EXHIBIT 10.5

                           REVOLVING CREDIT AGREEMENT

                          DATED AS OF DECEMBER 5, 1997

                                      AMONG

                            LNR PROPERTY CORPORATION

                         AND CERTAIN OF ITS SUBSIDIARIES

                                       AND

             BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION

                                    AS LENDER

                                       AND

             BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,

                                    AS AGENT
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                           REVOLVING CREDIT AGREEMENT

         THIS REVOLVING CREDIT AGREEMENT is entered into as of December 5, 1997,
by and among LNR PROPERTY CORPORATION, a Delaware corporation having its
principal place of business at 760 N.W. 107th Avenue, Miami, Florida 33172
("LNR"), the Subsidiaries of LNR identified on SCHEDULE I attached hereto (LNR
and said Subsidiaries being referred to herein individually and collectively as
the "Borrower"), the Lenders (as hereinafter defined), and BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOFA"), as administrative and
documentation agent (the "AGENT") for the Lenders.

                                    RECITALS

         A. The Borrower is primarily engaged in the business of (i) acquiring,
developing, owning and operating a variety of commercial and industrial real
properties, (ii) acquiring, itself or through partnerships which it manages,
portfolios of commercial mortgage loans and real properties and providing
workout, property management and asset sale services with regard to such
portfolio assets, (iii) acting as special servicer with regard to commercial
mortgage pools which are the subject of commercial mortgage backed securities
("CMBS"), (iv) acquiring unrated and rated CMBS issued with regard to commercial
mortgage pools as to which LNR acts as special servicer, (v) making mortgage
loans to companies and individuals engaged in commercial real estate activities
and to developers and builders of residential communities, and (vi) investing in
real estate related businesses.

         B. The Borrower has requested that the Lenders make loans available to
the Borrower in the maximum aggregate principal amount of $200,000,000
outstanding from time to time pursuant to the terms of this Agreement (the
"Facility"), and that the Agent act as administrative and documentation agent
for the Lenders. The Agent and the Lenders have agreed to do so.

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

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

         1.1 DEFINITIONS. As used in this Agreement, the following terms have
the respective meanings set forth below:

         "ADJUSTED BASE RATE" means a floating interest rate equal to the Base
Rate plus the Applicable Margin changing when and as the Base Rate or the
Applicable Margin changes.

         "ADJUSTED EBITDA" means an amount equal to (i) EBITDA less (ii) the
product of (a) 0.03 multiplied by (b) the sum of the Effective Gross Income
generated by each Project.

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         "ADJUSTED FIXED CHARGES" means the sum of Fixed Charges, plus the
amount specified in clause (c) of the definition of Debt Service.

         "ADJUSTED LIBOR RATE" means, with respect to a LIBOR Advance for the
relevant LIBOR Interest Period, the sum of (i) the quotient of (a) the LIBOR
Rate applicable to such LIBOR Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such LIBOR Interest
Period, plus (ii) the Applicable Margin in effect from time to time during such
LIBOR Interest Period.

         "ADJUSTED NET OPERATING INCOME" means, as to any property, the Net
Operating Income generated by such property over any fiscal period, on an
annualized basis (if such period is less than a full fiscal year), less an
amount equal to the product of 0.03 multiplied by the Effective Gross Income
generated by such property for such period, on an annualized basis (if such
period is less than a full fiscal year).

         "ADVANCE" means a loan to the Borrower hereunder by one or more of the
Lenders pursuant to SECTION 2.l(a) hereof (including Swingline Loans), including
the initial Advance and all subsequent Advances, whether such Advances are, from
time to time, Base Rate Advances, LIBOR Advances or Swingline Loans.

         "AFFILIATE" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with any other Person.
A Person shall be deemed to control another Person if the controlling Person
owns ten percent (10%) or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to 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 BOFA, acting as administrative and documentation agent
for the Lenders in connection with the transactions contemplated by this
Agreement, and its successors in such capacity.

         "AGGREGATE COMMITMENT" means, as of any date, the sum of all of the
Lenders' then-current Commitments, provided that the Aggregate Commitment shall
not at any time exceed an amount equal to the lesser of (a) $200,000,000, (b)
the Borrowing Base and (c) the maximum amount that permits compliance with
ARTICLE VII hereof.

         "AGREEMENT" means this Revolving Credit Agreement and all amendments,
modifications and supplements hereto.

         "AGREEMENT EXECUTION DATE" shall mean December 12, 1997, the date on
which all of the parties hereto have executed and delivered this Agreement.

         "ALLOCATED FACILITY AMOUNT" means, at any time, the sum of all then
outstanding Advances (including all Swingline Loans), and the then Facility
Letter of Credit Obligations.

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         "APPLICABLE LAWS " is defined in SECTION 6.26(b) hereof.

         "APPLICABLE MARGIN" means the applicable margin set forth in the table
in SECTION 2.6 used in calculating the interest rate applicable to the various
types of Advances, which shall vary from time to time in accordance with the
long term, senior unsecured debt ratings of LNR and the leverage ratio of
Borrower or, in the absence of such rating, in accordance with such leverage
ratio alone, all in the manner set forth in SECTION 2.6 hereof.

         "AVERAGE MARKET PRICE" means, as to any Investment Security at any
time, (i) if such Investment Security is traded on an established securities
exchange or there otherwise exists an established market for such Investment
Security an amount equal to the average of the bid prices for such Investment
Security at the close of trading on the last trading day of each calendar month
over the 90 day period immediately preceding the date of determination, and
otherwise (ii) the Market Price Proxy for such Investment Security. With respect
to CMBS, the closing bid price on any given date shall be the average of the
closing bid prices quoted by at least one generally recognized CMBS market
makers for the date in question, subject to Agent's confirmation by obtaining
quotes from one or more other recognized CMBS market makers.

         "BASE RATE" means a rate per annum equal to the rate of interest
announced by BOFA from time to time as its reference rate, changing when and as
such reference rate changes.

         "BASE RATE ADVANCE" means an Advance that bears interest at the
Adjusted Base Rate.

         "BOFA" means Bank of America National Trust and Savings Association.

         "BORROWER" means, individually and collectively, LNR and each of its
Subsidiaries identified on SCHEDULE I hereto (as amended from time to time in
accordance with SECTION 8.13 hereof), along with their respective permitted
successors and assigns.

         "BORROWING BASE" means, from time to time, the sum of the amounts
described in clauses (i) through (xix) below on a consolidated basis for
Borrower and its Subsidiaries with respect to assets wholly-owned (a) by
Borrower, (b) any wholly-owned Subsidiary of Borrower (including any Subsidiary
deemed to be so owned pursuant to the terms hereof) or (c) any Guarantor, and,
unless otherwise specified below, as reflected from time to time in accordance
with GAAP in the consolidated balance sheet of Borrower and its Subsidiaries.
For purposes of clauses (ii) through (vi) below, a Subsidiary shall be deemed
wholly-owned by Borrower, notwithstanding that Borrower owns less than 100
percent of the Capital Stock thereof, so long as (x) Borrower owns, directly or
indirectly, at least 75 percent of the Capital Stock of such Subsidiary, free
and clear of any Lien, (y) Borrower exercises a level of management control of
such Subsidiary and its assets that is satisfactory to the Agent, and (z) the
Property of such Subsidiary is an Unencumbered Asset; PROVIDED, HOWEVER, THAT
the aggregate amount included in the Borrowing Base at any time with respect to
Properties of such Subsidiaries of which Borrower owns, directly or indirectly,
less than 100 percent of the Capital Stock shall be based 


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upon a percentage of the Net Operating Income or book value (as the case may be)
of each such Property equal to Borrower's direct or indirect percentage
ownership interest in the relevant Subsidiary, and shall not exceed the lesser
of 10 percent of the Borrowing Base at that time or $50,000,000.

                                      CASH

         (i) 100 percent of cash and Cash Equivalents unencumbered by any Lien;

                                   REAL ESTATE

         (ii) 75 percent of the quotient of the Adjusted Net Operating Income of
all Stabilized Projects that are Unencumbered Assets divided by 0.10; (iii) an
amount equal to (a) 70 percent of the quotient of the Adjusted Net Operating
Income of all Stabilized Projects that are not Unencumbered Assets divided by
0.10, minus (b) all Indebtedness of Borrower and its Subsidiaries, other than
unsecured Subordinated Debt, secured by a Lien on any such Stabilized Project
(PROVIDED, HOWEVER, THAT the aggregate amount included at any time in the
Borrowing Base pursuant to this clause (iii) shall not exceed 25 percent of the
Borrowing Base at that time); (iv) 72.5 percent of the net book value of all
Completed Projects that are Unencumbered Assets; (v) 70 percent of the net book
value of all Development Properties that are Unencumbered Assets (PROVIDED,
HOWEVER, THAT the aggregate amount included at any time in the Borrowing Base
pursuant to the foregoing clauses (ii) through (v) for Properties that are
Special Purpose Properties shall not exceed the lesser of (a) 15 percent of the
Borrowing Base at that time, or (b) 30 percent of the aggregate amount included
at that time in the Borrowing Base pursuant to the foregoing clauses (ii)
through (v) for all Properties); (vi) 50 percent of the net book value of
Properties other than Qualified Properties that satisfy the requirements set
forth in clauses (b) and (c) of the definition of "Stabilized Project" and that
are Unencumbered Assets (PROVIDED, HOWEVER, THAT the aggregate amount included
at any time in the Borrowing Base pursuant to this clause (vi) shall not exceed
20 percent of the Borrowing Base at that time; and PROVIDED FURTHER THAT any
direct or indirect investment in real property located outside the United States
of America shall not be included in the Borrowing Base without the prior written
consent of the Agent);

                              INVESTMENT SECURITIES

         (vii) 75 percent of the Average Market Price of Investment Securities
unencumbered by any Lien and rated BB or better by S&P (or having an equivalent
Moody's rating or Third Rating); (viii) an amount equal to (a) 70 percent of the
Market Price Proxy for any encumbered Investment Securities rated BB or better
by S&P (or having an equivalent Moody's rating or Third Rating), minus (b) all
Indebtedness, other than unsecured Subordinated Debt, secured by a Lien on such
Investment Securities; (ix) 70 percent of the Average Market Price of Investment
Securities unencumbered by any Lien and rated B or B- by S&P (or having an
equivalent Moody's rating or Third Rating); (x) an amount equal to (a) 65
percent of the Market Price Proxy for encumbered Investment Securities rated B
or B- by S&P (or having an equivalent Moody's rating or Third Rating), minus (b)
all Indebtedness, other than unsecured 


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Subordinated Debt, secured by a Lien on such Investment Securities; (xi) 60
percent of the Average Market Price of Investment Securities unencumbered by any
Lien and either unrated by S&P or rated CCC by S&P (or having an equivalent
Moody's rating or Third Rating); (xii) an amount equal to (a) 55 percent of the
Market Price Proxy for encumbered Investment Securities unrated by S&P or rated
CCC by S&P (or having an equivalent Moody's rating or Third Rating), minus all
Indebtedness, other than unsecured Subordinated Debt, secured by a Lien on such
Investment Securities (PROVIDED, HOWEVER, THAT the aggregate amount included at
any time in the Borrowing Base pursuant to clauses (vii) through (xii) above
shall not exceed 35 percent of the Borrowing Base at that time; and PROVIDED
FURTHER THAT if any Investment Securities are rated by both Moody's, S&P and/or
any Third Rating, the lower of the ratings shall govern and control for purposes
of the foregoing clauses (vii) through (xii); and PROVIDED FURTHER THAT no
residual bonds or interest-only bonds shall be included in the Borrowing Base
pursuant to clauses (viii), (x) or (xii) above, and the amount of all such bonds
included at any time in the Borrowing Base pursuant to clauses (vii), (ix) or
(xi) above shall be determined without regard to clause (ii) of the definition
of Average Market Price (which shall not apply to such bonds) and shall not
exceed 3.5 percent of the Borrowing Base at that time);

                              MORTGAGE RECEIVABLES

         (xiii) 80 percent of the net book value of Mortgage Loans with respect
to which no Mortgage Loan Default has occurred and is continuing, and the
outstanding amount of which (including, without limitation, outstanding
principal, accrued interest and other amounts due) is less than 85 percent of
the fair market value of the real property securing the same; (xiv) 75 percent
of the net book value of Mortgage Loans with respect to which no Mortgage Loan
Default has occurred and is continuing, and the outstanding amount of which
(including, without limitation, outstanding principal, accrued interest and
other amounts due) is 85 percent or more, but less than 95 percent, of the fair
market value of the real property securing the same; (xv) 65 percent of the net
book value of any Mortgage Loan with respect to which a Mortgage Loan Default
has occurred and is continuing, and the outstanding amount of which (including,
without limitation, outstanding principal, accrued interest and other amounts)
is less than 95 percent of the fair market value of the real property securing
the same (PROVIDED, HOWEVER, THAT the aggregate amount included at any time in
the Borrowing Base pursuant to clauses (xiii) through (xv) above shall not
exceed 20 percent of the Borrowing Base at that time; and PROVIDED FURTHER THAT
the interest of any of the Borrower and its Subsidiaries in any Mortgage Loan
included in the computation of the Borrowing Base pursuant to said clauses
(xiii) through (xv) shall not be encumbered by any Lien);

                       PORTFOLIO/SINGLE ASSET PARTNERSHIPS

         (xvi) 75 percent of the net present value, calculated using an annual
discount rate of 12 percent, of projected cash flow (including, without
limitation, management fees payable to one of Borrower or its wholly-owned
Subsidiaries) generated over a period of 60 months following the date of
determination from Investments in Portfolio/Single Asset Partnerships in which
one of Borrower or its Subsidiaries first made an Investment before the
Agreement Execution Date, as such projected cash flow is reasonably projected by
Borrower, subject to 


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the Agent's approval (PROVIDED, HOWEVER, THAT the amount included at any time in
the Borrowing Base pursuant to this clause (xvi) shall not exceed the product of
two multiplied by the net book value of such Investments at that time); (xvii)
50 percent of the net book value of Investments in Portfolio/Single Asset
Partnerships first formed, or in which one of the Borrower or its Subsidiaries
first makes an Investment, after the Agreement Execution Date (PROVIDED,
HOWEVER, THAT the amount included at any time in the Borrowing Base pursuant to
this clause (xvii) shall not exceed 15 percent of the Borrowing Base at that
time);

                                LAND PARTNERSHIPS

         (xviii) 30 percent of the net book value of Investments in Land
Partnerships (PROVIDED, HOWEVER, THAT any outstanding Indebtedness secured by a
Lien on the real property owned by each such Land Partnership does not exceed 50
percent of the fair market value of such real property; and PROVIDED FURTHER
THAT the amount included at any time in the Borrowing Base pursuant to this
clause (xviii) does not exceed 20 percent of the Borrowing Base at that time);
and

                              STRATEGIC INVESTMENTS

         (xix) 50 percent of the net book value of Strategic Investments
(PROVIDED, HOWEVER, THAT the amount included at any time in the Borrowing Base
pursuant to this clause (xix) shall not exceed 25 percent of the Borrowing Base
at that time; and PROVIDED FURTHER THAT the aggregate amount included at any
time in the Borrowing Base pursuant to clauses (xvi) through (xix) above shall
not exceed 50 percent of the Borrowing Base at that time; and PROVIDED FURTHER
THAT the interests of Borrower and its Subsidiaries in the Investment referred
to in said clauses (xvi) through (xix) shall not be encumbered by any Lien).

         In the event that there exists any uncertainty or ambiguity concerning
the proper classification of any asset or Investment under the foregoing
definition of "Borrowing Base", the determination of the Agent concerning the
proper classification of such asset or Investment shall be determinative.

         "BORROWING DATE" means Business Day on which an Advance is made to the
Borrower.

         "BORROWING NOTICE" is defined in SECTION 2.11(a) hereof.

         "BUSINESS DAY" means a day, other than a Saturday, Sunday or holiday,
on which banks are open for business in Chicago, Illinois and, where such term
is used in reference to the selection or determination of the Adjusted LIBOR
Rate, in London, England.

         "CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent equity ownership interests in a Person which is not a
corporation and any and all warrants or options to purchase any of the
foregoing.

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         "CASH EQUIVALENTS" shall mean (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P's or P-1 or better by Moody's, or (iii) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000.

         "CHANGE OF CONTROL" means that either (i) any one of Jeff Krasnoff,
Steve Saiontz and Stuart Miller cease for any reason to be actively engaged in
the management of LNR, in a senior executive capacity, and any two of Leonard
Miller, Steve Saiontz and Stuart Miller cease for any reason to be members of
the Board of Directors of LNR, or (ii) Leonard Miller and/or members of his
Immediate Family (and/or trusts for his or their benefit) cease to own at least
a majority of the voting power attributable to the Capital Stock of LNR.

         "CMBS" is defined in RECITAL A.

         "CODE" means the Internal Revenue Code of 1986 as amended from time to
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.

         "COMMITMENT" means the obligation of each Lender, subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth opposite its signature below, or the amount stated in any subsequent
amendment hereto.

         "COMPLETED PROJECT" means a Project that satisfies all of the
requirements set forth in clauses (b) and (c) of the definition of Stabilized
Property, but has not achieved the applicable minimum occupancy level set forth
in clause (a) thereof.

         "CONSOLIDATED SECURED DEBT" means as of any date of determination, the
sum of the aggregate principal amount of all Indebtedness of the Borrower and
its Subsidiaries outstanding at such date which is secured by a Lien on any
asset or Capital Stock of Borrower or any Subsidiary, including, without
limitation, loans secured by mortgages, stock or partnership interests.

         "CONSOLIDATED SENIOR UNSECURED DEBT" means as of any date of
determination, the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries outstanding at such date, including, without
limitation, the undrawn portion of any revolving credit or similar facility,
other than (a) Subordinated Debt and (b) Consolidated Secured Debt.

         "CONSOLIDATED TANGIBLE NET WORTH" means, as of any date of
determination, the consolidated stockholders' equity of LNR as shown on its
balance sheet as of that date less the stockholders' equity of the Mortgage
Subsidiary (if included in LNR's consolidated stockholders' equity) and less the
aggregate amount of goodwill and other assets subject to classification as
"intangible assets."

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         "CONSOLIDATED TOTAL INDEBTEDNESS" means as of any date of
determination, all Indebtedness of the Borrower and its Subsidiaries outstanding
at such date, determined on a consolidated basis in accordance with GAAP, after
eliminating intercompany items; provided that for purposes of defining
"Consolidated Total Indebtedness" the term "Indebtedness" shall not include
short term debt (e.g., accounts payable within 60 days, short term accrued
expenses), Subordinated Debt, Indebtedness of the Mortgage Subsidiary for which
no Borrower or other Subsidiaries have any personal liability, or the portion of
non-recourse Indebtedness of Subsidiaries of Borrower that is allocable to the
owners of minority interests in such Subsidiaries, based on such owners'
percentage interests in such Subsidiaries, provided that such owners are not
Affiliates of Borrower.

         "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 all or any of the entities in the Borrower,
are treated as a single employer under Sections 414(b) or 414(c) of the Code.

         "CREDIT PARTIES" means each Borrower and each Guarantor.

         "DEBT SERVICE" means for any period, (a) Interest Expense for such
period PLUS (b) the aggregate amount of regularly scheduled principal payments
of Indebtedness (excluding optional prepayments and balloon principal payments
due on maturity in respect of any Indebtedness) required to be made during such
period by the Borrower or any of its consolidated Subsidiaries (including,
without limitation, principal of Subordinated Debt) plus (c) a percentage of all
such regularly scheduled principal payments required to be made during such
period by any Hot Investment Affiliate on recourse Indebtedness (excluding
optional prepayments and balloon principal payments due on maturity in respect
of any Indebtedness) equal to the percentage of the principal amount of such
Indebtedness for which the Borrower or any consolidated Subsidiary is liable, in
the aggregate, without duplication PLUS (d) Senior Preferred Stock Expense for
such period.

         "DEFAULT" means an event which, with notice or lapse of time or both,
would become an Event of Default.

         "DEFAULT RATE" means with respect to any Advance, a rate equal to the
interest rate applicable to such Advance plus two percent per annum.

         "DEFAULTING LENDER" means any Lender which fails or refuses to perform
its obligations under this Agreement within the time period specified for
performance of such obligation, or, if no time frame is specified, if such
failure or refusal continues for a period of five Business Days after written
notice from the Agent; PROVIDED that if such Lender cures such failure or
refusal, such Lender shall cease to be a Defaulting Lender.

         "DEVELOPMENT PROPERTY" means any Property which (a) is under
construction and then treated as an asset under development in accordance with
GAAP, (ii) satisfies the requirements set forth in clauses (b) and (c) of the
definition of Stabilized Project, and (iii) upon completion 


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of the development thereof in accordance with the plans and specifications
therefore, will constitute a Project.

         "DOLLARS" and "$" mean United States Dollars.

         "DUFF & PHELPS" means Duff & Phelps Credit Rating Company.

         "EBITDA" means (i) the sum of net income, as reported by the Borrower
and its Subsidiaries on a consolidated basis in accordance with GAAP, plus
Interest Expense, depreciation, amortization and income tax (if any) expense,
minus (ii) the amount by which such net income from Investment Affiliates for
the period in question exceeds cash distributions received by Borrower or its
Subsidiaries from such Investment Affiliates during that period.

         "EFFECTIVE DATE" means each Borrowing Date and, if no Borrowing Date
has occurred in the preceding calendar month, the first Business Day of each
calendar month.

         "EFFECTIVE GROSS INCOME" means projected gross income, adjusted for
vacancies and collection losses, but in no event in excess of Gross Revenues.

         "ENVIRONMENTAL LAWS" means any and all Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any governmental authority having jurisdiction over the
Borrower, its Subsidiaries or Hot Investment Affiliates, or their respective
assets, and regulating or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or at any time hereafter
in effect, in each case to the extent the foregoing are applicable to the
operations of the Borrower, any Hot Investment Affiliate, or any Subsidiary or
any of their respective Real Estate or other Assets.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder from time to time.

         "EVENT OF DEFAULT" means any event set forth in ARTICLE X hereof.

         "EXTENSION NOTICE" is defined in SECTION 2.2(a) hereof.

         "FACILITY" means the unsecured revolving credit facility described in
SECTION 2.1 hereof.

         "FACILITY FEE" is defined in SECTION 2.8(b) hereof.

         "FACILITY LETTER OF CREDIT" means a Financial Letter of Credit or
Performance Letter of Credit issued hereunder.

         "FACILITY LETTER OF CREDIT FEE" is defined in SECTION 3.8 hereof.

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         "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 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.

         "FINANCIAL LETTER OF CREDIT" means any standby Letter of Credit which
represents an irrevocable obligation to the beneficiary on the part of the
Issuing Bank (i) to repay money borrowed by or advanced to or for the account of
the account party or (ii) to make any payment on account of any indebtedness
undertaken by the account party, in the event the account party fails to fulfill
its obligation to the beneficiary.

         "FITCH" means Fitch Investors Service, L.P.

         "FIXED CHARGES" means the sum of Debt Service (less the amount
specified in clause (c) of the definition thereof) and dividends payable on
preferred stock of the Borrower and its Subsidiaries.

         "FUNDED PERCENTAGE" means, with respect to any Lender at any time, a
percentage equal to a fraction the numerator of which is the amount of the
Aggregate Commitment actually disbursed and outstanding to Borrower by such
Lender at such time, and the denominator of which is the total amount of the
Aggregate Commitment disbursed and outstanding to Borrower by all of the Lenders
at such time.

         "GAAP" means generally accepted accounting principles in the United
States of America consistent with those utilized in preparing the audited
financial statements of the Borrower required hereunder, and applied
consistently from period to period.

         "GROSS REVENUES" means total revenues, calculated in accordance with 
GAAP.

