EXHIBIT 10.9

                                CREDIT AGREEMENT

                                      AMONG

                              LENNAR LAND PARTNERS,
                                   AS BORROWER

                                       AND
                       THE FIRST NATIONAL BANK OF CHICAGO,
                               NATIONSBANK, N.A.,
                         CREDIT LYONNAIS ATLANTA AGENCY,
              BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
                                 COMERICA BANK,
                              FLEET NATIONAL BANK,
                         GUARANTY FEDERAL BANK, F.S.B.,
             THE INDUSTRIAL BANK OF JAPAN, LIMITED, ATLANTA AGENCY,
                        U. S. BANK NATIONAL ASSOCIATION,
                         PNC BANK, NATIONAL ASSOCIATION,
                                SOCIETE GENERALE,
                                  AMSOUTH BANK,
                       BARNETT BANK, N.A., SOUTH FLORIDA,
                         THE DAI-ICHI KANGYO BANK, LTD.,
                        THE FUJI BANK AND TRUST COMPANY,
                               KREDIETBANK, N.V.,
                                  SAKURA BANK,
                         SUNTRUST BANK, MIAMI, N.A. AND
                                 BANQUE PARIBAS

                                       AND

                       THE FIRST NATIONAL BANK OF CHICAGO,
                      AS ARRANGER AND ADMINISTRATIVE AGENT,
              BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,
                            AS SYNDICATION AGENT AND
                                  COMERICA BANK
                             AS DOCUMENTATION AGENT
              NATIONSBANK, N.A. AND CREDIT LYONNAIS ATLANTA AGENCY,
                               AS MANAGING AGENTS
              FLEET NATIONAL BANK AND GUARANTY FEDERAL BANK, F.S.B.
                                  AS CO-AGENTS

                         CLOSING DATE: NOVEMBER 3, 1997


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                                TABLE OF CONTENTS

                                                                               PAGE
                                                                               ----
<S>                                                                             <C>
ARTICLE I  CERTAIN DEFINED TERMS.................................................1
         SECTION 1.01.     Certain Defined Terms.................................1
         SECTION 1.02.     Computation of Time Periods..........................23
         SECTION 1.03.     Accounting Terms.....................................23

ARTICLE II  THE CREDITS.........................................................23
         SECTION 2.01.     Commitments..........................................23
         SECTION 2.02.     Types of Advances; Mandatory Principal Payments;
                           Final Maturity.......................................24
         SECTION 2.03.     Optional Principal Payments..........................25
         SECTION 2.04.     Commitment Fee and Reduction of Commitments..........26
         SECTION 2.05.     Method of Borrowing..................................26
         SECTION 2.06.     Method of Selecting Types and Interest Periods
                           for Advances.........................................26
         SECTION 2.07.     Method of Selecting Types and Interest Periods
                           for Conversion and Continuation of Advances..........27

         SECTION 2.08.     Minimum Amount of Each Advance.......................28
         SECTION 2.09.     Rate after Maturity..................................28
         SECTION 2.10.     Method of Payment....................................28
         SECTION 2.11.     Notes; Telephonic Notices............................29
         SECTION 2.12.     Interest Payment Dates; Interest and Fee Basis.......29
         SECTION 2.13.     Notification of Advances, Interest Rates, 
                           Prepayments and Commitment Reductions................29
         SECTION 2.14.     Lending Installations................................30
         SECTION 2.15.     Facility Letters of Credit...........................30
         SECTION 2.16.     Non-Receipt of Funds by the Agent....................36
         SECTION 2.17.     Withholding Tax Exemption............................36
         SECTION 2.18.     Unconditional Obligation to Make Payments............37
         SECTION 2.19.     Compensating Balances................................37
         SECTION 2.20.     Extension of Facility A Termination Date.............37
         SECTION 2.21.     Determination of Borrowing Base......................38

ARTICLE III  CHANGE IN CIRCUMSTANCES............................................39
         SECTION 3.01.     Yield-Protection.....................................39
         SECTION 3.02.     Changes in Capital Adequacy Regulations..............39
         SECTION 3.03.     Availability of Types of Advances....................40
         SECTION 3.04.     Funding Indemnification..............................40
         SECTION 3.05.     Lender Statements: Survival of Indemnity.............41

                                     -(i)-

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ARTICLE IV  REPRESENTATIONS AND WARRANTIES......................................41
         SECTION 4.01.     Organization, Powers, etc. of Borrower...............41
         SECTION 4.02.     Organization, Powers, Etc. of 
                           Subsidiary Guarantor.................................41
         SECTION 4.03.     Organization, Powers, Etc. of Lennar and LNR.........42
         SECTION 4.04.     Authorization and Validity of this Agreement,
                           Etc. of Borrower.....................................42
         SECTION 4.05.     Authorization and Validity of this Agreement,
                           Etc. By Subsidiary Guarantor.........................42
         SECTION 4.06.     Authorization and Validity of this Agreement,
                           Etc. By Lennar and LNR...............................43
         SECTION 4.07.     INTENTIONALLY OMITTED................................43
         SECTION 4.08.     INTENTIONALLY OMITTED................................43
         SECTION 4.09.     No Material Adverse Effect...........................44
         SECTION 4.10.     Title to Properties..................................44
         SECTION 4.11.     Litigation...........................................44
         SECTION 4.12.     Payment of Taxes by Subsidiary Guarantors............44
         SECTION 4.13.     Agreements...........................................44
         SECTION 4.14.     Foreign Direct Investment Regulations................45
         SECTION 4.15.     Federal Reserve Regulations..........................45
         SECTION 4.16.     Consents, Etc........................................45
         SECTION 4.17.     Compliance with Applicable Laws......................45
         SECTION 4.18.     Relationship of the Borrower and the
                           Subsidiary Guarantors................................46
         SECTION 4.19.     Subsidiaries; Joint Ventures.........................46

         SECTION 4.20.     ERISA................................................47

         SECTION 4.21.     Investment Company Act...............................47
         SECTION 4.22.     Public Utility Holding Company Act...................47
         SECTION 4.23.     Post-Retirement Benefits.............................47
         SECTION 4.24.     Insurance............................................47
         SECTION 4.25.     Environmental Representations........................47
         SECTION 4.26.     Security Documents...................................48
         SECTION 4.27.     Solvency.............................................48

         SECTION 4.28.     No Misrepresentation.................................48
         SECTION 4.29.     No Encroachments; Licenses and Permits...............48
         SECTION 4.30.     Independent Units....................................49
         SECTION 4.31.     Minimum Tangible Net Worth...........................49
         SECTION 4.32.     Stevenson Ranch Venture L............................49

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ARTICLE V  CONDITIONS PRECEDENT.................................................49
         SECTION 5.01.     Conditions of Effectiveness..........................49
         SECTION 5.02.     Conditions Precedent to All Borrowings...............54

ARTICLE VI  AFFIRMATIVE COVENANTS...............................................56
         SECTION 6.01.     Existence, Properties, etc...........................56

         SECTION 6.02.     Notice...............................................56

         SECTION 6.03.     Payments of Debts, Taxes, Etc........................56
         SECTION 6.04.     Accounts and Reports.................................57
         SECTION 6.05.     Access to Premises and Records.......................60
         SECTION 6.06.     Maintenance of Properties and Insurance..............60
         SECTION 6.07.     Financing; New Investments...........................60
         SECTION 6.08.     Compliance with Applicable Laws......................61
         SECTION 6.09.     Use of Proceeds......................................61
         SECTION 6.10.     Further Assurances...................................61
         SECTION 6.11.     Appraisals...........................................61

ARTICLE VII  NEGATIVE COVENANTS.................................................62
         SECTION 7.01.     Minimum Tangible Net Worth...........................62
         SECTION 7.02.     Limitation on Indebtedness...........................62
         SECTION 7.03.     Guaranties...........................................62
         SECTION 7.04.     Sale of Assets; Acquisitions; Merger.................63
         SECTION 7.05.     Investments..........................................63
         SECTION 7.06.     Subordinated Debt....................................64
         SECTION 7.07.     No Margin Stock......................................64
         SECTION 7.08.     Transactions with Affiliates.........................64
         SECTION 7.09.     Fixed Charge Coverage................................65
         SECTION 7.10.     Pro Forma Fixed Charge Coverage......................65
         SECTION 7.11.     Restrictions on Distributions........................65
         SECTION 7.12.     Liens and Encumbrances...............................66

ARTICLE VIII  COLLATERAL........................................................66
         SECTION 8.01.     Security for Obligations.............................66
         SECTION 8.02.     Collateral Documentation.............................66
         SECTION 8.03.     Powers and Duties of the Borrower and 
                           Subsidiary Guarantors with Respect to
                           the Collateral.......................................66

                                    -(iii)-

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         SECTION 8.04.     Power of Attorney....................................66
         SECTION 8.05.     Joinder in Subdivision Plats, Subdivision
                           Maps or Parcel Maps..................................67
         SECTION 8.06.     Sale of Lots.........................................67
         SECTION 8.07.     Partial Releases of Lots.............................67

ARTICLE IX  EVENTS OF DEFAULT...................................................70
         SECTION 9.01.     Events of Default....................................70
         SECTION 9.02.     Acceleration.........................................72
         SECTION 9.03.     Rights as to Collateral..............................73
         SECTION 9.04.     Application of Funds.................................75

ARTICLE X  THE AGENT............................................................76
         SECTION 10.01.    Appointment..........................................76

         SECTION 10.02.    Powers...............................................76

         SECTION 10.03.    General Immunity.....................................76
         SECTION 10.04.    No Responsibility for Loans, Recitals, Etc...........76
         SECTION 10.05.    Employment of Agents and Counsel.....................77
         SECTION 10.06.    Reliance on Documents; Counsel.......................77
         SECTION 10.07.    No Waiver of Rights..................................77
         SECTION 10.08.    Knowledge of Event of Default........................78
         SECTION 10.09.    Agent's Reimbursement and Indemnification............78
         SECTION 10.10.    Notices to the Borrower or Subsidiary Guarantor......78
         SECTION 10.11.    Action on Instructions of Lenders....................78
         SECTION 10.12.    Lender Credit Decision...............................79
         SECTION 10.13.    Resignation or Removal of the Agent..................79
         SECTION 10.14.    Benefits of Article X................................79
         SECTION 10.15.    Agent's Custodial Duties.............................79
         SECTION 10.16.    Collateral Value Determination; 
                           Determination Assumptions............................81

ARTICLE XI  RATABLE PAYMENTS....................................................81
         SECTION 11.01.    Ratable Payments.....................................81

ARTICLE XII  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..................81
         SECTION 12.01.    Successors and Permitted Assigns.....................81
         SECTION 12.02.    Participations.......................................82
         SECTION 12.03.    Assignments..........................................83

ARTICLE XIII  MISCELLANEOUS.....................................................84

                                     -(iv)-

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         SECTION 13.01.    Notice...............................................84
         SECTION 13.02.    Survival of Representations..........................84

         SECTION 13.03.    Expenses.............................................84

         SECTION 13.04.    Indemnification of the Lenders and the Agent.........84
         SECTION 13.05.    Maximum Interest Rate................................85
         SECTION 13.06.    Modification of Agreement............................85
         SECTION 13.07.    Preservation of Rights...............................86
         SECTION 13.08.    Joint and Several Obligations of Borrower;
                           Several Obligations of Lenders.......................87
         SECTION 13.09.    Severability.........................................87
         SECTION 13.10.    Counterparts.........................................87
         SECTION 13.11.    Representation and Warranty by the Lenders...........87
         SECTION 13.12.    The Borrower as Agent for Each 
                           Subsidiary Guarantor.................................87
         SECTION 13.13.    Loss, Etc., Notes or Subsidiary Guarantees...........87
         SECTION 13.14.    Governmental Regulation..............................88
         SECTION 13.15.    Taxes................................................88
         SECTION 13.16.    Headings.............................................88

         SECTION 13.17.    Entire Agreement.....................................88
         SECTION 13.18.    CHOICE OF LAW........................................88
         SECTION 13.19.    CONSENT TO JURISDICTION..............................88
         SECTION 13.20.    WAIVER OF JURY TRIAL.................................89

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                                     -(v)-

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                                    EXHIBITS

EXHIBIT                             DESCRIPTION

  A             Facility A Note

  B             Facility B Note

  C             Assignment Agreement

  C-1           Notice of Assignment

  C-2           Consent and Release

  D             Form of Mortgage/Deed of Trust and Security Agreement,

  E             Joinder Agreement

  F             Pricing Grid

  G             Borrowing Base Certificate

  H             Environmental Indemnity

  I             Subsidiary Guaranty

  J             Lennar and LNR Guaranty

  K             Security Agreement (Capital Stock and Partnership Interests)

  L             Requirements for Entitled Land


                                     -(vi)-

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                                    SCHEDULES

                                                                                  WHERE FOUND
SCHEDULE                            DESCRIPTION                                   IN AGREEMENT
--------                            -----------                                   ------------
<S>                        <C>                                                  <C>
  I                        Subsidiaries and Joint Venture Subsidiaries          (Definition of
                           of Borrower which are Subsidiary Guarantors          "Subsidiary Guarantor")

  II                       Lenders                                              Opening Paragraph

  III                      Mortgaged Property/Real Estate Owned                 (Definition of
                                                                                "Mortgaged Property")

  IV                       Required Consents                                       4.16

  V                        Subsidiaries and Joint Ventures                         4.19

  VI                       Permitted Liens                                      (Definition of
                                                                                "Permitted Liens")

  VII                      Mortgage Filing Offices                                 4.26(a)

  VIII                     UCC Filing Offices                                      4.26(b)
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                                    -(vii)-

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         CREDIT AGREEMENT, dated as of October 31, 1997, among LENNAR LAND
PARTNERS, a general partnership formed under the laws of the State of Florida
(the "Borrower"), the lenders listed in Schedule II hereto (hereinafter
collectively referred to as the "Lenders"), and THE FIRST NATIONAL BANK OF
CHICAGO, as Agent (the "Agent").

                                     RECITAL

         The Borrower desires to obtain from the Lenders and the Lenders are
willing to provide to the Borrower loans and letters of credit in an aggregate
principal amount outstanding from time to time not to exceed $225,000,000, upon
the terms and subject to the conditions hereinafter set forth.

                                    AGREEMENT

         In consideration of the foregoing and of the mutual covenants and
agreements hereinafter set forth, the parties hereto hereby agree as follows:

                                    ARTICLE I

                              CERTAIN DEFINED TERMS

         SECTION 1.01. CERTAIN DEFINED TERMS. As used herein, each of the
following terms shall have the meaning ascribed to it below, which meaning shall
be applicable to both the singular and plural forms of the terms defined:

         "ADDITIONAL MORTGAGED PROPERTY" means each Property added as a
Mortgaged Property in the manner described in Section 2.21(c).

         "ADJUSTED TANGIBLE NET WORTH" means, at any date, Tangible Net Worth at
such date less, to the extent not already deducted in the definition of Tangible
Net Worth, the aggregate of all of the following at such date: (i) the
stockholders' equity of each Subsidiary which is not a Subsidiary Guarantor
hereunder, (ii) the capital account of the Borrower and each Subsidiary in a
Joint Venture wherein the Joint Venture is not a Subsidiary Guarantor hereunder
and (iii) the principal amount of any loan or commitment to loan to any
Subsidiary or Joint Venture wherein the Borrower is an owner or venturer which
is not a Subsidiary Guarantor hereunder.

         "ADVANCE" includes any or all of a Facility A Advance and a Facility B
Advance.

         "AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to



<PAGE>


direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.

         "AGENT" means The First National Bank of Chicago in its capacity as
agent for the Lenders pursuant to Article X, and not in its individual capacity
as a Lender or an Issuer, and any successor Agent appointed pursuant to Article
X.

         "AGREEMENT DATE" means October 31, 1997.

         "AGGREGATE COMMITMENT" means, at any time, the sum of the then
applicable Aggregate Facility A Commitment and Aggregate Facility B Commitment.

         "AGGREGATE FACILITY A COMMITMENT" means $125,000,000, as such amount
may be reduced from time to time pursuant to the terms hereof.

         "AGGREGATE FACILITY B COMMITMENT" means $100,000,000, as such amount
may be reduced from time to time pursuant to the terms hereof.

         "AGGREGATE LETTER OF CREDIT COMMITMENT" means $20,000,000, as such
amount may be reduced from time to time pursuant to the terms hereof.

         "AGREEMENT" means this Credit Agreement, including the exhibits and
schedules hereto, as it may be amended, renewed, modified or restated and in
effect from time to time.

         "APPLICABLE MARGIN" shall be determined in accordance with the pricing
grid set forth as Exhibit "F" hereto.

         "APPRAISAL" means, with respect to any Property, a written appraisal of
such Property prepared by an MAI appraiser approved by the Agent in writing,
which appraisal is acceptable to the Agent and the Majority Lenders, done in
conformity with the following standards: Uniform Standards of Professional
Appraisal Practice, the requirements of the Code of Professional Ethics,
Financial Institutions Reform and Recovery Act and the Standards of Professional
Appraisal Practice of the Appraisal Institute and the Appraisal Guidelines set
forth by the Office of the Controller of the Currency and the Federal Reserve
Board.

         "APPRAISED VALUE" means the "as is" value of the land as determined by
the Appraisal for the Real Estate.

         "ARTICLE" means an article of this Agreement unless another document is
specifically referenced.

         "AUTHORIZED OFFICER" means any Person designated by the Borrower in
writing to act as an Authorized Officer hereunder, acting singly.

                                      -2-

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         "BORROWER" has the meaning assigned to that term in the introductory
paragraph of this Agreement. All of the Partners of the Borrower shall be
jointly and severally liable as Borrower under this Agreement, the Notes, and
all other Loan Documents.

         "BORROWER OBLIGATIONS" means all unpaid principal of and accrued and
unpaid interest on the Notes, all Facility Letter of Credit Obligations; all
accrued and unpaid fees, all expenses, reimbursements, indemnities and other
obligations of the Borrower to the Lenders or to any Lender, the Agent or any
indemnified party arising under the Loan Documents, and all Rate Hedging
Obligations of the Borrower to the Lenders, any Lender or to the Agent.

         "BORROWER SECURITY DOCUMENTS" means collectively the Borrower
Mortgages, Security Agreement (Capital Stock and Partnership Interests) and all
other security documents hereafter delivered to the Agent granting a Lien on any
asset or assets of the Borrower to secure the Borrower Obligations.

         "BORROWER'S COUNSELS' OPINIONS" means those opinions of counsel
described in Section 5.01(r) and (s).

         "BORROWER'S ORGANIZATIONAL DOCUMENTS" means those documents described
in Section 5.01(y) hereof.

         "BORROWING BASE" means, from time to time, the sum of the following
amounts, all as reflected from time to time in accordance with GAAP consistently
applied in the consolidated balance sheet of the Borrower but only to the extent
the same constitutes Collateral: (i) 65% of the Net Book Value of all Finished
Lots owned by the Borrower or a Subsidiary Guarantor, (ii) 50% of the Net Book
Value of all Land Under Development owned by the Borrower or a Subsidiary
Guarantor, (iii) 30% of the Net Book Value of all Unimproved Entitled Land owned
by the Borrower or a Subsidiary Guarantor, (iv) zero percent (0%) of the Net
Book Value of all Unentitled Land owned by the Borrower or a Subsidiary
Guarantor; and (v) 50% of the Net Book Value of Real Estate included in a
project which is under development that is not designated to be used for the
construction of housing units; PROVIDED that the amount determined pursuant to
this clause shall not exceed five percent (5%) of the Borrowing Base; PROVIDED
FURTHER that notwithstanding anything to the contrary provided herein, any asset
which is encumbered by a Lien (other than a Permitted Lien, other than Permitted
Liens described in clauses (a) and (d)) shall not be included in the calculation
of the Borrowing Base pursuant to clauses (i) through (v) above; PROVIDED
FURTHER, the Net Book Value of the Bramalea Land shall be adjusted for the
Purchase Price Accounting Adjustment and, provided further, no Mortgaged
Property shall be included in the Borrowing Base, unless and until all of the
conditions precedent set forth in Section 5.01 with respect to such Mortgaged
Property have been satisfied.

         "BORROWING BASE CERTIFICATE" means a certificate of the Borrower
setting forth the components of the Borrowing Base, substantially in the form of
Exhibit "G" delivered under this Agreement. The Borrowing Base Certificate shall
describe all of the Finished Lots, Land Under Devel-

                                      -3-

<PAGE>


opment, Unimproved Entitled Land, Unentitled Land, and other Real Estate. The
Borrowing Base Certificate shall further describe any change in condition from
the last preceding delivered Borrowing Base Certificate.

         "BORROWING DATE" means a date on which an Advance is made hereunder.

         "BORROWING NOTICE" is defined in Section 2.06.

         "BRAMALEA" means Bramalea California, LLC, a California limited
liability company.

         "BRAMALEA LAND" means that certain Property owned by Bramalea that is a
part of the Borrowing Base.

         "BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Fixed Rate Advances, a day (other than a Saturday or Sunday) on
which banks are open for business in Chicago and New York and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
are open for business in Chicago.

         "CAPITAL STOCK" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.

         "CAPITALIZED LEASE" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.

         "CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.

         "CLOSING DATE" means the date on which the Lenders shall first become
obligated to make Advances after satisfaction or waiver of all of the conditions
precedent set forth in Section 5.01 and Section 5.02.

         "CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

         "COLLATERAL" means, at any time, any assets owned by the Borrower or a
Subsidiary Guarantors that then are subject to a Lien in favor of the Agent as
security for the Obligations.

         "COLLATERAL DOCUMENTS" is defined in Section 10.15(a).

                                      -4-

<PAGE>


         "COMMITMENT" means, for each of the Lenders, the Facility A Commitment
and the Facility B Commitment of such Lender.

         "COMMITMENT FEE" means the fee determined in accordance with the
pricing grid set forth as Exhibit "F" hereto.

         "CONDEMNATION PROCEEDS" means all compensation, awards, rights of
action and proceeds awarded to the Borrower or any Subsidiary Guarantor by
reason of any Taking.

         "CONSOLIDATED INTEREST INCURRED" means, for any period, the aggregate
amount (without duplication and determined in each case in accordance with GAAP)
of (a) interest expensed or capitalized, paid, accrued, or scheduled to be paid
or accrued, of the Borrower, and its consolidated Subsidiaries during such
period, including (i) original issue discount and non-cash interest payments or
accruals on any Indebtedness, (ii) the interest portion of all deferred payment
obligations, and (iii) all commissions, discounts and other fees and charges
owed with respect to bankers' acceptances and letter of credit financings and
interest swap and hedging obligations, in each case to the extent attributable
to such period PLUS (b) the amount of dividends accrued or payable by any of the
consolidated Subsidiaries in respect of Disqualified Capital Stock (other than
by a Subsidiary of the Borrower to the Borrower or a Subsidiary Guarantor),
PROVIDED, HOWEVER, that interest, dividends or other payments or accruals of a
consolidated Subsidiary that is not wholly owned shall be included only to the
extent of the interest of the Borrower in such Subsidiary. For purposes of this
definition, (x) interest on Capitalized Lease Obligations shall be deemed to
accrue at an interest rate reasonably determined by the Borrower to be the rate
of interest implicit in such Capitalized Lease Obligations in accordance with
GAAP and (y) interest expense attributable to any Indebtedness represented by
the guaranty by the Borrower or a Subsidiary of the Borrower of an obligation of
another Person shall be deemed to be the interest expense attributable to the
Indebtedness guaranteed.

         "CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Borrower and the consolidated Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; PROVIDED, that (i)
net income (or loss) of any other Person which is not a Subsidiary or is
accounted for by such Person by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid to
the Borrower or a consolidated Subsidiary, (ii) the net income (or loss) of any
other Person acquired by the Borrower or a consolidated Subsidiary in a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded, (iii) all gains and losses which are either extraordinary (as
determined in accordance with GAAP) or are either unusual or nonrecurring
(including any gain from the sale or other disposition of assets outside the
ordinary course of business or from the issuance or sale of any Capital Stock),
shall be excluded, and (iv) the net income, if positive, of any of the
consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of
the terms of its charter or bylaws or any other agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
consolidated Subsidiary shall be excluded, PROVIDED, HOWEVER, in the case of

                                      -5-

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exclusions from Consolidated Net Income set forth in clauses (ii), (iii) and
(iv), such amounts shall be excluded only to the extent included in computing
such net income (or loss) in accordance with GAAP and without duplication;
PROVIDED FURTHER, HOWEVER, that for purposes of determining Consolidated Net
Income, the net income of any Person which is not a Subsidiary Guarantor shall
be excluded.

         "CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement or take-or-pay contract. With respect to the Borrower, Contingent
Obligation includes, without limitation of the foregoing, obligations under
reimbursement agreements with financial institutions (including Lenders)
relating to letters of credit issued by such financial institutions for the
account of Borrower.

         "CONVERSION/CONTINUATION NOTICE" is defined in Section 2.07(d).

         "CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or its Subsidiaries, are
treated as a single employer under Section 414 of the Code.

         "CORPORATE BASE RATE" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.

         "DEFAULT RATE" means the rate after maturity as provided for in Section
2.09.

         "DISQUALIFIED CAPITAL STOCK" means (a) except as set forth in (b), with
respect to any Person, Capital Stock of such Person that, by its terms or by the
terms of any security into which it is convertible, exercisable or exchangeable,
is, or upon the happening of an event or the passage of time would be, required
to be redeemed or repurchased (including at the option of the holder thereof) by
such Person or any of its subsidiaries, in whole or in part, on or prior to the
stated maturity of the securities, and (b) with respect to any subsidiary of
such Person (including with respect to any Subsidiary of the Borrower), any
Capital Stock other than any common stock with no preference, privileges, or
redemption or repayment provisions.

         "DISTRIBUTION" means (i) any dividend or other distribution, direct or
indirect, on account of any equity interest of the Borrower or of any Subsidiary
(other than those payable or distributable solely to the Borrower or a
Subsidiary Guarantor) now or hereafter outstanding, except (i) a dividend
payable solely in shares of a class of stock to the holders of that class; (ii)
any redemption, conversion, exchange, retirement or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of either of the Borrower or of any

                                      -6-

<PAGE>


Subsidiary (other than those payable or distributable solely to the Borrower or
a Subsidiary Guarantor) now or hereafter outstanding; (iii) any payment made to
retire, or obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of the Borrower or of any
Subsidiary now or hereafter outstanding; and (iv) any issuance and sale of
Capital Stock of any Subsidiary other than to the Borrower.

         "DOLLARS" and the sign "$" each means lawful money of the United States
of America.

         "DUFF & PHELPS" means Duff & Phelps Credit Rating Co. or any Person
succeeding to the securities rating business of such company.

         "ENGINEER" means each reputable engineer approved by the Agent licensed
as such in the state, province or other jurisdiction in which the Property in
question is located and experienced with real estate of the same type as the
Properties.

         "ENGINEERING REPORT" means with respect to any Property, a written
report prepared by an Engineer describing and analyzing the physical condition
of the Improvements of such Property and otherwise in form and substance
reasonably satisfactory to the Agent.

         "ENTITLED LAND" means a parcel of Real Estate constituting a part of
the Mortgaged Property owned by the Borrower or a Subsidiary Guarantor which is
to be developed primarily for residential dwelling units and which satisfies the
requirements for the state and county wherein it is located as more particularly
described in the Requirements for Entitled Land attached hereto as Exhibit L.

         "ENVIRONMENTAL CLAIM" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of the employees) which seeks to impose liability under any
Environmental Law.

         "ENVIRONMENTAL INDEMNITY" means one or more environmental indemnity
agreements dated as of the Closing Date in substantially the form attached as
Exhibit "H" executed or to be executed by the Borrower and the Subsidiary
Guarantors and any future Environmental Indemnities executed in connection with
any land as any of such Environmental Indemnities may be amended, modified or
restated hereafter in accordance with the terms of such agreements.

         "ENVIRONMENTAL LAW(S)" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, Hazardous Substances or wastes 

                                      -7-

<PAGE>


into surface water, ground water or land, or (iv) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Substances or wastes or the clean-up or
other remediation thereof.

         "ENVIRONMENTAL PERMIT" means any permit, license, order, approval or
other authorization under Environmental Law.

         "ENVIRONMENTAL REPORT" means with respect to the Mortgaged Property, an
environmental report issued not earlier than 12 months prior to the Closing Date
that can be relied on by the Agent and Lenders, which is satisfactory to the
Agent certifying to the Agent and the Lenders that the Mortgaged Property and
the soil and groundwater thereunder do not contain Hazardous Substances except
for Hazardous Substances as permitted by applicable laws.

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

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.

         "EURODOLLAR BASE RATE" means, with respect to a Fixed Rate Advance for
the relevant Eurodollar Interest Period, the rate determined by the Agent to be
the rate at which deposits in U.S. dollars are offered by First Chicago to
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Eurodollar
Interest Period, in the approximate amount of First Chicago's relevant Fixed
Rate Loan and having a maturity approximately equal to such Eurodollar Interest
Period.

         "EURODOLLAR INTEREST PERIOD" means, with respect to a Fixed Rate
Advance, a period of one, two, three or six months, as available, commencing on
a Business Day selected by the Borrower pursuant to this Agreement. Such
Eurodollar Interest Period shall end on (but exclude) the day which corresponds
numerically to such date one, two, three or six months thereafter, PROVIDED,
HOWEVER, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Eurodollar Interest Period shall
end on the last Business Day of such next, second, third or sixth succeeding
month. If a Eurodollar Interest Period would otherwise end on a day which is not
a Business Day, such Eurodollar Interest Period shall end on the next succeeding
Business Day, PROVIDED, HOWEVER, that if said next succeeding Business Day falls
in a new calendar month, such Eurodollar Interest Period shall end on the
immediately preceding Business Day.

         "EURODOLLAR RATE" means, with respect to a Fixed Rate Advance for the
relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (ii) the Applicable Margin. The Eurodollar
Rate shall be rounded to the next higher multiple of 1/16 of 1% if the rate is
not such a multiple.

                                      -8-

<PAGE>


         "EVENT" means an event, circumstance, condition or state of facts.

         "EVENT OF DEFAULT" is defined in Section 9.01.

