EXHIBIT 10.10

                           REVOLVING CREDIT AGREEMENT

                          dated as of November 6, 1997,

                                 by and between

                          LENNAR CAPITAL SERVICES, INC.

                                 (the Borrower)

                                       and

                              THE BANK OF NEW YORK

                                    (Lender)



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                                TABLE OF CONTENTS

Section 1. Definitions and Principles of Construction. .................... 1
     1.1. Defined Terms. .................................................. 1
     1.2. Principles of Construction. .....................................14

Section 2. Amount and Terms of Credit. ....................................14
     2.1. The Loans. ......................................................14
     2.2. Note. ...........................................................14
     2.3. Procedure for Borrowings. .......................................14
     2.4. Termination or Reduction of  Commitment. ........................15
     2.5. Payments and Prepayments of the Loans. ..........................15
     2.6. Conversions. ....................................................16
     2.7. Covered Rate Offers. ............................................16
     2.8. Interest Rate and Payment Dates. ................................17
     2.9. Application of Payments. ........................................19
     2.10. Substituted Interest Rate. .....................................19
     2.11. Taxes; Net Payments. ...........................................20
     2.12. Illegality. ....................................................20
     2.13. Increased Costs. ...............................................20
     2.14. Indemnification for Loss. ......................................21
     2.15. Option to Fund. ................................................22
     2.16. Capital Adequacy. ..............................................22
     2.17. Transaction Record. ............................................23

Section 3. Non-Usage Fee. .................................................23

Section 4. Conditions Precedent. ..........................................23
     4.1. Note; Credit Documents. .........................................24
     4.2. No Default; Representations and Warranties. .....................24
     4.3. Borrowing Request. ..............................................24
     4.4. Opinions of Counsel. ............................................24
     4.5. Subsequent Legal Opinions. ......................................24
     4.6. Corporate Documents; Proceedings. ...............................24
     4.7. Mandatory Prepayment. ...........................................25
     4.8. Financing Statements; Other Documents. ..........................25
     4.9. No Adverse Change. ..............................................26
     4.10. Fees and Expenses. .............................................26
     4.11. No Litigation. .................................................26

Section 5. Representations, Warranties and Agreements. ....................26
     5.1. Corporate Status. ...............................................26
     5.2. Corporate Power and Authority. ..................................26
     5.3. No Violation. ...................................................26
     5.4. Governmental Approvals. .........................................27
     5.5. Financial Statements; Financial Condition;
          Undisclosed Liabilities, etc. ...................................27
     5.6. Litigation. .....................................................28
     5.7. True and Complete Disclosure. ...................................28

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     5.8. Use of Proceeds; Margin Regulations. ............................28
     5.9. Tax Returns and Payments. .......................................29
     5.10. ERISA. .........................................................29
     5.11. Subsidiaries. ..................................................29
     5.12. Compliance with Statutes, etc. .................................29
     5.13. Investment Company Act. ........................................29
     5.14. Public Utility Holding Company Act. ............................30
     5.15. Labor Relations. ...............................................30
     5.16. No Burdensome Agreements. ......................................30
     5.17. Property. ......................................................30
     5.18. Security Interests .............................................30
     5.19. Principal Places of Business. ..................................31
     5.20. Environmental Matters. .........................................31
     5.21. Guarantor. .....................................................31

Section 6. Affirmative Covenants of the Borrower. .........................31
     6.1. Information. ....................................................32
     6.2. Books, Records and Inspections. .................................35
     6.3. Maintenance of Property, Insurance. .............................35
     6.4. Corporate Franchises. ...........................................35
     6.5. Compliance with Statutes, etc. ..................................35
     6.6. Performance of Obligations. .....................................36
     6.7. Payment of Taxes. ...............................................36
     6.8. Corporate Separateness. .........................................36
     6.9. Existing Credit Agreement. ......................................36

Section 7. Borrower's Negative Covenants. .................................37
     7.1. Adjusted Net Worth. .............................................37
     7.2. Ratio of Liabilities to Adjusted Net Worth. .....................37
     7.3. Liens. ..........................................................37
     7.4. Consolidation, Merger, Sale of Assets, etc. .....................38
     7.5. Dividends. ......................................................38
     7.6. Indebtedness. ...................................................38
     7.7. Guaranties. .....................................................39
     7.8. Advances, Investments and Loans. ................................39
     7.9. Transactions with Affiliates. ...................................40
     7.10. Capital Expenditures. ..........................................40
     7.11. Modifications of Articles of Incorporation,
           By-Laws and Certain Other Agreements, etc. .....................40
     7.12. Creation of Subsidiaries. ......................................40
     7.13. Business. ......................................................40
     7.14. Use of Proceeds. ...............................................40
     7.15. ERISA. .........................................................41

Section 8. Other Eligible Assets; Collateral. .............................41
     8.1. Substitutions, Additions and Withdrawals of
          Eligible Assets. ................................................41
     8.2. Collateral; Successor Security Agreement. .......................42

Section 9. Events of Default. .............................................43



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Section 10. Remedies; Application of Proceeds. ............................45
     10.1. Remedies. ......................................................45

Section 11. Miscellaneous. ................................................46
     11.1. Payment of Expenses, etc. ......................................46
     11.2. Right of Setoff. ...............................................46
     11.3. Notices. .......................................................47
     11.4. Successors and Assigns. ........................................48
     11.5. No Waiver; Remedies Cumulative. ................................49
     11.6. Calculation; Computations. .....................................49
     11.7. GOVERNING LAW; SUBMISSION TO JURISDICTION;
           VENUE. .........................................................49
     11.8. Obligation to Make Payments in Dollars. ........................50
     11.9. Counterparts. ..................................................50
     11.10. Effectiveness. ................................................50
     11.11. Headings Descriptive. .........................................51
     11.12. Amendment or Waiver. ..........................................51
     11.13. Survival. .....................................................51
     11.14. Domicile of Loans. ............................................51
     11.15. Severability. .................................................51
     11.16. Integration. ..................................................51
     11.17. WAIVER OF JURY TRIAL. .........................................51



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                             EXHIBITS AND SCHEDULES

EXHIBITS:

Exhibit A   -     Borrowing Base Certificate
Exhibit B   -     Borrowing Request
Exhibit C   -     Current Security Agreement
Exhibit D   -     Guaranty
Exhibit E   -     Successor Security Agreement
Exhibit F   -     Note
Exhibit G   -     Opinion
Exhibit H   -     Secretary Certificate


SCHEDULES:

Schedule A    - Eligible Assets 
Schedule B    - Existing Pension Plans 
Schedule 5.5  - Liabilities 
Schedule 5.6  - Litigation 
Schedule 5.11 - Subsidiaries 
Schedule 6.3  - Insurance of Borrower

<PAGE>

         REVOLVING CREDIT AGREEMENT (as the same may be amended, supplemented or
otherwise modified from time to time, this "AGREEMENT"), dated as of November 6,
1997, by and among LENNAR CAPITAL SERVICES, INC., a Florida corporation (the
"BORROWER") and THE BANK OF NEW YORK (the "LENDER").

                                    RECITALS:

         WHEREAS, the Borrower has requested that the Lender provide a revolving
credit facility to the Borrower on the terms and conditions hereinafter set
forth; and

         WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Lender is agreeable to such request.

         NOW, THEREFORE, in consideration of the premises and agreements
contained herein, the parties hereto agree as follows:

Section 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.

                  1.1. DEFINED TERMS.

                  As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):

                  "ACCUMULATED FUNDING DEFICIENCY" shall have the meaning set
forth in Section 302 of ERISA.

                  "ACTUAL INTEREST AMOUNT" shall have the meaning set forth in
Section 2.8(d)(ii).

                  "ADJUSTED NET WORTH" means the amount of stockholders' equity
of the Borrower, on a consolidated basis, as shown on the balance sheet of the
Borrower and its consolidated Subsidiaries, less the aggregate amount of all
receivables due from the Guarantor or Affiliates (but not Subsidiaries) of the
Borrower.

                  "ADVANCE" shall mean an Other Advance or a Eurodollar Advance.

                  "AFFECTED ADVANCE" shall have the meaning set forth in Section
2.10.

                  "AFFECTED PRINCIPAL AMOUNT" shall mean (a) in the event that
the Borrower shall fail for any reason to borrow after it shall have notified
the Lender of its intent to do so in which it shall have requested a Eurodollar
Advance pursuant to Sections 2.3 or 2.6, an amount equal to the unborrowed
principal amount of such Eurodollar Advance, (b) in the event that a Eurodollar
Advance shall terminate for any reason prior to the last day of the Eurodollar
Period applicable thereto, an amount equal to the principal amount of such
Eurodollar Advance, or (c) in the event that the Borrower shall prepay or repay
all or any part of the principal amount of a Eurodollar Advance prior to the
last day of the Eurodollar Period applicable thereto, an amount equal to the
principal amount of such Eurodollar Advance so prepaid or repaid.



<PAGE>

                  "AFFILIATE" shall mean, as to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided, however, that for purposes of
Section 7.9, an Affiliate of the Borrower shall include any Person that directly
or indirectly beneficially owns more than 5% of the Borrower and any officer or
director of the Borrower or any such Person.

                  "AGREEMENT" shall mean this Revolving Credit Agreement, as
modified, supplemented or amended from time to time.

                  "ALTERNATE BASE RATE" shall mean a rate of interest per annum
equal to the higher of (i) the BNY Rate in effect on such date or (ii) 1/2 of 1%
plus the Federal Funds Rate in effect on such date.

                  "APPROVED ACCOUNTANT" shall mean Deloitte & Touche, LLP or
such other firm of certified public accountants of recognized national standing
selected by the Borrower and satisfactory to the Lender.

                  "AVERAGE COVERED AMOUNT" shall mean, during any period, a
number equal to the lesser of (a) the Lender's Average Other Advances during
such period, and (b) the Lender's Average Qualifying Balances during such
period.

                  "AVERAGE OTHER ADVANCES" shall mean, during any period, the
average daily amount of Other Advances of the Lender during such period.

                  "AVERAGE QUALIFYING BALANCES" shall mean, during any period,
the average daily amount of Qualifying Balances maintained with the Lender
during such period.

                  "AVERAGE UNCOVERED AMOUNT" shall mean, during any period, a
number (but not less than zero) equal to the Lender's Average Other Advances
during such period LESS the Lender's Average Qualifying Balances during such
period.

                  "BNY" shall mean The Bank of New York.

                  "BNY RATE" shall mean a rate of interest per annum equal to
the prime commercial lending rate of BNY as publicly announced by BNY to be in
effect from time to time, such rate of interest to be adjusted automatically
(without notice) on the effective date of any change in such publicly announced
rate.

                  "BORROWER" shall have the meaning provided in the first
paragraph of this Agreement.

                  "BORROWER'S PERCENTAGE INTEREST" means, with respect to an
Eligible Asset which consists of a partnership interest held by the Borrower,
and which partnership owns one or more Mortgage Loans, a percentage equal to the
Borrower's percentage interest in said partnership.

                  "BORROWING BASE" shall mean, as of any date of determination,
with respect to any computation thereof, the Collateral Value of all Mortgage
Loans (or the Borrower's Percentage Interest therein) and Securities which are
Eligible Assets on such date.

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                  "BORROWING BASE CERTIFICATE" shall mean a certificate executed
by the Chief Financial Officer, Chief Accounting Officer or Treasurer of the
Company substantially in the form attached hereto as EXHIBIT A and delivered to
the Lender as a condition to each Loan and as otherwise required herein.

                  "BORROWING DATE" shall mean any date specified in a Borrowing
Request delivered pursuant to Section 2.3 as a date on which the Borrower
request a Loan.

                  "BORROWING REQUEST" shall mean a request for a Loan in the
form of EXHIBIT B.

                  "BUSINESS DAY" shall mean any day except Saturday, Sunday and
any day which shall be in New York, New York a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close.

                  "CARRYING VALUE" shall mean, on any date, and with respect to
any Mortgage Loan (or the Borrower's Percentage Interest therein) included in
the Eligible Assets or backing a Security which is an Eligible Asset, the lesser
of: (a) the Borrower's acquisition cost of such Mortgage Loan, interest therein
or Security as set forth on its books and records as of such date, net of
amortization, write-downs, loan loss reserves, deductions for uncollectible debt
or other reductions, or (b) the market value of the property or part thereof (or
the Borrower's Percentage Interest therein) encumbered by the Mortgage securing
said Mortgage Loan or backing a Security, as of such date. For purposes of this
definition, the term "MARKET VALUE" shall mean the estimated price at which such
property could readily be sold as set forth in a recent independent appraisal of
such property, or if no such appraisal is available, as determined in a manner
satisfactory to the Lender.

                  "CODE" shall mean the Internal Revenue Code of 1986, as the
same may be amended, or any successor thereto, and the rules and regulations
issued thereunder as from time to time in effect.

                  "COLLATERAL" shall mean the Collateral, as such term is
defined in the Current Security Agreement, and, after a Pledge Request Date, the
term "Collateral" shall mean the Collateral, as defined in the Current Security
Agreement and the Successor Security Agreement, collectively.

                  "COLLATERAL VALUE" shall mean, with respect to any computation
thereof, 75% of the lesser of: (a) the Carrying Value of each Mortgage Loan (or
the Borrower's Percentage Interest therein) or Security included in the Eligible
Assets on such date, or (b) the outstanding principal balance of each Mortgage
Loan (or the Borrower's Percentage Interest therein) included in the Eligible
Assets on such date or the portion of the principal balance of a Mortgage Loan
backing a Security included in the Eligible Assets on such date, in each case
determined in a manner satisfactory to the Lender.

                  "COMMITMENT" shall mean the commitment of the Lender to make
Loans in an aggregate principal amount at any time outstanding not to exceed the
Commitment Amount.

                  "COMMITMENT AMOUNT" shall mean the principal sum of
$50,000,000.

                                      -3-
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                  "COMMITMENT PERIOD" shall mean the period commencing on the
Effective Date and ending on the Commitment Expiration Date.

                  "COMMITMENT EXPIRATION DATE" shall mean the earlier of (i) the
date that is 180 days after the Effective Date, (ii) the date on which the first
advance is made to the Guarantor under a credit facility providing for, among
other things, the general working capital requirements of the Guarantor, or
(iii) a Commitment Termination Date.

                  "COMMITMENT TERMINATION DATE" shall mean any date on which the
Commitment shall terminate pursuant to Section 2.4.

                  "COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or
not incorporated, which is under common control with the Borrower within the
meaning of Sections 414(b) or 414(c) of the Code.

                  "COMPENSATORY INTEREST PAYMENT" shall have the meaning set
forth in Section 2.8(c).

                  "CONTINGENT OBLIGATION" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term "Contingent Obligation" shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.

                  "CONTROL PERSON" shall have the meaning set forth in Section
2.13.

                  "CONVERSION DATE" shall mean the date on which a Eurodollar
Advance is converted to an Other Advance, or the date on which an Other Advance
is converted to a Eurodollar Advance, or the date on which a Eurodollar Advance
is converted to a new Eurodollar Advance, all in accordance with Section 2.6.

                  "COVERED AMOUNT" shall mean the Loans or parts thereof which
accrue interest at the rate or rates provided for in Sections 2.8(a)(i) and
2.8(a)(ii).

                  "COVERED INTEREST AMOUNT" shall have the meaning set forth in
Section 2.8(d)(ii).



                                      -4-
<PAGE>

                  "COVERED RATE" shall mean 0.95% per annum.

                  "COVERED RATE PERIOD" shall have the meaning ascribed to such
term in Section 2.7.

                  "CREDIT DOCUMENTS" shall mean this Agreement, the Note, the
Current Security Agreement, the Guaranty and any Successor Security Agreement.

                  "CREDIT EVENT" shall mean the making of any Loan.

                  "CURRENT SECURITY AGREEMENT" shall mean the Pledge and
Security Agreement of even date herewith in the form of EXHIBIT C made by the
Borrower to the Lender, and all supplements and amendments thereto.

                  "DEFAULT" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.

                  "DOLLARS" and the sign "$" shall each mean freely transferable
lawful money of the United States.

                  "EFFECTIVE DATE" shall mean the date and time upon which (i)
there is a distribution to the shareholders of Lennar of all of the capital
stock of the Guarantor as contemplated by the Registration Statement, and (ii)
Lennar has distributed to the Guarantor the Lennar Subsidiaries which have been
engaged in its real estate investment and management business, as well as some
assets of other Subsidiaries which were used in that business and certain other
assets, all as more particularly set forth in the Registration Statement.

                  "ELIGIBLE ASSETS" shall mean, as of any date, all of the
Mortgages and Mortgage Notes, Securities and the partnership interests in
partnerships owning Mortgages and Mortgage Notes, as described on SCHEDULE A (as
said Schedule A may be amended from time to time pursuant to Section 8),
provided that each such Mortgage and Mortgage Note meets the following
requirements:

                           (1) each Mortgage (including the Mortgage backing a
         Security) must be a first lien on a commercial building consisting of a
         multifamily rental apartment building, a hotel, or a retail, office or
         industrial building;

                           (2) the Mortgage Loan secured by said Mortgage or
         which backs a Security must be a Performing Mortgage Loan; and

                           (3) each such Mortgage, Mortgage Note, Security or
         partnership interest must be approved by the Lender as acceptable to be
         included in the Borrowing Base.

                  For purposes of this definition, "PERFORMING MORTGAGE LOAN"
shall mean a Mortgage Loan satisfying the following tests: (i) there are no
defaults in the payment of any principal or interest under the terms of the
Mortgage or Mortgage Note for such Mortgage Loan, and (ii) the Cash Flow from
the property encumbered by the Mortgage securing said Mortgage Loan as at the
end of any fiscal quarter of the Borrower equals or 


                                      -5-
<PAGE>

exceeds the Projected Carrying Costs of such property as of such date. "CASH
FLOW" shall mean, with respect to any such property, and for any fiscal quarter
of the Borrower, the sum of all rents and, if applicable, hotel receipts,
actually received by the Borrower in respect of such property during said fiscal
quarter. "PROJECTED CARRYING COSTS" shall mean, with respect to any such
property, as of the last day of any fiscal quarter of the Borrower, the sum of
all debt payments (including principal and interest) and operating expenses
associated with such property projected to be payable during the next succeeding
fiscal quarter of the Borrower.

                  "EMPLOYEE BENEFIT PLAN" shall mean an employee benefit plan
within the meaning of Section 3(3) of ERISA, maintained, sponsored or
contributed to by the Borrower or any ERISA Affiliate.

                  "ENVIRONMENTAL LAWS" shall mean any and all federal, state and
local laws relating to the environment, the use, storage, transporting,
manufacturing, handling, discharge, disposal or recycling of hazardous
substances, materials or pollutants, including without limitation, (i) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA ss.9601 ET SEQ.; (ii) the Resource Conservation and Recovery
Act of 1976, as amended, 42 USCA ss.6901 ET SEQ.; (iii) the Toxic Substance
Control Act, as amended, 15 USCA ss.2601 ET SEQ.; (iv) the Water Pollution
Control Act, as amended, 33 USCA ss.1251 ET SEQ.; (v) the Clear Air Act, as
amended, 42 USCA ss.7401 ET SEQ.; (vi) the Hazardous Material Transportation
Act, as amended, 49 USCA ss.1801 ET SEQ.; and (vii) all rules, regulations
judgments decrees injunctions and restrictions thereunder and any analogous
state law.

                  "EQUITY INVESTMENT" means the ownership of, or participation
in the ownership of, an equity interest in Real Property or an equity interest
in a Person in the business of owning, developing, improving, operating or
managing Real Property.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, or any successor thereto, and the rules
and regulations issued thereunder, as from time to time in effect.

                  "ERISA AFFILIATE" shall mean, when used with respect to an
Employee Benefit Plan, ERISA, the PBGC or a provision of the Code pertaining to
Employee Benefit Plans, any Person that is a member of any group of
organizations within the meaning of Sections 414(b), (c), (m) or (o) of the Code
of which the Borrower is a member.

                  "ERISA TERMINATION EVENT" shall mean, with respect to any
Pension Plan, (a) a Reportable Event, (b) the termination of a Pension Plan, or
the filing of a notice of intent to terminate a Pension Plan, or the treatment
of a Pension Plan amendment as a termination under Section 4041(c) of ERISA, (c)
the institution of proceedings to terminate a Pension Plan under Section 4042 of
ERISA, or (d) the appointment of a trustee to administer any Pension Plan under
Section 4042 of ERISA.

                  "ERISA TEST DATE" shall have the meaning set forth in Section
5.10.

                  "EURODOLLAR ADVANCES" shall mean the Loans (or any portions
thereof) at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Eurodollar Rate.

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                  "EURODOLLAR BASE RATE" shall mean, with respect to any
Eurodollar Advance, a rate of interest per annum, as determined by the Lender,
obtained by dividing (and then rounding to the nearest 1/16 of 1% or, if there
is no nearest 1/16 of 1%, then to the next higher 1/16 of 1%):

                           (a) the rate, as quoted by the Lender to leading
         banks in the interbank eurodollar market as the rate at which the
         Lender is offering Dollar deposits in an amount equal approximately to
         such Eurodollar Advance for a period equal to the Eurodollar Period
         applicable to such Eurodollar Advance, as quoted at approximately 11:00
         A.M. (London time), two Eurodollar Business Days prior to the first day
         of such Eurodollar Period, by

                           (b) a number equal to 1.00 minus the average of the
         aggregate maximum rates during such Eurodollar Period of all reserve
         requirements (including, without limitation, marginal, emergency,
         supplemental and special reserves), expressed as a decimal, established
         by the Board of Governors of the Federal Reserve System and any other
         banking authority to which the Lender or any other major United States
         money center banking institution is subject, in respect of
         "eurocurrency liabilities" (as defined in Regulation D of the Board of
         Governors of the Federal Reserve System as from time to time in effect)
         or in respect of any other category of liabilities, in each case
         without the benefit of credits for proration, exceptions or offsets
         which may be available from time to time to the Lender under such
         Regulation D.

                  "EURODOLLAR BUSINESS DAY" shall mean a Business Day on which
trading is carried on in the London Interbank Market for Dollar deposits.

                  "EURODOLLAR PERIOD" shall mean, with respect to any Eurodollar
Advance requested by the Borrower, the period commencing on, as the case may be,
the Borrowing Date or Conversion Date with respect to such Eurodollar Advance
and ending one, two or three months thereafter, provided, however, that the
foregoing provisions relating to Eurodollar Periods are subject to the
following:

                                    (i) if any Eurodollar Period would otherwise
         end on a day which is not a Eurodollar Business Day, such Eurodollar
         Period shall be extended to the next succeeding Eurodollar Business Day
         unless the result of such extension would be to carry such Eurodollar
         Period into another calendar month, in which event such Eurodollar
         Period shall end on the immediately preceding Eurodollar Business Day,

                                    (ii) if, with respect to the borrowing of
         any Loan or the conversion of one Advance to another, the Borrower
         shall fail to give due notice as provided in Section 2.3 or 2.6, as the
         case may be, the Borrower shall be deemed to have elected that such
         Loan or Advance shall be made as an Other Advance,

                                    (iii) any Eurodollar Period that begins on
         the last Eurodollar Business Day of a calendar month (or on a day for
         which there is no numerically corresponding day in the calendar month
         at the end of such Eurodollar Period) shall end on the last Eurodollar
         Business Day of the immediately succeeding calendar month,

                                      -7-
<PAGE>

                                    (iv) no Eurodollar Period shall end after
         the Maturity Date, and

                                    (v) the Borrower shall select Eurodollar
         Periods so as not to have more than five different Eurodollar Periods
         outstanding at any one time for all Loans.

                  "EURODOLLAR RATE" shall mean the Eurodollar Base Rate plus the
Eurodollar Spread.

                  "EURODOLLAR SPREAD" shall mean 0.95%.

                  "EVENT OF DEFAULT" shall have the meaning provided in Section
11.

                  "EXECUTIVE OFFICER" shall mean the President, the Chief
Financial Officer or any Executive Vice President of any Person.

                  "EXISTING CREDIT AGREEMENT" shall mean that certain Revolving
Credit Agreement between the Lender and Lennar Financial Services, Inc., dated
May 30, 1996, as amended.

                  "EXISTING PENSION PLAN" shall mean a Pension Plan listed on
SCHEDULE B.

                  "FASB" shall mean the Financial Accounting Standards Board and
any successor thereto.

                  "FDIC" shall mean the Federal Deposit Insurance Corporation
and any successor thereto.