         "GUARANTEE OBLIGATION" means as to any Person (the "GUARANTEEING
PERSON"), any obligation (determined without duplication) of the guaranteeing
person (or any other Person [including, without limitation, any bank under any
letter of credit] if the guaranteeing person has issued a reimbursement, counter
indemnity or similar obligation in favor of such other Person) guaranteeing or
in effect guaranteeing any Indebtedness, leases, dividends or other obligations
(the "PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in


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any manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
maximum stated amount of the primary obligation relating to such Guarantee
Obligation (or, if less, the maximum stated liability set forth in the
instrument embodying such Guarantee Obligation), PROVIDED, HOWEVER, that in the
absence of any such stated amount or stated liability, the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as reasonably determined by the
Borrower in good faith, subject to the Agent's approval.

         "GUARANTOR" means each Person that executes and delivers a Guaranty.

         "GUARANTY" means the Guaranty to be executed and delivered by each
wholly-owned Subsidiary of a Borrower which is not itself a Borrower or a Pledge
Subsidiary, in the form attached hereto as EXHIBIT D.

         "HEDGING AGREEMENTS" means interest rate protection agreements, foreign
currency exchange agreements, commodity purchase or option agreements or other
interest, exchange rate or commodity price hedging agreements.

         "HOT INVESTMENT AFFILIATE" means an Investment Affiliate for the
obligations of which any of Borrower or its Subsidiaries has personal liability,
as a general partner or otherwise.

         "IMMEDIATE FAMILY" means, with respect to any natural person, such
person's spouse, children (whether biological or legally adopted) and lineal
descendants (including lineal descendants of legally adopted children of such
person).

         "INDEBTEDNESS" of any Person at any date means, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade liabilities and other current accounts payable and accrued
expenses incurred in the ordinary course of business and payable in accordance
with customary practices), to the extent such obligations constitute
indebtedness for the purposes of GAAP, (c) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument, (d) all
obligations of such Person under financing leases and capital leases, (e) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person, (f) all Guarantee Obligations of such Person (excluding
in any calculation of consolidated indebtedness of the Borrower, 


                                       11
<PAGE>

Guarantee Obligations of the Borrower in respect of primary obligations of any
Subsidiary), (g) all reimbursement obligations of such Person for letters of
credit and other similar contingent liabilities, (h) all liabilities secured by
any Lien (other than Liens for taxes not yet due and payable) on any property
owned by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, (i) any repurchase obligation or liability of
such Person or any of its Subsidiaries with respect to accounts or notes
receivable sold by such Person or any of its Subsidiaries, (j) Senior Preferred
Stock, (k) such Person's pro rata share of recourse debt of Hot Investment
Affiliates and any recourse loans where such Person is liable as a general
partner or otherwise, (l) all obligations to make advances and contributions to
Investment Affiliates, and (m) to the extent not included in Interest Expense,
all obligations under any Hedging Agreements, whether contingent or otherwise
(but excluding the notional amounts thereunder).

         "INSOLVENCY" means insolvency as defined in the United States
Bankruptcy Code, as amended. "INSOLVENT" when used with respect to a Person,
shall refer to a Person who satisfies the definition of Insolvency.

         "INTEREST EXPENSE" means all interest expense of the Borrower and its
Subsidiaries determined in accordance with GAAP (including, without limitation,
interest on Subordinated Debt) plus capitalized interest not covered by an
interest reserve from a loan facility.

         "INTEREST PERIOD" means a LIBOR Interest Period.

         "INVESTMENT" means, as to any Person, any loan, advance, extension of
credit, deposit or contribution by such Person to any other Person, or any
investment in, or purchase or other acquisition of, the Capital Stock,
Investment Securities, notes, debentures or other securities of any other Person
made by such Person.

         "INVESTMENT AFFILIATE" means any Person in which the Borrower, directly
or indirectly, has an ownership interest, whose financial results are not
consolidated under GAAP with the financial results of the Borrower on the
consolidated financial statements of the Borrower.

         "INVESTMENT SECURITIES" means debt or equity investment instruments
other than Cash Equivalents, including, without limitation, commercial paper and
CMBS.

         "ISSUANCE DATE" is defined in SECTION 3.4(a)(2) hereof.

         "ISSUANCE NOTICE" is defined in SECTION 3.4(c) hereof.

         "ISSUING BANK" means, with respect to each Facility Letter of Credit,
the Lender which issues such Facility Letter of Credit. Unless BOFA otherwise
agrees in writing, BOFA shall be the sole Issuing Bank.

         "JOINDER " is defined in SECTION 8.13 hereof.

                                       12
<PAGE>

         "LAND PARTNERSHIP" means an Investment Affiliate engaged in the
business of acquiring, owning, managing and developing (with site improvements
only) raw land, and selling site-improved land.

         "LENDERS" means, collectively, BOFA and any Person executing this
Agreement in such capacity, or any Person which subsequently executes and
delivers any amendment hereto in such capacity and each of their respective
permitted successors and assigns. Where reference is made to "the Lenders" in
any Loan Document it shall be read to mean "all of the Lenders".

         "LENDING INSTALLATION" means any U.S. office of any Lender authorized
to make loans similar to the Advances described herein.

         "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 COLLATERAL ACCOUNT" is defined in SECTION 3.9 hereof.

         "LETTER OF CREDIT REQUEST" is defined in SECTION 3.4(a) hereof.

         "LEVERAGE RATIO" means the ratio of Consolidated Total Indebtedness,
excluding obligations that would otherwise be included pursuant to clause (m) of
the definition of "Indebtedness", to Consolidated Tangible Net Worth.

         "LIBOR ADVANCE" means an Advance that bears interest at the Adjusted
LIBOR Rate.

         "LIBOR INTEREST PERIOD" means, with respect to a LIBOR Advance, a
period of 30, 60, 90 or 180 days (to the extent that periods in excess of three
months are generally available from the Lenders), as selected in advance by the
Borrower.

         "LIBOR RATE" means, with respect to a LIBOR Advance for the relevant
LIBOR Interest Period, the per annum rate of interest, rounded upward if
necessary to the nearest 1/16th of one percent (0.0625), determined by the Agent
to be the rate at which deposits in immediately available funds in U.S. Dollars
would be offered by the BOFA's London branch to first-class banks in the London
interbank eurodollar market at approximately 11:00 a.m. London time two Business
Days prior to the first day of such LIBOR Interest Period, in the approximate
amount of the relevant LIBOR Advance and having a maturity approximately equal
to such LIBOR Interest Period.

         "LIEN" means any mortgage, pledge, hypothecation, deposit arrangement,
preference, priority, security interest, collateral assignment, statutory or
consensual lien, charge, restriction or other encumbrance of any kind
(including, without limitation, any repurchase agreement, any conditional sale
or other title retention agreement or lease in the nature thereof, any filing or
agreement to file a financing statement as debtor under the Uniform Commercial
Code on any property leased to any Person under a lease which is not in the
nature of a 


                                       13
<PAGE>

conditional sale or title retention agreement, or any subordination agreement in
favor of another Person). For purposes of this Agreement, a Lien on the Capital
Stock of any Person shall be deemed to constitute a Lien on the assets of said
Person.

         "LNR " means LNR Property Corporation.

         "LOAN" means, with respect to a Lender, such Lender's portion of any
Advance.

         "LOAN DOCUMENTS" means this Agreement, the Notes, each Guaranty, the
Pledge Agreement and any and all other agreements or instruments required and/or
provided to the Agent or any Lenders hereunder or thereunder, as any of the
foregoing may be amended from time to time.

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

         "MARGIN STOCK" has the meaning ascribed to it in Regulation U of the
Board of Governors of the Federal Reserve System.

         "MARKET PRICE PROXY" means, as to any Investment Security for any
fiscal period, an amount equal to the quotient of (i) the cash flow generated by
such Investment Security for such period (including, without limitation, fees
payable to Borrower for serving as special servicer, where the right so to serve
is attributable to such Investment Security), on an annualized basis (if such
period is less than a full fiscal year), divided by (ii) a factor varying with
the investment rating (or absence thereof) of such Investment Security as
follows: (a) for a rating of BB or better by S&P (or an equivalent Moody's
rating or Third Rating), 0.10; (b) for a rating of B or B- by S&P (or an
equivalent Moody's rating or Third Rating), 0.11; and (c) in the absence of any
rating or for a rating of CCC by S&P (or an equivalent Moody's rating or Third
Rating), 0.18 (provided, however, that the factors set forth in the foregoing
clause (ii) shall be subject to adjustment on a quarterly basis to reflect then
prevailing market conditions, as determined by the Agent in its sole
discretion). In the case of any Investment Security rated by both S&P and
Moody's and/or a Third Rating, the lower of the ratings shall govern and
control.

         "MATERIAL ADVERSE EFFECT" means, with respect to any matter, that such
matter, in the Agent's judgment, constitutes a Material Adverse Financial Change
or may (x) materially and adversely affect the business, properties, condition
or results of operations of the Credit Parties taken as a whole, or (y)
constitute a challenge to the validity or enforceability of any material
provision of any Loan Document against any obligor party thereto.

         "MATERIAL ADVERSE FINANCIAL CHANGE" shall be deemed to have occurred if
the Agent determines that a material adverse financial change has occurred which
could prevent timely 


                                       14
<PAGE>

repayment of any Advance hereunder or materially impair Borrower's or any other
Credit Party's ability to perform its obligations under any of the Loan
Documents.

         "MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde insulation.

         "MATURITY DATE" means December 31, 2000, subject to extension pursuant
to the terms and conditions of SECTION 2.2(a) hereof or such earlier date on
which the principal balance of the Facility and all other sums due in connection
with the Facility shall be due as a result of the acceleration of the Facility
or Borrower's termination of the Commitments pursuant to SECTION 2.2(b) hereof.

         "MONETARY DEFAULT" means any Default involving Borrower's failure to
pay any of the Obligations when due.

         "MOODY'S" means Moody's Investors Service, Inc. and its successors.

         "MORTGAGE LOAN" means any Indebtedness of any Person secured by a first
priority Lien on real property, which secured Indebtedness represents a loan,
advance or extension of credit (i) originated and owned by any of Borrower or
its wholly-owned Subsidiaries, or (ii) originated by another Person and
purchased or otherwise acquired in its entirety by any of Borrower or its
wholly-owned Subsidiaries.

         "MORTGAGE LOAN DEFAULT" means, as to any Mortgage Loan, any failure of
the obligor(s) (i) to pay any principal when the same becomes due and payable,
(ii) to pay any interest or other amount within 60 days after the same becomes
due and payable or (iii) to observe or perform any other material covenant or
agreement within 60 days after the date such observance or performance becomes
due.

         "MORTGAGE SUBSIDIARY" means a wholly-owned, single purpose Subsidiary
of LNR to be formed after the Agreement Execution Date solely for the purpose of
engaging in the mortgage banking business and incidental activities directly
related thereto, which Mortgage Subsidiary shall, upon formation, become a
Guarantor and deliver a Guaranty of the Obligations.

         "NET OPERATING INCOME" means, as to any Property for any fiscal period,
an amount equal to (a) rents and other revenues earned in the ordinary course
from such Property (including proceeds of rent loss insurance), less (b) all
expenses paid or accrued related to the ownership, operation or maintenance of
such Property, excluding capital expenditures, but including, without
limitation, taxes, assessments and the like, insurance, utilities, payroll
costs, maintenance, repair and landscaping expenses, management fees, leasing
commissions and on-site marketing expenses.

                                       15
<PAGE>

         "NON-USE FEE" is defined in SECTION 2.7 hereof.

         "NOTE" means (i) the promissory note payable to the order of each
Lender in the amount of such Lender's maximum Commitment in the form attached
hereto as EXHIBIT B-1 and (ii) the promissory note payable to the order of the
Swingline Lender in the amount of $20,000,000.00 in the form attached hereto as
EXHIBIT B-2 (collectively, the "NOTES").

         "OBLIGATIONS" means the Advances, the Facility Letter of Credit
Obligations and all accrued and unpaid fees and all other obligations of
Borrower to the Agent or any or all of the Lenders arising under this Agreement
or any of the other Loan Documents.

         "PARCEL" means each parcel of real property, together with any and all
improvements thereon, owned or leased in whole or in part or operated by the
Borrower, any Subsidiary or Investment Affiliate.

         "PARTICIPANTS" is defined in SECTION 13.2.1 hereof.

         "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

         "PERCENTAGE" means, with respect to each Lender, the applicable
percentage of the then-current Aggregate Commitment represented by such Lender's
then-current Commitment.

         "PERFORMANCE LETTER OF CREDIT" means any standby Letter of Credit which
represents an irrevocable obligation to the beneficiary on the part of the
Issuing Bank to make payment on account of any default by the account party in
the performance of a nonfinancial or commercial obligation.

         "PERMITTED LIENS" are defined in SECTION 9.6 hereof.

         "PERSON" means an individual, a corporation, a limited or general
partnership, an association, a joint venture, a limited liability company or any
other entity or organization, including a governmental or political subdivision
or an agent or instrumentality thereof.

         "PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA, whether or not terminated, as to which the Borrower or any member of the
Controlled Group may have any liability.

         "PLEDGE AGREEMENT" is defined in SECTION 8.13 hereof.

         "PLEDGE SUBSIDIARY" is defined in SECTION 8.13 hereof.

         "PORTFOLIO/SINGLE ASSET PARTNERSHIP" means an Investment Affiliate
primarily engaged in the business of acquiring, owning, managing and, as
appropriate, liquidating (i) portfolios of 


                                       16
<PAGE>

real estate related assets and (ii) single real estate related assets (other
than development land held by a Land Partnership).

         "PROJECT" means any parcel of real property wholly-owned in fee simple
of record by the Borrower, any wholly-owned Subsidiary or any Guarantor, or any
long term leasehold estate in any parcel of real estate wholly-owned by Borrower
or any wholly-owned Subsidiary pursuant to a legal, valid, binding and
enforceable ground lease of record, together with any and all improvements
thereon, which is fully improved for use and operated as a commercial or
industrial property (including, without limitation, multi-family residential,
office, retail and warehouse properties), and with respect to which a
certificate of occupancy or comparable authorization has been issued by the
applicable governmental authority.

         "PROPERTY" means each parcel of real property owned in fee simple of
record by Borrower or any Subsidiary, or any long term leasehold estate in any
parcel of real estate owned by Borrower or any Subsidiary pursuant to a legal,
valid, binding and enforceable ground lease of record, together with any and all
improvements thereon.

         "PURCHASERS" is defined in SECTION 13.3.1 hereof.

         "QUALIFIED OFFICER" means, with respect to any entity, the chief
financial officer, chief accounting officer or controller of such entity if it
is a corporation or of such entity's general partner if it is a partnership.

         "QUALIFIED PROPERTY" means a Project or Property that is a Stabilized
Project, a Completed Project or a Development Property.

         "RATE OPTION" means the Adjusted Base Rate or the Adjusted LIBOR Rate.
The Rate Option in effect on any date shall always be the Adjusted Base Rate
unless the Borrower has properly selected the Adjusted LIBOR Rate pursuant to
SECTION 2.11 hereof.

         "REAL ESTATE" means all Projects, Properties and Parcels.

         "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 or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

         "REIMBURSEMENT OBLIGATIONS" means at any time, the aggregate of the
Obligations of the Borrower to the Lenders, the Issuing Bank and the Agent in
respect of all unreimbursed payments or disbursements made by the Lenders, the
Issuing Bank 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 


                                       17
<PAGE>

ERISA that it be notified within 30 days of the occurrence of such event,
provided that a failure to meet 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 waivers in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.

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

         "S&P" means Standard & Poor's Ratings Group and its successors.

         "SENIOR PREFERRED STOCK" means the stated value of any preferred stock
issued by any Borrower which is not typical preferred stock but instead is both
(i) redeemable by the holders thereof on any fixed date or upon the occurrence
of any event and (ii) as to payment of dividends or amounts on liquidation,
either guaranteed by any direct or indirect Subsidiary of such Borrower or
secured by any property of such Borrower or any direct or indirect Subsidiary of
such Borrower.

         "SENIOR PREFERRED STOCK EXPENSE" means for any period for any Person,
the aggregate dividend payments due to the holders of Senior Preferred Stock of
such Person, whether payable in cash or in kind, and whether or not actually
paid during such period.

         "SOLVENT" means, as to any Person on a particular date, that such
Person (a) has capital sufficient to carry on its existing business and
transactions and all business and transactions in which it is about to engage,
(b) owns property having a value, both at fair valuation and at present fair
salable value, greater than the amount required to pay its probable liabilities
(including, without limitation, contingencies), (c) does not intend to or
believe that it will incur debts or liabilities beyond its ability to pay the
same as they mature and (d) is not Insolvent.

         "SPECIAL PURPOSE PROPERTY" means a Project or Property improved
primarily for a specialized single purpose use, such as, for example, a hotel,
parking, golf course, amusement park, restaurant or theater facility.

         "STABILIZED PROJECT" means a Project which:

         (a) has achieved the applicable occupancy level set forth in clauses
(i) through (iv) below, pursuant to arm's length leases with unaffiliated
tenants (for purposes of this definition, Lennar Corporation and its
Subsidiaries shall be deemed unaffiliated tenants) which are in possession and
paying rent in accordance with such leases, such occupancy level to be measured,
as of any date of determination, by the rentable square footage of such Project
subject to such leases during the immediately preceding calendar quarter
relative to the total rentable square footage of such Project:

             (i)    80 percent, if such Project is leased primarily for multi-
                    family residential use;

                                       18
<PAGE>

             (ii)   75 percent, if such Project is leased primarily for either
                    retail use or industrial use;

             (iii)  70 percent, if such Project is leased primarily for office
                    use; and

             (iv)   if such Project is leased primarily for a use other than one
                    of those specified in clauses (i) through (iii) above, that
                    level of occupancy that Borrower demonstrates to the Agent's
                    satisfaction to be the average level of occupancy for
                    projects of the same type as such Project within the real
                    estate market in which such Project is located;

         (b) is not the subject of any material architectural/engineering issue
or any material Environmental Law issue, as evidenced by a certification of
Borrower, and (c) is in material compliance with the applicable representations
and warranties in ARTICLE VI below. Notwithstanding anything to the contrary
contained in this Agreement, if the Agent determines that any Project or
Property theretofore identified by Borrower as a Qualified Property may be the
subject of a material architectural/engineering issue or a material
Environmental Law issue, the Agent may (i) require Borrower to furnish a current
detailed environmental assessment or architectural/engineering assessment, as
the case may be, and, if applicable, a written estimate of any remediation costs
from a qualified architect, engineer or contractor acceptable to the Agent, in
which event Borrower shall promptly obtain and furnish the same at its own
expense, and (ii) exclude any such Project or Property from the Qualified
Properties at its election.

         "STRATEGIC INVESTMENT" means (i) an Investment by one of Borrower or
one of its wholly-owned Subsidiaries in a Subsidiary or Investment Affiliate
engaged in a real estate related businesses, such as, without limitation,
providing management, financing (including, without limitation, making mezzanine
loans), development, credit enhancement and securitization services for real
estate, and (ii) a passive Investment by one of Borrower or one of its
wholly-owned Subsidiaries in a Subsidiary or an Investment Affiliate owning real
estate related assets.

         "SUBORDINATED DEBT" means Indebtedness of the Borrower and its
Subsidiaries that is contractually subordinated in right of payment and
otherwise to the Indebtedness under the Loan Documents, such subordination to be
on terms acceptable to the Agent.

         "SUBSIDIARY" means as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person, and provided such corporation, partnership or other entity is
consolidated with such Person for financial reporting purposes under GAAP.

                                       19
<PAGE>

         "SWINGLINE ADVANCES" means, as of any date, collectively, all Swingline
Loans then outstanding under this Facility.

         "SWINGLINE COMMITMENT" means the obligation of the Swingline Lender to
make Swingline Loans not exceeding $20,000,000.

         "SWINGLINE LENDER" means BOFA, in its capacity as a Lender.

         "SWINGLINE LOAN" means a Loan made by the Swingline Lender under the
special availability provisions described in SECTIONS 2.16 hereof.

         "TERMINATION NOTICE" is defined in SECTION 2.2(b) hereof.

         "THIRD RATING" is defined in SECTION 2.6 hereof.

         "TOTAL LIABILITIES" means all Indebtedness plus all other GAAP
liabilities of the Borrower and its Subsidiaries.

         "TRANSFEREE" is defined in SECTION 13.4 hereof.

         "UNENCUMBERED ASSET" means any Project or Property which, as of any
date of determination, (a) is not subject to any Liens other than Permitted
Liens of the types described in clauses (i) through (v) of SECTION 9.6 hereof
and Liens in favor of the Lenders securing this Facility, (b) is not subject to
any agreement (including any agreement governing Indebtedness incurred in order
to finance or refinance the acquisition of such asset) which prohibits or limits
the ability of the Borrower, or its Subsidiaries, as the case may be, to create,
incur, assume or suffer to exist any Lien upon any assets or Capital Stock of
the Borrower or any of its Subsidiaries, and (c) is not subject to any agreement
(including any agreement governing Indebtedness incurred in order to finance or
refinance the acquisition of such asset) which (i) entitles any Person to the
benefit of any Lien (but excluding Liens in favor of Lenders securing this
Facility and other Permitted Liens described in clause (a) above) on any assets
or Capital Stock of the Borrower or any of its Subsidiaries or (ii) would
entitle any Person to the benefit of any Lien (but excluding liens in favor of
Lenders securing this Facility and other Permitted Liens described in clause (a)
above) on such assets or Capital Stock upon the occurrence of any contingency
(including, without limitation, pursuant to an "equal and ratable" clause).
Notwithstanding the foregoing, no Project or Property of a Subsidiary shall be
deemed to be an Unencumbered Asset unless both such Project or Property and all
Capital Stock of such Subsidiary are unencumbered by any Lien (other than a
Permitted Lien described in clause (a) above and Liens in favor of the Lenders
securing this Facility).

         The foregoing definitions shall be equally applicable to both the
singular and the plural forms of the defined terms.

         1.2 FINANCIAL STANDARDS. All financial and accounting terms used and
not otherwise defined herein shall be construed in accordance with GAAP. All
financial and accounting 


                                       20
<PAGE>

computations and determinations required of a Person under this Agreement shall
be made, and all financial information required under this Agreement shall be
prepared, in accordance with GAAP, except, in each case, as otherwise set forth
herein.

                                   ARTICLE II

                                  THE FACILITY

         2.1 THE FACILITY.

             (a) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower contained herein,
Lenders agree to make Advances through the Agent to Borrower from time to time
prior to the Maturity Date, PROVIDED THAT the making of any such Advance will
not cause the then Allocated Facility Amount to exceed the then-current
Aggregate Commitment. The Advances may be ratable Base Rate Advances, ratable
LIBOR Advances or non-pro rata Swingline Loans. Except as provided in SECTIONS
2.16 and 12.16 hereof, each Lender shall be required to fund only its Percentage
of each such Advance and no Lender will be required to fund any amounts which
when aggregated with such Lender's Percentage of (i) all other Advances then
outstanding, (ii) all Swingline Advances and (iii) all Facility Letter of Credit
Obligations would exceed such Lender's then-current Commitment. This facility
("FACILITY") is a revolving credit facility and, subject to the provisions of
this Agreement, Borrower may request Advances hereunder, repay such Advances and
reborrow Advances at any time prior to the Maturity Date.

             (b) The Facility created by this Agreement, and the Commitment of
each Lender to lend hereunder, shall terminate on the Maturity Date, unless
sooner terminated in accordance with the terms of this Agreement.

             (c) In no event shall the Aggregate Commitment exceed Two Hundred
Million Dollars ($200,000,000).

         2.2 PRINCIPAL PAYMENTS, EXTENSION OPTION AND EARLY TERMINATION OPTION.

             (a) Any outstanding Advances and all other unpaid Obligations shall
be paid in full by the Borrower on the Maturity Date. The Maturity Date can be
extended for a single extension period of one year upon notice to the Agent not
later than 60 days prior to the Maturity Date and not earlier than 90 days prior
to the Maturity Date (an "EXTENSION NOTICE"), if, but only if (i) no Default has
occurred and is continuing at the time of the Extension Notice or at the time of
the Maturity Date and (ii) Borrower pays an extension fee to the Agent for the
account of the Lenders equal to Two Hundred and Fifty Thousand Dollars
($250,000) on or before the Maturity Date. If the Borrower timely gives an
Extension Notice, the Agent shall promptly notify the Lenders of the extension
of the Maturity Date, subject to satisfaction of the requirements set forth in
clauses (i) and (ii) above.

