the last
              Advance);

                                   - - 180 - -


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      (vii)   that all change  orders and extras in any amount  whatsoever  have
              been approved in writing by Lender,  except as otherwise  provided
              for in this Agreement;  

      (viii)  that  the  undisbursed   portion  of  the  construction   fund  is
              sufficient  to pay the  cost of  completing  the  Improvements  in
              accordance with the Final Plans and Specifications; and

      (ix)    that each Advance is to be used for the specific account for which
              the disbursement is made.

      (x)     any other conditions  precedent to loan  disbursements that may be
              required by Lender, including, but not limited to, items set forth
              in the Loan  Commitment  executed by Lender and Borrower and dated
              December 11, 1998 (the "Loan Commitment").

      The request for an Advance shall contain claims for labor and materials to
the  date of the  last  inspection  by the  Inspector,  and not  for  labor  and
materials  rendered  thereafter.  Upon Lender's receipt for request for Advance,
the  Inspector  will  inspect  the  premises  to  determine  the  percentage  of
completion as well as the workmanship of the contractors and compliance with the
approved  final Plans and  Specifications  for the Houses.  The  Inspector  will
review all progress draw requests  based on the percentage of work completed and
the cost-to-complete.  Each draw will be contingent upon the Lender's receipt of
the Inspector's approval thereof.

              (d)                Subcontractors.  If requested by Lender, and if
                                 reasonably  available,  Borrower  shall furnish
                                 copies,  certified  by  Borrower to be true and
                                 correct, of all major subcontracts and purchase
                                 orders for the provision of labor and materials
                                 for the construction of the Improvements, and a
                                 statement from each Subcontractor and supplier:

                         (i)     stating  the  amount  of its  contract  and the
                                 amount paid to date; and

                         (ii)    acknowledging full payment (less retainage) for
                                 all work done and/or materials supplied.

              (e)                Title   Insurance.   Lender  shall  receive  an
                                 endorsement  to the  policy of title  insurance
                                 updating  the policy to the date of the current
                                 Advance,  and increasing the insurance coverage
                                 to an  amount  equal  to the  sum of all  prior
                                 Advances  and  the  current  Advance,   without
                                 additional exceptions or objections.

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              (f)                Survey. Upon the foundation of each House being
                                 completed,  a sketch of survey of the  premises
                                 shall be furnished to Lender showing each House
                                 foundation  to be  within  property  lines  and
                                 building  set  back  lines,  and  also  showing
                                 easements, roads, etc.

              (g)                Materials.  If  requested  by Lender,  Borrower
                                 shall  furnish  to Lender  evidence  reasonably
                                 satisfactory   to  Lender  that   Borrower  and
                                 Contractor  have  obtained  or can  obtain  all
                                 necessary  materials  as and when  required for
                                 the   completion   of   the   Improvements   in
                                 accordance    with   the   Final    Plans   and
                                 Specifications.  Lender shall be the sole,  but
                                 reasonable  judge  of the  sufficiency  of such
                                 evidence. Lender, at its option, may, but shall
                                 not  be  required  to,   disburse   funds  from
                                 materials  stored  on  the  Land  or  off-site;
                                 provided,   however,  in  each  instance,  said
                                 materials  will not be  purchased on a retained
                                 title basis,  and title to the materials  shall
                                 be in  Borrower,  and  shall be free of any and
                                 all claims of lien.  With  regard to  materials
                                 stored on the Land, any Advances  therefore are
                                 solely at the  discretion  of Lender,  and said
                                 materials  shall be stored in a secure  manner,
                                 and protected  from damage or theft.  Materials
                                 stored  off-site  shall be  either  in a bonded
                                 warehouse,  or, if in a  supplier's  warehouse,
                                 the supplier shall supply  evidence of adequate
                                 insurance.   Borrower  shall  also  provide  to
                                 Lender evidence of insurance in transit. Lender
                                 further   reserves   the   right  to  have  its
                                 Inspector  verify the  quantity and location of
                                 said materials.

              (h)                Photographs.  If requested  by Lender,  monthly
                                 photographs of the progress of  construction of
                                 each Residence.

              (i)                Inspector's   Report.  The  Lender  shall  have
                                 reviewed   and   approved   from  the  Lender's
                                 inspector, an acceptable "Front End" analytical
                                 report,  satisfactory to Lender,  approving the
                                 Plans

                                   - - 182 - -


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                                 and   Specifications,   cost   budget  for  the
                                 project, any construction  contracts,  and such
                                 other construction  documentation and all other
                                 information required by Lender.

      Lender need not make any requested Advance unless Lender shall approve the
Borrower's  Certificate  and all other required  documentation.  The approval of
such  Borrower's  Certificate  and  required  documentation  by Lender shall not
constitute an acceptance of the work and materials,  nor be binding upon Lender,
except to the extent that the facts are as  represented  when so approved.  With
respect to all disbursements under the Loan, Lender shall have the right to make
payment by check or joint check to Borrower, the Contractor,  Subcontractors and
Suppliers  and  any  combination  or by  credit  directly  to  Borrower  or  the
Contractor's  account,  all of which shall be separately or in any  combination,
constitute proper disbursement.

