EXHIBIT 10.73


                                 LOAN AGREEMENT


THIS AGREEMENT, made as of the ______ day of November, 1997, by and between
LUNDGREN BROS. CONSTRUCTION, INC., a Minnesota corporation (the "Borrower") and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association,
with its banking house located in Minneapolis, Minnesota (the "Lender").

                              W I T N E S S E T H :

WHEREAS, the Borrower has requested that the Lender extend a Three Million
Dollar ($3,000,000) revolving line of credit to provide financing for the
construction of pre-sold homes by the Borrower (the "Credit Facility"); and

WHEREAS, the Lender is willing to provide such a line of credit in accordance
with the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

1. LINE OF CREDIT. Upon the terms and subject to the conditions hereinafter set
forth, the Lender shall make advances to the Borrower for the purpose of
financing the construction of Acceptable Pre-Sold Homes (as defined below) by
the Borrower, from time to time until and including June 1, 1999 (the
"Expiration Date"), up to but not exceeding in the aggregate principal amount at
any one time outstanding the amount of Three Million and 00/100 Dollars
($3,000,000.00) (the "Construction Loan Amount"). So long as no Event of Default
(as defined herein) has occurred, the Borrower shall have the option to extend
the Expiration Date for two (2) additional periods of six months each (i.e.,
until December 1, 1999 and until June 1, 2000) provided (i) the Borrower gives
the Lender written notice of the Borrower's exercise of each such extension
option at least ten (10) days prior to the Expiration Date, and (ii) the
Borrower pays the Lender an extension fee of $15,000 contemporaneously with the
delivery of each such notice. The term "Expiration Date" shall include any date
to which the Credit Facility is so extended.

2. CONSTRUCTION LOANS. The terms (including, without limitation, interest rate,
payment amount and schedule, and maturity date) of the Credit Facility shall be
evidenced by a revolving real estate note (construction) in the original
principal amount of $3,000,000 of even date herewith executed by the Borrower
and made payable to the order of the Lender (the "Note"). "Acceptable Pre-Sold
Home" shall mean any home to be constructed by the Borrower on a single family
residential lot owned by the Borrower which has been pre-sold, as evidenced by
delivery to the Lender of a bona fide non-contingent purchase agreement in form
and substance acceptable to the Lender, executed by a qualified buyer, as
determined in the sole discretion of the Lender, providing for earnest money
payable to Borrower within fifteen (15) days after the date of the agreement in
an amount not less than five percent (5%) of the purchase price (an "Approved
Purchase Agreement"). The construction of no more than fifteen (15) Acceptable
Pre- Sold Homes may be financed under the Credit Facility at any one time. The

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maximum amount to be advanced by the Lender for the construction of any
Acceptable Pre-Sold Home shall not exceed the least of (a) sixty percent (60%)
of the appraised value of the Acceptable Pre-Sold Home plus the lot on which it
is situated pursuant to the appraisal, if any, obtained by the Lender pursuant
to Section 6 below; (b) sixty percent (60%) of the purchase price of the Project
being paid by the purchaser thereof pursuant to the Approved Purchase Agreement;
or (c) one hundred percent (100%) of the aggregate of (1) the retail purchase
price of the lot (i.e. the price paid by the purchaser thereof), and (2) amounts
paid or to be paid to contractors, subcontractors and material suppliers in
connection with the Project (the purchase price of the Lot plus such amounts
paid to contractors, subcontractors and material suppliers being hereinafter
collectively referred to as the "Hard Costs") (the least of (a), (b) or (c) is
referred to herein as the "Maximum Project Loan Amount").

3. CONDITIONS PRECEDENT - CREDIT FACILITY. As a condition precedent to the
establishment by the Lender of the Credit Facility, the following agreements,
documents, and other items shall have been executed and/or delivered to the
Lender, each of which agreements, documents and other items shall be in form and
substance acceptable to the Lender:

      A. Note and Loan Agreement. The Borrower shall have executed and delivered
      to the Lender this Agreement and the Note.

      B. Personal Guaranty. Peter Pflaum, Patrick C. Wells, Allan D. Lundgren,
      Edmund M. Lundgren and Gerald T. Lundgren (individually, a "Personal
      Guarantor" and collectively, the "Personal Guarantors") shall have each
      executed and delivered to the Lender a Personal Guaranty in form and
      substance acceptable to the Lender.