         "EXISTING CREDIT AGREEMENT" means the Second Amended and Restated
Revolving Credit Agreement, dated as of April 4, 1997, among Lennar and certain
of its Subsidiaries, as borrowers thereunder, First Chicago as Agent and lender
thereunder, and certain other lenders named therein.

         "FACILITIES" means Facility A and Facility B.

         "FACILITY A" means the revolving credit facility described in Section
2.01(a).

         "FACILITY A ADVANCE" means a Loan pursuant to Facility A.

         "FACILITY A COMMITMENT" means, for each of the Lenders, the obligation
of such Lender to make Loans pursuant to Facility A and purchase participations
in Facility Letters of Credit in the aggregate not exceeding the amount set
forth opposite its signature below as its "Facility A Commitment", as such
amount may be modified from time to time pursuant to the terms hereof.

         "FACILITY A NOTE" means a promissory note in substantially the form of
Exhibit "A" hereto, completed, executed and delivered by the Borrower and
payable to the order of a Lender in the amount of the Facility A Commitment,
including any amendments, modifications, restatements, renewals or replacements
of such promissory note.

         "FACILITY A TERMINATION DATE" means the fourth anniversary of the
Closing Date, or such later date, if any, to which the Facility A Commitment is
extended pursuant to Section 2.20.

         "FACILITY B" means the term loan facility described in Section 2.01(b).

         "FACILITY B ADVANCE" means a term loan made pursuant to Facility B.

         "FACILITY B COMMITMENT" means, for each of the Lenders, the obligation
of such Lender to make a term Loan pursuant to the Facility B Advance in the
amount set forth opposite its signature below as its "Facility B Commitment".

         "FACILITY B NOTE" means a promissory note in substantially the form of
Exhibit "B" hereto, completed, executed and delivered by the Borrower and
payable to the order of a Lender in the amount of its Facility B Commitment,
including any amendments, modifications, restatements, renewals or replacements
of such promissory note.

         "FACILITY B TERMINATION DATE" means the fourth anniversary of the
Closing Date.

                                      -9-

<PAGE>


         "FACILITY LETTER OF CREDIT" means a letter of credit issued by an
Issuer pursuant to Section 2.15.

         "FACILITY LETTER OF CREDIT FEE" means the fee identified in Section
2.15(f)(i).

         "FACILITY LETTER OF CREDIT OBLIGATIONS" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower with respect to Facility Letters of Credit, including the sum of (a)
the Reimbursement Obligations and (b) the aggregate undrawn face amount of the
then outstanding Facility Letters of Credit.

         "FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.

         "FINANCING STATEMENT" means any Uniform Commercial Code - Financing
Statement - Form UCC-1 to be executed and delivered by Borrower in connection
with perfecting the security interest assigned by any Borrower Security Document
or Subsidiary Guarantor Security Document or any extension, renewal,
restatement, modification, or amendment thereof.

         "FINISHED LOT" means a parcel of Entitled Land which satisfies the
requirements for Land Under Development and which the owner thereof has invested
not less than 85% of the cost to complete the Improvements thereon, and which;
in Florida, is a Lot described within a final recorded subdivision plat or
agreement in lieu of plat; in California is a Lot reflected on a duly recorded
final subdivision map or a parcel reflected on a duly recorded parcel map and is
subject to a final public subdivision report, if required, duly, validly and
unconditionally issued by the California Department of Real Estate pursuant to
and in accordance with the Subdivided Lands Act, Business and Professions Code
Section 11018.2; in Arizona, is a Lot described in a final public subdivision
report duly, validly and unconditionally issued with the Arizona Department of
Real Estate pursuant to and in accordance with Arizona Revised Statute Section
32-2181 et seq.; and, in Texas, is a Lot which constitutes a valid, legally
subdivided Lot within the meanings of the applicable laws of Texas, the County
and/or the City within which it is located, and other requirements governing the
subdivision of land and constitutes a Lot reflected on a duly recorded plat or
delineated representation of the subdivision of lands, being a complete and
exact representation of the subdivision and other conformation in compliance
with the requirements of all applicable sections of VTCA Local Government Code
Section 212, all the applicable local ordinances and other requirements
governing the subdivision of land and approved by the appropriate Governmental
Authority.

                                      -10-

<PAGE>


         "FIRST CHICAGO" means The First National Bank of Chicago in its
individual capacity, and its successors.

         "FITCH" means Fitch Investors Service, L.P. or any Person succeeding to
the securities rating business of such company.

         "FIXED RATE" means the Eurodollar Rate.

         "FIXED RATE ADVANCE" means an Advance which bears interest at a Fixed
Rate.

         "FIXED RATE LOAN" means a Loan which bears interest at a Fixed Rate.

         "FLOATING RATE" means, for any day, a rate per annum equal to the
higher of (i) the Corporate Base Rate for such day or (ii) the sum of the
Federal Funds Effective Rate plus 0.5%, in each case changing when and as the
Corporate Base Rate and the Federal Funds Effective Rate change.

         "FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.

         "FLOATING RATE LOAN" means a Loan which bears interest at the Floating
Rate.

         "FREE CASH FLOW" means Net Proceeds from the sale of Real Estate less
the sum of: (a) Real Estate development expenses incurred (excluding capitalized
interest), (b) property taxes paid or accrued, (c) general and administrative
expenses, and (d) other property expenses.

         "GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession as in effect from time to time.

         "GOVERNMENTAL AUTHORITY" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
the Lender, the Borrower, any Subsidiaries of the Borrower or any of their
respective properties.

         "GOVERNMENTAL PROCEEDINGS" means any action or proceeding by any
Governmental Authority, including without limitation, the promulgation,
enactment or entry of any legal requirement.

         "HAZARDOUS SUBSTANCES" means any toxic or hazardous wastes, pollutants
or substances, including, without limitation, asbestos, PCBs, petroleum products
and by-products, substances defined or listed as "hazardous substances" or
"toxic substances" or similarly identified in or 

                                      -11-

<PAGE>

pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. ss 9061 ET SEQ., hazardous materials
identified in or pursuant to the Hazardous Materials Transportation Act 49
U.S.C. ss 1802 ET SEQ., hazardous wastes identified in or pursuant to The
Resource Conservation and Recovery Act, 42 U.S.C. ss 6901 ET SEQ., any chemical
substance or mixture regulated under the Toxic Substance Control Act of 1976, as
amended, 15 U.S.C. ss 2601 ET seq., any "toxic pollutant" under the Clean Water
Act, 33 U.S.C. ss 466 ET SEQ., as amended, any hazardous air pollutant under the
Clean Air Act, 42 U.S.C. ss 7401 ET SEQ., and any hazardous or toxic substance
or pollutant regulated under any other applicable federal, state or local
Environmental Laws.

         "IMPROVEMENTS" means on and off-site development work, including but
not limited to filling to grade, main water distribution and sewer collection
systems and drainage system installation, paving, and other improvements
necessary for the use of residential dwelling units and as required pursuant to
development agreements which may have been entered into with Governmental
Authorities.

         "INDEBTEDNESS" of any Person means, without duplication, (a) all
liabilities and obligations, contingent or otherwise, of such Person, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (ii) evidenced
by bonds, notes, debentures or similar instruments, (iii) representing the
balance deferred and unpaid of the purchase price of any Property or services,
except those incurred in the ordinary course of its business that would
constitute ordinarily a trade payable to trade creditors, (iv) evidenced by
bankers' acceptances, (v) consisting of obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from property now
or hereafter owned or acquired by such Person, (vi) consisting of Capitalized
Lease Obligations, (vii) consisting of liabilities and obligations under any
sales/leaseback and receivable sales transactions, or (viii) consisting of a
letter of credit or a reimbursement obligation of such Person with respect to
any letter of credit; (b) all net obligations of such Person under interest swap
and hedging obligations; and (c) all liabilities and obligations of others of
the kind described in the preceding clauses (a) or (b) that such Person has
guaranteed or that is otherwise its legal liability or which are secured by any
assets or property of such Person and all obligations to purchase, redeem or
acquire any Capital Stock, other than liability under executory contracts to
purchase Capital Stock. With respect to the Borrower, Indebtedness includes,
without limitation of the foregoing, all Obligations.

         "INSURANCE CERTIFICATES" is defined in Section 5.01(o).

         "INTEREST PERIOD" means a Eurodollar Interest Period.

         "INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade), deposit account or contribution of capital by such Person to any 
other Person or any 

                                      -12-

<PAGE>

investment in, or purchase or other acquisition of, the stock, partnership
interests, membership interests, notes, debentures or other securities of any
other Person made by such Person.

         "ISSUANCE DATE" is defined in Section 2.15(c)(i).

         "ISSUANCE NOTICE" is defined in Section 2.15(c)(iii).

         "ISSUER" means, with respect to each Facility Letter of Credit, First
Chicago or such other Lender selected by the Borrower with the approval of the
Agent to issue such Facility Letter of Credit so long as such other Lender
consents to act in such capacity.

         "JOINDER AGREEMENT" means an agreement, in form and substance
substantially similar to the form attached hereto as Exhibit "E", executed by a
future Subsidiary pursuant to which such Subsidiary becomes a Subsidiary
Guarantor hereunder.

         "JOINT VENTURE" means a joint venture (whether in the form of a
corporation, a partnership, limited liability company or otherwise) (i) to which
the Borrower or a Joint Venture Subsidiary is or becomes a party, (ii) whether
or not Borrower is required to consolidate the joint venture in its financial
statements in accordance with GAAP, and (iii) in which the Borrower has or will
have a total investment exceeding $25,000 or which has total assets plus
contingent liabilities exceeding $100,000. For the purposes of this definition,
the Borrower's investment in a joint venture shall be deemed to include any
Securities of the joint venture owned by the Borrower, any loans, advances or
accounts payable to the Borrower from the joint venture, any commitment,
arrangement or other agreement by the Borrower to provide funds or credit to the
joint venture and the Borrower's share of the undistributed profits of the joint
venture.

         "JOINT VENTURE SUBSIDIARY" means a Subsidiary which is a partner,
shareholder or other equity owner in a Joint Venture.

         "LAND UNDER DEVELOPMENT" means Entitled Land upon which construction of
Improvements has commenced but not been completed and for which: (a) to the
extent required, a performance bond, surety or other security has been issued to
and in favor of and unconditionally accepted by each local agency and all
relevant Governmental Authorities, including any municipal utility district in
which the Real Estate is situated with regard to all work to be performed
pursuant to each and all of said subdivision improvement agreements or other
agreements; (b) all necessary plans have been approved by all relevant
Governmental Authorities for the installation of any and all Improvements
required to be installed upon such Real Estate; (c) all necessary permits have
been issued for the installation of said Improvements; and (d) utility services
necessary for construction of Improvements and residential dwelling units and
the operation thereon for the purpose intended will be available to such Real
Estate upon completion of the Improvements and there exists a binding obligation
on the part of each and every utility company to deliver necessary utility
services to such Real Estate.

                                      -13-

<PAGE>


         "LEGAL REQUIREMENT" means any law, statute, ordinance, decree,
requirement, order, directive, rule, regulation (or official interpretation of
any of the foregoing of, in the terms of any license or permit issued by, any
Governmental Authority).

         "LENDERS" means the lending institutions listed on the signature pages
of this Agreement and the respective successors and permitted assigns of such
lending institutions.

         "LENDING INSTALLATION" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.

         "LENNAR" means Lennar Corporation, a corporation organized and existing
under the laws of the State of Delaware, and its successors.

         "LENNAR AND LNR GUARANTY" means the guaranty of the Loans in
substantially the form of Exhibit "J" hereto including amendments,
modifications, renewals or replacements thereof.

         "LENNAR CREDIT AGREEMENT" means the Revolving Credit Agreement
(Facility A) and the Revolving Credit Agreement (Facility B), each dated the
Agreement Date among Lennar and certain Subsidiaries of Lennar, as borrowers
thereunder, First Chicago as agent and lender thereunder, and certain other
lenders named therein, as the same may be amended, modified, or restated from
time to time.

         "LETTER OF CREDIT" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

         "LETTER OF CREDIT COMMITMENT" means, for each Lender, the obligation of
such Lender to participate in Facility Letters of Credit in an amount not
exceeding the lesser of (i) its Pro Rata Share of the Aggregate Letter of Credit
Commitment or (ii) its Pro Rata Share of the unused amount of the Aggregate
Facility A Commitment.

         "LETTER OF CREDIT COLLATERAL ACCOUNT" is defined in Section 2.15(g).

         "LETTER OF CREDIT REQUEST" is defined in Section 2.15(c)(i).

         "LIABILITIES" of a Person means all items included in the liability
section of a balance sheet of that Person prepared in accordance with GAAP
consistently applied as of the date of calculation. Without limiting the
generality of the foregoing, 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 that 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;
(ii) the aggregate amount of the reserves established on the books of that
Person in respect of contingent liabilities and other contingencies (except
reserves which are prop-

                                      -14-

<PAGE>

erly treated as deductions from assets) and in any event shall include with
respect to the Borrower the amount of all outstanding Loans; and (iii)
obligations under reimbursement agreements with financial institutions
(including Lenders) relating to letters of credit issued by such financial
institutions for the account of Borrower.

         "LIEN" means any lien (statutory or other), Mortgage (including,
without limitation, purchase money mortgages), security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).

         "LLP PARTNER" means Lennar Land Partners Sub, Inc., a Delaware
corporation, a Wholly-Owned Subsidiary of Lennar which holds a 50% interest in
the Borrower and the managing general partner of the Borrower.

         "LNR" means LNR Property Corporation, a corporation organized under the
laws of the State of Delaware.

         "LNR PARTNER" means LNR Land Partners Sub, Inc., a Delaware
corporation, an indirect Wholly-Owned Subsidiary of LNR which holds a 50%
interest in the Borrower.

         "LOAN" means, with respect to a Lender, a loan made by such Lender
pursuant to Article II (and any conversion or continuation thereof).

         "LOAN DOCUMENTS" means this Agreement, the Notes, the Subsidiary
Guarantees, the Facility Letters of Credit (and any application and/or
reimbursement agreement delivered in connection therewith) the Lennar and LNR
Guaranty, the Borrower Security Documents, the Subsidiary Guarantor Security
Documents, and any and all other instruments or documents delivered or to be
delivered by the Borrower and the Subsidiary Guarantors pursuant hereto and
thereto, as such documents may be amended or modified and in effect from time to
time.

         "LOT" means parcel of Real Estate constituting a part of the Mortgaged
Property as depicted upon a subdivision plat or site plan upon which a
residential dwelling unit may be constructed according to a site plan which has
been approved by applicable Governmental Authorities.

         "MAJORITY LENDERS" means Lenders in the aggregate having in excess of
fifty percent (50%) of the Aggregate Commitment or, if the Aggregate Commitment
has been terminated, Lenders in the aggregate holding in excess of fifty percent
(50%) of the aggregate unpaid principal amount of the outstanding Loans.

         "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, properties, assets, condition (financial or otherwise), results of
operations, or prospects of (a) the Borrower and the Subsidiary Guarantors,
taken as a whole, or (b) if so specified, the Borrower or a

                                      -15-

<PAGE>

Subsidiary Guarantor, (ii) the ability of the Borrower or a Subsidiary Guarantor
to perform its obligations under the Loan Documents, or (iii) the validity or
enforceability of any of the Loan Documents or the rights or remedies of the
Agent or the Lenders thereunder.

         "MATURITY DATE" means the date upon which the outstanding principal
amount of the Notes, all accrued but unpaid interest thereon, and all other
Obligations become due and payable, whether as a result of the occurrence of the
stated maturity date or the acceleration of maturity pursuant to the terms of
any of the Loan Documents.

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

         "MONTHLY PAYMENT DATE" means the first day of each calendar month.

         "MORTGAGE" means collectively the mortgages and deeds of trust and
security agreement (including leasehold mortgages or deeds of trust) to be
executed and delivered by the Borrower and by the appropriate Subsidiary
Guarantor, substantially in the form of Exhibit "D" (with such changes therein
as may be required to reflect different laws and practices in the various
jurisdictions in which the mortgages are to be recorded) as the same may be
amended, supplemented or otherwise modified from time to time.

         "MORTGAGED PROPERTIES" means Properties as to which, now or hereafter,
the Agent for the benefit of the Lenders has been granted a first priority
mortgage pursuant to the Mortgages. As of the Closing Date, the Mortgaged
Properties shall be the Properties listed in Schedule III.

         "MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.

         "NET BOOK VALUE" means, with respect to an asset owned by the Borrower
or a Subsidiary, the gross investment of Borrower or a Subsidiary in the asset,
less all reserves (including loss reserves and reserves for depreciation)
attributable to that asset, all determined in accordance with GAAP consistently
applied.

         "NET PROCEEDS" means, in connection with the sale of any Mortgaged
Property or Additional Mortgaged Property or any Recovery Event, the proceeds
thereof net of (A) all bona fide prorations and adjustments to the sales price
required to be made pursuant to the terms of the sales contract and (B) the
aggregate amount of bona fide closing costs due to any Person, PROVIDED that if
such closing costs are due to an Affiliate of the Borrower, such costs comply
with Section 7.08.

         "NONRECOURSE DEBT" means Indebtedness of the Borrower or a Subsidiary
secured by a Mortgage on Real Estate of the Borrower or a Subsidiary, as to
which Indebtedness the sole recourse of the holders thereof is to the Real
Estate encumbered by that Mortgage and none of such

                                      -16-

<PAGE>

holders has the right (as a matter of law, by contract or otherwise) to enforce
payment thereof against the Borrower or a Subsidiary or any of the Borrower's or
Subsidiary's properties and assets other than the Real Estate encumbered by that
Mortgage.

         "NOTES" means, collectively, the Facility A Notes and the Facility B
Notes, and "Note" means any one of the Notes, as the same may be amended,
modified, restated, renewed, or replaced.

         "NOTICE OF ASSIGNMENT" is defined in Section 12.03(b).

         "OBLIGATIONS" means collectively the Borrower Obligations and the
Subsidiary Guarantor Obligations. Any document which incorporates by reference
the definition of Obligations contained in this Agreement shall in the instance
of a document executed by the Borrower refer to the Borrower Obligations and in
the instance of a document executed by a Subsidiary Guarantor refer to the
Subsidiary Guarantor Obligations.

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

         "PARTICIPANTS" is defined in Section 12.02.

         "PERFORMANCE LETTER OF CREDIT" means a letter of credit issued to a
governmental authority or quasi-governmental agency to insure the completion by
the Borrower of a development of land improvement or to ensure payment by the
Borrower of escrow accounts.

         "PERMITTED TITLE EXCEPTIONS" means those exceptions from coverage taken
in the Title Policy which are acceptable to Agent in its sole discretion.

         "PERMITTED LIENS" means (a) Liens existing on the date of this
Agreement and described on Schedule VI hereto; (b) Liens imposed by governmental
authorities for taxes, assessments or other charges not yet subject to penalty
or which are being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of the
Borrower in accordance with GAAP; (c) statutory liens of carriers, warehousemen,
mechanics, materialmen, landlords, repairmen or other like Liens arising by
operation of law in the ordinary course of business PROVIDED that (i) the
underlying obligations are not overdue for a period of more than 30 days or (ii)
such Liens are being contested in good faith and by appropriate proceedings and
adequate reserves with respect thereto are maintained on the books of the
Borrower in accordance with GAAP; (d) Liens securing the performance of bids,
trade contracts (other than borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business; (e) the Permitted Title
Exceptions; (f) zoning, similar restrictions and other similar encumbrances or
title defects which, singly or in the aggregate, do not in any case materially
detract from the value of the Real Estate subject thereto (as such Real Estate
is used by the Borrower or any of the Subsidiaries) or interfere with the
ordinary conduct of the business of the Borrower or any of the Subsidiaries; (g)
Liens

                                      -17-

<PAGE>

arising by operation of law in connection with judgments, only to the extent,
for an amount and for a period not resulting in a default with respect thereto;
(h) pledges or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security legislation; and (i) Liens securing the Obligations.

         "PERSON" means any natural person, corporation, firm, enterprise,
trust, association, company, partnership, limited liability company, joint
venture or other entity or organization, or any government or political
subdivision or any agency, department, or instrumentality thereof.

         "PLAN" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.

         "PRO RATA SHARE" means, for each Lender, the ratio that such Lender's
Commitment bears to the Aggregate Commitment.

         "PROJECT" means a parcel of Real Estate, owned by the Borrower or a
Subsidiary Guarantor which is to be developed or sold as part of a common
scheme.

         "PROPERTY" means the Real Estate now or hereafter forming a part of the
Borrowing Base.

         "PURCHASE PRICE ACCOUNTING ADJUSTMENT" means at the Closing Date the
lower of (x) the appraised value of the Bramalea Land less the book value of the
Bramalea Land at the Closing Date or (y) the absolute value of the purchase
price accounting adjustment as shown on the books of Bramalea or (z) Thirty Nine
Million Dollars ($39,000,000.00); and, following the Closing Date, decreased by
the book value of the purchase price accounting adjustment as determined at the
Closing Date for each Lot sold after the Closing Date.

         "PURCHASERS" is defined in Section 12.03(a).

         "QUARTERLY PAYMENT DATE" means the first day of each April, July,
October and January.

         "RATE HEDGING AGREEMENT" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.

         "RATE HEDGING OBLIGATIONS" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any all Rate
Hedging Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.

                                      -18-

<PAGE>


         "RATING AGENCY" means any one of Duff & Phelps, Fitch, Moody's or S&P.

         "RATINGS" means a rating of Lennar's senior unsecured long-term debt
from one or more of the Rating Agencies.

         "REAL ESTATE" means land, together with all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages, projections,
appurtenances, water rights including riparian and littoral rights, streets,
ways, alleys, and strips and gores of land now or hereafter in any way
belonging, adjoining, crossing or pertaining to the land (including, without
limitation, leasehold interests), and improvements thereto, located on or used
in connection with land, rights in land or interests therein (including
leasehold interests), but shall not include Mortgages or interests therein.

         "RECOVERY EVENT" means any settlement or repayment in respect of a
Property or casualty insurance claim or any Taking relating to any Mortgaged
Property (including any condemnation proceeds or insurance proceeds).

         "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.

         "REORGANIZATION" means (i) the formation of LNR, (ii) the transfer to
LNR of all of the business and assets of the Asset Management Division of Lennar
and that portion of the Financial Services Division of Lennar relating to the
servicing, acquisition and management of commercial mortgages and real estate,
(iii) the distribution to the shareholders of Lennar of all of the capital stock
of LNR, (iv) the transfer by LLP Partner to the Borrower of the Real Estate
described on Schedule III hereto in exchange for a 50% general partnership
interest in the Borrower, and (v) the merger of Lennar with and into Pacific
Greystone Corporation.

         "REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

         "REIMBURSEMENT OBLIGATIONS" means, at any time, the aggregate of the
Borrower Obligations to the Lenders, the Issuers and the Agent in respect of all
unreimbursed payments or disbursements made by the Lenders, the Issuers and the
Agent under or in respect of the Facility Letters of Credit.

         "REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, PROVIDED, HOWEVER, that a failure to meet

                                      -19-

<PAGE>

the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.

         "REQUIRED LENDERS" means Lenders in the aggregate having at least 66
2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66 2/3% of the sum of (i)
the aggregate unpaid principal amount of the outstanding Loans PLUS (ii) the
Facility Letter of Credit Obligations.

         "RESERVE REQUIREMENT" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities.

         "REVOLVING COMMITMENT" means, for each Lender, the obligation of such
Lender to make Facility A Loans and purchase participations in Facility Letters
of Credit not exceeding its Pro Rata Share of the Facility A Commitment.

         "S&P" means Standard & Poor's Corporation and any Person succeeding to
the securities rating business of such company.

         "SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.

         "SECURITIES" of any Person means equity securities and debt securities
and any other instrument commonly understood to be a security issued by that
Person.

         "SECURITY DOCUMENTS" means collectively the Borrower Security Documents
and Subsidiary Guarantor Security Documents.

         "SECURITY AGREEMENT (CAPITAL STOCK AND PARTNERSHIP INTERESTS)" means
the Security Agreement substantially in the form of Exhibit "K" including any
amendment, modification, renewal or restatement thereof.

         "SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.

         "SOLVENT" means, as to any Person, that such Person has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature and owns property having a value, both at fair valuation and at present
fair saleable value, greater than the amount required to pay its debts.

         "SUBORDINATED DEBT" means any Indebtedness of the Borrower which by its
terms is subordinated, in form and substance and in a manner satisfactory to the
Required Lenders, in

                                      -20-

<PAGE>

time and right of payment to the prior payment in full of
the Obligations, but which in any event matures after the Facility A Termination
Date.

         "SUBSIDIARY" means (i) any corporation more than 50% of the outstanding
securities having ordinary voting power of which shall at the time be owned or
controlled, directly or indirectly, by the Borrower, or by one or more
Subsidiaries or by the Borrower and one or more Subsidiaries, or (ii) any
partnership, limited liability company, association, joint venture or similar
business organization more than 50% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.

         "SUBSIDIARY GUARANTOR" means a Subsidiary or Joint Venture of the
Borrower listed in Schedule I hereto, and any Subsidiary or Joint Venture of the
Borrower hereafter guaranteeing the Loans.

         "SUBSIDIARY GUARANTOR SECURITY DOCUMENTS" means collectively the
Subsidiary Guarantor Mortgages, and all other security documents hereafter
delivered to the Agent granting a Lien on any asset or assets of any Subsidiary
Guarantor to secure the Subsidiary Guarantor Obligations.

         "SUBSIDIARY GUARANTOR OBLIGATIONS" means all unpaid principal of and
accrued and unpaid interest on the Subsidiary Guarantees, all accrued and unpaid
fees and expenses, reimbursements, indemnities and other obligations of the
Subsidiary Guarantors to the Lenders or to any lender, the Agent or any
indemnified party arising under the Loan Documents.

         "SUBSIDIARY GUARANTY" means the guarantee of the Loans, in
substantially the form of Exhibit "I" hereto, including any amendment,
modification, renewal, restatement or replacement thereof.

         "SURVEY" means a survey of the Mortgaged Property prepared by a
registered land surveyor which shall show the legal description of the Mortgaged
Property to be the same as Schedule III hereto; set forth an accurate meets and
bounds description of the Mortgaged Property; be certified to the Lenders and to
the title company; include a certificate of the map or plat and the survey on
which it is based or prepared (i) in accordance with the "minimum standard
detail requirements for land title surveys" jointly established and adopted by
the American Land Title Association and the American Congress on Surveying and
Mapping in 1992, and including items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13 of
Table A thereof and (ii) pursuant to the Accuracy Standards (as adopted by ALTA
and ACSM and in effect on the date of this certification) of an urban survey.
For Real Estate located in Texas, the survey shall be made in accordance with
then current Texas Surveyor's Association Standards and Specifications for a
Category IA, Condition II Survey.

         "SWAP DOCUMENTS" mean any existing or future agreement between the
Borrower and a Lender or any affiliate of a Lender governing or evidencing the
terms of any foreign exchange or derivatives transaction, including, without
limitation, any interest rate swap or option, currency swap or option, any
combination thereof, or any option with respect to any of the foregoing.

                                      -21-

<PAGE>


         "TAKING" means the taking or appropriation (including by deed in lieu
of condemnation or by voluntary sale or transfer under threat of condemnation or
while legal proceedings for condemnation are pending) of any Mortgaged Property,
or any part thereof or interest therein, for public or quasi public use under
the power of eminent domain, or reason of any public improvement or condemnation
proceedings, or in any other manner or any damage or injury or diminution in
value through condemnation, inverse condemnation or the exercise of the power of
eminent domain. The term "Taking" used as a verb has a correlative meaning.

         "TANGIBLE NET WORTH" means, as at any date, the amount of consolidated
partners' equity of the Borrower and its consolidated Subsidiaries as shown on
its balance sheet as of such date, less the aggregate amount of the goodwill and
other assets that are properly classified as "intangible assets" at such date in
accordance with GAAP.

         "TITLE POLICY" means, with respect to the Mortgaged Properties, a
mortgagee policy of title insurance which (a) is in the form of American Land
Title Association Standard Loan Policy - 1970 (without modification, revision or
amendment) (or such other form as required by the laws of the state wherein such
Real Estate is located approved by the Agent) with such endorsements as are
available in the state wherein the Real Estate is located and required by the
Agent in its sole discretion, such as endorsements, commonly known as variable
or adjustable rate, environmental protection, comprehensive or ALTA 9, doing
business, usury, contiguity, survey, plat act, revolving credit, tie-in, if more
than one policy is issued for Real Estate located within a single state, patent
reservation, water rights, tax parcel and a Lender's group endorsement, (b) is
issued by underwriters reasonably acceptable to the Agent with such reinsurance
as Agent shall reasonably request, (c) insures that the grantor of the Lien
insured by such policy owns the Real Estate subject to such Lien in fee simple
and that the mortgage covering the Real Estate is a valid lien on the Real
Estate in favor of the Agent for the benefit of the Lenders (subject only to
permitted exceptions), (d) does not contain any exceptions for rights of parties
in possession, or unpaid delinquent sums or taxes, special assessments or
subsequent assessments due to changes in ownership or usage, or any other
exceptions to coverage other than Permitted Exceptions. and (e) contains a
lender's group endorsement.

         "TRANSFEREE" is defined in Section 12.03(c).

         "TYPE" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Fixed Rate Advance.

         "UCC SEARCH" is defined in Section 5.01(n).

         "UNAUDITED FINANCIAL STATEMENTS" is defined in Section 4.08.

         "UNENTITLED LAND" means a parcel of Real Estate constituting a part of
the Mortgaged Property owned by the Borrower or a Subsidiary which is not either
a Finished Lot, Land Under Development, or Unimproved Entitled Land.

                                      -22-

<PAGE>


         "UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans.

         "UNIMPROVED ENTITLED LAND" means Entitled Land upon which no
Improvements have been commenced.

         "UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute an Event of Default.

         "WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.

         SECTION 1.02. COMPUTATION OF TIME PERIODS. For the purposes of this
Agreement, in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including", the words "to"
and "until" each means "to but excluding" and the word "through" means "to and
including".

         SECTION 1.03. ACCOUNTING TERMS. All accounting terms used and not
specifically defined herein shall be construed in accordance with GAAP. All
references herein to GAAP shall be deemed to refer to those principles.

                                   ARTICLE II

                                   THE CREDITS

         SECTION 2.01. COMMITMENTS.