(E)   Final Advance.  When the Improvements have been completed,  Borrower shall
      supply Lender with the following  documents in addition to satisfying  all
      of the conditions and supply all of the documents required under paragraph
      (D) hereof,  prior to payment of the final Advance and  retainage  held by
      Lender:

              (a)                Certificates  from the Architect and Engineers,
                                 if  applicable,  and  the  Inspector  that  the
                                 Improvements  have been completed in accordance
                                 with the  Final  Plans and  Specifications,  in
                                 good and workmanlike  manner, and in accordance
                                 with  the   requirements  of  all  governmental
                                 authorities   having  or   purporting  to  have
                                 jurisdiction over the premises.

              (b)                A certificate  from Borrower  stating the total
                                 construction  for costs of the Improvements for
                                 which the final Advance is requested.

              (c)                A photographic  copy of a final  Certificate of
                                 Occupancy   for  each  House  which  the  final
                                 Advance is requested  issued by the appropriate
                                 official  of  the  jurisdiction  in  which  the
                                 premises is located, and any other governmental
                                 certificates  necessary  to  evidence  that the
                                 completed   House   complies  with  all  zoning
                                 ordinances and building regulations.


                                   - - 183 - -


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              (d)                Two (2) originals of an  "As-Built"  survey for
                                 each  House  for which  the  final  Advance  is
                                 requested  prepared  by a  registered  surveyor
                                 satisfactory   to  Lender,   and  containing  a
                                 certification  to Lender in such form as Lender
                                 may require, showing each House as completed to
                                 be within the  property  lines and building set
                                 back lines, and also showing easements,  roads,
                                 etc.

              (e)                Contractor's  and Borrower's Final Affidavit in
                                 form and substance  satisfactory  to Lender and
                                 the Title  Company,  stating that all bills and
                                 expenses in connection with the construction of
                                 each  House  for which  the  final  Advance  is
                                 requested have been paid, and complete releases
                                 of  liens  signed  by the  Contractor  and  all
                                 Subcontractors     and    persons    furnishing
                                 materials,  services  or  labor  to or  on  the
                                 premises.

              (f)                A  policy  of  title  insurance  containing  no
                                 exceptions unacceptable to Lender and issued by
                                 the Title Company in the name of the Lender and
                                 the amount of the Note.

              (g)                Policies  of  fire,   lightening  and  extended
                                 coverage  insurance  and  such  other  types of
                                 insurance  as may be required by Lender in such
                                 amounts and  containing  such terms as required
                                 in the  Mortgage  or as  otherwise  required by
                                 Lender, endorsed to show the interest of Lender
                                 and  in  form  and  substance  and  written  by
                                 company satisfactory to Lender.

              (h)                All other instruments and documents  reasonably
                                 required by Lender.

(F)   Right to Withhold  Funds. In addition to the right to require Equity Funds
      (hereinafter   defined),   Lender  may  elect  to  withhold  any  Advance,
      notwithstanding the substance of any report of any Inspector or Architect,
      or any documentation  submitted to Lender in connection with a request for
      an  Advance,  if Lender  determines,  at any time,  that the actual  cost,
      budget or progress of construction  differs  materially from that as shown
      on the breakdown of costs or that the

                                   - - 184 - -


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      percentage  of  progress  of  construction  of  the  Improvements  differs
      materially from that as shown on the request for an Advance for the period
      in  question.  Furthermore,  if any  instrument  or document  submitted by
      Borrower in  connection  with any request for an Advance shall not, in the
      reasonable  exercise  of  Lender's  reasonable  discretion,  comply in all
      respects with the  conditions and  requirements  of this  Agreement,  then
      Lender may amend,  reduce or withhold funding of a request for an Advance,
      as Lender,  in its  reasonable  discretion,  shall deem  proper  under the
      circumstances.

(G)   Equity Funds.  Borrower shall supply a minimum equity  contribution of not
      less than $1,771,083.32 as set forth within the Loan Commitment.  Also, at
      any time, and from time to time,  Lender may require a  construction  cost
      breakdown of the Project in progress by the Borrower or  Inspector,  or by
      an expert in the construction  cost field to be designated by Lender.  If,
      in the judgment of Lender, the balance of the total estimated construction
      costs of the  Improvements,  including all soft costs and interest  carry,
      exceeds  the  amount  of  the  total  construction  fund  remaining  to be
      disbursed,  Lender must be provided  with evidence to show where the funds
      necessary to complete  the  Improvements  are to be derived.  Lender shall
      have the  right to demand  that  Borrower,  within  five (5) days of being
      notified,  deposit equity funds in an amount  equivalent to the deficiency
      with  Lender to be  disbursed  during  the course of  construction  of the
      Improvements  ("Equity  Funds").  Failure to provide the  required  Equity
      Funds  within  said five (5) days shall be an Event of  Default  under the
      Note, Mortgage, and hereunder.