      C. Origination Fee. The Borrower shall have paid to the Lender a
      non-refundable initial origination fee in an amount equal to $7,500.00. In
      addition, the Borrower shall pay to the Lender a supplemental origination
      fee of $16,250 on the earlier of (i) one year from the date hereof, or
      (ii) the date on which the Borrower requests the first advance under the
      Note.

      D. Secretary's Certificate. The Borrower shall have delivered to the
      Lender a certificate of the secretary of the Borrower, certifying as to
      (i) the resolutions of the directors of the Borrower authorizing the
      execution, delivery and performance of this Agreement and the documents
      related hereto, (ii) the articles of incorporation and bylaws of the
      Borrower, and (iii) signatures of the officers or agents of the Borrower
      authorized to execute and deliver this Agreement, the documents related
      hereto, and other instruments, agreements and certificates, including
      advance requests, on behalf of the Borrower.

      E. Opinion of Counsel. The Borrower shall have delivered an opinion of
      counsel, addressed to the Lender, in form and substance acceptable to the
      Lender.

      F. UCC Search. The Lender shall have received and approved a UCC Search as
      to the Borrower.

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      G. Costs And Expenses. The Borrower shall have paid all reasonable costs
      and expenses, including, without limitation, attorneys' fees, paid or
      incurred by the Lender in connection with the closing and consummation of
      the transaction contemplated hereby.

4. CONDITIONS PRECEDENT - INITIAL ADVANCES. As a condition precedent to the
making by the Lender of the initial (or any subsequent) advance under the Credit
Facility with respect to any Acceptable Pre-Sold Home or Project (as defined
below), the following agreements, documents and other items shall have been
executed and/or delivered to the Lender, each of which agreements, documents and
other items shall be in form and substance acceptable to the Lender.

      A. Approved Purchase Agreement. The Approved Purchase Agreement, duly
      executed by the Borrower and the purchaser of such Acceptable Pre-Sold
      Home.

      B. Mortgage. The Borrower shall have executed and delivered to the Lender
      a mortgage, security agreement, fixture financing statement and assignment
      of leases and rents pursuant to which the Borrower shall have granted a
      mortgage and security interest in and to, and an assignment of leases and
      rents with respect to, the Acceptable Pre-Sold Home and the property on
      which it is situated (the Acceptable Pre-Sold Home together with the
      property on which it is situated are hereinafter referred to as the
      "Project"). With respect to any Project other than the first Project
      financed hereunder located in each county, the Borrower shall have
      executed and delivered to the Lender an Amendment to Mortgage with respect
      to such Project in the form attached hereto as EXHIBIT A pursuant to which
      the legal description of the property covered by the mortgage securing the
      Note on file in such county is amended to add the legal description of the
      Project thereto (said mortgage, as amended by any Amendment to Mortgage,
      is hereinafter referred to as a "Mortgage"). The Lender agrees to
      cooperate with the Borrower in good faith and as allowed by law to enable
      the Borrower to avoid paying duplicative mortgage registry tax on the
      Construction Loan Amount as a Mortgage is recorded in more than one
      county.

      C. Certificate of No Hazardous Material. With respect to the first Project
      located in any subdivision, a certificate of no hazardous material with
      respect to such subdivision, duly executed by the Borrower (a "Hazardous
      Material Certificate").

      D. Title Insurance. The Lender shall have received a fully paid ALTA
      mortgagee's title insurance policy issued by Chicago Title Insurance
      Company, or another title insurance company acceptable to the Lender
      ("Title") in form and substance satisfactory to the Lender, naming the
      Lender as the insured, insuring the Mortgage to be a valid first lien on a
      good and marketable fee simple title to the Project, in an amount not less
      than the Maximum Project Loan Amount, and specifically insuring against
      mechanic's liens, matters which would be disclosed by a comprehensive
      survey, the rights of parties in possession and rights of the purchasers
      under the Approved Purchase Agreement, and containing judgment, tax lien,
      assessment and bankruptcy searches and such endorsements as shall be
      requested by the Lender and with no pending disbursement clause.