                                       21
<PAGE>

             (b) Borrower may terminate the Commitments of the Lenders upon
notice to the Agent not later than 60 days prior to the effective date of such
termination and not more than 90 days prior thereto (a "TERMINATION NOTICE"),
if, but only if, (i) no Default has occurred and is continuing at the time of
the Termination Notice or at the time of the effective date of such termination
specified therein, and (ii) Borrower pays all of the Obligations in full on or
before such effective date, including, without limitation, all break funding
costs and all fees and other amounts accrued but not yet payable hereunder as of
the date of such payment. If the Borrower timely gives a Termination Notice, the
Agent shall promptly notify the Lenders of the termination of their Commitments
on the date specified in the Termination Notice, subject to satisfaction of the
requirements set forth in clauses (i) and (ii) above.

         2.3 REQUESTS FOR ADVANCES; RESPONSIBILITY FOR ADVANCES. Ratable
Advances funded by the Lenders shall be made available to Borrower by Agent in
accordance with SECTION 2.1(a) and SECTION 2. 11(a) hereof. The obligation of
each Lender to fund its Percentage of each ratable Advance shall be several and
not joint or joint and several.

         2.4 EVIDENCE OF CREDIT EXTENSIONS. The Advances of each Lender
outstanding at any time shall be evidenced by the Notes. Each Note executed by
the Borrower shall be in a maximum principal amount equal to each Lender's
Percentage of the Aggregate Commitment. Each Lender shall record Advances and
principal payments thereof on the schedule attached to its Note or, at its
option, in its records, and each Lender's record thereof shall be conclusive
absent Borrower furnishing to such Lender conclusive and irrefutable evidence of
an error made by such Lender with respect to that Lender's records.
Notwithstanding the foregoing, the failure to make, or an error in making, a
notation with respect to any Advance shall not limit or otherwise affect the
obligations of Borrower hereunder or under the Notes to pay the amount actually
owed by Borrower to Lenders.

         2.5 RATABLE AND NON-PRO RATA LOANS. Each Advance hereunder shall
consist of Loans made from the several Lenders ratably in proportion to their
Percentages, except for Swingline Loans which shall be made by the Swingline
Lender in accordance with SECTION 2.16. The ratable Advances may be Base Rate
Advances, LIBOR Advances or a combination thereof selected by the Borrower in
accordance with SECTIONS 2.10 and 2.11.

         2.6 APPLICABLE MARGINS. The Applicable Margin (if any) over the then
Base Rate or LIBOR Rate, as applicable to the Advance(s) in question, shall vary
from time to time in accordance with (i) Borrower's Leverage Ratio, which
Leverage Ratio shall be computed, for purposes of this SECTION 2.6 only, without
regard to any Guarantee Obligations with respect to Indebtedness of Lennar Land
Partners, and (ii) LNR's long-term unsecured, non-credit enhanced debt ratings,
if any, by (x) Moody's, (y) S&P and/or (z) Fitch, Duff & Phelps or another
nationally recognized rating agency acceptable to the Agent (a "THIRD RATING").
The Applicable Margin shall be adjusted effective as of the next Business Day
following any change in LNR's Moody's debt rating or S&P debt rating or Third
Rating, as the case may be, or any change in Borrower's Leverage Ratio, in each
case as established by Borrower to the Agent's satisfaction. LNR shall notify
the Agent in writing promptly after becoming aware of any change in any of its
debt ratings. In order to qualify for an Applicable Margin based upon 


                                       22
<PAGE>

a debt rating, LNR shall obtain and maintain debt ratings from at least two (2)
rating agencies identified above, one of which must be Moody's or S&P so long as
such Persons are in the business of providing debt ratings for the real estate
industry; PROVIDED that until such time as LNR obtains two debt ratings or if
LNR fails to maintain at least two debt ratings, the Applicable Margin shall be
based upon an S&P rating of less than BBB- and a Moody's rating of less than
Baa3 in the table below. If at any time of determination of the Applicable
Margin, LNR has then current debt ratings from two (2) or more rating agencies,
then the Applicable Margin shall be based on the lowest of such ratings. The
applicable debt ratings and Leverage Ratios, and the Applicable Margins are set
forth in the following table:
<TABLE>
<CAPTION>
                                                              APPLICABLE                APPLICABLE        
                                                             MARGIN-LIBOR               MARGIN-BASE  
DEBT RATING                   LEVERAGE RATIO                    ADVANCES               RATE ADVANCES       NON-USE FEE
-----------                   --------------                 ------------              -------------       -----------
<S>                           <C>                              <C>                      <C>                 <C> 
Equal to or higher than       less than 1.0:1                  1 percent                0 percent         0.1375 percent
BBB- (S&P) Baa3 (Moody's)
or equivalent Third Rating

No rating or less than BBB-   less than 1.0:1                  1.1 percent              0 percent         0.1425 percent
(S&P), Baa3 (Moody's) or
equivalent Third Rating

                              1.0:1 or greater but             1.25 percent             0 percent         0.1875 percent
                              less than 1.5:1

                              1.5:1 or greater but             1.6 percent              0.1 percent       0.23 percent
                              less than 1.75:1

                              1.75:1 or greater but            1.75 percent             0.2 percent       0.275 percent
                              not to exceed 2.0:1
</TABLE>

         2.7 UNUSED COMMITMENT FEE. The Borrower agrees to pay to the Agent for
the account of each Lender an unused commitment fee (the "NON-USE Fee") from the
Agreement Execution Date to and including the Maturity Date, calculated at the
applicable rate per annum set forth in the table appearing in SECTION 2.6 hereof
on the daily unborrowed portion of such Lender's Commitment (which is equal to
the difference between (a) such Lender's Commitment on such day and (b) the then
outstanding Loans owed to such Lender plus the Lender's Percentage of any
outstanding and undrawn Facility Letters of Credit) payable quarterly in arrears
on the first day of each calendar quarter hereafter and on the Maturity Date.
Amounts outstanding under the Swingline Loans shall be considered part of the
available unborrowed portion of the Facility for purposes of computing the
Non-Use Fee. 


                                       23
<PAGE>

Notwithstanding the foregoing, all accrued Commitment Fees shall be payable on
the effective date of any termination of the obligations of the Lenders to make
Loans hereunder.

         2.8  OTHER FEES.

              (a) The Borrower shall pay all fees payable to the Agent pursuant
to the Borrower's letter agreements with it.

              (b) The Borrower shall pay a one time commitment fee ("FACILITY
FEE") to the Agent for the account of the Lenders in the amount of $600,000, to
be shared among the Lenders based on their respective Percentages. The portion
of the Facility Fee allocable to each Lender shall be paid by Borrower on the
date such Lender becomes a party to this Agreement.

         2.9  MINIMUM AMOUNT OF EACH ADVANCE. Each LIBOR Advance shall be in the
minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Base Rate Advance shall be in the minimum amount of $500,000
(and in multiples of $100,000 if in excess thereof), provided, however, that any
Base Rate Advance may be in the amount of the unused Aggregate Commitment.

         2.10 INTEREST.

              (a) The outstanding principal balance under the Notes shall bear
interest from time to time at a rate per annum equal to:

                  (i)  the Adjusted Base Rate; or

                  (ii) at the election of Borrower with respect to all or
              portions of the Obligations, the Adjusted LIBOR Rate.

              (b) All interest shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest accrued on each Advance shall be payable
in arrears on the first day of each calendar month, commencing with the first
such date to occur after the date hereof, and the Maturity Date. Interest shall
not be payable for the day of any payment on the amount paid if payment is
received by Agent prior to noon (Chicago time). If any payment of principal or
interest under the Notes shall become due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a payment of principal, such extension of time shall be included in computing
interest due in connection with such payment.

         2.11 SELECTION OF RATE OPTIONS AND LIBOR INTEREST PERIODS.

              (a) Borrower, from time to time, may select the Rate Option and,
in the case of each LIBOR Advance, the commencement date (which shall be a
Business Day) and the length of the LIBOR Interest Period applicable to each
LIBOR Advance. Borrower shall give Agent irrevocable notice (a "BORROWING
NOTICE" not later than 11:00 a.m. (Chicago time) (i) at 


                                       24
<PAGE>

least one Business Day prior to a Base Rate Advance, (ii) at least three (3) 
Business Days prior to a ratable LIBOR Advance, and (iii) not later than 
11:00 a.m. (Chicago time) on the Borrowing Date for each Swingline Loan, 
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

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

         The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in SECTION 5.2, if required, and otherwise
comply with the conditions set forth in SECTION 5.2 for Advances. Agent shall
use reasonable efforts to provide each Lender by facsimile with a copy of each
Borrowing Notice and compliance certificate on the same Business Day it is
received.

         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. Agent will promptly make the funds so received from the
Lenders available to the Borrower.

              (b) Agent shall, as soon as practicable after receipt of a
Borrowing Notice requesting a LIBOR Advance, determine the Adjusted LIBOR Rate
applicable to the requested ratable LIBOR Advance and inform Borrower and
Lenders of the same. Each determination of the Adjusted LIBOR Rate by Agent
shall be conclusive and binding upon Borrower in the absence of manifest error.

              (c) If Borrower shall prepay a LIBOR Advance other than on the
last day of the LIBOR Interest Period applicable thereto, Borrower shall be
responsible to pay all amounts due to Lenders as required by SECTION 4.4 hereof.

              (d) As of the end of each LIBOR Interest Period selected for a
ratable LIBOR Advance, the interest rate on the LIBOR Advance will become the
Adjusted Base Rate, unless Borrower has once again selected a LIBOR Interest
Period in accordance with the timing and procedures set forth in SECTION
2.11(g).

              (e) The right of Borrower to select the Adjusted LIBOR Rate for an
Advance pursuant to this Agreement is subject to the availability to Lenders of
a similar option. If Agent determines that (i) deposits of Dollars in an amount
approximately equal to the LIBOR Advance for which the Borrower wishes to select
the Adjusted LIBOR Rate are not generally available at such time in the London
interbank eurodollar market, or (ii) the rate at which the deposits described in
subsection (i) herein are being offered will not adequately and 


                                       25
<PAGE>

fairly reflect the costs to Lenders of maintaining an Adjusted LIBOR Rate on an
Advance or of funding the same in such market for such LIBOR Interest Period, or
(iii) reasonable means do not exist for determining an Adjusted LIBOR Rate, or
(iv) the Adjusted LIBOR Rate would be in excess of the maximum interest rate
which Borrower may by law pay, then in any of such events, Agent shall so notify
Borrower and Lenders and such Advance shall bear interest at the Adjusted Base
Rate.

              (f) In no event may Borrower elect a LIBOR Interest Period which
would extend beyond the Maturity Date. In no event may Borrower have more than
seven (7) different LIBOR Interest Periods for LIBOR Advances outstanding at any
one time.

              (g) CONVERSION AND CONTINUATION.

                  (i) Borrower may elect from time to time, subject to the other
              provisions of this SECTION 2.11, to convert all or any part of a
              ratable Advance into any other type of Advance; provided that any
              conversion of a ratable LIBOR Advance shall be made on, and only
              on, the last day of the LIBOR Interest Period applicable thereto.

                  (ii) Base Rate Advances shall continue as Base Rate Advances
              unless and until such Base Rate Advances are converted into
              ratable LIBOR Advances pursuant to a Conversion/Continuation
              Notice from Borrower in accordance with SECTION 2.11(g)(iv).
              Ratable LIBOR Advances shall continue until the end of the then
              applicable LIBOR Interest Period therefor, at which time each such
              Advance shall be automatically converted into an Base Rate Advance
              unless the Borrower shall have given the Agent a
              Conversion/Continuation Notice in accordance with SECTION
              2.11(g)(iv) requesting that, at the end of such LIBOR Interest
              Period, such Advance continue as an Advance of such type for an
              additional LIBOR Interest Period of the same or a different
              duration.

                  (iii) Notwithstanding anything to the contrary contained in
              this SECTION 2, no Advance may be converted into a LIBOR Advance
              or continued (following the end of a LIBOR Interest Period) as a
              LIBOR Advance when any Monetary Default or Event of Default has
              occurred and is continuing.

                  (iv) The Borrower shall give the Agent irrevocable notice (a
              "CONVERSION/CONTINUATION NOTICE") of each conversion of an Advance
              or continuation of a LIBOR Advance not later than 11:00 a.m.
              (Chicago time) on the Business Day immediately preceding the date
              of the requested conversion, in the case of a conversion into a
              Base Rate Advance, or 11:00 a.m. (Chicago time) at least three (3)
              Business Days prior to the date of the requested conversion or
              continuation, in the case of a conversion into or continuation of
              a ratable LIBOR Advance, specifying: (1) the requested date (which
              shall be a Business Day) of such conversion or continuation; (2)
              the amount and type of the Advance to be converted or continued;
              and (3) the amounts and type(s) of 


                                       26
<PAGE>

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

         2.12 METHOD OF PAYMENT. All payments of the Obligations hereunder shall
be made, without set-off, deduction, or counterclaim, in immediately available
funds by wire transfer to Agent's account designated in writing from time to
time by notice to Borrower or, in the absence of such notice, to Agent at its
address specified herein, or at any other Lending Installation of Agent
specified in writing by Agent to Borrower, by noon (local time) on the date when
due and shall be applied ratably by Agent among the Lenders, except as otherwise
provided herein. Each payment delivered to Agent for the account of any Lender
shall be delivered promptly by Agent to such Lender in the same type of funds
that Agent received at its address specified herein or at any Lending
Installation specified in a notice received by Agent from such Lender. If Agent
shall not have received payment as provided above, Agent is hereby authorized to
charge any accounts of Borrower maintained with BOFA for each payment of
principal, interest and fees as it becomes due hereunder; provided, however,
that Agent shall first exhaust any funds on deposit in LNR's Account No.
1420804858 with BOFA before having recourse to any other such accounts.

         2.13 DEFAULT. Notwithstanding the foregoing and notwithstanding SECTION
3.7(c) hereof to the contrary, during the continuance of a Monetary Default, any
other material Default or any Event of Default, Borrower shall not have the
right to request a LIBOR Advance, continue or select a new LIBOR Interest Period
for an existing ratable LIBOR Advance, convert any Base Rate Advance to a
ratable LIBOR Advance or request (or be deemed to request) a Base Rate Advance
to satisfy any Reimbursement Obligations with respect to Facility Letter of
Credit. During the continuance of a Monetary Default, any other material
Default, or any Event of Default, outstanding Advances shall bear interest at
the applicable Default Rates until such Monetary Default, other material Default
or Event of Default ceases to exist or the Obligations are paid in full.

         2.14 LENDING INSTALLATIONS. Each Lender may book its Loans 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 notice to
the Agent and Borrower, designate a Lending Installation through which Loans
will be made by it and for whose account payments are to be made.

         2.15 NON-RECEIPT OF FUNDS BY AGENT. Unless Borrower or a Lender, as the
case may be, has notified Agent prior to the date on which it is scheduled to
make payment to Agent of (i) in the case of a Lender, an Advance, or (ii) in the
case of Borrower, a payment of principal, interest or fees to the Agent for the
account of the Agent or of any or all of the Lenders, that it does not intend to
make such payment (which notice shall not affect the obligations of Borrower or
any Lender, as the case may be, hereunder), and such notice has been received by
Administrative Agent, Agent may assume that such payment has been or will be
made when due. Agent may, but shall not be obligated to, make the amount of such
payment available to 


                                       27
<PAGE>

the intended recipient in reliance upon such assumption. If such Lender or
Borrower, as the case may be, has not in fact made such payment to Agent, the
recipient of such payment shall, on demand by Agent, repay to 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 Agent
until the date Agent recovers such amount at a rate per annum equal to (i) in
the case of payment by a Lender, the Federal Funds Effective Rate (as determined
by Agent) for such day or (ii) in the case of payment by Borrower, the interest
rate applicable to the relevant Advance.

         2.16 SWINGLINE LOANS. In addition to the other options available to
Borrower hereunder, the amount of the Swingline Commitment shall be available
for Swingline Loans subject to the following terms and conditions. Swingline
Loans shall be made available for same day borrowings provided that notice is
given in accordance with SECTION 2.11 hereof. All Swingline Loans shall bear
interest at the Adjusted Base Rate and shall be deemed to be Base Rate Advances.
In no event shall the Swingline Lender be required to fund a Swingline Loan if
it would increase the total aggregate outstanding Loans by Swingline Lender
hereunder plus its Percentage of Facility Letter of Credit Obligations to an
amount in excess of its Commitment. Upon request of the Swingline Lender made to
all the Lenders, each Lender irrevocably agrees to purchase its Percentage of
any Swingline Loan made by the Swingline Lender regardless of whether the
conditions for disbursement are satisfied at the time of such purchase,
including the existence of an Event of Default hereunder, provided no Lender
shall be required to have total outstanding Loans plus its Percentage of
Facility Letters of Credit Obligations in an amount greater than its Commitment.
Such purchase shall take place on the date of the request by Swingline Lender so
long as such request is made by noon (Chicago time), otherwise on the next
Business Day following such request. All requests for purchase shall be in
writing. From and after the date it is so purchased, each such Swingline Loan
shall, to the extent purchased, (i) be treated as a Loan made by the purchasing
Lenders and not by the selling Lender for all purposes under this Agreement and
the payment of the purchase price by a Lender shall be deemed to be the making
of a Loan by such Lender and shall constitute outstanding principal under such
Lender's Note, and (ii) no longer be considered a Swingline Loan, except that
all interest accruing on or attributable to such Swingline Loan for the period
prior to the date of such purchase shall be paid when due by the Borrower to the
Agent for the benefit of the Swingline Lender, but shall be considered a Base
Rate Advance by each such Lender and all interest accruing on or attributable to
such Loans for the period from and after the date of such purchase shall be paid
when due by the Borrower to the Agent for the benefit of the purchasing Lenders.
If prior to purchasing its Percentage of a Swingline Loan one of the events
described in SECTION 10.10 shall have occurred and such event prevents the
consummation of the purchase contemplated by the preceding provisions, each
Lender will purchase an undivided participating interest in the outstanding
Swingline Loan in an amount equal to its Percentage of such Swingline Loan. From
and after the date of each Lender's purchase of its participating interest in a
Swingline Loan, if the Swingline Lender receives any payment on account thereof,
the Swingline Lender will distribute to such Lender its participating interest
in such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
was received by the Swingline Lender and is required to be 


                                       28
<PAGE>

returned to the Borrower, each Lender will return to the Swingline Lender any
portion thereof previously distributed by the Swingline Lender to it. If any
Lender fails to so purchase its Percentage of any Swingline Loan, such Lender
shall be deemed to be a Defaulting Lender hereunder. No Swingline Loan shall be
outstanding for more than five (5) Business Days at a time.

         2.17 APPLICATION OF MONEYS RECEIVED. All moneys collected or received
by the Agent on account of the Facility directly or indirectly, shall be applied
in the following order of priority:

                  (i) to the payment of all expenses then due and payable by
              Borrower hereunder, including, without limitation, costs incurred
              in the collection of such moneys;

                  (ii) to the reimbursement of any yield protection due to any
              of the Lenders in accordance with SECTION 4.1;

                  (iii) to the payment of all indemnity obligations then due and
              payable by Borrower hereunder;

                  (iv) to payment of all fees then due to the Agent;

                  (v) the payment of any fee due pursuant to SECTION 3.8(b) in
              connection with the issuance of a Facility Letter of Credit to the
              Issuing Bank, to the payment of the Non-Use Fee, Facility Fee and
              Facility Letter of Credit Fee to the Lenders, if then due, and to
              the payment of all fees due hereunder;

                  (vi) to payment of the full amount of interest and principal
              on the Swingline Loans;

                  (vii) first to interest until paid in full and then to
              principal for all Lenders (other than Defaulting Lenders) in
              accordance with the respective Funded Percentages of the Lenders;

                  (viii) any other sums due to the Agent or any Lender under any
              of the Loan Documents; and

                  (ix) to the payment of any sums due to each Defaulting Lender
              as their respective Percentages appear (provided that Agent shall
              have the right to set-off against such sums any amounts due from
              such Defaulting Lender).

                                   ARTICLE III

                        THE LETTER OF CREDIT SUBFACILITY

                                       29
<PAGE>

         3.1 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, the Issuing Bank hereby agrees to issue for the
account of Borrower one or more Facility Letters of Credit in accordance with
this ARTICLE III, from time to time during the period commencing on the
Agreement Execution Date and ending on a date one Business Day prior to the
Maturity Date.

         3.2 TYPES AND AMOUNTS. The Issuing Bank shall not have any obligation 
to:

                  (i) issue any Facility Letter of Credit if the aggregate
             maximum amount then available for drawing under Letters of Credit
             issued by such Issuing Bank, after giving effect to the Facility
             Letter of Credit requested hereunder, shall exceed any limit
             imposed by law or regulation upon such Issuing Bank;

                  (ii) issue any Facility Letter of Credit if, after giving
             effect thereto, either (1) the then applicable Allocated Facility
             Amount would exceed the then current Aggregate Commitment, or (2)
             the Facility Letter of Credit Obligations would exceed $75,000,000;

                  (iii) issue any Facility Letter of Credit having an expiration
             date, or containing an extension provision to extend such date, to
             a date which is after the Business Day immediately preceding the
             Maturity Date; or

                  (iv) issue any Facility Letter of Credit having an expiration
             date, or containing an extension provision to extend such date, to
             a date which is more than twelve (12) months after the date of its
             issuance.

         3.3 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in ARTICLE V hereof, the obligation of the Issuing Bank to
issue any Facility Letter of Credit is subject to the satisfaction in full of
the following conditions:

                  (i) the Borrower shall have delivered to the Issuing Bank at
             such times and in such manner as the Issuing Bank may prescribe
             such documents and materials (including, without limitation, an
             application and reimbursement agreement on Issuing Bank's standard
             forms) as the Issuing Bank may require (it being understood that if
             any inconsistency exists between such documents and the Loan
             Documents, the terms of the Loan Documents shall control) and the
             proposed Facility Letter of Credit shall be reasonably satisfactory
             to the Issuing Bank as to form and content;

                  (ii) 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 the Issuing Bank from issuing the
             requested Facility Letter of Credit and no law, rule or regulation
             applicable to the Issuing Bank and no request or 


                                       30
<PAGE>

             directive (whether or not having the force of law) from any
             governmental authority with jurisdiction over the Issuing Bank
             shall prohibit or request that the Issuing Bank refrain from the
             issuance of Letters of Credit generally or the issuance of the
             requested Facility Letter of Credit in particular; and

                 (iii) there shall not exist any Default or Event of Default.

         3.4 PROCEDURE FOR ISSUANCE OF FACILITY LETTERS OF CREDIT.

             (a) Borrower shall give the Issuing Bank and the Agent at least
three (3) Business Days' prior written notice of any requested issuance of a
Facility Letter of Credit under this Agreement (a "LETTER OF CREDIT REQUEST"), a
copy of which shall be sent promptly by the Agent to all Lenders (except that,
in lieu of such written notice, the Borrower may give the Issuing Bank and the
Agent telephonic notice of such request if confirmed in writing by delivery to
the Issuing Bank and the Agent (i) immediately a telecopy of the written notice
required hereunder which has been signed by an authorized officer, and (ii)
promptly (but in no event later than the requested date of issuance) of the
written notice required hereunder containing the original signature of an
authorized officer); such notice shall be irrevocable and shall specify:

         (1)  the stated amount of the Facility Letter of Credit requested
              (which stated amount shall not be less than $10,000);

         (2)  the effective date (which day shall be a Business Day) of issuance
              of such requested Facility Letter of Credit (the "ISSUANCE DATE");

         (3)  the date on which such requested Facility Letter of Credit is to
              expire;

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

         (5)  the full name and address of the Person for whose benefit the
              requested Facility Letter of Credit is to be issued; and

         (6)  any special language required to be included in the Facility
              Letter of Credit.