         (a) FACILITY A REVOLVING COMMITMENT. On and after the Closing Date and
prior to the Facility A Termination Date, upon the terms and conditions set
forth in this Agreement and in reliance upon the representations and warranties
of Borrower herein set forth, each Lender severally agrees to make Advances to
the Borrower from time to time in amounts not to exceed in the aggregate at any
one time outstanding the amount of its Facility A Commitment PROVIDED that (A)
if any Facility Letters of Credit are issued and outstanding or drawn and
unreimbursed, the aggregate availability under the Facility A Commitments of
the Lenders shall be reduced by the aggregate amount of the Facility Letter of
Credit Obligations for as long as, and to the extent that, they remain
outstanding or unreimbursed, and the availability under the Facility A
Commitment of 

                                      -23-

<PAGE>

each Lender shall accordingly be reduced on a PRO RATA basis in accordance with
its Pro Rata Share, (B) in no event may the aggregate principal amount of all
outstanding Facility A Advances and the aggregate amount of all Facility Letter
of Credit Obligations exceed the Aggregate Facility A Commitment, and (C) in no
event shall the aggregate principal amount of all outstanding Advances at any
time exceed the Borrowing Base at such time. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow under Facility A at any
time prior to the Facility A Termination Date. The Facility A Commitments to
lend hereunder shall expire on the Facility A Termination Date.

         (b) FACILITY B COMMITMENT. On the Closing Date, upon the terms and
conditions set forth in this Agreement and in reliance upon the representations
and warranties of Borrower herein set forth, each Lender severally agrees to
make the Facility B Advance to the Borrower in the amount of its Facility B
Commitment.

         (c) LETTER OF CREDIT COMMITMENT. On and after the Closing Date and
prior to the Facility A Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement and in reliance upon the
representations and warranties of Borrower herein set forth, to participate in
Facility Letters of Credit issued for the account of the Borrower pursuant to
Section 2.15; PROVIDED that in no event may the aggregate amount of all Facility
Letter of Credit Obligations exceed the lesser of (i) the Aggregate Letter of
Credit Commitment and (ii) the Aggregate Facility A Commitment minus all
outstanding Facility A Advances.

         (d) ADVANCES AND PARTICIPATIONS PRO RATA. Each Advance and each
purchase of a Facility Letter of Credit participation hereunder shall be made by
the several Lenders ratably in accordance with their respective Pro Rata Shares.

         SECTION 2.02. TYPES OF ADVANCES; MANDATORY PRINCIPAL PAYMENTS; FINAL
                       MATURITY.

         (a) The Advances may be Floating Rate Advances, or Fixed Rate Advances,
or a combination thereof, selected by the Borrower in accordance with Section
2.06.

         (b) Upon the sale, transfer or the disposition of any of the Collateral
in accordance with the provisions of Section 8.07, Borrower shall make a
mandatory prepayment to the Agent of 100% of Net Proceeds as follows:

                  (i) For each Lot sold, $6,000 shall be applied to Facility B
(first to the next following four scheduled principal payments and then, on a
pro rata basis to all future scheduled principal payments) until paid in full,
and then to prepay the outstanding balance under Facility A;

                  (ii)     any Net Proceeds in excess of $6,000 per Lot shall be
applied to prepayment of the then outstanding balance under Facility A; and

                                      -24-

<PAGE>


                  (iii) for Real Estate other than Lots sold, the Net Proceeds
shall be applied to Facility B in such amount as Agent, in its sole discretion,
deems to be equivalent to a sale of Lots (the payment shall first be applied to
the next following four (4) scheduled principal payments and then on a prorata
basis to all future scheduled principal payments) until paid in full, and then
to repay the outstanding balance under Facility A and, any Net Proceeds in
excess of the amount applied to Facility B shall be applied to prepayment of the
then outstanding balance under Facility A.

         (c) Upon the issuance of any debt or equity security by the Borrower,
100% of the Net Proceeds therefrom shall be used to reduce the Facilities as
follows:

                  (i) first to retire Facility B applied pro rata to all future
scheduled principal payments until paid in full; and

                  (ii) thereafter to repay Facility A until paid in full.

         (d) If at any time the outstanding principal amount of the Advances
exceeds the Borrowing Base at such time, the Borrower shall forthwith prepay the
outstanding Advances by the amount of the excess, plus accrued and unpaid
interest thereon.

         (e) Principal of the Facility B Note shall be repaid as follows:
beginning on the third Quarterly Payment Date after the Closing Date and
continuing thereafter on each Quarterly Payment Date the Borrower shall pay the
sum of $7,000,000 (less any amounts paid since the immediately preceding
Quarterly Payment Date pursuant to Section 2.02(b) or (c)) and shall pay the
outstanding principal balance at the Facility B Termination Date.

         (f) All Obligations evidenced by the Facility A Notes shall be repaid
on the Facility A Termination Date.

         (g) Except as provided above in this Section or elsewhere in this
Agreement, the Borrower may direct the Agent to apply prepayments of the
Obligations against either of the Facilities.

         SECTION 2.03. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time
to time pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $100,000 or any integral multiple of
$100,000 (or the amount required to repay all Advances in full) in excess
thereof, any portion of the outstanding Floating Rate Advances upon one Business
Day's prior notice to the Agent. A Fixed Rate Advance may not be paid prior to
the last day of the applicable Interest Period.

                                      -25-

<PAGE>


         SECTION 2.04. COMMITMENT FEE AND REDUCTION OF COMMITMENTS.

         (a) The Borrower agrees to pay to the Agent for the account of each
Lender a Commitment Fee per annum on the daily unborrowed and unused portion of
such Lender's Facility A Commitment (i.e., after deducting from such Facility A
Commitment the then outstanding amount of all Loans made by such Lender under
Facility A and the then outstanding amount of all participations by such Lender
in Facility Letters of Credit) from the Closing Date to and including the
Facility A Termination Date, payable in arrears on each Quarterly Payment Date
thereafter and on the Facility A Termination Date. Such Commitment Fee shall be
determined on each Quarterly Payment Date in accordance with the pricing grid
set forth as Exhibit "F" hereto.

         (b) The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders in integral multiples of $5,000,000,
upon at least three Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction, PROVIDED, HOWEVER, that the
amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the outstanding Advances and Facility Letter of Credit
Obligations. All accrued Commitment Fees under this Section 2.04 shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder. The fees payable under this Section 2.04, once
paid, shall not be refundable for any reason.

         SECTION 2.05. METHOD OF BORROWING. Not later than noon (Chicago time)
on each Borrowing Date, each Lender shall make available its Loan or Loans, in
funds immediately available in Chicago to the Agent at its address specified
pursuant to Section 13.01. The Agent will make the funds so received from the
Lenders available to the Borrower by deposit into Account No. 5596467 maintained
by the Borrower at First Chicago.

         SECTION 2.06. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR
                       ADVANCES.

         (a) The Borrower shall select the Type of Advance and, in the case of
each Fixed Rate Advance, the Interest Period applicable to each Advance from
time to time; PROVIDED, HOWEVER, that the Borrower may have no more than ten
(10) Fixed Rate Advances in Facility A and ten (10) Fixed Rate Advances in
Facility B outstanding at any one time. The Borrower shall give the Agent
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago
time) on the Borrowing Date for each Floating Rate Advance and prior to 10:00
a.m. (Chicago time) on the date which is two Business Days before the Borrowing
Date for each Fixed Rate Advance, specifying:

               (i)         the Borrowing Date, which shall be a Business Day, of
such Advance,

              (ii)         the aggregate amount of such Advance,

             (iii)         the Type of Advance selected, and

                                      -26-

<PAGE>


              (iv) in the case of each Fixed Rate Advance, the Interest Period
applicable thereto.

The Borrower shall be entitled to obtain only one Advance in any single Business
Day, which may be comprised in whole or in part of any Fixed Rate Advance.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Floating Rate. Each Fixed Rate Advance shall bear interest from and including
the first day of the Interest Period applicable thereto to (but not including)
the last day of such Interest Period at the interest rate determined as
applicable to such Fixed Rate Advance. The Borrower shall select Interest
Periods with respect to Fixed Rate Advances so that it is not necessary to pay a
Fixed Rate Advance prior to the last day of the applicable Interest Period in
order to make any mandatory payment required to be made pursuant to Section 2.02
above or to repay the Obligations in full on the Maturity Date.

         (b) Each Borrowing Notice shall be irrevocable and binding on the
Borrower and, in respect of the borrowing specified in the Borrowing Notice, the
Borrower shall indemnify each Lender against any loss or expense incurred by
that Lender as a result of any failure to fulfill the applicable conditions set
forth in Section 5.02 on or before the proposed Borrowing Date specified in the
Borrowing Notice, including, without limitation, any loss (including loss of
profit) or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund the Loan to be made by
that Lender as part of that borrowing when that Loan, as a result of that
failure, is not made on that date.

         SECTION 2.07. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR
                       CONVERSION AND CONTINUATION OF ADVANCES.

         (a) RIGHT TO CONVERT. The Borrower may elect from time to time, subject
to the provisions of Section 2.07(c), to convert all or any part of an Advance
of any Type into any other Type or Types of Advances; PROVIDED that any
conversion of any Fixed Rate Advance shall be made on, and only on, the last day
of the Interest Period applicable thereto.

         (b) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Advances shall
continue as Floating Rate Advances unless and until such Floating Rate Advances
are converted into Fixed Rate Advances. Fixed Rate Advances of any Type shall
continue as Fixed Rate Advances of such Type until the end of the then
applicable Interest Period therefor, at which time such Fixed Rate Advance shall
be automatically converted into a Floating Rate Advance unless the Borrower
shall have given the Agent notice in accordance with Section 2.07(d) requesting
that, at the end of such Interest Period, such Fixed Rate Advance either
continue as a Fixed Rate Advance of such Type for the same or another Interest
Period or be converted into an Advance of another Type.

         (c) NO CONVERSION IN CASE OF AN EVENT OF DEFAULT OR UNMATURED DEFAULT.
Notwithstanding anything to the contrary contained in Section 2.07(a) or
2.07(b), no Advance may be

                                      -27-

<PAGE>

converted into or continued as a Fixed Rate Advance (except with the consent of
the Required Lenders) when any Event of Default or Unmatured Default has
occurred and is continuing.

         (d) CONVERSION/CONTINUATION NOTICE. The Borrower shall give the Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of an
Advance or continuation of a Fixed Rate Advance not later than 10:00 a.m.
(Chicago time) on the day of any conversion into a Floating Rate Advance or
prior to 10:00 a.m. (Chicago time) on the date which is two Business Days prior
to the date of the requested conversion into or continuation of a Fixed Rate
Advance, specifying:

                  (i) the requested date (which shall be a Business Day) of such
         conversion or continuation;

                  (ii) the amount and Type of the Advance to be converted or
         continued; and

                  (iii) the amount and Type(s) of Advance(s) into which such
         Advance is to be converted or continued and, in the case of a
         conversion into or continuation of a Fixed Rate Advance, the duration
         of the Interest Period applicable thereto.

         SECTION 2.08. MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be in
the minimum amount of $500,000 for Floating Rate Advances (and in multiples of
$100,000, if in excess thereof) and $3,000,000 for Fixed Rate Advances (and in
multiples of $100,000, if in excess thereof).

         SECTION 2.09. RATE AFTER MATURITY. Except as provided in the next
sentence, any Advance which is not paid at maturity for such Advance, whether by
acceleration or otherwise, shall bear interest until paid in full at a rate per
annum equal to the Floating Rate plus 5% per annum. In the case of a Fixed Rate
Advance the maturity of which is accelerated, such Fixed Rate Advance shall bear
interest at the rate otherwise applicable to such Interest Period plus 5% per
annum for the remainder of the applicable Interest Period, and thereafter at the
Floating Rate plus 5% per annum.

         SECTION 2.10. METHOD OF PAYMENT. All payments of principal, interest,
and fees hereunder shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 1:00 p.m. (local time) on
the date when due and shall be made ratably by the Agent among the Lenders with
respect to their Loans. Each payment delivered to the Agent for the account of
any Lender shall be delivered promptly by the Agent to such Lender in the same
type of funds which the Agent received at its address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender. The Agent is hereby authorized to charge any account
of the Borrower maintained with First Chicago for each payment of principal,
interest and fees as it becomes due hereunder. The Agent shall endeavor in good
faith to provide telephonic notice to

                                      -28-

<PAGE>

Borrower prior to any such charge, but the Agent shall not be liable to Borrower
or any other Person if Agent fails to provide any such notice. If and to the
extent payment owed to any Lender is not made by the Borrower to the Agent or
that Lender, as the case may be, when due hereunder or under the Note held by
that Lender, the Borrower further authorizes such Lender to charge from time to
time against any or all of the accounts maintained by the Borrower with the
Lender, its subsidiaries, affiliates or branches any amount so due, subject to
the provisions of Article XI.

         SECTION 2.11. NOTES; TELEPHONIC NOTICES. Each Lender is hereby
authorized to record the principal amount of each of its Loans and each
repayment on the schedule attached to its applicable Notes; PROVIDED, however,
that the failure to so record shall not affect the Borrower's obligations under
any such Note. The Borrower hereby authorizes the Lenders and the Agent to
extend, convert or continue Advances, effect selections of Types of Advances and
to transfer funds based on telephonic notices made by any person or persons the
Agent or any Lender in good faith believes to be acting on behalf of the
Borrower. All actions taken by the Lenders and the Agent upon such telephonic
notices are hereby approved by the Borrower, and the Lenders and the Agent shall
incur no liability as a result of any such actions. The Borrower agrees to
deliver promptly to the Agent a written confirmation, if such confirmation is
requested by the Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, the records of the Agent and
the Lenders shall govern absent manifest error.

         SECTION 2.12. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest
accrued on each Floating Rate Advance shall be payable on each Monthly Payment
Date, commencing with the first such date to occur after the date hereof, on any
date on which the Floating Rate Loan is prepaid, whether due to acceleration or
otherwise, and on the Facility A Termination Date or the Facility B Termination
Date, as the case may be. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Fixed Rate
Advance on a day other than a Monthly Payment Date shall be payable on the date
of conversion. Interest accrued on each Fixed Rate Advance shall be payable on
the last day of its applicable Interest Period, on any date on which the Fixed
Rate Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Fixed Rate Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on Floating Rate Loans and
Commitment Fees shall be calculated for actual days elapsed on the basis of a
365-day year; interest on Fixed Rate Loans shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to 1:00 p.m. (Chicago time) at the place of payment. If any
payment of principal of or interest on an Advance shall become due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment.

         SECTION 2.13. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents

                                      -29-

<PAGE>

of each Aggregate Commitment reduction notice, Borrowing Notice,
Conversion/Continuation Notice, Letter of Credit Request, Issuance Notice,
notice from a Lender pursuant to Section 2.15(e)(i) and repayment notice
received by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Fixed Rate Advance promptly upon determination of such
interest rate.

         SECTION 2.14. LENDING INSTALLATIONS. Each Lender may book its Loans and
participation in Facility Letters of Credit at any Lending Installation selected
by such Lender and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Notes shall be deemed held by each Lender for the benefit of such Lending
Installation. Each Lender may, by written or telex notice to the Agent and the
Borrower, designate a Lending Installation through which Loans will be made by
it and for whose account Loan payments are to be made.

         SECTION 2.15. FACILITY LETTERS OF CREDIT.

         (a) OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, each Issuer hereby agrees to issue upon the request
of and for the account of the Borrower, through such of the Issuer's Lending
Installations or Affiliates as the Issuer and the Borrower may jointly agree
(PROVIDED that in the absence of such joint agreement for any Facility Letter of
Credit for which the Agent is the Issuer, the Agent agrees to issue such
Facility Letters of Credit out of its main office), one or more Facility Letters
of Credit in accordance with this Section 2.15, from time to time during the
period, commencing on the Closing Date and ending on the tenth Business Day
prior to the Facility A Termination Date.

         (b) CONDITIONS FOR ISSUANCE. In addition to being subject to the
satisfaction of the conditions contained in Section 5.02, the obligation of an
Issuer to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:

                  (i)  the requested Facility  Letter of Credit is (x) for a
Performance Letter of Credit and (y) for the installation of Improvements on
Mortgaged Property;

                  (ii) the aggregate maximum amount then available for drawing
under Facility Letters of Credit issued by such Issuer, after giving effect to
the Facility Letter of Credit requested hereunder, shall not exceed any limit
imposed by law or regulation upon such Issuer;

                  (iii) after giving effect to the requested issuance of any
Facility Letter of Credit, the Facility Letter of Credit Obligations do not
exceed the lesser of (a) the Aggregate Letter of Credit Commitment, or (b) an
amount equal to the Aggregate Facility A Commitment minus the outstanding
principal amount of the Facility A Advances;

                                      -30-

<PAGE>


                  (iv) the requested Facility Letter of Credit has an expiration
date not later than the earlier of (x) ten Business Days prior to the Facility A
Termination Date and (y) one year after its date of issuance;

                  (v) the Borrower shall have delivered to such Issuer at such
times and in such manner as such Issuer may reasonably prescribe such documents
and materials as may be required pursuant to the terms of the proposed Facility
Letter of Credit, and the proposed Facility Letter of Credit shall be
satisfactory to such Issuer as to form and content; and

                  (vi) as of the date of issuance, no order, judgment or decree
of any court, arbitrator or governmental authority shall purport by its terms to
enjoin or restrain such Issuer from issuing the Facility Letter of Credit and no
law, rule or regulation applicable to such Issuer and no request or directive
(whether or not having the force of law) from any governmental authority with
jurisdiction over the Issuer shall prohibit or request that such Issuer refrain
from the issuance of Letters of Credit generally or the issuance of that
Facility Letter of Credit (and in any such case, such Issuer shall promptly
notify the Agent and the Borrower of such fact).

         (c)      PROCEDURE FOR ISSUANCE.

                  (i) The Borrower shall give an Issuer at least three Business
Days' prior written notice of any requested issuance of a Facility Letter of
Credit under this Agreement (a "Letter of Credit Request"). Such notice shall be
irrevocable and shall specify:

                  (A)      the stated amount of the Facility Letter of Credit
                           requested (which stated amount shall not be less than
                           $1,000,000), PROVIDED, HOWEVER, that up to five
                           Facility Letters of Credit issued in any twelve-month
                           period may have a stated amount of less than
                           $1,000,000 each;

                  (B)      the effective date (which day shall be a Business
                           Day) of issuance of such requested Facility Letter of
                           Credit (the "Issuance Date");

                  (C)      the date on which such requested Facility Letter of
                           Credit is to expire (which date shall be a Business
                           Day and shall comply with the provisions of Section
                           2.15(b)(iv));

                  (D)      the name of the Issuer chosen by the Borrower to
                           issue the requested Facility Letter of Credit;

                  (E)      the purpose for which such Facility Letter of Credit
                           is to be issued; and

                  (F)      the Person for whose benefit the requested Facility 
                           Letter of Credit is to be issued.


                                      -31-
<PAGE>

At the time the Letter of Credit Request is made, the Borrower shall also
provide the Agent and the Issuer with a copy of the form (if specified by the
beneficiary) of the Facility Letter of Credit it is requesting be issued. Such
Letter of Credit Request, to be effective, must be received by such Issuer and
the Agent not later than 2:00 p.m. (Chicago time) on the last Business Day on
which a Letter of Credit Request can be given under this Section 2.15(c)(i).

                  (ii) Subject to the terms and conditions of this Section 2.15
and PROVIDED that the applicable conditions set forth in Sections 5.01 and 5.02
hereof have been satisfied, such Issuer shall, on the Issuance Date, issue a
Facility Letter of Credit on behalf of the Borrower in accordance with the
Issuer's usual and customary business practices unless the Issuer has actually
received (a) written notice from the Borrower specifically revoking the Letter
of Credit Request with respect to such Facility Letter of Credit, (b) written
notice from a Lender, which complies with the provisions of Section 2.15(e)(i)
or (c) written or telephonic notice from the Agent stating that the issuance of
such Facility Letter of Credit would violate Section 2.15(b).

                  (iii) Each Issuer shall give the Agent and the Borrower
written or telex notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of a Facility Letter of Credit (the "Issuance Notice"),
together with (for the Borrower and the Agent) a copy of such Facility Letter of
Credit.

                  (iv) An Issuer shall not extend or amend any Facility Letter
of Credit or allow a Facility Letter of Credit to be automatically extended
unless the requirements of this Section 2.15(c) are met as though a new Facility
Letter of Credit was being requested and issued.

         (d)       PAYMENT OF REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUERS.

                  (i) (A) Each Issuer shall promptly notify the Borrower and the
Agent of any draw under a Facility Letter of Credit and the Borrower shall
reimburse such Issuer in accordance with Section 2.15(f), and (B) any
Reimbursement Obligation with respect to any Facility Letter of Credit shall
bear interest from the date of the relevant drawings under the pertinent
Facility Letter of Credit until payment in full is received by the pertinent
Issuer at (X) the Floating Rate until the next succeeding Business Day and (Y)
the Floating Rate plus 2% thereafter.

                  (ii) Any action taken or omitted to be taken by an Issuer
under or in connection with any Facility Letter of Credit, if taken or omitted
in the absence of bad faith, willful misconduct or gross negligence, shall not
put that Issuer under any resulting liability to any Lender or, assuming that
such Issuer has complied with the procedures specified in Section 2.15(c) all
conditions to the issuance of a Facility Letter of Credit have been satisfied
and any such Lender has not given a notice contemplated by Section 2.15(e)(i)
that continues in full force and effect, relieve any such Lender of its
obligations hereunder to that Issuer. In determining whether to pay under any
Facility Letter of Credit, an Issuer shall have no obligation relative to the
Lenders or to the Borrower other than to confirm that any documents required to
be delivered under such Facility Letter of Credit have been delivered in
compliance and that they comply on their face (including 


                                      -32-
<PAGE>

that any draw request has been purportedly executed by an authorized signatory,
if and to the extent such a requirement is specified in the related Facility
Letter of Credit), with the requirements of such Facility Letter of Credit.

                  (iii) The Borrower agrees to pay to each Issuer the amount of
all Reimbursement Obligations, interest and other amounts payable to such Issuer
under or in connection with any Facility Letter of Credit immediately when due
(and in any event shall reimburse an Issuer for drawings under a Facility Letter
of Credit issued by it no later than the next Business Day after payment by that
Issuer), irrespective of any claim, set-off, defense or other right which the
Borrower may have at any time against any Issuer or any other Person, under all
circumstances, including without limitation, any of the following circumstances:

                  (A)  any lack of validity or enforceability of this Agreement
                       or any of the other Loan Documents;

                  (B)  the existence of any claim, setoff, defense or other
                       right which the Borrower may have at any time against a
                       beneficiary named in a Facility Letter of Credit or, if
                       such Facility Letter of Credit is transferable, any
                       transferee of any Facility Letter of Credit (or any
                       Person for whom any such transferee may be acting), the
                       Agent, the Issuer, any Lender, or any other Person,
                       whether in connection with this Agreement, any Facility
                       Letter of Credit, the transactions contemplated herein or
                       any unrelated transactions (including any underlying
                       transactions between the Borrower and the beneficiary
                       named in any Facility Letter of Credit);

                  (C)  any draft, certificate or any other document presented
                       under the Facility Letter of Credit proving to be forged,
                       fraudulent or invalid in any respect or any statement
                       therein being untrue or inaccurate in any respect (except
                       to the extent any such invalidity or insufficiency is
                       found in a final judgment of a court of competent
                       jurisdiction to have resulted from the gross negligence
                       or willful misconduct of such Issuer);

                  (D)  the surrender or impairment of any guaranty or security
                       for the performance or observance of any of the terms of
                       any of the Loan Documents; or

                  (E)  the occurrence of any Event of Default or Unmatured
                       Default.

                  (iv) As among the Borrower, the Issuers, the Agent and the
Lenders, the Borrower assumes all risks of the acts and omissions of, or misuse
of the Facility Letters of Credit by, the respective beneficiaries of the
Facility Letters of Credit (except such as are found in a final judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of an Issuer). In furtherance and not in limitation of the
foregoing, the Issuers, the Agent and the Lenders shall not be responsible
(absent gross negligence or willful misconduct in 


                                      -33-
<PAGE>

connection therewith, as determined by the final judgment of a court of
competent jurisdiction) for (A) the forms, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Facility Letter of Credit, even if
it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Facility Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (C) failure of the beneficiary of a Facility Letter of Credit to
comply fully with underlying conditions required in order to draw upon such
Facility Letter of Credit, so long as such beneficiary has presented the
appropriate documentation required to draw upon such Facility Letter of Credit;
(D) errors, omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise; (E) errors in
interpretation of technical terms; (F) misapplication by the beneficiary of a
Facility Letter of Credit of the proceeds of any drawing under such Facility
Letter of Credit; (G) any consequences arising from causes beyond the control of
any Issuer, the Agent or any Lender.

         (e)       PARTICIPATION.

                  (i) Immediately upon issuance by an Issuer of any Facility
Letter of Credit in accordance with the procedures set forth in Section
2.15(c) each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Issuer, without recourse or warranty, an
undivided interest and participation equal to its Pro Rata Share of such
Facility Letter of Credit (including, without limitation, all rights and
obligations of the Issuer with respect thereto) and any security therefor or
guaranty pertaining thereto; PROVIDED, that a Letter of Credit issued by any
Issuer shall not be deemed to be a Facility Letter of Credit for purposes of
this Agreement if the Agent and such Issuer shall have received written notice
from any Lender on or before the Business Day prior to the date of its issuance
of such Letter of Credit that one or more of the conditions contained in
Sections 5.01 and 5.02 is not then satisfied, and, in the event an Issuer
receives such a notice, it shall have no further obligation to issue any
Facility Letter of Credit until such notice is withdrawn by that Lender or it
receives a notice from the Agent that such condition has been effectively waived
in accordance with the provisions of this Agreement.

                  (ii) In the event that any Issuer makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
such Issuer pursuant to Section 2.15(d), such Issuer shall promptly notify the
Agent, which shall promptly notify each Lender, of such failure, and each Lender
shall promptly and unconditionally pay to the Agent for the account of such
Issuer the amount of such Lender's Pro Rata Share of the unreimbursed amount of
any such payment. The failure of any Lender to make available to the Agent its
Pro Rata Share of the unreimbursed amount of any such payment shall not relieve
any other Lender of its obligation hereunder to make available to the Agent its
Pro Rata Share of the unreimbursed amount of any payment on the date such
payment is to be made, but no Lender shall be responsible for the failure of any
other Lender to make available to the Agent its Pro Rata Share of the
unreimbursed amount of any payment on the date such payment is to be made.

                                      -34-
<PAGE>

                  (iii) Whenever an Issuer receives a payment on account of a
Reimbursement Obligation, including any interest thereon, it shall promptly pay
to the Agent and the Agent shall promptly pay to each Lender which has funded
its participating interest therein, in immediately available funds, an amount
equal to such Lender's Pro Rata Share thereof.

                  (iv) Upon the request of the Agent or any Lender, an Issuer
shall furnish to such Agent or Lender copies of any Facility Letter of Credit to
which that Issuer is party and such other documentation as may reasonably be
requested by the Agent or Lender.

                  (v) The obligations of a Lender to make payments to the Agent
for the account of an Issuer with respect to a Facility Letter of Credit shall
be absolute, unconditional and irrevocable, not subject to any counterclaim,
set-off, qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances.

                  (vi) In the event any payment by the Borrower received by an
Issuer with respect to a Facility Letter of Credit and distributed by the Agent
to the Lenders on account of their participations is thereafter set aside,
avoided or recovered from that Issuer in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by that Issuer, contribute such Lender's
Pro Rata Share of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by that Issuer upon the amount required
to be repaid by it.

         (f)       COMPENSATION FOR FACILITY LETTERS OF CREDIT.

                  (i) The Borrower shall pay to the Agent, for the ratable
account of the Lenders, based upon the Lenders' respective Pro Rata Shares, a
fee with respect to each Facility Letter of Credit that is for the period from
the Issuance Date thereof to and including the final expiration date thereof, in
a per annum amount equal to the product of (x) the average daily undrawn amount
of such Facility Letter of Credit times (y) the Facility Letter of Credit Fee
percentage shown in the pricing grid set forth in Exhibit "F" hereto. The
Facility Letter of Credit Fees shall be due and payable in arrears on each
Monthly Payment Date and, to the extent any such fees are then due and unpaid,
on the Facility A Termination Date. The Agent shall promptly remit such Facility
Letter of Credit Fees, when paid, to the other Lenders in accordance with their
Pro Rata Shares thereof.

                  (ii) Each Issuer shall have the right to receive, solely for
its own account, an issuing fee equal to the product of (x) 12.5 basis points
times (y) the amount of each Facility Letter of Credit, and other customary and
competitive fees agreed to between the Borrower and the Issuer with respect to
any Facility Letter of Credit which it issued. In addition, each Issuer shall be
entitled to receive its reasonable out-of-pocket costs of issuing and servicing
Facility Letters of Credit.

         (g) LETTER OF CREDIT COLLATERAL ACCOUNT. From and after the occurrence
and during the continuance of an Event of Default, (i) the Borrower hereby
agrees that it will, until the Facility A 


                                      -35-
<PAGE>

Termination Date, maintain a special collateral account (the "Letter of Credit
Collateral Account") at the Agent's office at the address specified pursuant to
Article XIII, in the name of the Borrower but under the sole dominion and
control of the Agent, for the benefit of the Lenders, and in which the Borrower
shall have no interest other than as set forth in Section 9.03 and (ii) the
Agent shall not be obligated to release any Lots or other Collateral from the
Lien of the Mortgage if the Borrower has not deposited in the Letter of Credit
Collateral Account an amount equal to the aggregate undrawn face amount of all
outstanding Facility Letters of Credit and all fees and other amounts due or
which may become due with respect thereto. In addition to the foregoing, the
Borrower hereby grants to the Agent, for the benefit of the Lenders as security
for the repayment of the Obligations, a security interest in and to the Letter
of Credit Collateral Account and any funds that may hereafter be on deposit in
such account pursuant to Section 9.02.