                  "FEDERAL FUNDS RATE" shall mean for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the preceding Business Day) by
the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day, the average of quotations for such day on such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by the Lender.

                  "FUNDED CURRENT LIABILITY PERCENTAGE" shall have the meaning
set forth in Section 401(a)(29) of the Code.

                  "FUNDED INDEBTEDNESS" shall mean with respect to any Person
and its Subsidiaries determined on a consolidated basis at a time, without
duplication: (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid or accrued, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person, (e) all obligations of such Person issued or assumed
as the deferred purchase price of property or services, but excluding trade
payables incurred and paid in the ordinary course of business, (f) all
obligations of others secured by any Lien on property owned or acquired by such
Person, whether or not the obligations secured 


                                      -8-
<PAGE>

thereby have been assumed, (g) the aggregate amount required in accordance with
GAAP to be capitalized under leases for which such Person is the lessee, (h) all
obligations of such Person in respect of interest rate protection agreements
entered into in connection with obligations described in clauses (a), (b), (c),
(d), (e), (f), (g), (i), (j) or (k) of this definition, (i) all obligations of
such Person, actual or contingent, in respect of letters of credit or banker's
acceptances, (j) all obligations of any partnership or joint venture as to which
such Person is or may become personally liable, and (k) all Contingent
Obligations of such Person.

                  "FUNDING ACCOUNT" shall mean a depository account owned by the
Borrower and maintained by The Bank of New York at its offices located at One
Wall Street, New York, New York 10286.

                  "GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the statements and
pronouncements of the FASB or in such other statement by such other entity as
may be approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of determination.

                  "GUARANTOR" shall mean LNR Property Corporation, its
successors and assigns.

                  "GUARANTY" shall mean that certain Guaranty of even date
herewith in the form of EXHIBIT D made by the Guarantor to the Lender, and all
supplements and amendments thereto.

                  "HAZARDOUS SUBSTANCE" shall mean any hazardous or toxic
substance, material or waste, including, but not limited to, (i) those
substances, materials, and wastes listed in the United States Department of
Transportation Hazardous Materials Table (49 CFR ss.172.101) or by the
Environmental Protection Agency as hazardous substances in 40 CFR Part 302 and
any amendments thereto and replacements therefor and (ii) any substance,
pollutant or material defined as, or designated in, any Environmental Law as a
"hazardous substance," "toxic substance," "hazardous material," "hazardous
waste," "restricted hazardous waste," "pollutant," "toxic pollutant" or terms of
similar import.

                  "HIGHEST LAWFUL RATE" shall mean the maximum rate of interest,
if any, that at any time or from time to time may be contracted for, taken,
charged or received on the Advances or the Note or which may be owing to the
Lender pursuant to this Agreement under the laws applicable to the Lender and
this transaction.

                  "INCOME PRODUCING PROPERTIES" means all industrial Real
Property, commercial Real Property or multiple family dwellings owned and
developed by the Guarantor, except for Real Property developed for sale as
condominium units directly to individual purchasers for their residential use.

                  "INDEBTEDNESS" shall mean, as to any Person, without
duplication, (i) all Funded Indebtedness, (ii) all trade payables, and (iii) all
repurchase agreements classified by the Approved Accountant as indebtedness.

                                      -9-
<PAGE>

                  "INTEREST PAYMENT DATE" shall mean: (i) in the case of Other
Advances, the fifth Business Day of each calendar month hereafter, and (ii) in
the case of any Eurodollar Advance, the last day of each applicable Eurodollar
Period.

                  "INVESTMENTS" shall have the meaning set forth in Section 7.8.

                  "LENDER" shall have the meaning provided in the first
paragraph of this Agreement.

                  "LENNAR" means Lennar Corporation, a Delaware corporation.

                  "LIABILITIES" means, with respect to any Person, all items
included in the liability section of a balance sheet of such Person prepared in
accordance with GAAP consistently applied as of the date of calculation. Without
limiting the generality of the forgoing, the term "Liabilities" shall include,
without limitation: (i) all Indebtedness secured by any Mortgage, lien, pledge,
security interest, charge or encumbrance upon or in property owned by such
Person, to the extent attributable to that Person's interest in the property,
even though that Person has not assumed or become liable for the payment of the
Indebtedness; and (ii) the aggregate amount of the reserves established on the
books of such Person in respect of contingent liabilities and other
contingencies (except reserves which are properly treated as deductions from
assets) and in any event shall include with respect to the Borrower the amount
of all outstanding Loans.

                  "LIEN" shall mean any mortgage, pledge, hypothecation,
assignment, restricted deposit arrangement, encumbrance, lien (statutory or
other), preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).

                  "LOAN" and "LOANS" shall have the meaning set forth in Section
2.1.

                  "LNR FINANCIAL STATEMENTS" shall have the meaning ascribed to
such term in Section 5.6(b).

                  "MARGIN STOCK" shall have the meaning provided in Regulation U
of the Board of Governors of the Federal Reserve System.

                  "MATERIAL ADVERSE CHANGE" shall mean a material adverse change
in the business, assets, property, operations, financial condition or prospects
of the Borrower or the Guarantor, as the case may be, or the Borrower and its
Subsidiaries taken as a whole or the Guarantor and its Subsidiaries taken as a
whole, as the case may be.

                  "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect
on the business, assets, property, operations, financial condition or prospects
of the Borrower or the Guarantor, as the case may be, or the Borrower and its
Subsidiaries taken as a whole or the Guarantor and its Subsidiaries taken as a
whole, as the case may be.

                  "MOODY'S" means Moody's Investors Services, Inc. or any Person
succeeding to the securities rating business of such company.

                                      -10-
<PAGE>

                  "MORTGAGE" shall mean a mortgage, deed of trust, deed to
secure debt or other security device which is customary and serves the same
function as a mortgage under law and practice in the jurisdiction in which the
premises subject to the mortgage or deed of trust are located.

                  "MORTGAGE LOAN" shall mean a loan evidenced by a Mortgage Note
and secured by a Mortgage.

                  "MORTGAGE NOTE" shall mean, at any time, a negotiable
promissory note executed by a competent party which is secured by a Mortgage.

                  "MULTIEMPLOYER PLAN" shall mean a Pension Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.

                  "NOTE" shall have the meaning set forth in Section 2.2.

                  "OBLIGATIONS" shall mean all amounts owing to the Lender
pursuant to the terms of this Agreement, the Note and the other Credit
Documents.

                  "OFFICE" shall mean the office of the Lender located at One
Wall Street, New York, New York 10286, or such other office as the Lender may
hereafter designate in writing as such to the other parties hereto.

                  "OTHER ADVANCES" shall mean the Loans (or any portions
thereof) at such time as they or such portions are made and/or being maintained
at a rate of interest which is not based upon the Eurodollar Rate.

                  "OTHER COMPUTATION PERIOD" shall mean, any month or part
thereof which is not within or part of a Covered Rate Period.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or any governmental
body succeeding to the functions thereof.

                  "PENSION PLAN" shall mean, at any time, any Employee Benefit
Plan (including a Multiemployer Plan), the funding requirements of which (under
Section 302 of ERISA or Section 412 of the Code) are, or at any time within the
six years immediately preceding the time in question, were in whole or in part,
the responsibility of the Borrower or an ERISA Affiliate.

                  "PLEDGE REQUEST DATE" shall have the meaning ascribed thereto
in Section 8.2.

                  "PERSON" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.

                  "PROHIBITED TRANSACTION" shall mean a transaction that is
prohibited under Section 4975 of the Code or Section 406 of ERISA and not exempt
under Section 4975 of the Code or Section 408 of ERISA.

                                      -11-
<PAGE>

                  "QUALIFYING BALANCES" shall mean, with respect to the Lender,
those free collected balances maintained in non-interest bearing accounts (other
than the Funding Account) in the Borrower's name with the Lender (after
deducting for purposes of calculating such balances FDIC insurance premiums,
float and balances required by the Lender under its normal practices to
compensate the Lender for the maintenance of such accounts and taking into
consideration any reserve requirements applicable to such accounts), and which
are not employed by the Borrower to effect an interest rate reduction,
accommodation or other "buy-down" arrangement under any loan or credit facility
other than this Agreement.

                  "REAL PROPERTY" shall mean all real property which is either
(i) owned by the Borrower or any of its Subsidiaries, or the Guarantor, or (ii)
which is leased by the Borrower or any of its Subsidiaries, or the Guarantor,
and pursuant to the terms of such lease the Borrower or the Guarantor, as the
case may be, is obligated to remove any Hazardous Substances from the property
that is the subject of said lease or indemnify the owner of the property with
respect to Hazardous substances at such property.

                  "REGISTRATION STATEMENT" means the General Form for
Registration of Securities filed with Securities Exchange Commission pursuant to
Section 12(b) of the Securities Exchange Act of 1934 in connection with the
registration of the securities of the Guarantor and the Information Statement
filed in connection therewith.

                  "REGULATION D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.

                  "REMAINING EURODOLLAR PERIOD" shall mean (i) in the event that
the Borrower shall fail for any reason to borrow or effect a conversion after it
shall have notified the Lender of its intent to do so in which it shall have
requested a Eurodollar Advance pursuant to Section 2.3 or Section 2.6, a period
equal to the Eurodollar Period that the Borrower elected in respect of such
Eurodollar Advance; or (ii) in the event that a Eurodollar Advance shall
terminate for any reason prior to the last day of the Eurodollar Period
applicable thereto, a period equal to the remaining portion of such Period if
such Eurodollar Period had not been so terminated; or (iii) in the event that
the Borrower shall prepay or repay all or any part of the principal amount of a
Eurodollar Advance prior to the last day of the Eurodollar Period applicable
thereto, a period equal to the period from and including the date of such
prepayment or repayment to but excluding the last day of such Eurodollar Period.

                  "REPORTABLE EVENT" shall mean, with respect to any Pension
Plan, (a) any event set forth in Sections 4043(b) (other than a Reportable Event
as to which the 30 day notice requirement is waived by the PBGC under applicable
regulations), 4068(f) or 4063(a) of ERISA or the regulations thereunder, (b) an
event requiring the Borrower or any ERISA Affiliate to provide security to or
for a Pension Plan under Section 401(a)(29) of the Code, or (c) any failure to
make any payment required by Section 412(m) of the Code.

                  "SECURITY" means a security which is backed by one or more
Mortgage Loans or parts thereof.

                                      -12-
<PAGE>

                  "SECURITY AGREEMENTS" shall mean, collectively, the Current
Security Agreement and any Successor Security Agreement and all supplements and
amendments thereto.

                  "SUBORDINATED DEBT" means any Indebtedness of the Guarantor
which by its terms is subordinated, in form and substance and in a manner
satisfactory to the Lender, in lien and right of payment to the prior payment in
full of the Obligations.

                  "SUBSIDIARY" shall mean, as to any Person, (i) any corporation
50% or more of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person or one or more
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person or one or more Subsidiaries of such Person
is entitled to share in more than 50% of the profits and losses, however
determined.

                  "SUCCESSOR SECURITY AGREEMENT" shall mean a Pledge and
Security Agreement in the form of EXHIBIT E to be delivered by the Borrower to
the Lender at the request of the Lender pursuant to Section 8.

                  "UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York.

                  "UNFUNDED PENSION LIABILITIES" shall mean, with respect to any
Pension Plan, at any time, the amount determined by taking the accumulated
benefit obligation, as disclosed in accordance with Statement of Accounting
Standards No. 87, "Employers' Accounting for Pensions", over the fair market
value of Pension Plan assets.

                  "UNITED STATES" and "U.S." shall each mean the United States
of America.

                  "UNQUALIFIED AMOUNT" shall have the meaning set forth in
Section 2.8(c).

                  "UNRECOGNIZED RETIREE WELFARE LIABILITY" shall mean, with
respect to any Employee Benefit Plan that provides post-retirement benefits
other than pension benefits, the amount of the transition obligation, as
determined in accordance with Statement of Financial Accounting Standards No.
106, "Employers' Accounting for Post-retirement Benefits Other Than Pensions,"
as of the most recent valuation date, that has not been recognized as an expense
in the income statement of the Borrower and its consolidated Subsidiaries,
provided that (i) prior to the date such Statement is applicable to the
Borrower, such amount shall be based on an estimate made in good faith of the
transition obligation, and (ii) for purposes of determining the aggregate amount
of the Unrecognized Retiree Welfare Liability, Plans maintained by a
consolidated Subsidiary of the Borrower that is not otherwise an ERISA Affiliate
shall be included.

                  "WHOLLY-OWNED SUBSIDIARY" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.

                                      -13-
<PAGE>

1.2. PRINCIPLES OF CONSTRUCTION.

                  (a) All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. The words "hereof", "herein", "hereto" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.

                  (b) All accounting terms not specifically defined herein shall
be construed in accordance with GAAP in conformity with those principles used in
the preparation of the financial statements referred to in Section 5.5. All
references herein to consolidated and consolidating financial statements shall
mean the statements of the Borrower and its consolidated Subsidiaries.

                  (c) All references to time of day shall mean the then
applicable time in New York, New York unless expressly provided to the contrary.

Section 2. AMOUNT AND TERMS OF CREDIT.

                  2.1. THE LOANS.

                  Subject to the terms and conditions hereof, the Lender agrees
to make loans during the Commitment Period (each a "LOAN" and, collectively, the
"LOANS") to the Borrower from time to time, provided, however, that at no time
shall such Loan, when combined with the principal balance of all other Loans
outstanding, exceed the lesser of (i) the Commitment Amount, or (ii) the
Borrowing Base. During the Commitment Period, the Borrower may borrow, prepay in
whole or in part and reborrow under the Commitment, all in accordance with the
terms and conditions of this Agreement. Subject to the provisions of Sections
2.3, 2.6 and 2.7, the Loans may be comprised of (x) Other Advances, (y)
Eurodollar Advances, or (z) any combination thereof.

                  2.2. NOTE.

                  NOTE. The Loans shall be evidenced by a promissory note of the
Borrower, substantially in the form of EXHIBIT F, payable to the order of the
Lender for the account of its Lending Office, in the maximum principal amount of
the Commitment Amount, and dated the Effective Date (as indorsed or modified
from time to time, the "NOTE").

                  2.3. PROCEDURE FOR BORROWINGS.

                  (a) TIME FOR NOTICE; ETC. During the Commitment Period, the
Borrower may borrow one or more Loans, on any Business Day, provided, however,
that the Borrower shall notify the Lender by telephone by 11:00 A.M., three
Eurodollar Business Days prior to the requested Borrowing Date in the case of
Eurodollar Advances, or 11:00 A.M., on such requested Borrowing Date, in the
case of Other Advances specifying (i) the aggregate principal amount requested
to be borrowed, (ii) the requested Borrowing Date, and (iii) if such borrowing
is to consist of a Eurodollar Advance, the portion thereof to constitute such
Eurodollar Advance. Each such notice shall be irrevocable and confirmed


                                      -14-
<PAGE>

immediately by delivery to the Lender by telecopier of a Borrowing Request.
Simultaneously with the delivery to the Lender of said Borrowing Request (or on
the Borrowing Date, if such Borrowing Request is dated earlier than the
Borrowing Date), the Borrower shall also deliver to the Lender by telecopier a
Borrowing Base Certificate dated as of the Borrowing Date.

                  (b) AMOUNT. Each borrowing shall be in an aggregate principal
amount equal to no less than $100,000 or, if less, the unused Commitment amount.
Each Eurodollar Advance shall be in an aggregate principal amount equal to
$1,000,000 or such amount plus a whole multiple of $1,000,000 in excess thereof.

                  (c) FUNDING. Each Loan will, subject to the satisfaction of
the terms and conditions of this Agreement, as determined by the Lender, be
disbursed by the Lender on such date either by wire transfer or deposit into the
Funding Account, at which time the Loan shall be deemed made to the Borrower for
purposes of this Agreement.

                  2.4. TERMINATION OR REDUCTION OF COMMITMENT.

                  Prior to the Commitment Expiration Date, the Borrower shall
have the right, upon at least fifteen Business Days' prior written notice (which
shall be irrevocable) to the Lender, at any time to terminate the Commitment, or
from time to time to permanently reduce the Commitment, provided, however, that
any such reduction shall be in the amount of $10,000,000 or such amount plus a
whole multiple of $1,000,000 in excess thereof.

                  2.5. PAYMENTS AND PREPAYMENTS OF THE LOANS.

                  (a) VOLUNTARY PREPAYMENTS. The Borrower may, at its option,
prepay the Loans, in whole or in part, without premium or penalty, at any time
and from time to time on any Business Day, in an aggregate principal amount of
$1,000,000 or such amount plus a whole multiple of $1,000,000 in excess thereof,
or, if less, the outstanding principal balance of the Loans.

                  (b) MANDATORY BORROWING BASE PREPAYMENTS. In the event that,
on any Business Day, (i) the outstanding principal amount of the Obligations
shall exceed the Borrowing Base, the Borrower shall, within three business Days
thereafter, prepay the Loans by an amount equal to such excess.

                  (c) MANDATORY COMMITMENT TERMINATION AND REDUCTION
PREPAYMENTS. Simultaneously with the termination of the Commitment under Section
2.4, the Borrower shall prepay the Loans in full. Simultaneously with each
reduction of the Commitment under Section 2.4, the Borrower shall prepay the
Loan by the amount, if any, by which the aggregate unpaid principal balance of
the Loans, exceeds the Commitment, as so reduced.

                  (d) MANDATORY PAYMENT ON THE COMMITMENT EXPIRATION DATE. All
Loans outstanding on the Commitment Expiration Date, and all accrued and unpaid
interest, fees and other amounts in respect thereof, shall be due and payable on
the Commitment Expiration Date.

                                      -15-
<PAGE>

                  2.6. CONVERSIONS.

                  (a) PROCEDURE. The Borrower may elect from time to time to
convert Eurodollar Advances to Other Advances by giving the Lender at least one
Business Day's prior irrevocable written notice of such election, specifying the
amount to be so converted, provided, that any such conversion of Eurodollar
Advances shall only be made on the last day of the Eurodollar Period applicable
thereto. In addition, the Borrower may elect from time to time to convert Other
Advances to Eurodollar Advances or to convert Eurodollar Advances to new
Eurodollar Advances by giving the Lender at least three Eurodollar Business
Days' prior irrevocable written notice of such election, specifying the amount
to be so converted and the initial Eurodollar Period relating thereto, provided
that any such conversion of Other Advances to Eurodollar Advances shall only be
made on a Eurodollar Business Day and any such conversion of Eurodollar Advances
to new Eurodollar Advances shall only be made on the last day of the Eurodollar
Period applicable to the Eurodollar Advances which are to be converted to such
new Eurodollar Advances. Other Advances and Eurodollar Advances may be converted
pursuant to this Section in whole or in part, provided that conversions of Other
Advances to Eurodollar Advances, or Eurodollar Advances to new Eurodollar
Advances, shall be in an aggregate principal amount of $1,000,000 or such amount
plus a whole multiple of $1,000,000 in excess thereof.

                  (b) FAILURE TO MAKE ELECTION; ETC. Notwithstanding anything in
this Section to the contrary, no Other Advance may be converted to a Eurodollar
Advance, and no Eurodollar Advance may be converted to a new Eurodollar Advance,
if any of the Borrower or the Lender has knowledge that a Default or Event of
Default has occurred and is continuing either (i) at the time the Borrower shall
notify the Lender of its election to convert or (ii) on the requested Conversion
Date. In such event, such Other Advance shall be automatically continued as an
Other Advance or such Eurodollar Advance shall be automatically converted to an
Other Advance on the last day of the Eurodollar Period applicable to such
Eurodollar Advance. If an Event of Default shall have occurred and be
continuing, the Lender may notify the Borrower (by telephone or otherwise) that
all, or such lesser amount as the Lender shall designate, of the outstanding
Eurodollar Advances shall be automatically converted to Other Advances in which
event such Eurodollar Advances shall be automatically converted to Other
Advances on the date such notice is given.

                  (c) ROLLOVERS, ETC. Each conversion shall be effected by the
Lender by applying the proceeds of its new Other Advance or Eurodollar Advance,
as the case may be, to its Advances (or portion thereof) being converted (it
being understood that such conversion shall not constitute a borrowing for
purposes of Sections 5 or 6).

                  2.7. COVERED RATE OFFERS.

                  The Lender may, in its sole discretion, at any time and from
time to time offer to the Borrower the right to have the Average Covered Amount
of the Lender's Average Other Advances bear interest at a rate per annum equal
to the Covered Rate during each period which shall occur during the period (each
a "COVERED RATE PERIOD") commencing upon the date the Borrower shall notify the
Lender, in writing, of its acceptance of such offer and ending upon the earlier
of (a) thirty days after the date the Lender shall notify the Borrower, in
writing that the Lender, in its sole discretion, has withdrawn such offer, or
(b) the date upon which any law, regulation, treaty or directive, 


                                      -16-
<PAGE>

or any change therein or in the interpretation thereof, shall, in the opinion 
of the Lender, make it unlawful for the Lender to maintain or offer to maintain
the Average Covered Amount of the Lender's Average Other Advances at the 
Covered Rate.

                  2.8. INTEREST RATE AND PAYMENT DATES.

                  (a)      INTEREST RATES.

                      (i) During any Covered Rate Period, the Average Covered
                  Amount of the Lender's Other Advances shall bear interest at a
                  rate per annum equal to the Covered Rate,

                      (ii) During each Covered Rate Period, the Average
                  Uncovered Amount of the Lender's Other Advances shall bear
                  interest at a rate per annum equal to the Alternate Base Rate,

                      (iii) During each Other Computation Period, the Average
                  Other Advances of the Lender shall bear interest at a rate per
                  annum equal to the Alternate Base Rate, and

                      (iv) The outstanding principal balance of each Eurodollar
                  Advance shall bear interest at the applicable Eurodollar Rate.

                  (b) LATE PAYMENTS. Notwithstanding anything to the contrary
contained in Section 2.8(a), if all or any portion of the principal amount of or
interest payable on the Loans, or any other amount payable by the Borrower to
the Lender under the Credit Documents, shall not be paid on the date due
(whether on the scheduled due date therefor, by acceleration or otherwise), such
overdue principal, interest or other amount shall bear interest, payable on
demand, from such due date until paid at a rate per annum equal to the Alternate
Base Rate plus 2%.

                  (c) HIGHEST LAWFUL RATE. Notwithstanding anything to the
contrary contained in this Agreement, at no time shall the interest rate payable
on the Loans, together with all fees and other amounts payable hereunder to the
extent the same constitute or are deemed to constitute interest, exceed the
Highest Lawful Rate. If in respect of any period during the term of this
Agreement, any amount paid hereunder, to the extent the same shall (but for the
provisions of this Section 2.8(c)) constitute or be deemed to constitute
interest, would exceed the maximum amount of interest permitted by the Highest
Lawful Rate during such period (such amount being hereinafter referred to as an
"UNQUALIFIED AMOUNT"), then (i) notwithstanding anything to the contrary
contained in Section 2.5, such Unqualified Amount shall be applied or shall be
deemed to have been applied as a prepayment of the Loans, and (ii) if in any
subsequent period during the term of this Agreement, all amounts payable
hereunder in respect of such period which constitute or shall be deemed to
constitute interest shall be less than the maximum amount of interest permitted
by the Highest Lawful Rate during such period, then the Borrower shall pay to
the Lender in respect of such period an amount (each a "COMPENSATORY INTEREST
PAYMENT") equal to the lesser of (x) a sum which, when added to all such
amounts, would equal the maximum amount of interest permitted by the Highest
Lawful Rate during such period, and (y) an amount equal to the Unqualified
Amount less all other Compensatory Interest Payments made in respect thereof.

                                      -17-
<PAGE>

                  (d) INTEREST PAYMENTS AND COVERED RATE STATEMENTS. The
Borrower will pay interest on the Loans as follows:

                      (i) On each Interest Payment Date hereafter, the Borrower
                  shall pay to the Lender interest on the Loans, exclusive of
                  the Covered Amount, which accrued through the end of the
                  immediately preceding calendar month or applicable Eurodollar
                  Period, as the case may be at the rate or rates equal to those
                  set forth in Sections 2.8(a)(iii) or 2.8(a)(iv), as the case
                  may be.