At the time such request is made, the Borrower shall also provide the Agent and
the Issuing Bank with a copy of any particular form on which Borrower is
requesting that the Facility Letter of Credit be issued. Such notice, to be
effective, must be received by such Issuing Bank and the Agent not later than
noon (Chicago time) on the last Business Day on which notice can be given under
this SECTION 3.4(a).

             (b) Subject to the terms and conditions of this ARTICLE III and
provided that the applicable conditions set forth in ARTICLE V hereof have been
satisfied, the Issuing Bank shall, on the Issuance Date, issue a Facility Letter
of Credit on behalf of the Borrower in accordance with the Letter of Credit


                                       31
<PAGE>

Request and the Issuing Bank's usual and customary business practices unless the
Issuing Bank has actually received (i) written notice from the Borrower
specifically revoking the Letter of Credit Request with respect to such Facility
Letter of Credit, (ii) written notice from a Lender, which complies with the
provisions of SECTION 3.6(a), or (iii) written or telephonic notice from the
Agent stating that the issuance of such Facility Letter of Credit would violate
SECTION 3.2.

             (c) The Issuing Bank shall give the Agent (who shall promptly
notify Lenders) and the Borrower written or telecopy notice, or telephonic
notice confirmed promptly thereafter in writing, of the issuance of a Facility
Letter of Credit (the "ISSUANCE NOTICE").

             (d) The Issuing Bank shall not extend or amend any Facility Letter
of Credit unless the requirements of this SECTION 3.4 are met as though a new
Facility Letter of Credit was being requested and issued.

         SECTION 3.5 REIMBURSEMENT OBLIGATIONS: DUTIES OF ISSUING BANK.

                (a) The Issuing Bank shall promptly notify the Borrower and
the Agent (who shall promptly notify Lenders) of any draw under a Facility
Letter of Credit. Any such draw shall immediately be reimbursed (by Advances or
otherwise) in accordance with SECTION 3.7 hereof.

         (b) The Borrower and each Lender irrevocably authorizes the Issuing
Bank to honor draws on each Facility Letter of Credit by the beneficiary thereof
in accordance with its terms. Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Facility Letter of Credit, if taken
or omitted in the absence of willful misconduct or gross negligence, shall not
(i) put the Issuing Bank under any resulting liability to Borrower or any
Lender, (ii) relieve Borrower of any of its obligations hereunder to the Issuing
Bank or the Lenders or (iii) provided that such Lender has not given a notice
contemplated by SECTION 3.6(a) that continues in full force and effect, relieve
any Lender of its obligations hereunder to the Issuing Bank. In determining
whether to pay under any Facility Letter of Credit, the Issuing Bank shall have
no obligation relative to the Lenders or Borrower other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered, and that they appear to comply on their face with the
requirements of such Letter of Credit. Without limiting the generality of the
foregoing, the Agent and the Issuing Bank shall be entitled to rely, and shall
be fully protected in relying upon, any Facility Letter of Credit, draft,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Agent or the
Issuing Bank. The Agent and the Issuing Bank shall in all cases be fully
protected by the Lenders in acting, or in refraining from acting, in accordance
with a request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders and all future
holders of the Notes.

         3.6 PARTICIPATION.

                                       32
<PAGE>

             (a) Immediately upon issuance by the Issuing Bank of any Facility
Letter of Credit in accordance with the procedures set forth in SECTION 3.4,
each Lender shall be deemed to have irrevocably and unconditionally purchased
and received from the Issuing Bank, without recourse, representation or
warranty, an undivided interest and participation equal to such Lender's
Percentage in such Facility Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto) and all related rights
hereunder and under the Guaranty and other Loan Documents; PROVIDED that a
Letter of Credit issued by the Issuing Bank shall not be deemed to be a Facility
Letter of Credit for purposes of this SECTION 3.6 if the Issuing Bank 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 SECTION 5.2 is not then satisfied, and in the event the
Issuing Bank 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
the Issuing Bank receives a notice from the Agent that such condition has been
effectively waived in accordance with the provisions of this Agreement. Each
Lender's obligation to make further Loans to Borrower (other than any payments
such Lender is required to make under subparagraph (b) below) or to purchase an
interest from the Issuing Bank in any subsequent Facility Letters of Credit
issued by the Issuing Bank on behalf of Borrower shall be reduced by such
Lender's Percentage of the Facility Letter of Credit Obligations.

             (b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
the Issuing Bank pursuant to SECTION 3.7 hereof, the Issuing Bank 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 the Issuing Bank the amount of such Lender's Percentage of the unreimbursed
amount of such payment, and the Agent shall promptly pay such amount to the
Issuing Bank. A Lender's payments of its Percentage of such Reimbursement
Obligation as aforesaid shall be deemed to be a Loan by such Lender and shall
constitute outstanding principal under such Lender's Note. The failure of any
Lender to make available to the Agent for the account of the Issuing Bank its
Percentage of the unreimbursed amount of any such payment shall not relieve any
other Lender of its obligation hereunder to make available to the Agent for the
account of such Issuing Bank its Percentage 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 Percentage of the unreimbursed amount of any payment on the date such
payment is to be made. Any Lender which fails to make any payment required
pursuant to this SECTION 3.6(b) shall be deemed to be a Defaulting Lender
hereunder.

             (c) Whenever the Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, the Issuing Bank 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 Percentage thereof.

                                       33
<PAGE>

             (d) Upon the request of the Agent or any Lender, the Issuing Bank
shall furnish to such Agent or Lender copies of any Facility Letter of Credit to
which the Issuing Bank is party and such other readily available documentation
relating thereto as may reasonably be requested by the Agent or Lender.

             (e) The obligations of each Lender to make payments to the Agent
for the account of the Issuing Bank 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 other than a
failure of any such Issuing Bank to comply with the terms of this Agreement
relating to the issuance of such Facility Letter of Credit, and such payments
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances.

         3.7 PAYMENT OF REIMBURSEMENT OBLIGATIONS.

             (a) The Borrower agrees to pay to the Agent for the account of the
Issuing Bank the amount of all Reimbursement Obligations, interest and other
amounts payable to the Issuing Bank under or in connection with any Facility
Letter of Credit when due, irrespective of any claim, set-off, defense or other
right which the Borrower may have at any time against any Issuing Bank or any
other Person, under all circumstances, including without limitation any of the
following circumstances:

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

                 (ii) 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 any transferee of any Facility
             Letter of Credit (or any Person for whom any such transferee may be
             acting), the Agent, the Issuing Bank, 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);

                 (iii) any draft, certificate or any other document presented
             under the Facility Letter of Credit proving to be forged,
             fraudulent, invalid or insufficient in any respect of any statement
             therein being untrue or inaccurate in any respect;

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

                 (v) the occurrence of any Default or Event of Default.

             (b) In order to induce the Issuing Bank to issue, extend and renew
each Facility Letter of Credit and the Lenders to participate therein, the
Borrower agrees, except as


                                       34
<PAGE>

contemplated in SECTION 3.7(c) below, to reimburse or pay to the Agent, for the
account of the Issuing Bank or (as the case may be) the Lenders, with respect to
each Letter of Credit issued, extended or renewed by the Issuing Bank hereunder.

                 (i) except as otherwise expressly provided in SECTION
             3.7(b)(ii) below or SECTION 3.7(c) below, on each date that any
             draft presented under such Facility Letter of Credit is honored in
             accordance with its terms by the Issuing Bank, or the Issuing Bank
             otherwise makes a payment with respect thereto, (a) the amount paid
             by the Issuing Bank under or with respect to such Facility Letter
             of Credit, and (b) any amounts payable pursuant to this Agreement
             under, or with respect to, such Facility Letter of Credit, and

                 (ii) upon the termination of the Aggregate Commitment, or the
             acceleration of the Reimbursement Obligations with respect to all
             Facility Letters of Credit, an amount equal to the then maximum
             aggregate amount that the beneficiaries may at any time draw under
             all outstanding Facility Letters of Credit, which amount shall be
             held by the Agent as cash collateral in the Letter of Credit
             Collateral Account for the benefit of the Issuing Bank, the Lenders
             and the Agent for all Reimbursement Obligations.

         Each such payment shall be made to the Agent in immediately available
funds. Interest on any and all amounts not converted to an Advance pursuant to
SECTION 3.7(c) and remaining unpaid by the Borrower under this SECTION 3.7(b) at
any time from the date such amounts become due and payable (whether as stated in
this SECTION 3.7, by acceleration or otherwise) until payment in full (whether
before or after judgment) shall be payable to the Agent for the benefit of the
Issuing Bank and Lenders on demand at the Default Rate.

             (c) Notwithstanding anything contained in SECTION 3.7(b) to the
contrary, unless the Borrower shall have notified the Agent and the Issuing Bank
prior to 11:00 a.m. (Chicago time) on the Business Day immediately prior to the
date of a drawing on a Facility Letter of Credit that the Borrower shall
reimburse the Issuing Bank for the amount of such drawing with funds other than
the proceeds of an Advance, the Borrower shall be deemed to have timely given to
the Agent a Borrowing Notice requesting a Base Rate Advance on the date on which
such drawing is honored and in an amount equal to the amount of such drawing.
The Borrowers may thereafter convert any such Base Rate Advance to a LIBOR Rate
Advance in accordance with SECTION 2.10 hereof. Each Lender shall, in accordance
with ARTICLE II hereof, make available such Lender's Percentage of such Advance
to the Agent, the proceeds of which shall be applied directly by the Agent to
reimburse the Issuing Bank for the amount of such draw. In the event that any
Lender fails to make available to the Agent the amount of such Lender's
Percentage of such Advance on the date of the drawing, the Agent shall be
entitled to recover such amount on demand from such Lender plus any additional
amounts payable hereunder in the event of a late funding by a Lender.

             (d) In the event any payment by the Borrower received by the
Issuing Bank or the Agent with respect to a Facility Letter of Credit and
distributed by the Agent to the 


                                       35
<PAGE>

Lenders on account of their participations is thereafter set aside, avoided or
recovered from the Agent or Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by the Agent, contribute such Lender's
Percentage of the amount set aside, avoided or recovered together with interest
at the rate required to be paid by the Issuing Bank or the Agent upon the amount
required to be repaid by the Issuing Bank or the Agent.

         3.8 COMPENSATION FOR FACILITY LETTERS OF CREDIT.

             (a) The Borrower shall pay to the Agent, for the ratable account of
the Lenders, based upon the Lenders' respective Percentages, a per annum fee
(the "FACILITY LETTER OF CREDIT FEE") with respect to each Facility Letter of
Credit in an amount equal to the Applicable Margin in effect from time to time
for LIBOR Advances. The Facility Letter of Credit Fee relating to any Facility
Letter of Credit shall be due and payable with respect to the period during
which the Facility Letter of Credit is outstanding in arrears in equal quarterly
installments on the first Business Day of each calendar quarter following the
issuance of any Facility Letter of Credit and, to the extent any such fees are
then due and unpaid, on the Maturity Date. The Agent shall promptly remit any
such Facility Letter of Credit Fees received by it, when received, to the other
Lenders in accordance with their Percentages thereof.

             (b) The Issuing Bank also shall have the right to receive solely
for its own account an issuance fee in the amount of the greater of $500 and
0.125 percent of the face amount of each Facility Letter of Credit, payable by
the Borrower on the Issuance Date for each such Facility Letter of Credit. The
Issuing Bank shall also be entitled to receive upon demand its reasonable
out-of-pocket costs and the Issuing Bank's standard charges for amending,
modifying and servicing Facility Letters of Credit and processing draws
thereunder. The Borrower shall pay such issuance fee and other amounts when due
to the Agent for the account of the Issuing Bank.

         3.9 LETTER OF CREDIT COLLATERAL ACCOUNT. The Borrower hereby agrees
that it will, until the Maturity Date, maintain a special collateral account
(the "LETTER OF CREDIT COLLATERAL ACCOUNT") with the Agent 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 11.1. In addition to the foregoing, the Borrower hereby
grants to the Agent, for the benefit of the Lenders, a security interest in and
to the Letter of Credit Collateral Account and any funds that may hereafter be
on deposit in such account, including income earned thereon. The Lenders
acknowledge and agree that the Borrower has no obligation to fund the Letter of
Credit Collateral Account unless and until so required under SECTION 3.7(b)(ii)
and SECTION 11.1 hereof.

                                   ARTICLE IV

                             CHANGE IN CIRCUMSTANCES

                                       36
<PAGE>

         4.1 YIELD PROTECTION. If the adoption of or change in any law or
any governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,

                  (i) subjects any Lender or any applicable Lending Installation
             to any tax, duty, charge or withholding on or from payments due
             from Borrower (excluding federal and state taxation of the overall
             net income of any Lender or applicable Lending Installation), or
             changes the basis of such taxation of payments to any Lender in
             respect of its Loans, its interest in the Facility Letters of
             Credit 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 (including reserves and assessments relating to LIBOR
             Advances), or

                  (iii) imposes any other condition, and the result is to
             increase the cost to any Lender or any applicable Lending
             Installation of making, funding or maintaining Loans or reduces any
             amount receivable by any Lender or any applicable Lending
             Installation in connection with Loans, or requires any Lender or
             any applicable Lending Installation to make any payment calculated
             by reference to the amount of Loans held, Facility Letters of
             Credit issued or participated in or interest received by it, by an
             amount deemed material by such Lender,

THEN, within five (5) days after demand by such Lender, 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 and its Commitment.

         4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporate entity controlling such
Lender is increased as a result of a Change (as defined below), then, within
five (5) days after demand by such Lender, Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is attributable
to this Agreement, its Loans, its interest in the Facility Letters of Credit, or
its obligation to make Loans hereunder or participate in or issue Facility
Letters of Credit hereunder (after taking into account such Lender's policies as
to capital adequacy). "CHANGE" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as defined below) 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 


                                       37
<PAGE>

Lender. "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. Without in any way
affecting the Borrower's obligation to pay compensation actually claimed by a
Lender under this SECTION 4.2, the Borrower shall have the right to replace any
Lender which has demanded such compensation with a replacement Lender acceptable
to the Agent; provided, however, that no Monetary Default, other material
Default or any Event of Default shall then exist, and that Borrower notifies
such Lender that it has elected to replace such Lender and notifies such Lender
and the Agent of the identity of the proposed replacement Lender not more than
sixty (60) days after the date of such Lender's most recent demand for
compensation under this SECTION 4.2. The Lender being replaced shall assign its
Percentage of the Aggregate Commitment and its rights and obligations under this
Facility to the replacement Lender in accordance with the requirements of
SECTION 13.3 hereof and the replacement Lender shall assume such Percentage of
the Aggregate Commitment and the related obligations under this Facility, all
pursuant to an assignment agreement substantially in the form of EXHIBIT J
hereto. The purchase by the replacement Lender shall be at par (plus all accrued
and unpaid interest and any other sums owed to such Lender being replaced
hereunder) which shall be paid to the Lender being replaced upon the execution
and delivery of the assignment.

         4.3 AVAILABILITY OF LIBOR ADVANCES. If any Lender determines that
maintenance of any of Loans bearing interest at the Adjusted LIBOR Rate at a
suitable Lending Installation would violate any applicable law, rule, regulation
or directive of any Governmental Authority having jurisdiction, the Agent shall
suspend by written notice to Borrower the availability of outstanding LIBOR
Advances and require any outstanding LIBOR Advances to be repaid. If the
Majority Lenders determine that deposits of a type or maturity appropriate to
match fund LIBOR Advances are not available, the Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances from and after the date of
any such determination. If the Majority Lenders determine that an interest rate
applicable to a LIBOR Advance does not accurately reflect the cost of making a
LIBOR Advance, and, if for any reason whatsoever the provisions of SECTION 4.1
are inapplicable, the Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances from and after the date of any such
determination.

         4.4 FUNDING INDEMNIFICATION. If any payment of a LIBOR 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 LIBOR Advance is not made
on the date specified by Borrower for any reason other than default by one or
more of the Lenders, Borrower shall indemnify and hold harmless each Lender from
and against any loss, damage, expense or cost incurred by such Lender resulting
therefrom, including, without limitation, any loss, damage, expense or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.

                                       38
<PAGE>

         4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Advances to reduce any liability of Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a LIBOR Advance, 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 4.1, 4.2 or 4.4 hereof. 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 Borrower in the absence of
manifest error. Determination of amounts payable under such Sections in
connection with a LIBOR Advance shall be calculated as though each Lender funded
its LIBOR Advance through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Adjusted
LIBOR Rate applicable to such Advance, 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 Borrower of the written statement.
The obligations of Borrower under SECTIONS 4.1, 4.2 and 4.4 hereof shall survive
payment of the Obligations and termination of this Agreement.

                                    ARTICLE V

                              CONDITIONS PRECEDENT

         5.1 CONDITIONS PRECEDENT TO CLOSING. The Lenders shall not be required
to make the initial Advance hereunder, nor shall the Issuing Bank be required to
issue the initial Facility Letter of Credit hereunder, unless (i) the Borrower
shall have paid all fees then due and payable to the Lenders and the Agent
hereunder, (ii) all of the conditions set forth in SECTION 5.2 are satisfied,
and (iii) the Borrower shall have furnished to the Agent, in form and substance
satisfactory to the Lenders and their counsel and in a number of counterparts
sufficient for all of the Lenders, the following:

             (a) CERTIFICATES OF INCORPORATION. A copy of the articles of
incorporation of LNR, and a copy of the articles of incorporation or other
applicable organizational documents of each other Borrower and each Guarantor,
each certified by the appropriate Secretary of State or equivalent state
official.

             (b) AGREEMENTS OF LIMITED PARTNERSHIP/BYLAWS. A copy of the bylaws
of LNR, including all amendments thereto, and a copy of the by-laws, partnership
agreement, operating agreement or other applicable governing instrument of each
other Borrower and each Guarantor, each certified by the Secretary or other
appropriate officer of the Person in question as being in full force and effect
on the Agreement Execution Date.

             (c) GOOD STANDING CERTIFICATES. A certified copy of a certificate
from the Secretary of State or equivalent state official of the states where
each Borrower and each Guarantor are organized, dated as of the most recent
practicable date, showing the good standing of each Borrower and each Guarantor.

                                       39
<PAGE>

             (d) FOREIGN QUALIFICATION CERTIFICATES. A certified copy of a
certificate from the Secretary of State or equivalent state official of the
states where each Borrower and each Guarantor maintain their principal place of
business, dated as of the most recent practicable date, showing the
qualification to transact business in such state as a foreign entity for each
Borrower and each Guarantor.

             (e) RESOLUTIONS. A copy of a resolution or resolutions adopted by
the Board of Directors or other applicable governing body of each Borrower and
each Guarantor, certified by the Secretary or other appropriate officer of the
Person in question as being in full force and effect on the Agreement Execution
Date, authorizing the execution, delivery and performance of the Loan Documents
to which such Person is a party, and the transactions provided for therein.

             (f) INCUMBENCY CERTIFICATE. A certificate for each Borrower and
each Guarantor, signed by the Secretary other appropriate officer of the Person
in question and dated the Agreement Execution Date, as to the incumbency, and
containing the specimen signature or signatures, of the Persons authorized to
execute and deliver the Loan Documents to be executed and delivered by such
Borrower or Guarantor, as the case may be.

             (g) LOAN DOCUMENTS. Originals of the Loan Documents (in such
quantities as the Lenders may reasonably request), duly executed by authorized
officers of the appropriate entity.

             (h) OPINION OF FLORIDA COUNSEL. A written opinion, dated the
Agreement Execution Date, from outside Florida counsel for the Borrower and each
Guarantor, which counsel is reasonably satisfactory to Agent, substantially in
the form attached hereto as EXHIBIT E.

             (i) OPINION OF ILLINOIS COUNSEL. A written opinion, dated the
Agreement Execution Date, from outside Illinois counsel for the Borrower and
each Guarantor, which counsel is reasonably satisfactory to Agent, substantially
in the form attached hereto as EXHIBIT F.

             (j) INSURANCE. Original or certified copies of insurance policies
or binders therefor, with accompanying receipts showing current payment of all
premiums, evidencing that Borrower carries insurance on all Properties, which
satisfies the Agent's insurance requirements, including, without limitation:

                 (i) Property and casualty insurance (including coverage for
             flood and other water damage for any Properties located within a
             100-year flood plain) in the amount of the replacement cost of the
             improvements at the Properties with limits (if any) of not less
             than $40,000,000 per occurrence;

                 (ii) Loss of rental income insurance in the amount not less
             than one year's net revenues from the Properties; and

                                       40
<PAGE>

                 (iii) Comprehensive general liability insurance in the amount
             of at least $5,000,000 per occurrence.

                 All insurance must be carried by companies with a Best
Insurance Reports (1996) Policyholder's and Financial Size Rating of "A-IX" or
better; provided, however, that if Borrower uses multiple insurers to insure
distinct tiers of risk, only the insurers of the first two tiers of risk (I.E.,
the first dollars of loss with respect to any insured risk) must be rated as
aforesaid, but other insurers shall in any event be rated "A-VII" or better.

             (k) A calculation of the Borrowing Base and an initial Borrowing
Base report, each conforming to the requirements of SECTION 8.2(ii) hereof.

             (l) FINANCIAL AND RELATED INFORMATION. The following information:

                 (i) A certificate, signed by an executive officer of the
             Borrower, stating that on the Agreement Execution Date no Default
             or Event of Default has occurred and is continuing and that all
             representations and warranties of the Borrower contained herein are
             true and correct as of the Agreement Execution Date as and to the
             extent set forth herein;

                 (ii) The most recent consolidated annual and quarterly
             financial statements of the Borrower and a certificate from a
             Qualified Officer of LNR that no change in the Borrower's financial
             condition that could have a Material Adverse Effect has occurred
             since August 31, 1997;

                 (iii) Written money transfer instructions, in substantially the
             form of EXHIBIT G hereto, addressed to the Agent and signed by a
             Qualified Officer of LNR, together with such other related money
             transfer authorizations as the Agent may have reasonably requested;
             and

                 (iv) Operating statements (certified as accurate by a Qualified
             Officer of LNR) and other evidence satisfactory to the Agent to
             establish Borrower's compliance with the covenants set forth in
             ARTICLES VII, VIII AND IX hereof.

             (m) OTHER EVIDENCE AS ANY LENDER MAY REQUIRE. Such other documents
and evidence as the Agent or any Lender may reasonably request to fully
effectuate and establish the consummation of the transactions contemplated
hereby, the taking of all necessary actions in any proceedings in connection
herewith and compliance with the conditions set forth in this Agreement.

         5.2 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES. Advances after the
initial Advance shall be made from time to time as requested by Borrower, and
the obligation of each Lender to make any Loan for any such Advance (including
Swingline Loans), and the 


                                       41
<PAGE>

obligation of the Issuing Bank to issue Facility Letters of Credit, are subject
to the following terms and conditions:

             (a) prior to and at the time of each such Advance or issuance no
Default or Event of Default shall have occurred and be continuing under this
Agreement or any of the Loan Documents and, if required by Agent, Borrower shall
deliver a certificate of Borrower to such effect; and

             (b) The representations and warranties contained in ARTICLE VI are
true and correct as of such Borrowing Date, Issuance Date, or date of conversion
and/or continuation as and to the extent set forth therein, except to the extent
any such representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall be true and correct on
and as of such earlier date.

             (c) As to each Subsidiary that executes and delivers a Joinder or a
Guaranty after the Agreement Execution Date (or that is required to do so), the
Borrower has delivered to the Agent the items described in subsections (a)
through (i) of SECTION 5.1 hereof.