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      E. Insurance Certificates. The Borrower shall have delivered to the Lender
      a certificate or certificates in form and substance acceptable to the
      Lender evidencing hazard, builder's risk and liability insurance coverage
      with respect to such Project in an amount acceptable to the Lender and
      naming the Lender as mortgagee and loss payee, with respect to builder's
      risk insurance and additional insured, with respect to liability
      insurance. The Lender agrees to accept "blanket" insurance covering
      multiple Projects, subject to compliance with other terms hereof.

      F. Preliminary Cost Statements. The Borrower shall have executed and
      delivered to the Lender a preliminary construction statement in form and
      substance acceptable to the Lender duly executed by the Borrower showing
      (if such advance related only to land acquisition costs), in summary form
      the projected Hard Costs relating to such Project or (if such advance
      includes payment of Hard Costs other than land acquisition costs), all
      Hard Costs in detail relating to such Project (a "Project Cost
      Statement").

      G. Building Permit; Zoning Letter. The Lender shall have received
      confirmation of the issuance of a building permit in connection with each
      Project, along with satisfactory evidence of the Project zoning, and
      compliance therewith, in form acceptable to the Lender.

      H. Project Fee. The Borrower shall have paid to the Lender a nonrefundable
      Project fee in the amount of $500.

5. CONDITIONS PRECEDENT - ALL ADVANCES. With respect to each advance, the
obligation of the Lender to make any advance in connection therewith shall be
subject to the further conditions precedent that on the date of such advance:

      A. No Event of Default. No "Event of Default" (as defined herein), and no
      event of which with the giving of notice or the lapse of time or both
      would constitute an Event of Default (an "Event") shall have occurred and
      be continuing, and all representations and warranties made by the Borrower
      herein or in any document related hereto or required hereby shall continue
      to be true and correct as of the date of such advance.

      B. Compliance. The Borrower shall have provided to the Lender such
      evidence of compliance with all of the provisions of this Agreement as the
      Lender may reasonably request.

      C. Government Approvals. No license or permit necessary for the
      construction and installation of the improvements for a Project shall have
      been revoked or the issuance of any such license or permit or the
      authority of the Borrower to construct and install the improvements shall
      have been subjected to challenger by or before any court or other
      governmental authority having or asserting jurisdiction over such Project.

      D. Tract Search. If requested by the Lender in the Lender's sole
      discretion, a tract search from Title with respect to any Projects, which
      shall be acceptable in substance to the Lender.

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      E. Inspecting Architect Report. If the Lender so determines, in its sole
      discretion, a report of an inspecting architect in form and substance
      acceptable to the Lender.

      F. Costs and Expenses. The Borrower shall have paid all costs and expenses
      including, without limitation, title insurance fees, mortgage registration
      tax, recording fees and attorney's fees, paid or incurred by the Lender in
      connection with all Projects.

6. Appraisals. The Lender may, in its discretion and at its cost, obtain an
appraisal of any Project or Projects in connection with which advances are to be
made hereunder. Notwithstanding the foregoing, upon approval by the Lender of
all other documents required hereunder and satisfaction of all other conditions
set forth herein with respect to such Project, the Lender shall commence
advances in connection therewith prior to receipt of such appraisal.

7. TERMS OF ADVANCES UNDER CREDIT FACILITY. So long as no Event of Default has
occurred, advances made under the Credit Facility with respect to any Project
shall be made directly to the Borrower (other than the initial advance with
respect to any Project, which shall be made to Title) from time to time from and
after the date hereof in accordance with the terms hereof and prior to the
Expiration Date in an aggregate principal amount up to, but not exceeding, the
Construction Loan Amount, (and, with respect to each Project, in an aggregate
principal amount up to, but not exceeding, the Maximum Project Loan Amount) to
pay Hard Costs with respect to each Project.