         SECTION 2.16. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or
a Lender, as the case may be, notifies the Agent prior to the date on which it
is scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or the unreimbursed amount of any payment required pursuant
to Section 2.15(e)(ii), (ii) in the case of an Issuer, payment of any
Reimbursement Obligation received from the Borrower, or (iii) in the case of the
Borrower, a payment of principal, interest or fees to the Agent for the account
of the Lenders or an Issuer, that it does not intend to make such payment, the
Agent may assume that such payment has been made. The Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender, or the Borrower, as
the case may be, has not in fact made such payment to the Agent, the recipient
of such payment shall, on demand by the Agent, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to (i)
in the case of payment by a Lender or an Issuer, the Federal Funds Effective
Rate for such day or (ii) in the case of payment by the Borrower, the interest
rate applicable to the relevant Loan or Reimbursement Obligation.

         SECTION 2.17. WITHHOLDING TAX EXEMPTION. At least five Business Days
prior to the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it will deliver to
each of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes. Each
Lender which so delivers a Form 1001 or 4224 further undertakes to deliver to
each of the Borrower and the Agent two additional copies of such form (or a
successor form) on or before the date that such form expires (currently, three
successive calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent forms so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
in each case certifying that such Lender is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any 


                                      -36-
<PAGE>

United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.

         SECTION 2.18. UNCONDITIONAL OBLIGATION TO MAKE PAYMENTS. To the fullest
extent permitted by law, the Borrower shall make all payments hereunder, under
the Notes and under all of the other Loan Documents regardless of any defense,
claim, offset, cross claim, or counterclaim, including any defense, claim,
offset, cross claim, or counterclaim based on any law, rule or policy which is
now or hereafter promulgated by any governmental authority or regulatory body
and which may adversely affect the Borrower's obligations to make, or the right
of the holder of any Note to receive, those payments.

         SECTION 2.19. COMPENSATING BALANCES. First Chicago shall have the right
(but no obligation) to enter into a separate agreement with the Borrower or any
Subsidiary which provides for the reduction of the interest rate payable to
First Chicago hereunder in the event that the Borrower or such Subsidiary
maintains collected balances in non-interest bearing accounts at First Chicago,
but in no event shall such agreement affect the amounts payable under this
Agreement to any other Lender. Similarly, each other Lender shall have the right
(but no obligation) to enter into a separate agreement with the Borrower or any
Subsidiary which provides for the rebate to Borrower of a portion of the
interest paid to such Lender under this Agreement in the event that the Borrower
or such Subsidiary maintains collected balances in non-interest bearing accounts
at such Lender, but in no event shall any such agreement affect the amounts
payable under this Agreement to such Lender.

         SECTION 2.20. EXTENSION OF FACILITY A TERMINATION DATE. At any time
following the first anniversary of this Agreement, the Borrower may request a
one (1) year extension of the Facility A Termination Date by submitting a
request for an extension to the Agent (an "Extension Request") not less than 60
days prior to the Facility A Termination Date. Promptly following receipt of an
Extension Request, the Agent shall notify each Lender of the contents thereof,
shall request each Lender to approve the Extension Request, and shall specify
the date (which must be at least 30 days but not more than 60 days after the
Extension Request is delivered to the Lenders) as of which the Lenders must
respond to the Extension Request (the "Reply Date"). Each Lender approving the
Extension Request shall deliver its written consent no later than the Reply
Date. If the consent of all of the Lenders is received by the Agent on or prior
to the Reply Date, the Facility A Termination Date specified in the Extension
Request shall become effective at the expiration of the existing Facility A
Termination Date and the Agent shall promptly notify the Borrower and each
Lender of the new Facility A Termination Date. The Borrower may only request one
extension of the Facility A Termination Date pursuant to this Section. If an
Extension Request is granted, the Borrower, prior to same being effective, shall
deliver to the Agent, an endorsement to 


                                      -37-
<PAGE>

each of the Title Policies insuring that the policy continues to be effective
with respect to any Advances made during the extended term.

         SECTION 2.21. DETERMINATION OF BORROWING BASE. The Borrowing Base shall
be determined by the Agent as follows:

                  (a) MONTHLY. On the 30th day following each month, the
Borrower shall submit to the Agent a Borrowing Base Certificate dated as of the
last day of the immediately preceding calendar month.

                  (b) NOTICE OF BORROWING BASE CHANGE. Promptly upon receipt,
the Agent shall furnish a copy of the Borrowing Base Certificate to each of the
Lenders.

                  (c) ADDITIONAL MORTGAGED PROPERTY/ADDITION TO BORROWING BASE.
So long as there is no Event of Default or Unmatured Default, the Borrower may,
but shall not be required to, add additional Real Estate as Mortgaged Property.
Within sixty (60) days after the Closing Date, the Borrower may add to the
Borrowing Base any and all of the Real Estate described in Schedule III hereto,
subject to the Borrower satisfying all of the conditions precedent set forth in
Sections 5.01(e), (g), (h), (i), (l), (m), (p), (q) and (w) hereof with respect
thereto. In addition, if the Borrower wishes to add other Real Estate as a
Mortgaged Property, it shall provide the Agent, with a copy for each Lender,
such information with respect to such Real Estate as shall be required by the
Agent and the Required Lenders, which information shall be generally the same
type of information as that provided in respect of the initial Mortgaged
Properties prior to the Closing Date. The Agent and the Required Lenders shall
review such information to determine, by applying the standards and criteria
consistent with the valuation of the Mortgaged Properties included in the
Borrowing Base on the Closing Date, whether or not to accept such proposed Real
Estate as a Mortgaged Property. If the Agent and the Required Lenders approve
such property to become a Mortgaged Property, the Borrower shall deliver a
Mortgage with respect thereto, together with all other documentation, opinions,
insurance and other items, and take all other actions, consistent with the
deliveries made and actions taken in respect to the Mortgaged Properties
included in the Borrowing Base on the Closing Date. After such approval and upon
delivery of all the foregoing documents, information and approvals thereof in
writing by the Agent and the Required Lenders, such Additional Mortgaged
Property shall be added to the Borrowing Base. The delivery by the Borrower of a
request to add such Real Estate to the Borrowing Base shall constitute a
representation by the Borrower on the date of delivery of the Mortgage with
respect to such Real Estate, and on each date thereafter on which the Borrower
is deemed to make the representations and warranties set forth in Article IV in
respect of each Mortgaged Property, to such additional Real Estate.


                                      -38-
<PAGE>
                                   ARTICLE III

                             CHANGE IN CIRCUMSTANCES

         SECTION 3.01. YIELD-PROTECTION. If the adoption, on or after the
Agreement Date, of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change, on or after the Agreement Date, in interpretation thereof,
or the compliance of any Lender (which term, for purposes of this Article III,
shall be deemed to include such Issuer in such capacity) therewith,

               (i) subjects any Lender or any applicable Lending Installation to
         any tax, duty, charge or withholding on or from payments due from the
         Borrower (excluding federal taxation of the overall net income of any
         Lender or applicable Lending Installation), or changes the basis of
         taxation of payments to any Lender in respect of its Loans or other
         amounts due it hereunder, or

              (ii) imposes or increases or deems applicable any reserve,
         assessment, insurance charge, special deposit or similar requirement
         against assets of, deposits with or for the account of, or credit
         extended by, any Lender or any applicable Lending Installation (other
         than reserves and assessments taken into account in determining the
         interest rate applicable to Fixed Rate Advances), or

             (iii) imposes any other condition the result of which is to
         increase the cost to any Lender or any applicable Lending Installation
         of making, funding or maintaining loans (or letters of credit or
         participations therein) or reduces any amount receivable by any Lender
         or any applicable Lending Installation in connection with loans (or
         letters of credit or participations therein), or requires any Lender or
         any applicable Lending Installation to make any payment calculated by
         reference to the amount of loans held or interest received by it, by an
         amount deemed material by such Lender,

then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans (PROVIDED, that the foregoing shall not include any
amounts which First Chicago certifies is reflected in an increase of the
Corporate Base Rate for the relevant period).

         SECTION 3.02. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender
reasonably determines the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such Lender or any
corporation controlling such Lender is increased as a result of a Change, and
such increase will have the effect of reducing the rate of return on such
Lender's capital as a consequence of such Lender's obligations hereunder to a
level below that which such Lender or such corporation, as the case may be,
could have achieved but for such Change (taking into account such Lender's or
such corporation's policies, as the case may be, with 


                                      -39-
<PAGE>

respect to capital adequacy and any payments made to such Lender pursuant to
Section 3.01 which relate to capital adequacy and assuming that such Lender's
capital was fully utilized prior to such Change), then within 15 days of demand
by such Lender, the Borrower shall pay to the Agent, for the account of such
Lender, such additional amount or amounts as will compensate such Lender for
such reduction. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.02 it shall promptly notify the Borrower through the
Agent of the event by reason of which it has become so entitled, but in any
event within 90 days, after such Lender obtains actual knowledge thereof;
PROVIDED that if such Lender fails to give such notice within the 90-day period
after it obtains actual knowledge of such an event, such Lender shall, with
respect to such compensation in respect of any costs resulting from such event,
only be entitled to payment for costs incurred from and after the date 90 days
prior to the date that such Lender does give such notice. A certificate setting
forth in reasonable detail the computation of any additional amount payable
pursuant to this Section 3.02, submitted by such Lender to the Borrower through
the Agent, shall be delivered to the Borrower promptly after the initial
incurrence of such additional amounts. "Change" means (i) any change after the
Agreement Date in the Risk-Based Capital Guidelines or (ii) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender or any Lending Institution.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.

         SECTION 3.03. AVAILABILITY OF TYPES OF ADVANCES. If any Lender
determines that maintenance of its Fixed Rate Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if the Agent determines that (i)
deposits of a type and maturity appropriate to match fund Fixed Rate Advances
are not available or (ii) the interest rate applicable to a Type of Advance does
not accurately reflect the cost of making or maintaining such Advance, then the
Agent shall suspend the availability of the affected Type of Advance and require
any Fixed Rate Advances of the affected Type to be repaid or to be converted (in
accordance with the terms of this Agreement) to any Type of Advance which is not
affected and is then available under this Agreement.

         SECTION 3.04. FUNDING INDEMNIFICATION. If any payment of a Fixed Rate
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a Fixed
Rate Advance is not made on the date specified by the Borrower for any reason
other than default by the Lenders, the Borrower will indemnify each Lender for
any loss or cost incurred by it resulting therefrom, including, without
limitation, 


                                      -40-
<PAGE>

any loss or cost in liquidating or employing deposits acquired to fund or
maintain the Fixed Rate Advance.

         SECTION 3.05. LENDER STATEMENTS: SURVIVAL OF INDEMNITY. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Fixed Rate Loans to reduce any liability of the
Borrower to such Lender under Sections 3.01 and 3.02 or to avoid the
unavailability of a Type of Advance under Section 3.03, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender as to the amount due, if any, under Sections
3.01, 3.02 or 3.04. Such written statement shall set forth in reasonable detail
the calculations upon which such Lender determined such amount and shall be
final, conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a Fixed
Rate Loan shall be calculated as though each Lender funded its Fixed Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Fixed Rate applicable to such
Loan, whether in fact that is the case or not. Unless otherwise provided herein,
the amount specified in the written statement shall be payable on demand after
receipt by the Borrower of the written statement. The obligations of the
Borrower under Sections 3.01, 3.02 and 3.04 shall survive payment of the
Obligations and termination of this Agreement.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to each of the Lenders that:

         SECTION 4.01. ORGANIZATION, POWERS, ETC. OF BORROWER. Borrower (i) is a
general partnership duly organized, validly existing and in good standing under
laws of Florida, (ii) has the power and authority to own or hold under lease the
properties it purports to own or hold under lease and to carry on its business
as now conducted, (iii) is duly qualified or licensed to transact business in
every jurisdiction in which such qualification or licensing is necessary to
enable it to enforce all of its material contracts and other material rights and
to avoid any material penalty or forfeiture or in which the failure to be so
qualified would have a Material Adverse Effect.

         SECTION 4.02. ORGANIZATION, POWERS, ETC. OF SUBSIDIARY GUARANTORS. Each
Subsidiary Guarantor (i) is an entity duly organized, validly existing and in
good standing under laws of its state of organization, (ii) has the power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to carry on its business as now conducted, (iii) is duly
qualified or licensed to transact business in every jurisdiction in which such
qualification or licensing is necessary to enable it to enforce all of its
material contracts and other material rights and to avoid any material penalty
or forfeiture, or in which the failure to be so qualified would have a Material
Adverse Effect.

                                      -41-
<PAGE>

         SECTION 4.03. ORGANIZATION, POWERS, ETC. OF LENNAR AND LNR. Lennar and
LNR (i) are each an entity duly organized, validly existing and in good standing
under laws of its state of organization, (ii) have the power and authority to
own or hold under lease the properties they purport to own or hold under lease
and to carry on their business as now conducted, (iii) are duly qualified or
licensed to transact business in every jurisdiction in which such qualification
or licensing is necessary to enable them to enforce all of their material
contracts and other material rights and to avoid any material penalty or
forfeiture, or in which the failure to be so qualified would have a Material
Adverse Effect.

         SECTION 4.04. AUTHORIZATION AND VALIDITY OF THIS AGREEMENT, ETC. OF
BORROWER. Each of the Borrower and LLP Partner has the power and authority to
execute and deliver this Agreement, the Notes and the other Loan Documents to
which it is a party and to perform all its obligations hereunder and thereunder.
The execution and delivery by the Borrower, LLP Partner and LNR Partner of this
Agreement, the Notes and the other Loan Documents to which it is a party and the
performance by the Borrower, LLP Partner and LNR Partner of all its obligations
hereunder and thereunder and any and all actions taken by the Borrower (i) have
been duly authorized by all requisite partnership action, (ii) will not violate
or be in conflict with (a) any provisions of law (including, without limitation,
any applicable usury or similar law), (b) any order, rule, regulation, writ,
judgment, injunction, decree or award of any court or other agency of
government, or (c) any provision of its partnership agreement, (iii) will not
violate, be in conflict with, result in a breach of or constitute (with or
without the giving of notice or the passage of time or both) a default under any
material indenture, agreement or other instrument to which it is a party or by
which it or any of its properties or assets is or may be bound, and (iv) except
as otherwise contemplated by this Agreement, will not result in the creation or
imposition of any Lien upon, or any security interest in, any of its properties
or assets. Each of this Agreement, the Notes and the other Loan Documents to
which the Borrower, LLP Partner or LNR Partner is a party has been duly executed
and delivered by the Borrower, LLP Partner or LNR Partner, as the case may be.
The Loan Documents constitute legal, valid and binding obligations of the
Borrower, LLP Partner and LNR Partner, enforceable against the Borrower, LLP
Partner and LNR Partner in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.

         SECTION 4.05. AUTHORIZATION AND VALIDITY OF THIS AGREEMENT, ETC. BY
SUBSIDIARY GUARANTORS. Each Subsidiary Guarantor has the power and authority to
execute and deliver this Agreement, the Subsidiary Guaranty and the other Loan
Documents and to perform all its obligations thereunder. The execution and
delivery by each Subsidiary Guarantor of the Subsidiary Guaranty and the other
Loan Documents to which such Subsidiary Guarantor is a party and the performance
by each Subsidiary Guarantor of all its obligations thereunder and any and all
actions taken by such Subsidiary Guarantor (i) have been duly authorized by all
requisite entity action, (ii) will not violate or be in conflict with (a) any
provisions of law (including, without limitation, any applicable usury or
similar law), (b) any order, rule, regulation, writ, judgment, injunction,
decree or award of any court or other agency of government, or (c) any provision
of its certificate of organization, joint venture, partnership agreement, or
by-laws, (iii) will not violate, be in conflict 


                                      -42-
<PAGE>

with, result in a breach of or constitute (with or without the giving of notice
or the passage of time or both) a default under any material indenture,
agreement or other instrument to which it is a party or by which it or any of
its properties or assets is or may be bound, and (iv) except as otherwise
contemplated by this Agreement, will not result in the creation or imposition of
any Lien upon, or any security interest in, any of its properties or assets.
Each of the Subsidiary Guarantees and the other Loan Documents to which a
Subsidiary Guarantor is a party has been duly executed and delivered by such
Subsidiary Guarantor and the Loan Documents to which such Subsidiary Guarantor
is a party constitutes the legal, valid and binding obligations of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

         SECTION 4.06. AUTHORIZATION AND VALIDITY OF THIS AGREEMENT, ETC. BY
LENNAR AND LNR. Each of Lennar and its subsidiaries and LNR and its subsidiaries
has the power and authority to execute and deliver the Lennar and LNR Guaranty
and the other Loan Documents to which it is a party and to perform all its
obligations thereunder. The execution and delivery by Lennar and its
subsidiaries and LNR and its subsidiaries of the Lennar and LNR Guaranty and the
other Loan Documents to which Lennar and its subsidiaries or LNR and its
subsidiaries are a party and the performance by Lennar and its subsidiaries and
LNR and its subsidiaries of all their obligations thereunder and any and all
actions taken by Lennar and its subsidiaries and LNR and its subsidiaries (i)
have been duly authorized by all requisite entity action, (ii) will not violate
or be in conflict with (a) any provisions of law (including, without limitation,
any applicable usury or similar law), (b) any order, rule, regulation, writ,
judgment, injunction, decree or award of any court or other agency of
government, or (c) any provision of its certificate of organization or by-laws,
(iii) will not violate, be in conflict with, result in a breach of or constitute
(with or without the giving of notice or the passage of time or both) a default
under any material indenture, agreement or other instrument to which it is a
party or by which it or any of its properties or assets is or may be bound, and
(iv) except as otherwise contemplated by this Agreement, will not result in the
creation or imposition of any lien, charge or encumbrance upon, or any security
interest in, any of their properties or assets. Each of the Lennar and LNR
Guaranty and the other Loan Documents to which Lennar and its subsidiaries or
LNR and its subsidiaries are a party has been duly executed and delivered by
Lennar and its subsidiaries and LNR and its subsidiaries, as the case may be.
The Loan Documents to which Lennar and its subsidiaries or LNR and its
subsidiaries are a party constitute legal, valid and binding obligations of
Lennar and its subsidiaries and LNR and its subsidiaries, as the case may be,
enforceable against Lennar and its subsidiaries and LNR and its subsidiaries in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

         SECTION 4.07.     INTENTIONALLY OMITTED.

         SECTION 4.08.     INTENTIONALLY OMITTED.

                                      -43-
<PAGE>

         SECTION 4.09. NO MATERIAL ADVERSE EFFECT WITH RESPECT TO SUBSIDIARY
GUARANTORS. No Event has occurred which has had or could reasonably be expected
to have a Material Adverse Effect upon the Subsidiary Guarantors.

         SECTION 4.10. TITLE TO PROPERTIES. Schedule III hereto contains a
complete and accurate list of all Real Estate owned by the Borrower and the
Subsidiary Guarantors and constituting Collateral as of the Closing Date.

         SECTION 4.11. LITIGATION. There is no action, suit, proceeding,
arbitration, inquiry or investigation (whether or not purportedly on behalf of
the Borrower or any Subsidiary Guarantor) pending or, to the best knowledge of
the Borrower, threatened against or affecting the Borrower or any Subsidiary
Guarantor which could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any Subsidiary Guarantor is in default with respect to
any final judgment, writ, injunction, decree, rule or regulation of any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which default would or
could have a Material Adverse Effect on the Borrower or Subsidiary Guarantors.
The Borrower and Subsidiary Guarantors have no material contingent obligations
not provided for or disclosed in the Unaudited Financial Statements.

         SECTION 4.12. PAYMENT OF TAXES BY SUBSIDIARY GUARANTORS. There have
been filed all federal, state and local tax returns with respect to the
operations of the Subsidiary Guarantors which are required to be filed,
including federal tax returns for the fiscal year ended November 30, 1996 and
all prior fiscal years of the Subsidiary Guarantors, except where extensions of
time to make those filings have been granted by the appropriate taxing
authorities and the extensions have not expired. Each Subsidiary Guarantor has
paid or caused to be paid to the appropriate taxing authorities all taxes as
shown on those returns and on any assessment received by any of them, to the
extent that those taxes have become due, except for taxes the failure to pay
which do not violate the provisions of Section 6.03 hereof. The Internal Revenue
Service has completed an examination of the Subsidiary Guarantors' federal
income tax returns for the years ended 1980 through 1994, as part of its
examination of Lennar's consolidated tax returns for those years, and Subsidiary
Guarantors have paid all additional taxes, assessments, interest and penalties
with respect to such years.

         SECTION 4.13. AGREEMENTS. Neither the Borrower nor any Subsidiary
Guarantor is a party to any agreement or instrument or is subject to any charter
or other restriction that could reasonably be expected to have a Material
Adverse Effect on it. Neither the Borrower nor any Subsidiary Guarantor is in
material default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material agreement or
instrument to which it is a party and consummation of the transactions
contemplated hereby and in the other Loan Documents will not cause Borrower or
such Subsidiary Guarantor to be in material default thereof.

                                      -44-
<PAGE>

         SECTION 4.14. FOREIGN DIRECT INVESTMENT REGULATIONS. Neither the making
of the Advances nor the repayment thereof nor any other transaction contemplated
hereby will involve or constitute a violation by the Borrower or any Subsidiary
Guarantor any provision of the Foreign Direct Investment Regulations of the
United States Department of Commerce or of any license, ruling, order, or
direction of the Secretary of Commerce thereunder.

         SECTION 4.15.     FEDERAL RESERVE REGULATIONS.

         (a) Neither the Borrower nor any Subsidiary Guarantor is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any margin stock (within the
meaning of Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System of the United States). Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
and of any Subsidiary Guarantor which are subject to any limitation on sale,
pledge, or other restriction hereunder.

         (b) No part of the proceeds of any of the Advances will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock. If requested by the
Lenders, the Borrower and the Subsidiaries shall furnish to the Lenders a
statement in conformity with the requirements of Federal Reserve Form U-l
referred to in Regulation U of said Board of Governors. No part of the proceeds
of the Advances will be used for any purpose that violates, or which is
inconsistent with, the provisions of Regulation X of said Board of Governors.

         SECTION 4.16. CONSENTS, ETC. Except as set forth on Schedule IV, no
order, license, consent, approval, authorization of, or registration,
declaration, recording or filing (except for the filing of a Current Report on
Form 8-K, and a Quarterly Report on Form 10-Q, in each case by Lennar and LNR
with the Securities and Exchange Commission) with, or validation of, or
exemption by, any governmental or public authority (whether federal, state or
local, domestic or foreign) or any subdivision thereof is required in connection
with, or as a condition precedent to, the due and valid execution, delivery and
performance by Borrower of this Agreement, the Notes, the other Loan Documents,
and by the Subsidiary Guarantors of the Subsidiary Guarantees and other Loan
Documents to which they are a party or the legality, validity, binding effect or
enforceability of any of the respective terms, provisions or conditions thereof.
To the extent that any franchises, licenses, certificates, authorizations,
approvals or consents from any federal, state or local (domestic or foreign)
government, commission, bureau or agency are required for the acquisition,
ownership, operation or maintenance by the Borrower and the Subsidiary
Guarantors of properties now owned, operated or maintained by it, those
franchises, licenses, certificates, authorizations, approvals and consents have
been validly granted, are in full force and effect and constitute valid and
sufficient authorization therefor.

         SECTION 4.17. COMPLIANCE WITH APPLICABLE LAWS. The Borrower and the
Subsidiaries are in compliance with and conform to all statutes, laws,
ordinances, rules, 


                                      -45-
<PAGE>

regulations, orders, restrictions and all other legal requirements of all
domestic or foreign governments or any instrumentality thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective properties, the violation of which would have a Material
Adverse Effect on it, including, without limitation, regulations of the Board of
Governors of the Federal Reserve System, the Federal Interstate Land Sales Full
Disclosure Act and the Florida Land Sales Act, The California Subdivided Lands
Act, the California Subdivision Map, and Regulations promulgated by the
California Department of Real Estate, Arizona Revised Statutes Sections
9-463.01, ET SEQ. and A.R.S. Sections 11-806.01, ET SEQ., A.R.S. Sections
32-2181, ET SEQ. and similar laws, if any in the State of Texas. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable federal, state and local health and safety statutes and regulations.

         SECTION 4.18. RELATIONSHIP OF THE BORROWER AND THE SUBSIDIARY
GUARANTORS. The Borrower and the Subsidiary Guarantors are engaged as an
integrated group in the business of owning, developing and selling Real Estate.
The Borrower and the Subsidiary Guarantors require financing on such a basis
that funds can be made available from time to time to such entities, to the
extent required for the continued successful operation of their integrated
operations. The Advances to be made to the Borrower and the Facility Letters of
Credit to be issued for the account of the Borrower under this Agreement are for
the purpose of financing the integrated operations of the Borrower and the
Subsidiary Guarantors, and each of the Borrower and the Subsidiary Guarantors
expects to derive benefit, fair consideration and reasonably equivalent value,
directly or indirectly, from the Advances and Facility Letters of Credit, both
individually and as a member of the integrated group, since the financial
success of the operations of each Borrower and Subsidiary Guarantor is dependent
upon the continued successful performance of the integrated group as a whole.

         SECTION 4.19. SUBSIDIARIES; JOINT VENTURES. Schedule V hereto contains
a complete and accurate list with respect to the Borrower of (i) all
Subsidiaries, including, with respect to each such Subsidiary, (a) its state of
incorporation, (b) all jurisdictions (if any) in which it is qualified as a
foreign corporation, (c) the number of shares of its Capital Stock outstanding,
and (d) the number and percentage of those shares owned by the Borrower and/or
by any other Subsidiary, and (ii) each Joint Venture, including, with respect to
each such Joint Venture, (a) its jurisdiction of organization, (b) all other
jurisdictions in which it is qualified as a foreign entity and (c) all Persons
other than the Borrower that are parties, partners, venturers, or members,
whether direct or indirect, thereto. All the outstanding shares of Capital Stock
of each Subsidiary are validly issued, fully paid and nonassessable, except as
otherwise provided by state wage claim laws of general applicability. All of the
outstanding shares of Capital Stock of each Subsidiary as specified in Schedule
V are owned free and clear of all liens, pledges, security interests, equity or
other beneficial interests, charges and encumbrances of any kind whatsoever. The
Borrower does not own of record or beneficially any shares of the Capital Stock
of any corporation that is not a Subsidiary Guarantor or a Joint Venture
Subsidiary.

                                      -46-
<PAGE>

         SECTION 4.20. ERISA. Neither the Borrower nor any Subsidiary Guarantor
is executing or delivering any of the Loan Documents or entering into any of the
transactions contemplated hereby, directly or indirectly, in connection with any
arrangement or understanding in any respect involving any "employee benefit
plan" with respect to which the Borrower or any Subsidiary is a "party in
interest" within the meaning of the Employee Retirement Income Security Act of
1974, or a "disqualified person", within the meaning of the Internal Revenue
Code 1986, as amended. No Unfunded Liabilities exist with respect to any Single
Employer Plans. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and no
steps have been taken to reorganize or terminate any Plan.

         SECTION 4.21. INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.

         SECTION 4.22. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower
nor any Subsidiary 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.

         SECTION 4.23. POST-RETIREMENT BENEFITS. The present value of the
expected cost of post-retirement medical and insurance benefits payable by the
Borrower and the Subsidiaries to its employees and former employees, as
estimated by the Borrower in accordance with procedures and assumptions deemed
reasonable by the Required Lenders, does not exceed $ -0- .

         SECTION 4.24. INSURANCE. The certificate signed by the President or
Chief Financial Officer of the Borrower, that attests to the existence and
adequacy of, and summarizes, the property, casualty, and liability insurance
programs carried by the Borrower and each Subsidiary Guarantor and that has been
furnished by the Borrower to the Agent and the Lenders, is complete and
accurate. This summary includes the insurer's or insurers' name(s), policy
number(s), expiration date(s), amount(s) of coverage, type(s) of coverage,
exclusion(s), and deductibles. This summary also includes similar information,
and describes any reserves, relating to any self-insurance program that is in
effect.

         SECTION 4.25. ENVIRONMENTAL REPRESENTATIONS. To the best of the
Borrower's knowledge and belief, no Hazardous Substances in material violation
of any Environmental Laws are present upon any of the Real Estate owned by
Borrower or any Subsidiary, and neither the Borrower nor any Subsidiary has
received any notice to the effect that any of the Real Estate owned by Borrower
or any Subsidiary or any their respective operations are not in compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any 


                                      -47-
<PAGE>

Hazardous Substance into the environment which non-compliance or remedial action
could be reasonably expected to have a Material Adverse Effect.

         SECTION 4.26.     SECURITY DOCUMENTS.

                  (a) Each Mortgage, when executed and delivered by the relevant
Loan party, and properly filed and recorded (with all required filing and
recording fees being paid) in the office(s) specified in Schedule VIII shall
constitute a Lien on, and security interest in, all right, title, interest,
claim and estate of each Subsidiary Guarantor, Joint Venturer, or Borrower
executing such Mortgage on the Mortgaged Property described therein, security
for the Obligations (as defined in the relevant Mortgage), in each case prior
and superior in right to any other Person, other than with respect to the
Permitted Liens.

                  (b) The Security Agreement (Capital Stock and Partnership
Interest) is effective to create in favor of the Agent, for the benefit of the
Lenders, legal, valid and enforceable security interests in the Capital Stock
and partnership interests of the Subsidiaries described therein and proceeds
thereof and, when the stock certificates and partnership certificates (if any)
described therein are delivered to the Agent, and such financing statements
describing such Collateral as may be necessary to be filed in the appropriate
jurisdictions in order to perfect the security interest being granted, the
Security Agreement (Capital Stock and Partnership Interests) shall constitute a
perfected first priority lien on, and security interest in, all right, title and
interest of the Borrower, or each Subsidiary owning Capital Stock or partnership
interests of another Subsidiary, in such Capital Stock and partnership interests
and the proceeds thereof as security for the Obligations, in each case prior and
superior in right to any other Person when financing statements in appropriate
form are properly filed (with all required filing fees deemed paid) in the
office(s) specified in Schedule IX.

         SECTION 4.27. SOLVENCY. The Borrower, each partner of Borrower, and
each Subsidiary Guarantor are, and after giving effect to the Reorganization and
the incurrence of all Indebtedness and Obligations being incurred and the
transfers to be made in connection herewith and therewith will be and will
continue to be, Solvent.