         Subject to the last grammatical paragraph of ARTICLE VI hereof, each
Borrowing Notice, Letter of Credit Request, and Conversion/Continuation Notice
shall constitute a representation and warranty by the Borrower that the
conditions contained in SECTIONS 5.2(a) THROUGH (c) have been satisfied.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

         Borrower hereby represents and warrants that:

         6.1 EXISTENCE. Attached hereto as SCHEDULE 6.1 (as updated from time to
time in accordance with this Agreement) is a table showing, for each Credit
Party, its organizational form (E.G., corporation, partnership, limited
liability company, etc.), state of organization, state in which its principal
place of business is located, owner(s) of its Capital Stock and percentage
ownership interest, and certain other information. Each Credit Party is an
entity of the type indicated for such Credit Party on SCHEDULE 6.1 (as updated
from time to time) duly organized and validly existing under the laws of the
state of its organization as indicated on SCHEDULE 6.1 (as updated from time to
time), with its principal place of business in the state indicated for such
Credit Party on SCHEDULE 6.1 (as updated from time to time), and is duly
qualified as a foreign entity, properly licensed (if required), in good standing
and has all requisite authority to conduct its business in each jurisdiction in
which it owns any Real Estate and, except where the failure to be so qualified
or to obtain such authority would not have a Material Adverse Effect, in each
other jurisdiction in which the nature of its business or activities requires
such qualification or authority. Each Subsidiary of each Credit Party is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite authority to conduct its
business in each jurisdiction in which 


                                       42
<PAGE>

it owns any Real Estate, and except where the failure to be so qualified or to
obtain such authority would not have a Material Adverse Effect, in each other
jurisdiction in which the nature of its business or activities requires such
qualification.

         6.2 CORPORATE/PARTNERSHIP POWERS. The execution, delivery and
performance of the Loan Documents required to be delivered by each Credit Party
hereunder are within the authority of such entity and the powers of the general
partners of each such entity which is a partnership, have been duly authorized
by all requisite action, and are not in conflict with the terms of any
organizational instruments of such entity, or any instrument or agreement to
which such Credit Party is a party or by which such Credit Party or any of its
respective assets may be bound or affected.

         6.3 POWER OF OFFICERS. The officers of each Credit Party, and of the
general partners of each Credit Party which is a partnership, executing the Loan
Documents required to be delivered by such entities hereunder have been duly
elected or appointed and were fully authorized to execute the same at the time
each such agreement, certificate or instrument was executed.

         6.4 GOVERNMENT AND OTHER APPROVALS. No approval, consent, exemption or
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of any of
the Loan Documents by any of the Credit Parties. No other consent to or approval
of the transactions contemplated hereunder is required from any ground lessor,
mortgagee, beneficiary under a deed of trust or any other Person, except as has
been delivered to the Lenders on or before the Agreement Execution Date.

         6.5 SOLVENCY. Immediately after the Agreement Execution Date and
immediately following the making of each Advance and after giving effect to the
application of the proceeds of such Advance, each of the Borrower and its
Subsidiaries will be Solvent.

         6.6 COMPLIANCE WITH LAWS AND AGREEMENTS. There is no judgment, decree
or order or any law, rule or regulation of any court or governmental authority
binding on any of the Credit Parties or any of their respective assets which
would be violated or contravened by the execution, delivery or performance of
the Loan Documents. The Credit Parties and their respective Real Estate and
other assets are in substantial compliance with applicable laws, and with all
material leases, licenses and other agreements to which any Credit Party is a
party or by which such Credit Party or any of its assets is bound. There exist
no defaults on the part of any other party to any such lease, license or other
agreement which, individually or in the aggregate, could have a Material Adverse
Effect.

         6.7 ENFORCEABILITY OF AGREEMENT. This Agreement and each of the other
Loan Documents is (or, when fully executed and delivered, will be) the legal,
valid and binding agreement of each of the Credit Parties thereto, enforceable
against each such Credit Party in accordance with its respective terms, except
to the extent that such enforcement may be limited 


                                       43
<PAGE>

by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the rights of creditors generally.

         6.8 TITLE TO PROPERTY. Borrower or its Subsidiaries (or, in the case of
the Parcels, an Investment Affiliate) has good and marketable title to the Real
Estate and assets reflected in the financial statements most recently delivered
to the Agent as owned by it or any such Subsidiary (or, in the case of the
Parcels, an Investment Affiliate) free and clear of Liens except for the
Permitted Liens, and except for mechanics liens which, individually and in the
aggregate, could not have a Material Adverse Effect. Neither the execution,
delivery nor performance of the Loan Documents required by the Credit Parties
will result in the creation of any Lien on the Real Estate or such assets.
Borrower and its Subsidiaries either own, or have entered into valid leases,
licenses and other agreements for, all assets, services and facilities necessary
for the conduct of their respective businesses and the operation of their
respective assets.

         6.9 LITIGATION. There are no suits, arbitrations, claims, disputes or
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of
Borrower's knowledge after due inquiry, threatened against or affecting any of
the Borrower or its Subsidiaries or any of the Real Estate, the adverse
determination of which individually or in the aggregate could have a Material
Adverse Effect, except as disclosed on SCHEDULE 6.9 hereto.

         6.10 EVENTS OF DEFAULT. No Default or Event of Default has occurred and
is continuing or would result from the incurring of obligations by any of the
Credit Parties under any of the Loan Documents or any other document to which
any of the Credit Parties is a party.

         6.11 INVESTMENT COMPANY ACT OF 1940. None of the Borrower or its
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940 and none of the Credit Parties will become such an
investment company.

         6.12 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Borrower or its
Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the definitions of the Public Utility Holding
Company Act of 1935, as amended.

         6.13 REGULATION U. The proceeds of the Advances will not be used,
directly or indirectly, to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.

         6.14 NO MATERIAL ADVERSE FINANCIAL CHANGE. There has been no Material
Adverse Financial Change since the date of the financial and/or operating
statements most recently submitted to the Lenders.

                                       44
<PAGE>

         6.15 FINANCIAL INFORMATION. All financial statements and operating
statements furnished to the Lenders by or at the direction of any of the Credit
Parties and all other financial information and data furnished by any of the
Credit Parties to the Lenders are complete and correct in all material respects
as of the date thereof, and such statements have been prepared in accordance
with GAAP and fairly present the consolidated financial condition and results of
operations of the Credit Parties and the Real Estate as of such date. None of
the Credit Parties has any contingent obligations, liabilities for taxes or
other outstanding financial obligations which are material in the aggregate,
except as disclosed in such statements, information and data. Without limiting
the generality of the foregoing, Borrower has furnished to the Agent pro forma
consolidated financial statements (including a balance sheet, and related
statements of income and stockholders' equity) of Borrower and its Subsidiaries
for the period from December 1, 1996 through August 31, 1997, which pro forma
financial statements fairly and accurately present, in accordance with GAAP,
what the consolidated assets, liabilities, financial condition and results of
operations of Borrower and its Subsidiaries would have been for the said period
had LNR been spun-off by Lennar Corporation, and commenced operations, as of the
close of business on November 30, 1996. Notwithstanding anything to the contrary
contained herein, calculations of the Borrowing Base and of compliance with the
covenants contained in ARTICLE VII hereof shall be based on said pro forma
financial statements to the extent such calculations include information to be
derived from GAAP financial statement and relate to the period covered thereby.

         6.16 FACTUAL INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of any of the Credit Parties to the
Lenders for purposes of or in connection with this Agreement and the other Loan
Documents and the transactions contemplated herein and therein is, and all other
such factual information hereafter furnished by or on behalf of any of the
Credit Parties to the Lenders will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information not misleading at such time.

         6.17 ERISA. (i) None of the Borrower or its Subsidiaries is an entity
deemed to hold "plan assets" within the meaning of ERISA or any regulations
promulgated thereunder of an employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title I of ERISA or any plan within the meaning of
Section 4975 of the Code, and (ii) the execution of this Agreement and the other
Loan Documents and the transactions contemplated hereunder and thereunder do not
give rise to a prohibited transaction within the meaning of Section 406 of ERISA
or Section 4975 of the Code.

         6.18 TAXES. All required tax returns have been filed by each of the
Borrower or its Subsidiaries with the appropriate authorities except to the
extent that extensions of time to file have been requested, granted and have not
expired or except to the extent such taxes are being contested in good faith by
appropriate proceedings and for which adequate reserves, in accordance with
GAAP, are being maintained.

                                       45
<PAGE>

         6.19 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 6.19 and
except for Real Estate owned by Investment Affiliates which are not Hot
Investment Affiliates:

                  (i) The Real Estate does not contain any Materials of
              Environmental Concern in amounts or concentrations which
              constitute a violation of, or could give rise to liability under,
              Environmental Laws.

                  (ii) None of Borrower, its Subsidiaries or Investment
              Affiliates has received any written notice alleging that any or
              all of the Real Estate or any or all of the operations at the Real
              Estate are not in compliance with all applicable Environmental
              Laws, or alleging the existence of any contamination at or under
              such Real Estate in amounts or concentrations which constitute a
              violation of any Environmental Law.

                  (iii) To the best of Borrower's knowledge after due inquiry,
              no notice, violation, non-compliance or liability referred to in
              SECTION 6.19(ii) above is threatened, and no condition, fact or
              circumstance exists that could result in such notice, violation,
              non-compliance or liability.

                  (iv) During the ownership of the Real Estate by any or all of
              Borrower, its Subsidiaries and Investment Affiliates, Materials of
              Environmental Concern have not been released, transported or
              disposed of, or otherwise migrated, from the Real Estate in
              violation of, or in a manner or to a location which could give
              rise to liability under any applicable Environmental Laws, nor
              during the ownership of the Real Estate by any or all of Borrower,
              its Subsidiaries and Investment Affiliates have any Materials of
              Environmental Concern been generated, treated, stored, abandoned
              or disposed of at, on or under any of such the Real Estate in
              violation of, or in a manner that could give rise to liability
              under any applicable Environmental Laws. To the best knowledge of
              Borrower after due inquiry, no such release, transport, disposal,
              migration, generation, treatment, abandonment or storage from, at,
              on or under any of the Real Estate occurred prior to ownership
              thereof by Borrower, its Subsidiaries and Investment Affiliates.

                  (v) No judicial proceedings or governmental or administrative
              action is pending, or, to the best knowledge of Borrower after due
              inquiry, threatened, under any Environmental Law to which
              Borrower, any of its Subsidiaries or any Investment Affiliate is
              named as a party with respect to any of the Real Estate, nor are
              there any consent or other decrees, orders, or other
              administrative or judicial decisions or requirements outstanding
              under any Environmental Law with respect to such Real Estate.

         6.20 INSURANCE. Borrower has obtained the insurance which Borrower is
required to furnish to Lenders under SECTION 5.1(j) hereof.



                                       46
<PAGE>

         6.21 NO BROKERS. None of the Borrower or its Subsidiaries or Affiliates
has dealt with any brokers, finders or other intermediaries in connection with
this Facility, and no fees, commissions or other compensation are payable by or
to any such Person in connection with this Agreement or the Advances. Lenders
shall not be responsible for the payment of any fees or commissions to any
brokers, finders or other intermediaries and Borrower shall indemnify, defend
and hold Lenders harmless from and against any claims, liabilities, obligations,
damages, costs and expenses (including attorneys' fees and disbursements) made
against or incurred by Lenders as a result of claims made or actions instituted
by any brokers, finders or other intermediaries claiming by, through or under
any of the Borrower or its Subsidiaries or Affiliates in connection with the
Facility.

         6.22 NO VIOLATION OF USURY LAWS. No aspect of any of the transactions
contemplated herein or in any of the other Loan Documents violates or will
violate any applicable usury laws or laws regarding the validity of agreements
to pay interest.

         6.23 NOT A FOREIGN PERSON. None of the Credit Parties is a "foreign
person" within the meaning of Section 1445 or Section 7701 of the Code.

         6.24 NO TRADE NAME. Except for the name "LNR Property Corporation" and
except as otherwise set forth on SCHEDULE 6.24 attached hereto, none of the
Borrower or its Subsidiaries uses any trade name and has not and does not do
business under any name other than their actual names set forth herein.

         6.25 SUBSIDIARIES. SCHEDULE 6.25 hereto (as updated from time to time
in accordance with this Agreement) contains an accurate list of all of the
Subsidiaries of each of the Credit Parties, which Subsidiaries are not
themselves Credit Parties, and of all of the Investment Affiliates of each of
the Credit Parties, setting forth their respective jurisdictions of formation,
the percentage of their respective Capital Stock owned by each Credit Party and
the Real Estate owned by them. All of the issued and outstanding shares of
Capital Stock of all of the direct and indirect Subsidiaries and Investment
Affiliates of LNR have been duly authorized and issued and are fully paid and
non-assessable. All of such Capital Stock owned directly or indirectly by
Borrower is free and clear of Liens, except as otherwise specifically noted on
Schedule 6.25 (as updated from time to time).

         SECTION 6.26 PROPERTIES. SCHEDULE 6.26 hereto (as updated from time to
time in accordance with the terms of this Agreement) contains a complete and
accurate description, as of the Agreement Execution Date and the date of each
update of SCHEDULE 6.26 submitted by Borrower from time to time in accordance
with the terms of this Agreement, of each Project and Property, including the
name of the entity that owns each such Project or Property, and whether such
Project or Property is a Development Property, a Stabilized Project, a Completed
Project and/or an Unencumbered Asset. With respect to each Project and Property
identified from time to time by Borrower for inclusion in the Borrowing Base,
Borrower hereby represents and warrants as follows, except to the extent
otherwise disclosed in writing to the Lenders and approved in writing by the
Majority Lenders:

                                       47
<PAGE>

                (a) No portion of any improvement on any such Project or
Property is located in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, as amended, or any successor law, or, if located within
any such area, Borrower has obtained and will maintain the insurance prescribed
in SECTION 5.1(j) hereof.

                (b) To the Borrower's knowledge, each such Project and Property
and the development, use and occupancy thereof are in material compliance with
all applicable zoning ordinances (without reliance upon adjoining or other
properties), building codes, land use and Environmental Laws, and other laws
regulating the development, use and occupancy of real property ("APPLICABLE
LAWS").

                (c) Each such Project and Property is or, in the case of raw
land, can (at reasonable cost) be served by all utilities required for the
current and contemplated uses thereof.

                (d) All public roads and streets necessary for service of and
access to each such Property and Project for the current or contemplated use
thereof have been or, in the case of raw land, will be completed, are or, in the
case of raw land, will be serviceable and all-weather and are or, in the case of
raw land, will be physically and legally open for use by the public.

                (e) Each such Property and Project is or, in the case of raw
land, will be served by public water and sewer systems.

                (f) Each such Property and Project is free of any patent or, to
the best knowledge of Borrower and its Subsidiaries, latent structural or other
material defect or deficiency. Each such Property and Project is free of damage
and waste that would materially and adversely affect its value, is in good
repair and there is no deferred maintenance other than ordinary wear and tear.
Each such Property or Project is free from damage caused by fire or other
casualty. There is no pending or, to the best knowledge of Borrower after due
inquiry, threatened condemnation proceedings affecting any such Project or
Property, or any material part thereof.

                (g) All liquid and solid waste disposal, septic and sewer
systems located on each such Property and Project are in a good and safe
condition and repair and are in compliance with all Applicable Laws with respect
to such systems.

                (h) All improvements on each such Property and Project lie
within the boundaries and building restrictions of the legal description of
record of such Property or Project, no such improvements encroach upon any
adjoining property, and no improvements on adjoining properties encroach upon
such Property or Project or easements benefiting such Property or Project. All
amenities, access routes or other items that benefit such Property or Project
are under direct control of Borrower or one of its Subsidiaries, constitute
permanent 


                                       48
<PAGE>

easements that benefit all or part of such Property or Project or are public
property, and such Property or Project, by virtue of such easements or
otherwise, is contiguous to a physically open, dedicated all weather public
street, and has the necessary permits for ingress and egress.

                (i) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, insurance premiums, leasehold payments, or other
outstanding charges affecting any such Project or Property, except to the extent
such items are being contested in good faith by appropriate proceedings and as
to which adequate reserves have been provided.

                (j) With respect to each Development Property, each required
performance bond, surety or other security has been issued to and in favor of
and unconditionally accepted by each relevant governmental authority, all plans,
specifications and drawings for improvements have been approved by all relevant
governmental authorities, and all necessary easements, licenses, permits and
other authorizations have been granted for the development thereof (including,
without limitation, demolition, grading and construction permits).

         SECTION 6.27 RELATIONSHIP OF THE BORROWER. The Borrower and its
Subsidiaries are engaged as an integrated group in the business of owning,
developing and selling real estate, of providing the required services, credit
and other facilities for those integrated operations and of making other types
of investments permitted herein. The Credit Parties 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 Credit Parties, and
each of the Credit Parties expects to derive benefit, 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 Guarantor is dependent upon the continued successful
performance of the integrated group as a whole.

         SECTION 6.28 NO SIDE DEALS. None of the Borrower or its Subsidiaries or
Affiliates have entered into any written or oral agreements, arrangements or
understandings with any Lender or any Affiliate of any Lender relating to the
Facility or the Loan Documents, except as otherwise disclosed in this Agreement.

         SECTION 6.29 STOCK PLEDGE. The Capital Stock of each wholly-owned
direct or indirect Subsidiary of Borrower that is not itself a Borrower or a
Guarantor has been pledged to the Lenders pursuant to the Pledge Agreement.

                                       49
<PAGE>

                                   ARTICLE VII

                               FINANCIAL COVENANTS

         The Borrower covenants and agrees that, so long as the Commitments
shall remain in effect and until full and final payment of all Obligations,
without the prior written consent of the Majority Lenders, it shall not, and
shall cause the other Credit Parties not to:

         7.1 BORROWING BASE LIMIT. At any time, permit the aggregate amount of
the Obligations to exceed an amount equal to the Borrowing Base, less
outstanding Unsecured Senior Debt other than the Facility.

         7.2 MAXIMUM LEVERAGE RATIO. At any time, permit the ratio of
Consolidated Total Indebtedness to Consolidated Tangible Net Worth to exceed
2.0:1.

         7.3 MINIMUM CONSOLIDATED TANGIBLE NET WORTH. At any time, permit
Consolidated Tangible Net Worth to be less than the sum of (i) $400,000,000,
plus (ii) an amount equal to 75 percent of the aggregate proceeds received by
Borrower in connection with any offering or issuance of Capital Stock of the
Borrower after the Agreement Execution Date, plus (iii) 80 percent of the
consolidated retained earnings of the Borrower accrued after the Agreement
Execution Date.

         7.4 INTEREST COVERAGE. At any time, permit the ratio of Adjusted EBITDA
to Interest Expense to be less than 2.0:1.

         7.5 FIXED CHARGE COVERAGE. At any time, permit the ratio of Adjusted
EBITDA to Fixed Charges to be less than 1.75:1, or permit the ratio of Adjusted
EBITDA to Adjusted Fixed Charges to be less than 1.25:1.

         7.6 OTHER UNSECURED SENIOR DEBT. At any time, permit Consolidated
Senior Unsecured Debt other than the Facility to exceed $150,000,000 satisfying
each of the following requirements: (i) the terms and condition of such other
Consolidated Senior Unsecured Debt shall, in the judgment of the Agent, be no
more favorable to the lender(s) thereof than the terms and conditions of the
Facility, and (ii) such lender(s), the Borrower and the Lenders have entered
into an intercreditor agreement(s) satisfactory to Agent.

         7.7 SUBORDINATED DEBT. Incur or issue any Subordinated Debt, except on
terms and conditions with respect to subordination satisfactory to Agent and in
amounts not to exceed $250,000,000 per year.

Compliance with each of the foregoing financial covenants shall be measured and
certified following the end of each fiscal quarter with respect to the one year
period consisting of such 


                                       50
<PAGE>

fiscal quarter and the three immediately proceeding fiscal quarters, in 
accordance with SECTION 8.2 hereof.

                                  ARTICLE VIII

                              AFFIRMATIVE COVENANTS

         The Borrower covenant and agree that so long as the Commitment of any
Lender shall remain available and until the full and final payment of all
Obligations incurred under the Loan Documents they will:

         8.1 NOTICES. Promptly give written notice to Agent of:

             (a) all litigation or arbitration proceedings affecting the
Borrower or any of the other Credit Parties, where the amount claimed is
$2,500,000 or more;

             (b) any Default or Event of Default, specifying the nature and the
period of existence thereof and what action has been taken or been proposed to
be taken with respect thereto;

             (c) all claims filed against any of the Real Estate which, if
adversely determined, could have a Material Adverse Effect;

             (d) the occurrence of any other event which might have a Material
Adverse Effect;

             (e) any Reportable Event or any "prohibited transaction" (as such
term is defined in Section 4975 of the Code) in connection with any Plan or any
trust created thereunder, which may, singly or in the aggregate materially
impair the ability of any of the Credit Parties to repay any of its obligations
under the Loan Documents, describing the nature of each such event and the
action, if any, such Credit Party proposes to take with respect thereto;

             (f) any notice from any federal, state, local or foreign authority
regarding any Hazardous Material, asbestos, or other environmental condition,
proceeding, order, claim or violation affecting any of the Real Estate of any
Borrower, Subsidiary or Hot Investment Affiliate.