      Any Equity  Funds  deposited  by Borrower  with Lender  shall be held in a
      separate account to be disbursed by Lender or the Disbursing Agent to fund
      all subsequent  requests for Advances and in a manner so as to comply with
      the Florida  Construction  Lien Law,  it being  agreed that no Advances of
      Loan  proceeds  shall be made until the Equity  Funds have been  exhausted
      unless Lender  otherwise  agrees in writing.  Lender may, at any time, and
      from time to time,  require  Borrower to deposit  additional  Equity Funds
      within five (5) days of  notification  whenever it shall  appear to Lender
      that the  remaining  proceeds of the Loan to be  disbursed  and  remaining
      Equity  Funds will be  insufficient  to pay the  remaining  portion of the
      construction cost not already paid and to otherwise complete  construction
      of each House in accordance  with the Final Plans and  Specifications.  If
      Lender does not require a deposit of Equity Funds,  Borrower shall pay and
      deliver to Lender  satisfactory  evidence of the payment of any portion of
      the  construction  cost in excess of the amount of the  construction  fund
      which remains to be disbursed, together with a lien waiver satisfactory to
      Lender and Title Company.

(H)   Disbursement Schedule.  Said payments shall be made in accordance with the
      schedule approved by Lender, and Contractor  (hereinafter defined) subject
      to the  provisions  of the Florida  Construction  Lien Law,  and the other
      provisions  hereof.  Lender may, in its sole  discretion,  establish a ten
      percent (10%)  "hold-back"  requirement for the disbursements of the funds
      hereunder  which will be released upon the  completion  of any  particular
      subcontract or line item.

                                   - - 185 - -


<PAGE>






(I)   Revolving Nature of Loan. The Borrower shall be permitted to borrow, repay
      and reborrow under the Loan,  from time to time,  subject to the terms and
      conditions of the  Construction  Note governed by this  Construction  Note
      Agreement,   provided,   however,  that  the  aggregate  principal  amount
      outstanding  under the  Construction  Note may increase or  decrease,  but
      shall  never  exceed  the  sum  of  THREE   MILLION  and  00/100   DOLLARS
      ($3,000,000.00).  The  proceeds  of the  Construction  Note  shall only be
      utilized  to  fund  the  acquisition  cost  of the  individual  lots to be
      mortgaged  hereunder,  and to fund Lender approved  vertical hard and soft
      construction  costs.  Additionally,  Borrower  shall  not be  entitled  to
      receive any advances under the Construction  Note if the total outstanding
      principal  balance  of the  Construction  Note,  plus  all  sums yet to be
      disbursed to complete  construction of Houses for which  disbursement  has
      already  commenced,  exceeds the sum of THREE  MILLION and 001/00  DOLLARS
      ($3,000,00.00).

(J)   Default.  Upon any default to comply with any of the terms hereunder or an
      Event of Default,  as such term is defined in the Note, Mortgage or in the
      other Loan Documents, Lender shall not be obligated to make disbursements.

(K)   Correction of Defects.  The Lender has the right to reject  defective work
      and materials and shall withhold payments until defects are corrected.

(L)   Lender's  Inspection  Rights. The Lender shall have the unrestricted right
      of making inspections of the Property encumbered by the Mortgage from time
      to time and each Residence by its duly authorized agent from time to time,
      at Borrower's sole cost and expense, during the period of construction but
      same is solely  for the  benefit of  Lender.  Furthermore,  Lender has the
      right to select any Inspector of its choice to make any of the inspections
      and/or inspection  reports that may be referenced  herein. The cost of any
      such inspector(s), inspections, or inspection reports shall be paid for by
      Borrower.

(M)   Payments  to  Lienors.  The  Lender,  upon an Event of  Default,  may make
      payments for labor and  materials  and services due under the terms of the
      contract directly to the lienor who has furnished or performed same.

(N)   Inspection  Fees. A Construction  Plan and Budget Review Fee shall be paid
      by  Borrower  to Lender in the  amount of  $625.00.  Additionally,  a Draw
      Inspection  Fee in the amount of $150.00 per House,  shall be collected at
      the time of the first draw for construction of a particular  House.  Also,
      all costs  incurred by Lender in  connection  with the  Lender's use of an
      Inspector, including, but not limited to, any architect or engineer costs,
      shall be paid by Borrower.

(O)   Disbursing  Agent.  The Loan  proceeds of the  Construction  Note shall be
      disbursed  by  Lender  through  its  Project  Administrator   ("Disbursing
      Agent").  All costs  associated  with disbursing the Loan and the costs of
      the Disbursing Agent shall be borne by the Borrower.

                                   - - 186 - -


<PAGE>







                                   ARTICLE II
                                   ----------
                                  MISCELLANEOUS

(A)   Drawings,  Specifications  and Addenda.  The drawings,  specifications and
      addenda form a part of this  Agreement  and any work shown on the drawings
      but not mentioned in the specifications and addenda,  or vice versa, is to
      be executed the same as though particularly  specified or set forth in the
      drawings   to  the  true   meaning  and  intent  of  said   drawings   and
      specifications.

(B)   Property of Lender.  All drawings,  specifications  and addenda filed with
      the Lender are and remain the Property of the Lender.

(C)   Change  Request.  No change in said plans,  drawings  and  specifications,
      exclusive  of buyer  options,  the cost of which  exceeds  $10,000.00  per
      House, shall be made without the express prior written approval of Lender,
      which approval  shall not be  unreasonably  withheld or delayed.  Lender's
      approval may be  unreasonably  withheld or delayed for change orders which
      exceed, in the aggregate, $250,000.00.