                      (ii) The Borrower shall pay interest to the Lender on the
                  Covered Amount as follows:

                                    (x) on each Interest Payment Date hereafter,
                  the Borrower shall pay to the Lender interest on the Covered
                  Amount at the rate equal to that set forth in Section
                  2.8(a)(i) (the "COVERED INTEREST AMOUNT"), and

                                    (y) promptly and in any event within 14 days
                  after the end of each calendar month hereafter which was
                  within or part of a Covered Rate Period, the Lender shall
                  deliver to the Borrower an accrued interest statement setting
                  forth the amount of interest which accrued on the Lender's
                  Other Advances through the end of such immediately preceding
                  calendar month in accordance with Sections 2.8(a) and (b) (the
                  "ACTUAL INTEREST AMOUNT"). In the event that the Actual
                  Interest Amount shall exceed the Covered Interest Amount, then
                  the Borrower shall, no later than one Business Day after its
                  receipt of such statement, pay to the Lender an amount equal
                  to such excess. In the event that the Borrower shall dispute
                  the amount set forth on any such statement submitted pursuant
                  to this Section 2.8(d)(ii)(y), the Borrower shall nevertheless
                  pay the amount set forth on such statement and, thereafter,
                  settle such dispute with the Lender.

                      (iii) Notwithstanding anything to the contrary contained
                  in any Credit Document in the event that the Lender shall have
                  failed to render any statement under this Section 2.8(d) when
                  due, the Borrower shall not be relieved of its obligation to
                  pay interest to the Lender at the rate or rates provided for
                  herein.

                  (e) IN GENERAL. Interest on all Loans shall be calculated on
the basis of a 360 day year for the actual number of days elapsed. Interest on
the Loans shall accrue from and including the date of the making thereof to but
excluding the date of any repayment if payment is received by the Lender prior
to 2:00 P.M. Except as otherwise specifically provided herein, interest shall be
payable in arrears on each Interest Payment Date and upon each payment or
prepayment of the Loans in full. Interest on overdue amounts shall be payable
upon demand. Any change in the interest rate on a Loan resulting from a change
in the Alternate Base Rate shall become effective as of the opening of business
on the day on which such change in the Alternate Base Rate shall become
effective. The Lender shall, as soon as practicable following request therefor,
notify the Borrower of the effective date and the amount of each change in the
BNY Rate, but any failure to give such notice shall not in any manner affect the
obligation of the Borrower to 


                                      -18-
<PAGE>

pay interest on the Loans in the amounts and on the dates required. The Borrower
and the Lender acknowledge that to the extent interest payable on the Average
Other Advances is based on the BNY Rate, the BNY Rate is only one of the bases
for computing interest on loans made by the Lender, and by basing interest
payable on the Average Other Advances on the BNY Rate, the Lender has not
committed to charge, and the Borrower has not in any way bargained for, interest
based on a lower or the lowest rate at which the Lender may now or in the future
make extensions of credit to other Persons. Each determination by the Lender of
the BNY Rate shall be conclusive and binding absent manifest error. The Lender
is hereby authorized to charge the Funding Account for each payment of
principal, interest and fees as the same become due under this Agreement.

                  2.9. APPLICATION OF PAYMENTS.

                  All payments by the Borrower to the Lender in respect of the
interest on the Loans shall be applied first to interest in respect of
Eurodollar Advances and next to interest in respect of Other Advances in
accordance with the provisions of Section 2.8(d). Each payment by the Borrower
shall be made without set-off or counterclaim and shall be made prior to 2:00
P.M., on the applicable due date therefor at the Lender's Office in lawful money
of the United States of America and in immediately available funds. The failure
of the Borrower to make any such payment by 2:00 P.M. on such due date shall not
constitute a Default or Event of Default provided that such payment is made on
such due date, but any such payment received by the Lender on any Business Day
after 2:00 P.M., shall be deemed to have been received on the immediately
succeeding Business Day for the purpose of calculating any interest payable in
respect of the Obligations. If any payment hereunder or under the Note or a
Credit Document becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day (unless,
in the case of Eurodollar Advances, the result of such extension would be to
extend such payment into another calendar month, in which event such maturity
shall be shortened to the immediately preceding Business Day). In the event of
any such extension or shortening, interest shall be adjusted accordingly.

                  2.10. SUBSTITUTED INTEREST RATE.

                  In the event that (a) the Lender shall have determined (which
determination shall be conclusive and binding upon the Borrower) that by reason
of circumstances affecting the interbank eurodollar market adequate and
reasonable means do not exist for ascertaining the Eurodollar Base Rate or (b)
the Lender has determined (which determination shall be conclusive and binding
on the Borrower) that the applicable Eurodollar Base Rate will not adequately
and fairly reflect the cost to the Lender of maintaining or funding loans
bearing interest based on the Eurodollar Rate, in either case, with respect to
proposed Loans that the Borrower has requested be made as a Eurodollar Advance
or a Eurodollar Advance that will result from the requested conversion of any
outstandings into a Eurodollar Advance (hereinafter referred to as an "AFFECTED
ADVANCE"), the Lender shall promptly notify the Borrower (by telephone or
otherwise) of such determination, to be confirmed in writing, to the Borrower on
or prior to, the requested Borrowing Date for such Affected Advance or the
requested Conversion Date of such Advance. If the Lender shall give such notice,
(i) any requested Affected Advance shall be made as an Other 


                                      -19-
<PAGE>

Advance, (ii) any outstanding Loan balance that was to have been converted to an
Affected Advance shall be converted to or continued as an Other Advance, and
(iii) any outstanding Affected Advance shall be converted, on the last day of
the then current Eurodollar Period with respect thereto, to an Other Advance.
Until any such notice under clause (a) of this Section 2.10 has been withdrawn
by the Lender (by notice to the Borrower promptly upon the Lender having
determined that such circumstances affecting the interbank eurodollar market no
longer exist and that adequate and reasonable means do exist for determining the
Eurodollar Base Rate) no further Eurodollar Advances shall be made by the Lender
nor shall the Borrower have the right to convert any outstandings to Eurodollar
Advances. Until any such notice under clause (b) of this Section 2.10 has been
withdrawn by the Lender (by notice to the Borrower promptly upon the Lender
having determined that circumstances no longer render any Loan or outstanding an
Affected Advance), no further Eurodollar Advances, shall be required to be made
by the Lender nor shall the Borrower have the right to convert any outstanding
of the Lender to a Eurodollar Advance of the Lender.

                  2.11. TAXES; NET PAYMENTS.

                  All payments made by the Borrower under the Credit Documents
to the Lender shall be made free and clear of, and without reduction for or on
account of, any taxes required by law to be withheld from any amounts payable
under the Credit Documents. A statement setting forth the calculations of any
amounts payable pursuant to this Section 2.11 submitted by the Lender to the
Borrower shall be conclusive absent manifest error.

                  2.12. ILLEGALITY.

                  Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for the Lender to make or
maintain its Eurodollar Advances as contemplated by this Agreement, (a) the
commitment of the Lender hereunder to make or continue Eurodollar Advances or to
convert Other Advances to Eurodollar Advances shall forthwith be suspended and
(b) the Lender's Loans then outstanding as Eurodollar Advances affected thereby,
if any, shall be converted automatically to Other Advances on the last day of
the then current Eurodollar Period applicable thereto or within such earlier
period as required by law. If the commitment of the Lender with respect to
Eurodollar Advances is suspended pursuant to this Section and the Lender shall
determine that it is once again legal for the Lender to make or maintain
Eurodollar Advances, the Lender's commitment to make or maintain Eurodollar
Advances shall be reinstated.

                  2.13. INCREASED COSTS.

                  In the event that any law, regulation, treaty or directive
hereafter enacted, promulgated, approved or issued or any change in any
presently existing law, regulation, treaty or directive or in the interpretation
or application thereof by any governmental body charged with the administration
thereof or compliance by the Lender, or any Person directly or indirectly owning
or controlling the Lender (each a "CONTROL PERSON") with any request or
directive from any central bank or other governmental body, agency or
instrumentality hereafter made:

                                      -20-
<PAGE>

                      (a) does or shall subject the Lender or such Control
         Person to any tax of any kind whatsoever with respect to any Eurodollar
         Advance or the Lender's obligations under this Agreement to make
         Eurodollar Advances or changes the basis of taxation of payments to the
         Lender of principal, interest or any other amount payable hereunder in
         respect of its Eurodollar Advances (except for imposition of, or change
         in the rate of, tax on the overall net income of the Lender or such
         Control Person); or

                      (b) does or shall impose, modify or make applicable any
         reserve, special deposit, compulsory loan, assessment, increased cost
         or similar requirement not in effect on the Effective Date against
         assets held by, or deposits of, or advances or loans by, or other
         credit extended by, or any other acquisition of funds by, any office of
         the Lender in respect of its Eurodollar Advances which is not otherwise
         included in the determination of the applicable rate or rates of
         interest hereunder;

and the result of any of the foregoing is to increase the cost to the Lender of
making, renewing, converting or maintaining the Lender's Eurodollar Advances or
its commitment to make Eurodollar Advances, or to reduce any amount receivable
hereunder in respect of its Eurodollar Advances, then, in any such case, the
Borrower shall promptly pay the Lender, upon its demand, any additional amounts
necessary to compensate the Lender or such Control Person for such additional
cost or reduction in such amount receivable as reasonably determined in good
faith by the Lender. No failure by the Lender to demand compensation for any
increased cost shall constitute a waiver of the Lender's right to demand such
compensation at any time. A statement setting forth in reasonable detail the
calculations of any additional amounts payable pursuant to the foregoing
sentence submitted by the Lender to the Borrower shall be conclusive absent
manifest error.

                  2.14. INDEMNIFICATION FOR LOSS.

                  (a) Notwithstanding anything contained herein to the contrary,
if the Borrower shall fail to borrow on a Borrowing Date or to convert on a
proposed Conversion Date, as the case may be, after it shall have given notice
to do so, or if a Eurodollar Advance shall be terminated for any reason prior to
the last day of the Eurodollar Period applicable thereto, or if, while a
Eurodollar Advance is outstanding, any repayment or prepayment of such
Eurodollar Advance is made for any reason (including, without limitation, as a
result of acceleration or illegality) on a date which is prior to the last day
of the Eurodollar Period applicable thereto, the Borrower agree to indemnify the
Lender against, and to pay on demand directly to the Lender, any loss or expense
suffered by the Lender as a result of such failure to borrow, termination,
prepayment or repayment, including without limitation, an amount, if greater
than zero, equal to:

                                  A x (B-C) x D
                                             ---
                                             360

                  where:

                  "A" equals the Lender's Affected Principal Amount;

                                      -21-
<PAGE>

                  "B" equals the Eurodollar Rate (expressed as a decimal)
                  applicable to such Affected Principal Amount;

                  "C" equals the applicable Eurodollar Rate in effect on or
                  about the first day of the applicable Remaining Eurodollar
                  Period, based on the applicable rates offered on or about such
                  date, for deposits in an amount equal approximately to the
                  Lender's Affected Principal Amount with a Eurodollar Period
                  equal approximately to the applicable Remaining Eurodollar
                  Period, as determined by the Lender; and

                  "D" equals the number of days from and including the first day
                  of the applicable Remaining Eurodollar Period to but excluding
                  the last day of such Remaining Eurodollar Period.

                  (b) The Borrower shall also pay to the Lender all
administrative expenses and other costs suffered by the Lender as a result of
any of the events set forth in Section 2.14(a).

                  2.15. OPTION TO FUND.

                  The Lender has indicated that, if the Borrower elects to
borrow or convert to a Eurodollar Advance, the Lender may wish to purchase one
or more deposits in order to fund or maintain its funding of such Eurodollar
Advance during the Eurodollar Period in question; it being understood that the
provisions of this Agreement relating to such funding are included only for the
purpose of determining the rate of interest to be paid in respect of such
Eurodollar Advance and any amounts owing under Sections 2.13, 2.14 and 2.16. The
Lender shall be entitled to fund and maintain its funding of all or any part of
each Eurodollar Advance made by it in any manner it sees fit, but all
determinations under Sections 2.13, 2.14 and 2.16 shall be made as if the Lender
had actually funded and maintained such Eurodollar Advance during the applicable
Eurodollar Period through the purchase of deposits in an amount equal to such
Eurodollar Advance and having a maturity corresponding to such Eurodollar
Period. The obligations of the Borrower under Sections 2.13, 2.14 and 2.16 shall
survive the termination of the Commitment and the payment of the Note and all
other amounts payable hereunder.

                  2.16. CAPITAL ADEQUACY.

                  If the amount of capital required or expected to be maintained
by the Lender, or any Control Person with respect to the Lender, shall be
affected by

                  (a)  the introduction or phasing in of any law, rule or
                       regulation after the date hereof,

                  (b)  any change after the date hereof in the interpretation of
                       any existing law, rule or regulation by any central bank
                       or United States or foreign governmental body charged
                       with the administration thereof, or

                  (c)  compliance by the Lender or such Control Person with any
                       directive, guideline or request from any central bank or
                       United States or 


                                      -22-
<PAGE>

                       foreign governmental body (whether or not having the 
                       force of law) promulgated or made after the date hereof,

and the Lender shall have determined that such introduction, phasing in, change
or compliance shall have had or will thereafter have the effect of reducing (i)
the rate of return on the Lender's or such Control Person's capital, or (ii) the
asset value to the Lender or such Control Person of the Loans made or maintained
by the Lender, in either case to a level below that which the Lender or such
Control Person could have achieved or would thereafter be able to achieve but
for such introduction, phasing in, change or compliance (after taking into
account the Lender's or such Control Person's policies regarding capital), then,
within ten days after demand by the Lender, the Borrower shall pay to the Lender
or such Control Person such additional amount or amounts as shall be sufficient
to compensate the Lender or such Control Person, as the case may be, for such
reduction. A certificate as to such amount submitted to the Borrower by the
Lender setting forth the determination of such amount shall be conclusive absent
manifest error.

                  2.17. TRANSACTION RECORD.

                  The Lender has established a transaction record (the
"TRANSACTION RECORD") with respect to this Agreement. The Transaction Record
sets forth the Lender's Loans, their character from time to time as Eurodollar
Advances, each payment by the Borrower of principal and interest on the Lender's
Advances and certain additional information. The Transaction Record shall be
presumptively correct absent manifest error as to the amount of the Lender's
Advances and as to the amount of principal and interest paid by the Borrower in
respect of such Advances and as to the other information relating to the
Advances and amounts paid and payable by the Borrower hereunder and under the
Note set forth in such Transaction Record.

Section 3. NON-USAGE FEE.

                  The Borrower agrees to pay to the Lender a fee (the "NON-USAGE
FEE"), during the Commitment Period, equal to 0.15% per annum on the excess of
(a) the Commitment over (b) the average daily sum of the outstanding principal
balance of the Loans. The Non-Usage Fee shall be payable monthly in arrears for
each calendar month, or part thereof, occurring during the Commitment Period.
The Non-Usage Fee shall be paid on the fifth Business Day of each month
following the calendar month, or part thereof, in which such Non-Usage Fee
accrued, commencing on the first such day following the Effective Date, and
ending on the fifth Business Day of the month following the Commitment
Expiration Date. The Non-Usage Fee shall be calculated on the basis of a 360-day
year for the actual number of days elapsed.

Section 4. CONDITIONS PRECEDENT.

                  The obligation of the Lender to make a Loan is subject, at the
time of the Credit Event with respect thereto (except as hereinafter indicated),
to the satisfaction of the following conditions:

                                      -23-
<PAGE>

                  4.1. NOTE; CREDIT DOCUMENTS.

                  (a) On the Effective Date, the Borrower shall have delivered
to the Lender the duly executed Note, bearing the appropriate insertions therein
as to date and amount, and the other Credit Documents.

                  (b) After the Pledge Request Date, the Borrower shall have
delivered to the Lender prior to the next succeeding Credit Event a duly
executed Successor Security Agreement.

                  4.2. NO DEFAULT; REPRESENTATIONS AND WARRANTIES.

                  At the time of each Credit Event and immediately after giving
effect thereto (i) no Default or Event of Default shall or would have occurred
and be continuing, and (ii) all representations and warranties contained herein
and in the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made both at the time of such Credit Event and immediately after giving
effect thereto.

                  4.3. BORROWING REQUEST.

                  Prior to each Credit Event, the Lender shall have received a
Borrowing Request with respect thereto, together with a Borrowing Base
Certificate, meeting the requirements of Section 2.3.

                  4.4. OPINIONS OF COUNSEL.

                  On the Effective Date, the Lender shall have received from the
Borrower's counsel (who shall be reasonably satisfactory to the Lender) an
opinion addressed to the Lender and dated as of the Effective Date covering the
matters set forth in EXHIBIT G.

                  4.5. SUBSEQUENT LEGAL OPINIONS.

                  If the Lender reasonably believes that any legal matter could
reasonably be expected to have had, or could reasonably be expected to have, a
Material Adverse Effect or a material adverse effect on the transactions
contemplated hereby or on the Lender or any of its respective rights or remedies
under the Credit Documents, then, prior to each Credit Event and if reasonably
requested by the Lender, the Lender shall have received from the Borrower's
counsel (who shall be reasonably satisfactory to the Lender an opinion in form
and substance reasonably satisfactory to the Lender, addressed to the Lender and
dated the date of such Credit Event, covering such matters of law.

                  4.6. CORPORATE DOCUMENTS; PROCEEDINGS.

                  (a) On the Effective Date, the Lender shall have received a
certificate, dated as of the Effective Date, signed by an Executive Officer of
the Borrower, and attested to by the Secretary or any Assistant Secretary of the
Borrower, substantially in the form of EXHIBIT H, with appropriate insertions,
together with copies of (i) the Articles of Incorporation and By-Laws of the
Borrower and (ii) the resolutions of the Board of Directors of the Borrower
referred to in such certificate.

                                      -24-
<PAGE>

                  (b) Prior to or simultaneously with each Credit Event, all
corporate and legal proceedings and all instruments and agreements required by
the terms of the Credit Documents or reasonably necessary in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Lender, and the Lender
shall have received all information and copies of all documents and papers,
including records of corporate proceedings which the Lender reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate bodies.

                  4.7. MANDATORY PREPAYMENT.

                  After giving effect to the proposed Loan, no prepayment would
be required pursuant to Section 2.5(b).

                  4.8. FINANCING STATEMENTS; OTHER DOCUMENTS.

                  (a) On the Effective Date, the Lender shall have received:

                                            (i) Financing Statements in form for
                                    filing in each jurisdiction as may be
                                    necessary or, in the opinion of the Lender,
                                    desirable to perfect the security interests
                                    created by the Current Security Agreement,
                                    duly executed by the Borrower;

                                         (ii) evidence of the completion of all
                                    other recordings and filings as may be
                                    necessary or, in the opinion of the Lender,
                                    desirable to perfect the security interests
                                    created by the Current Security Agreement;
                                    and

                                        (iii) evidence that all other actions
                                    necessary or, in the opinion of the Lender,
                                    desirable to perfect and protect the
                                    security interests created by the Current
                                    Security Agreement have been taken.

                  (b) After a Pledge Request Date, the Lender shall have
received prior to the next succeeding Credit Event:

                                            (i) Financing Statements in form for
                                    filing in each jurisdiction as may be
                                    necessary in the opinion of the Lender to
                                    perfect the security interests created by
                                    the Successor Security Agreement, duly
                                    executed by the Borrower;

                                           (ii) the documents and opinions 
                                    required under Section 8.2(a);

                                        (iii) evidence of the completion of all
                                    other recordings and filings as may be
                                    necessary or, in the opinion of the Lender,
                                    desirable to perfect the security interests
                                    created by the Successor Security Agreement;
                                    and

                                         (iv) evidence that all other actions
                                    necessary or, in the opinion of the Lender,
                                    desirable to perfect and protect the
                                    security interests created by the Successor
                                    Security Agreement have been taken.

                                      -25-
<PAGE>

                  4.9. NO ADVERSE CHANGE.

                  As of the date of each Credit Event, no Material Adverse
Change shall have occurred since the date of the Registration Statement or the
ERISA Test Date.

                  4.10. FEES AND EXPENSES.

                  Prior to or simultaneously with each Credit Event, the
Borrower shall have paid to the Lender all fees and expenses then due and
payable.

                  4.11. NO LITIGATION.

                  On and as of the date of each Credit Event, there shall be no
judgment, order, injunction or other restraint which shall prohibit or impose,
and no litigation pending or threatened against or affecting the Borrower or its
Subsidiaries which would prohibit or result in the imposition of adverse
conditions upon the secured financing contemplated hereby, or otherwise have a
Material Adverse Effect.

Section 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

         In order to induce the Lender to enter into this Agreement and to make
the Loans, the Borrower makes the following representations, warranties and
agreements:

                  5.1. CORPORATE STATUS.

                  The Borrower (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the power and authority to own its property and assets
and to transact the business in which it is engaged and (iii) is duly qualified
as a foreign corporation and in good standing in each jurisdiction where the
ownership, leasing or operation of its property or the conduct of its business
requires such qualification.

                  5.2. CORPORATE POWER AND AUTHORITY.

                  The Borrower has the corporate power to execute, deliver and
perform the terms and provisions of the Credit Documents to which it is a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance by it of each such Credit Document. The Borrower has
duly executed and delivered each of the Credit Documents to which it is a party,
and each of such Credit Documents constitutes its legal, valid and binding
obligations enforceable in accordance with its terms, provided that, (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.

                  5.3. NO VIOLATION.

                  Neither the execution, delivery or performance by the Borrower
of the Credit Documents to which it is a party, nor compliance by it with the
terms and provisions thereof (i) will contravene any provision of any law,
statute, rule or regulation or 


                                      -26-
<PAGE>

any order, writ, injunction or decree of any governmental body, (ii) will
conflict or be inconsistent with or result in any breach of any of the material
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (other than a Lien permitted pursuant to Section 7.3) upon any of the
property or assets of the Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, loan agreement or any other
agreement, contract or instrument to which the Borrower is a party or by which
it or any of its property or assets is bound or to which it may be subject or
(iii) will violate any provision of the Articles of Incorporation or By-Laws of
the Borrower.

                  5.4. GOVERNMENTAL APPROVALS.

                  No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except as have been
obtained or made prior to the Effective Date), or exemption by, any governmental
body is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document by the Borrower, or
(ii) the legality, validity, binding effect or enforceability of any Credit
Document.

                  5.5. FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES, ETC.

                  (a) The Borrower has heretofore delivered to the Lender copies
of its audited consolidated and consolidating Balance Sheet of the Borrower and
its Subsidiaries for its fiscal year ending November 30, 1996 and the related
consolidated Statements of Operations, Retained Earnings and Cash Flows for the
period then ended, and its financial statements for its fiscal quarter ending
May 31, 1997, and all such financial statements fairly present the consolidated
financial condition and results of the operations of the Borrower and its
Subsidiaries as of the dates and for the periods indicated therein and have been
prepared in conformity with GAAP.

                  (b) The Borrower has heretofore delivered to the Lender the
consolidated Balance Sheet of the Guarantor and its Subsidiaries as of November
30, 1996 and the six-month period ending May 31 1997 and the related combined
Statements of Operations, Retained Earnings and Cash Flows for the periods then
ended, all in the form as set forth in the Registration Statement (the "LNR
FINANCIAL STATEMENTS"). The LNR Financial Statements have been prepared to
reflect the Guarantor and its Subsidiaries as a separate combined group for such
period, and have been extracted from the financial statements of Lennar using
Lennar's historical results of operations and historical cost basis of its
assets and liabilities which are used in the businesses being operated by the
Guarantor and its Subsidiaries. The LNR Financial Statements fairly present the
financial condition and results of the operations of the Guarantor and its
Subsidiaries as of the dates and for the periods indicated therein and have been
prepared in conformity with GAAP. Since the date of delivery of the LNR
Financial Statements, no event has occurred which has had or could reasonably be
expected to have, a Material Adverse Effect.

                  (c) Except as fully reflected in the financial statements
referred to in Section 5.5(a) or in SCHEDULE 5.5, as of the Effective Date there
are no liabilities or obligations with respect to the Borrower of any nature
whatsoever (whether absolute, accrued, 


                                      -27-
<PAGE>

contingent or otherwise and whether or not due) which, either individually or in
aggregate, are material to the Borrower. Except as set forth in Schedule 5.5, as
of the Effective Date the Borrower knows of no basis for the assertion against
the Borrower of any liability or obligation of any nature whatsoever that is not
fully reflected in the financial statements referred to in Section 5.5(a) which,
either individually or in the aggregate, could have a Material Adverse Effect.