         8.2 FINANCIAL STATEMENTS, REPORTS, ETC. The Borrower shall maintain,
for itself and each Subsidiary, a system of accounting established and
administered in accordance with GAAP, and furnish to the Lenders:

                 (i) as soon as available, but in any event not later than 60
             days after the close of each fiscal quarter, for the Borrower
             and its Subsidiaries, an 


                                       51
<PAGE>

             unaudited consolidated balance sheet as of the close of each
             such period and the related unaudited consolidated statements of
             income and stockholders equity for such period and for the year to
             date and cash flows for the year to date of the Borrower and its
             Subsidiaries, setting forth in each case in comparative form the
             corresponding figures for the previous year, all prepared in
             accordance with GAAP and all certified as being complete and
             accurate, subject to normal year end adjustments, by a Qualified
             Officer of the Borrower, accompanied by a reasonably detailed
             discussion by such Qualified Officer of material variances from the
             most recent projections delivered pursuant to SECTION 8.2(v)
             hereof;

                 (ii) As soon as available, but in any event not later than 60
             days after the close of each fiscal quarter, for the Borrower and
             its Subsidiaries, related reports in form, substance and detail
             satisfactory to the Lenders, all certified by a Qualified Officer
             of Borrower, including (a) updates of SCHEDULES 6.1, 6.25 AND 6.26
             to this Agreement, (b) a rolling 60 month projection of cash flow
             from Investments in Portfolio/Single Asset Partnerships, (c) a
             report on any amendments to the statement of policy concerning
             mitigation of interest rate risks referred to in SECTION 8.14
             hereof, and on all Hedging Agreements entered into and all other
             steps taken to mitigate interest rate risks pursuant thereto, (d)
             a calculation of the Borrowing Base, (e) a separate report
             regarding each category of assets included in such calculation
             pursuant to one of the numbered subsections of the definition of
             "Borrowing Base" (which report shall identify the assets in each
             such category, identify any Liens on each such asset, show the
             valuation of each such asset used in such calculation in accordance
             with such definition and, for any valuation based, in whole or in
             part, on projections, show a comparison of projections to actual
             results for the period covered by said report), (f) a report
             listing and describing all newly formed or acquired Subsidiaries
             and all Real Estate newly acquired by any Borrower or Subsidiary,
             including their cost and secured or unsecured Indebtedness assumed
             in connection with such acquisition, if any, (g) summary
             information for all Real Estate owned by any Borrower or 
             Subsidiary, including, without limitation, occupancy rates, square
             footage, property type, date acquired or built, Gross Revenues, Net
             Operating Income, operating expenses, capital expenditures and the
             status of development, (h) a report of all Liens on the Real Estate
             which, due to their perceived significance, have been specifically
             brought to the attention of any Qualified Officer, other than the
             Permitted Liens, (i) a report regarding payment arrearages and 
             other defaults by third Persons under any leases, licenses and
             other agreements with any Credit Party, or affecting the Real
             Estate of any Credit Party, that, due to their perceived
             significance, have come to the attention of any Qualified Officer,
             and (j) such other information as may be requested (including,
             without limitation, operating statements) to evaluate the quarterly
             compliance certificate delivered as provided below;

                 (iii) As soon as available but in no event later than the third
             business day after the date such reports are to be filed with the
             Securities Exchange 


                                       52
<PAGE>

             Commission, copies of any Forms 10K, 10Q, 8K, and any other
             annual, quarterly, monthly or other reports, copies of all
             registration statements and any other public information which the
             Borrower or any of its Subsidiaries files with the Securities
             Exchange Commission or any other governmental authority;

                 (iv) As soon as available, but in any event not later than 120
             days after the close of each fiscal year of the Borrower and its
             Subsidiaries, (a) (i) a consolidated and, if available,
             consolidating balance sheet of Borrower and its Subsidiaries as of
             the end of that fiscal year and related consolidated and, if
             available, consolidating statements of income, cash flows and
             stockholders' equity for that fiscal year, (ii) a separate balance
             sheet of the Mortgage Subsidiary as of the end of that fiscal year
             and related statements of income, retained earnings, cash flows and
             stockholders' equity for that fiscal year, in each case with
             accompanying notes and schedules, prepared in accordance with GAAP
             and audited by a firm of independent certified public accountants
             of recognized standing selected by Borrower and acceptable to the
             Agent, which accountants shall have issued an unqualified audit
             report thereon, and (b) a letter signed by said accountants to the
             effect that, during the course of their examination, nothing came
             to their attention which caused them to believe that any Default or
             Event of Default has occurred, or if they believe that any Default
             or Event of Default occurred, specifying the facts with respect
             thereto;

                 (v) Within 90 days after the beginning of each fiscal year of
             Borrower, a projection in reasonable detail and in form and
             substance satisfactory to the Agent, on a quarterly basis, of the
             assets, liabilities, cash flow and earnings of the Borrower and its
             Subsidiaries for that fiscal year and the following fiscal year;

                 (vi) As soon as available, but in any event not later than
             three business days after receipt thereof by any Borrower or
             Subsidiary, all monthly and quarterly financial statements,
             operating reports and other financial and operating information
             regarding Investment Affiliates and/or Real Estate owned by any
             Investment Affiliate;

                 (vii) As soon as available, but in any event not later than 120
             days after the close of each fiscal year of each Investment
             Affiliate a balance sheet of such Investment Affiliate as of the
             end of that fiscal year and related statements of income, cash flow
             and stockholders' equity for that fiscal year, with accompanying
             notes and schedules, prepared in accordance with GAAP and audited
             by a firm of independent certified public accountants, which
             accountants have issued an unqualified report thereon, provided,
             however, that Borrower may furnish unaudited financial statements
             for Investment Affiliates in each of which Borrower has made an
             Investment of less than $1,000,000 and in all of which Borrower has
             made an aggregate Investment of less than $10,000,000;

                                       53
<PAGE>

                 (viii) Not later than sixty (60) days after the end of each of
             the first three fiscal quarters, and not later than one-hundred and
             twenty (120) days after the end of the fiscal year, a compliance
             certificate in substantially the form of EXHIBIT H hereto signed by
             a Qualified Officer of the Borrower confirming that Borrower is in
             compliance with all of the covenants of the Loan Documents, showing
             the calculations and computations necessary to determine compliance
             with the financial covenants contained in this Agreement (including
             such schedules and backup information as may be necessary to
             demonstrate such compliance) and stating that no Default or Event
             of Default exists, or if any Default or Event of Default exists,
             stating the nature and status thereof;

                 (ix) (a) As soon as possible and in any event within 10
             Business Days after the Borrower knows that any Reportable Event
             has occurred with respect to any Plan, a statement, signed by a
             Qualified Officer of the Borrower, describing said Reportable Event
             and within 20 days after such Reportable Event, a statement signed
             by such officer describing the action which Borrower proposes to
             take with respect thereto; and (b) within 10 Business Days of
             receipt, any notice from the Internal Revenue Service, PBGC or
             Department of Labor with respect to a Plan regarding any excise
             tax, proposed termination of a Plan, prohibited transaction or
             fiduciary violation under ERISA or the Code which could result in
             any liability to Borrower or any member of the Controlled Group in
             excess of $100,000; and (c) within 10 Business Days of filing, any
             Form 5500 filed by Borrower with respect to a Plan or any member of
             the Controlled Group which includes a qualified accountant's
             opinion.

                 (x) As soon as possible and in any event within 10 days after
             receipt by the Borrower, a copy of (a) any notice or claim to the
             effect that the Borrower or any of its Subsidiaries or Hot
             Investment Affiliates is or may be liable to any Person as a result
             of the release by such entity, or any of its Subsidiaries, or any
             other Person of any toxic or hazardous waste or substance into the
             environment, and (b) any notice alleging any violation of any
             federal, state or local environmental, health or safety law or
             regulation by the Borrower or any of its Subsidiaries or Hot
             Investment Affiliates, which, in either case, could be reasonably
             likely to have a Material Adverse Effect;

                 (xi) Promptly upon the furnishing thereof to the shareholders
             of the Borrower, copies of all financial statements, reports,
             notices and proxy statements so furnished;

                 (xii) Promptly upon the distribution thereof to the press or
             the public, copies of all press release relating to material
             events;

                 (xiii) As soon as possible, and in any event within 10 days
             after the Borrower knows of any fire or other casualty or any
             pending or threatened condemnation or eminent domain proceeding
             with respect to all or any material 


                                       54
<PAGE>

             portion of any of the Real Estate, a statement signed by a 
             Qualified Officer of Borrower, describing such fire, casualty or 
             condemnation and the action Borrower intends to take with respect 
             thereto; and

                 (xiv) Such supplements to the foregoing documents and such
             other information and reports (including, without limitation,
             non-financial information) as the Agent or any Lender may from time
             to time request.

         8.3 EXISTENCE AND CONDUCT OF OPERATIONS. Except as otherwise expressly
permitted herein, the Borrower shall, and shall cause its Subsidiaries to: (i)
maintain and preserve its existence and all rights, privileges, authorizations
and franchises now enjoyed and necessary for the operation of its business,
including remaining in good standing in each jurisdiction in which business is
currently operated; (ii) carry on and conduct their respective businesses in
substantially the same manner and in substantially the same fields of enterprise
as presently conducted; (iii) do all things necessary to remain duly
incorporated and/or duly qualified, validly existing and in good standing as a
corporation, general partnership, limited liability company or limited
partnership, as the case may be, in its jurisdiction of incorporation/formation;
and (iv) maintain all requisite authority to conduct its business in each
jurisdiction in which any of the Real Estate is located and, except where the
failure to be so qualified would not have a Material Adverse Effect, in each
jurisdiction required to carry on and conduct its businesses in substantially
the same manner as it is presently conducted.

         8.4 MAINTENANCE OF PROPERTIES. The Borrower shall, and shall cause its
Subsidiaries to, maintain, preserve, protect and keep the Real Estate in good
and safe repair, working order and condition, and make all necessary and proper
repairs, renewals and replacements.

         8.5 INSURANCE. The Borrower shall, and shall cause its Subsidiaries to,
provide a certificate of insurance from all insurance carriers which have issued
policies with respect to any of their Real Estate within thirty (30) days after
the end of each fiscal year, evidencing that the insurance required to be
furnished to Lenders pursuant to SECTION 5.1(j) hereof is in full force and
effect. The Agent (for the benefit of the Lenders) shall be named as a loss
payee on each such policy of casualty insurance and as an additional insured on
each such policy of liability insurance, and all such polices of insurance shall
contain provisions to the effect that they may not be canceled or materially
changed without at least 30 days prior notice to the Agent. Borrower shall
timely pay, or cause to be paid, all premiums on all insurance policies required
under this Agreement from time to time. The Borrower shall, and shall cause its
Subsidiaries to, promptly notify the insurance carrier or agent therefor (with a
copy of such notification being provided simultaneously to Agent) if there is
any occurrence which, under the terms of any insurance policy then in effect
with respect to any of their Real Estate, requires such notification.

         8.6 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause its
Subsidiaries to, pay all taxes, assessments, governmental charges and other
obligations when due, except such as may be contested in good faith by
appropriate proceedings, and for which adequate reserves have been provided in
accordance with sound accounting principles.

                                       55
<PAGE>

         8.7  COMPLIANCE WITH LAWS. The Borrower shall, and shall cause its
Subsidiaries to, comply in all material respects with all applicable laws,
rules, regulations, orders and directions of any governmental authority having
jurisdiction over Borrower, any of its Subsidiaries or any of their respective
businesses or assets.

         8.8  ADEQUATE BOOKS. The Borrower shall, and shall cause its
Subsidiaries to, maintain adequate books, accounts and records in order to
provide financial statements in accordance with GAAP and, if requested by any
Lender, permit employees or representatives of such Lender at any reasonable
time and upon reasonable notice (i) to inspect and audit the assets of the
Borrower and its Subsidiaries, or any of them, (ii) to examine or audit the
inventory, books, accounts and records of each of them and make copies and
memoranda thereof and (iii) to consult with appropriate personnel of each of
them regarding the foregoing.

         8.9  ERISA. The Borrower shall, and shall cause its Subsidiaries to,
comply in all material respects with all requirements of ERISA applicable with
respect to each Plan.

         8.10 MAINTENANCE OF STATUS. LNR shall continue to be a corporation
listed and in good standing on the New York Stock Exchange.

         8.11 USE OF PROCEEDS. The Borrower shall use the proceeds of the
Facility solely for the general business purposes of the Borrower, including,
without limitation, repayment of existing indebtedness, acquisitions and
development of real properties, repurchasing LNR's Common Stock, to the extent
permitted herein, purchasing CMBS and working capital needs.

         8.12 PRE-ACQUISITION ENVIRONMENTAL INVESTIGATIONS. The Borrower shall,
and shall its Subsidiaries to, obtain, prior to the acquisition of each parcel
of real property that it intends to acquire, an environmental report of the
scope described in EXHIBIT I attached hereto and made a part hereof.

         8.13 JOINDER OF NEW SUBSIDIARIES. The Borrower shall, from time to
time, promptly cause each Person that becomes a wholly-owned Subsidiary of
Borrower after the Agreement Execution Date to duly execute and deliver to the
Agent either: (i) a joinder agreement pursuant to which such Subsidiary agrees
to become a Borrower hereunder and under the other Loan Documents, assumes all
of the Obligations and agrees that Schedule I hereto and the signature pages to
the Notes shall be amended to include such Subsidiary, all in form and content
satisfactory to the Agent (a "JOINDER"); or (ii) at the Agent's option, a
Guaranty of the Obligations. Notwithstanding anything to the contrary contained
herein, such duly executed Joinder or Guaranty, together with the related
documentation required to be furnished pursuant to SECTION 5.2(c) hereof, shall
be delivered to the Agent no later than 45 days after the end of the fiscal
quarter during which such Person became a Subsidiary of Borrower. If any
wholly-owned Subsidiary of Borrower is prohibited from becoming a Borrower or a
Guarantor hereunder by the terms of any bona fide agreement with an unaffiliated
third person entered into by such Subsidiary for legitimate business reasons,
and without any intent to avoid becoming a Borrower or a Guarantor hereunder,
then, in lieu of such Subsidiary becoming a 


                                       56
<PAGE>

Borrower or a Guarantor hereunder, Borrower shall pledge all of the stock of
such Subsidiary (a "PLEDGE SUBSIDIARY") to Agent, for the benefit of the
Lenders, pursuant to a Pledge Agreement in the form of EXHIBIT C attached hereto
(the "PLEDGE AGREEMENT").

         8.14 INTEREST RATE PROTECTION. Within 60 days after the Agreement
Execution Date, the Board of Directors of LNR shall have approved a written
statement of policy concerning the mitigation of interest rate risks through the
use of Hedging Agreements, or by other appropriate means, with respect to
interest payable on all unsecured Indebtedness of Borrower and its Subsidiaries,
in form and content reasonably satisfactory to Agent, and Borrower and its
Subsidiaries shall thereafter implement said policy, as the same may be amended
from time to time in a manner reasonably acceptable to the Agent.

         8.15 INVESTMENT IN MORTGAGE SUBSIDIARY. The aggregate Investment of
Borrower and its Subsidiaries in the Mortgage Subsidiary shall not exceed
$40,000,000.

                                   ARTICLE IX

                               NEGATIVE COVENANTS

         The Borrower covenants and agrees that, so long as the Commitment shall
remain in effect and until full and final payment of all Obligations incurred
under the Loan Documents, without the prior written consent of the Majority
Lenders, it shall not, and shall cause its Subsidiaries not to:

         9.1 CHANGE IN BUSINESS. Engage in any business activities or operations
other than (i) acquisition, development, ownership, management, operation and
leasing of commercial and industrial real properties (including, without
limitation, multi-family residential, office, retail and warehouse properties)
and ancillary businesses specifically related thereto, (ii) real estate lending
and (iii) Investments in any type of asset which may be included in the
computation of the Borrowing Base pursuant to the definition thereof.

         9.2 [INTENTIONALLY OMITTED].

         9.3 CHANGE OF CONTROL. Permit or suffer any Change of Control to occur.

         9.4 USE OF PROCEEDS. Apply or permit to be applied any proceeds of any
Advance directly or indirectly, to the funding of any purchase of, or offer for,
any shares of capital stock of any publicly held corporation constituting (alone
or together with other shares owned by Borrower or its Subsidiaries) a
controlling interest in such corporation, or as part of a series of transactions
to acquire such a controlling interest, unless the board of directors of such
corporation has consented to such purchase or offer the Lenders have consented
to such use of the proceeds of the Facility.

                                       57
<PAGE>

         9.5 TRANSFERS OF ASSETS. Sell or otherwise dispose of any Real Estate
(other than Real Estate of any Investment Affiliate) or other asset, or any
interest therein, for less than the fair market value thereof.

         9.6 LIENS. Create, incur, or suffer to exist any Lien in, of or on any
of the Real Estate (other than Real Estate of any Investment Affiliate) except:

                  (i) Liens for taxes, assessments or governmental charges or
             levies on their Property if the same shall not at the time be
             delinquent or thereafter can be paid without penalty, or are being
             contested in good faith and by appropriate proceedings and for
             which adequate reserves shall have been set aside on their books;

                  (ii) Liens which arise by operation of law, such as carriers',
             warehousemen's, landlords', materialmen and mechanics' liens and
             other similar liens arising in the ordinary course of business
             which secure payment of obligations not more than 30 days past due
             or which are being contested in good faith by appropriate
             proceedings and for which adequate reserves shall have been set
             aside on its books;

                  (iii) Liens arising out of pledges or deposits under worker's
             compensation laws, unemployment insurance, old age pensions, or
             other social security or retirement benefits, or similar
             legislation;

                  (iv) Utility easements, building restrictions, zoning
             restrictions, easements and such other encumbrances or charges
             against real property as are of a nature generally existing with
             respect to properties of a similar character and which do not in
             any material way affect the marketability of the same or interfere
             with the use thereof in the business of the Borrower or any of the
             other Credit Parties;

                  (v) Liens of any Subsidiary in favor of the Borrower; and

                  (vi) Liens arising in connection with any Indebtedness
             permitted hereunder (which permitted Indebtedness includes real
             estate mortgage financing) to the extent such Liens will not result
             in a violation of any of the provisions of this Agreement.

Liens permitted pursuant to this SECTION 9.6 shall be deemed to be "PERMITTED
LIENS".

         9.7 REGULATION U. Use any of the proceeds of the Advances to purchase
or carry any Margin Stock.

         9.8 MERGERS AND DISPOSITIONS. Enter into any merger, consolidation,
pool, business combination, reorganization or liquidation, or transfer or
otherwise dispose of all or a 


                                       58
<PAGE>

substantial portion of its properties, except for: such transactions that occur
between wholly-owned Subsidiaries; transactions where Borrower is the surviving
entity and there is no change in business conducted or loss or material
diminution of any credit rating by S&P, Moody's or any Third Rating, and no
Default or Event of Default under the Loan Documents results from such
transaction; or as otherwise approved in advance by the Lenders.

         9.9  NEGATIVE PLEDGE. Agree with any third party not to create, assume
or suffer to exist any Lien securing a charge or obligation on any of its real
or personal property, whether now owned or hereafter acquired, except that
Borrower may agree with any Person holding a Lien permitted hereunder on any
particular asset not to further encumber such asset so long as such Lien remains
in effect.

         9.10 DISTRIBUTIONS. Declare, pay or agree to declare or pay to any
Person(s) (other than the Credit Parties) during any fiscal period any dividends
or other distributions on or in respect of its Capital Stock (including, without
limitation, any pro rata redemption or pro rata repurchase of Capital Stock) in
an aggregate amount for all Credit Parties that exceeds the consolidated net
income of Borrower and its Subsidiaries for that fiscal period.

                                    ARTICLE X

                                    DEFAULTS

         The occurrence of any one or more of the following events shall
constitute an Event of Default:

         10.1 NONPAYMENT OF PRINCIPAL. The Borrower fails to pay any principal
portion of the Obligations when due, whether on the Maturity Date or otherwise.

         10.2 CERTAIN COVENANTS. The Borrower or any of its Subsidiaries is not
in compliance with any one or more of the provisions of ARTICLE VII or ARTICLE
IX hereof.

         10.3 NONPAYMENT OF INTEREST AND OTHER OBLIGATIONS. The Borrower fails
to pay any interest or other portion of the Obligations, other than payments of
principal, and such failure continues for a period of five (5) days after the
date such payment is due.

         10.4 CROSS DEFAULT. Any monetary default occurs (after giving effect to
any applicable cure period) under any other Indebtedness (which includes
liability under Guaranties) of one or more of Borrower or its Subsidiaries,
singly or in the aggregate, in excess of Five Million Dollars ($5,000,000),
other than (i) Indebtedness arising from the purchase of personal property or
the provision of services, the amount of which is being contested by Borrower in
good faith by appropriate proceedings or (ii) Indebtedness which is
"non-recourse", i.e., which is not recoverable by the creditor thereof from the
general assets of the Borrower or any of its Subsidiaries, but is limited to the
proceeds of certain real estate, improvements and related personal property.

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<PAGE>

         10.5  LOAN DOCUMENTS. Any Loan Document is not in full force and effect
in accordance with its terms, or a default has occurred and is continuing
thereunder after giving effect to any cure or grace period in any such document.

         10.6  REPRESENTATION OR WARRANTY. At any time or times hereafter any
representation or warranty set forth in ARTICLE VI of this Agreement or in any
other Loan Document or in any statement, report or certificate now or hereafter
made by the Borrower or any of its Subsidiaries to the Lenders or the Agent is
not true and correct in any material respects.

         10.7  COVENANTS, AGREEMENTS AND OTHER CONDITIONS. The Borrower fails to
perform or observe any of the covenants, agreements and conditions contained in
this Agreement or any of the other Loan Documents, not specifically referred to
in any other Section of this ARTICLE X, in accordance with the terms hereof or
thereof, and such Default continues unremedied for a period of thirty (30) days
after written notice from Agent, PROVIDED, HOWEVER, that if such Default is
susceptible of cure but cannot by the use of reasonable efforts be cured within
such thirty (30) day period, such Default shall not constitute an Event of
Default under this SECTION 10.7 so long as (i) the Borrower has commenced a cure
within such thirty-day period in a manner satisfactory to the Agent, and (ii)
thereafter, Borrower is proceeding to cure such default continuously and
diligently and in a manner satisfactory to the Agent, and (iii) such default is
fully cured to the Agent's satisfaction not later than sixty (60) days after the
expiration of such thirty (30) day period.

         10.8  [INTENTIONALLY OMITTED].

         10.9  MATERIAL ADVERSE FINANCIAL CHANGE. Any of the Borrower or its
Subsidiaries has suffered a Material Adverse Financial Change or is Insolvent.

         10.10 BANKRUPTCY.

               (a) Any of the Borrower or its Subsidiaries shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws as
now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any substantial portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it as a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate action to authorize or effect any of
the foregoing actions set forth in this SECTION 10.10(a), (vi) fail to contest
in good faith any appointment or proceeding described in SECTION 10.10(b) or
(vii) not pay, or admit in writing its inability to pay, its debts generally as
they become due.

               (b) A receiver, trustee, examiner, liquidator or similar official
shall be appointed for any of the Borrower or its Subsidiaries or any
substantial portion of any of their 


                                       60
<PAGE>

Properties or other material assets, or a proceeding described in SECTION
10.10(a)(iv) shall be instituted against any of the Borrower or its such
Subsidiaries and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of sixty (60) consecutive days.

         10.11 LEGAL PROCEEDINGS. Any of the Borrower or its Subsidiaries is
enjoined, restrained or otherwise impaired by any court order or judgment or if
a notice of lien, levy or assessment is filed of record with respect to all or
any part of their Properties or other material assets by any governmental
department, office, agency or authority, which, alone or in the aggregate, could
have a Material Adverse Affect, or any proceeding is filed or commenced seeking
to enjoin, restrain or otherwise impair any of the said Persons from conducting
all or a substantial part of their respective business affairs, and such
proceeding is not vacated, stayed, dismissed, set aside, removed or otherwise
remedied within ninety (90) days after the occurrence thereof.

         10.12 ERISA. Any of the Borrower or its Subsidiaries is deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code).

         10.13 FAILURE TO SATISFY JUDGMENTS. Any of the Borrower or its
Subsidiaries shall fail within sixty (60) days to pay, bond or otherwise
discharge any judgments or orders for the payment of money in an amount which,
when added to all other judgments or orders outstanding against the Borrower or
any Subsidiary, would exceed Five Million Dollars ($5,000,000) in the aggregate,
which have not been stayed pending appeal, unless the liability is insured
against and the insurer has not challenged coverage of such liability.

         10.14 ENVIRONMENTAL REMEDIATION. Failure to remediate within the time
period required by law or governmental order (or within a reasonable time in
light of the nature of the problem if no specific time period is so
established), environmental problems in violation of applicable law related to
any of the Real Estate (other than Real Estate of an Investment Affiliate that
is not a Hot Investment Affiliate) where the estimated cost of remediation is in
the aggregate in excess of Five Million Dollars ($5,000,000), in each case after
all administrative hearings and appeals have been concluded.

                                   ARTICLE XI

                  ACCELERATION, WAIVERS AMENDMENTS AND REMEDIES

         11.1 ACCELERATION.

              If any Event of Default described in SECTION 10.10 hereof occurs,
the obligation of the Lenders to make Advances and of the Issuing Bank to issue
Facility Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable. If any other Event of
Default described in ARTICLE X hereof occurs, such obligation to 


                                       61
<PAGE>

make Advances and to issue Facility Letters of Credit shall be terminated and, 
at the election of the Majority Lenders, the Obligations may be declared to be 
due and payable.

              In addition to the foregoing, following the occurrence of an Event
of Default and 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 BOFA having a
maturity not exceeding thirty (30) days. Such funds and any interest thereon
shall be promptly applied by the Agent to reimburse the Issuing Bank 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 Obligations in full shall, unless the Agent is otherwise directed by a
court of competent jurisdiction, be promptly paid over to the Person(s) entitled
to the same.

         11.2 PRESERVATION OF RIGHTS; AMENDMENTS. No delay or omission of the
Lenders in exercising any right under the Loan Documents shall impair such right
or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of an Advance notwithstanding the existence
of a Default or Event of Default or the inability of the Borrower to satisfy any
conditions precedent to such Advance 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, release or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Agent and the number of Lenders required hereunder 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 may be exercised
concurrently or successively, and all shall be available to the Lenders until
the Obligations have been paid in full.

                                   ARTICLE XII

                            THE ADMINISTRATIVE AGENT

         12.1 APPOINTMENT. BOFA is hereby irrevocably appointed Agent hereunder
and under each other Loan Document, and 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 XII. The Agent
shall not have any duties or responsibilities except those expressly set forth
herein and shall not have a fiduciary relationship in respect of any Lender by
reason of this Agreement.