(D)   Itemized  Breakdown.  The Borrower,  when  requested by the Lender,  shall
      promptly furnish the Lender and/or Inspector with an itemized breakdown of
      the hard and soft construction  costs of the Improvements  which are to be
      or have been made subject to the terms of this  Agreement.  Loan  proceeds
      for items not associated  with the  construction  of project  Improvements
      (e.g.,  architect's and engineer's fees, impact fees, equipment,  reserved
      interest and other soft cost reserves) will be advanced no more frequently
      than twice a month, in accordance with the approved budget for the project
      and upon presentation of a proper,  fully documented request  satisfactory
      to  and  approved  by  Lender.   Lender  may  require  the  submission  of
      corresponding  invoices,  paid receipts,  canceled  checks,  lien waivers,
      and/or bills-of-sale,  as it may determine, from time to time, in its sole
      discretion.

(E)   Survey.  A foundation  survey,  in form and scope  satisfactory to Lender,
      shall be required when the foundation of each House is completed.

(F)   Final Survey.  A final survey,  in form and scope  satisfactory to Lender,
      shall be required when each House is completed.

(G)   Title  Insurance.  An endorsement to Lender's  mortgagee  title  insurance
      policy  ("Title  Policy"),  satisfactory  to Lender,  shall be provided to
      Lender at the time of each  disbursement  of funds  under  the Loan.  Each
      endorsement  shall show all matters of record  since the last  endorsement
      and increase its coverage to include the amount of the disbursement.


                                   - - 187 - -


<PAGE>






(H)   Financial Covenants.

      (i)     Annually,  during  the term of the Loan,  Borrower  shall  provide
              Lender with fiscal year end  audited  income  statements,  balance
              sheets, cash flow analysis,  projections,  tax returns, contingent
              liability statements and a Quarterly Financial  Presentation which
              shall be certified,  true and correct in all material  respects by
              an officer of the Borrower.  The Quarterly Financial  Presentation
              shall  include  the  following  schedules  for  Borrower  and  its
              subsidiaries:

              (1)    Consolidated Balance Sheets;
              (2)    Consolidated Statement of Operations;
              (3)    Consolidated Statement of Cash Flows;
              (4)    Interest, Rental and Other Income Schedule;
              (5)    Net Inventories Schedule;
              (6)    Consolidated  Statement of Operations By Quarters- one page
                     schedule for applicable period;
              (7)    Cost of Houses and Condominiums Sold;
              (8)    Selling, General and Administrative Expenses;
              (9)    Operations Earnings Analysis - Current Period;
              (10)   Operations Earnings Analysis - Prior Year;
              (11)   Report of New Contracts, Closings and Backlog of Houses and
                     Condominiums;
              (12)   Estimated Cost of Completion Included in Inventories; and
              (13)   Houses/Condominiums Completed or Under Construction.

      (ii)    During the term of the Loan,  Borrower  shall provide  Lender with
              income and  expense  statements  (quarterly),  cash flow  analysis
              (annually),  projections  (annually) and sales reports (quarterly)
              relating to the Project which shall be certified, true and correct
              in all material respects by an officer of the Borrower.

(I)   Conformance  with Law.  Borrower agrees to comply with all federal,  state
      and local laws, rules and regulations of any nature whatsoever, including,
      without  limitation,  all applicable zoning ordinances and building codes,
      throughout  the  term  of  the  Loan.  The  Borrower  certifies  that  all
      Improvements,  when  completed,  will  comply  with  all  applicable  law.
      Borrower  represents that it has obtained all licenses,  building  permits
      and approvals for the  construction of all  Improvements  according to the
      terms hereof and the Loan  Documents and has furnished  Lender with copies
      of such items.


                                   - - 188 - -


<PAGE>






(J)   Insurance.  Borrower  shall,  at its sole expense,  comply with all of the
      insurance  requirements  set  forth in the  Mortgage  and the  other  Loan
      Documents throughout the term of the Loan.

(K)   Florida Law. In the event of  enforcement of this Agreement or any dispute
      as to the interpretation or construction  hereof, the laws of the State of
      Florida shall apply. In the event either party deems it necessary to cause
      litigation to enforce,  interpret or construe the terms of this Agreement,
      court costs and  attorneys'  fees,  including  those incurred in appellate
      proceedings,  shall be awarded to the prevailing party.  Venue shall be in
      State  Court  in and  for  Broward  or Palm  Beach  County,  Florida,  the
      jurisdiction of which court the parties hereby consent to.

(L)   Commitment Letter Incorporated. All of the terms, covenants and conditions
      set  forth  in the Loan  Commitment  are  hereby  incorporated  herein  by
      reference and made a part hereof.  In the event of a conflict  between the
      Loan Documents and the Commitment, the Loan Documents shall prevail.