         SECTION 4.28. NO MISREPRESENTATION. No representation or warranty
contained herein or made hereunder and no certificate, schedule, exhibit, report
or other document provided or to be provided by Borrower or any Subsidiary
Guarantor in connection with the transactions contemplated hereby or thereby
(including, without limitation, the negotiation of and compliance with the Loan
Documents) contains or will contain a misstatement of a material fact or omit to
state a material fact required to be stated herein or therein in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.

         SECTION 4.29. NO ENCROACHMENTS; LICENSES AND PERMITS. Except as shown
on the Title Policy or on the survey referred to in the Title Policy, all of the
Improvements lie wholly within the boundaries and building restriction lines of
the Mortgaged Properties and no 


                                      -48-
<PAGE>

improvements on adjoining properties encroach upon the Mortgaged Properties,
except in either case for immaterial encroachments which do not adversely affect
the benefits of the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the Mortgaged Properties. Each of the
Mortgaged Properties is in compliance with, and is lawfully occupied and used in
compliance with, all applicable laws and insurance requirements, including,
without limitation, building and zoning ordinances and codes. Each of the
Borrower or the Subsidiary Guarantors, as the case may be, is in possession of,
and in compliance with, all licenses, permits, certificates or other
authorizations necessary or required by applicable law or insurance requirements
for the conduct of its business or the use or occupancy of the Mortgaged
Properties; all such licenses, permits, certificates and authorizations are
valid and in full force and effect and have not been modified or qualified in a
manner detrimental to the operation of the Mortgaged Properties. Neither the
Borrower nor any of the Subsidiary Guarantors has received any material written
notification or threat of any action or proceeding regarding the non-compliance
or non-conformity of the Mortgaged Properties with any applicable law or
insurance requirements, nor is the Borrower or any of the Subsidiary Guarantors
aware of any such pending actions or proceedings.

         SECTION 4.30. INDEPENDENT UNITS. Each of the Mortgaged Properties is an
independent unit which does not rely on any drainage, water, sewer, access,
parking, structural or other facilities located on any property not included in
the Mortgaged Properties or on public or utility easements (i) to fulfill any
zoning, building code or other requirement of any governmental authority that
has jurisdiction over the Mortgaged Properties, (ii) for structural support or
(iii) to fulfill the requirements of any lease or other agreement affecting the
Mortgaged Properties.

         SECTION 4.31. MINIMUM TANGIBLE NET WORTH. On the Closing Date, the
Tangible Net Worth of the Borrower will not be less than $175,000,000.

         SECTION 4.32. STEVENSON RANCH VENTURE L.L.C. AND BRESSI RANCH. On the
Closing Date, Investments by the Borrower in Stevenson Ranch Venture L.L.C. and
Bressi Ranch collectively shall not exceed $23,500,000.

         SECTION 4.33 IMPROVEMENTS ON PROPERTY. None of the Property is
"improved", as such term is defined in 12 CFR Section 22.1, Subpart (b), except
as has been disclosed to the Lenders, in writing, prior to the Agreement Date.

                                    ARTICLE V

                              CONDITIONS PRECEDENT


         SECTION 5.01. CONDITIONS OF EFFECTIVENESS. This Agreement shall become
effective when the Agent shall have received counterparts of this Agreement
executed by the Borrower and each of the Lenders; PROVIDED, HOWEVER, that the
Lenders shall not be required to make any 


                                      -49-
<PAGE>

Advance and the Issuer shall not be required to issue any Facility Letters of
Credit, hereunder, unless and until the Agent shall have received each of the
following items (with all documents required below, except as otherwise
specified, to be dated the Closing Date, which date shall be the same for all
such documents, and each of such documents to be in form and substance
satisfactory to the Agent, in the sole and absolute discretion of the Agent, be
fully and properly executed by all parties thereto, and (except for the Notes)
to be in sufficient copies for each Lender), and the conditions specified below
shall have been satisfied:

         (a) Facility A Notes and the Facility B Notes payable to the order of
each of the Lenders.

         (b) The Subsidiary Guarantees.

         (c) The Lennar and LNR Guaranty.

         (d) Borrowing Base Certificate calculating the Borrowing Base as of the
Closing Date, based upon the Book Value of the Collateral as of August 31, 1997,
executed by an Authorized Officer.

         (e) Fully executed and acknowledged counterparts of the Mortgages, and
all other security documents with respect to the Mortgaged Properties as of the
Closing Date and the delivery of evidence satisfactory to the Agent and
counterparts of the Mortgages and all other of such documents the Agent desires
to have recorded have been or will be recorded in all places necessary or
desirable to create and maintain valid and enforceable first priority liens on
the fee simple or leasehold interest of the Borrower and the Subsidiary
Guarantors, as applicable, in the Mortgaged Properties in favor of the Agent, as
mortgagee (or as beneficiary in those jurisdictions where the lien is granted to
a trustee for the benefit of the Agent) and in all other items of Collateral as
of the Closing Date in favor of the Agent.

         (f) Security Agreement (Capital Stock and Partnership Interests).

         (g) Properly executed Financing Statements or any other documents
required to be filed by legal requirements, satisfactory in form and substance
of the Agent in each jurisdiction as may be necessary (in the Agent's reasonable
judgment) effectively to perfect and maintain the security interest in the
Collateral created by the Borrower Security Documents and Subsidiary Guarantor
Security Documents and the delivery of evidence that such financing statements
or other documents will have been or will be filed and recorded in all places
necessary or desirable, in the reasonable judgment of the Agent, to create and
maintain valid and enforceable first priority Liens on the Collateral in favor
of the Agent.

         (h) The Title Policy or marked title commitment for each Mortgaged
Property.

                                      -50-
<PAGE>

         (i) The Survey (or as to the Lots which have been platted, a copy of
the plat) of all of the constituent parts of the Mortgaged Property dated within
sixty (60) days next prior to the Closing Date.

         (j) INTENTIONALLY OMITTED.

         (k) The stock certificates (which certificates shall be accompanied by
irrevocable undated stock powers duly endorsed in blank and irrevocable proxies,
all satisfactory in form and substance to the Agent), certificates of
certificated partnership interest, and certificates of certificated limited
liability company membership interest, representing the Capital Stock and
partnership and limited liability company interests to be pledged on the Closing
Date pursuant to the Security Agreement (Capital Stock and Partnership
Interests).

         (l) The Environmental Indemnity.

         (m) A draft of an Appraisal of each Mortgaged Property satisfactory in
form and substance to the Agent evidencing that the Appraised Value of the
Finished Lots, Land Under Development, Entitled Land, and Unentitled Land
included in the Borrowing Base in the aggregate equals or exceeds the Net Book
Value of such Collateral in the aggregate; PROVIDED, HOWEVER that the Net Book
Value of the Bramalea Land shall be adjusted for the Purchase Price Accounting
Adjustment.

         (n) The results of a recent search (the "UCC Search") in such states
and other jurisdictions as the Agent shall determine by a Person satisfactory to
the Agent of the Uniform Commercial Code (or similar legislation), judgment and
tax lien filings which may have been filed with respect to personal property of
the Borrower and the Subsidiary Guarantors, and the results of such search shall
be satisfactory to the Agent.

         (o) Evidence of insurance (the "Insurance Certificates") required by
this Agreement satisfactory to the Agent.

         (p) A flood plain certificate (if not included in the survey relating
to each Mortgaged Property).

         (q) An Environmental Report.

         (r) The favorable written opinion by Rubin Baum Levin Constant Friedman
& Bilzin, counsel for the Borrower, the Subsidiary Guarantors, Lennar and LNR
addressed to the Lenders and in form and substance satisfactory to the Agent,
(i) confirming the accuracy of the representations and warranties set forth in
Sections 4.01, 4.02 and 4.03 (excluding from each such section clause (ii)
thereof, and limited, in the case of clause (iii) thereof, to the jurisdictions
listed under the heading "Where Qualified" in Schedule V hereto), 4.11, 4.17,
4.18 and the second sentence of Section 4.13 hereof (which opinion, as to the
representations set forth in clauses (ii)(b), 


                                      -51-
<PAGE>

(iii) and (iv) of Sections 4.04, 4.05 and 4.06, Sections 4.11, 4.17, 4.18 and
the second sentence of Section 4.13 hereof, may be to the best knowledge of such
counsel, and may in its entirety be limited to Florida, Arizona, Delaware,
Texas, California and United States federal law); and (ii) to the effect that
this Agreement, the Notes, Subsidiary Guarantees, and other Loan Documents have
been duly authorized, executed and delivered by the Borrower and Subsidiary
Guarantors. Such counsel may rely, in its opinion, on the opinions of special
counsel to the Borrower referred to in Section 5.01(s) below, as to matters of
law of the State of Illinois, on the opinion of Fennemore, Craig of Phoenix,
Arizona as to matters of law of the State of Arizona, on the opinion of Belinger
& DeWolf, P.C. as to matters of law of the State of Texas and on the opinion of
Palmieri, Tyler, Wiener, Wilhelm & Waldron as to matters of law of the State of
California. In addition, Rubin, Baum, Levin, Constant, Friedman & Bilzin may
rely on the opinion of Rogers & Wells as to matters of Delaware law applicable
to the transaction. The Borrower hereby instructs its counsel to prepare its
opinion and deliver it to Lenders for their benefit, and such opinion shall
contain a statement to such effect.

         (s) The favorable written opinion of Rudnick & Wolfe, special counsel
to the Borrower, the Subsidiary Guarantors, Lennar and LNR that (i) no
authorization, consent, approval, license or exemption of, or filing nor
registration with or other action by any Illinois, United States federal or
Delaware governmental department, commission, board, bureau, regulatory body,
agency or instrumentality or to the best knowledge of such counsel, any court is
or will be necessary for the execution, delivery and performance by the Borrower
of this Agreement, the Notes, and the Subsidiary Guarantees and (ii) this
Agreement, the Notes and the Subsidiary Guarantees constitute the legal, valid
and binding obligations of the Borrower and the Subsidiary Guarantors,
enforceable in accordance with their respective terms, except as the rights and
remedies of the Lenders thereunder may be limited by (A) applicable bankruptcy,
Reorganization, insolvency and other laws effecting creditors' rights generally
from time to time in effect, (B) the exercise of the discretionary powers of the
court before which any proceeding seeking equitable remedies (including, without
limitation, specific performance and injunctive relief) may be brought, and (C)
such other qualifications expressed in the opinion PROVIDED that such
qualifications are acceptable to Agent. Such counsel may rely on the opinion of
counsel to the Borrower and the Subsidiary Guarantors delivered pursuant to
subsection (b) above relating to the representations set forth in Sections 4.01
and 4.02 hereof and on the opinion of Palmieri, Tyler, Wiener, Wilhelm & Waldron
as to matters of law of the State of California. The Borrower hereby instructs
its special counsel to prepare its opinion and deliver it to Lenders for their
benefit, and such opinion shall contain a statement to such effect.

         (t) The favorable written opinion of Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A., special counsel to the Agent and the Lenders, dated
the Closing Date, addressed to the Lenders to the effect that: while it has not
independently considered the matters covered by the opinions provided pursuant
to Sections 5.01(s) and (t) to the extent necessary to enable it to express the
conclusions stated therein, those opinions of counsel and the other documents
provided pursuant to this Section 5.01 are substantially responsive to the
requirements of this Agreement.

                                      -52-
<PAGE>

         (u) The following supporting documents with respect to the Borrower,
each Subsidiary Guarantor, Lennar and LNR: (i) a copy of its certificate of
existence or certificate or articles of incorporation, as the case may be, and,
with respect to the Borrower, the certificate of incorporation of LLP Partner
and LNR Partner certified as of a date reasonably close to the Closing Date to
be a true and accurate copy by the Secretary of State of its state of
incorporation, as the case may be, or if a copy of such certificate of
incorporation has been previously delivered to the Agent in connection with the
Existing Credit Agreement, a certificate of its Secretary or Assistant Secretary
to the effect that there have been no amendments to its certificate of
incorporation since April 4, 1997; (ii) a certificate of that Secretary of
State, dated as of a date reasonably close to the Closing Date, as to its
existence and (if available) good standing and, with respect to the Borrower,
also as to LLP Partner and LNR Partner; (iii) a certificate of the Secretary of
State of each jurisdiction, other than its state of incorporation, in which it
does business, as to its qualification as a foreign corporation; (iv) a copy of
its by-laws, certified by its Secretary or Assistant Secretary to be a true and
accurate copy of its by-laws in effect on the Closing Date, or, if a copy of
such by-laws has been previously delivered to the Agent in connection with the
Existing Credit Agreement, a certificate of its Secretary or Assistant Secretary
to the effect that there have been no amendments to its by-laws since April 4,
1997; (v) a certificate of its Secretary or Assistant Secretary, dated the
Closing Date, as to the incumbency and signatures of its general partner or
officers, as the case may be, who have executed any documents in connection with
the transactions contemplated by this Agreement; (vi) a copy of resolutions of
the Executive Committee of its Board of Directors, certified by its Secretary or
Assistant Secretary to be a true and accurate copy of resolutions duly adopted
by such Executive Committee or a certificate executed by an authorized officer
of the general partner as to the partnership actions duly adopted by such
general partner, as the case may be, that are in full force and effect on the
Closing Date, authorizing the execution and delivery by it of this Agreement,
the Notes and the other Loan Documents and the performance by it of all its
obligations thereunder; and (vii) such additional supporting documents and other
information with respect to its operations and affairs as the Agent may
reasonably request.

         (v) A certificate signed by a duly authorized officer of the Borrower
stating that: (i) the representations and warranties of the Borrower contained
in Article IV hereof are correct and accurate on and as of the date of that
certificate as though made on and as of that date and (ii) no event has occurred
and is continuing which constitutes an Event of Default or Unmatured Default
hereunder.

         (w) Such other documents as any Lender or its counsel may reasonably
request.

         (x) There shall not have occurred any changes in the consolidated
financial condition, results of operations or cash flows of the Subsidiary
Guarantors from that reflected in the Pro Forma Financial Statements which has
or reasonably could be expected to have, in the judgment of the Required
Lenders, a Material Adverse Effect on the Borrower's financial condition or
results of operations, taken as a whole.

                                      -53-
<PAGE>

         (y) The Borrower shall not have entered into or agreed to any amendment
or modification of the Borrower's Partnership Agreement, or waived or released
any material right or benefits of the Borrower thereunder without the prior
written consent of the Agent or the Required Lenders.

         (z) The Agent shall have received the Pro Forma consolidated balance
sheet of Lennar referred to in Section 5.01(p) of the Lennar Credit Agreement.

         (aa) All conditions precedent to the effectiveness of the Lennar Credit
Agreement and the obligations of the "Lenders" thereunder to make "Advances"
thereunder shall have been satisfied.

         (bb) A certificate signed by the Chief Financial Officer of Lennar
showing in reasonable detail the calculations used to determine the Leverage
Ratio for the Pricing Grids attached hereto as Exhibit F.

         (cc) A report in reasonable detail and in form and substance
satisfactory to the Agent, with calculations indicating that the Borrower, as of
the Closing Date is in compliance with the provisions of Article VII, which
calculations shall be based upon the financial statements of the Borrower.

         (dd) The Agent shall have received an estimated consolidating balance
sheet of the Borrower and its consolidated Subsidiaries, dated as of the Closing
Date, reflecting (i) the combined accounts of the Borrower and all of its
Subsidiaries, (ii) the combined accounts of the Borrower and the Subsidiary
Guarantors, and (iii) the combined accounts of all Subsidiaries that are not
Subsidiary Guarantors (the "Estimated Opening Balance Sheet"). The Estimated
Opening Balance Sheet shall be prepared in accordance with sound accounting
practices, consistent with the financial statements of those Subsidiaries of the
Borrower which were included in the historical financial statements of Lennar
and, to the extent the Estimated Opening Balance Sheet includes estimates, such
estimates shall be made based on factors and assumptions that are reasonable
under the circumstances.

         SECTION 5.02.     CONDITIONS PRECEDENT TO ALL BORROWINGS.

         (a) No Lender shall be required to make any Advance (other than an
Advance that after giving effect thereto and to the application of the proceeds
thereof, does not increase the amount of the sum of outstanding (a) Advances and
(b) Reimbursement Obligations) and no Issuer shall be obligated to issue any
Facility Letter of Credit, unless on the applicable Borrowing Date:

               (i) the Agent shall have received notice of Borrower's request
         for the Advance and/or the issuance of a Facility Letter of Credit with
         respect thereto as provided in Sections 2.06(a) and 2.15(c)(i),
         respectively, and such other approvals, opinions or documents as the
         Agent may reasonably request; and

                                      -54-
<PAGE>

              (ii) the representations and warranties of the Borrower contained
         in Article IV hereof are true and correct as of such Borrowing Date or
         Issuance Date, PROVIDED, HOWEVER, for the purposes hereof (A) from and
         after the date of delivery by the Borrower pursuant to Section 6.04(a)
         of its Consolidated Financial Statements for the year ending November
         30, 1997, the Borrower shall represent and warrant to each of the
         Lenders that the annual audited financial statements, and the related
         notes and schedules (if any), audited and reported upon by Deloitte &
         Touche, independent certified public accountants, most recently
         delivered by the Borrower pursuant to Section 6.04(a) as of the date of
         the request for an Advance and/or the issuance of a Facility Letter of
         Credit (a) were prepared in accordance with GAAP, consistently applied
         throughout the respective periods covered thereby, (b) present fairly
         the consolidating financial condition of the Borrower and the
         Subsidiary Guarantors as of the respective dates thereof, (c) show all
         material Liabilities, direct or contingent, of each Subsidiary
         Guarantor as of those dates (including, without limitations,
         Liabilities for taxes and material commitments), and (d) present fairly
         the consolidating results of operations and cash flows of the
         Subsidiary Guarantors for the respective periods covered thereby; and
         (B) from and after the date of delivery by the Borrower pursuant to
         Section 6.04(b) of its Consolidated Financial Statements for the
         quarter ending February 28, 1998, the references in Section 4.08 to
         "Unaudited Financial Statements" shall be deemed to be references to
         the quarterly unaudited financial statements most recently delivered by
         the Borrower pursuant to Section 6.04(b) as of the date of the request
         for an Advance and/or the issuance of a Facility Letter of Credit and
         such financial statements shall present fairly the consolidating
         results of operations and cash flows of the Subsidiary Guarantors for
         the respective periods covered thereby;

             (iii) All legal matters incident to the making of such Advance
         shall be satisfactory to the Lenders and their counsel;

              (iv) There exists no Event of Default or Unmatured Default;

               (v) The making of the Advance and/or the issuance of a Facility
         Letter of Credit will not result in any Event of Default or Unmatured
         Default.

         (b) Each Borrowing Notice with respect to each such Advance or the
Issuance Notice with respect to such Facility Letter of Credit shall constitute
a representation and warranty by the Borrower that all of the conditions
contained in this Section 5.02 have been satisfied.

         SECTION 5.03 TERMINATION. Notwithstanding anything to the contrary
contained in this Agreement or any of the other Loan Documents, if all of the
conditions precedent to the obligations of the Lenders set forth in Sections
5.01 and 5.02 (as to the initial Borrowing Date only) shall not have been
satisfied or waived by the Lenders prior to December 31, 1997, the Commitments
and all other obligations of the Lenders under this Agreement and the other Loan
Documents shall terminate as of such date and be of no further force or effect
thereafter. Such termination shall not diminish or affect or relieve the
Borrower or any Subsidiary Guarantor, from 


                                      -55-
<PAGE>

any of their respective Obligations which are stated to survive a termination of
the Commitments or the termination of this Agreement or the other Loan
Documents.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

         The Borrower covenants and agrees that from the date hereof until
payment in full of all the Obligations, unless the Required Lenders otherwise
shall consent in writing as provided in Section 13.06 hereof, the Borrower will,
and will cause each of the Subsidiaries to:

         SECTION 6.01. EXISTENCE, PROPERTIES, ETC. Do or cause to be done all
things or proceed with due diligence with any actions or courses of action which
may be necessary to preserve and keep in full force and effect its existence
under the laws of their respective states of incorporation and all
qualifications or licenses in jurisdictions in which such qualification or
licensing is required for the conduct of its business or in which the Lenders
shall request such qualification; PROVIDED, HOWEVER, that nothing herein shall
be deemed to prohibit the Borrower or any Subsidiary other than the Borrower
from (i) merging into or consolidating with any other Subsidiary (including the
Borrower, if the Borrower is the surviving entity) or (ii) declaring and paying
dividends in complete liquidation. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted. The primary business of the
Borrower and the Subsidiaries shall at all times be the acquisition,
development, and sale of land.

         SECTION 6.02. NOTICE. Give prompt written notice to the Agent of (i)
any proceeding instituted by or against the Borrower or any of the Subsidiaries
in any federal or state court or before any commission or other regulatory body,
federal, state or local, or any such proceedings threatened against the Borrower
or any Subsidiary in writing by any federal, state or other governmental agency,
which, if adversely determined, could reasonably be expected to have a Material
Adverse Effect, and (ii) any other Event which could reasonably be expected to
lead to or result in a Material Adverse Effect, or which, with or without the
giving of notice or the passage of time or both, would constitute an Event of
Default or a default under any material agreement, other than this Agreement or
the other Loan Documents, to which the Borrower is a party or by which any of
its properties or assets is or may be bound.

         SECTION 6.03. PAYMENTS OF DEBTS, TAXES, ETC. Pay all its debts and
perform all its obligations promptly and in accordance with the respective terms
thereof, and pay and discharge or cause to be paid and discharged promptly all
taxes, assessments and governmental charges or levies imposed upon the Borrower
or Subsidiary or upon its incomes or receipts or upon any of their properties
before the same shall become in default or past due, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
result in the imposition of a lien 


                                      -56-
<PAGE>

or charge upon such properties or any part thereof; PROVIDED, HOWEVER, that it
shall not constitute a violation of the provisions of this Section 6.03 if the
Borrower or a Subsidiary shall fail to perform any such obligation or to pay any
such debt (except for obligations for money borrowed), tax, assessment,
governmental charge or levy or claim for labor, materials or supplies which is
being contested in good faith, by proper proceedings diligently pursued, and as
to which adequate reserves have been provided.

         SECTION 6.04. ACCOUNTS AND REPORTS. Maintain a standard system of
accounting established and administered in accordance with GAAP, and provide to
the Lenders the following:

         (a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower (commencing with the fiscal year ending
November 30, 1997), a consolidated balance sheet of the Borrower and the
Subsidiaries as of the end of that fiscal year and the related consolidated
statements of earnings, partners' equity and cash flows for that fiscal year,
all with accompanying notes and schedules, prepared in accordance with GAAP
consistently applied and audited and reported upon by Deloitte & Touche or
another firm of independent certified public accountants of recognized standing
selected by the Borrower and acceptable to the Agent (such audit report shall be
unqualified except for qualifications relating to changes in GAAP and required
or approved by the Borrower's independent certified public accountants);

         (b) 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 Borrower (commencing with the quarter
and Fiscal Year ending November 30, 1997), a consolidated balance sheet of the
Borrower and the Subsidiaries as of the end of that quarter, and the related
consolidated statement of partners' and stockholders' equity earnings and cash
flows of the Borrower and the Subsidiaries for the period from the beginning of
the fiscal year to the end of that quarter, all prepared in accordance with GAAP
consistently applied, unaudited but certified to be true and accurate, subject
to normal year-end audit adjustments, by the Chief Financial Officer of the
Borrower;

         (c) 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 Borrower (commencing with the quarter and Fiscal Year ending November 30,
1997), the following described balance sheets and statement of earnings all
prepared in accordance with GAAP consistently applied, unaudited but certified
to be true and accurate, subject to normal year-end audit adjustments, by the
Chief Financial Officer of the Borrower, (i) a consolidated balance sheet of the
Borrower (in a form acceptable to the Agent) as of the end of that quarter and
the related consolidated statement of earnings of the Borrower (in a form
acceptable to the Agent) for the period from the beginning of the fiscal year to
the end of that quarter and (ii) a balance sheet of each Subsidiary Guarantor
(in a form acceptable to the Agent) as of the end of that quarter and the
related statement of earnings of such Subsidiary Guarantor (in a form acceptable
to the Agent) for the period from the beginning of the fiscal year to the end of
that quarter;

                                      -57-
<PAGE>

         (d) concurrently with the delivery of the financial statements
described in subsection (a) above, a letter signed by that firm of independent
certified public accountants to the effect that, during the course of their
examination, nothing came to their attention which caused them to believe that
any Event of Default or Unmatured Default has occurred, or if such Event of
Default or Unmatured Default has occurred, specifying the facts with respect
thereto; and concurrently with the delivery of the financial statements
described in subsections (b) and (c) above, a certificate signed by the
President or Executive Vice President and the Chief Financial Officer of the
Borrower to the effect that, having read this Agreement, and based upon an
examination which they deemed sufficient to enable them to make an informed
statement, there does not exist any Event of Default or Unmatured Default, or if
such Event of Default or Unmatured Default has occurred, specifying the facts
with respect thereto;

         (e) within 60 days after the end of each fiscal quarter and within 120
days after the end of each fiscal year of the Borrower (commencing with the
fiscal year ending November 30, 1997), a schedule of all Real Estate owned by
the Borrower and the Subsidiaries in the form of Schedule III annexed hereto or
as otherwise required by Agent, which schedule, in addition to providing all the
categories of information specified in Schedule III, shall specify those
properties the interest and carrying charges attributable to which are being
deducted, for financial reporting purposes, for the fiscal year in which they
are paid and shall contain all such other information as Agent shall require;

         (f) within 90 days after the beginning of each fiscal year of the
Borrower, a projection, in reasonable detail and in form and substance
satisfactory to the Agent, on a quarterly basis of the cash flow and of the
earnings of the Borrower and the Subsidiaries for that fiscal year and for the
immediately succeeding fiscal year;

         (g) Promptly upon becoming available, copies of all financial
statements, reports, notices and proxy statements sent by Lennar and LNR to
their respective stockholders, and of all regular and periodic reports and other
material (including copies of all registration statements and reports under the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended) filed by Lennar and LNR with any securities exchange or any
governmental authority or commission, except material filed with governmental
authorities or commissions relating to the development of Real Estate in the
ordinary course of the business of Lennar and LNR;

         (h) 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 each Joint Venture, a balance sheet of
that Joint Venture as of the end of that quarter and a statement of earnings of
that Joint Venture for the period from the beginning of the fiscal year to the
end of that quarter, prepared in accordance with GAAP consistently applied,
unaudited but certified to be true and accurate, subject (in the case of the
financial statements delivered for the first three quarter of each fiscal year)
to normal year-end adjustments, by the Chief Financial Officer of the Borrower;

                                      -58-
<PAGE>

         (i) within 60 days after the end of each of the first three quarters,
and within 90 days after the end of each fiscal year of the Borrower (commencing
with the quarter and Fiscal Year ending November 30, 1997), a report, in
reasonable detail and in form and substance satisfactory to the Agent, with
calculations indicating that the Borrower is in compliance with the provisions
of Article VII and, Article VIII, of this Agreement;

         (j) within 270 days after the close of each fiscal year, a statement of
the Unfunded Liabilities of each Single Employer Plan, certified as correct by
an actuary enrolled under ERISA, but the foregoing statement shall be required
only if any Single Employer Plan shall exist;

         (k) as soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect to any Plan,
a statement, signed by the Chief Financial Officer of the Borrower, describing
said Reportable Event and the action which the Borrower proposes to take with
respect thereto;

         (l) as soon as possible and in any event within 10 days after receipt
thereof by the Borrower, a copy of (a) any Environmental Claim against the
Borrower or any of the Subsidiaries, and (b) any notice alleging any violation
of any Environmental Law or any federal, state or local health or safety law or
regulation by the Borrower or any of the Subsidiaries, which, in either case,
could reasonably be expected to have a Material Adverse Effect;

         (m) such supplements to the aforementioned documents and additional
information (including, but not limited to, leasing, occupancy and non-financial
information) and reports as the Agent or any Lender may from time to time
reasonably require;

         (n) concurrently with the quarterly financial statements described in
subsection (b) above following the end of any quarter in which each new
Subsidiary that is to become a Subsidiary Guarantor under Section 6.07 hereof
was formed, the Borrower shall deliver to the Agent (i) revised copies of
Schedule I to this Agreement and Schedule I to the Notes, adding thereto the
name of such new Subsidiary Guarantor, (ii) a revised copy of Schedule V to this
Agreement, adding thereto the information with respect to such new Subsidiary
required by Section 4.19 hereof, (iii) a Joinder Agreement, in form and content
satisfactory to the Agent, executed by a duly authorized officer of such new
Subsidiary, pursuant to which such Subsidiary agrees to become a Subsidiary
Guarantor hereunder, assumes all of the Obligations, and agrees that Schedule I
hereto and Schedule I to the Notes shall be amended to include the name of such
Subsidiary; (iv) a copy of the certificate of incorporation or other
organizational document of such new Subsidiary, certified by the secretary of
state or other official of the state or other jurisdiction of its incorporation;
and (v) a copy of the bylaws of such new Subsidiary, certified by the secretary
or other appropriate officer or partner of such Subsidiary.

         (o) within 60 days of the Closing Date, a Closing Date balance sheet of
the Borrower, as of such date and after giving effect to the formation of the
Borrower, the transfer of assets by LLP Partner to the Borrower pursuant to the
Reorganization and the effectiveness of this 


                                      -59-
<PAGE>

Agreement and the Lennar Credit Agreement and the funding of the initial loans
thereunder, prepared in accordance with GAAP, unaudited but certified to be true
and accurate by the Chief Financial Officer of the Borrower.

         SECTION 6.05. ACCESS TO PREMISES AND RECORDS. At all reasonable times
and as often as any Lender may reasonably request, permit authorized
representatives and agents designated by that Lender to (i) have access to the
premises of the Borrower and each Subsidiary and to their respective corporate
books and financial records, and all other records relating to their respective
operations and procedures, (ii) make copies of or excerpts from those books and
records and (iii) upon reasonable notice to the Borrower, discuss the respective
affairs, finances and operations of the Borrower and the Subsidiaries with, and
to be advised as to the same by, their respective officers and directors.