8. DRAW REQUESTS FOR ADVANCES UNDER CONSTRUCTION LOANS.

      A. Whenever the Borrower desires to obtain an advance with respect to any
      Project, which shall be no more often than twice per month (each of which
      may include requests for advances in connection with different Projects),
      the Borrower shall submit to the Lender (and with respect to the first
      advance for any Project, to Title) a draw request substantially in the
      form attached hereto as EXHIBIT B (a "Draw Request") duly signed by the
      Borrower, setting forth the information requested therein. Each Draw
      Request shall constitute a representation and warranty by the Borrower
      that all representations and warranties of the Borrower set forth in this
      Agreement are true and correct as of the date of such Draw Request, that
      no mechanic's or material supplier's liens have been filed with respect to
      any Project and that no Event of Default or Event has occurred as of the
      date of such Draw Request.

      B. At the time of submission of each Draw Request, other than the final
      Draw Request, the Borrower shall also submit to the Lender an update of
      the Project Cost Statement in connection with such Project along with such
      other documentation and information relating to such Project as the Lender
      may request.

      C. At the time of submission of the final Draw Request in connection with
      any Project, which shall not be submitted until completion of such
      Project, the Borrower shall also submit the following to the Lender and
      Title:

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            i) a final Project Cost Statement, in form and substance acceptable
            to the Lender and Title; and

            ii) such other supportive evidence as may reasonably be requested by
            the Lender or Title to substantiate all payments which are to be
            made out of such Draw Request and/or to substantiate all payments
            then made with respect to such improvements.

      D. If on the date an advance is desired, the Borrower has performed all of
      its agreements and complied with all requirements theretofore to be
      performed or complied with hereunder, the Lender shall (subject to the
      conditions, representations and warranties of the Borrower pursuant to
      this Agreement hereof and elsewhere herein) disburse the amount of the
      requested advance to the Borrower (or, in the case of the initial advance
      for any Project to Title) no later than the fifth (5th) day after receipt
      by the Lender of the Draw Request; provided however, that the Lender shall
      not be required to disburse any amount for payment for materials to be
      stored off the Premises or ordered.

9. ESCROW ACCOUNT. In the event the closing of the sale of any Project does not
occur for any reason within the earlier of (i) ten (10) days after the closing
date set forth in the Approved Purchase Agreement executed in connection with
such Project, or if the purchasers under an Approved Purchase Agreement are in
default thereunder (including, without limitation, rejection of any mortgage
application by such purchasers) and remain in default for thirty (30) days; or
(ii) within six (6) months of the date of initial advance in connection with
such Project then the Lender may require that the Borrower provide evidence to
the Lender that such Project is "in balance". For purposes hereof, the term "in
balance" shall mean that the aggregate undisbursed amount of the Maximum Project
Loan Amount for the construction of such Project is sufficient to pay all costs
and expenses of any kind which reasonably may be anticipated in connection with
the completion of the improvements relating to such Project. Solely for purposes
of this Section 9, the term "Maximum Project Loan Amount" shall mean the lesser
of (i) sixty percent (60%) of the appraised value of the Project, or (ii) eighty
five percent (85%) of Hard Costs in connection with such Project. If such
Project is not in balance, the Lender shall thereupon send written notice
thereof to the Borrower specifying the amount required to be deposited by the
Borrower with the Lender to provide sufficient funds to complete such
improvements. The Borrower shall, within ten (10) calendar days of the receipt
of any such notice, deposit with the Lender the amount of funds specified in the
Lender's notice. In the event any funds have been deposited with the Lender
pursuant to this Section 9, and in the event the Borrower thereafter submits a
Draw Request to the Borrower with respect to such Project, and notwithstanding
anything contained herein to the contrary, disbursements thereafter with respect
to such Project shall be made by the Lender first from the funds deposited by
the Borrower with the Lender, which funds shall be placed in a non-interest
bearing escrow account to be established by the Lender in the name of the
Borrower but with respect to which the Lender shall have sole authority to make
withdrawals therefrom, into which any and all amounts required to be deposited
by the Borrower pursuant to this Agreement shall be deposited (the "Escrow
Account") and, second from proceeds of an advance with respect to such Project.
At the time the final advance with respect to any Project is made hereunder
pursuant to Section 8.D. hereof, and 

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so long as no Event of Default or Event has occurred, the Lender shall, without
receipt of a Draw Request from the Borrower, return the then-remaining portion
of the funds deposited in the Escrow Account in connection with such Project to
the Borrower.