(M)   Appraisal.  Prior to closing,  Lender must receive a satisfactory  current
      MAI  appraisal  of the Project  (consisting  of the Land and the  proposed
      Improvements)  expressing an opinion of Market Value ((i) as is, (ii) upon
      completion,  and (iii) upon sell out).  The Lender  must  arrange  for the
      appraisal and engage the appraiser. The appraisal must be ordered directly
      by the  Lender  and must  conform  to the  Financial  Institutions  Reform
      Recovery and  Enforcement  Act of 1989  (FIRREA) and the related rules and
      regulations of the Office of the Comptroller of the Currency (the OCC), 12
      CFR Part 34,  effective  August  24,  1990,  as  amended.  The  appraisal,
      including,   without  limitation,   the  appraisal   methodology  and  the
      conclusion(s)  of Market  Value,  shall be subject to Lender's  review and
      approval.  All  appraisal  costs and fees shall be paid by  Borrower,  and
      Borrower  hereby agrees to immediately  pay or prepay such appraisal costs
      or fees upon the  request  of  Lender.  Lender  acknowledges  receipt of a
      satisfactory MAI appraisal sufficient for the closing of the Loan.

       If at any time,  but no more than once per year,  Lender  has  reasonable
      belief  that the value of the  Mortgaged  Premises  may have  declined  or
      diminished  in value  from the value  stated in the  appraisal  previously
      submitted  to Lender,  or at any time in the event the Loan is in default,
      then in that event,  within  seventy-five  (75) days from Lender's written
      request to  Borrower  therefor,  Borrower  shall  provide  to  Lender,  at
      Borrower's  sole cost and expense,  a current  appraisal of the  Mortgaged
      Premises to be ordered by Lender from an  appraiser  designated  by Lender
      and in form and content as required by Lender.  Borrower  shall  cooperate
      fully  with  any  such  appraiser  and  provide  all  such  documents  and
      information  as  such  appraiser  may  request  in  connection  with  such
      appraiser's  performance  and  preparation of such  appraisal.  Borrower's
      failure to promptly and fully  comply with  Lender's  requirements  shall,
      without further notice,  constitute an Event of Default under the Mortgage
      and the other Loan documents.

                                   - - 189 - -


<PAGE>






(N)   Partial  Releases.  The  Borrower  shall be  required  to repay  principal
      amounts  outstanding under the Acquisition Note and Construction Note from
      the proceeds of the sale of Houses.  If, upon the  execution  hereof,  the
      outstanding  principal  balance of the  Acquisition  Note is Three Million
      Seven  Hundred  Fifty  Thousand and 00/100 U. S. Dollars  ($3,750,000.00),
      then the Lender  shall  release  each House  from the lien  operation  and
      effect of the Mortgage upon Lender's receipt of $42,000.00, which sum will
      be allocated  against the amounts  outstanding under the Acquisition Note,
      together  with 100% for all monies  funded by Lender  towards all hard and
      soft  construction  costs and interest carry for the particular  House for
      which a release is  requested,  which sum shall be  allocated  against the
      amounts funded under the Construction Note (hereinafter referred to as the
      "Release  Price").  If Borrower pays down the principal of the Acquisition
      Note by Six Hundred  Eighty-Eight  Thousand  Four  Hundred and 00/100 U.S.
      Dollars   ($688,400.00)  within  ninety  (90)  days  after  the  date  the
      Acquisition  Note is funded,  then the Release Price shall be reduced from
      Forty-Two  Thousand and 00/100 U.S.  Dollars  ($42,000.00) to Thirty-Three
      Thousand  and  00/100  U.S.  Dollars   ($33,000.00)  after  the  principal
      reduction  under the  Acquisition  Note is made.  If,  upon the  execution
      hereof,  the principal  balance of the  Acquisition  Note is Three Million
      Sixty-One  Thousand Six Hundred and 00/100 U.S.  Dollars  ($3,061,600.00),
      then the Release  Price shall be  $33,000.00.  The Release  Price shall be
      utilized to repay the  principal  amount  outstanding  under the Note.  In
      addition,  Borrower  shall pay accrued but unpaid  interest.  The Borrower
      shall be  responsible  for  paying  all of  Lender's  expenses  and  costs
      incurred  in  connection  with the  release  of  Residences  from the lien
      operation and effect of the Mortgage.

(O)   Lender's  Cooperation.  Lender  shall  provide  reasonable  assistance  to
      Borrower,  at  no  cost  or  unreasonable   inconvenience  to  Lender,  in
      Borrower's efforts to secure from Palm Beach County the return of Lender's
      check number 528652794 in the amount of $688,400.00  reflecting the amount
      funded to Palm Beach  County  under that  certain  Letter of Credit  dated
      November 12, 1996,  Letter of Credit Number S538620,  or obtain Palm Beach
      County's check in the amount of $688,400.00 payable to Lender.


                                   ARTICLE III
                CONSTRUCTION LIEN LAW AND NOTICE OF COMMENCEMENT
                ------------------------------------------------

(A)   Proper  Payments.  The right of the Borrower to make proper payments under
      its  construction  contract  will be limited by any Notice to  Borrower or
      Claims  of Lien  which  may be served  by any  person  supplying  labor or
      materials to the project.

(B)   Lender  Notification.  The Borrower shall furnish the Lender a copy of all
      Notices or Claims of Lien filed against the Land  immediately upon receipt
      of same.