         SECTION 6.06. MAINTENANCE OF PROPERTIES AND INSURANCE. Maintain all its
and each Subsidiary Guarantor's properties and assets in good working order and
condition and make all necessary repairs, renewals and replacements thereof so
that its business carried on in connection therewith may be properly conducted
at all times; and maintain or require to be maintained (i) adequate insurance,
by financially sound and reputable insurers, on all properties of the Borrower
and each Subsidiary Guarantor which are of character usually insured by Persons
engaged in the same or a similar business against loss or damage resulting from
fire, defects in title or other risks insured against by extended coverage and
of the kind customarily insured against by those Persons, (ii) adequate public
liability insurance against tort claims which may be incurred by the Borrower,
and (iii) such other insurance as may be required by law. Upon the request of
the Agent, the Borrower will furnish to the Lenders full information as to the
insurance carried.

         SECTION 6.07. FINANCING; NEW INVESTMENTS. Give the Agent (i) written
notice of any serious negotiations for debt or equity financing or for the
placement of the Borrower's Securities in either a private or public financing,
if any of the foregoing transactions are to be in excess of $1,000,000 in any
one transaction or series of related transactions, (ii) advance written notice
of the formation of any new Significant Subsidiary (as hereinafter defined), the
establishment of any new Joint Venture or the commencement of any new Project,
which such new Significant Subsidiary shall become a party to this Agreement as
a Subsidiary Guarantor hereunder, effective upon the date of such Subsidiary's
formation, unless (x) such Subsidiary is a Joint Venture Subsidiary and (y) all
of the issued and outstanding equity Securities of such Subsidiary are pledged
to the Lenders pursuant to Section 7.05 hereof, and (iii) written notice of the
formation of any new Subsidiary which is not a Significant Subsidiary given not
later than ten (10) days after such formation, which new Subsidiary shall become
a party to this Agreement as a Subsidiary Guarantor hereunder effective upon
such Subsidiary's formation; PROVIDED, HOWEVER, that nothing in this Section
6.07 shall be deemed to authorize the Borrower to enter into any such
transaction if the same would violate any of the limitations set forth in
Article VII hereof. As used in this Section 6.07, the term "Significant
Subsidiary" means a Subsidiary in which the Borrower or another Subsidiary makes
investments (whether through the purchase of Capital Stock or instru-


                                      -60-
<PAGE>

ments evidencing debt, advances or loans to such Subsidiary or by the guaranty
of Indebtedness of such Subsidiary) in a cumulative amount in excess of
$1,000,000.

         SECTION 6.08. COMPLIANCE WITH APPLICABLE LAWS. Promptly and fully
comply with, conform to and obey all present and future laws, ordinances, rules,
regulations, orders, writs, judgments, injunctions, decrees, awards and all
other legal requirements applicable to the Borrower, the Subsidiaries and their
respective properties, including Environmental Laws, Regulation Z of the Board
of Governors of the Federal Reserve System, the Federal Interstate Land Sales
Full Disclosure Act, ERISA and the Florida Land Sales Act, the violation of
which would have a Material Adverse Effect on the Borrower or impose a liability
on the Lender.

         SECTION 6.09. USE OF PROCEEDS. Use the proceeds of the Advances to
repay existing Indebtedness outstanding on the Closing Date, to make the
Distributions permitted by the last sentence of Section 7.11, for working
capital including interest payments and general partnership purposes.

         SECTION 6.10. FURTHER ASSURANCES. Upon the request of the Agent,
promptly perform or cause to be performed any and all acts, execute or cause to
be executed any and all documents (including without limitation, financing
statements and continuation statements) for filing or recording under the
provisions of the Uniform Commercial Code or any other Legal Requirement which
is necessary or advisable to maintain in favor of the Agent, for the benefit of
the Lenders, Liens on the collateral that are duly perfected in accordance with
all applicable Legal Requirements or otherwise appropriately recorded so as to
put third parties on notice with respect to the Liens on the collateral.

         SECTION 6.11. APPRAISALS. Within sixty (60) days of the Closing Date,
each draft Appraisal furnished pursuant to Section 5.01(m) hereof shall be made
final and reviewed for FIRREA compliance by the Agent and each Lender. If and to
the extent that any such Appraisal is not satisfactory to the Agent or if the
Majority Lenders determine that such Appraisal does not comply with FIRREA, such
Mortgaged Property described in such Appraisal shall thereupon no longer be
included in the Borrowing Base and Borrower shall, if necessary, make a
mandatory prepayment of the Loan in such amount as may be necessary to cause the
Borrower to be in compliance with Section 2.02(d) hereof. Furthermore, after
each such Appraisal has been approved for FIRREA compliance by the Majority
Lenders, and such Appraisal is satisfactory to the Agent, the aggregate
appraised value on an "as is basis" of the Mortgaged Property described in such
Appraisals must be greater than the aggregate Net Book Value of the Finished
Lots, Land Under Development, Entitled Land, and Unentitled Land included in the
Borrowing Base at the Closing Date. Upon the request of the Agent, obtain one or
more Appraisals at any time; PROVIDED that, so long as no Unmatured Default has
occurred and is continuing, the Borrower shall not be required to pay for more
than one Appraisal per Property every two years.

                                      -61-
<PAGE>

                                   ARTICLE VII

                               NEGATIVE COVENANTS

         The Borrower covenants and agrees that from the date hereof until
payment in full of all the Obligations, unless the Required Lenders otherwise
shall consent in writing as provided in Section 13.06 hereof, Borrower will not,
either directly or indirectly:

         SECTION 7.01. MINIMUM TANGIBLE NET WORTH. Permit the Tangible Net Worth
of the Borrower at any time to be less than the sum of (a) $150,000,000, (b) an
amount equal to 50% of the cumulative amount of Consolidated Net Income of the
Borrower and the Subsidiaries for each fiscal quarter of the Borrower ending
after the Closing Date for which the Borrower and the Subsidiaries, taken as a
whole, had Consolidated Net Income, and (c) an amount equal to 100% of the
aggregate amount of the increase in the consolidated partners' equity of the
Borrower resulting from contributions to the capital of the Borrower and the
issuance of equity Securities of the Borrower after the Closing Date. For
purposes of this Section 7.01, "Consolidated Net Income", when used in respect
of any period, shall not include any loss for such period.

         SECTION 7.02.     LIMITATION ON INDEBTEDNESS.

                  (a) MAXIMUM LEVERAGE RATIO. As of the last day of each fiscal
quarter of the Borrower, permit the aggregate outstanding amount of the
Indebtedness of the Borrower (excluding the Nonrecourse Debt owed by
Subsidiaries of the Borrower which are not Subsidiary Guarantors), to exceed
150% of Adjusted Tangible Net Worth.

                  (b) OTHER INDEBTEDNESS. Permit the sum of the Borrower's other
Indebtedness (including Nonrecourse Debt, but excluding the Obligations and
Nonrecourse Debt of Subsidiaries which are not Subsidiary Guarantors), recourse
Indebtedness and Contingent Obligations of Subsidiaries and Joint Ventures
(excluding letters of credit related to assets in the Borrowing Base) to exceed
15% of Tangible Net Worth (excluding Tangible Net Worth of any Subsidiary which
is not a Subsidiary Guarantor).

         SECTION 7.03. GUARANTIES. Make or suffer to exist any Contingent
Obligation (including, without limitation, any Contingent Obligation with
respect to the obligations of a Subsidiary or Joint Venture) or otherwise
assume, secure, provide Collateral for, or otherwise hypothecate or transfer any
property in respect of, 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 services (whether
by way of stock purchase, capital contribution, advance or loan) for the purpose
of paying or discharging the obligations of any other Person, except for: (a)
guaranties of obligations of another Borrower issued in the ordinary course of
business; (b) the endorsement of negotiable instruments in the ordinary course
of business; (c) guaranties of performance and completion and performance and
completion bonds issued in connection with the 


                                      -62-
<PAGE>

construction of Real Estate developments owned by the Borrower; (d) guaranties
of liabilities incurred by Joint Ventures to which the Borrower or a Joint
Venture Subsidiary is a party except as provided in Section 7.02(b) above.

         SECTION 7.04.     SALE OF ASSETS; ACQUISITIONS; MERGER.

         (a)      Do any of the following:

                  (i) sell, assign, lease or otherwise dispose of (whether in
         one transaction or in a series of transactions) all or substantially
         all of the assets (whether now owned or hereafter acquired) of the
         Borrower and the Subsidiaries (on a consolidated basis) except for the
         sale of inventory in the ordinary course of business;

                  (ii) merge into or consolidate with any other Person or permit
         any other Person to merge into or consolidate with it;

                  (iii) dissolve, liquidate or wind up its business by operation
         of law or otherwise; or

                  (iv) distribute to the partners of the Borrower any Securities
         of any Subsidiary;

PROVIDED, HOWEVER, that any Subsidiary or any other Person may merge into or
consolidate with or may dissolve and liquidate into the Borrower, if (and only
if), (1) in the case of a merger or consolidation, the Borrower is the surviving
Person, (2) in the case of a merger or consolidation involving the Borrower, the
Borrower is the surviving Person, (3) the character of the business of the
Borrower and the Subsidiaries on a consolidated basis will not be materially
changed by such occurrence, and (4) such occurrence shall not constitute or give
rise to an Event of Default or Unmatured Default or a default in respect of any
of the covenants contained in any agreement to which the Borrower or such
Subsidiary is a party or by which its property may be bound.

         (b) Acquire another Person unless (i) such Person is involved in the
acquisition, development and/or sale of Real Estate as its primary business and
(ii) the board of directors or other governing body and such Person approves
such acquisition.

         Nothing contained in this Section 7.04, however, shall restrict any
sale of assets between the Borrower and any Subsidiary Guarantor, or between
Subsidiary Guarantors, which is in compliance with all other provisions of this
Agreement and the other Loan Documents.

         SECTION 7.05. INVESTMENTS. Purchase or otherwise acquire, hold or
invest in the Securities (whether Capital Stock or instruments evidencing debt)
of, make loans or advances to, enter into any arrangements for the purpose of
providing funds or credit to, or make any Equity Investment in, any Person which
is not on the Closing Date a Subsidiary Guarantor or which becomes a Subsidiary
Guarantor upon the making of the investment, except for: (i) Investments in 


                                      -63-
<PAGE>

or loans or advances to Joint Ventures to which the Borrower or a Subsidiary is
a party, PROVIDED that (A) all such Investments, loans and advances outstanding
at any time, not including Investments, loans and advances with respect to
Stevenson Ranch Venture L.L.C. and Bressi Ranch, when aggregated with the then
outstanding guaranties of the obligations of the Joint Ventures of the type
referred to in clause (d) of Section 7.03 hereof do not exceed 25% of Tangible
Net Worth and (B) all such Investments, loans and advances made after the
Agreement Date with respect to Stevenson Ranch Venture L.L.C. and Bressi Ranch
do not exceed an aggregate of $3,000,000 (the "Additional Investment") at any
one time outstanding, it being presumed that any payment or distribution made to
the Borrower by either Stevenson Ranch Venture L.L.C. or Bressi Ranch, as the
case may be, after the date of making such Additional Investment shall be first
a repayment or return of such Additional Investment and the balance of such
distribution being presumed to be a repayment or return of the Investment made
in such entities prior to the Agreement Date, and (ii) with respect to
Investments in, or loans and advances to each Joint Venture Subsidiary, all of
the issued and outstanding equity Securities of such Joint Venture Subsidiary
shall have been pledged to the Agent pursuant to the terms and provisions of the
Security Agreement (Capital Stock and Partnership Interests) and such pledge
shall not be prohibited by, or result in a breach or violation of, any
agreement, indenture or other instrument to which the Borrower or any Subsidiary
is a party or is bound; (iii) purchases of direct obligations of the government
of the United States of America, or any agency thereof, or obligations
unconditionally guaranteed by the United States of America; (iv) certificates of
deposit of any bank organized or licensed to conduct a banking business under
the laws of the United States or any state thereof having capital, surplus and
undivided profits of not less than $100,000,000; (v) Investments in commercial
paper which, at the time of acquisition by the Borrower, is accorded an "A" or
equivalent rating by any of the Rating Agencies or any other nationally
recognized credit rating agency of similar standing; and (vi) Investments in
publicly traded, readily marketable securities, traded on a recognized national
exchange or over-the-counter, PROVIDED, HOWEVER, that no more than an aggregate
of $15,000,000, may be invested in such securities.

         SECTION 7.06. SUBORDINATED DEBT. Directly or indirectly make any
payment of principal or interest with respect to any Subordinated Debt prior to
the date the same is due, or amend or modify the terms of any Subordinated Debt
except for extensions of the due date thereof, or directly or indirectly redeem,
retire, defease, purchase, retire or otherwise acquire any Subordinated Debt.

         SECTION 7.07. NO MARGIN STOCK. Use any of the proceeds of the Advances
to purchase or carry any "margin stock" (as defined in Regulation U).

         SECTION 7.08. TRANSACTIONS WITH AFFILIATES. Enter into any transaction
(including, without limitation, the purchase or sale of any property or service)
with, or make any payment or transfer to, any Affiliate, except in the ordinary
course of business and pursuant to the reasonable requirements of the Borrower's
or a Subsidiary's business and upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction.

                                      -64-
<PAGE>

         SECTION 7.09. FIXED CHARGE COVERAGE. Permit Free Cash Flow to be less
than 125% of the sum of (x) principal payments made on all Indebtedness of the
Borrower and the Subsidiaries, (y) Consolidated Interest Incurred and (z)
Distributions (other than Distributions permitted by the last sentence of
Section 7.11), in each case calculated (i) with respect to the period commencing
on the date of the formation of the Borrower and ending on the last day of the
quarter in which the first anniversary of the Closing Date occurs, on a
cumulative basis, and (ii) commencing with the first day of the first full
quarter next following the first anniversary of the Closing Date and on the
first day of each quarter thereafter for the four (4) quarters preceding such
day.

         SECTION 7.10. PRO FORMA FIXED CHARGE COVERAGE. On the last day of each
fiscal quarter next following the Closing Date and the last day of each fiscal
quarter thereafter, permit unrestricted cash in excess of $2,000,000 plus the
amount, if any, by which the Borrowing Base exceeds all (i) Loans then
outstanding under Facility A and Facility B and (ii) then outstanding Facility
Letters of Credit Obligations to be less than 125% of the sum of the following
for the quarter commencing on such Quarterly Payment Date, (a) required
(including but not limited to scheduled) principal payments (remaining after any
prepayments), (b) interest payments to be made in said quarter and (c) projected
tax distributions which for the purpose of this Agreement shall mean tax
payments on the Consolidated Net Income of the Borrower excluding income from
Subsidiaries which are not Subsidiary Guarantors or Joint Ventures, calculated
at the maximum federal tax rate for a corporation plus the maximum applicable
state income tax.

         SECTION 7. 11. RESTRICTIONS ON DISTRIBUTIONS. Permit Distributions by
the Borrower to exceed 50% of the Borrower's Consolidated Net Income. The
Borrower may elect to make Distributions not more frequently than once per
quarter. Free Cash Flow from Subsidiaries which are not Subsidiary Guarantors
may be distributed without limitation; PROVIDED no Default or Event of Default
then exists or would result from such Distribution. No Distribution (other than
for the cash payment of Lennar's and LNR's income taxes related to the Borrower
and Distributions from Subsidiaries that are not Subsidiary Guarantors) shall be
made until after the first two fiscal quarters next following the Closing Date.
No Distributions (other than for the cash payment of Lennar's and LNR's income
taxes related to the Borrower) shall be made in any quarter unless the Borrower
delivers its quarterly compliance certificate showing compliance with all
covenants after giving effect to the Distribution as if it had been made during
said the immediately preceding quarter. Any permitted Distributions which are
not made in a quarter may be made in the following quarter. Notwithstanding
anything in this section to the contrary, the Borrower shall be permitted to
make Distributions by way of return of capital to its partners of up to fifty
percent (50%) of the Net Book Value of all Mortgaged Property contributed by
Lennar (including indirect contributions by way of Capital Stock of Subsidiary
Guarantors) to the capital of the Borrower on or before the Closing Date and
reflected on Schedule III hereto, PROVIDED that (i) such Distributions do not,
individually or in the aggregate, result in an Event of Default or Unmatured
Default, (ii) all such Distributions are completed by December 31, 1997, and
(iii) such Distributions do not, individually or in the aggregate, result in a
violation of Section 4.31.

                                      -65-
<PAGE>

         SECTION 7.12.     LIENS AND ENCUMBRANCES.

         (a) NEGATIVE PLEDGE. Grant any Liens on any of its or any Subsidiary's
rights, properties or assets other than Permitted Liens.

         (b) NO AGREEMENT FOR NEGATIVE PLEDGE. Agree with any third party not to
create, assume or suffer to exist any Lien securing a charge or obligation on or
of any of Borrower's or any Subsidiary's property, real or personal, whether now
owned or hereafter acquired.

                                  ARTICLE VIII

                                   COLLATERAL

         SECTION 8.01. SECURITY FOR OBLIGATIONS. The Borrower and the Subsidiary
Guarantors, respectively, shall grant the Agent, on behalf of the Lenders, as
security for the payment in full of all the Borrower Obligations and Subsidiary
Guarantor Obligations, a first Lien on all of the Borrower's and each Subsidiary
Guarantor's respectively now or hereafter owned assets which are included in the
Borrowing Base.

         SECTION 8.02. COLLATERAL DOCUMENTATION. With respect to the assets
forming the Borrowing Base as at the Closing Date and any other asset hereafter
added to the Borrowing Base, the Borrower and each Subsidiary Guarantor shall
deliver to the Agent their respective documentation described in Section 5.01.

         SECTION 8.03. POWERS AND DUTIES OF THE BORROWER AND SUBSIDIARY
                       GUARANTORS WITH RESPECT TO THE COLLATERAL.

         (a) Subject to the provisions of this Agreement, so long as no Event of
Default shall have occurred and be continuing, the Borrower and the Subsidiary
Guarantors shall have the right to deal with, manage and administer the
Collateral and to collect and use the proceeds thereof in such manner as they
shall deem appropriate (subject to the provisions of Section 2.02).

         (b) Unless the Borrower shall have been notified, pursuant to Section
9.03 hereof, that it has been discharged from its right to deal with, manage and
administer all items of the Collateral, the Borrower shall, subject to the
provisions of this Agreement, manage and administer all the Collateral in such
manner as they shall deem appropriate, without charge to the Lenders; PROVIDED,
HOWEVER, that the Borrower shall remain fully responsible for all its
obligations as owner, creditor or otherwise with respect to the Collateral.

         SECTION 8.04. POWER OF ATTORNEY. With respect to the Collateral which
the Agent may from time to time hold and/or be entitled to obtain hereunder, the
Agent hereby is irrevocably appointed by the Borrower and each Subsidiary
Guarantor as Borrower's and each Subsidiary 


                                      -66-
<PAGE>

Guarantor's true and lawful attorney-in-fact with full power, from time to time
upon the occurrence and during the continuance of an Event of Default, to (i)
take possession of and endorse in Borrower's and each Subsidiary Guarantor's
name any pledges, assignments and other documents and any notes, checks, drafts,
bills of exchange, money orders and any other documents received in payment for
or on account of those assets and properties, (ii) to collect, sue for and give
acquittance for moneys due on account of those assets and properties, (ii) to
withdraw any claims, suits or proceedings pertaining to or arising out of those
assets and properties. The foregoing appointment is with full power of
substitution and is coupled with an interest. The Agent shall not be liable for
any failure to collect or enforce the payment of any of those assets and
properties.

         SECTION 8.05. JOINDER IN SUBDIVISION PLATS, SUBDIVISION MAPS OR PARCEL
MAPS. To the extent required by Governmental Authorities, Agent will join in the
execution of plats, subdivision maps or parcel maps of the Mortgaged Property
and Additional Mortgaged Property (each a "Plat"), which joinder shall be
provided within ten (10) Business Days of the fulfillment of each and every one
of the following conditions precedent:

                  (i) Lenders shall not incur any liability of any kind in
         connection with the execution and processing of the Plat, and all
         reasonable out-of-pocket costs and expenses incurred by Lenders shall
         be paid by Borrower;

                  (ii) The Borrower, each Subsidiary Guarantor and the Plat
         shall have complied in all respects with all Governmental Authority
         requirements; and,

                  (iii) A written commitment from the Title Company that the
         Title Policy will be endorsed to insure that the Plat is a valid
         subdivision upon recordation of the Plat.

         SECTION 8.06. SALE OF LOTS. Borrower and the Subsidiary Guarantors
shall:

                  (i) Sell all Lots upon a fee simple basis;

                  (ii) Comply with all Legal Requirements affecting the sale of
         the Lots, or any interest in the Lot or any part of the Lot; and

                  (iii) Assign to Lenders all reservations, deposits, down
         payments, or the like, under contracts of sale (which contracts of sale
         shall be expressly inferior and subordinate to the lien of any Mortgage
         now or hereafter existing which encumbers the subject property) and
         reservation receipts for lots, or any similar deposits respecting the
         Project.

         SECTION 8.07. PARTIAL RELEASES OF LOTS. As long as (i) no Event of
Default or Unmatured Default has occurred and is continuing, and (ii) all then
outstanding Loans do not exceed the Borrowing Base at such time, Lenders agree
to grant partial releases of Lots or other Collateral from the Lien of the
Mortgage within thirty (30) days of a request therefor in accordance with and
subject to all of the following:

                                      -67-
<PAGE>

                  (i) As necessary to satisfy Legal Requirements, the Plat shall
         have first been recorded in the public records of the county in which
         the Lot is located;

                  (ii) The Borrower shall be current in all payments required by
         this Agreement;

                  (iii) Requests for partial releases must be in writing,
         delivered to Agent, and accompanied by all data necessary to support
         the Borrower's entitlement to the partial release, including, without
         limitation, (a) a partial release form, in form and content
         satisfactory to Agent; (b) a schedule containing a list of the Lots
         previously released by Lender, and the Lots remaining to be released;
         and (c) if the Lots are not described in a recorded Plat, a Survey
         certified to the Agent in accordance with the Agent's requirements,
         which survey shall show the unreleased portion of the Real Estate, the
         location of the Lot to be released and the location of all previously
         released lots;

                  (iv) The Real Estate encumbered by the Mortgage following the
         release shall have access to a publicly dedicated right-of-way insured
         by an access endorsement to the applicable Title Policy to the extent
         such endorsement is available in the application jurisdiction;

                  (v) The partial release documents shall be prepared by
         Borrower at Borrower's expense, and must be in form and content
         satisfactory to the Agent and the Agent's counsel;

                  (vi) Borrower shall pay all out-of-pocket costs of the Agent
         and the Lenders attendant upon obtaining any partial release; and

                  (vii) The requested release is in connection with payments
         made pursuant to Sections 2.02(b)(i) and 2.02(b)(ii) and an all-cash
         sale made in the ordinary course of the Borrower's business of the Real
         Estate as to which the partial release of the Mortgage is requested;

PROVIDED, HOWEVER, that unless the Required Lenders shall otherwise consent, the
Agent shall not be obligated to grant any such release if, after giving effect
to such release, the sum of all then outstanding Advances and Letter of Credit
Obligations exceeds the sum of (i) the Borrowing Base at such time and (ii) the
amount of cash on deposit at such time in the Letter of Credit Collateral
Account pursuant to Section 9.02.

         SECTION 8.08. SALE OF ACREAGE. Borrower and the Subsidiary Guarantor
shall:

                  (i) Sell all Real estate, not constituting a Lot, upon a fee
         simple basis;

                                      -68-
<PAGE>

                  (ii) Comply with all Legal Requirements affecting the sale of
         such Real Estate; and

                  (iii) Assign to Lenders all reservations, deposits, down
         payments, or the like under contracts of sale (which contracts of sale
         shall be expressly inferior and subordinate to the lien of any mortgage
         now or hereafter existing which encumbers the subject property).

         SECTION 8.09. PARTIAL RELEASES OF ACREAGE AND COMMON AREAS. As long as
no Event of Default or Unmatured Default has occurred and is continuing, and
(ii) all then outstanding Loans do not exceed the Borrowing Base at such time,
Lenders agree to grant partial releases of Real Estate not constituting Lots
from the Lien of the mortgage within thirty (30) days after the request therefor
in accordance with and subject to all of the following:

                  (i) The Borrower shall be current in all payments required by
         this Agreement;

                  (ii) Requests for partial releases must be in writing,
         delivered to the Agent and accompanied by all data necessary to support
         the Borrower's entitlement to the partial release, including, without
         limitation, (a) a partial release form, in form and content
         satisfactory to the Agent; and (b) a map or sketch showing the real
         estate to be released and the real estate remaining encumbered by the
         mortgage;

                  (iii) The Real Estate encumbered by the mortgage following the
         release shall have access to a publicly dedicated right-of-way insured
         by an access endorsement to the applicable Title Policy to the extent
         available in the applicable jurisdiction;

                  (iv) The partial release document shall be prepared by
         Borrower, at Borrower's expense, and must be in form and content
         satisfactory to the Agent and the Agent's counsel;

                  (v) Borrower shall pay all out-of-pocket costs of the Agent
         and the Lenders attendant upon obtaining any partial release;

                  (vii) Unless the Real Estate to be released from the lien of
         the Mortgage is common area for the use of homeowners in the Project,
         for which no consideration is to be received by the Mortgagor, the
         requested release is in connection with payments made pursuant to
         Section 2.02(b)(iii) and an all-cash sale made in the ordinary course
         of the Borrower's business of the Real Estate as to which the partial
         release of the Mortgage is requested;

PROVIDED, HOWEVER, that unless the Required Lenders shall otherwise consent, the
Agent shall not be obligated to grant any such release if, after giving effect
to such release, the sum of all then outstanding Advances and Letter of Credit
Obligations exceeds the sum of (i) the Borrowing Base 


                                      -69-
<PAGE>

at such time and (ii) the amount of cash on deposit at such time in the Letter
of Credit Collateral Account pursuant to Section 9.02.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

         SECTION 9.01. EVENTS OF DEFAULT. The occurrence of any one or more of
the following Events shall constitute an "Event of Default":

         (a) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary Guarantor to the Lenders or the Agent under or
in connection with this Agreement or any Loan Document shall be false or
misleading in any material respect when made;

         (b) any report, certificate, financial statement or other document or
instrument furnished in connection with this Agreement or the Loans hereunder
shall be false or misleading in any material respect when furnished;

         (c) default shall be made in the payment of (i) the principal of any of
the Notes or of any Reimbursement Obligation when and as due and payable, or
(ii) the interest on any of the Notes, any fees or any other sums due pursuant
to Article II (other than mandatory prepayments pursuant to Section 2.02), which
default continues for five days after the same becomes due and payable;

         (d) default shall be made with respect to any Indebtedness or
Contingent Obligations of the Borrower or any Subsidiary Guarantor (other than
the Indebtedness evidenced by the Notes), or in any net liabilities under
interest rate swap, exchange or cap agreements or any Swap Documents, beyond any
applicable period of grace, or default shall be made with respect to the
performance of any other obligation incurred in connection with any such
Indebtedness or liabilities beyond any applicable period of grace, or default
shall be made with respect to any other liability of $100,000 or more, if the
effect of any such default is to accelerate the maturity of such Indebtedness or
liability or to cause any other liability to become due prior to its stated
maturity, or any such Indebtedness or liability shall not be paid when due and
such default shall not have been remedied or cured by the Borrower or such
Subsidiary Guarantor or waived by the obligor;

         (e) default shall be made in the due observance or performance of any
of the provisions of Article VII or Article VIII of this Agreement;

         (f) default shall be made in the due observance or performance of any
other covenant, agreement or condition on the part of the Borrower or any
Subsidiary Guarantor to be performed under or in connection with this Agreement
or any Loan Document, and such default shall have continued for a period of 30
days after the occurrence thereof;

                                      -70-
<PAGE>

         (g) the Borrower or any Subsidiary Guarantor shall (i) petition or
apply for, seek, consent to, or acquiesce in, the appointment of a receiver,
trustee, examiner, custodian, liquidator or similar official of the Borrower or
any Subsidiary Guarantor or any of its properties or assets, (ii) be unable, or
admit in writing its inability, to pay its debts as they mature, (iii) make a
general assignment for the benefit of or a composition with its creditors, (iv)
have an order for relief entered with respect to it under the Federal bankruptcy
laws as now or hereafter in effect, (v) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in
effect, or file a petition or an answer seeking dissolution, winding up,
liquidation or reorganization or an arrangement with creditors or a composition
of its debts or to take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debts, dissolution or liquidation law or statute or other
statute or law for the relief of debtors, or file any answer admitting the
material allegations of a petition filed against it in any proceeding under such
law, or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, or if corporate or other
action shall be taken by the Borrower or such Subsidiary Guarantor for the
purpose of effecting any of the foregoing, or (vi) fail to contest in good faith
any appointment or proceeding described in Section 9.01(h);

         (h) an order, judgment, or decree shall be entered without the
application, approval, or consent of the Borrower or any Subsidiary Guarantor by
any court of competent jurisdiction appointing a receiver, trustee or liquidator
of the Borrower or any Subsidiary Guarantor or a proceeding described in Section
9.01(g) shall be instituted against the Borrower or any Subsidiary Guarantor,
and such appointment shall continue undischarged or such proceeding continues
undismissed or unstayed for any period of 45 days;

         (i) final judgment for the payment of money in excess of $250,000 shall
be rendered against the Borrower or any Subsidiary Guarantor and the same shall
remain undischarged for a period of 30 days during which execution shall not be
effectively stayed;

         (j) final judgment(s) for the payment of money in excess of an
aggregate of $250,000 shall be rendered against the Borrower or any Subsidiary
Guarantor after the Closing Date and shall remain undischarged and unstayed for
a period of ten days;

         (k) there shall occur any Event or Events which, individually or in the
aggregate, shall be deemed by the Required Lenders to have had a Material
Adverse Effect;

         (l) The Borrower or any Subsidiary Guarantor shall be the subject of
any proceeding or investigation pertaining to the release by the Borrower, any
Subsidiary Guarantor or any other Person of any Hazardous Substance into the
environment, or any violation of any Environmental Law or any federal, state or
local health or safety law or regulation, which, in either case, could
reasonably be expected to have a Material Adverse Effect;

         (m) The occurrence of any "default", as defined in any Loan Document
(other than this Agreement or the Notes) or the breach of any of the terms or
provisions of any Loan Document 


                                      -71-
<PAGE>

(other than this Agreement or the Notes), which default or breach continues
beyond any period of grace therein provided;

         (n) An Event of Default (as such term in defined in the Lennar Credit
Agreement) under the Lennar Credit Agreement shall have occurred;

         (o) Lennar or its subsidiaries, LNR or its subsidiaries, or any
Subsidiary Guarantor shall take any action or threaten to take any action to
avoid its obligations under the Lennar and LNR Guaranty or the Subsidiary
Guarantees, respectively, including, without limitation, any repudiation,
revocation, termination or purported revocation or termination thereof;

         (p) Any Lien that has been granted to the Lenders pursuant hereto no
longer continues to be a first priority Lien; or

         (q) Lennar shall cease to own directly or indirectly a 50% interest in
the Borrower or Lennar or its Wholly-Owned Subsidiary shall at any time for any
reason cease to be the managing general partner of the Borrower.