10. RELEASES. So long as no Event of Default has occurred, the Borrower shall
have the right to obtain the release of any Project from the lien of the
Mortgage upon payment to the Lender of a release price, which shall be in an
amount equal to 100% of the Bank's aggregate advances with respect to such
Project plus any accrued but unpaid interest related thereto.

11. REPRESENTATIONS. In order to induce the Lender to extend the Credit Facility
and to consider making advances hereunder, the Borrower hereby warrants and
represents to the Lender as follows:

      A. Corporate Existence and Power. The Borrower is a corporation duly
      organized and validly existing under the laws of the State of Minnesota,
      and is duly qualified to do business and is in good standing in the State
      of Minnesota and in every other jurisdiction where the nature of its
      business or the character of its properties makes such qualification
      necessary and where failure to be so qualified and in good standing would,
      in the aggregate, have a material adverse affect on the business,
      properties, operations, assets, liabilities or condition (financial or
      otherwise), of the Borrower, and has all requisite power and authority to
      carry on its business as now conducted and as presently proposed to be
      conducted.

      B. Authority of Borrower. The Borrower has full corporate power and
      authority to execute and deliver this Agreement and the documents related
      hereto and to incur and perform its obligations hereunder and thereunder;
      the execution, delivery and performance by the Borrower of this Agreement
      and any and all other documents and transactions contemplated hereby will
      not violate any provision of any law, rule, regulation or court order or
      result in the breach of, constitute a default under, or create or give
      rise to any lien under, any indenture or other agreement or instrument to
      which the Borrower is a party or by which the Borrower or its property may
      be bound or affected.

      C. Enforceability Against Borrower. This Agreement, the Note and the
      documents related hereto each constitute the legal, valid and binding
      obligations of the Borrower enforceable in accordance with their
      respective terms (subject, as to enforceability, to limitations resulting
      from bankruptcy, insolvency and other similar laws affecting creditors'
      rights generally).

      D. Financial Condition. The financial statements of the Borrower
      heretofore furnished to the Lender are complete and correct in all
      respects and fairly present the respective financial condition of the
      Borrower at the date of such statement, and have been prepared in
      accordance with generally accepted accounting principles, consistently
      applied. Since the most recent set of financial statements delivered by
      the Borrower to the Lender, there have been no material adverse changes in
      the financial condition of the Borrower.

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      E. Litigation. There is no action, suit or proceeding pending or, to the
      knowledge of the Borrower, threatened against or affecting the Borrower
      which, if adversely determined, would have a material adverse effect on
      the condition (financial or otherwise), business, properties or assets of
      the Borrower or which would question the validity of this Agreement or any
      instrument, document or other agreement related hereto or required hereby,
      or impair the ability of the Borrower to perform its obligations under the
      foregoing agreements.

      F. Licenses. The Borrower possesses adequate licenses, permits,
      franchises, patents, copyrights, trademarks and trade names, or rights
      thereto, to conduct their business substantially as now conducted and as
      presently proposed to be conducted.

      G. Default. The Borrower is not in default of a material provision under
      any material agreement, instrument, decree or order to which it is a party
      or by which it or its property is bound or affected.

      H. Consents. No consent, approval, order or authorization of, or
      registration, declaration or filing with, or notice to, any governmental
      authority or any third party is required in connection with the execution
      and delivery of this Agreement or any of the agreements or instruments
      herein mentioned to which the Borrower is a party or the carrying out or
      performance of any of the transactions required or contemplated hereby or
      thereby or, if required, such consent, approval, order or authorization
      has been obtained or such registration, declaration or filing has been
      accomplished or such notice has been given prior to the date hereof.

      I. Taxes. The Borrower has filed all tax returns required to be filed and
      either paid all taxes shown thereon to be due, including interest and
      penalties, which are not being contested in good faith and by appropriate
      proceedings, or provided adequate reserves for payment thereof, and the
      Borrower does not have any information or knowledge of any objections to
      or claims for additional taxes in respect of federal income or excess
      profits tax returns for prior years.

      J. Title. The Borrower has or will have good, absolute and marketable
      title to all Projects, free and clear of all liens, claims and
      encumbrances, except the Mortgage.