                                   - - 190 - -


<PAGE>






(C)   Lender's  Right to  Disburse.  Upon an Event of  Default,  the  Lender may
      disburse as directed by this Agreement without regard to the provisions of
      Florida's  Construction Lien Law, and without  responsibility or liability
      to the Borrower, Contractor, subcontractors, laborers or materialmen.

(D)   Release of Lien.  Borrower  further agrees to furnish releases of lien for
      all  persons  or  entities  who  have  filed a Claim of Lien  against  any
      property  encumbered  by the  Mortgage or transfer the lien to bond within
      ten (10) days  after its  receipt  of notice of the  filing of same as set
      forth  in  paragraph  (J)  hereof   provided  same  must  be  released  or
      transferred to bond no more than thirty (30) days after the filing thereof
      and provided that a Notice of Commencement must be filed for each House.

(E)   Contractor's  Final  Affidavit.  Borrower  shall furnish the  Contractor's
      Final Affidavit as required by the Florida Construction Lien Law.

(F)   Lender's Right to Make Payments to Lienors.  Nothing in this article shall
      in any  way  restrict  the  Lender's  prerogative  for  protection  of its
      security interests, to make payments directly to lienors, as authorized by
      the Florida Construction Lien Law upon an Event of Default.

(G)   Notice of Commencement.  Borrower agrees not to permit  recordation of any
      Notice of Commencement  prior to recording the Mortgage of the Lender.  In
      the  event a  Notice  of  Commencement  should  be  recorded  prior to the
      recording  of the  Lender's  Mortgage,  the Lender shall have the right to
      cancel  this  Agreement  and be  reimbursed  for its  costs  and  expenses
      incurred to date.

(H)   Commencement  and  Completion  of the  Project.  The  construction  of the
      Improvements  shall  commence on or before thirty (30) days after the date
      hereof.  Borrower  shall  take all  necessary  steps to  assure  that such
      construction   shall  proceed   continuously   and   diligently,   without
      interruption,  and Borrower shall  complete each House,  as evidenced by a
      certificate   of  completion   and   certificate  of  occupancy  from  the
      appropriate  governmental  agencies  having  jurisdiction,  not later than
      eight  (8)  months  from  the  date  Lender  funds  proceeds   toward  the
      construction of each House,  subject to force majeure events not to exceed
      a period of ninety  (90) days which are beyond the  reasonable  control of
      Borrower.

(I)   Post Copy.  Borrower is required to post a certified copy of the Notice of
      Commencement  for  each  lot  which  is  encumbered  by  the  Mortgage  in
      accordance with Florida's Construction Lien Law.

(J)   Transfer of Lien.  Borrower is required,  at Lender's request, to transfer
      any lien to other  security (cash deposit or transfer bond) within 10 days
      after receipt of notice that a Claim of Lien is

                                   - - 191 - -


<PAGE>






      recorded  and no more than thirty (30) days of the  recording of the same,
      provided a Notice of Commencement must be filed for each House.

(K)   Contested  Lien.  Lender  has the right to  contest  any lien  filed or to
      transfer  said  lien to other  security  if  Borrower  fails to do so in a
      timely manner.

(L)   General  Contractor.  Borrower  will be acting as the  General  Contractor
      (sometimes  referenced to herein as "Contractor")  for the construction of
      the Improvements.


                                   ARTICLE IV
                               LENDER'S LIABILITY
                               ------------------

(A)   Disbursement  Obligation of Lender.  The Borrower agrees that the holding,
      application and disbursement of the Loan funds shall be for the account of
      the Borrower,  however, it is expressly understood by the parties that the
      holding,  application  and  disbursement  of the  Loan  funds  is for  the
      protection of the Lender.

(B)   Protection   of   Lender.   Lender's   activities   concerning   Florida's
      Construction  Lien  Law are  for  the  protection  of the  Lender  not the
      protection of the Borrower or potential lienors.

(C)   Liability To Third Persons.  This Agreement shall not be construed to make
      the Lender liable to materialmen,  contractors,  craftsmen,  laborers,  or
      others  for  goods  or  services  delivered  by  them  upon  any  property
      encumbered  by the Mortgage,  or for debts or claims  accruing to any such
      parties against the Borrower.

(D)   Inspection/Service.  It is expressly agreed that all inspections and other
      services  rendered by the  Lender's  officers or agents  shall be rendered
      solely for the protection and benefit of the Lender and the Borrower shall
      not be  entitled to claim any loss or damage  against  the Lender,  or its
      officers,  employees or agents. Lender shall not be liable for the failure
      of any dealer,  contractor,  craftsmen  or laborer to deliver the goods or
      perform the services to be delivered or performed by them.