                  5.6. LITIGATION.

                  Except as set forth on SCHEDULE 5.6, on and as of the date of
this Agreement,

                  (a) there are no actions, suits or proceedings (whether or not
purportedly on behalf of the Borrower or any of its Subsidiaries) pending or, to
the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries. There are no actions, suits or proceedings pending or, to the
best knowledge of the Borrower, threatened (i) with respect to any Credit
Document or (ii) that are reasonably likely to have a Material Adverse Effect,
and

                  (b) to the best knowledge of the Borrower, there are no
actions, suits or proceedings (whether or not purportedly on behalf of the
Guarantor or any of its Subsidiaries) pending or threatened against the
Guarantor or any of its Subsidiaries (i) with respect to the Guaranty, or (ii)
that are reasonably likely to have a Material Adverse Effect.

                  5.7. TRUE AND COMPLETE DISCLOSURE.

                  All factual information (taken as a whole) heretofore or
contemporaneously furnished by or on behalf of the Borrower to the Lender
(including without limitation all information contained in the Credit Documents)
for purposes of or in connection with this Agreement or any transaction
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of the Borrower to the Lender will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided.

                  5.8. USE OF PROCEEDS; MARGIN REGULATIONS.

                  No part of the proceeds of any Loan will be used by the
Borrower to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. The use of the proceeds
thereof will not violate or be inconsistent with the provisions of Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System.

                                      -28-
<PAGE>

                  5.9. TAX RETURNS AND PAYMENTS.

                  The Borrower and each of its Subsidiaries has filed all tax
returns required to be filed by it and has paid all income taxes payable by it
which have become due pursuant to such tax returns and all other taxes and
assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith and for which adequate
reserves have been established. The Borrower and each of its Subsidiaries hereof
has paid, or has provided adequate reserves (in the good faith judgment of the
management of the Borrower and such Subsidiaries, as the case may be) for the
payment of, all federal and state income taxes applicable for all prior fiscal
years and for the current fiscal year to the date hereof.

                  5.10. ERISA.

                  Each Employee Benefit Plan of the Borrower and any ERISA
Affiliate is in compliance with ERISA and the Code, where applicable, in all
material respects. As of November 30, 1995, (the "ERISA TEST DATE"), (i) the
amount of all Unfunded Pension Liabilities under the Pension Plans, excluding
any plan which is a Multiemployer Plan, does not exceed $1, and (ii) the amount
of the aggregate Unrecognized Retiree Welfare Liability under all applicable
Employee Benefit Plans does not exceed $500,000. There is no Multiemployer Plan.
The Borrower and/or any ERISA Affiliate has, as of the date hereof, made all
contributions or payments to or under each such Pension Plan required by law or
the terms of such Pension Plan or any contract or agreement. No material
liability to the PBGC has been, or is expected by the Borrower or any ERISA
Affiliate to be, incurred by the Borrower or any ERISA Affiliate. Liability, as
referred to in this Section 5.10, includes any joint and several liability. Each
Employee Benefit Plan which is a group health plan within the meaning of Section
5000(b)(1) of the Code is in material compliance with the continuation of health
care coverage requirements of Section 4980B of the Code.

                  5.11. SUBSIDIARIES.

                  Set forth on Schedule 5.11 is an accurate and complete list of
all Subsidiaries of the Borrower on the Effective Date, together with a
description of the business of each such Subsidiary.

                  5.12. COMPLIANCE WITH STATUTES, ETC.

                  The Borrower and each of its Subsidiaries is in compliance
with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies in respect of the conduct of
its business and the ownership of its property, except such noncompliance as
would not, in the aggregate, have a Material Adverse Effect.

                  5.13. INVESTMENT COMPANY ACT.

                  Neither the Borrower nor any of its Subsidiaries is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.

                                      -29-
<PAGE>

                  5.14. PUBLIC UTILITY HOLDING COMPANY ACT.

                  Neither the Borrower nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company" or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

                  5.15. LABOR RELATIONS.

                  Neither the Borrower nor any of its Subsidiaries is engaged in
any unfair labor practice that could have a Material Adverse Effect. There is
(i) no significant unfair labor claim or action pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against it or any such Subsidiary, before the National Labor Relations Board,
and no significant grievance or significant arbitration proceeding arising out
of or under any collective bargaining agreement is so pending against the
Borrower or any of its Subsidiaries, to the best knowledge of the Borrower,
threatened against it, (ii) no significant strike, labor dispute, slowdown or
stoppage pending against the Borrower or any of its Subsidiaries, or, to the
best knowledge of the Borrower, threatened against it or any such Subsidiary,
(iii) to the best knowledge of the Borrower, no union representation question
existing with respect to the employees of the Borrower or any of its
Subsidiaries and, to the best of its knowledge, no union organizing is taking
place, except (with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate) such as could not have a
Material Adverse Effect.

                  5.16. NO BURDENSOME AGREEMENTS.

                  Neither the Borrower nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or restriction which by its terms would
have a Material Adverse Effect or a material adverse effect on the ability of
the Borrower to carry out its obligations under the Credit Documents.

                  5.17. PROPERTY.

                  (a) The Borrower and its Subsidiaries have good and marketable
title to all of their Property, title to which is material to the Borrower or
such Subsidiary, subject to no Liens, except for Liens permitted under Section
7.3.

                  (b) All of the tangible property of the Borrower which is
necessary for the operation of its business is in substantially good repair and
operating condition and is and will be in compliance in all material respects
with all material requirements of law.

                  5.18. Security Interests

                  The Credit Documents are effective to create in favor of the
Lender a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof, and, (a) after financing statements in
appropriate form are filed in the appropriate offices with respect to Collateral
and (b) after taking possession of any Mortgage Notes and Securities included in
the Collateral, by the Lender and assuming the continued possession thereof by
the Lender, the security interest granted under the Security Agreements 


                                      -30-
<PAGE>

shall at all times constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Borrower in such Collateral and the
proceeds thereof, in each case prior and superior in right to any other Person.

                  5.19. PRINCIPAL PLACES OF BUSINESS.

                  The principal place of business of the Borrower is 760 N.W.
107th Avenue, First Floor, Miami, Florida 33172.

                  5.20. ENVIRONMENTAL MATTERS.

                  (a) The Borrower and each of its Subsidiaries is in compliance
in all material respects with the requirements of all applicable Environmental
Laws.

                  (b) To the best of the Borrower's knowledge and belief, no
Hazardous Substances are present upon the Borrower's Real Property in violation
of any Environmental Law and the Borrower has not received any notice to the
effect that any of its Real Property, or any of the its operations, is not in
compliance with any Environmental Law or that any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
Hazardous Substance into the environment is pending which, in either case, could
be reasonably expected to have a Material Adverse Effect.

                  (c) No Real Property of the Borrower is located in an area
identified by the Secretary of Housing and Urban Development as an area having
special flood hazards unless the same is covered by flood insurance.

                  5.21. GUARANTOR.

                  (a) FORMATION; CONTRIBUTIONS. The Guarantor was formed by
Lennar in June of 1997. Lennar will distribute to the Guarantor the Lennar
Subsidiaries which have been engaged in its real estate investment and
management business, as well as some assets of other Subsidiaries which were
used in that business and certain other assets, all as more particularly set
forth in the Registration Statement prior to December 1, 1997. As of the
Effective Date, the consolidated net worth of the Guarantor and its Subsidiaries
will be not less than $500,000,000.

                  (b) DISTRIBUTION. The shares of the Guarantor will be
distributed to the shareholders of Lennar prior to December 1, 1997. Such
distribution will be made in a manner consistent with the description thereof
set forth in the Registration Statement.

Section 6. AFFIRMATIVE COVENANTS OF THE BORROWER.

                  The Borrower covenants and agrees that on and after the
Effective Date and until the Commitment shall have been terminated and the Loans
and the Note, together with interest, fees and all other obligations incurred
hereunder and under all Credit Documents, are paid in full:

                                      -31-
<PAGE>

                  6.1. INFORMATION.

                  The Borrower will furnish to the Lender:

                  (a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within 120 days after the end of each fiscal year of the Borrower, (i)
a copy of its unaudited consolidated Balance Sheet as at the end of such fiscal
year, together with the related consolidated Statements of Operations, Retained
Earnings and Cash Flows, in each case as of and through the end of such fiscal
year, setting forth in each case in comparative form the figures for the
preceding fiscal year all in reasonable detail, prepared in accordance with GAAP
and certified as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer of the Borrower and
(ii) if requested by the Lender, the unaudited consolidating Balance Sheet of
the Borrower and its Subsidiaries as at the end of such fiscal year, together
with the related consolidating Statement of Operations as of and through the end
of such fiscal year, setting forth in each case in comparative form the figures
for the preceding fiscal year and all in reasonable detail.

                  (b) PERIODIC FINANCIAL STATEMENTS.

                      (i) As soon as available, and in any event within 60 days
after the end of each of the first three quarters of each fiscal year of the
Borrower, a copy of (x) the Borrower's unaudited consolidated Balance Sheet as
of the end of such quarter, and (y) the related unaudited consolidated
Statements of Operations, Retained Earnings and Cash Flows for such quarter and
for the period from the beginning of the then current fiscal year of the
Borrower to the end of such quarter and for the comparable periods in the
preceding fiscal year, all in reasonable detail, prepared in accordance with
GAAP and certified as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer of the Borrower.

                      (ii) As soon as available, and in any event within 30 days
after the end of each calendar month, a copy of (x) the Borrower's consolidated
Balance Sheets as of the end of such month and (y) the related consolidated
Statements of Operations and Retained Earnings for such month and for the period
from the beginning of the then current fiscal year of the Borrower to the end of
such month and for the comparable periods in the preceding fiscal year, all in
reasonable detail, prepared in accordance with GAAP (except as otherwise
disclosed thereon and in any event without footnotes and subject to year-end
adjustments) throughout the periods involved.

                      (iii) Within five Business Days after the end of each
calender month occurring after the Effective Date, a Borrowing Base Certificate
in the form of EXHIBIT A showing the status and Collateral Value of each
Eligible Asset, and the availability to the Borrower of further Loans, all
calculated as of 5:00 P.M. on said last day of the month, provided that if said
last day of the month is not a Business Day, then such calculation shall be as
of the Business Day immediately preceding said day.

                  (c) MANAGEMENT LETTERS. Promptly after receipt by the Borrower
thereof, a copy of any "management letter" received by it from its certified
public accountants detailing any "material weaknesses in internal control" noted
by such accountants (as defined by FASB).

                                      -32-
<PAGE>

                  (d) OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements provided for in Section 7.1(a) and (b), a certificate of
the chief financial officer of the Borrower to the effect that, to the best of
his knowledge, no Default or Event of Default has occurred and is continuing or,
if any Default or Event of Default has occurred and is continuing, specifying
the nature and extent thereof and any actions taken or proposed to be taken with
respect to any such Default or Event of Default, which certificate for the
Borrower shall also set forth the calculations required to establish whether
Borrower was in compliance with the provisions of Sections 7.1, 7.2 and 7.10,
inclusive, at the end of such quarterly accounting period or such fiscal year,
as the case may be.

                  (e) NOTICES. Promptly, notice of (i) the occurrence of any
event which constitutes a Default or Event of Default, detailing the nature of
such Default or Event of Default and any actions taken or proposed to be taken
with respect to such Default or Event of Default, (ii) the commencement of any
action, suit or proceeding before any court, arbitrator or governmental body
which (A) could result in liability or loss of $1,000,000 or more in the
aggregate, in excess of any applicable insurance coverage, to the Borrower or
any of its Subsidiaries or (B) would otherwise have a Material Adverse Effect,
(iii) with respect to the Borrower, any change in any Executive Officer, (iv)
any threatened loss of any authorization, qualification, license or permit
issued by any governmental body to the Borrower the loss of which could have a
Material Adverse Effect, (v) any written correspondence or notification from any
governmental body, which revokes or threatens to revoke, limits or threatens to
limit, or imposes or threatens to impose any material restrictions on, any
approvals or authorizations granted by such governmental body to either of the
Borrower or any of its Subsidiaries, together with a copy thereof, or (vi) any
violation of any requirements or guidelines established by any governmental
body, which might have a material adverse effect on the status of the Borrower
or any of its Subsidiaries thereof as a lender, seller or servicer approved by
such governmental body.

                  (f) PREPAYMENTS; MODIFICATION. Prior written notice of any (i)
voluntary or optional payment or prepayment on or redemption or acquisition for
value of any Funded Indebtedness providing for repayment in installments or (ii)
amendment or modification of any provision affecting the term, principal amount,
applicable interest rate, financial covenants or collateral securing any
obligations of the Borrower under any Funded Indebtedness or any agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) otherwise relating to any of the foregoing.

                  (g) LENDER REQUESTED INFORMATION. Promptly, such additional
financial and other information, including without limitation, financial
statements of the Borrower or any of its Subsidiaries, and information regarding
the Collateral as the Lender may from time to time reasonably request.

                  (h) ENVIRONMENTAL PROCEEDINGS. Prompt written notice of any
order, notice, claim or proceeding received by, or brought against, the Borrower
or any of its Subsidiaries, or with respect to any of the Real Property, under
any Environmental Law.

(i) EMPLOYEE BENEFIT PLAN INFORMATION. Prompt written notice in the event that
the Borrower or any ERISA Affiliate knows, or has reason to know, that (i) any
ERISA Termination Event with respect to a Pension Plan has occurred or will
occur, (ii) 


                                      -33-
<PAGE>

any condition exists with respect to a Pension Plan which presents a material
risk of termination of the Pension Plan, imposition of an excise tax,
requirement to provide security to or in respect of the Pension Plan or other
liability of the Borrower or any ERISA Affiliate, (iii) the Borrower or any
ERISA Affiliate has applied for a waiver of the minimum funding standard under
Section 412 of the Code with respect to a Pension Plan, (iv) the aggregate
amount of the Unfunded Pension Liabilities under all Pension Plans has increased
to an amount in excess of $1, (v) the aggregate amount of Unrecognized Retiree
Welfare Liability under all applicable Employee Benefit Plans has increased to
an amount in excess of $500,000, (vi) the Borrower or any ERISA Affiliate has
engaged in a Prohibited Transaction with respect to an Employee Benefit Plan,
(vii) a tax under Section 4980B(a) of the Code shall have been imposed upon the
Borrower or any ERISA Affiliate, (viii) the Secretary of Labor shall have
assessed a civil penalty under Section 502(c) of ERISA against the Borrower or
any ERISA Affiliate, or (ix) there is an action brought against the Borrower or
any ERISA Affiliate under ERISA Section 502 with respect to its failure to
comply with ERISA Section 515, together with a certificate of the president or
chief financial officer of the Borrower setting forth the details of such event
and the action which the Borrower or any ERISA Affiliate proposes to take with
respect thereto, together with a copy of all notices and filings with respect
thereto.

                  (j) EMPLOYEE BENEFIT PLAN LIABILITY. Prompt written notice in
the event that the Borrower or any ERISA Affiliate shall receive a demand letter
from the PBGC notifying the Borrower or any ERISA Affiliate of any final
decision finding liability and the date by which such liability must be paid,
together with a copy of such letter and a certificate of the president or chief
financial officer of the Borrower setting forth the action which the Borrower or
any ERISA Affiliate proposes to take with respect thereto.

                  (k) PENSION PLAN AMENDMENTS. Promptly upon the same becoming
available, and in any event by the date such amendment is adopted, a copy of any
Pension Plan amendment that the Borrower or any ERISA Affiliate proposes to
adopt which would require the posting of security under Section 401(a)(29) of
the Code, together with a certificate of the president or chief financial
officer of the Borrower setting forth the reasons for the adoption of such
amendment and the action which the Borrower or any ERISA Affiliate proposes to
take with respect thereto.

                  (l) PENSION PAYMENT DEFAULT. As soon as possible and in any
event by the 10th day after any required installment or other payment under
Section 412 of the Code owed to a Pension Plan shall have become due and owing
and remains unpaid a copy of the notice of failure to make required
contributions provided to the PBGC by the Borrower or any ERISA Affiliate under
Section 412(n) of the Code, together with a certificate of the president or
chief financial officer setting forth the action which the Borrower or any ERISA
Affiliate proposes to take with respect thereto.

                  (m) PENSION PLAN TERMINATION. If the termination of any
Pension Plan would result in the imposition of any tax under Section 4980 of the
Code, then as soon as possible, but in no event less than 60 days before the due
date of the tax, a certificate of the president or chief financial officer of
the Borrower setting forth the estimated amount of the tax, any reversion, and
the proposed use of the reversion. This subparagraph shall apply to a
transaction notwithstanding a reduction or complete elimination of the tax
because of the operation of either Sections 4980(d) or 420(a)(3)(A) of the Code.

                                      -34-
<PAGE>

                  (n) NOTICE OF INDEBTEDNESS. Prior written notice of any
Indebtedness it intends to incur in an amount (either singly or in the
aggregate) over $5,000,000.

                  (o) OTHER INFORMATION. Promptly, from time to time, copies of
any notices or information given to or received from the holders of any
Indebtedness of the Borrower relating to any actual or alleged default, demand
for payment or acceleration of payment, and such other information or documents
(financial or otherwise) as the Lender may reasonably request.

                  6.2. BOOKS, RECORDS AND INSPECTIONS.

                  The Borrower will, and will cause each of its Subsidiaries to,
keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Lender to visit and inspect, under guidance of
officers of the Borrower or such Subsidiary, any of the properties of the
Borrower or such Subsidiary, and to examine the books of record and accounts of
the Borrower or its Subsidiaries and discuss the affairs, finances, accounts and
prospects of the Borrower or its Subsidiaries with, and be advised as to the
same by, its and their officers, all at such reasonable times and intervals and
to such reasonable extent as the Lender may request.

                  6.3. MAINTENANCE OF PROPERTY, INSURANCE.

                  SCHEDULE 6.3 sets forth a true listing of the insurance
policies in which the coverage amount is in excess of $1,000,000 maintained by
the Borrower and its Subsidiaries as of the Effective Date. The Borrower will,
and will cause each of its Subsidiaries to, (i) keep all property necessary for
the operation of its business in good working order and condition, (ii) except
as otherwise provided in clause (iii) below, maintain with financially sound and
reputable insurance companies insurance (including such insurance as the Lender
shall reasonably require) in such amounts and against such risks as are usually
carried by corporations engaged in similar businesses similarly situated, and
(iii) furnish to the Lender, upon written request, full information as to the
insurance carried.

                  6.4. CORPORATE FRANCHISES.

                  The Borrower will, and will cause each of its Subsidiaries to,
do or cause to be done all things necessary to preserve and keep in full force
and effect (i) their corporate existence in good standing in the state of its
incorporation and in each other state in which it is required to be qualified to
do business as a foreign corporation and (ii) all of their material rights,
franchises, qualifications, licenses, permits, copyrights, trademarks and
patents.

                  6.5. COMPLIANCE WITH STATUTES, ETC.

                  (a) The Borrower will, and will cause each of its Subsidiaries
to, comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies in respect of the
conduct of its business and the ownership of its property (including, without
limitation, Environmental Laws), except 


                                      -35-
<PAGE>

such non-compliances as could not, in the aggregate, have a Material Adverse 
Effect or a material adverse effect on the Collateral or the Borrowing Base.

                  (b) In the event that the Lender shall have a reasonable basis
for believing that any Hazardous Substance may be on, at, under or around any
Real Property of the Borrower in violation of any applicable Environmental Law
and that such violation might reasonably be expected to have a Material Adverse
Effect, the Borrower will conduct and complete (at the Borrower's expense) all
investigations, studies, samplings and testings relative to such Real Property
and such Hazardous Substances as the Lender may reasonably request.

                  6.6. PERFORMANCE OF OBLIGATIONS.

                  The Borrower will, and will cause each of its Subsidiaries to,
perform all of its obligations under the terms of each mortgage, indenture,
security agreement, debt instrument or other contract or agreement by which it
is bound, except such non-performances as could not in the aggregate, have a
Material Adverse Effect or a material adverse effect on the Collateral or the
Borrowing Base.

                  6.7. PAYMENT OF TAXES.

                  The Borrower will pay and discharge, and will cause each of
its Subsidiaries to pay and discharge all taxes, assessments and governmental
charges or liens imposed upon the Borrower or any of its Subsidiaries or upon
the Borrower's or any such Subsidiary's income or profits, or upon any
properties belonging to the Borrower, or any of its Subsidiaries thereof prior
to the date on which the same become due, and all lawful claims, which, if
unpaid, might become a Lien or charge upon any properties of the Borrower or of
such Subsidiary, provided that neither of the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim for which it has obtained an adequate bond or adequate insurance and which
is being contested in good faith and by appropriate proceedings so long as such
contest shall operate to stay any Material Adverse Effect caused by such Lien or
charge.

                  6.8. CORPORATE SEPARATENESS.

                  The Borrower will, and will cause each of its Subsidiaries to
take such actions as are necessary to keep its operations and the operations of
each of its Subsidiaries separate and apart, including, without limitation,
insuring that all customary formalities regarding the corporate existence of the
Borrower and each of its Subsidiaries, including holding regular meetings and
maintenance of its current minute books, are followed.

                  6.9. EXISTING CREDIT AGREEMENT.

                  On the Effective Date, the Borrower shall pay in full all
amounts outstanding under the Existing Credit Agreement in accordance with the
terms thereof, whereupon the Existing Credit Agreement shall be deemed
terminated and the parties thereto shall have no further obligations thereunder
(except for the rights of the Lender thereunder to be reimbursed for costs and
expenses relating to, and to be indemnified with respect to, matters
attributable to events, acts or conditions occurring prior to the Effective
Date, to the extent provided for in the Existing Credit Agreement).
Notwithstanding the foregoing, 


                                      -36-
<PAGE>

from and after the Effective Date Lennar shall no have no further obligations
under its Guaranty (as defined in the Existing Credit Agreement).

Section 7. BORROWER'S NEGATIVE COVENANTS.

         The Borrower covenants and agrees that on and after the Effective Date
and until the Commitment shall have been terminated and the Loans and the Note,
together with interest, fees and all other obligations incurred hereunder and
under all Credit Documents, are paid in full:

                  7.1. ADJUSTED NET WORTH.

                  The Borrower will not permit its Adjusted Net Worth on any
date to be less than the sum of (i) the greater of (A) $60,000,000 or (B) 90% of
the Borrower's Adjusted Net Worth on the Effective Date, plus (ii) 50% of all
net income (determined in accordance with GAAP) of the Borrower after the
Effective Date, plus (iii) 90% of all capital contributions made to the Borrower
after the Effective Date.

                  7.2. RATIO OF LIABILITIES TO ADJUSTED NET WORTH.

                  The Borrower will not on any date permit the ratio of (i) the
Liabilities of the Borrower, on a consolidated basis, on such date to (ii) the
Borrower's Adjusted Net Worth on such date, to be more than 5:1.

                  7.3. LIENS.

                  (a) LIENS ON THE COLLATERAL; LIENS ON THE ELIGIBLE ASSETS. The
Borrower will not create, incur, assume or suffer to exist any Lien upon or with
respect to any Collateral or the Eligible Assets other than Liens thereon
arising under the Security Agreements.

                  (b) OTHER LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any other property or assets (real or personal, tangible
or intangible) of the Borrower or its Subsidiaries, whether now owned or
hereafter acquired, provided, however, that the provisions of this Section 7.3
shall not prohibit the creation, incurrence, assumption or existence of the
following Liens on property other than the Collateral and the Eligible Assets:

                  (i) Liens on Mortgage Loans, mortgage-backed securities,
         Mortgage Loan servicing rights and receivables securing Indebtedness
         described in Section 7.6(b);

                  (ii) Liens incurred or deposits made in the ordinary course of
         business to secure the performance of bids, sales, leases, statutory
         obligations, surety, appeal and performance bonds, and other similar
         obligations incurred in the ordinary course of business and not
         incurred in connection with Funded Indebtedness or otherwise obtaining
         credit;

                                      -37-
<PAGE>

                  (iii) Liens on property of the Borrower arising under the
         Security Agreements;

                  (iv) Liens for property taxes not delinquent;

                  (v) attachments and similar involuntary Liens provided that
         such are discharged by bonding or otherwise within 30 days of their
         creation; or

                  (vi) purchase money Liens on property hereafter acquired by
         the Borrower created contemporaneously with such acquisition to secure
         or provide for the payment or financing of all or any part of the
         purchase price thereof, provided that the Lien secured thereby shall
         attach only to the property so acquired.