         SECTION 9.02. ACCELERATION. If any Event of Default described in
subsection 9.01(g) or (h) occurs, the obligations of the Lenders to make Loans
and of an Issuer to issue Facility Letters of Credit hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Agent or any Lender.
If any other Event of Default occurs and is continuing, the Required Lenders may
terminate or suspend the obligations of the Lenders to make Loans and of an
Issuer to issue Facility Letters of Credit hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower and each Subsidiary Guarantor hereby
expressly waives. In addition to the foregoing following the occurrence and
during the continuance of an Event of Default, so long as any Facility Letter of
Credit has not been fully drawn and has not been canceled or expired by its
terms, upon demand by the Agent the Borrower shall deposit in the Letter of
Credit Collateral Account cash in an amount equal to the aggregate undrawn face
amount of all outstanding Facility Letters of Credit and all fees and other
amounts due or which may become due with respect thereto. The Borrower shall
have no control over funds in the Letter of Credit Collateral Account, which
funds shall be invested by the Agent from time to time in its discretion in
certificates of deposit of First Chicago having a maturity not exceeding 30
days, so long as the Borrower has provided the Agent with such documents as the
Agent shall have requested in order to perfect a security interest in such
certificates of deposit. Such funds shall be promptly applied by the Agent to
reimburse any Issuer for drafts drawn from time to time under the Facility
Letters of Credit. Such funds, if any, remaining in the Letter of Credit
Collateral Account following the payment of all of the Borrower Obligations in
full shall, unless the Agent is otherwise directed by a court of competent
jurisdiction, be promptly paid over to the Borrower.

                                      -72-
<PAGE>

         If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
of an Issuer to issue Facility Letters of Credit hereunder as a result of any
Event of Default (other than any Event of Default as described in subsection
9.01 (g) or (h) with respect to the Borrower) and before any judgment or decree
for the payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or termination.

         SECTION 9.03.     RIGHTS AS TO COLLATERAL.

         (a) If, on the Maturity Date for Facility A or Facility B, the Borrower
shall not have paid in full all the Obligations which are due and payable on
such Maturity Date, the Agent, at the direction of the Required Lenders, shall
take (and/or shall cause one or more of its designees to take) any or all of the
following actions, in addition to and not in derogation of any right contained
in the Loan Documents, after giving at least three Business Days' (which notice
period the Borrower acknowledges to be adequate and reasonable) written notice
to the Borrower (a single such notice being sufficient to entitle the Agent to
take one or more of the actions described below):

               (i) prohibit the Borrower from taking any action otherwise
         permitted by Section 8.03(a) hereof, and/or discharge the Borrower from
         their right to manage and administer the items of Collateral as
         provided in Section 8.03(b) hereof;

              (ii) notify the obligors or other parties interested in any item
         of the Collateral of the interest of the Lenders therein and of any
         action proposed to be taken with respect thereto, and inform any of
         those parties that all payments otherwise payable to the Borrower with
         respect thereto thereafter shall be made to the Agent until all the
         Obligations have been paid in full;

             (iii) receive and retain all payments and all other distributions
         of any kind with respect to any and all of the Collateral;

              (iv) exercise any rights of voting or consent pertaining to any
         item of Collateral to the same extent as if the Agent were the outright
         owner thereof for the benefit of the Lenders, or cause any item of the
         Collateral to be transferred to its own name and have such transfer
         recorded in any place or places deemed appropriate by the Agent;

               (v) deal with the Collateral in all respects as if it were the
         outright owner thereof for the benefit of the Lenders;

              (vi) take such action as directed by the Required Lenders with
         respect to the sale, assignment and delivery of the whole of, or from
         time to time any one or more items of, the Collateral, including,
         without limitation: to sell, assign and deliver the whole of, or from

                                      -73-
<PAGE>

         time to time any part of, the Collateral at any broker's board or at
         any private sale or at public auction, with or without demand on the
         Borrower or advertisement of the time or place of sale or adjournment
         thereof or otherwise, for cash, for credit or for other property, for
         immediate or future delivery, and for such price or prices and on such
         terms as the Required Lenders in their discretion may determine, and
         the Agent or any of the other Lenders may bid for and purchase the
         whole or any one or more items of the Collateral so sold free from any
         right or equity of redemption; to adjourn any such sale or cause the
         same to be adjourned from time to time to a subsequent time and place
         announced at the time and place fixed for the sale; and to carry out
         any agreement to sell any item or items of Collateral in accordance
         with the terms of such agreement, notwithstanding that after the Agent
         shall have entered into such agreement, all the Obligations may have
         been paid in full; and

             (vii) in addition to, and not by way of limitation of, any of the
         rights specified above, exercise any and all rights and remedies
         afforded to it, as a secured party in possession of collateral or
         otherwise, under any and all applicable provisions of laws.

         (b) The Agent, any Person designated by the Agent to take any of the
action as enumerated in subsection (a) above, any of the Lenders, and their
respective officers, directors, employees, agents and counsel shall not incur
any liability (other than for acts or omissions amounting to gross negligence or
willful misconduct) as a result of the sale of the Collateral, or any part
thereof, in a commercially reasonable manner in accordance with the provisions
of subsection (a)(vi) above or of applicable law, or for the failure to sell or
offer for sale the Collateral, for any reason whatsoever. The Borrower waives
any claims (other than those attributable to acts or omissions amounting to
gross negligence or willful misconduct) against the Agent, any Person designated
by the Agent to take any action, the Lenders, and their respective officers,
directors, employees, agents and counsel arising with respect to the price at
which the Collateral, or any part thereof, may have been sold or by reason of
the fact that such price was less than the aggregate of all the Obligations,
PROVIDED that all such sales have been effected in a commercially reasonable
manner.

         (c) The Agent shall collect the cash proceeds received from any sale or
other disposition or from any other source contemplated by subsection (a) above
and, after deducting all costs and expenses incurred by the Agent, any person
designated by the Agent to take any of the actions enumerated in subsection (a)
above, and the Lenders (other than in connection with the purchase by any of the
Lenders of any item of the Collateral) in connection with such collection and
sale (including, without limitation, reasonable counsel fees and expenses),
shall apply the same in accordance with the provisions of Section 9.04 below.
Noncash proceeds received by the Agent shall be held by it, unless and until
instructions are received from the Required Lenders to distribute those
proceeds. Upon any such distribution in the order set forth in Section 9.04
below, the Obligations shall be reduced by the fair market value of any such
noncash proceeds.

         (d) If the amount of all proceeds received in liquidation of the
Collateral which shall be applied to payment of the Obligations shall be
insufficient to pay all the Obligations in full, the Borrower acknowledges that
it shall continue to remain liable for any deficiency, together with any



                                      -74-
<PAGE>

interest thereon and costs of collection thereof (including reasonable counsel
fees and legal expenses), in accordance with the terms of this Agreement and the
other Loan Documents. The Agent shall account to the Borrower as to all
applications of the proceeds of the Collateral in reduction of the Obligations.

         (e) Notwithstanding the foregoing, none of the provisions of this
Section 9.03 shall confer on the Agent or any of the Lenders any rights or
privileges not permissible under applicable law; PROVIDED, HOWEVER, that to the
extent the Borrower may waive any provisions of applicable law which would or
could be in conflict with the terms of this Section 9.03, the Borrower hereby
expressly waives the application of any such laws and provisions.

         (f) In connection with the foregoing provisions of this Section 9.03,
the Borrower from time to time promptly shall execute and deliver, or cause to
be executed and delivered, to the Agent such reasonable documents and
instruments, and take or cause to be taken other reasonable and lawful action,
as the Agent reasonably shall deem necessary or desirable to enable it to
exercise any of the rights with respect to the Collateral granted to it pursuant
to this Section 9.03.

         SECTION 9.04. APPLICATION OF FUNDS. In the event that all the
Obligations shall have become or been declared due and payable pursuant to the
terms of Section 9.02 hereof, the Lenders agree, by and among themselves (and,
with respect to subsection (f) below, with the Borrower), that any funds
received from or on behalf of the Borrower (pursuant to the provisions of
Section 9.03 or otherwise) by the Agent or any of the Lenders (except funds
retained by any Lender pursuant to the terms of Section 11.01 hereof) shall be
remitted to the Agent, if received by any Lender, and applied by the Agent (in
the case of subsections (c), (d) and (e) below), on a pro rata basis among the
Lenders in accordance with their respective percentages of the Loans outstanding
at the time of such declaration in the following manner and order:

         (a) first, to pay to or reimburse the Agent for any out-of-pocket
expenses for which it is entitled to be paid or reimbursed pursuant to the
provisions of Section 13.03 hereof;

         (b) second, to reimburse any of the Lenders pursuant to the provisions
of Section 13.03 hereof;

         (c) third, to payment of accrued and unpaid interest due on the Notes;

         (d) fourth, to payment of the outstanding principal of the Notes;

         (e) fifth, to payment in full of all the remaining Obligations (other
than Facility Letter of Credit Obligations and Rate Hedging Obligations);

         (f) sixth, if any Facility Letter of Credit remains outstanding, the
Agent shall retain in the Letter of Credit Collateral Account an amount equal to
the aggregate face amount of all outstanding Facility Letters of Credit;

                                      -75-
<PAGE>

         (g) seventh, to payment in full of all remaining Rate Hedging
Obligations PARI PASSU among those Lenders to whom such Rate Hedging Obligations
are owed; and

         (h) eighth, any remainder, including any funds no longer required to
remain on deposit pursuant to subsection (f) of this section, shall be returned
to the Borrower or as otherwise required by applicable law.

                                    ARTICLE X

                                    THE AGENT

         SECTION 10.01. APPOINTMENT. The First National Bank of Chicago is
hereby appointed Agent hereunder and under each other Loan Document and, subject
to the provisions of Section 10.13 below, each of the Lenders irrevocably
authorizes the Agent to act as the agent of such Lender. The Agent agrees to act
as such upon the express conditions contained in this Article X. The Agent shall
not have a fiduciary relationship in respect of any Lender by reason of this
Agreement. Bank of America National Trust & Savings Association is hereby
appointed to act as Syndication Agent, Comerica Bank is hereby appointed to act
as Documentation Agent, and NationsBank, N.A. and Credit Lyonnais Atlanta Agency
are hereby appointed as Managing Agents, and Fleet National Bank and Guaranty
Federal Bank, F.S.B. are hereby appointed as Co-Agents. Neither the Syndication
Agent, the Documentation Agent, nor the Managing Agents shall have any right,
power, obligation, liability, responsibility or duty under this Agreement in
such capacity.

         SECTION 10.02. POWERS. The Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the Lenders, or
any obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.

         SECTION 10.03. GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, any
Subsidiary Guarantor, the Lenders or any Lender for any action taken or omitted
to be taken by it or them hereunder or under any other Loan Document or in
connection herewith or therewith except for its or their own gross negligence or
willful misconduct.

         SECTION 10.04. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in Article V, except receipt of items
required to be delivered to the Agent; or 


                                      -76-
<PAGE>

(iv) the validity, effectiveness or genuineness (except its own due execution
thereof) of any Loan Document or any other instrument or writing furnished in
connection therewith. Further, the Agent assumes no obligation to any other
Lender as to the collectibility of any Loans made by any Lender to the Borrower.
Each Lender expressly acknowledges that the Agent has not made any
representations or warranties to it on or prior to the date hereof and that no
act by the Agent hereafter taken shall be deemed to constitute any
representation or warranty by the Agent to any other Lender. Each Lender
acknowledges that it has taken and will take such action and make such
investigation as it deems necessary to inform itself as to the affairs and
creditworthiness of the Borrower and the Subsidiary Guarantors.

         SECTION 10.05. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute
any of its duties as Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.

         SECTION 10.06. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall not be
under a duty to examine into or pass upon the validity, effectiveness,
genuineness or value of this Agreement, the Notes or any other document
furnished pursuant hereto or thereto or in connection herewith, and the Agent
shall be entitled to assume that the same are valid, effective and genuine and
what they purport to be. The Agent shall be entitled to rely upon any Note,
notice, consent, certificate, affidavit, letter, telegram, statement, paper or
document reasonably believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and, in respect to legal
matters, upon the opinion of counsel selected by the Agent, which counsel may be
employees of the Agent. The Agent shall not be liable for any action taken or
suffered in good faith by it based on or in accordance with any of the
foregoing.

         SECTION 10.07. NO WAIVER OF RIGHTS. With respect to its Commitment,
Loans made and Facility Letters of Credit issued by it and the Notes issued to
it, the Agent shall have the same rights and powers hereunder and under any
other Loan Document as any Lender or Issuer and may exercise the same as though
it was not the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity as a
Lender. The Agent may accept deposits from, lend money to and issue letters of
credit for the account of, and generally engage in any kind of business with the
Borrower or its Affiliates (including, without limitation, trust, debt, equity
and other transactions) in addition to the transaction contemplated by this
Agreement or any other Loan Document; it being expressly understood and agreed
that neither the Agent nor any other Lender shall be deemed by the execution
hereof to have waived any rights under any term loan or other agreement with the
Borrower relating to any other business or loans to the Borrower which are not a
part of the Aggregate Commitment under this Agreement. Without limiting the
generality of the foregoing, each of the Lenders acknowledges and consents to
First 


                                      -77-
<PAGE>

Chicago acting as Agent under the Lennar Credit Agreement and the other loan 
documents referred to in such agreement.

         SECTION 10.08. KNOWLEDGE OF EVENT OF DEFAULT. It is expressly
understood and agreed that the Agent shall be entitled to assume that no Event
of Default or Unmatured Default has occurred and is continuing, unless the
officers of the Agent active on the Borrower's account have actual knowledge of
such occurrence or have been notified by a Lender that such Lender considers
that an Event of Default or Unmatured Default has occurred and is continuing and
specifying the nature thereof.

         SECTION 10.09. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders
agree to reimburse and indemnify the Agent ratably in accordance with their
respective Pro Rata Shares (i) for any amounts not reimbursed by the Borrower
for which the Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents and (iii) for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to or arising
out of the Loan Documents or any other document delivered in connection
therewith or the transactions contemplated thereby, or the enforcement of any of
the terms thereof or of any such other documents, PROVIDED that no Lender shall
be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent.

         SECTION 10.10. NOTICES TO THE BORROWER OR SUBSIDIARY GUARANTORS. In
each instance that a notice is required, pursuant to the terms hereof, to be
given by one or more of the Lenders to the Borrower or a Subsidiary Guarantor,
the Lenders desiring that such notice be given shall so advise the Agent (which
advice, if given by telephone, shall be promptly confirmed by telex or letter to
the Agent at its address listed in the signature pages hereto), which shall
transmit such notice to the Borrower or such Subsidiary Guarantor promptly after
its having been so advised by the appropriate number of Lenders; PROVIDED,
HOWEVER, that subject to the provisions of Section 10.14 hereof, if the Agent
shall fail to transmit such notice to the Borrower within a reasonable period of
time after its having been so advised by the appropriate number of Lenders, the
Lenders desiring that such notice be given may transmit such notice directly to
the Borrower and PROVIDED FURTHER, HOWEVER, that, in all cases, notice to the
Borrower shall be deemed notice to each Subsidiary Guarantor.

         SECTION 10.11. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders or all Lenders, as the case may be, and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of Notes. Except where an
action or inaction is expressly required under this Agreement, the Agent shall
be fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified 


                                      -78-
<PAGE>

to its satisfaction by the Lenders, pro rata in accordance with their respective
Pro Rata Shares against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.

         SECTION 10.12. LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and the Subsidiary
Guarantors and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents.

         SECTION 10.13. RESIGNATION OR REMOVAL OF THE AGENT. If, at any time,
Lenders holding Notes having aggregate outstanding principal balances equal to
at least 75% of the then outstanding amount of the Aggregate Commitment
(excluding from such computation the Agent and its Notes) shall deem it
advisable, those Lenders may submit to the Agent notification by certified mail,
return receipt requested of its removal as Agent under this Agreement, which
removal shall be effective as of the date of receipt of such notice by the
Agent. If, at any time, the Agent shall deem it advisable, in its sole
discretion, it may submit to each of the Lenders written notification, by
certified mail, return receipt requested, of its resignation as Agent under this
Agreement, which resignation shall be effective as of thirty days after the date
of such notice. In the event of any such removal or resignation, the Required
Lenders may appoint a successor to the Agent. In the event the Agent shall have
resigned and/or have been removed and so long as no successor shall have been
appointed, the Borrower shall make all payments due each Lender hereunder
directly to that Lender and all powers specifically delegated to the Agent by
the terms hereof may be exercised by the Required Lenders. Upon the removal or
resignation of the Agent, the retiring Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents. After the removal
or resignation of the Agent, the provisions of this Article X shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
while it was acting as the Agent hereunder and under the other Loan Documents.

         SECTION 10.14. BENEFITS OF ARTICLE X. None of the provisions of this
Article X shall inure to the benefit of the Borrower or of any Person other than
Agent and each of the Lenders and their respective successors and permitted
assigns. Accordingly, neither the Borrower nor any Person other than Agent and
the Lenders (and their respective successors and permitted assigns) shall be
entitled to rely upon, or to raise as a defense, the failure of the Agent or any
Lenders to comply with the provisions of this Article X.

         SECTION 10.15.    AGENT'S CUSTODIAL DUTIES.

         (a) The Agent shall take custody of and hold on behalf of the Lenders
the following documents (the "Collateral Documents"):

                                      -79-
<PAGE>

                  (i) the Borrower Security Documents;

                  (ii) the Subsidiary Guarantor Security Documents;

                  (iii) the Title Policies for each Mortgaged Property;

                  (iv) the Surveys (or plat or subdivision map if no survey has
                  been furnished);

                  (v) the Zoning Certificates;

                  (vi) the stock certificates, certificates of certificated
                  partnership interest and certificates of certificated limited
                  liability company membership interest representing the Capital
                  Stock and partnership and limited liability company interests
                  pledged pursuant to the Security Agreement;

                  (vii) the Environmental Indemnity;

                  (viii) an Appraisal of each Mortgaged Property;

                  (ix) the UCC Search;

                  (x) the Insurance Certificate;

                  (xi) the Environmental Report;

                  (xii) the Borrower's Counsels' Opinions; and

                  (xiii) the Borrower's Organizational Documents.

         (b) The Agent's duties with respect to the Collateral Documents are
limited to reviewing the same and verifying that:

                  (i) they appear regular on their face and are in its
                  possession;

                  (ii) that each Collateral Document bears an original signature
                  which appears to be that of a person authorized to sign such
                  document;

                  (iii) there is a loan title commitment which appears to commit
                  to insure the lien of the Mortgage on each of the Mortgaged
                  Properties (and the Title Policy when it is issued pursuant to
                  such commitment);

                  (iv) there is a plat, subdivision map or a Survey apparently
                  prepared by a surveyor for each parcel of Mortgaged Property;
                  and

                                      -80-
<PAGE>

                  (v) they have received information regarding flood zone
                  verification on each of the Mortgaged Properties.

         (c) At the request of any Lender, at any time, at Borrower's sole cost
and expense, the Agent shall cause to be copied any or all of the Collateral
Documents and deliver same to such lender.

         SECTION 10.16. COLLATERAL VALUE DETERMINATION; DETERMINATION
ASSUMPTIONS.

         (a) Upon the receipt of each Borrowing Notice, the Agent shall review
the computation of the Borrowing Base (a "Collateral Value Determination") and
notify each Lender thereof.

         (b) In making any Collateral Value Determination, the Agent shall be
permitted to rely, without independent investigation of the correctness thereof,
on the most recent information supplied by, or at the direction of, the Borrower
pursuant to this Agreement.

                                   ARTICLE XI

                                RATABLE PAYMENTS

         SECTION 11.01. RATABLE PAYMENTS. If any Lender has payment made to it
upon any of its Loans or participations in Facility Letters of Credit (other
than payments received pursuant to Sections 3.01, 3.02 or 3.04) in a greater
proportion than that received by any other Lender with respect to Loans or
participations in Facility Letters of Credit, such Lender agrees, promptly upon
demand, to purchase a portion of such Loans held by the other Lenders so that
after such purchase each Lender will hold its Pro Rata Share of all Loans or
participations in Facility Letters of Credit. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in accordance with their respective Pro Rata Shares. In case
any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         SECTION 12.01. SUCCESSORS AND PERMITTED ASSIGNS. The terms and
provisions of the Loan Documents shall be binding upon and inure to the benefit
of the Borrower, the Subsidiary 


                                      -81-
<PAGE>

Guarantors and the Lenders and their respective successors and permitted
assigns, except that (i) neither the Borrower nor any Subsidiary Guarantor shall
have the right to assign its rights or obligations under the Loan Documents and
(ii) any assignment by any Lender must be made in compliance with Section 12.03.
Notwithstanding clause (ii) of this Section, any Lender may at any time, without
the consent of the Borrower, any Subsidiary Guarantor, or the Agent, assign all
or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; PROVIDED, HOWEVER, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with Section 12.03 in the case of an assignment thereof or, in
the case of any other transfer, a written notice of the transfer is filed with
the Agent. Any assignee or transferee of a Note agrees by acceptance thereof to
be bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor. A Lender may not assign less than
the lesser of its Commitment or $10,000,000.

         SECTION 12.02.    PARTICIPATIONS.

         (a) PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender under the Loan Documents. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, such Lender shall remain the
holder of any such Note for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents.

         (b) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Facility Letter of Credit Obligations or
Commitment in which such Participant has an interest which forgives principal,
interest or fees or reduces the interest rate or fees payable with respect to
any such Loan, Facility Letter of Credit Obligations or Commitment, postpones
any date fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Commitment, releases any Subsidiary Guarantor of
any such Loan, Facility Letter of Credit Obligations or releases any substantial
portion of collateral, if any, securing any such Loan or Facility Letter of
Credit Obligations.

                                      -82-
<PAGE>

         (c) NO SETOFF. No Participant shall have the right of setoff in respect
of its participating interest in amounts owing under the Loan Documents without
the prior written consent of the Agent.

         SECTION 12.03.    ASSIGNMENTS.

         (a) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit "C" hereto. Unless an Event of Default has occurred and is
continuing, the consent of the Borrower and the Agent shall be required prior to
an assignment becoming effective with respect to a Purchaser which is not a
Lender or an Affiliate thereof. Such consent shall be substantially in the form
attached as Exhibit "C-2" hereto and shall not be unreasonably withheld.

         (b) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as Exhibit "C-1" hereto (a
"Notice of Assignment"), together with any consents required by Section
12.03(a), and (ii) payment of a $4,000 fee to the Agent for processing such
assignment (PROVIDED that no such fee shall be required if the assignee is an
Affiliate of an assignor Lender or if the assignee is already a Lender
hereunder), such assignment shall become effective on the effective date
specified in such Notice of Assignment. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by the Lenders and shall have all
the rights and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent or action
by the Borrower, the Lenders or the Agent shall be required to release the
transferor Lender with respect to the percentage of the Aggregate Commitment and
Loans assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.03(b), the transferor Lender, the Agent
and the Borrower and each Subsidiary Guarantor shall make appropriate
arrangements so that replacement Notes and Subsidiary Guarantees are issued to
such transferor Lender and new Notes and Subsidiary Guarantees or, as
appropriate, replacement Notes and Subsidiary Guarantees, are issued to such
Purchaser, in each case in principal amounts reflecting their Commitment, as
adjusted pursuant to such assignment.

         (c) DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and the Subsidiaries.

         (d) TAX TREATMENT. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any state thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 2.17.

                                      -83-
<PAGE>

                                  ARTICLE XIII

                                  MISCELLANEOUS

         SECTION 13.01.    NOTICE.

         (a) Except as otherwise permitted by Section 2.11 with respect to
borrowing notices, all notices and other communications provided to any party
hereto under this Agreement or any other Loan Document shall be in writing or by
telex or by facsimile and addressed or delivered to such party at its address
set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid, shall be deemed given when received
(or when delivery is refused); any notice, if transmitted by telex or facsimile,
shall be deemed given when transmitted (answerback confirmed in the case of
telexes and facsimile confirmation in the case of a facsimile).

         (b) The Borrower, the Agent and any Lender may each change the address
for service of notice upon it by a notice in writing to the other parties
hereto.

         (c) Notice to the Borrower shall be deemed notice to each Subsidiary
Guarantor.

         SECTION 13.02. SURVIVAL OF REPRESENTATIONS. All covenants, agreements,
representations and warranties made herein and in the certificates delivered
pursuant hereto shall survive the making by the Lenders of any Loans herein
contemplated and the execution and delivery to the Lenders of the Notes
evidencing the Commitments, and shall continue in full force and effect until
all of the Obligations have been paid in full and the Aggregate Commitment has
been terminated.

         SECTION 13.03. EXPENSES. The Borrower shall pay (i) all expenses,
including attorneys' fees and disbursements (which attorneys may be employees of
the Agent or any Lender), incurred by the Agent and any Lender in connection
with the administration of this Agreement and the other Loan Documents, any
amendments, modifications or waivers with respect to any of the provisions
thereof and the enforcement and protection of the rights of the Lenders and the
Agent under this Agreement or any of the other Loan Documents, including all
recording and filing fees, documentary stamp, intangibles and similar taxes,
title insurance premiums, appraisal fees and other costs and disbursements
incurred in connection with the taking of collateral and the perfection and
preservation of the Lenders' security therein, and (ii) the reasonable fees and
the disbursements of Agent's attorneys (which attorneys may be employees of the
Agent) in connection with the preparation, negotiation, execution, delivery and
review of this Agreement, the Notes and the other Loan Documents (whether or not
the transactions contemplated by this Agreement shall be consummated) and the
closing of the transactions contemplated hereby.

         SECTION 13.04. INDEMNIFICATION OF THE LENDERS AND THE AGENT. The
Borrower shall indemnify and hold harmless the Agent and each Lender, and their
respective directors, officers 


                                      -84-
<PAGE>

and employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Agent or any Lender is a
party thereto) which any of them may pay or incur arising out of or relating to,
directly or indirectly, this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder; PROVIDED, HOWEVER,
that in no event shall the Agent or a Lender have the right to be indemnified
hereunder for its own gross negligence or willful misconduct nor shall the Agent
be indemnified against any liabilities which arise as a result of any claims
made or actions, suits or proceedings commenced or maintained against any Lender
(including the Agent, in its capacity as such) (i) by that Lender's shareholders
or any governmental regulatory body or authority asserting that such Lender or
any of its directors, officers, employees or agents violated any banking or
securities law or regulation or any duty to its own shareholders, customers
(excluding the Borrower) or creditors in any manner whatsoever in entering into
or performing any of its obligations contemplated by this Agreement or (ii) by
any other Lender. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.

         SECTION 13.05. MAXIMUM INTEREST RATE. It is the intention of the
Lenders and the Borrower that the interest (as defined under applicable law) on
the Indebtedness evidenced by the Notes which may be charged to, or collected or
received from the Borrower shall not exceed the maximum rate permissible under
applicable law. Accordingly, anything herein or in any of the Notes to the
contrary notwithstanding, should any interest (as so defined) be charged to, or
collected or received from the Borrower by the Lenders pursuant hereto or
thereto in excess of the maximum legal rate, then the excess payment shall be
applied to the reduction of the aggregate outstanding principal balance of the
Obligations, and any portion of the excess payment remaining after payment in
full thereof shall be returned by the Lenders to the Borrower.

         SECTION 13.06.    MODIFICATION OF AGREEMENT.

         (a) No modification, amendment or waiver of any provision of this
Agreement or the Notes, nor any consent to any departure by the Borrower
therefrom, in any event shall be effective unless the same shall be in writing
and signed by the Borrower and by the Required Lenders (or by the Agent on their
behalf if the Required Lenders have so authorized the Agent), and then the
waiver or consent shall be effective only in the specific instance and for the
purpose for which given; PROVIDED, HOWEVER, that no such modification, amendment
or waiver shall, without the consent of all of the Lenders affected thereby:

                  (i) extend the maturity of any Loan or Note or reduce or
         forgive the principal amount thereof, or reduce the rate or extend the
         time of payment of interest or fees thereon;

                  (ii) reduce the percentage specified in the definition of
         Required Lenders;

                  (iii) extend the Facility A Termination Date or the Facility B
         Termination Date, as the case may be, or reduce the amount or extend
         the payment date for, the mandatory 


                                      -85-
<PAGE>

         payments required under Section 2.02, or increase the amount of the
         Commitment of any Lender hereunder, or permit the Borrower to assign
         its rights under this Agreement;

                  (iv) amend, modify or waive any provision of this Section
         13.06; or

                  (v) increase the maximum drawable amount or extend the
         expiration date of any outstanding Facility Letter of Credit (except as
         expressly permitted by its terms and in accordance with Section 2.15)
         or reduce the principal amount of or extend the time of payment of any
         Reimbursement Obligation or fee associated with any Facility Letter of
         Credit; or

                  (vi) amend, modify or waive Section 5.03.

         (b) Anything in this Agreement to the contrary notwithstanding, if at a
time when the conditions precedent set forth in Article V hereof to any Loan
are, in the opinion of the Required Lenders, satisfied, any Lender (a
"Defaulting Lender") shall fail to fulfill its obligations to make such Loan and
such failure continues for at least two Business Days then, for so long as such
failure shall continue, such Defaulting Lender shall (unless the Required
Lenders, determined as if such Defaulting Lender were not a "Lender" hereunder,
shall otherwise consent in writing) be deemed for all purposes relating to
amendments, modifications, waivers or consents under this Agreement (including,
without limitation, under Section 13.06(a)) to have no Loans or Commitments,
shall not be treated as a "Lender" hereunder when performing the computation of
Required Lenders, and shall have no rights under Section 13.06(a); PROVIDED that
any action taken by the other Lenders with respect to the matters referred to in
clauses (i) through (v) of Section 13.06(a) shall not be effective as against
such Defaulting Lender.