(E)   Indemnification.  Borrower  hereby  agrees to indemnify  and hold harmless
      Lender,  its  directors,   officers,  employees,  agents,  successors  and
      assigns,  of and from any and all loss or damage,  of whatever  kind,  and
      defend Lender and such other indemnified  parties of, from and against any
      suits,  claims  or  demands,  including,   without  limitation,   Lender's
      reasonable legal fees, paralegal fees, costs and expenses at the trial and
      appellate  levels,  on account of any matters or  anything  arising out of
      this  Agreement or in connection  with the Loan.  Such  obligations  shall
      survive  completion of the  Improvements  and  repayment of the Loan.  The
      foregoing indemnification

                                   - - 192 - -


<PAGE>






      shall not apply to any acts or claims which  result  solely from the gross
      negligence or willful misconduct of Lender. The foregoing  indemnification
      shall not apply to  occurrences  taking place after  Borrower is no longer
      the owner of the Land with regard to claims not attributable in any manner
      to Borrower.  Borrower shall also indemnify Lender with respect to any and
      all damages and/or liability  arising out of any development work existing
      and previously  completed on the Land,  whether or not inspected by Lender
      or Palm Beach  County,  and any  requirements  that Palm Beach  County may
      impose subject to the Closing,  including,  but not limited to, correcting
      any defects  which Palm Beach  County may require upon  inspection  of the
      project.


                                    ARTICLE V
                                LENDER'S REMEDIES
                                -----------------

(A)   Failure to Perform. Upon the failure of the Borrower or its contractors or
      agents to  perform  according  to the terms of this  Agreement,  or in the
      event they should prevent the Lender from so performing, or if they should
      cause or permit  conditions to arise so that performance would be rendered
      impossible  or  hazardous  for the Lender or in the event of the breach of
      any material  condition by the Borrower  under this  Agreement or the Loan
      Documents,  the Lender is authorized to withhold further  disbursements of
      funds until all objections are removed.

(B)   Breach Or Default.  Borrower  shall have a ten (10) day grace  period from
      each  respective  due date in which to make any  periodic  installment  of
      interest required under the terms of the Note. Additionally,  in the event
      of any  non-monetary  breach or  default  hereunder  (expressly  excluding
      voluntary or involuntary  bankruptcy  proceedings  filed by or against the
      Borrower  and/or  judgments  rendered  against the  Borrower  which in the
      aggregate exceed $200,000.00),  the Lender shall give the Borrower 30 days
      written notice to correct such breach or default,  and upon failure of the
      Borrower to comply with such written notice, within said 30 day period and
      such reasonable extensions thereof as may be granted by the Lender, solely
      at its  option,  the Lender  may either  credit all Loan funds then in its
      control upon the mortgage  debt,  and declare the Mortgage to be forthwith
      due and  payable,  and proceed to  foreclose  the Mortgage for the balance
      then remaining unpaid under the Note; or the Lender may assume full charge
      of the  construction  of the  Improvements  as agent of the  Borrower  and
      Borrower's  Contractor,  and  proceed  to enter  into a  contract  for the
      completion of the Improvements.

(C)   Payment to Lender.  In the event Lender  completes the  Improvements,  the
      Borrower  expressly agrees to pay to the Lender,  upon demand, all amounts
      that may be  disbursed  in  completing  the  Improvements,  together  with
      reasonable compensation to the Lender for extra services rendered by it in
      completing the  Improvements  in excess of the aggregate Loan amount,  and
      agrees that such  excess sum shall be secured by the lien of the  Lender's
      Mortgage if said excess sum shall not be paid  immediately  upon demand or
      arrangements  satisfactory to the Lender made for the payment thereof, the
      Lender may declare the Mortgage immediately due and payable and may

                                   - - 193 - -


<PAGE>






      proceed to foreclose  the same,  for said excess sum and for the principal
      sum then remaining unpaid under the Note.

(D)   Reimbursement of Lender. Borrower agrees to reimburse Lender for all costs
      and expenses incurred by Lender in connection with any controversy, claim,
      demand  or  suit  filed  in  connection  with  the   construction  of  the
      Improvements,  the  performance  by either  party  under  this  Agreement,
      including all court costs and Lender's reasonable attorneys' fees incurred
      in connection with any matter relating hereto.


                                   ARTICLE VI
                              BORROWER'S COVENANTS
                              --------------------

(A)   Selection of Contractors  and  Subcontractors.  The Borrower has accepted,
      and hereby  accepts,  the full  responsibility  for the  selection  of its
      Contractor and subcontractors and all materials, supplies and equipment to
      be used in the construction of the Improvements, and the Lender assumes no
      responsibility  for the completion of the  Improvements,  according to the
      plans and specifications and for the contract price.

(B)   Borrower's  Compliance With Florida's  Construction Lien Law. Borrower has
      further accepted,  and hereby accepts,  full responsibility for compliance
      with Florida's  Construction  Lien Law and hereby relieves the Lender from
      any and all liability thereunder of any nature whatsoever.

(C)   Non-Commencement  of  Work.  Borrower  certifies  that  there  has been no
      commencement of construction on the Land incident to the date hereof which
      could result in any Construction  Lien or similar lien being filed against
      the Land which would be superior to the lien of the Lender's Mortgage.

(D)   Default and  Non-Performance.  Anything  herein  contained to the contrary
      notwithstanding,  there shall be no obligation upon the Lender to make any
      additional disbursements hereunder, if at the time of the request for such
      disbursements  the  Borrower  is in default  or has failed to perform  any
      provision of this Agreement or of the Note and Mortgage.