                  7.4. CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.

                  (a) The Borrower will not wind up, liquidate or dissolve its
affairs or enter into any transaction of merger or consolidation, or convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time) all or any substantial part of its property or assets.

                  (b) Except as provided for herein, the Borrower will not
permit any of its other Subsidiaries to wind up, liquidate or dissolve its
affairs, or enter into any transaction of merger or consolidation, and the
Borrower will not, and will not permit any of such Subsidiaries to, convey,
sell, lease or otherwise dispose of (or agree to do any of the foregoing at any
future time) all or any part of its property or assets, if any of the foregoing
could have a Material Adverse Effect or result in a material change in the scope
of the business as conducted by the Borrower or such Subsidiaries as of the date
of this Agreement.

                  7.5. DIVIDENDS.

                  The Borrower will not declare or pay any dividends or declare
or make any distribution in respect of its capital to its stockholders, or
authorize or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class of
its capital stock now or hereafter outstanding (or any options or warrants
issued by the Borrower with respect to its capital stock), or set aside any
funds for any of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock of the Borrower now or hereafter outstanding (or any options or
warrants issued by the Borrower with respect to its capital stock) if, after
giving effect to any of the foregoing, there shall occur an Event of Default.

                  7.6. INDEBTEDNESS.

                  The Borrower will not, nor will it permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness unless (a) such Indebtedness will appear on the financial
statements of the Borrower required to be delivered to the Lender pursuant to
Section 6.1, and (b) such Indebtedness does not create a Default under this
Agreement

                                      -38-
<PAGE>

                  7.7. GUARANTIES.

                  The Borrower will not, nor will it permit any of its
Subsidiaries to, make or suffer to exist any Contingent Obligation or otherwise
assume, guarantee or in any way become contingently liable or responsible for
obligations of any other Person, whether by agreement to purchase those
obligations of any other Person, or by agreement for the furnishing of funds
through the purchase of goods, supplies or (whether by way of stock purchase,
capital contribution, advance or loan) for the purpose of paying or discharging
the obligations of any other Person.

                  7.8. ADVANCES, INVESTMENTS AND LOANS.

                  Without the prior written consent of the Lender, the Borrower
will not, and will not permit any of its Subsidiaries to, lend money or credit
or make advances to any Person, or purchase, acquire or hold any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person on an unsecured basis (collectively,
"INVESTMENTS"), except for:

                  (i)    securities issued or guaranteed by the United States
                         Government, its agencies (including GNMA), or
                         government sponsored agencies (including FNMA and
                         FHLMC) and money market mutual funds that invest in any
                         of the foregoing, provided however that, the by-laws of
                         any such fund stipulate that its management seeks to
                         maintain a $1 redemption value per share, that any
                         securities acquired by the fund under a repurchase
                         agreement be segregated and held in custody for the
                         fund, and that otherwise the fund may only borrow for
                         temporary emergency purposes in amounts not to exceed
                         5% of the fund's total assets based on the lower of
                         cost or market value of the assets less liabilities at
                         the time the borrowing is made;

                  (ii)   commercial paper which, at the time of a Borrower's
                         investment therein, or contractual commitment providing
                         for such investment, is rated at least P-1 by Moody's
                         Investors Service, Inc. and A-1 by Standard & Poor's
                         Corporation;

                  (iii)  general obligations of any municipality, PROVIDED,
                         HOWEVER, that any such security is rated at least AA by
                         Standard and Poor's Corporation or the equivalent of
                         Aa2 by Moody's Investor Services, Inc., the amount
                         invested in any one issuer does not exceed $1,000,000,
                         and the term to maturity does not exceed twenty-four
                         (24) months;

                  (iv)   negotiable certificates of deposit in any United States
                         bank, PROVIDED, HOWEVER, that any such certificate of
                         deposit has a term not to exceed one year and is issued
                         by a bank that is rated not less than "75" by IDC
                         Financial Publishing and not less than "C" by
                         Thompson's Bank Watch, and has GAAP capital of not less
                         than $250,000,000;

                  (v)    Mortgage Loans of any type made by the Borrower to any
                         Person.

                                      -39-
<PAGE>

                  (vi)   Investments in partnership interests provided that the
                         sole purpose of the partnership which is the subject of
                         such Investment is to make or invest in mortgage loans.

                  (vii)  Investments permitted by Section 7.13.

                  7.9. TRANSACTIONS WITH AFFILIATES.

                  The Borrower will not, and will not permit any or its
Subsidiaries to, enter into any transaction or series of related transactions,
whether or not in the ordinary course of business, with any Affiliate of either
of the Borrower, other than on terms and conditions substantially as favorable
to the Borrower or such Subsidiary as would be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate.

                  7.10. CAPITAL EXPENDITURES.

                  The Borrower will not, and will not permit any or its
Subsidiaries to, make any expenditure for fixed or capital assets in excess of
$2,000,000 in the aggregate per year (including, without limitation,
expenditures for maintenance and repairs which should be capitalized in
accordance with GAAP and including capitalized lease obligations).

                  7.11. MODIFICATIONS OF ARTICLES OF INCORPORATION, BY-LAWS AND
CERTAIN OTHER AGREEMENTS, ETC.

                  The Borrower will not (a) amend, modify or change its Articles
of Incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or By-Laws, or any agreement entered into by
the Borrower with respect to its capital stock, or (b) enter into any new
agreement with respect to its capital stock, if in either case it would have an
adverse effect on the Lender.

                  7.12. CREATION OF SUBSIDIARIES.

                  The Borrower will not, and will not permit any of its
Subsidiaries to, create or acquire any Subsidiaries or issue any capital stock
(including by way of sales of treasury stock) or any options or warrant to
purchase, or securities convertible into, capital stock.

                  7.13. BUSINESS.

                  The Borrower will not, and will not permit any of its
Subsidiaries to (other than Lennar Communications Company, Inc.), engage
(directly or indirectly) in any business other than that which the Borrower or
its Subsidiaries, as the case may be, is engaged in as of the Effective Date.

                  7.14. USE OF PROCEEDS.

                  The proceeds of the Loans shall be used solely to acquire or
refinance assets which shall thereafter be eligible for inclusion in the
Borrowing Base.

                                      -40-
<PAGE>

                  7.15. ERISA.

                  The Borrower shall not (a) (i) establish, contribute to, or
become liable (directly or indirectly) in respect of, any Multiemployer Plan, or
(ii) establish or contribute to, or permit any Subsidiary thereof so to do, to
any Pension Plan other than an Existing Pension Plan which would increase the
aggregate Unfunded Pension Liabilities under all Pension Plans to an amount in
excess of $1, (b) cause any Pension Plan, or permit any Subsidiary thereof so to
do, to have a Funded Current Liability Percentage of less than 60 percent, or
(c) increase benefits, or permit any Subsidiary thereof so to do, under any
Employee Benefit Plan or establish or contribute to any new Employee Benefit
Plan which would have the effect of increasing its aggregate Unrecognized
Retiree Welfare Liability to an amount in excess of $500,000.

Section 8. OTHER ELIGIBLE ASSETS; COLLATERAL.

                  8.1. SUBSTITUTIONS, ADDITIONS AND WITHDRAWALS OF ELIGIBLE
ASSETS.

                  (a) The Borrower may from time to time, provided there does
not then exist any uncured Default under this Agreement or the other Credit
Documents, and subject to the provisions of Section 8.1(e), on not less than 10
Business Days prior written notice to the Lender, request that other property of
a Borrower qualifying as an Eligible Asset under the definition of "Eligible
Assets" be either (i) substituted for an existing Eligible Asset, or (ii) added
to Schedule A and, in either case, become an Eligible Asset under this
Agreement. In the case of an addition or substitution of Eligible Assets, such
notice shall identify the proposed new Eligible Assets and, in the case of a
substitution, also identify the Eligible Assets which the Borrower is requesting
be withdrawn from Schedule A.

                  (b) With each notice of a requested substitution or addition
of other Eligible Assets, the Borrower shall deliver to the Lender copies of all
Mortgages, Mortgage Notes, Securities, partnership agreements and other
documents relating thereto, and thereafter such other relevant documents as the
Lender may require. The decision to permit any such addition or substitution
shall be made by the Lender in its sole discretion.

                  (c) In addition to the foregoing requirements any addition to
or substitution of Eligible Assets, is subject to the Borrower's compliance with
the provisions of Section 12 of the Current Security Agreement, and, if such
addition or substitution shall occur after a Pledge Request Date, the Borrower's
compliance with provisions of Section 11 of the Successor Security Agreement.

                  (d) The Borrower may from time to time, provided there does
not then exist any uncured Default under this Agreement or the other Credit
Documents, and subject to the provisions of Section 8.1(e), on not less than 5
Business Days prior written notice to the Lender, request that an existing
Eligible Asset be withdrawn from the Eligible Assets under this Agreement.

                  (e) Each notice described in Sections 8.1(a) or (d) shall be
accompanied by Borrowing Base Certificates which shall calculate the Borrowing
Base prior 


                                      -41-
<PAGE>

to, and after giving effect to, any such addition, substitution or withdrawal.
No substitution or withdrawal of Eligible Assets shall be permitted if, after
giving effect thereto, the Obligations outstanding as of the date of such
substitution or withdrawal would exceed the Borrowing Base on such date.

                  (f) If the Lender shall agree to any such addition,
substitution or withdrawal, the Lender shall evidence its agreement to such
addition, substitution or withdrawal by delivering a notice to the Borrower
confirming its agreement, and attaching thereto a new Schedule A. Such new
Schedule A shall thereupon supercede the Schedule A then in effect. With respect
to any Eligible Asset for which other property is substituted in accordance with
this Section 8, or which is withdrawn in accordance with this Section 8, the
Lender shall deliver such partial releases from the financing statements
previously delivered by the Borrower as may be necessary to effect the release
of such Eligible Assets therefrom.

                  8.2. COLLATERAL; SUCCESSOR SECURITY AGREEMENT.

                  (a) Upon the written request of the Lender (the "PLEDGE
REQUEST DATE") the Borrower shall pledge and assign to the Lender, and grant to
the Lender a first priority security interest in and to, all of the Eligible
Assets, as security for the payment and performance of all of the Obligations.
Such pledge, assignment and grant shall be pursuant to a Successor Security
Agreement in the form of EXHIBIT E hereto, which the Borrower shall execute and
deliver to the Lender within 5 days after the Pledge Request Date, together
with:

                  (i)    the original recorded Mortgages included in the
                         Eligible Assets and assignments in favor of the Lender
                         (or any nominee of the Lender set forth in a notice to
                         the Borrower) of said Mortgages, in recordable form;

                  (ii)   the original Mortgage Notes included in the Eligible
                         Assets and endorsements in favor of the Lender (or any
                         nominee of the Lender set forth in a notice to the
                         Borrower) of said Mortgage Notes;

                  (iii)  assignments of any financing statements recorded with
                         respect to the Mortgage Loans included in the Eligible
                         Assets;

                  (iv)   all title insurance polices, surveys, fire and casualty
                         policies, environmental audits and other documents in
                         the possession of either of the Borrower relating to
                         the Eligible Assets;

                  (v)    all original partnership agreements, consents of
                         partners and other documentation relating to the
                         Assigned Partnership Interests (as such term is defined
                         in the Successor Security Agreement) which the Lender
                         deems necessary or appropriate to perfect its interest
                         in said Assigned Partnership Interests and to effect
                         any disposition of the Assigned Partnership Interests
                         permitted to the Lender under the Successor Security
                         Agreement;

                                      -42-
<PAGE>

                  (vi)   all original certificates representing the Securities
                         pledged to the Lender, together with stock powers
                         signed by the Borrower in blank in respect thereof or,
                         if the Securities are uncertificated, other appropriate
                         transfer thereof;

                  (vii)  an opinion of counsel to the Borrower, dated the date
                         of execution of the Successor Security Agreement to the
                         effect that, subject to due compliance with the
                         recording and/or filing requirements of applicable law,
                         the Lender has a valid and perfected security interest
                         in the Collateral.

                  (b) The Collateral under and as defined in the Successor
Security Agreement shall be held by the Lender subject to the terms thereof.

Section 9. EVENTS OF DEFAULT.

         The following shall each constitute an "EVENT OF DEFAULT" hereunder:

                  (a) Any principal amount of any Loan shall not be paid when
due and payable; or

                  (b) (i) Any interest on any Loan, the amount set forth on any
accrued interest statement delivered to the Borrower in accordance with Section
2.8(d) or the Non-Usage Fee shall not be paid when due and payable and shall
continue to remain unpaid for five Business Days, or (ii) all or any portion of
any other fee or other amount payable by any Borrower to the Lender under this
Agreement, any Credit Document or any other document executed and delivered in
connection therewith shall not be paid upon demand therefor and shall continue
to remain unpaid for three Business Days; or

                  (c) Any representation or warranty made or deemed made by the
Borrower, the Guarantor or any of their Subsidiaries (or any of their respective
officers) herein or in any Credit Document, or in any certificate, agreement,
instrument or statement contemplated by or made or delivered pursuant to or in
connection herewith or therewith, shall prove to have been incorrect in any
material respect when made; or

                  (d) If at any time (i) any representation or warranty made by
the Guarantor in the Guaranty or in any other document, statement or writing
shall be incorrect or misleading when made in any material respect; or (ii) the
Guarantor shall fail to comply with any covenant made by it in the Guaranty or
any default shall occur under the Guaranty; or (iii) the Guarantor shall revoke
or attempt to revoke, contest, commence any action or raise any defense against
its obligations under the Guaranty; or

                  (e) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 6.4, Section 7 or Section 8.2; or

                  (f) The Borrower shall fail to perform or observe any other
term, covenant or agreement contained herein on its part to be performed or
observed and any such failure remains unremedied for 30 days after the Borrower
shall have obtained knowledge thereof; or

                                      -43-
<PAGE>

                  (g) Any default shall occur under any Security Agreement and
such default shall continue beyond the grace period specified therein, if any;
or

                  (h) Either this Agreement, the Note or any other Credit
Document shall, at any time after its execution and delivery, for any reason
cease to be in full force and effect (unless such occurrence is in accordance
with its terms or after payment thereof) or shall be declared to be null and
void, or the validity or enforceability thereof shall be contested by the
Borrower or the Borrower shall deny that it has any further liability or
obligation thereunder; or

                  (i) The Borrower, the Guarantor or any of their Subsidiaries
shall be adjudicated bankrupt or insolvent, or admit in writing its inability to
pay its debts as they mature, or make an assignment for the benefit of
creditors; or the Borrower, the Guarantor or any of their Subsidiaries shall
fail generally to pay their debts as such debts become due and payable; or the
Borrower, the Guarantor or any of their Subsidiaries shall apply for or consent
to the appointment of any receiver, trustee, custodian or similar officer for it
or for all or any substantial part of its property; or such receiver, trustee,
custodian or similar officer shall be appointed without the application or
consent of the Borrower, the Guarantor or such Subsidiary, as the case may be,
and such appointment shall continue undischarged for a period of 45 days; or of
the Borrower, the Guarantor or any of their Subsidiaries shall institute (by
petition, application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it under the laws of any jurisdiction; or any
such proceeding shall be instituted (by petition, application or otherwise)
against the Borrower, the Guarantor or any of their Subsidiaries and shall
remain undismissed for a period of 45 days; or any judgment, writ, warrant of
attachment or execution or similar process shall be issued or levied in respect
of an obligation (alleged or otherwise) of the Borrower, the Guarantor or any of
their Subsidiaries against (i) any of property of the Borrower, the Guarantor or
their Subsidiaries (other than the Collateral), and such obligation is in the
amount of $2,000,000 or more, or (ii) the Collateral, and in either case, such
judgment, writ or similar process shall not be released, vacated, stayed or
fully bonded within 45 days after its issue or levy; or

                  (j) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Borrower, the Guarantor or any Subsidiary thereof
bankrupt or insolvent, (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of or in
respect of the Borrower, the Guarantor or any Subsidiary thereof under the
United States bankruptcy laws or any other applicable Federal or state law,
(iii) appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Borrower, the Guarantor or any
Subsidiary thereof or of any substantial part of the Property thereof, (iv)
ordering the winding up or liquidation of the affairs of the Borrower, the
Guarantor or any Subsidiary thereof and any such decree or order continues
unstayed and in effect for a period of 45 days; or

                  (k) Judgments or decrees against the Borrower, the Guarantor
or any Subsidiary thereof aggregating in excess of $2,000,000 shall remain
unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period
of 30 days; or

                                      -44-
<PAGE>

                  (l) The Borrower, the Guarantor or any of their Subsidiaries
shall default in the payment when due of any principal of or interest on any of
its Indebtedness in excess of $2,000,000 in the aggregate and such default shall
continue beyond any applicable grace period therefor; or any event specified in
any note, agreement, indenture or other document evidencing or relating to any
such Indebtedness shall occur if the effect of such event is to cause, or (with
the giving of any notice or the lapse of time or both) to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be prepaid in full,
prior to its stated maturity; or

                  (m) (i) any ERISA Termination Event shall occur, (ii) any
Accumulated Funding Deficiency, whether or not waived, shall exist with respect
to any Pension Plan, (iii) any Person shall engage in any Prohibited Transaction
involving any Employee Benefit Plan, (iv) the Borrower, the Guarantor or any
ERISA Affiliate thereof shall fail to pay when due an amount which is payable by
it to the PBGC or to a Pension Plan under Title IV of ERISA, (v) the imposition
upon the Borrower, the Guarantor or any ERISA Affiliate thereof of any tax under
Section 4980(B)(a) of the Code, (vi) the assessment by the Secretary of Labor of
a civil penalty against the Borrower, the Guarantor or any ERISA Affiliate
thereof with respect to any Employee Benefit Plan under Section 502(c) of ERISA,
or (vii) any other event or condition shall occur or exist with respect to an
Employee Benefit Plan, and (2) any such event or condition set forth in clauses
(i) - (vii) of this Section 9(m) might reasonably be expected to have a Material
Adverse Effect; or

                  (n) The Borrower or the Guarantor shall terminate its
existence or suspend or discontinue its business; or

                  (o) The Lien against any of the Collateral created under the
Security Agreements shall cease to be a perfected first priority security
interest; or

                  (p) The use of proceeds of any Loan in a manner inconsistent
with or in violation of this Agreement; or

                  (q) Any Material Adverse Change since the date of the
Registration Statement.

Section 10. REMEDIES; APPLICATION OF PROCEEDS.

                  10.1. REMEDIES.

                  Upon the occurrence of any Event of Default,

                  (a) The Lender may at the same or different times, take one or
more of the following actions: (i) by notice to the Borrower, terminate the
Commitment and it shall thereupon terminate or (ii) by notice to the Borrower
declare the Obligations to be, and the Obligations shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower, provided that in
the case of any of the Events of Default specified in subparagraphs (i) or (j)
of Section 9, without any notice to the Borrower or any other act by the 


                                      -45-
<PAGE>

Lender, the Commitment shall thereupon terminate and all Obligations shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.

                  (b) Whether or not the Lender exercises any right given
pursuant to this Section 10.1, the Lender shall have as to any Collateral all
other rights and remedies provided for herein and in the other Credit Documents,
all rights and remedies of a secured party under the Uniform Commercial Code
and, in addition thereto and not in lieu thereof, all other rights or remedies
at law or in equity existing or conferred upon the Lender by other jurisdictions
or other applicable law or given to the Lender pursuant to any Security
Agreement, other instrument or agreement heretofore, now, or hereafter given as
security for, or a guarantee of, the Borrower's obligations hereunder.

Section 11. MISCELLANEOUS.

                  11.1. PAYMENT OF EXPENSES, ETC.

                  The Borrower shall: (i) whether or not the transactions herein
contemplated are consummated, pay all reasonable out-of-pocket costs and
expenses (x) of the Lender (including, without limitation, the reasonable fees
and disbursements of Emmet, Marvin & Martin, LLP) in connection with the
preparation, negotiation, execution and delivery of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein and any amendment, waiver or consent relating hereto or thereto, whether
or not executed, and the administration of the Credit Documents, and (y) of the
Lender in connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
the protection of their respective rights under the Credit Documents (including,
without limitation, the reasonable fees and disbursements of counsel for the
Lender); (ii) pay and hold the Lender harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save the Lender harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to the Lender) to pay such taxes; and (iii) indemnify the
Lender, its officers, directors, employees, representatives and agents from and
hold each of them harmless against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements incurred by any of them as a result of, or arising out of, or in
any way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not the Lender is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of the proceeds of any Loan hereunder or the consummation of any
transactions contemplated herein or in any other Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such liabilities, obligations, losses, etc., to the extent
incurred solely by reason of the gross negligence or willful misconduct of the
Person to be indemnified).

                  11.2. RIGHT OF SETOFF.

                  In addition to any rights granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default, the 


                                      -46-
<PAGE>

Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set-off and
to appropriate and apply all deposits (general or special and including, without
limitation, the Funding Account, but not escrow accounts) and any other
Indebtedness at any time held or owing by the Lender (including without
limitation by branches and agencies of the Lender wherever located) to or for
the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to the Lender under this Agreement
or under any of the other Credit Documents, and all other claims of any nature
or description arising out of or connected with this Agreement or any other
Credit Document, irrespective of whether or not the Lender shall have made any
demand hereunder and although said Obligations, liabilities or claims, or any of
them, shall be contingent or unmatured. To the extent not prohibited by
applicable law, the aforesaid right of set-off may be exercised by the Lender
against either of the Borrower or against any trustee in bankruptcy, custodian,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor of the Borrower, or against anyone
else claiming through or against the Borrower or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receivers, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by the Lender
prior to the making, filing or issuance, or service upon the Lender of, or of
notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance of
execution, subpoena, order or warrant.

                  11.3. NOTICES.

                  Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder to a party hereto shall be in
writing (including telecopier) and mailed, telecopied or delivered to such
party, at the following address or at such other address as shall be designated
by such party in a written notice to the other parties hereto:

                  IF TO THE BORROWER:

                  Lennar Capital Services, Inc.
                  760 N.W. 107th Avenue, First Floor
                  Suite 100
                  Miami, Florida  33172

                  Attention: Shelly Rubin
                                     Chief Financial Officer

                  Telephone: (305) 229-6440
                  Telecopier: (305) 226-7691

                                      -47-
<PAGE>

                  IF TO THE LENDER:

                  The Bank of New York
                  One Wall Street -- 17th Floor
                  New York, New York  10286

                  Attention: William H. Cunningham
                                     Vice President

                  Telephone: (212) 635-6471
                  Telecopier: (212) 635-6468

         All such notices and communications shall, (i) when telecopied be
effective when sent, (ii) when mailed by first class mail, postage prepaid, be
effective on the fifth (5th) day following deposit in the mails, and (iii) when
sent or delivered by any other means be effective when received, except that
notices and communications given to the Lender pursuant to Section 2 shall not
be effective until received by the Lender. Any party to a Credit Document may
rely on signatures of the parties thereto which are transmitted by telecopier or
other electronic means as fully as if originally signed.

                  11.4. SUCCESSORS AND ASSIGNS.

                  (a) This Agreement and the other Credit Documents shall be
binding upon and inure to the benefit of the Borrower, the Lender, all future
holders of the Note and their respective successors and assigns, except that the
Borrower may not assign, delegate or transfer any of its rights or obligations
under this Agreement or the other Credit Documents without the prior written
consent of the Lender.

                  (b) The Lender shall have the right at any time, (A) to
assign, transfer or negotiate all or any part of the Lender's rights under this
Agreement and the other Credit Documents to one or more of its Affiliates
(provided that for purposes of determining the interest payable on the Loans of
the Borrower and said Affiliate pursuant to Sections 2.8(a) (i) and (ii) after
giving effect to such assignment, the Loans of the Lender and such Affiliate
shall be deemed held solely by the Lender), or, (B) with the prior written
consent of the Borrower, which consent shall not be unreasonably withheld (and
shall not be required after the occurrence and during the continuance of an
Event of Default) to sell, assign, transfer or negotiate all or any part of the
Lender's rights and obligations under the Credit Documents to any bank,
insurance company, pension fund, mutual fund or other financial institution. At
the request of the Lender, the Borrower shall execute and deliver to such
assignee, any assumption and attornment agreement, replacement note and
amendments to the Credit Documents as shall reasonably be required by such
assignee to effect any such transfer.