         (c) No amendment, modification or waiver of any provision of this
Agreement relating to the Agent shall be effective without the written consent
of the Agent. No notice to or demand of the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in the same, similar or
other circumstances.

         SECTION 13.07. PRESERVATION OF RIGHTS. No delay or omission of the
Lenders or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Event of Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
an Event of Default or Unmatured Default, or the inability of the Borrower to
satisfy the conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 13.06, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent and the Lenders until the Obligations have been paid in full.

                                      -86-
<PAGE>

         SECTION 13.08. JOINT AND SEVERAL OBLIGATIONS OF BORROWER; SEVERAL
OBLIGATIONS OF LENDERS; THIRD PARTY BENEFICIARIES. All obligations,
representations and warranties hereunder and under any of the Loan Documents,
unless otherwise expressly stated, shall be the joint and several liability of
the Borrower and all of the Partners of the Borrower and the Subsidiary
Guarantors. The respective obligations of the Lenders hereunder are several and
not joint and no Lender shall be the partner or agent of any other (except to
the extent to which the Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.

         SECTION 13.09. SEVERABILITY. If any one or more of the provisions
contained in this Agreement or the Notes is held invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby.

         SECTION 13.10. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which may be executed by one or more of the parties
hereto, but all of which, when taken together, shall constitute a single
agreement binding on all the parties hereto.

         SECTION 13.11. REPRESENTATION AND WARRANTY BY THE LENDERS. The Lenders
represent and warrant to the Borrower that the Notes to be acquired by them
hereunder will evidence loans made in the ordinary course of their respective
commercial banking or real estate lending businesses.

         SECTION 13.12. THE BORROWER AS AGENT FOR EACH SUBSIDIARY GUARANTOR.
Pursuant to the terms of the Subsidiary Guarantees, each Subsidiary Guarantor
will appoint the Borrower as its agent and attorney-in-fact to execute and
deliver any and all documents for an on behalf of each Subsidiary Guarantor in
connection with the transactions contemplated by this Agreement or any of the
other Loan Documents, or in connection with the amendment, modification or
termination of any thereof, and hereby agree that upon execution of any such
documents or instruments they shall be binding upon each of the Subsidiary
Guarantor. Each Subsidiary Guarantor will further acknowledge that such power is
coupled with an interest and may not be revoked.

         SECTION 13.13. LOSS, ETC., NOTES OR SUBSIDIARY GUARANTEES. Upon receipt
by the Borrower of reasonably satisfactory evidence of the loss, theft,
destruction or mutilation of any of the Notes and/or any Subsidiary Guaranty,
upon reimbursement to the Borrower of all reasonable expenses incidental thereto
and upon surrender and cancellation of the relevant Note and/or Subsidiary
Guaranty, if mutilated, the Borrower shall make and deliver in lieu of that Note
or shall cause the Subsidiary Guarantor to make and delivery a new Subsidiary
Guaranty (the "Prior Note" or "Prior Guaranty") a new Note or Subsidiary
Guaranty of like tenor, except that no reference need be made in the new Note to
any installment or installments of principal, if any, previously due and paid
upon the Prior Note. Any Note made and delivered in accordance with the
provisions of this 


                                      -87-
<PAGE>

Section shall be dated as of the date to which interest has been paid on the
unpaid principal amount of the Prior Note.

         SECTION 13.14. GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.

         SECTION 13.15. TAXES. Any taxes (excluding federal, state or local
income taxes on the overall net income of any Lender) or other similar
assessments or charges payable or ruled payable by any governmental authority in
respect of the Loan Documents shall be paid by the Borrower, together with
interest and penalties, if any.

         SECTION 13.16. HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.

         SECTION 13.17. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof;
PROVIDED, HOWEVER, that the fees payable by Borrower to First Chicago in
consideration of its agreement to serve as Agent hereunder are set forth in a
separate letter agreement between Borrower and First Chicago.

         SECTION 13.18. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.

         SECTION 13.19. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE
BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY
LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT
IN CHICAGO, ILLINOIS.

                                      -88-
<PAGE>

         SECTION 13.20. WAIVER OF JURY TRIAL. THE BORROWER , THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.

                     [Signatures appear on following pages]

                                      -89-
<PAGE>


         IN WITNESS WHEREOF, the Borrower and the Lenders have caused this
Agreement to be duly executed as of the date first above written.

                            BORROWER:

                            LENNAR LAND PARTNERS, A GENERAL PARTNERSHIP
                            ORGANIZED UNDER THE LAWS OF THE STATE OF FLORIDA

                            By:   Lennar Land Partners Sub, Inc., a Delaware
                                  corporation, Managing General Partner

                            By:   /s/ CORY J. BOYDSTON
                                  ----------------------------------------------
                                  Cory J. Boydston, as Vice President

                            Address:
                            700 Northwest 107th Avenue
                            Miami, Florida 33172
                            Attention: ________________________

                            By:   LNR Land Partners Sub, Inc., a Delaware
                                  corporation

                            By:   /s/ CORY J. BOYDSTON
                                  ----------------------------------------------
                                  ________________, as ____________________

                            Address:
                            700 Northwest 107th Avenue
                            Miami, Florida 33172
                            Attention: ________________________


<PAGE>


COMMITMENTS:                LENDERS:
------------                --------
FACILITY A: $11,290,322.58  THE FIRST NATIONAL BANK OF CHICAGO,
FACILITY B: $ 9,032.258.06  Individually and as Agent

                            By: /s/ GREGORY A. GILBERT
                                ------------------------------------------------
                            Gregory A. Gilbert, Vice President

                            Address:
                            The First National Bank of Chicago
                            One First National Plaza
                            14th Floor, Suite 0151
                            Chicago, Illinois 60670-0151
                            Attention: Gregory A. Gilbert, Vice President

                            with a copy to:
                            The First National Bank of Chicago
                            One First National Plaza, Suite 0801
                            Chicago, Illinois   60670-0801
                            Attention: Law Department

FACILITY A: $ 9,677,419.35  NATIONSBANK, N.A.
FACILITY B: $ 7,741,935.48

                            By: /s/ PHILIP CARROLL
                               -----------------------------------------------
                                    Philip Carroll, Senior Vice President

                            Address:
                            100 S.E. 2nd Street, 14th FL
                            Miami, Florida 33131
                            Attention: Mr. Philip Carroll

FACILITY A: $ 9,677,419.35  CREDIT LYONNAIS ATLANTA AGENCY
FACILITY B: $ 7,741,935.48

                            By: /s/ DAVID M. CAWRSE
                               -----------------------------------------------
                                    David M. Cawrse, First Vice President
                                    & Manager

                            Address:
                            303 Peachtree Street, N.E., Suite 4400
                            Atlanta, Georgia 30308
                            Attention: Mr. Kevin Murphy, Vice President


<PAGE>


FACILITY A: $ 9,677,419.35  BANK OF AMERICA NATIONAL TRUST &
FACILITY B: $ 7,741,935.48  SAVINGS ASSOCIATION

                            By: /s/ MARK LARIVIERE
                               ----------------------------------------------
                               Mark Lariviere, Vice President

                            Address:
                            231 S. LaSalle, 15th Floor
                            Chicago, Illinois 60697
                            Attention: Mr. Mark Lariviere

FACILITY A: $ 9,677,419.35  COMERICA BANK
FACILITY B: $ 7,741,935.48

                            By: /s/ MARTIN G. ELLIS
                              ------------------------------------------------
                                    Martin G. Ellis, Vice President

                            Address:
                            One Detroit Center
                            500 Woodward Avenue, 9th Floor
                            Detroit, Michigan 48226
                            Attention: Mr. Martin Ellis, Vice President

FACILITY A: $ 8,467,741.94  FLEET NATIONAL BANK
FACILITY B: $ 6,774,193.55

                            By: /s/ JAMES B. MCLAUGHLIN
                               -----------------------------------------------
                                    James B. McLaughlin, Vice President

                            Address:
                            111 Westminster Street
                            RIMO0215 - 8th FL
                            Providence, Rhode Island 02903
                            Attention: Mr. James B. McLaughlin


<PAGE>


FACILITY A: $ 8,467,741.94  GUARANTY FEDERAL BANK, F.S.B.
FACILITY B: $ 6,774,193.55

                            By: /s/ RANDALL REID
                              ----------------------------------------------
                                    Randall Reid, Vice President

                            Address:
                            8333 Douglas Avenue
                            Dallas, Texas 75225
                            Attention: Mr. Randy Reid

FACILITY A: $ 6,451,612.90  THE INDUSTRIAL BANK OF JAPAN,
FACILITY B: $ 5,161,290.32  LIMITED, ATLANTA AGENCY

                            By: /s/ KAZUO IIDA
                              ----------------------------------------------
                                    Kazuo Iida, General Manager

                            Address:
                            191 Peachtree Street, Suite 3600
                            Atlanta, Georgia 30303-1757
                            Attention: Mr. Michael Harvey, Vice President

FACILITY A: $ 6,451,612.90  U. S. BANK NATIONAL ASSOCIATION
FACILITY B: $ 5,161,290.32

                            By: /s/ KATHLEEN M. CONNOR
                              ----------------------------------------------
                                    Kathleen M. Connor, Vice President

                            Address:
                            Real Estate Banking Division
                            601 2nd Avenue South
                            First Bank Place
                            Minneapolis, Minnesota 55402
                            Attention: Ms. Kathleen Connor

<PAGE>


FACILITY A: $ 6,451,612.90  PNC BANK, NATIONAL ASSOCIATION
FACILITY B: $ 5,161,290.32

                            By: /s/ DOUGLAS G. PAUL
                              ----------------------------------------------
                                    Douglas G. Paul, Vice President

                            Address:
                            Two Tower Center
                            Suite J3-JTTC-18-6
                            East Brunswick, New Jersey 08816
                            Attention: Mr. Douglas G. Paul

FACILITY A: $ 6,451,612.90  SOCIETE GENERALE
FACILITY B: $ 5,161,290.32

                            By: /s/ RALPH SAHEB
                              ----------------------------------------------
                                    Ralph Saheb, Manager

                            Address:
                            303 Peachtree Street, Suite 3840
                            Atlanta, Georgia 30308
                            Attention: Mr. Ed Forseberg

FACILITY A: $ 4,838,709.68  AMSOUTH BANK
FACILITY B: $ 3,870,967.74

                            By: /s/ RONNY HUDSPETH
                              ----------------------------------------------
                                    Ronny Hudspeth, Vice President

                            Address:
                            1900 Fifth Avenue
                            Birmingham, Alabama 35288
                            Attention: Mr. William Staples

<PAGE>

FACILITY A: $ 4,032,258.06  BARNETT BANK, N.A., SOUTH FLORIDA
FACILITY B: $ 3,225,806.45

                            By: /s/ CLAY F. WILSON
                              ----------------------------------------------
                              ____________________,_________________________

                            Address:
                            701 Brickell Avenue, 6th FL
                            Miami, Florida 33131
                            Attention: Mr. Clay F. Wilson,
                                       Group Senior Vice President

FACILITY A: $ 4,032,258.06  THE DAI-ICHI KANGYO BANK, LTD.
FACILITY B: $ 3,225,806.45

                            By: /s/ TAKAO MOCHIZUKI
                              ----------------------------------------------
                                    Takao Mochizuki, General Manager

                            Address:
                            Marquis Two Tower, Suite 2400
                            285 Peachtree Center Avenue, N.E.
                            Atlanta, Georgia 30303
                            Attention: Mr. Guenter Kittel

FACILITY A: $ 4,032,258.06  THE FUJI BANK AND TRUST COMPANY
FACILITY B: $ 3,225,806.45

                            By: /s/ TORO UENO
                              ----------------------------------------------
                                    Toro Ueno, Executive Vice President

                            Address:
                            Two World Trade Center, 79th FL
                            New York, New York 10048
                            Attention: Mr. David Lee, Assistant Vice President

<PAGE>


FACILITY A: $ 4,032,258.06  KREDIETBANK, N.V.
FACILITY B: $ 3,225,806.45

                            By: /s/ MICHAEL V. CURRAN /s/ ROBERT SNAUFFER
                              ----------------------------------------------
                                    Michael V. Curran, Vice President
                                    Robert Snauffer, Vice President

                            Address:
                            125 West 55th Street
                            New York, New York 10019
                            Attention: Mr. Michael Curran

FACILITY A: $ 4,032,258.06  SAKURA BANK
FACILITY B: $ 3,225,806.45

                            By: /s/ HIROYASU IMANISHI
                              ----------------------------------------------
                                    Hiroyasu Imanishi, V.P. & Senior Manager

                            Address:
                            Marquis 1 Tower
                            245 Peachtree Center Avenue
                            Atlanta, Georgia 30303
                            Attention: Mr. Ric Spenser

FACILITY A: $ 4,032,258.06  SUNTRUST BANK, MIAMI, N.A.
FACILITY B: $ 3,225,806.45

                            By: /s/ ROBERT E. HUMMEL
                              ----------------------------------------------
                                    Robert E. Hummel, Senior Vice President

                            Address:
                            Real Estate Division
                            777 Brickell Avenue
                            Miami, Florida 33131
                            Attention: Mr. Robert Hummel, Senior Vice President


<PAGE>


FACILITY A: $ 3,225,806.45  BANQUE PARIBAS
FACILITY B: $ 2,580,645.16

                            By: /s/ DUANE HELKOWSKI /s/ JOHN J. MCCORMICK III
                              ------------------------------------------------
                                    Duane Helkowski, Vice President
                                    John J. McCormick III, Vice President

                            Address:
                            787 Seventh Avenue
                            New York, New York 10019
                            Attention: Mr. Duane Helkowski


<PAGE>

                                    GUARANTY

         THIS GUARANTY (this "Guaranty") is made as of the 31st day of October,
1997, jointly and severally by LENNAR CORPORATION, a corporation organized under
the laws of the State of Delaware ("Lennar") AND ITS SUBSIDIARIES LISTED ON
SCHEDULE I ATTACHED HERETO (the "Lennar Subsidiaries; and together with Lennar
the "Lennar Guarantors"), LNR PROPERTY CORPORATION, a corporation organized
under the laws of the State of Delaware ("LNR") AND ITS SUBSIDIARIES LISTED ON
SCHEDULE II ATTACHED HERETO (the "LNR Subsidiaries"; and together with LNR the
"LNR Guarantors") in favor of the Agent, for the ratable benefit of the Lenders,
under the Credit Agreement referred to below. The Lennar Guarantors and the LNR
Guarantors are hereinafter referred to collectively as the "Guarantors").

                                    RECITALS

         A. Lennar Land Partners, a general partnership formed under the laws of
the State of Florida (the "Borrower"), and The First National Bank of Chicago,
as Agent (the "Agent"), and certain other Lenders from time to time party
thereto have entered into a certain Credit Agreement dated as of even date
herewith (as same may be amended, modified, extended or restated from time to
time, the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by the Lenders to the Borrower;

         B. It is a condition precedent to the obligations of the Agent and the
Lenders under the Credit Agreement (including obligations to make Advances and
issue Facility Letters of Credit) that the Guarantors shall have executed and
delivered this Guaranty whereby the Guarantors shall jointly and severally
guarantee the payment when due, of all principal, interest, fees and other
amounts that shall be at any time payable by the Borrower under the Credit
Agreement and the Notes and the other Loan Documents referred to therein.

         C. Lennar indirectly owns a 50% interest in the Borrower through its
wholly-owned subsidiary Lennar Land Partners Sub, Inc. and LNR indirectly owns a
50% interest in the Borrower through LNR Land Partners Sub, Inc,. a wholly-owned
subsidiary of Leisure Colony Management Corp., which is a wholly-owned
subsidiary of LNR, and each of the Guarantors will derive direct and indirect
economic benefit from the Loans and Facility Letters of Credit.

         D. In order to induce the Lenders and the Agent to enter into the
Credit Agreement, each of the Guarantors is willing to guarantee the obligations
of the Borrower under the Credit Agreement, the Notes and the other Loan
Documents.


<PAGE>


                                    AGREEMENT

         In consideration of the forgoing recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

         SECTION 1. DEFINITIONS. Terms defined in the Credit Agreement and not
otherwise defined herein have, as used herein, the respective meanings provided
for therein.

         SECTION 2.01. REPRESENTATIONS AND WARRANTIES. Each of the Guarantors
represents and warrants (which representations and warranties shall be deemed to
have been renewed upon each Borrowing Date under the Credit Agreement) that:

                  (a) it (i) is a corporation duly organized, validly existing
         and in good standing under the laws of its jurisdiction of
         incorporation; (ii) has all requisite corporate power, and has all
         material governmental licenses, authorizations, consents and approvals
         necessary to own its assets and carry on its business as now being or
         as proposed to be conducted; and (iii) is qualified to do business in
         all jurisdictions in which the nature of the business conducted by it
         makes such qualification necessary and where failure so to qualify
         would have a material adverse effect on its business, properties,
         assets, condition (financial or otherwise), results of operations, or
         prospects;

                  (b) it has all necessary corporate power and authority to
         execute, deliver and perform its obligations under this Guaranty; the
         execution, delivery and performance of this Guaranty have been duly
         authorized by all necessary corporate action; and this Guaranty has
         been duly and validly executed and delivered by it and constitutes its
         legal, valid and binding obligation, enforceable in accordance with its
         terms, except as the enforceability thereof may be limited by
         bankruptcy, insolvency, reorganization or moratorium or other similar
         laws relating to the enforcement of creditors' rights generally and by
         general equitable principles; and

                  (c) neither the execution and delivery by it of this Guaranty
         nor compliance with the terms and provisions hereof will conflict with
         or result in a breach of, or require any consent under, its certificate
         of incorporation or by-laws or any applicable law or regulation, or any
         order, writ, injunction or decree of any court or governmental
         authority or agency, or any agreement or instrument to which it is a
         party or by which it is bound or to which it is subject, or constitute
         a default under any such agreement or instrument, or result in the
         creation or imposition of any Lien upon any of its revenues or assets
         pursuant to the terms of any such agreement or instrument.

                                      -2-

<PAGE>


         SECTION 2.02. COVENANTS. Each of the Guarantors covenants that, so long
as any Lender has any Commitment outstanding under the Credit Agreement or any
amount payable under the Credit Agreement or any Note shall remain unpaid, that
it will cause the Borrower to, fully comply with those covenants and agreements
set forth in the Credit Agreement.

         SECTION 3. THE GUARANTY. The Guarantors hereby jointly, severally and
unconditionally guarantee the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by the Borrower pursuant to the Credit Agreement, and the full
and punctual payment of all other amounts payable by the Borrower under the
Credit Agreement and the other Loan Documents including, without limitation, the
Obligations (all of the foregoing being referred to collectively as the
"Guaranteed Obligations"). Upon failure by the Borrower to pay punctually any
such amount, each of the Guarantors agrees that it shall forthwith on demand pay
the amount not so paid at the place and in the manner specified in the Credit
Agreement, any Note or the relevant Loan Document, as the case may be.

         SECTION 4. GUARANTY UNCONDITIONAL. The obligations of the Guarantors
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:

                  (a) any extension, renewal, settlement, compromise, waiver or
         release in respect of any obligation of the Borrower under the Credit
         Agreement, any Note, or any other Loan Document, by operation of law or
         otherwise or any obligation of any other guarantor of any of the
         Obligations;

                  (b) any modification, amendment, renewal or restatement of or
         supplement to the Credit Agreement, any Note or any other Loan
         Document;

                  (c) any release, exchange, enforcement, waiver, (whether
         intentional or unintentional) nonperfection, invalidity, purchase at a
         public or private sale, or application and direction of order or manner
         of sale in the Agent's discretion, of any direct or indirect security
         or any part thereof for any obligation of the Borrower under the Credit
         Agreement, any Note, the Security Agreement (Capital Stock and
         Partnership Interest), any Loan Document, or any obligations of any
         other guarantor of any of the Obligations;

                  (d) any change in the corporate existence, structure or
         ownership of the Borrower or any other guarantor of any of the
         Obligations, or any insolvency, bankruptcy, reorganization or other
         similar proceeding affecting the Borrower, or any other guarantor of
         any of the Obligations, or its assets or any resulting release or
         discharge of any obligation of the Borrower, or any other guarantor of
         any of the Obligations;

                                      -3-

<PAGE>


                  (e) the existence of any claim, setoff or other rights which
         the Guarantors may have at any time against the Borrower, any other
         guarantor of any of the Obligations, the Agent, any Lender or any other
         Person, whether in connection herewith or any unrelated transactions;

                  (f) any invalidity or unenforceability relating to or against
         the Borrower, or any other guarantor of any of the Obligations, for any
         reason related to the Credit Agreement, any other Loan Document, or any
         provision of applicable law or regulation purporting to prohibit the
         payment by the Borrower, or any other guarantor of any of the
         Obligations, of the principal of or interest on any Note or any other
         amount payable by the Borrower under the Credit Agreement, the Notes or
         any other Loan Document; or

                  (g) any other act or omission to act or delay of any kind by
         the Borrower, any other guarantor of any of the Obligations, the Agent,
         any Lender or any other Person or any other circumstance whatsoever
         which might, but for the provisions of this paragraph, constitute a
         legal or equitable discharge of any Guarantor's obligations hereunder.

         SECTION 5. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. The Guarantors' obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitments under the Credit Agreement shall have terminated or
expired. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrower or any other party under the Credit
Agreement or any other Loan Document is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, the Guarantors' obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.

         SECTION 6. WAIVER OF RIGHTS.

                  (a) Each of the Guarantors waives the right to require the
Agent or any of the Lenders to proceed against the Borrower or any other Person
liable on the Obligations, to proceed against or exhaust any security held from
the Borrower or any other Person, or to pursue any other remedy in the Agent's
or any of the Lenders's power whatsoever and each of the Guarantors waives the
right to have the property of the Borrower first applied to the discharge of the
Obligations. Either the Agent or any of the Lenders may, at its election,
exercise any right or remedy it may have against the Borrower or any security
held by the Agent or any Lenders, including, without limitation, the right to
foreclose upon any such security by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable, without
affecting or impairing in any way the liability of the Guarantors hereunder,
except to the extent the Obligations have been paid, and each of the Guarantors
waives any defense arising out of the absence, impairment or loss of any right

                                      -4-

<PAGE>


of reimbursement, contribution or subrogation or any other right or remedy of
the Guarantors against the Borrower or any such security, whether resulting from
such election by the Agent or any Lenders or otherwise. Each of the Guarantors
waives any defense arising by reason of any disability or other defense of the
Borrower or by reason of the cessation from any cause whatsoever (including
without limitation, any intervention or omission by the Agent or any Lenders) of
the liability, either in whole or in part, of the Borrower to the Agent or any
Lenders for the Obligations. Each of the Guarantors understands that if all or
any part of the liability of the Borrower to the Agent or any Lenders for the
Obligations is secured by real property each of the Guarantors shall be liable
for the full amount of its liability hereunder notwithstanding foreclosure on
such real property by trustee sale or any other reason impairing the Guarantors'
right to proceed against the Borrower. Each of the Guarantors hereby waives, to
the fullest extent permitted by law, all rights and benefits under Section 2809
of the California Civil Code purporting to reduce a guarantor's obligations in
proportion to the obligation of the principal. Each of the Guarantors hereby
waives all rights and benefits under Section 580a of the California Code of
Civil Procedure purporting to limit the amount of any deficiency judgment which
might be recoverable following the occurrence of a trustee's sale under a deed
of trust, all rights and benefits under Section 580b of the California Code of
Civil Procedure stating that no deficiency may be recovered on a real property
purchase money obligation and all rights and benefits under Section 580d of the
California Code of Civil Procedure stating that no deficiency may be recovered
on a note secured by a deed of trust on real property in case such real property
is sold under the power of sale contained in such deed of trust, if such
sections, or any of them, have any application hereto or any application to the
Guarantors. In addition, each of the Guarantors hereby waives, to the fullest
extent permitted by law, (i) any defense arising as a result of any election by
the Agent or any Lenders, in any proceeding instituted under the Bankruptcy
Code, under Section 1111(b)(2) of the Bankruptcy Code, (ii) any defense based on
any borrowing or grant of a security interest under Section 364 of the
Bankruptcy Code, (iii) any defense arising as a result of any election made by
the Agent or any Lenders under Section 9501(4) of the California Uniform
Commercial Code, and (iv) without limiting the generality of the foregoing or
any other provision hereof, all rights and benefits which might otherwise be
available to the Guarantors under California Civil Code Sections 2810, 2819,
2839, 2845, 2818, 2849, 2850, 2899, and 3433.

                  (b) Each of the Guarantors expressly acknowledges that it will
be and remain fully liable for the Guaranteed Obligations hereunder even if, as
a result of any exercise of the power of sale under the Mortgages and/or any
other election of remedies by the Agent or any Lenders under the Mortgages
and/or any of the other Loan Documents or for any other reason, any rights of
reimbursement, contribution or subrogation on the part of the Guarantors against
the Borrower, in respect of the Mortgaged Property or from or against any other
guarantor has been destroyed or impaired. Each of the Guarantors further
expressly acknowledges that it could, in the absence of the waivers and
agreements set forth herein, have one or more defenses to or otherwise be
exonerated from the obligations and liabilities arising under this Guaranty as a
result of any such election of remedies by the Agent or any Lenders, including,
without limitation, exercise of the power of sale under the Mortgages, and each
of the Guarantors hereby knowingly, expressly and irrevocably

                                      -5-

<PAGE>

waives each and every such defense to its liability hereunder, and expressly
acknowledges the reliance hereon of the Agent and the Lenders.

         SECTION 7. WAIVER OF NOTICE. The Guarantors irrevocably waive
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any Person against the Borrower, any
other guarantor of the Obligations, or any other Person.

         SECTION 8. SUBROGATION. The Guarantors hereby agree not to assert any
right, claim or cause of action, including, without limitation, a claim for
subrogation, reimbursement, indemnification or otherwise, against the Borrower
arising out of or by reason of this Guaranty or the obligations hereunder,
including, without limitation, the payment or securing or purchasing of any of
the Obligations by the other Guarantor unless and until the Guaranteed
Obligations are paid in full and any commitment to lend under the Credit
Agreement and other Loan Documents is terminated.

         SECTION 9. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Borrower under the Credit Agreement, any
Note or any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, any Note or any other Loan
Document shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by the Agent made at the request of the Required Lenders.

         SECTION 10. NOTICES. All notices, requests and other communications to
any party hereunder shall be given or made by telecopier or other writing and
telecopied, or mailed or delivered to the intended recipient at its address or
telecopier number set forth on the signature pages hereof or such other address
or telecopier number as such party may hereafter specify for such purpose by
notice to the Agent in accordance with the provisions of Section 13.01 of the
Credit Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice sent by
certified mail return-receipt requested, on the date set forth on the receipt
(PROVIDED that any refusal to accept any such notice shall be deemed to be
notice thereof as of the time of any such refusal), in each case given or
addressed as aforesaid.

         SECTION 11. NO WAIVERS. No failure or delay by the Agent or any Lenders
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty, the Credit Agreement, the
Notes and the other Loan Documents shall be cumulative and not exclusive of any
rights or remedies provided by law. Each of the Guarantors assumes the
responsibility for being and keeping itself informed of the financial condition
of the Borrower and of all other circumstances bearing upon the risk of
nonpayment of the Obligations which diligent inquiry would reveal, and agrees
that

                                      -6-

<PAGE>

the Agent and the Lenders shall have no duty to advise the Guarantors of
information known to the Agent or the Lenders regarding such condition or any
such circumstances.

         SECTION 12. SUCCESSORS AND ASSIGNS. This Guaranty is for the benefit of
the Agent and the Lenders and their respective successors and permitted assigns
and, in the event of an assignment of any amounts payable under the Credit
Agreement, the Notes or the other Loan Documents, the rights hereunder, to the
extent applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty shall be binding upon each of the Guarantors and
their respective successors and permitted assigns.

         SECTION 13. CHANGES IN WRITING. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by each of the Guarantors and the Agent with the consent of the
Required Lenders.

         SECTION 14. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF ILLINOIS. EACH OF THE GUARANTORS HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS AND OF ANY ILLINOIS STATE COURT SITTING IN CHICAGO,
ILLINOIS FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS GUARANTY (INCLUDING, WITHOUT LIMITATION, ANY OF THE OTHER LOAN DOCUMENTS)
OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE GUARANTORS IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH ANY OF THEM
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE GUARANTORS, AND THE
AGENT AND THE LENDERS ACCEPTING THIS GUARANTY, HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         SECTION 15. TAXES, ETC. All payments required to be made by any of the
Guarantors hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any present
or future taxies, levies, imposts, duties or other charges of whatsoever nature
imposed by any government or any political or taxing authority thereof,
PROVIDED, HOWEVER, that if any of the Guarantors is required by law to make such
deduction or withholding, such Guarantor shall forthwith pay to the Agent or any
Lender, as applicable, such additional amount as results in the net amount
received by the Agent or any Lender, as applicable, equaling the full amount
which would have been received by the Agent or any Lender, as applicable, had no
such deduction or withholding been made.

                                      -7-

<PAGE>


         IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to
be duly executed by its authorized officer as of the day and year first above
written.

                           LENNAR CORPORATION AND EACH OF THE SUBSIDIARIES OF
                           LENNAR CORPORATION LISTED ON SCHEDULE I

                           By: /S/ STUART A. MILLER
                               ------------------------------------------------
                               Stuart A. Miller,  President or authorized
                               signatory of each of such corporations

                           LNR PROPERTY CORPORATION AND EACH OF THE SUBSIDIARIES
                           OF LNR PROPERTY CORPORATION LISTED ON SCHEDULE II

                           By: /S/ STUART A. MILLER
                               ------------------------------------------------
                               Name: Stuart A. Miller
                               Title:  Chairman of the Board or authorized 
                                       signatory of each of such corporations

                                      -8-

<PAGE>


                                   SCHEDULE I

                         LENNAR CORPORATION SUBSIDIARIES


<PAGE>


                                   SCHEDULE II

                      LNR PROPERTY CORPORATION SUBSIDIARIES


                                      -10-