(E)   Liability for Claims,  Demands,  Losses or Damages.  It is understood  and
      agreed that the Lender shall not be liable for any claims, demands, losses
      or damages made, claimed or suffered by the Borrower excepting such as may
      arise  through  or  could  be  caused  by the  Lender's  willful  or gross
      negligence.


                                   - - 194 - -


<PAGE>






(F)   Power of  Completion.  In the event of the  bankruptcy  of the Borrower or
      Contractor,  or in the event of the general assignment to creditors by the
      Borrower or Contractor during the period of construction of each Residence
      and before  completion  thereof,  or upon any other  occasion  which might
      result in  cessation  of work,  the  Lender  shall have full power to take
      charge of and complete the construction and make disbursements of the Loan
      funds.

(G)   Cross Default. In the event that Borrower shall be in default with respect
      to the Mortgage and the Loan evidenced by the Note, then Borrower shall be
      deemed in default with  respect to all loans from Lender to  Borrower.  In
      the event  that  Borrower  shall be in  default  with  respect to any loan
      whatsoever  from Lender,  then  Borrower  shall be deemed to be in default
      with respect to the Mortgage and the Loan evidenced by the Note.

(H)   Palm Beach  Inspectors.  Within  ninety (90) days hereof,  Borrower  shall
      secure Palm Beach County  inspection of all existing  Improvements made on
      the Land.

(I)   Principal Reduction Payment.  Within three hundred sixty (360) days of the
      date that the Acquisition Note is funded,  Borrower shall make a principal
      reduction payment under the Acquisition Note in the amount of $688,400.00.
      Failure to make such payment  within said time shall be deemed an Event of
      Default  hereunder  and  under  the Note,  Mortgage,  and all  other  Loan
      Documents.


                                   ARTICLE VII
                                NOTICES OR COPIES
                                -----------------

      All notices or copies referred to herein shall be sent certified or return
receipt  requested mail to the Lender at the address specified in this Agreement
with a copy to Lender's  Counsel,  Michael S. Ross,  Esq.,  Greenspoon,  Marder,
Hirschfeld,  Rafkin,  Ross & Berger,  P.A., Trade Centre South,  Suite #700, 100
West Cypress Creek Road, Ft. Lauderdale, Florida 33309.


                                  ARTICLE VIII
                                  SEVERABILITY
                                  ------------

      If any one or more of the  provisions  of this  Agreement  shall,  for any
reason,  be held to be invalid,  illegal or unenforceable  in any respect,  then
such  invalidity,  illegality  or  unenfoceability  shall not  affect  any other
provision hereof.



                                   - - 195 - -


<PAGE>





                                   ARTICLE IX
                              WAIVER OF JURY TRIAL
                              --------------------

      LENDER AND BORROWER HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION  ARISING
OUT  OF,  UNDER,  OR IN  CONNECTION  WITH  THIS  AGREEMENT  OR ANY  OF THE  LOAN
DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR  WRITTEN),  OR ACTIONS OF ANY PARTIES  HERETO.  THIS  PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER ENTERING INTO THIS AGREEMENT.



                                   - - 196 - -


<PAGE>







      IN WITNESS WHEREOF,  the Borrower and Lender have caused these presents to
be signed, the day and year first above written.

WITNESSES:

      BORROWER:

-------------------------
              ORIOLE HOMES CORP., a Florida
-------------------------
              corporation
(Printed Name of Witness)


      By:_________________________________

-------------------------
                    Mark A. Levy, President
-------------------------

(Printed Name of Witness)

         [Corporate Seal]




      LENDER:

-------------------------
              FIRST UNION NATIONAL BANK, a

-------------------------
              national banking association
(Printed Name of Witness)


      By:__________________________               _________________________
                                          Name:   ______________________
-------------------------
              Title:     ______________________
(Printed Name of Witness)

                                   - - 197 - -


<PAGE>







STATE OF FLORIDA         )
                         )  SS.
COUNTY OF ___________    )


      The  foregoing  instrument  was  acknowledged  before  me this  ___ day of
December,  1998, by Mark A. Levy, as President of ORIOLE HOMES CORP.,  a Florida
corporation,  on behalf of the corporation.  He is personally known to me or has
produced _____________________ (type of identification) as identification. .


                                        ----------------------------------------

                                                 NOTARY PUBLIC, STATE OF FLORIDA

                                       Printed Name:____________________________

                                       My Commission Expires:___________________
[Notary Seal]

      My Commission No.:______________________




                                   - - 198 - -


<PAGE>







STATE OF FLORIDA               )
                               )  SS.
COUNTY OF ___________          )

      The  foregoing  instrument  was  acknowledged  before  me this  ___ day of
December,  1998, by  _________________,  as ____________ of FIRST UNION NATIONAL
BANK, a national banking association,  on behalf of the banking association.  He
is  personally  known  to me or  has  produced  _____________________  (type  of
identification) as identification.


                                        ----------------------------------------

                                                 NOTARY PUBLIC, STATE OF FLORIDA

                                       Printed Name:____________________________

                                       My Commission Expires:___________________
[Notary Seal]

      My Commission No.:______________________




                                   - - 199 - -