                  (c) The Lender may grant participations in all or any part of
the Loans, the Note and the Commitment to one or more banks, insurance
companies, pension funds, mutual funds or other financial institutions. The
Borrower acknowledges and agrees that any such participant shall, have all of
the benefits of the Lender under Sections 2.11, 2.13, 2.14, 2.15 and 2.19.

                                      -48-
<PAGE>

                  (d) The Lender shall be relieved of its obligations to the
extent of any such sale, assignment, transfer, or negotiation of all or any part
of its Loans, its Commitment or its Note made pursuant to subsection (b) above.

                  (e) Notwithstanding anything to the contrary contained in this
Section, the Lender may at any time or from time to time assign all or any
portion of its rights under this Agreement and the other Credit Documents to a
Federal Reserve Bank.

                  11.5. NO WAIVER; REMEDIES CUMULATIVE.

                  No failure or delay on the part of the Lender in exercising
any right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Borrower and the Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Lender would otherwise have. No notice to
or demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Lender to any other or further action in any
circumstances without notice or demand.

                  11.6. CALCULATION; COMPUTATIONS.

                  (a) The financial statements to be furnished to the Lender
pursuant hereto shall be made and prepared in accordance with GAAP consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Lender);
provided that, except as otherwise specifically provided herein, all
computations determining compliance with Section 7 shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements referred to in Section 5.5(a).

                  (b) All computations of interest and the Non-Usage Fee
hereunder shall be made on the basis of a year of 360 days for the actual number
of days occurring in the period for which such interest or fees are payable.

                  11.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

                  (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING AGAINST ANY ONE OR MORE OF THE BORROWER OR
THE LENDER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK, OR THE DISTRICT COURT OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER AND THE LENDER HEREBY IRREVOCABLY


                                      -49-
<PAGE>

ACCEPT FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS.

                  (B) THE BORROWER AND THE LENDER EACH HEREBY IRREVOCABLY WAIVE
ANY OBJECTION WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED
TO IN CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVE AND AGREE NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                  (C) THE BORROWER HEREBY AGREES THAT PROCESS MAY BE SERVED
AGAINST IT IN ANY SUIT, ACTION OR PROCEEDING REFERRED TO IN THIS SECTION BY
SENDING THE SAME BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED OR BY OVERNIGHT
COURIER SERVICE, TO THE ADDRESS OF THE BORROWER SET FORTH IN SECTION 11.3. THE
BORROWER HEREBY AGREES THAT ANY SUCH SERVICE (I) SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON THEN IN ANY SUCH SUIT, ACTION, OR
PROCEEDING, AND (II) SHALL TO THE FULLEST EXTENT ENFORCEABLE BY LAW, BE TAKEN
AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT.

                  (D) NOTHING IN THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS OR ANY MODIFICATION, WAIVER, CONSENT OR AMENDMENT HERETO OR THERETO
SHALL AFFECT THE RIGHT OF THE LENDER TO SERVE PROCESS IN ANY MANNER PERMITTED BY
LAW OR LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER
IN THE COURTS OF ANY JURISDICTION OR JURISDICTIONS IN WHICH THE BORROWER MAY BE
SERVED.

                  11.8. OBLIGATION TO MAKE PAYMENTS IN DOLLARS.

                  All payments of the principal and interest on the Note and any
other amounts due hereunder or under any other Credit Document shall be made in
Dollars.

                  11.9. COUNTERPARTS.

                  This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

                  11.10. EFFECTIVENESS.

                  This Agreement shall become effective on the Effective Date.

                                      -50-
<PAGE>

                  11.11. HEADINGS DESCRIPTIVE.

                  The headings of the sections and subsections of this Agreement
are inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.

                  11.12. AMENDMENT OR WAIVER.

                  No amendment, waiver, consent or supplement to this Agreement
or any other Credit Document nor any terms hereof or thereof shall be effective
unless such amendment, waiver, consent or supplement is in writing and is signed
by the party or parties against which such amendment is to be enforceable.

                  11.13. SURVIVAL.

                  All representations, warranties and indemnities set forth in
this Agreement shall survive the termination of this Agreement and the repayment
of the Loans.

                  11.14. DOMICILE OF LOANS.

                  The Lender may transfer and carry its Loans at, to or for the
account of any branch or office of the Lender.

                  11.15. SEVERABILITY.

                  Every provision of this Agreement and the other Credit
Documents is intended to be severable, and if any term or provision thereof
shall be invalid, illegal or unenforceable for any reason, the validity,
legality and enforceability of the remaining provisions thereof shall not be
affected or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.

                  11.16. INTEGRATION.

                  All exhibits to this Agreement and all exhibits to a Credit
Document shall be deemed to be a part thereof. This Agreement, the other Credit
Documents and any document executed and delivered in connection therewith embody
the entire agreement and understanding among the Borrower and the Lender with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings among the Borrower and the Lender with respect to
the subject matter hereof and thereof.

                  11.17. WAIVER OF JURY TRIAL.

                  THE LENDER AND THE BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES THE RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTE, THE CREDIT DOCUMENTS
AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF ANY PARTY RELATING HERETO OR 


                                      -51-
<PAGE>

THERETO. FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE LENDER, OR COUNSEL TO THE LENDER, HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE THE LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK
TO ENFORCE THIS PROVISION. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDER TO ENTER INTO THIS AGREEMENT.

                                      -52-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Revolving Credit Agreement as of
the date first above written.


                                   LENNAR CAPITAL SERVICES, INC.

                                   By: /s/ MARK GRIFFITH
                                     ----------------------------------
                                     Name:  MARK GRIFFITH
                                     Title: VICE PRESIDENT



                                   THE BANK OF NEW YORK

                                   By: /s/ WILLIAM H. CUNNINGHAM
                                     ----------------------------------
                                     William H. Cunningham
                                     Vice President


<PAGE>
                                    EXHIBIT D

                          to Revolving Credit Agreement

                                    GUARANTY

                                                              November 6, 1997

                     FOR VALUE RECEIVED, and in consideration of loans made or
to be made or credit otherwise extended or to be extended by THE BANK OF NEW
YORK, a New York banking corporation and its participants, successors, endorsees
and assigns (hereinafter referred to collectively as "LENDER") to or for the
account of LENNAR CAPITAL SERVICES, INC. and its successors and assigns
(hereinafter referred to collectively as "BORROWER") and for other good and
valuable consideration and to induce the Lender, in its discretion, to make such
loans or extensions of credit and to make or grant such renewals, extensions,
releases of collateral or relinquishments of legal rights as the Lender may deem
advisable, the undersigned, its successors and assigns, hereby agrees as
follows:

                  1. GUARANTY.

                     The undersigned, its successors and assigns, guarantees to
the Lender the prompt payment when due of all present and future obligations and
liabilities, whether deemed principal, interest, additional interest, fees,
expenses or otherwise, of the Borrower to the Lender, including, without
limitation, all obligations under (i) that certain Note dated the date hereof,
in the principal amount of $50,000,000 made by the Borrower to the Lender (the
"NOTE"); (ii) that certain Revolving Credit Agreement dated the date hereof
between the Borrower and the Lender, as the same may be amended from time to
time (the "CREDIT AGREEMENT"), and (iii) all other Credit Documents (as such
term is defined in the Credit Agreement) (all of which are herein collectively
referred to as the "OBLIGATIONS"), and irrespective of the genuineness,
validity, regularity or enforceability of such Obligations, or of any instrument
evidencing any of the Obligations or of any collateral therefor or of the
existence of such collateral. Defined terms used herein which are not defined
herein but which are defined in the Credit Agreement shall have the meanings
ascribed to such terms in the Credit Agreement.

                  2. REPRESENTATIONS AND WARRANTIES.

                     The undersigned hereby represents and warrants to the
Lender that:

                     (a) CORPORATE ORGANIZATION. The undersigned (i) is duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware, (ii) has the power and authority to own its property and
assets and to transact the business in which it is engaged and (iii) is duly
qualified as a foreign corporation and in good standing in each jurisdiction
where the ownership, leasing or operation of its property or the conduct of its
business requires such qualification.


<PAGE>

                     (b) FORMATION; CONTRIBUTIONS; DISTRIBUTION.

                         (i) FORMATION; CONTRIBUTIONS. The undersigned was
formed by Lennar in June of 1997. Lennar will distribute to the undersigned the
Lennar Subsidiaries which have been engaged in its real estate investment and
management business, as well as some assets of other Subsidiaries which were
used in that business and certain other assets, all as more particularly set
forth in the Registration Statement, prior to November 15. As of the Effective
Date, the consolidated net worth of the undersigned and its Subsidiaries will be
not less than $500,000,000.

                         (ii) DISTRIBUTION. The shares of the undersigned will
be distributed to the shareholders of Lennar prior to November 15. Such
distribution will be made in a manner consistent with the description thereof
set forth in the Registration Statement.

                         (iii) FORMATION; CONTRIBUTIONS. The undersigned was
formed by Lennar in June of 1997. Lennar has distributed to the undersigned the
Lennar Subsidiaries which have been engaged in its real estate investment and
management business, as well as some assets of other Subsidiaries which were
used in that business and certain other assets, all as more particularly set
forth in the Registration Statement. As of the date hereof, the consolidated net
worth of the undersigned and its Subsidiaries is not less than $500,000,000.

                         (iv) DISTRIBUTION. The shares of the undersigned have
been distributed to the shareholders of Lennar. Such distribution was made in a
manner consistent with the description thereof set forth in the Registration
Statement.

                     (c) POWER AND AUTHORITY. The undersigned has the corporate
power to execute, deliver and perform the terms and provisions of this Guaranty
and has taken all necessary corporate action to authorize the execution,
delivery and performance by it of this Guaranty. The undersigned has duly
executed and delivered this Guaranty and the Guaranty constitutes the legal,
valid and binding obligations of the undersigned and is enforceable in
accordance with its terms, provided that, (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.

                     (d) CONSENTS AND APPROVALS. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the date hereof), or
exemption by, any governmental body is required to authorize, or is required in
connection with, (i) the execution, delivery and performance of this Guaranty by
the undersigned, or (ii) the legality, validity, binding effect or
enforceability of this Guaranty.

                     (e) PRINCIPAL PLACE OF BUSINESS. The principal place of
business of the undersigned is 760 N.W. 107th Avenue, First Floor, Miami,
Florida 33172.

                     (f) SOLVENCY. The undersigned is not insolvent (as such
term is defined in Section 101(32) of the Bankruptcy Code of 1978, as amended)
and will not be rendered insolvent (as such term is defined in Section 101(32)
of the Bankruptcy Code of 1978, as amended) by execution of this Guaranty or
consummation of the transaction contemplated thereby; and

                     (g) NO OFFSETS. The undersigned has no offsets, defenses or
counterclaims to the enforcement of this Guaranty.

                                      -2-
<PAGE>

                     (h) NO VIOLATIONS. Neither the execution, delivery or
performance by the undersigned of this Guaranty, nor compliance by it with the
terms and provisions hereof (i) will contravene any provision of any law,
statute, rule or regulation or any order, writ, injunction or decree of any
governmental body, (ii) will conflict or be inconsistent with or result in any
breach of any of the material covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
the undersigned pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement, loan agreement or any other agreement, contract or instrument
to which the undersigned is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will violate any
provision of the Articles of Incorporation or By-Laws of the undersigned.

                     (i) FINANCIAL STATEMENTS. The undersigned has heretofore
delivered to the Lender the consolidated Balance Sheet of the undersigned and
its Subsidiaries as of November 30, 1996 and the six-month period ending May 31
1997 and the related combined Statements of Operations, Retained Earnings and
Cash Flows for the periods then ended (the "FINANCIAL STATEMENTS"). The
Financial Statements have been prepared to reflect the undersigned and its
Subsidiaries as a separate combined group for such period, and have been
extracted from the financial statements of Lennar using Lennar's historical
results of operations and historical cost basis of its assets and liabilities
which are used in the businesses being operated by the undersigned and its
Subsidiaries. The Financial Statements fairly present the financial condition
and results of the operations of the undersigned and its Subsidiaries as of the
dates and for the periods indicated therein and have been prepared in conformity
with GAAP. Since the date of delivery of such statements, no event has occurred
which has had or could reasonably be expected to have, a Material Adverse
Effect.

                     (j) LITIGATION. There are no actions, suits or proceedings
(whether or not purportedly on behalf of the undersigned pending or threatened
against the undersigned (x) with respect to this Guaranty, or (y) which could,
if adversely determined, have a material adverse effect on the business, assets,
property, operations, financial condition or prospects of the undersigned.

                     (j) TAX RETURNS. The undersigned has filed all tax returns
required to be filed by it and has paid all income taxes payable by it which
have become due pursuant to such tax returns and all other taxes and assessments
payable by it which have become due, other than those not yet delinquent and
except for those contested in good faith and for which adequate reserves have
been established. The undersigned has paid, or has provided adequate reserves
(in the good faith judgment of the management of the undersigned) for the
payment of, all federal and state income taxes applicable for all prior fiscal
years and for the current fiscal year to the date hereof.

                     (l) ERISA. Each Employee Benefit Plan of the undersigned
and any ERISA Affiliate is in compliance with ERISA and the Code, where
applicable, in all material respects. As of November 30, 1996, (the "ERISA TEST
DATE"), (i) the amount of all Unfunded Pension Liabilities under the Pension
Plans, excluding any plan which is a Multiemployer Plan, does not exceed $1, and
(ii) the amount of the aggregate Unrecognized Retiree Welfare Liability under
all applicable Employee Benefit Plans does not exceed $500,000. There is no
Multiemployer Plan. The undersigned and/or any ERISA Affiliate has, as of the
date hereof, made all contributions or payments to or under each such Pension
Plan required by law or the terms of such Pension Plan or any contract or
agreement. No material liability to the PBGC has been, or is expected by the
undersigned 


                                      -3-
<PAGE>

or any ERISA Affiliate to be, incurred by the undersigned or any ERISA
Affiliate. Liability, as referred to herein, includes any joint and several
liability. Each Employee Benefit Plan which is a group health plan within the
meaning of Section 5000(b)(1) of the Code is in material compliance with the
continuation of health care coverage requirements of Section 4980B of the Code.

                     (m) LABOR RELATIONS. The undersigned is not engaged in any
unfair labor practice that could have a Material Adverse Effect. There is (i) no
significant unfair labor claim or action pending against the undersigned or, to
the best knowledge of the undersigned, threatened against it, before the
National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the undersigned or, to the best knowledge of the
undersigned, threatened against it, (ii) no significant strike, labor dispute,
slowdown or stoppage pending against the undersigned or, to the best knowledge
of the undersigned, threatened against it, (iii) to the best knowledge of the
undersigned, no union representation question existing with respect to the
employees of the undersigned and, to the best of its knowledge, no union
organizing is taking place, except (with respect to any matter specified in
clause (i), (ii) or (iii) above, either individually or in the aggregate) such
as could not have a Material Adverse Effect.

                     (n) NO BURDENSOME AGREEMENTS. The undersigned is not a
party to any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any charter or restriction which by its terms would
have a Material Adverse Effect or a material adverse effect on the ability of
the Undersigned to carry out its obligations under this Guaranty.

                     (o) PROPERTY. The undersigned has good and marketable title
to all of its Property, title to which is material to the undersigned. All of
the tangible property of the undersigned which is necessary for the operation of
its business is in substantially good repair and operating condition and is and
will be in compliance in all material respects with all material requirements of
law.

                     (p) ENVIRONMENTAL MATTERS. (i) The undersigned is in
compliance in all material respects with the requirements of all applicable
Environmental Laws.

                         (ii) To the best of the undersigned's knowledge and
belief, no Hazardous Substances are present upon the undersigned's Real Property
in violation of any Environmental Law and the undersigned has not received any
notice to the effect that any of its Real Property, or any of the its
operations, is not in compliance with any Environmental Law or that any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any Hazardous Substance into the environment is pending
which, in either case, could be reasonably expected to have a Material Adverse
Effect.

                  3. AFFIRMATIVE COVENANTS.

                     Subject to Section 5 of this Guaranty, the undersigned
agrees that so long as the Commitment is not terminated, or any amount remains
outstanding or owing to the Lender under the Credit Agreement or the Note or the
other Credit Documents:

                     (a) ACCOUNTS AND REPORTING. The undersigned will maintain a
standard system of accounting established and administered in accordance with
generally accepted accounting principles, and provide to the Lender the
following:

                                      -4-
<PAGE>

                         (i) ANNUAL FINANCIAL STATEMENTs. As soon as available
and in any event within 120 days after the end of each fiscal year of the
undersigned, a consolidated balance sheet of the undersigned and its
subsidiaries as of the end of that fiscal year and the related consolidated
statements of earnings, stockholders' equity and cash flows for that fiscal
year, all with accompanying notes and schedules, prepared in accordance with
United States generally accepted accounting principles consistently applied and
audited and reported upon by Deloitte and Touche, LLP or another firm of
independent certified public accountants of recognized standing selected by the
undersigned (such audit report shall be unqualified except for qualifications
relating to changes in United States general accepted principles of accounts and
required or approved by the undersigned's independent certified public
accountants). Notwithstanding any of the foregoing, the Borrower may satisfy its
obligation to furnish Consolidated Balance Sheets and Consolidated Statements of
Operations, Stockholders' Equity and Cash Flows by furnishing copies of the
Borrower's annual report on Form 10-K in respect of such fiscal year, together
with the financial statements required to be attached thereto, provided the
Borrower is required to file such annual report on Form 10-K with the SEC and
such filing is actually made;

                         (ii) QUARTERLY FINANCIAL STATEMENTS. As soon as
available and in any event within 60 days after the end of each of the first
three quarters, and within 120 days after the end of the fourth quarter, of each
fiscal year of the undersigned, a consolidated balance sheet of the undersigned
and its subsidiaries as of the end of that quarter, and the related consolidated
statement of earnings of the undersigned and its subsidiaries for the period
from the beginning of the fiscal year to the end of that quarter, all prepared
in accordance with United States generally accepted accounting principles
consistently applied, unaudited but certified to be true and accurate, subject
to normal year-end audit adjustments, by the chief financial officer of the
undersigned. Notwithstanding any of the foregoing, the Borrower may satisfy its
obligation to furnish quarterly Consolidated Balance Sheets and Consolidated
Statements of Operations and Cash Flows by furnishing copies of the Borrower's
quarterly report on Form 10-Q in respect of such fiscal quarter, together with
the financial statements required to be attached thereto, provided the Borrower
is required to file such quarterly report on Form 10-Q with the SEC and such
filing is actually made;

                         (iii) OFFICER'S CERTIFICATES. At the time of the
delivery of the financial statements provided for in Section 3(a) (i) and (ii),
a certificate of the chief financial officer of the undersigned to the effect
that, to the best of his knowledge, the undersigned is not in default under this
Guaranty or, if any default has occurred and is continuing, specifying the
nature and extent thereof and any actions taken or proposed to be taken with
respect to any such default.

                         (iv) MANAGEMENT LETTERS. Promptly after receipt by the
undersigned thereof, a copy of any "management letter" received by it from its
certified public accountants detailing any "material weaknesses in internal
control" noted by such accountants (as defined by FASB).

                         (v) NOTICES. Promptly, notice of (i) the occurrence of
any default under this Guaranty, (ii) the commencement of any action, suit or
proceeding before any court, arbitrator or governmental body which (A) could
result in liability or loss of $1,000,000 or more in the aggregate, in excess of
any applicable insurance coverage, to the undersigned or (B) would otherwise
have a Material Adverse Effect, (iii) with respect to the undersigned, any
change in any Executive Officer, (iv) any threatened loss of any authorization,
qualification, license or permit issued by any governmental body to the
undersigned the loss of which could have a Material Adverse Effect, (v) any
written correspondence or notification from any governmental body, which revokes
or threatens to


                                      -5-
<PAGE>

revoke, limits or threatens to limit, or imposes or threatens to impose any
material restrictions on, any approvals or authorizations granted by such
governmental body to the undersigned, together with a copy thereof, or (vi) any
violation of any requirements or guidelines established by any governmental
body, which might have a material adverse effect on the status of the
undersigned thereof as a lender, seller or servicer approved by such
governmental body.

                         (vi) LENDER REQUESTED INFORMATION. Promptly, such
additional financial and other information, including without limitation,
financial statements of the undersigned, as the Lender may from time to time
reasonably request.

                         (vii) ENVIRONMENTAL PROCEEDINGS. Prompt written notice
of any order, notice, claim or proceeding received by, or brought against, the
undersigned, or with respect to any of the Real Property, under any
Environmental Law.

                         (viii) EMPLOYEE BENEFIT PLAN INFORMATION. Prompt
written notice in the event that the undersigned or any ERISA Affiliate knows,
or has reason to know, that (i) any ERISA Termination Event with respect to a
Pension Plan has occurred or will occur, (ii) any condition exists with respect
to a Pension Plan which presents a material risk of termination of the Pension
Plan, imposition of an excise tax, requirement to provide security to or in
respect of the Pension Plan or other liability of the undersigned or any ERISA
Affiliate, (iii) the undersigned or any ERISA Affiliate has applied for a waiver
of the minimum funding standard under Section 412 of the Code with respect to a
Pension Plan, (iv) the aggregate amount of the Unfunded Pension Liabilities
under all Pension Plans has increased to an amount in excess of $1, (v) the
aggregate amount of Unrecognized Retiree Welfare Liability under all applicable
Employee Benefit Plans has increased to an amount in excess of $500,000, (vi)
the undersigned or any ERISA Affiliate has engaged in a Prohibited Transaction
with respect to an Employee Benefit Plan, (vii) a tax under Section 4980B(a) of
the Code shall have been imposed upon the undersigned or any ERISA Affiliate,
(viii) the Secretary of Labor shall have assessed a civil penalty under Section
502(c) of ERISA against the undersigned or any ERISA Affiliate, or (ix) there is
an action brought against the undersigned or any ERISA Affiliate under ERISA
Section 502 with respect to its failure to comply with ERISA Section 515,
together with a certificate of the president or chief financial officer of the
undersigned setting forth the details of such event and the action which the
undersigned or any ERISA Affiliate proposes to take with respect thereto,
together with a copy of all notices and filings with respect thereto.

                         (ix) EMPLOYEE BENEFIT PLAN LIABILITY. Prompt written
notice in the event that the undersigned or any ERISA Affiliate shall receive a
demand letter from the PBGC notifying the undersigned or any ERISA Affiliate of
any final decision finding liability and the date by which such liability must
be paid, together with a copy of such letter and a certificate of the president
or chief financial officer of the undersigned setting forth the action which the
undersigned or any ERISA Affiliate proposes to take with respect thereto.

                         (x) PENSION PLAN AMENDMENTS. Promptly upon the same
becoming available, and in any event by the date such amendment is adopted, a
copy of any Pension Plan amendment that the undersigned or any ERISA Affiliate
proposes to adopt which would require the posting of security under Section
401(a)(29) of the Code, together with a certificate of the president or chief
financial officer of the undersigned setting forth the reasons for the adoption
of such amendment and the action which the undersigned or any ERISA Affiliate
proposes to take with respect thereto.

                                      -6-
<PAGE>

                         (xi) PENSION PAYMENT DEFAULT. As soon as possible and
in any event by the 10th day after any required installment or other payment
under Section 412 of the Code owed to a Pension Plan shall have become due and
owing and remains unpaid a copy of the notice of failure to make required
contributions provided to the PBGC by the undersigned or any ERISA Affiliate
under Section 412(n) of the Code, together with a certificate of the president
or chief financial officer setting forth the action which the undersigned or any
ERISA Affiliate proposes to take with respect thereto.

                         (xii) PENSION PLAN TERMINATION. If the termination of
any Pension Plan would result in the imposition of any tax under Section 4980 of
the Code, then as soon as possible, but in no event less than 60 days before the
due date of the tax, a certificate of the president or chief financial officer
of the undersigned setting forth the estimated amount of the tax, any reversion,
and the proposed use of the reversion. This subparagraph shall apply to a
transaction notwithstanding a reduction or complete elimination of the tax
because of the operation of either Sections 4980(d) or 420(a)(3)(A) of the Code.

                         (xiii) OTHER INFORMATION. Promptly, from time to time,
copies of any notices or information given to or received from the holders of
any Indebtedness of the undersigned relating to any actual or alleged default,
demand for payment or acceleration of payment, and such other information or
documents (financial or otherwise) as the Lender may reasonably request.