12. COVENANTS OF THE BORROWER. On and after the date hereof and until the
payment in full of the Note, and the performance of all other obligations of the
Borrower hereunder, the Borrower agrees that, unless the Lender shall otherwise
consent in writing:

      A. Financial Statements. During the term of the loan contemplated hereby,
      the Borrower shall deliver to the Lender the following:

            i) as soon as available and in any event within ninety (90) days
            after the end of each fiscal year of the Borrower, annual audited
            financial statements of the Borrower (balance sheet, statement of
            income, and statement of cash flow), all in 

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            reasonable detail and prepared in accordance with generally accepted
            accounting principles consistently applied;

            ii) as soon as available and in any event within forty-five (45)
            days after the end of each fiscal quarter of the Borrower,
            unaudited/internal balance sheets and statements of income and
            retained earnings of the Borrower as of the end of and for such
            quarter and for the fiscal year to date period then ended, all in
            reasonable detail and prepared in accordance with generally accepted
            accounting principles consistently applied (subject only to year-end
            audit adjustments);

            iii) promptly after the sending or filing thereof, copies of all
            regular and periodic financial reports which the Borrower shall file
            with the Securities and Exchange Commission or any national
            securities exchange;

            iv) as soon as available and in any event within one hundred twenty
            (120) days after the end of each calendar year, annual financial
            statements for such year from the Personal Guarantors, all in
            reasonable detail and prepared in accordance with generally accepted
            accounting principles, consistently applied, and specifically noting
            each and every contingent liability (including partnership and
            guaranty obligations) of the Personal Guarantors; and

            v) from time to time, with reasonable promptness, such further
            information as the Lender may reasonably request regarding the
            business, operations, properties, assets, liabilities (including
            specifically, but not by way of limitation, all guaranty,
            partnership, direct, indirect, contingent, absolute, joint and joint
            and several, liabilities and obligations, whether matured or
            unmatured), affairs and financial and other condition of the
            Borrower, the Personal Guarantors, and the Projects.

      B. Taxes and Claims. The Borrower shall pay and discharge all taxes,
      assessments and governmental charges or levies imposed upon it or upon its
      income or profits, or upon any of its assets or properties, prior to the
      date on which penalties attach thereto, and all lawful claims which, if
      unpaid, might become a lien or charge upon any Project or the other assets
      of the Borrower.

      C. Insurance. The Borrower shall maintain insurance coverage with respect
      to the Projects with responsible insurance companies licensed to do
      business in the State of Minnesota as required by the Mortgage. The
      Borrower shall furnish to the Lender full information and written evidence
      as to the insurance maintained by the Borrower.

      D. Litigation. The Borrower shall promptly give to the Lender notice in
      writing of all litigation and of all proceedings by or before any court or
      governmental or regulatory agency affecting the Borrower or the Personal
      Guarantors, except litigation or proceedings which, if adversely
      determined, would not materially affect the financial condition or
      business of the Borrower or the Personal Guarantors.

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      E. Liens. The Borrower shall promptly provide written notice to the Lender
      of the service on the Borrower or the filing of any mechanic's or material
      suppliers lien on any Project.

      F. Access to Books and Inspection. The Borrower shall at all times keep
      proper books of record and accounts for itself, and, upon request of the
      Lender, the Borrower shall provide any duly authorized representative of
      the Lender access during normal business hours to, and permit such
      representative to examine, copy or make extracts from, any and all books,
      records and documents in the Borrower's or the Personal Guarantors'
      possession or control relating to the Borrower's or the Personal
      Guarantors' affairs, and to inspect any of their facilities and
      properties; provided, however, that the Lender shall treat all such books
      and records confidential and shall only be permitted to disclose the
      information contained therein to its legal counsel, its independent public
      accountants, any participating banks, or in connection with any action to
      collect on any of the Notes or to enforce this Agreement or the documents
      related hereto, or as otherwise permitted or required by law.

      G. Access. The Borrower shall grant to the Lender's agents access to the
      Projects at any reasonable time upon reasonable notice in order to inspect
      the same and the Borrower's property and business.