         12.2 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, 


                                       62
<PAGE>

obligations or liabilities 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. Only Agent may perform the duties reserved
to it under the Loan Documents and no Lender shall act or purport to act on
behalf of the other Lenders or Agent on any such matters. Without limiting the
generality of the foregoing:

              (a) Agent shall have the exclusive right to collect from Borrower
and any Guarantor, or third parties, on account of the Facility, including,
principal, interest, fees, protective advances and prepayment premiums (if any),
whether such sums are received directly from Borrower, any Guarantor, or any
other Persons, or obtained by right of offset by Agent of any kind, or by
enforcement of the Loan Documents. Agent will receive and hold all collections
with respect to the Loan for the benefit of the Lenders in accordance with their
Percentages or as otherwise provided herein.

              (b) If any Lender shall receive any payments or property in
connection with the Facility (whether or not voluntary), except from Agent, that
Lender shall transfer to Agent all such funds or property within one Business
Day of receipt.

              (c) No Lender shall independently initiate any judicial action or
other proceeding against Borrower or any Guarantor with respect to the Facility.

         12.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, 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.

         12.4 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 (iv) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith.

         12.5 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
Majority Lenders (or such greater number of Lenders as may be specifically
required herein in connection with any particular matter), 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. 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 receive such advise or concurrence, if it so
requests, of the Majority Lenders (or such greater number of Lenders as may be
specifically required herein in 


                                       63
<PAGE>

connection with any particular matter), and shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.

         12.6 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 engage and
rely upon advice of legal counsel (including the Borrower's counsel),
independent accountants and other professionals and experts selected by the
Agent concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.

         12.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, writing, notice, consent, certificate, facsimile, affidavit,
letter, telegram, statement, paper, document or other communication believed by
it to be genuine and correct and to have been signed, sent or otherwise
communicated by the proper person or persons.

         12.8 AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify upon demand the Agent ratably in accordance with their
respective Percentages (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 (including, attorneys' fees) incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration, modification and enforcement of the Loan
Documents, if not paid by Borrower, 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. Each Lender shall indemnify the Agent and the
other Lenders with respect to claims, liabilities, damages, costs, losses and
expenses (including, without limitation, attorneys' fees) arising from or
relating to the failure of such indemnifying Lender to satisfy its obligations
under this Agreement and the other Loan Documents.

         12.9 RIGHTS AS A LENDER. With respect to the Commitment, Advances made
by it, the Note issued to it and otherwise, the Agent shall have the same rights
and powers hereunder and under any other Loan Document as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its capacity as a Lender. The Agent, in its capacity as a Lender, may accept
deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Borrower or any of its Subsidiaries in
which the Borrower or such Subsidiary is not restricted hereby from engaging
with any other Person. The Lenders 


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acknowledge that Agent and its Affiliates now or in the future may have banking
or other financial relationships, including being an agent on other loans, with
Borrower and its Affiliates, as though BOFA were not Agent hereunder and without
notice to or consent of the Lenders. Each Lender hereby expressly waives any
objection to such actual or potential conflict of interest. The Lenders
acknowledge that in the course of such activities, BOFA or its Affiliates may
receive information regarding Borrower or its Affiliates and acknowledge that
Agent shall be under no obligation to provide such information to them, whether
or not confidential.

         12.10 COMMITMENT AS A LENDER. BOFA agrees to maintain at all times a
Commitment of at least 10 percent of the Aggregate Commitment so long as BOFA
remains as Agent; provided, that the foregoing agreement of BOFA shall not apply
at any time following a Monetary Default or Event of Default (irrespective of
whether such Monetary Default or Event of Default subsequently is waived).

         12.11 LENDER CREDIT DECISION. Each Lender acknowledges that neither the
Agent nor any of its agents has made any representation or warranty to such
Lender and that no action or statement hereafter made or taken by the Agent or
any of its agents shall be deemed to be representation or warranty by the Agent
to such Lenders. Each Lender further 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 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 analysis and decisions in taking or
not taking action under this Agreement and the other Loan Documents.

         12.12 SUCCESSOR AGENT. Each Lender agrees that BOFA shall serve as
Agent at all times during the term of this Facility, except that BOFA may resign
as Agent at any time, in its sole discretion, upon thirty (30) days' prior
written notice to the Lenders and Borrower. Upon any such resignation, the
Majority Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within thirty (30) days after the retiring Agent's giving notice of resignation,
then the retiring Agent may appoint, on behalf of the Borrower and the Lenders,
a successor Agent. Such successor Agent shall be a commercial bank having
capital and retained earnings of at least $100,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent (including the right to receive any
fees for performing such duties which accrue thereafter), and the retiring Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents. After any retiring Agent's resignation hereunder as Agent,
the provisions of this ARTICLE XII shall continue in effect for its benefit and
that of the other Lenders in respect of any actions taken or 


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omitted to be taken by it while it was acting as the Agent hereunder and under 
the other Loan Documents.

         12.13 NOTICE OF DEFAULTS. If a Lender becomes aware of a Default or
Event of Default, such Lender shall notify the Agent of such fact. Upon receipt
of such notice that a Default or Event of Default has occurred, the Agent shall
notify each of the Lenders of such fact. Except for defaults in the payment of
principal, interest and fees payable to Agent for the account of the Lenders and
such other Obligations for which Agent is expressly responsible for determining
Borrower's compliance, Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default, unless Agent shall have
received written notice from a Lender or Borrower referring to the Loan,
describing such Default or Event of Default and stating that such notice is a
"notice of default". Agent will notify the Lenders of its receipt of any such
notice. Agent shall take action with respect to such Default or Event of Default
in accordance with the provisions of this Agreement and the Loan Documents.

         12.14 REQUESTS FOR APPROVAL. If the Agent requests in writing the
consent or approval of a Lender, whether or not such consent or approval is
required hereunder (and no such requirement shall be inferred from any such
request), such Lender shall respond and either approve or disapprove
definitively in writing to the Agent within five (5) Business Days (or sooner if
such notice specifies a shorter period based on Agent's good faith determination
that circumstances exist warranting its request for an earlier response) after
such written request from the Agent. If any Lender does not so respond, that
Lender shall be deemed to have approved the request.

         12.15 COPIES OF DOCUMENTS. Agent shall promptly deliver to each of the
Lenders copies of all notices of default and other formal notices sent to or
received by the Agent pursuant to SECTION 15.1 of this Agreement. Within fifteen
(15) Business Days after a request by a Lender to the Agent for other documents
furnished to the Agent by the Borrower, the Agent shall provide copies of such
documents to such Lender except where this Agreement obligates Agent to provide
copies in a shorter period of time.

         12.16 DEFAULTING LENDERS. At such time as a Lender becomes a Defaulting
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Majority Lenders, such Defaulting Lender or all
Lenders shall be immediately suspended until such time as the Lender is no
longer a Defaulting Lender. If a Defaulting Lender has failed to fund its
Percentage of any Advance and until such time as such Defaulting Lender
subsequently funds its Percentage of such Advance, all Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of payment, as
provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender has
not funded its Percentage (such principal, interest and fees being referred to
as "SENIOR LOANS" for the purposes of this section). All amounts paid by the
Borrower and otherwise due to be applied to the Obligations owing to such
Defaulting Lender pursuant to the terms hereof shall be distributed by the Agent
to the other Lenders in accordance with their respective Percentages
(recalculated for the purposes hereof to exclude 


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<PAGE>

the Defaulting Lender) until all Senior Loans have been paid in full. At that
point, the "Defaulting Lender" shall no longer be deemed a Defaulting Lender.
After the Senior Loans have been paid in full equitable adjustments will be made
in connection with future payments by the Borrower to the extent a portion of
the Senior Loans had been repaid with amounts that otherwise would have been
distributed to a Defaulting Lender but for the operation of this SECTION 12.16.
This provision governs only the relationship among the Agent, each Defaulting
Lender and the other Lenders; nothing hereunder shall limit the obligation of
the Borrower to repay all Loans in accordance with the terms of this Agreement.
The provisions of this SECTION 12.16 shall apply and be effective regardless of
whether a Default occurs and is continuing, and notwithstanding (i) any other
provision of this Agreement to the contrary, (ii) any instruction of the
Borrower as to its desired application of payments or (iii) the suspension of
such Defaulting Lender's right to vote on matters as provided above.

         12.17 WITHHOLDING TAX. All taxes due and payable on any payments to be
made to a Lender under this Agreement shall be such Lender's sole
responsibility, except to the extent such taxes are actually reimbursed by
Borrower under the Loan Documents. All payments to be made to each Lender under
this Agreement shall be made after deduction for any taxes, charges, levies or
withholdings which are imposed by the country of incorporation of Borrower, the
United States of America or any other applicable taxing authority. Each Lender
agrees to provide to Agent completed and signed copies of any forms that may be
required by the United States Internal Revenue Service (and any applicable state
authority) in order to certify such Lender's exemption from or reduction of
United States (or applicable state) withholding taxes with respect to payments
to be made to such Lender under this Agreement or the Loan Documents. Each
Lender agrees to promptly notify Agent of any change which would modify or
render invalid any claimed exemption or reduction, or of any sale, assignment,
participation, or other transfer by such Lender of all or part of its interest
in the Facility. If any governmental authority of the United States or other
jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts paid to or for the account of any Lender, such Lender shall indemnify
Agent fully for all amounts paid by Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amount payable to Agent under this section, together with all costs and
expenses (including legal expenses). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of Agent.

         12.18 BORROWER'S DEFAULT; ENFORCEMENT. Upon the occurrence of an Event
of Default under any Loan Document, the Majority Lenders shall have the right,
upon written notice to Agent, to require that Agent exercise the rights of the
Lenders as directed by the Majority Lenders; provided, however, that the Lenders
shall indemnify, exonerate and hold Agent harmless from and against any and all
claims, losses, liabilities, damages and costs (including reasonable legal fees)
incurred by Agent as a result of any such exercise of rights at the direction of
the Lenders.

         12.19 WORKOUT. If Borrower is in material default under the Loan
Documents and has not cured the default within any applicable cure period, Agent
may declare by written notice to the Banks that the Loan is "in workout" (the
"NOTICE OF WORKOUT"). The Lenders 


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<PAGE>

acknowledge that workouts of defaulted loans usually are resolved by either a
borrower cure of the default; or a restructure of or other modification to the
loan; or by exercising remedies; and that it is in the interest of the Lenders
to attain a resolution within a reasonable period of time. Therefor the Lenders
agree that if, after 90 days from the date of Agent's Notice of Workout, there
has been neither a cure of the default(s), nor a restructure nor other
modification executed, nor exercise of the Lenders' remedies hereunder, then
Agent on behalf of the Lenders shall sue Borrower and any Guarantors for
collection of amounts owing to the Lenders, subject to and in accordance with
advice of Agent's counsel. Notwithstanding any action by Agent under this
SECTION 12.19, Agent shall follow the direction of the Majority Lenders under
SECTION 12.18 above at any time. Nevertheless, unless and until the Majority
Lenders shall direct Agent to the contrary, Agent shall have the right but not
the obligation to take such action as it may deem appropriate to preserve the
rights of the Lenders to recover any amounts owing under the Loan Documents,
without the consent of the Majority Lenders.

         12.20 BANKRUPTCY OF BORROWER. In the event of a bankruptcy by Borrower,
the Lenders shall act through Agent to petition the court, make any motion for
relief from the automatic stay, participate in any appropriate creditors'
committee, vote on a plan of reorganization or pursue other remedies or actions
in accordance with the approval of the Majority Lenders.

         12.21 RELATIONSHIP OF PARTIES. This Agreement is not intended to
establish a partnership or joint venture between Agent and the Lenders. The
provisions of the Loan Documents regarding the relationships among Agent and the
Lenders and this ARTICLE XII is intended solely to facilitate co-lending
relationships among the Lenders for the Facility. No security or investment
contract under any federal or state law is intended to be created among the
Lenders or between Agent and the Lenders. The execution of this Agreement, the
performance of the terms thereof, and the Lenders' purchase of and ownership
interest in the Facility and the Loan Documents shall not constitute any Lender
as owner, purchaser or seller of any security (as that term is defined in the
Securities Act of 1933 or the Securities Exchange Act of 1934) issued, owned,
purchased or sole by BOFA or any of its Subsidiaries or Affiliates, either as
principal or as agent for Borrower. Each Lender is purchasing and acquiring
legal and equitable ownership of its Percentage and is not making a loan to
BOFA, and no debtor-creditor relationship exists between them as a result of
this Agreement.

         12.22 COUNSEL. The Lender acknowledge that Agent's counsel has
represented and shall represent only Agent in connection with the Loan Documents
and this Agreement. Each other Lender shall retain independent legal counsel
regarding all such matters, documents and agreements. After an Event of Default,
the Banks shall enter into a joint privilege agreement regarding the exchange of
information that is or may be subject to attorney-client privilege or related
privileges. Agent's counsel shall prepare such joint privilege agreement,
subject to the approval of the Majority Lenders which approval shall not be
unreasonably withheld by any Bank.

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                                  ARTICLE XIII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         13.1 SUCCESSORS AND ASSIGNS.

              The terms and provisions of the Loan Documents shall be binding
upon and inure to the benefit of Borrower and the Lenders and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the consent of
all the Lenders and any assignment by any Lender must be made in compliance with
SECTION 13.3. 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 13.3 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.

         13.2 PARTICIPATIONS.

         13.2.1 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 Advance 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 Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and Borrower and the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents.

         13.2.2 VOTING RIGHTS. Each Lender shall retain the sole right to vote
its Percentage of the Aggregate Commitment, without the consent of any
Participant, for the approval or disapproval of any amendment, modification or
waiver of any provision of the Loan Documents, provided that such Lender may
grant such Participant the right to approve any amendment, modification or
waiver which forgives principal, interest or fees or reduces the interest rate
or fees payable hereunder, postpones any date fixed for any regularly-scheduled
payment of principal of or interest on the Obligations, releases 


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Collateral beyond any releases expressly provided for herein or extends the 
Maturity Date.

         13.3 ASSIGNMENTS.

              13.3.1 PERMITTED ASSIGNMENTS. Any Lender may, with the prior
written consent of Agent and Borrower (which consents shall not be unreasonably
withheld or delayed), in accordance with applicable law, at any time assign to
one or more banks or other entities (collectively, "PURCHASERS") all or any part
of its rights and obligations under the Loan Documents, except that no consent
of Borrower shall be required if a Monetary Default, other material Default or
Event of Default has occurred and is continuing and that no consent of Agent or
Borrower shall ever be required for (i) any assignment to a Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with the assigning Lender or (ii) the pledge or assignment by a Lender of such
Lender's Note and other rights under the Loan Documents to any Federal Reserve
Bank in accordance with applicable law. Such assignments and assumptions shall
be substantially in the form of EXHIBIT J hereto. The Borrower shall execute any
and all documents which are customarily required by such Lender (including,
without limitation, a replacement promissory note or notes in the forms provided
hereunder) in connection with any such assignment, but Borrower shall not be
obligated to pay any fees and expenses incurred by any Lender in connection with
any assignment pursuant to this Section. Any Lender selling all or any part of
its rights and obligation hereunder in a transaction requiring the consent of
the Agent shall pay to the Agent a fee of $3,500.00 per assignee to reimburse
Agent for its involvement in such assignment.

              13.3.2 EFFECT: EFFECTIVE DATE OF ASSIGNMENT. Upon delivery to the
Agent of a notice of assignment executed by the assigning Lender and the
Purchaser, such assignment shall become effective on the effective date
specified in such notice of assignment. The notice of assignment shall contain
an undertaking by the Purchaser to be bound as a Lender by this Agreement and
the other Loan Documents with the same force and effect as if it were an
original signatory hereto, and a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment and
the Loan under the applicable assignment agreement are "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and under the
Loan Documents will not be "plan assets" under ERISA, all in form and content
satisfactory to the Agent. 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 Borrower,
the Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the Commitment and Advances assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this SECTION 13.3.2, the transferor Lender, the Agent and Borrower shall make
appropriate arrangements so that replacement Notes are 


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issued to such transferor Lender and new Notes or, as appropriate, replacement 
Notes, are issued to such Purchaser, in each case in principal amounts 
reflecting their respective Commitments, as adjusted pursuant to such 
assignment.

         13.4 DISSEMINATION OF INFORMATION. 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 Borrower and its Subsidiaries. Each
Transferee shall agree to keep confidential any such information which is not
publicly available.

         13.5 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 all applicable provisions of the Code with respect to withholding and other
tax matters.

                                   ARTICLE XIV

                               GENERAL PROVISIONS

         14.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties
contained in this Agreement shall survive delivery of the Notes and the making
of the Advances herein contemplated.

         14.2 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.

         14.3 TAXES. Any recording and other taxes (excluding franchise, income
or similar taxes) or other similar assessments or charges payable or ruled
payable by any governmental authority incurred in connection with the
consummation of the transactions contemplated by this Agreement shall be paid by
the Borrower, together with interest and penalties, if any.

         14.4 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.

         14.5 NO THIRD PARTY BENEFICIARIES. 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.

         14.6 EXPENSES: INDEMNIFICATION. Subject to the provisions of this
Agreement, Borrower will pay (a) all out-of-pocket costs and expenses incurred
by the Agent (including the reasonable fees, out-of-pocket expenses and other
reasonable expenses of counsel, which 


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<PAGE>

counsel may be employees of Agent) in connection with the preparation, execution
and delivery of this Agreement, the Notes, the Loan Documents and any other
agreements or documents referred to herein or therein and any amendments
thereto, (b) all out-of-pocket costs and expenses incurred by the Agent and the
Lenders (including the reasonable fees, out-of-pocket expenses and other
reasonable expenses of counsel to the Agent and the Lenders, which counsel may
be employees of Agent or the Lenders) in connection with the enforcement and
protection of the rights of the Lenders under this Agreement, the Notes, the
Loan Documents or any other agreement or document referred to herein or therein,
and (c) all reasonable and customary costs and expenses of periodic audits by
the Agent's personnel of the Borrower's books and records provided that prior to
an Event of Default, Borrower shall not be required to pay for more than one
such audit during any year and the cost thereof to Borrower shall not exceed
$3,000. The Borrower further agrees to indemnify the Lenders, their directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including, without imitation,
all expenses of litigation or preparation therefor, whether or not the Lenders
are a party thereto) which any of them may pay or incur arising out of or
relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Advance hereunder, except that the foregoing
indemnity shall not apply to a Lender to the extent that any losses, claims,
etc. are the result of such Lender's gross negligence or willful misconduct. The
obligations of the Borrower under this Section shall survive the termination of
this Agreement.

         14.7 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

         14.8 NONLIABILITY OF THE LENDERS. The relationship between the Borrower
and the Lenders shall be solely that of borrower and lender. Neither the Agent
nor the Lenders shall have any fiduciary responsibilities to the Borrower.
Neither the Agent nor the Lenders undertake any responsibility to the Borrower
to review or inform the Borrower of any matter in connection with any phase of
the Borrower's business or operations.

         14.9 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE 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.

         14.10 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, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL 


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<PAGE>

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 LENDERS TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
LENDERS OR ANY AFFILIATE OF THE LENDERS 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.

         14.11 WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE LENDERS 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.

         14.12 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents. Any assignee or transferee of the Notes 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 the Notes, shall be conclusive
and binding on any subsequent holder, transferee or assignee of such Notes or of
any note or notes issued in exchange therefor.

         14.13 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents
embody the entire agreement among the Borrower, the Agent, and the Lenders and
supersede all prior conversations, agreements, understandings, commitments and
term sheets among any or all of such parties with respect to the subject matter
hereof. Any provisions of this Agreement may be amended or waived, or any
liability thereunder released, if, but only if, such amendment or waiver is in
writing and is signed by the Borrower, and Agent if the rights or duties of
Agent are affected thereby, and

               (a) each of the Lenders if such amendment or waiver

                   (i) reduces or forgives any payment of principal or interest
               on the Obligations or any fees payable by Borrower to such Lender
               hereunder; or

                   (ii) postpones the date fixed for any payment of principal of
               or interest on the Obligations or any fees payable by Borrower to
               such Lender hereunder; or

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<PAGE>

                   (iii) changes the amount of such Lender's Commitment (other
               than pursuant to an assignment permitted under SECTION 13.3) or
               the unpaid principal amount of such Lender's Note; or

                   (iv) extends the Maturity Date; or

                   (v) changes the definition of Majority Lenders or modifies
               any requirement for consent by each of the Lenders under this
               SECTION 14.13(a).

               (b) the Majority Lenders, as to all other matters.

         14.14 DEALINGS WITH THE BORROWER. The Lenders and their affiliates may
accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with the Borrower or the Borrower or any of
their Affiliates regardless of the capacity of the Lenders hereunder.

         14.15 SET-OFF.

               (a) If an Event of Default shall have occurred, each Lender shall
have the right, at any time and from time to time without notice to the
Borrower, any such notice being hereby expressly waived, to set-off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due hereunder
and all other obligations and liabilities of the Borrower under this Agreement,
irrespective of whether or not such Lender shall have made any demand hereunder
and whether or not said obligations and liabilities shall have matured.

               (b) Each Lender agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a proportion of the
aggregate amount of principal, interest or fees due with respect to any Note
held by it which is greater than the proportion received by any other Lender in
respect of the aggregate amount of principal, interest or fees due with respect
to any Note held by such other Lender, the Lender receiving such proportionately
greater payment shall purchase such participations in the Notes held by the
other Lenders and such other adjustments shall be made as may be required so
that all such payments of principal, interest or Fees with respect to the Notes
held by the Lenders shall be shared by the Lenders pro rata according to their
respective Commitments.

         14.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by the
Borrower and each of the Lenders shown on the signature pages hereof.

         14.17 DISCRETION. In exercising any discretion reserved herein to the
Agent, the Majority Lenders or the Lenders, the Agent, the Majority Lenders or
the Lenders, as the case may be, shall exercise such discretion in a manner
which is commercially reasonable by the standards of the commercial lending
industry with respect to credits comparable to the Facility.


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<PAGE>
                                   ARTICLE XV

                                     NOTICES

         15.1 GIVING NOTICE. 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 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; any notice,
if transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confined in the case of telexes). Notice may be given as follows:

                  To the Borrower:

                           LNR Property Corporation
                           760 N.W. 107th Avenue
                           Miami, Florida 33172
                           Attn:  Shelly Rubin
                           Telecopy:  305-226-7691

                  With a copy to:

                           Rubin Baum Levin Constant Freidman & Bilzin
                           2500 First Union Financial Center
                           Miami, Florida 33131
                           Attn:  Brian L. Bilzin, Esq.
                           Telecopy: 305-374-7593

                  To each Lender:

                           As shown below the Lenders' signatures.

                  To the Agent:

                           Bank of America National Trust and
                                Savings Association
                           Commercial Real Estate Services
                           231 South LaSalle Street, 12th Floor
                           Chicago, Illinois 60697
                           Attention: Mark Lariviere
                           Telecopy:  (312) 974-4970



                                       75
<PAGE>

                  With a copy to:

                           Barack Ferrazzano Kirschbaum Perlman & Nagelberg
                           333 W. Wacker Drive
                           Suite 2700
                           Chicago, Illinois 60606
                           Attention: Howard J. Kirschbaum, Esq.
                           Telecopy:  (312) 984-3150

         15.2 CHANGE OF ADDRESS. Each party may change the address for service
of notice upon it by a notice in writing to the other parties hereto.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.