                     (b) NO IMPAIRMENT FROM CHANGES IN OBLIGATIONS. The Lender
may at any time and from time to time, either before or after the maturity
thereof, without notice to or further consent of the undersigned, extend the
time of payment of, exchange or surrender any collateral for, renew or extend
any of the Obligations or increase the interest rate thereon, and may also make
any agreement with the Borrower or with any other party to or person liable on
any of the Obligations, or interested therein, for the extension, renewal,
payment, compromise, discharge or release thereof, in whole or in part, or for
any modification of the terms thereof or of any agreement between the Lender and
Borrower or any such other party or person, without in any way impairing or
affecting this Guaranty.

                     (c) NO OBLIGATION TO PURSUE ANY COLLATERAL. This Guaranty
shall not be impaired or otherwise affected by any failure to call for, take,
hold, protect or perfect, continue the perfection of or enforce any security
interest in or other Lien upon, any collateral for the Obligations, or by any
failure to exercise, delay in the exercising or waiver of, or forbearance with
respect to, any right or remedy available to the Lender with respect to the
Obligations.

                     (d) REINSTATEMENT OF OBLIGATIONS. To the extent that the
undersigned makes a payment or payments to the Lender on the Obligations, or the
Lender receives any proceeds of collateral to be applied to the Obligations,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or otherwise is required to
be repaid including, without limitation, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such
repayment, the obligation or part thereof which has been paid, reduced or
satisfied by such amount shall be reinstated and continued in full force and
effect as of the date that such initial payment, reduction or satisfaction
occurred notwithstanding any contrary action which may have been taken by the
Lender in reliance upon such payment or payments. The undersigned shall defend
and indemnify the Lender from and against any claim or loss under this paragraph
including attorneys' fees and expenses in the defense of any such action or
suit.

                     (e) BOOKS, RECORDS AND INSPECTIONS. The undersigned will
keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all 


                                      -7-
<PAGE>

requirements of law shall be made of all dealings and transactions in relation
to its business and activities. The undersigned will permit officers and
designated representatives of the Lender to visit and inspect, under guidance of
officers of the undersigned, any of the properties of the undersigned, and to
examine the books of record and accounts of the undersigned and discuss the
affairs, finances, accounts and prospects of the undersigned with, and be
advised as to the same by, its and their officers, all at such reasonable times
and intervals and to such reasonable extent as the Lender may request.

                     (f) MAINTENANCE OF PROPERTY, INSURANCE. The undersigned
will (i) keep all property necessary for the operation of its business in good
working order and condition, (ii) except as otherwise provided in clause (iii)
below, maintain with financially sound and reputable insurance companies
insurance (including such insurance as the Lender shall reasonably require) in
such amounts and against such risks as are usually carried by corporations
engaged in similar businesses similarly situated, and (iii) furnish to the
Lender, upon written request, full information as to the insurance carried.

                     (g) CORPORATE FRANCHISES. The undersigned will do or cause
to be done, all things necessary to preserve and keep in full force and effect
(i) their corporate existence in good standing in the state of its incorporation
and in each other state in which it is required to be qualified to do business
as a foreign corporation and (ii) all of their material rights, franchises,
qualifications, licenses, permits, copyrights, trademarks and patents.

                     (h) COMPLIANCE WITH STATUTES, ETC. (i) The undersigned will
comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies in respect of the
conduct of its business and the ownership of its property (including, without
limitation, Environmental Laws), except such non-compliances as could not, in
the aggregate, have a Material Adverse Effect.

                           (ii) In the event that the Lender shall have a
reasonable basis for believing that any Hazardous Substance may be on, at, under
or around any Real Property in violation of any applicable Environmental Law and
that such violation might reasonably be expected to have a Material Adverse
Effect, the undersigned will conduct and complete (at the undersigned's expense)
all investigations, studies, samplings and testings relative to such Real
Property and such Hazardous Substances as the Lender may reasonably request.

                     (i) PERFORMANCE OF OBLIGATIONS. The undersigned will
perform all of its obligations under the terms of each mortgage, indenture,
security agreement, debt instrument or other contract or agreement by which it
is bound, except such non-performances as could not in the aggregate, have a
Material Adverse Effect.

                     (j) PAYMENT OF TAXES. The undersigned will pay and
discharge all taxes, assessments and governmental charges or liens imposed upon
the undersigned or upon the undersigned's income or profits, or upon any
properties belonging to the undersigned prior to the date on which the same
become due, and all lawful claims, which, if unpaid, might become a Lien or
charge upon any properties of the undersigned, provided that the undersigned
shall not be required to pay any such tax, assessment, charge, levy or claim for
which it has obtained an adequate bond or adequate insurance and which is being
contested in good faith and by appropriate proceedings so long as such contest
shall operate to stay any Material Adverse Effect caused by such Lien or charge.

                     (k) CORPORATE SEPARATENESS. The undersigned will take such
actions as are necessary to keep its operations separate and apart, including,
without limitation, insuring that all customary formalities regarding the
corporate existence of the undersigned, including holding regular meetings and
maintenance of its current minute books, are followed.

                                      -8-
<PAGE>

                  4. NEGATIVE COVENANTS.

                     The undersigned agrees that from and after the date hereof
and until the Commitment shall have been terminated and the Loans and the Note,
together with interest, fees and all other obligations incurred hereunder and
under all Credit Documents, are paid in full:

                     (a) BOOK NET WORTH. The undersigned will not permit its
Book Net Worth to be less than the sum of (i) the greater of (x) $500,000,000 or
(y) 90% of Book Net Worth as of Effective Date, plus (ii) plus 50% of all net
income (determined in accordance with GAAP) of the undersigned after NOVEMBER
30, 1997, plus (iii) 90% of all capital contributions made to the Guarantor
after the Effective Date.

                     For purposes of this Agreement, "Book Net Worth" means, as
of any date of determination thereof, the net worth of the Guarantor on such
date as determined in accordance with GAAP.

                     (b) RATIO OF LIABILITIES TO BOOK NET WORTH. The undersigned
will not on any date permit the ratio of (i) the Liabilities of the undersigned,
on a consolidated basis, on such date to (ii) the undersigned's Book Net Worth
on such date, to be more than 2:1.

                     (c) LIENS. The undersigned will not create, incur, assume
or suffer to exist any Lien upon or with respect to any property or assets (real
or personal, tangible or intangible) of the undersigned, whether now owned or
hereafter acquired, other than in the ordinary course of business of the
undersigned.

                     (d) CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. (i) The
undersigned will not wind up, liquidate or dissolve its affairs or enter into
any transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or any
substantial part of its property or assets,

                         (ii) The undersigned will not permit any of its
Subsidiaries to wind up, liquidate or dissolve its affairs, or enter into any
transaction of merger or consolidation, and the undersigned will not, and will
not permit any of its Subsidiaries to, convey, sell, lease or otherwise dispose
of (or agree to do any of the foregoing at any future time) all or any part of
its property or assets, if any of the foregoing could have a Material Adverse
Effect or result in a material change in the scope of the business as conducted
by the undersigned as of the date of this Guaranty.

                     (e) DIVIDENDS. The undersigned will not declare or pay any
dividends or declare or make any distribution in respect of its capital to its
stockholders, or authorize or make any other distribution, payment or delivery
of property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any options or
warrants issued by the undersigned with respect to its capital stock), or set
aside any funds for any of the foregoing purposes, or permit any of its
Subsidiaries to purchase or otherwise acquire for a consideration any shares of
any class of the capital stock of the undersigned now or hereafter outstanding
(or any options or warrants issued by the undersigned with respect to its
capital stock) if, after giving effect to any of the foregoing, there shall
occur an Event of Default.

                     (f) INDEBTEDNESS. The undersigned will not contract,
create, incur, assume or suffer to exist any Indebtedness unless (i) such
Indebtedness will appear on the financial statements of the undersigned required
to be delivered to the Lender pursuant to this Guaranty, and (ii) such
Indebtedness does not create a Default under this Guaranty.

                                      -9-
<PAGE>

                     (g) TRANSACTIONS WITH AFFILIATES. The undersigned will not
enter into any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of either of the
undersigned, other than on terms and conditions substantially as favorable to
the undersigned as would be obtainable by the undersigned at the time in a
comparable arm's-length transaction with a Person other than an Affiliate.

                     (h) MODIFICATIONS OF ARTICLES OF INCORPORATION, BY-LAWS AND
CERTAIN OTHER AGREEMENTS, ETC. The undersigned will not (a) amend, modify or
change their Articles of Incorporation (including, without limitation, by the
filing or modification of any certificate of designation) or By-Laws, or any
agreement entered into by either of them with respect to their capital stock, or
(b) enter into any new agreement with respect to their capital stock, if in
either case it would have an adverse effect on the Lender.

                     (i) RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS. The
undersigned will not, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any such Subsidiary to (a) pay dividends or make any other
distributions on its capital stock or any other interest or participation in its
profits owned by the undersigned or any of its Subsidiaries, or pay any
Indebtedness owed by any such Subsidiary to the undersigned or any other
Subsidiary of the undersigned, (b) make loans or advances to the undersigned, or
(c) transfer any of its properties or assets to the undersigned, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Guaranty, (iii) or customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the undersigned or any
Subsidiary of the undersigned.

                     (j) ERISA. The undersigned shall not (a)(i) establish,
contribute to, or become liable (directly or indirectly) in respect of, any
Multiemployer Plan, or (ii) establish or contribute to any Pension Plan other
than an Existing Pension Plan which would increase the aggregate Unfunded
Pension Liabilities under all Pension Plans to an amount in excess of $1, (b)
cause any Pension Plan to have a Funded Current Liability Percentage of less
than 60 percent, or (c) increase benefits under any Employee Benefit Plan or
establish or contribute to any new Employee Benefit Plan which would have the
effect of increasing its aggregate Unrecognized Retiree Welfare Liability to an
amount in excess of $500,000.

                  5. NOTICES.

                     All notices and other communications provided for hereunder
to a party hereto shall be in writing (including telecopier) and mailed,
telecopied or delivered to such party, at the following address or at such other
address as shall be designated by such party in a written notice to the other
parties hereto:

                  IF TO THE UNDERSIGNED:

                  LNR Property Corporation
                  760 N.W. 107th Avenue, First Floor
                  Suite 100
                  Miami, Florida  33172

                  Attention:        Shelly Rubin
                                    Chief Financial Officer

                  Telephone:        (305) 229-6640
                  Telecopier:       (305) 226-7691



                                      -10-
<PAGE>

                  IF TO THE LENDER:

                  The Bank of New York
                  One Wall Street -- 17th Floor
                  New York, New York  10286

                  Attention: William H. Cunningham
                             Vice President

                  Telephone:  (212) 635-6471
                  Telecopier: (212) 635-6468

                  All such notices and communications shall, (i) when
telecopied be effective when sent, (ii) when mailed by first class mail, postage
prepaid, be effective on the fifth (5th) day following deposit in the mails, and
(iii) when sent or delivered by any other means be effective when received. The
undersigned and the Lender may rely on signatures of each other which are
transmitted by telecopier or other electronic means as fully as if originally
signed.

                  6. JURISDICTION; VENUE.

                     The undersigned irrevocably submits to the jurisdiction of
any New York State or Federal court sitting in the City or State of New York
over any suit, action or proceeding arising out of or relating to this Guaranty.
The undersigned hereby agrees that Lender shall have the option, in its sole
discretion, to lay the venue of any such suit, action or proceeding, in the
courts of the State of New York or the United States of America for the Southern
District of New York, and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in such court and any claim that
any such suit, action or proceeding brought in such a court has been brought in
an inconvenient forum. The undersigned agrees that a final judgment in any such
suit, action or proceeding brought in such a court shall be conclusive and
binding upon the undersigned.

                  7. WAIVER OF TRIAL BY JURY.

                     THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO
REPRESENTATIVE OF THE LENDER, OR COUNSEL TO THE LENDER, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS PROVISION. THE PROVISIONS OF THIS PARAGRAPH
CONSTITUTE A MATERIAL INDUCEMENT TO THE LENDER TO ACCEPT THIS GUARANTY.

                  8. GOVERNING LAW.

                     This Guaranty and the rights and obligations of the parties
hereunder shall be construed, enforced, and interpreted according to the laws of
the State of New York applicable to contracts made in and performed in the State
of New York. Unless the text otherwise requires all terms used herein shall have
the meaning specified in the Uniform Commercial Code as in effect in the State
of New York on the date hereof.

                                      -11-
<PAGE>

                  9. OTHER PROVISIONS.

                     (a) The undersigned hereby acknowledges that it has derived
or expects to derive a financial or other advantage from each and every
Obligation incurred by Borrower to the Lender.

                     (b) The undersigned waives notice of the acceptance of this
Guaranty and of the making of any such loans or extensions of credit,
presentment to or demand of payment from anyone whomsoever liable upon any of
the Obligations, protest, notice of presentment, non-payment or protest and
notice of any sale of collateral security or any default of any sort.

                     (c) The undersigned hereby agrees that, in the event that
any property of the undersigned is or may be hypothecated with property of
Borrower as security for any Obligations, any right of the undersigned to have
such property of Borrower first applied to the discharge of such Obligations is
hereby irrevocably waived by the undersigned.

                     (d) This is a continuing guaranty and shall remain in full
force and effect and be binding upon the undersigned, and the undersigned's
successors and assigns. Nothing except cash payment in full of all Obligations
and the termination of the Commitment shall release the undersigned from
liability under this Guaranty.

                     (e) This Guaranty is a guaranty of payment and not of
collection, and the Lender shall be under no obligation to take any action
against Borrower or any other person liable with respect to any of the
Obligations or resort to any collateral security held by it to secure any of the
Obligations as a condition precedent to the undersigned being obligated to
perform as agreed herein. The undersigned hereby waives any rights to interpose
any defense, counterclaim or offset of any nature and description which he may
have or which may exist between and among the Lender, Borrower and/or the
undersigned.

                     (f) This Guaranty may be assigned by the Lender and its
benefits shall inure to the successors, indorsees and assigns of the Lender.

                     (g) Until such time as the Lender shall have received
payment in full in cash in satisfaction of all of the Obligations and the
commitment shall have been terminated, the undersigned waives any rights to be
subrogated to the rights of the Lender with respect to the Obligations and the
undersigned waives any right to and agrees that it will not institute or take
any action against the Borrower seeking contribution, reimbursement or
indemnification by the Borrower with respect to any payments made by the
undersigned to the Lender hereunder.

                     (h) The undersigned waives any and all notice of the
creation, renewal, extension or accrual of any of the Obligations or of the
reliance by Lender upon this Guaranty. The Obligations, and each of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Guaranty. This Guaranty shall be construed as a continuing, absolute
and unconditional guaranty without regard to the validity, regularity or
enforceability of the Obligations and any other indebtedness at any time held or
owing by the Lender to or for the credit or the account of the undersigned
against and on account of the Obligations and liabilities of the undersigned
hereunder.

                     (i) The undersigned hereby waives any and all legal
requirements that require or compel the Lender to institute any action or
proceedings at law or in equity 


                                      -12-
<PAGE>

against Borrower, or anyone else, in respect of the Loans or any other document
executed in connection with the Loans or resort to or seek to realize upon or
exhaust the security held by the Lender or pursue any other remedy in the
Lender's power, as a condition precedent to bringing an action against the
undersigned upon this Guaranty, and failure of the Lender to do any of the
foregoing shall not exonerate, release or discharge the undersigned from its
absolute, unconditional and independent liabilities to the Lender hereunder.

                     (j) The Lender may bring and prosecute a separate action
against the undersigned to enforce its liabilities hereunder, whether or not any
action is brought against Borrower or any other person and whether or not
Borrower or any other person is joined in any such action or actions. Nothing
shall prohibit the Lender from exercising its rights against the undersigned,
the Borrower, the security, if any, for the Obligations, and any other person
simultaneously, jointly and/or severally. The undersigned shall be bound by each
and every ruling, order and judgment obtained by the Lender against Borrower in
respect of the Obligations, whether or not the undersigned is a party to the
action or proceeding in which such ruling, order or judgment is issued or
rendered.

                     (k) The undersigned shall not be discharged, released or
exonerated, in any way, from its absolute, unconditional and independent
liabilities hereunder, even though any rights or defenses which the undersigned
may have against Borrower, the Lender or others may be destroyed, diminished or
otherwise affected by:

                         (i) Any declaration by the Lender of a default in
respect of any of the Obligations;

                         (ii) The exercise by the Lender of any rights or
remedies against Borrower or any other person;

                         (iii) The failure of the Lender to exercise any rights
or remedies against Borrower or any other person;

                         (iv) The sale or enforcement of, or realization upon
(through judicial foreclosure, power of sale or any other means) any security
for any of the Obligations, even though (i) recourse may not thereafter be had
against Borrower for any deficiency, or (ii) the Lender fails to pursue any such
recourse which might otherwise be available; whether by way of deficiency
judgment following judicial foreclosure, or otherwise;

                         (v) Any bankruptcy or reorganization of Borrower;

                         (vi) The release of any other guarantor by operation of
law or otherwise; or

                         (vii) The voluntary or involuntary participation by
Borrower in any settlement or composition for the benefit of Borrower's
creditors either in liquidation, readjustment, receivership, bankruptcy or
otherwise.

                     (l) The undersigned waives any right to plead any election
of remedies.

                     (m) This Guaranty is absolute and unconditional and shall
not be changed or affected by any representation, oral agreement, act or thing
whatsoever, except as herein otherwise expressly provided. No modification or
amendment of any provisions 


                                      -13-
<PAGE>

of this Guaranty shall be effective unless in writing and signed by a duly
authorized officer of the Lender.

                     (n) No failure on the part of the Lender to exercise, and
no delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Lender of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power.

                     (o) Each and every right, remedy and power hereby granted
to the Lender or allowed it by law or other agreement shall be cumulative and
not exclusive of any other, and may be exercised by the Lender at any time and
from time to time.

                     IN WITNESS WHEREOF, this Guaranty has been executed by the
undersigned as of the date first above written.


                                   LNR PROPERTY CORPORATION

                                   By:
                                      ------------------------------------------
                                      Name:
                                      Title:

                                      -14-


<PAGE>

                                                                       Exhibit A

                                    GUARANTY

                                                              November 21, 1997

                  FOR VALUE RECEIVED, and in consideration of loans made or to
be made or credit otherwise extended or to be extended by THE BANK OF NEW YORK,
a New York banking corporation and its participants, successors, endorsees and
assigns (hereinafter referred to collectively as "LENDER") to or for the account
of LENNAR CAPITAL SERVICES, INC. and its successors and assigns (hereinafter
referred to collectively as "BORROWER") and for other good and valuable
consideration and to induce the Lender, in its discretion, to make such loans or
extensions of credit and to make or grant such renewals, extensions, releases of
collateral or relinquishments of legal rights as the Lender may deem advisable,
the undersigned, its successors and assigns, hereby agrees as follows:

1.                GUARANTY.

                  The undersigned, its successors and assigns, guarantees to the
Lender the prompt payment when due of all present and future obligations and
liabilities, whether deemed principal, interest, additional interest, fees,
expenses or otherwise, of the Borrower to the Lender, including, without
limitation, all obligations under (i) that certain Note dated the date hereof,
in the principal amount of $50,000,000 made by the Borrower to the Lender (the
"NOTE"); (ii) that certain Revolving Credit Agreement dated November 6, 1997
between the Borrower and the Lender, as the same may be amended from time to
time (the "CREDIT AGREEMENT"), and (iii) all other Credit Documents (as such
term is defined in the Credit Agreement) (all of which are herein collectively
referred to as the "OBLIGATIONS"), and irrespective of the genuineness,
validity, regularity or enforceability of such Obligations, or of any instrument
evidencing any of the Obligations or of any collateral therefor or of the
existence of such collateral. Defined terms used herein which are not defined
herein but which are defined in the Credit Agreement shall have the meanings
ascribed to such terms in the Credit Agreement.

1.                REPRESENTATIONS AND WARRANTIES.

                  The undersigned hereby represents and warrants to the Lender
that:

(a) CORPORATE ORGANIZATION. The undersigned (i) is duly organized and validly
existing corporation in good standing under the laws of the State of Nevada,
(ii) has the power and authority to own its property and assets and to transact
the business in which it is engaged and (iii) is duly qualified as a foreign
corporation and in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its



<PAGE>


business requires such qualification. The undersigned is wholly owned and
controlled by Mortgage Investment Holdings, a Nevada partnership, which is owned
(i) 80% by the Borrower and (ii) 20% by Lennar Capital Corp., a wholly owned
subsidiary of the Borrower.

(a) POWER AND AUTHORITY. The undersigned has the corporate power to execute,
deliver and perform the terms and provisions of this Guaranty and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of this Guaranty. The undersigned has duly executed and delivered this
Guaranty and the Guaranty constitutes the legal, valid and binding obligations
of the undersigned and is enforceable in accordance with its terms, provided
that, (i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) the availability of
equitable remedies may be limited by equitable principles of general
applicability.

(a) CONSENTS AND APPROVALS. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with (except as have been
obtained or made prior to the date hereof), or exemption by, any governmental
body is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Guaranty by the undersigned, or (ii)
the legality, validity, binding effect or enforceability of this Guaranty.

(a) PRINCIPAL PLACE OF BUSINESS. The principal place of business of the
undersigned is 760 N.W. 107th Avenue, First Floor, Miami, Florida 33172.

(a) SOLVENCY. The undersigned is not insolvent (as such term is defined in
Section 101(32) of the Bankruptcy Code of 1978, as amended) and will not be
rendered insolvent (as such term is defined in Section 101(32) of the Bankruptcy
Code of 1978, as amended) by execution of this Guaranty or consummation of the
transaction contemplated thereby; and

(a) NO OFFSETS. The undersigned has no offsets, defenses or counterclaims to the
enforcement of this Guaranty.

(a) NO VIOLATIONS. Neither the execution, delivery or performance by the
undersigned of this Guaranty, nor compliance by it with the terms and provisions
hereof (i) will contravene any provision of any law, statute, rule or regulation
or any order, writ, injunction or decree of any governmental body, (ii) will
conflict or be inconsistent with or result in any breach of any of the material
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of the undersigned pursuant to the terms
of any indenture, mortgage, deed of trust, credit agreement, loan agreement or
any other agreement, contract or instrument to which the undersigned is a party
or by which it or

                                      -2-

<PAGE>


any of its property or assets is bound or to which it may be subject or (iii)
will violate any provision of the Articles of Incorporation or By-Laws of the
undersigned.

(a) LITIGATION. There are no actions, suits or proceedings (whether or not
purportedly on behalf of the undersigned pending or threatened against the
undersigned (x) with respect to this Guaranty, or (y) which could, if adversely
determined, have a material adverse effect on the business, assets, property,
operations, financial condition or prospects of the undersigned.

(a) TAX RETURNS. The undersigned has filed all tax returns required to be filed
by it and has paid all income taxes payable by it which have become due pursuant
to such tax returns and all other taxes and assessments payable by it which have
become due, other than those not yet delinquent and except for those contested
in good faith and for which adequate reserves have been established. The
undersigned has paid, or has provided adequate reserves (in the good faith
judgment of the management of the undersigned) for the payment of, all federal
and state income taxes applicable for all prior fiscal years and for the current
fiscal year to the date hereof.

(a) ERISA. Each Employee Benefit Plan of the undersigned and any ERISA Affiliate
is in compliance with ERISA and the Code, where applicable, in all material
respects. As of November 30, 1996, (the "ERISA TEST DATE"), (i) the amount of
all Unfunded Pension Liabilities under the Pension Plans, excluding any plan
which is a Multiemployer Plan, does not exceed $1, and (ii) the amount of the
aggregate Unrecognized Retiree Welfare Liability under all applicable Employee
Benefit Plans does not exceed $500,000. There is no Multiemployer Plan. The
undersigned and/or any ERISA Affiliate has, as of the date hereof, made all
contributions or payments to or under each such Pension Plan required by law or
the terms of such Pension Plan or any contract or agreement. No material
liability to the PBGC has been, or is expected by the undersigned or any ERISA
Affiliate to be, incurred by the undersigned or any ERISA Affiliate. Liability,
as referred to herein, includes any joint and several liability. Each Employee
Benefit Plan which is a group health plan within the meaning of Section
5000(b)(1) of the Code is in material compliance with the continuation of health
care coverage requirements of Section 4980B of the Code.