      H. Consolidated Tangible Net Worth. The Borrower will at all times during
      the fiscal year ending on or about December 31, 1997, maintain
      "Consolidated Tangible Net Worth" (as defined in the Indenture) in an
      amount at least equal to the sum of $5,586,000 plus 50% of the Borrower's
      fiscal year to date net income (calculated in accordance with generally
      accepted accounting principles, consistently applied) calculated as of the
      last day of each fiscal quarter ending or after June 30, 1997. The
      Borrower will at all times during each fiscal year ending after December
      31, 1997 maintain Consolidated Tangible Net Worth in an amount at least
      equal to the sum of actual Consolidated Tangible Net Worth as of the last
      day of the immediately preceding fiscal year plus 50% of fiscal year to
      date net income (calculated in accordance with generally accepted
      accounting principles consistently applied). The "Indenture" means that
      certain Prospectus dated as of October 18, 1996 for the issuance of Senior
      Subordinated Debentures Series 11% of Borrower, but not including any
      amendments thereto unless such amendments are specifically approved in
      writing by the Lender.

      I. Ratio of Funded Debt to Consolidated Tangible Net Worth Plus
      Shareholder's Subordinated Debt. The Borrower will at all times maintain a
      ratio of Funded Debt to Consolidated Tangible Net Worth plus Shareholder
      Subordinated Debt (as said terms are defined in the Indenture) calculated
      quarterly, of not greater than 7.0 to 1.0.

13. ARBITRATION.

      A. Application. Except for "Core Proceedings" under the United States
      Bankruptcy Code, the Lender and the Borrower agree to submit to binding
      arbitration all claims, disputes and controversies between or among them,
      whether in tort, contract or otherwise

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      (and their respective employees, officers, directors, attorneys, and other
      agents) arising out of or relating to in any way (i) the Credit Facility
      and related loan and security documents which are the subject of this
      Agreement and its negotiation, execution, collateralization,
      administration, repayment, modification, extension, substitution,
      formation, inducement, enforcement, default or termination; or (ii)
      requests for additional credit. Any arbitration proceeding will (i)
      proceed in Minneapolis, Minnesota; (ii) be governed by the Federal
      Arbitration Act (Title 9 of the United States Code); and (iii) be
      conducted in accordance with the Commercial Arbitration rules of the
      American Arbitration Association ("AAA").

      B. Exclusions. The arbitration requirement does not limit the right of
      either party to (i) foreclose against real or personal property
      collateral; (ii) exercise self-help remedies relating to collateral or
      proceeds of collateral such as setoff or repossession; or (iii) obtain
      provisional ancillary remedies such as replevin, injunctive relief,
      attachment or the appointment of a receiver, before, during or after the
      pendency of any arbitration proceeding. This exclusion does not constitute
      a waiver of the right or obligation of either party to submit any dispute
      to arbitration, including those arising from the exercise of the actions
      detailed in section (i), (ii) and (iii) of this paragraph.

      C. Arbitrator. Any arbitration proceeding will be before a single
      arbitrator selected according to the Commercial Arbitration Rules of the
      AAA. The arbitrator will be a neutral attorney who has practiced in the
      area of commercial law for a minimum of ten years. The arbitrator will
      determine whether or not an issue is arbitratable and will give effect to
      the statutes of limitation in determining any claim. Judgment upon the
      award rendered by the arbitrator may be entered in any court having
      jurisdiction.

      D. Motion Practice. In any arbitration proceeding the arbitrator will
      decide (by documents only or with a hearing at the arbitrator's
      discretion) any pre-hearing motions which are similar to motions to
      dismiss for failure to state a claim or motions for summary adjudication.

      E. Discovery. In any arbitration proceeding discovery will be permitted
      and will be governed by the Minnesota Rules of Civil Procedure. All
      discovery must be completed no later than twenty (20) days before the
      hearing date and within one hundred eighty (180) days of the commencement
      of arbitration proceedings. Any requests for an extension of the discovery
      periods, or any discovery disputes, will be subject to final determination
      by the arbitrator upon a showing that the request for discovery is
      essential for the party's presentation and that no alternative means for
      obtaining the information is available.