BORROWER:                         LNR PROPERTY CORPORATION

                                  By: /s/ MARK T. BRIGGS
                                  --------------------------------------
                                  Title: VP

                                  [SIGNATURE BLOCKS FOR
                                  OTHER BORROWERS APPEAR ON
                                  THE FOLLOWING PAGES S-1 - S-19]

LENDERS:                          BANK OF AMERICA NATIONAL TRUST
                                  AND SAVINGS ASSOCIATION

                                  By: /s/ MARK LARIVIERE
                                  ----------------------------------------
                                  Title: Vice President
                                  Commitment:  $40,000,000
                                  Percentage of Aggregate Commitment: 20%

                                  Address for Notices:
                                  Commercial Real Estate Services
                                  231 South LaSalle Street, 12th Floor
                                  Chicago, Illinois 60697
                                  Attention: Mark Lariviere
                                  Telephone:  (312) 282-2513
                                  Telecopy:  (312) 974-4970

                                       76
<PAGE>

AGENT:                  BANK OF AMERICA NATIONAL TRUST AND
                        SAVINGS ASSOCIATION

                         By: /s/ MARK T. BRIGGS
                         -----------------------------------
                         Title: Vice President

                         Address for Notices:
                         Commercial Real Estate Services
                         231 South LaSalle Street, 12th Floor
                         Chicago, Illinois 60697
                         Attention: Mark Lariviere
                         Telephone:  (312) 828-2345
                         Telecopy:  (312) 974-4970


                                       77
<PAGE>

                                        ALEXANDRIA LP, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        AURORA LP, INC.    

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        BERT L. SMOKLER & COMPANY

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        MIDWEST MANAGEMENT COMPANY, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        DCA HOMES, INC.    

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                      S-1
<PAGE>
                                        DCA MANAGEMENT CORPORATION

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        DEVCO SHOPPING CENTERS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        DREYFUS INTERSTATE DEVELOPMENT CORP.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        EVERETT LP, INC.                

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LNR SHELF I, INC. (formerly known as
                                        Friendswood Development Company)

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                      S-2
<PAGE>
                                        H. MILLER & SONS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        HMS REALTY, INC.   

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        H. MILLER & SONS OF FLORIDA, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        MILLER'S PLANTATION DEVELOPMENT COMPANY

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LEISURE COLONY MANAGEMENT CORP.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                      S-3
<PAGE>
                                        LEISURE COMMUNITIES MANAGEMENT, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LEN ACQUISITION CORPORATION, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR AFFILIATE PURCHASER CORPORATION

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR ATLANTIC HOLDINGS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR BEVERLY HOLDINGS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                      S-4
<PAGE>
                                        LENNAR CAPITAL SERVICES, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR CAPITAL CORPORATION

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR FUNDING CORPORATION

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR COMMUNICATIONS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        WEST COAST MORTGAGE HOLDINGS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                      S-5
<PAGE>
                                        LENNAR CGA HOLDINGS, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        LENNAR COMMERCIAL PROPERTIES, INC.

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        ARBOR LAKE CLUB, LTD.

                                        By: Lennar Commercial Properties, Inc.,
                                            general partner

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                        UNIVERSAL AMERICAN REALTY CORPORATION

                                        By: /s/ MARK T. BRIGGS
                                          -------------------------------------
                                          Its: VP


                                      S-6
<PAGE>
                                 PRADO ASSOCIATES

                                 By: Leisure Colony Management Corp., a
                                     general partner

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 By: Universal American Realty Corporation, a
                                     general partner

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 SOUTH DADE UTILITIES, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR CORPORATE CENTER, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR COTO HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LFH SUB I, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                      S-7
<PAGE>

                                 LFS ASSET CORP.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR GATEWAY CENTER HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR GEORGIA PARTNERS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR HUNTINGTON BEACH, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR KEARNY HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                      S-8
<PAGE>
                                 LENNAR LEGEND OAKS HOLDINGS, INC.


                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR L.W. ASSETS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR LW HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR LW NEVADA ASSETS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR MBS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP

                                      S-9
<PAGE>
                           LENNAR MARIETTA HOLDINGS INC.

                           By: /s/ MARK T. BRIGGS
                             -------------------------------------
                             Its: VP


                           LENNAR MORTGAGE HOLDINGS CORPORATION

                           By: /s/ MARK T. BRIGGS
                             -------------------------------------
                             Its: VP


                           LENNAR WESTERN HOLDINGS, INC.
                           (formerly Nevada Financial Holdings Corporation)

                           By: /s/ MARK T. BRIGGS
                             -------------------------------------
                             Its: VP


                           LENNAR CALIFORNIA PARTNERS, INC.

                           By: /s/ MARK T. BRIGGS
                             -------------------------------------
                             Its: VP


                           LENNAR MORTGAGE HOLDINGS I, INC.

                           By: /s/ MARK T. BRIGGS
                             -------------------------------------
                             Its: VP



                                      S-10
<PAGE>

                                 MSWH SUB I, INC. 

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR NORTHEAST HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR PACIFIC HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR PARK CENTER III HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR PARK JV, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP

                                      S-11
<PAGE>
                                 DORAL PARK JV

                                 By: Lennar Park JV, Inc., a joint venture

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 By: Leisure Colony Management Corp., a joint
                                     venturer        

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR PARTNERS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 ATLANTIC HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR PARTNERS OF CALIFORNIA, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                      S-12
<PAGE>
                                 LNVP HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR NEVADA PARTNERS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR REAL ESTATE HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR ROCKLAND, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR ROLLING RIDGE, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP




                                      S-13
<PAGE>
                                 LENNAR SEABOARD HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR SECURITIES HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR STEVENSON HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR TEXAS PROPERTIES, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR TRANSAMERICA HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                      S-14
<PAGE>

                                 LENNAR WILSHIRE HOLDINGS, INC.


                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LENNAR PARTNERS OF LOS ANGELES, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR CANDLEWOOD HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR LAFAYETTE HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR LAFAYETTE LP, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                      S-15
<PAGE>
                                 LNR LAND PARTNERS SUB, INC.


                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR MADISON HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR RELATED VENTURE, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR SANDS HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 LNR VERANDAH HOLDINGS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP




                                      S-16
<PAGE>
                                 LNR VERANDAH LP, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 PARKVIEW ASSOCIATES, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 PARKVIEW AT PEMBROKE POINTE, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 SPRINGS DEVELOPMENT CORPORATION

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP



                                      S-17
<PAGE>
                                 THE TURTLE RUN VENTURE

                                 By: Leisure Colony Management Corp., a joint
                                     venturer       

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 By: Springs Development Corporation, a joint
                                     venturer        

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 TALLADEGA MANUFACTURING, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 VISTA DEL LAGO APARTMENTS, INC.

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP


                                 WESTERN FUNDING HOLDINGS CORPORATION

                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP



                                      S-18
<PAGE>
                                 NEVADA SECURITIES HOLDINGS, INC.


                                 By: /s/ MARK T. BRIGGS
                                   -------------------------------------
                                   Its: VP

                                      S-19


<PAGE>

                                    EXHIBIT D

                                FORM OF GUARANTY

         This Guaranty made as of __________________ , 1997, by
______________________ , a _____________________ ("GUARANTOR"), to and for the
benefit of Bank of America National Trust and Savings Association, individually
as a lender ("BOFA") and as agent ("Agent") for itself and the other Lenders, as
defined in the Credit Agreement (as defined below), and their respective
successors and assigns.

                                    RECITALS

         A. LNR Property Corporation, a Delaware corporation ("LNR"), and
certain of its Subsidiaries (collectively, "BORROWER") have requested that the
Lenders make an unsecured revolving credit facility available to Borrower in the
aggregate principal amount of up to $200,000,000 ("FACILITY"), and that Agent
act as administrative agent, documentation agent and syndication agent with
respect thereto.

         B. The Lenders have agreed to make available the Facility to Borrower,
and Agent has agreed to act in said agency capacities, pursuant to the terms and
conditions set forth in an Revolving Credit Agreement dated as of December 5,
1997, between Borrower, Agent and the Lenders ("CREDIT AGREEMENT"), and
Guarantor desires that the Lenders continue to make Advances under the Credit
Agreement and that Agent continue to act in said agency capacities. All
capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to such terms in the Credit Agreement.

         C. Borrower has executed and delivered to the Lenders one or more
promissory notes each dated ______________ , 1997 in the aggregate principal
amount of $200,000,000 as evidence of its indebtedness to the Lenders with
respect to the Facility (the promissory notes described above, together with any
amendments or allonges thereto, or restatements, replacements or renewals
thereof, and/or new promissory notes to new Lenders under the Credit Agreement,
are collectively referred to herein as the "Revolving Note"). Borrower has also
executed and delivered to BOFA a promissory note dated _____________ , 1997
("SWINGLINE NOTE") which evidences any Swingline Loans that may be made by BOFA
under the Credit Agreement.

         D. Guarantor is a newly formed, wholly-owned single purpose Subsidiary
of LNR engaged solely in the mortgage banking business, and Guarantor is
deriving and will continue to derive substantial financial benefit from the
Facility evidenced by the Revolving Note, the Swingline Note, the Credit
Agreement and the other Loan Documents.

         E. The execution and delivery of this Guaranty by Guarantor is required
pursuant to the express terms of the Credit Agreement as a condition to any
further Advances under the Facility.

                                      D-1
<PAGE>

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the matters described in the
foregoing Recitals, which Recitals are incorporated herein and made a part
hereof, and for other good and valuable consideration, Guarantor hereby agrees
as follows:

         1. Guarantor absolutely, unconditionally, and irrevocably guarantees to
Agent and the Lenders:

            (a) the full and prompt payment of the principal of and interest on
         the Revolving Note and/or the Swingline Note when due, whether at
         stated maturity, upon acceleration or otherwise, and at all times
         thereafter, and the prompt payment of all other sums which may now be
         or may hereafter become due and owing under the Revolving Note, the
         Swingline Note, the Credit Agreement and/or the other Loan Documents;

            (b) the payment of all Enforcement Costs (as hereinafter defined);
         and

            (c) the full, complete, and punctual observance, performance, and
         satisfaction of all of the obligations, duties, covenants, and
         agreements of Borrower under the Credit Agreement and the Loan
         Documents.

All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this PARAGRAPH 1 are referred to herein as the
"FACILITY INDEBTEDNESS. " All obligations described in subparagraph (c) of this
PARAGRAPH 1 are referred to herein as the "OBLIGATIONS."

         2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, Guarantor agrees,
on demand by Agent, to pay all the Facility Indebtedness and to perform all the
Obligations as are or then or thereafter become due and owing or are to be
performed under the terms of the Revolving Note, the Swingline Note, the Credit
Agreement and/or the other Loan Documents, and to pay any reasonable expenses
incurred by Agent or the Lenders in protecting, preserving or defending its
interest in the Real Estate or any collateral for the Facility, or otherwise in
connection with the Facility or under any of the Loan Documents, including,
without limitation, all reasonable attorneys' fees and costs. Agent shall have
the right, at its option, either before, during or after pursuing any other
right or remedy against Borrower or Guarantor, to perform any and all of the
Obligations by or through any agent, contractor or subcontractor, or any of
their agents, of its selection, all as Agent in its sole discretion deems
proper, and Guarantor shall indemnify and hold Agent and the Lenders free and
harmless from and against any and all loss, damage, cost, expense, injury, or
liability Agent or the Lenders may suffer or incur in connection with the
exercise of its rights under this Guaranty or the performance of the
Obligations, except to the extent the same arises as a result of the gross
negligence or willful misconduct of Agent.

                                      D-2
<PAGE>

         All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Agent for the benefit
of itself and the Lenders, and the choice by Agent of one such alternative over
another shall not be subject to question or challenge by Guarantor or any other
person, nor shall any such choice be asserted as a defense, set-off or failure
to mitigate damages in any action, proceeding or counteraction by Agent for the
benefit of itself and/or the Lenders to recover or seeking any other remedy
under this Guaranty, nor shall such choice preclude Agent from subsequently
electing to exercise a different remedy. The parties have agreed to the
alternative remedies hereinabove specified in part because they recognize that
the choice of remedies in the event of a failure hereunder will necessarily and
should properly be a matter of business judgment, which, with hindsight after
the passage of time and events, may or may not prove to have been the best
choice to maximize recovery by Agent for the benefit of itself and the Lenders
at the lowest cost to Borrower and/or Guarantor. It is the intention of the
parties that such choice by Agent be given conclusive effect regardless of such
subsequent developments.

         3. Guarantor does hereby waive (i) notice of acceptance of this
Guaranty by Agent or the Lenders and any and all notices and demands of every
kind which may be required to be given by any statute, rule or law, (ii) any
defense, right of set-off or other claim which Guarantor may have against the
Borrower or which Guarantor or Borrower may have against Agent or any of the
Lenders or the holder of the Revolving Note or the holder of the Swingline Note,
(iii) presentment for payment, demand for payment, notice of nonpayment,
dishonor, protest and notice of protest, diligence in collection and any and all
formalities which otherwise might be legally required to charge Guarantor with
liability, (iv) any failure by Agent or any of the Lenders to inform Guarantor
of any facts Agent or any of the Lenders may now or hereafter know about
Borrower, the Facility, or the transactions contemplated by the Credit
Agreement, it being understood and agreed that Agent and the Lenders have no
duty so to inform and that Guarantor is fully responsible for being and
remaining informed by Borrower of all circumstances bearing on the existence or
creation or risk of nonpayment of the Facility Indebtedness or the risk of
nonperformance of the Obligations, and (v) any and all right to cause a
marshalling of assets of the Borrower or any other action by any court or
governmental body with respect thereto, or to cause Agent or any of the Lenders
to proceed against any other security given to Agent or any of the Lenders in
connection with the Facility Indebtedness or the Obligations. Credit may be
granted or continued from time to time Borrower without notice to or
authorization from Guarantor, regardless of the financial or other condition of
Borrower at the time of any such grant or continuation. Guarantor acknowledges
that no representations of any kind whatsoever have been made by Agent or any of
the Lenders to Guarantor. No modification or waiver of any of the provisions of
this Guaranty shall be binding upon Agent or the Lenders except as expressly set
forth in a writing duly signed and delivered on behalf of Agent and the Lenders.

         4. Guarantor further agrees that Guarantor's liability as guarantor
shall in nowise be impaired by any renewals or extensions which may be made from
time to time, with or without the knowledge or consent of Guarantor of the time
for payment of interest or principal under the Revolving Note or the Swingline
Note or by any forbearance or delay in collecting interest or principal under
the Revolving Note or the Swingline Note, or by any waiver under 


                                      D-3
<PAGE>

the Credit Agreement or any other Loan Documents, or by failure or election not
to pursue any other remedies against Borrower, or by any change or modification
in the Revolving Note, the Credit Agreement, the Swingline Note or any other
Loan Documents, or by the acceptance of any additional security or any increase,
substitution or change therein, or by the release of any security or any
withdrawal thereof or decrease therein, or by the application of payments
received from any source to the payment of any obligation other than the
Facility Indebtedness, even though Agent or the Lenders might lawfully have
elected to apply such payments to any part or all of the Facility Indebtedness,
it being the intent hereof that Guarantor shall remain liable as principal for
payment of the Facility Indebtedness and performance of the Obligations until
all indebtedness has been paid in full and the other terms, covenants and
conditions of the Credit Agreement and other Loan Documents and this Guaranty
have been performed, notwithstanding any act or thing which might otherwise
operate as a legal or equitable discharge of a surety. Guarantor further
understands and agrees that Agent and the Lenders may at any time enter into
agreements with Borrower to amend and modify the Revolving Note, Credit
Agreement, the Swingline Note or other Loan Documents, and may waive or release
any provision or provisions thereof, and, with reference to such instruments,
may make and enter into any such agreement or agreements as Agent, the Lenders
and Borrower may deem proper and desirable, without in any manner impairing this
Guaranty or any of Agent's or the Lenders' rights hereunder or any of the
Guarantor's obligations hereunder.

         5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance, and not of collection only. Guarantor
agrees that this Guaranty may be enforced by Agent and the Lenders without the
necessity at any time of resorting to or exhausting any other security or
collateral given in connection herewith or with the Facility or any of the Loan
Documents, or resorting to any other guaranties, and Guarantor hereby waives the
right to require Agent or the Lenders to join Borrower in any action brought
hereunder or to commence any action against or obtain any judgment against
Borrower or to pursue any other remedy or enforce any other right. Guarantor
further agrees that nothing contained herein or otherwise shall prevent Agent
and the Lenders from pursuing concurrently or successively all rights and
remedies available to it at law and/or in equity or under any of the Loan
Documents, and the exercise of any of its rights or the completion of any of its
remedies shall not constitute a discharge of any of Guarantor's obligations
hereunder, it being the purpose and intent of Guarantor that the obligations of
Guarantor hereunder shall be primary, absolute, independent and unconditional
under any and all circumstances whatsoever. Neither Guarantor's obligations
under this Guaranty nor any remedy for the enforcement thereof shall be
impaired, modified, changed or released in any manner whatsoever by any
impairment, modification, change, release or limitation of the liability of
Borrower under the Revolving Note, the Credit Agreement, the Swingline Note or
any other Loan Documents or by reason of Borrower's bankruptcy or by reason of
any creditor or bankruptcy proceeding instituted by or against Borrower. This
Guaranty shall continue to be effective and be deemed to have continued in
existence or be reinstated (as the case may be) if at any time payment of all or
any part of any sum payable pursuant to the Revolving Note, the Credit
Agreement, the Swingline Note or any other Loan Document is rescinded or
otherwise required to be returned by the payee upon the insolvency, bankruptcy,
or reorganization of the payer, all as though such payment had not been made,
regardless of whether Agent or any of the Lenders contested the 


                                      D-4
<PAGE>

order requiring the return of such payment. The obligations of Guarantor
pursuant to the preceding sentence shall survive any termination, cancellation
or release of this Guaranty.

         6. This Guaranty shall be assignable by Agent and/or any of the Lenders
to any assignee of all or a portion of Agents and/or such Lender's rights under
the Loan Documents.

         7. If: (i) this Guaranty, the Revolving Note, the Swingline Note, the
Credit Agreement or any other Loan Document is placed in the hands of an
attorney for collection or is collected through any legal proceeding; (ii) an
attorney is retained to represent Agent and/or any of the Lenders in any
bankruptcy, reorganization, receivership, or other proceedings affecting
creditors' rights and involving a claim under this Guaranty, the Revolving Note,
the Swingline Note, the Credit Agreement or any Loan Document; (iii) an attorney
is retained to provide advice or other representation with respect to the Loan
Documents in connection with an enforcement action or potential enforcement
action; or (iv) an attorney is retained to represent Agent and/or any of the
Lenders in any other legal proceedings whatsoever in connection with this
Guaranty, the Revolving Note, any the Swingline Note, the Credit Agreement, any
of the other Loan Documents or any property subject thereto, then Guarantor
shall pay to Agent upon demand all reasonable attorney's fees, costs and
expenses, including, without limitation, court costs, filing fees, recording
costs and all other costs and expenses whatsoever incurred in connection
therewith (all of which are referred to herein as "ENFORCEMENT COSTS"), in
addition to all other amounts due hereunder.

         8. The parties hereto intend that each provision in this Guaranty
comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of competent
jurisdiction to be in violation of any applicable local, state or federal
ordinance, statute, law, administrative or judicial decision, or public policy,
and if such court should declare such portion, provision or provisions of this
Guaranty to be illegal, invalid, unlawful, void or unenforceable as written,
then it is the intent of all parties hereto that such portion, provision or
provisions shall be given force to the fullest possible extent that they are
legal, valid and enforceable, that the remainder of this Guaranty shall be
construed as if such illegal, invalid, unlawful, void or unenforceable portion,
provision or provisions were not contained therein, and that the rights,
obligations and interest of Agent, the Lenders and the holder(s) of the
Revolving Note or the Swingline Note under the remainder of this Guaranty shall
continue in full force and effect.

         9. Any indebtedness of Borrower to Guarantor now or hereafter existing
is hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full, (i) Guarantor will not
seek, accept or retain for Guarantor's own account, any payment from Borrower on
account of such subordinated debt, and (ii) any such payments to Guarantor on
account of such subordinated debt shall be collected and received by Guarantor
in trust for Agent and the Lenders and shall be paid over to Agent on account of
the Facility Indebtedness without impairing or releasing the obligations of
Guarantor hereunder.

                                      D-5
<PAGE>

         10. Guarantor waives and releases any claim (within the meaning of 11
U.S.C. ss. 101) which Guarantor may have against Borrower arising from a payment
made by Guarantor under this Guaranty and agrees not to assert or take advantage
of any subrogation rights of Guarantor, Agent or the Lenders or any right of
Guarantor, Agent or the Lenders to proceed against (i) Borrower for
reimbursement, or (ii) any other guarantor or any collateral security or
guaranty or right of offset held by Agent or the Lenders for the payment of the
Facility Indebtedness and performance of the Obligations, nor shall Guarantor
seek or be entitled to seek any contribution or reimbursement from Borrower or
any other guarantor in respect of payments made by Guarantor hereunder. It is
expressly understood that the waivers and agreements of Guarantor set forth
above constitute additional and cumulative benefits given to Agent and the
Lenders for their security and as an inducement for their continuing extension
of credit to Borrower.

         11. Any amounts received by Agent or Lender from any source on account
of any indebtedness may be applied by Agent toward the payment of such
indebtedness, and in such order of application, as Agent may from time to time
elect.

         12. This Guaranty shall be governed by the internal laws of the State
of Illinois, without regard to its choice of law rules or conflict of laws
principles. The Guarantor hereby submits to personal jurisdiction in the State
of Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Cook County, Illinois, or the United States District Count for
the Northern District of Illinois, in any action, suit, or proceeding which
Agent or the Lenders may at any time wish to file in connection with this
Guaranty or any related matter. Guarantor hereby agrees that an action, suit, or
proceeding to enforce this Guaranty may be brought in any state or federal court
in the State of Illinois and hereby waives any objection which Guarantor may
have to the laying of the venue of any such action, suit, or proceeding in any
such court; provided, however, that the provisions of this Paragraph shall not
be deemed to preclude Agent or the Lenders from filing any such action, suit, or
proceeding in any other appropriate forum.

         13. All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by
facsimile and addressed or delivered to such party at its address set forth
below 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; any notice, if transmitted by
facsimile, shall be deemed given when transmitted. Notice may be given as
follows:

                  To the Guarantor:

                                      D-6
<PAGE>
                   ----------------------------
                   c/o LNR Property Corporation
                   760 N.W. 107th Avenue
                   Miami, Florida 33172
                   Attention: Shelly Rubin
                   Telecopy: (305) 226-7691

          With a copy to:

          To the Agent or the Lenders:

                   Bank of America National Trust and Savings Association
                   One First National Plaza
                   231 S. LaSalle Street, 12th Floor
                   Chicago, Illinois 60697
                   Attention: Mark Lariviere
                   Telecopy:  (312) 974-4970

          With a copy to:

                   Barack Ferrazzano Kirschbaum Perlman & Nagelberg
                   333 W. Wacker Drive, Suite 2700
                   Chicago, Illinois 60606
                   Attention: Howard J. Kirschbaum, Esq.
                   Telecopy:  (312) 984-3150

or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.

         14. This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor and shall inure to
the benefit of Agent's and Lender's successors and assigns.

         15. This Guaranty shall be construed and enforced under the internal
laws of the State of Illinois.

         16. GUARANTOR AND AGENT AND THE LENDERS, BY ACCEPTANCE HEREOF, EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING
THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS
GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.

                                      D-7
<PAGE>

         IN WITNESS WHEREOF, Guarantor has delivered this Guaranty as of the
date first written above.

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

                             By:
                                ---------------------------------------
                                Its:___________________________________

                                      D-8
<PAGE>

STATE OF___________________)
                           )  SS.
COUNTY OF__________________)

         I, the undersigned, a Notary Public, in and for said County, in the
State aforesaid, DO HEREBY CERTIFY, that ______________ , the ____________ of
_________________ , personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he signed and delivered the said instrument as his own
free and voluntary act and as the free and voluntary act of said corporation,
for the uses and purposes therein set forth.

GIVEN under my hand and Notarial Seal, this ___ day of ___________ , 199_.




                                            ----------------------------------
                                                      Notary Public

                                      D-9