(a) LABOR RELATIONS. The undersigned is not engaged in any unfair labor practice
that could have a Material Adverse Effect. There is (i) no significant unfair
labor claim or action pending against the undersigned or, to the best knowledge
of the undersigned, threatened against it, before the National Labor Relations
Board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the undersigned or, to the best knowledge of the undersigned, threatened
against it, (ii) no significant strike, labor dispute, slowdown or stoppage
pending against the undersigned or, to the best knowledge of the undersigned,
threatened against it, (iii) to the best knowledge of the undersigned, no union

                                      -3-

<PAGE>


representation question existing with respect to the employees of the
undersigned and, to the best of its knowledge, no union organizing is taking
place, except (with respect to any matter specified in clause (i), (ii) or (iii)
above, either individually or in the aggregate) such as could not have a
Material Adverse Effect.

(a) NO BURDENSOME AGREEMENTS. The undersigned is not a party to any indenture,
loan or credit agreement or any lease or other agreement or instrument or
subject to any charter or restriction which by its terms would have a Material
Adverse Effect or a material adverse effect on the ability of the Undersigned to
carry out its obligations under this Guaranty.

(a) PROPERTY. The undersigned has good and marketable title to all of its
Property, title to which is material to the undersigned. All of the tangible
property of the undersigned which is necessary for the operation of its business
is in substantially good repair and operating condition and is and will be in
compliance in all material respects with all material requirements of law.

(a) ENVIRONMENTAL MATTERS. (i) The undersigned is in compliance in all material
respects with the requirements of all applicable Environmental Laws.

    (ii) To the best of the undersigned's knowledge and belief, no Hazardous
Substances are present upon the undersigned's Real Property in violation of any
Environmental Law and the undersigned has not received any notice to the effect
that any of its Real Property, or any of the its operations, is not in
compliance with any Environmental Law or that any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
Hazardous Substance into the environment is pending which, in either case, could
be reasonably expected to have a Material Adverse Effect.

1.                AFFIRMATIVE COVENANTS.

                  Subject to Section 5 of this Guaranty, the undersigned agrees
that so long as the Commitment is not terminated, or any amount remains
outstanding or owing to the Lender under the Credit Agreement or the Note or the
other Credit Documents:

(a) ACCOUNTS AND REPORTING. The undersigned will maintain a standard system of
accounting established and administered in accordance with generally accepted
accounting principles, and provide to the Lender the following:

    (i) NOTICES. Promptly, notice of (i) the occurrence of any default under
this Guaranty, (ii) the commencement of any action, suit or proceeding before
any court, arbitrator or governmental body which (A) could result in liability
or loss of $1,000,000 or more in the aggregate, in excess of any applicable
insurance coverage, to the undersigned or (B) would otherwise have a Material
Adverse Effect, (iii) with respect to the

                                      -4-

<PAGE>


undersigned, any change in any Executive Officer, (iv) any threatened loss of
any authorization, qualification, license or permit issued by any governmental
body to the undersigned the loss of which could have a Material Adverse Effect,
(v) any written correspondence or notification from any governmental body, which
revokes or threatens to revoke, limits or threatens to limit, or imposes or
threatens to impose any material restrictions on, any approvals or
authorizations granted by such governmental body to the undersigned, together
with a copy thereof, or (vi) any violation of any requirements or guidelines
established by any governmental body, which might have a material adverse effect
on the status of the undersigned thereof as a lender, seller or servicer
approved by such governmental body.

   (ii) LENDER REQUESTED INFORMATION. Promptly, such additional financial and
other information, including without limitation, financial statements of the
undersigned, as the Lender may from time to time reasonably request.

   (iii) ENVIRONMENTAL PROCEEDINGS. Prompt written notice of any order, notice,
claim or proceeding received by, or brought against, the undersigned, or with
respect to any of the Real Property, under any Environmental Law.

   (iv) EMPLOYEE BENEFIT PLAN INFORMATION. Prompt written notice in the event
that the undersigned or any ERISA Affiliate knows, or has reason to know, that
(i) any ERISA Termination Event with respect to a Pension Plan has occurred or
will occur, (ii) any condition exists with respect to a Pension Plan which
presents a material risk of termination of the Pension Plan, imposition of an
excise tax, requirement to provide security to or in respect of the Pension Plan
or other liability of the undersigned or any ERISA Affiliate, (iii) the
undersigned or any ERISA Affiliate has applied for a waiver of the minimum
funding standard under Section 412 of the Code with respect to a Pension Plan,
(iv) the aggregate amount of the Unfunded Pension Liabilities under all Pension
Plans has increased to an amount in excess of $1, (v) the aggregate amount of
Unrecognized Retiree Welfare Liability under all applicable Employee Benefit
Plans has increased to an amount in excess of $500,000, (vi) the undersigned or
any ERISA Affiliate has engaged in a Prohibited Transaction with respect to an
Employee Benefit Plan, (vii) a tax under Section 4980B(a) of the Code shall have
been imposed upon the undersigned or any ERISA Affiliate, (viii) the Secretary
of Labor shall have assessed a civil penalty under Section 502(c) of ERISA
against the undersigned or any ERISA Affiliate, or (ix) there is an action
brought against the undersigned or any ERISA Affiliate under ERISA Section 502
with respect to its failure to comply with ERISA Section 515, together with a
certificate of the president or chief financial officer of the undersigned
setting forth the details of such event and the action which the undersigned or
any ERISA Affiliate proposes to take with respect thereto, together with a copy
of all notices and filings with respect thereto.

   (vi) EMPLOYEE BENEFIT PLAN LIABILITY. Prompt written notice in the event
that the undersigned or any ERISA Affiliate shall receive a demand letter from
the

                                      -5-

<PAGE>

PBGC notifying the undersigned or any ERISA Affiliate of any final decision
finding liability and the date by which such liability must be paid, together
with a copy of such letter and a certificate of the president or chief financial
officer of the undersigned setting forth the action which the undersigned or any
ERISA Affiliate proposes to take with respect thereto.

   (vii) PENSION PLAN AMENDMENTS. Promptly upon the same becoming available, and
in any event by the date such amendment is adopted, a copy of any Pension Plan
amendment that the undersigned or any ERISA Affiliate proposes to adopt which
would require the posting of security under Section 401(a)(29) of the Code,
together with a certificate of the president or chief financial officer of the
undersigned setting forth the reasons for the adoption of such amendment and the
action which the undersigned or any ERISA Affiliate proposes to take with
respect thereto.

   (iii) PENSION PAYMENT DEFAULT. As soon as possible and in any event by the
10th day after any required installment or other payment under Section 412 of
the Code owed to a Pension Plan shall have become due and owing and remains
unpaid a copy of the notice of failure to make required contributions provided
to the PBGC by the undersigned or any ERISA Affiliate under Section 412(n) of
the Code, together with a certificate of the president or chief financial
officer setting forth the action which the undersigned or any ERISA Affiliate
proposes to take with respect thereto.

   (ix) PENSION PLAN TERMINATION. If the termination of any Pension Plan would
result in the imposition of any tax under Section 4980 of the Code, then as soon
as possible, but in no event less than 60 days before the due date of the tax, a
certificate of the president or chief financial officer of the undersigned
setting forth the estimated amount of the tax, any reversion, and the proposed
use of the reversion. This subparagraph shall apply to a transaction
notwithstanding a reduction or complete elimination of the tax because of the
operation of either Sections 4980(d) or 420(a)(3)(A) of the Code.

   (xii) OTHER INFORMATION. Promptly, from time to time, copies of any notices
or information given to or received from the holders of any Indebtedness of the
undersigned relating to any actual or alleged default, demand for payment or
acceleration of payment, and such other information or documents (financial or
otherwise) as the Lender may reasonably request.

(a) NO IMPAIRMENT FROM CHANGES IN OBLIGATIONS. The Lender may at any time and
from time to time, either before or after the maturity thereof, without notice
to or further consent of the undersigned, extend the time of payment of,
exchange or surrender any collateral for, renew or extend any of the Obligations
or increase the interest rate thereon, and may also make any agreement with the
Borrower or with any other party to or person liable on any of the Obligations,
or interested therein, for the extension, renewal, payment, compromise,
discharge or release thereof, in whole or in part, or for any modification of
the terms thereof or of any

                                      -6-

<PAGE>

agreement between the Lender and Borrower or any such other party or person,
without in any way impairing or affecting this Guaranty.

(a) NO OBLIGATION TO PURSUE ANY COLLATERAL. This Guaranty shall not be impaired
or otherwise affected by any failure to call for, take, hold, protect or
perfect, continue the perfection of or enforce any security interest in or other
Lien upon, any collateral for the Obligations, or by any failure to exercise,
delay in the exercising or waiver of, or forbearance with respect to, any right
or remedy available to the Lender with respect to the Obligations.

(a) REINSTATEMENT OF OBLIGATIONS. To the extent that the undersigned makes a
payment or payments to the Lender on the Obligations, or the Lender receives any
proceeds of collateral to be applied to the Obligations, which payment or
payments or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or otherwise is required to be repaid
including, without limitation, under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such repayment, the
obligation or part thereof which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the date
that such initial payment, reduction or satisfaction occurred notwithstanding
any contrary action which may have been taken by the Lender in reliance upon
such payment or payments. The undersigned shall defend and indemnify the Lender
from and against any claim or loss under this paragraph including attorneys'
fees and expenses in the defense of any such action or suit.

(a) BOOKS, RECORDS AND INSPECTIONS. The undersigned will keep proper books of
record and account in which full, true and correct entries in conformity with
GAAP and all requirements of law shall be made of all dealings and transactions
in relation to its business and activities. The undersigned will permit officers
and designated representatives of the Lender to visit and inspect, under
guidance of officers of the undersigned, any of the properties of the
undersigned, and to examine the books of record and accounts of the undersigned
and discuss the affairs, finances, accounts and prospects of the undersigned
with, and be advised as to the same by, its and their officers, all at such
reasonable times and intervals and to such reasonable extent as the Lender may
request.

(a) MAINTENANCE OF PROPERTY, INSURANCE. The undersigned will (i) keep all
property necessary for the operation of its business in good working order and
condition, (ii) except as otherwise provided in clause (iii) below, maintain
with financially sound and reputable insurance companies insurance (including
such insurance as the Lender shall reasonably require) in such amounts and
against such risks as are usually carried by corporations engaged in similar
businesses similarly situated, and (iii) furnish to the Lender, upon written
request, full information as to the insurance carried.

(a) CORPORATE FRANCHISES. The undersigned will do or cause to be done, all
things necessary to preserve and keep in full force and effect (i) their
corporate existence in good standing in the state of its incorporation and in
each other state in which it is required to be

                                      -2-

<PAGE>

qualified to do business as a foreign corporation and (ii) all of their material
rights, franchises, qualifications, licenses, permits, copyrights, trademarks
and patents.

(i) COMPLIANCE WITH STATUTES, ETC. The undersigned will comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies in respect of the conduct of its business
and the ownership of its property (including, without limitation, Environmental
Laws), except such non-compliances as could not, in the aggregate, have a
Material Adverse Effect.

(i) In the event that the Lender shall have a reasonable basis for believing
that any Hazardous Substance may be on, at, under or around any Real Property in
violation of any applicable Environmental Law and that such violation might
reasonably be expected to have a Material Adverse Effect, the undersigned will
conduct and complete (at the undersigned's expense) all investigations, studies,
samplings and testings relative to such Real Property and such Hazardous
Substances as the Lender may reasonably request.

(a) PERFORMANCE OF OBLIGATIONS. The undersigned will perform all of its
obligations under the terms of each mortgage, indenture, security agreement,
debt instrument or other contract or agreement by which it is bound, except such
non-performances as could not in the aggregate, have a Material Adverse Effect.

(a) PAYMENT OF TAXES. The undersigned will pay and discharge all taxes,
assessments and governmental charges or liens imposed upon the undersigned or
upon the undersigned's income or profits, or upon any properties belonging to
the undersigned prior to the date on which the same become due, and all lawful
claims, which, if unpaid, might become a Lien or charge upon any properties of
the undersigned, provided that the undersigned shall not be required to pay any
such tax, assessment, charge, levy or claim for which it has obtained an
adequate bond or adequate insurance and which is being contested in good faith
and by appropriate proceedings so long as such contest shall operate to stay any
Material Adverse Effect caused by such Lien or charge.

(a) CORPORATE SEPARATENESS. The undersigned will take such actions as are
necessary to keep its operations separate and apart, including, without
limitation, insuring that all customary formalities regarding the corporate
existence of the undersigned, including holding regular meetings and maintenance
of its current minute books, are followed.

1.                NEGATIVE COVENANTS.

                  The undersigned agrees that from and after the date hereof and
until the Commitment shall have been terminated and the Loans and the Note,
together with interest, fees and all other obligations incurred hereunder and
under all Credit Documents, are paid in full:

                                      -3-

<PAGE>


(a) LIENS. The undersigned will not create, incur, assume or suffer to exist any
Lien upon or with respect to any property or assets (real or personal, tangible
or intangible) of the undersigned, whether now owned or hereafter acquired,
other than in the ordinary course of business of the undersigned.

(i) CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The undersigned will not wind
up, liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any substantial part of its
property or assets,

(i) The undersigned will not permit any of its Subsidiaries to wind up,
liquidate or dissolve its affairs, or enter into any transaction of merger or
consolidation, and the undersigned will not, and will not permit any of its
Subsidiaries to, convey, sell, lease or otherwise dispose of (or agree to do any
of the foregoing at any future time) all or any part of its property or assets,
if any of the foregoing could have a Material Adverse Effect or result in a
material change in the scope of the business as conducted by the undersigned as
of the date of this Guaranty.

(a) INDEBTEDNESS. The undersigned will not contract, create, incur, assume or
suffer to exist any Indebtedness unless (i) such Indebtedness will appear on the
financial statements of the undersigned required to be delivered to the Lender
pursuant to this Guaranty, and (ii) such Indebtedness does not create a Default
under this Guaranty.

(a) TRANSACTIONS WITH AFFILIATES. The undersigned will not enter into any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any Affiliate of either of the undersigned, other than
on terms and conditions substantially as favorable to the undersigned as would
be obtainable by the undersigned at the time in a comparable arm's-length
transaction with a Person other than an Affiliate.

(a) MODIFICATIONS OF ARTICLES OF INCORPORATION, BY-LAWS AND CERTAIN OTHER
AGREEMENTS, ETC. The undersigned will not (a) amend, modify or change their
Articles of Incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or By-Laws, or any agreement
entered into by either of them with respect to their capital stock, or (b) enter
into any new agreement with respect to their capital stock, if in either case it
would have an adverse effect on the Lender.

(a) RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS. The undersigned will not,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to (a)
pay dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the undersigned or any of its
Subsidiaries, or pay any Indebtedness owed by any such Subsidiary to the
undersigned or any other Subsidiary of the undersigned, (b) make loans or
advances to the undersigned, or (c) transfer any of its properties or assets to
the undersigned, except for such encumbrances or restrictions existing under or
by reason of (i) applicable law, (ii) this Guaranty,

                                      -4-

<PAGE>

(iii) or customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the undersigned or any Subsidiary of the
undersigned.

(a) ERISA. The undersigned shall not (a)(i) establish, contribute to, or become
liable (directly or indirectly) in respect of, any Multiemployer Plan, or (ii)
establish or contribute to any Pension Plan other than an Existing Pension Plan
which would increase the aggregate Unfunded Pension Liabilities under all
Pension Plans to an amount in excess of $1, (b) cause any Pension Plan to have a
Funded Current Liability Percentage of less than 60 percent, or (c) increase
benefits under any Employee Benefit Plan or establish or contribute to any new
Employee Benefit Plan which would have the effect of increasing its aggregate
Unrecognized Retiree Welfare Liability to an amount in excess of $500,000.

1.                NOTICES.

                  All notices and other communications provided for hereunder to
a party hereto shall be in writing (including telecopier) and mailed, telecopied
or delivered to such party, at the following address or at such other address as
shall be designated by such party in a written notice to the other parties
hereto:

                  IF TO THE UNDERSIGNED:

                  LNR Sands Holdings, Inc.
                  c/o LNR Property Corporation
                  760 N.W. 107th Avenue, First Floor
                  Suite 100
                  Miami, Florida  33172

                  Attention:        Shelly Rubin
                                    Chief Financial Officer

                  Telephone:        (305) 229-6640
                  Telecopier:       (305) 226-7691

                  IF TO THE LENDER:

                  The Bank of New York
                  One Wall Street -- 17th Floor
                  New York, New York  10286

                  Attention:        William H. Cunningham
                                    Vice President

                                      -5-

<PAGE>

                  Telephone:        (212) 635-6471
                  Telecopier:       (212) 635-6468

         All such notices and communications shall, (i) when telecopied be
effective when sent, (ii) when mailed by first class mail, postage prepaid, be
effective on the fifth (5th) day following deposit in the mails, and (iii) when
sent or delivered by any other means be effective when received. The undersigned
and the Lender may rely on signatures of each other which are transmitted by
telecopier or other electronic means as fully as if originally signed.

1.                JURISDICTION; VENUE.

                  The undersigned irrevocably submits to the jurisdiction of any
New York State or Federal court sitting in the City or State of New York over
any suit, action or proceeding arising out of or relating to this Guaranty. The
undersigned hereby agrees that Lender shall have the option, in its sole
discretion, to lay the venue of any such suit, action or proceeding, in the
courts of the State of New York or the United States of America for the Southern
District of New York, and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in such court and any claim that
any such suit, action or proceeding brought in such a court has been brought in
an inconvenient forum. The undersigned agrees that a final judgment in any such
suit, action or proceeding brought in such a court shall be conclusive and
binding upon the undersigned.

1.                WAIVER OF TRIAL BY JURY.

                  THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS AND
THE TRANSACTIONS CONTEMPLATED HEREIN AND THEREIN, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE. FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO
REPRESENTATIVE OF THE LENDER, OR COUNSEL TO THE LENDER, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS PROVISION. THE PROVISIONS OF THIS PARAGRAPH
CONSTITUTE A MATERIAL INDUCEMENT TO THE LENDER TO ACCEPT THIS GUARANTY.

1.                GOVERNING LAW.

         This Guaranty and the rights and obligations of the parties hereunder
shall be construed, enforced, and interpreted according to the laws of the State
of New York applicable to contracts made in and performed in the State of New
York. Unless the text otherwise requires all terms used herein shall have the
meaning specified in the Uniform Commercial Code as in effect in the State of
New York on the date hereof.

                                      -6-

<PAGE>

1.                OTHER PROVISIONS.

(a) The undersigned hereby acknowledges that it has derived or expects to derive
a financial or other advantage from each and every Obligation incurred by
Borrower to the Lender.

(a) The undersigned waives notice of the acceptance of this Guaranty and of the
making of any such loans or extensions of credit, presentment to or demand of
payment from anyone whomsoever liable upon any of the Obligations, protest,
notice of presentment, non-payment or protest and notice of any sale of
collateral security or any default of any sort.

(a) The undersigned hereby agrees that, in the event that any property of the
undersigned is or may be hypothecated with property of Borrower as security for
any Obligations, any right of the undersigned to have such property of Borrower
first applied to the discharge of such Obligations is hereby irrevocably waived
by the undersigned.

(a) This is a continuing guaranty and shall remain in full force and effect and
be binding upon the undersigned, and the undersigned's successors and assigns.
Except as provided in Section 10 below, nothing except cash payment in full of
all Obligations and the termination of the Commitment shall release the
undersigned from liability under this Guaranty.

(a) This Guaranty is a guaranty of payment and not of collection, and the Lender
shall be under no obligation to take any action against Borrower or any other
person liable with respect to any of the Obligations or resort to any collateral
security held by it to secure any of the Obligations as a condition precedent to
the undersigned being obligated to perform as agreed herein. The undersigned
hereby waives any rights to interpose any defense, counterclaim or offset of any
nature and description which he may have or which may exist between and among
the Lender, Borrower and/or the undersigned.

(a) This Guaranty may be assigned by the Lender and its benefits shall inure to
the successors, indorsees and assigns of the Lender.

(a) Until such time as the Lender shall have received payment in full in cash in
satisfaction of all of the Obligations and the commitment shall have been
terminated, the undersigned waives any rights to be subrogated to the rights of
the Lender with respect to the Obligations and the undersigned waives any right
to and agrees that it will not institute or take any action against the Borrower
seeking contribution, reimbursement or indemnification by the Borrower with
respect to any payments made by the undersigned to the Lender hereunder.

(a) The undersigned waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations or of the reliance by Lender upon
this Guaranty. The Obligations, and each of them, shall conclusively be deemed
to have been created, contracted

                                      -7-

<PAGE>

or incurred in reliance upon this Guaranty. This Guaranty shall be construed as
a continuing, absolute and unconditional guaranty without regard to the
validity, regularity or enforceability of the Obligations and any other
indebtedness at any time held or owing by the Lender to or for the credit or the
account of the undersigned against and on account of the Obligations and
liabilities of the undersigned hereunder.

(a) The undersigned hereby waives any and all legal requirements that require or
compel the Lender to institute any action or proceedings at law or in equity
against Borrower, or anyone else, in respect of the Loans or any other document
executed in connection with the Loans or resort to or seek to realize upon or
exhaust the security held by the Lender or pursue any other remedy in the
Lender's power, as a condition precedent to bringing an action against the
undersigned upon this Guaranty, and failure of the Lender to do any of the
foregoing shall not exonerate, release or discharge the undersigned from its
absolute, unconditional and independent liabilities to the Lender hereunder.

(a) The Lender may bring and prosecute a separate action against the undersigned
to enforce its liabilities hereunder, whether or not any action is brought
against Borrower or any other person and whether or not Borrower or any other
person is joined in any such action or actions. Nothing shall prohibit the
Lender from exercising its rights against the undersigned, the Borrower, the
security, if any, for the Obligations, and any other person simultaneously,
jointly and/or severally. The undersigned shall be bound by each and every
ruling, order and judgment obtained by the Lender against Borrower in respect of
the Obligations, whether or not the undersigned is a party to the action or
proceeding in which such ruling, order or judgment is issued or rendered.

(a) The undersigned shall not be discharged, released or exonerated, in any way,
from its absolute, unconditional and independent liabilities hereunder, even
though any rights or defenses which the undersigned may have against Borrower,
the Lender or others may be destroyed, diminished or otherwise affected by:

(i) Any declaration by the Lender of a default in respect of any of the
Obligations;

(i) The exercise by the Lender of any rights or remedies against Borrower or any
other person;

(i) The failure of the Lender to exercise any rights or remedies against
Borrower or any other person;

(i) The sale or enforcement of, or realization upon (through judicial
foreclosure, power of sale or any other means) any security for any of the
Obligations, even though (i) recourse may not thereafter be had against Borrower
for any deficiency, or (ii) the Lender fails

                                      -8-

<PAGE>

to pursue any such recourse which might otherwise be available; whether by way
of deficiency judgment following judicial foreclosure, or otherwise;

(i) Any bankruptcy or reorganization of Borrower;

(i) The release of any other guarantor by operation of law or otherwise; or

(i) The voluntary or involuntary participation by Borrower in any settlement or
composition for the benefit of Borrower's creditors either in liquidation,
readjustment, receivership, bankruptcy or otherwise.

(a) The undersigned waives any right to plead any election of remedies.

(a) This Guaranty is absolute and unconditional and shall not be changed or
affected by any representation, oral agreement, act or thing whatsoever, except
as herein otherwise expressly provided. No modification or amendment of any
provisions of this Guaranty shall be effective unless in writing and signed by a
duly authorized officer of the Lender.

(a) No failure on the part of the Lender to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Lender of any right,
remedy or power hereunder preclude any other or future exercise of any other
right, remedy or power.

(a) Each and every right, remedy and power hereby granted to the Lender or
allowed it by law or other agreement shall be cumulative and not exclusive of
any other, and may be exercised by the Lender at any time and from time to time.

1.                TERMINATION.

                  Subject to Section 3(d) hereof, this Guaranty shall terminate,
and the undersigned shall have no further obligations hereunder, upon the
occurrence of the following conditions: (i) the Lender shall have received
payment, in immediately available funds for application to the outstanding
Obligations, of the sum of $33,092,000 and (ii) on the date such payment is
received, and after giving effect thereto, there shall not exist any Event of
Default under and as defined in the Credit Agreement.

                  IN WITNESS WHEREOF, this Guaranty has been executed by the
undersigned as of the date first above written.

                                      -9-

<PAGE>



                                                LNR SANDS HOLDINGS, INC.

                                                By:_____________________________
                                                   Name:
                                                   Title:

                                      -2-