14. As used herein, the term "Event of Default" shall mean and include any one
or more of the following events:

      A. the Borrower or any of the Personal Guarantors shall fail to pay, when
      due or within fifteen (15) days thereafter, any amounts required to be
      paid by the Borrower

<PAGE>


      under the Note or any other indebtedness of the Borrower or any of the
      Personal Guarantors to the Lender, or the Borrower or any of the Personal
      Guarantors shall fail to pay (i) within thirty (30) days of its due date
      any indebtedness to any third party secured creditor or (ii) within one
      hundred twenty (120) days of its due date any indebtedness to any other
      third party, which is not being contested in good faith, whether any such
      indebtedness is now existing or hereafter arises and whether direct or
      indirect, due or to become due, absolute or contingent, primary or
      secondary or joint or joint and several;

      B. the Borrower shall fail to observe or perform any covenant, condition
      or agreement to be observed or performed by it under the Note, this Loan
      Agreement, the Mortgage, any Certificate of No Hazardous Material or any
      other document related hereto or thereto (collectively, the "Borrower
      Documents") or any other instrument, agreement or other documents executed
      by the Borrower in favor of or with the Lender, whether related to the
      Credit Facility or any other matter, for a period of thirty (30) days
      after written notice, specifying such default and requesting that it be
      remedied, given to the Borrower by the Lender;

      C. any of the Personal Guarantors shall fail to observe or perform any
      covenant, condition or agreement to be observed or performed by him under
      the Personal Guaranty or any other instrument, agreement or other document
      executed by such Personal Guarantor in favor of the Lender, whether
      related to the Credit Facility or any other matter for a period of thirty
      (30) days after written notice, specifying such default and requesting
      that it be remedied, given to such Personal Guarantor by the Lender;

      D. the Borrower or any of the Personal Guarantors shall file or have filed
      against it a petition in bankruptcy or for reorganization or for an
      arrangement pursuant to any present or future state or federal bankruptcy
      act or under any similar federal or state law, or shall be adjudicated a
      bankrupt or insolvent, or shall make a general assignment for the benefit
      of its, his or her creditors, or shall be unable to pay its, his or her
      debts generally as they become due; or if an order for relief under any
      present or future federal bankruptcy act or similar state or federal law
      shall be entered against the Borrower or any of the Personal Guarantors;
      or if a petition or answer requesting or proposing the entry of such order
      for relief or the adjudication of the Borrower or any of the Personal
      Guarantors as a debtor or bankrupt or reorganization under any present or
      future state or federal bankruptcy act or any similar federal or state law
      shall be filed in any court and such petition or answer shall not be
      discharged or denied within ninety (90) days after the filing thereof; or
      if a receiver, trustee or liquidator of the Borrower or any of the
      Personal Guarantors or of all or substantially all of the assets of the
      Borrower or any of the Personal Guarantors, or of the property subject to
      the Mortgage or any part thereof, shall be appointed in any proceeding
      brought against the Borrower or any of the Personal Guarantors and shall
      not be discharged within ninety (90) days of such appointment; or if the
      Borrower or any of the Personal Guarantors shall consent to or acquiesce
      in such appointment; or if any property of the Borrower or any of the
      Personal Guarantors (including without limitation the estate or interest
      of the Borrower in the property subject to the Mortgage or any part
      thereof) shall be levied upon or attached in any proceeding;

<PAGE>


      E. final judgment(s) for the payment of money in excess in the aggregate
      of $50,000 shall be rendered against the Borrower or any of the Personal
      Guarantors and shall remain undischarged for a period of thirty (30) days
      during which execution shall not be effectively stayed;

      F. the Borrower or Peter Pflaum shall be or become insolvent (whether in
      the equity or bankruptcy sense) or Peter Pflaum shall die;

      G. Peter Pflaum shall no longer be the chief executive officer of the
      Borrower;

      H. (i) twenty-five percent (25%) or more of the voting equity securities
      of the Borrower shall be sold, transferred or otherwise disposed of in one
      transaction or in a series of transactions occurring within a twelve (12)
      month period (except for the redemption or repurchase by the Borrower of
      shares of voting equity securities owned by Allan D. Lundgren, Edmund M.
      Lundgren, Gerald T. Lundgren or Patrick C. Wells, or a transfer of
      ownership as a result of the death of a shareholder of the Borrower); or
      (ii) additional voting equity securities of the Borrower shall be issued
      in one transaction or in a series of transactions occurring within a
      twelve (12) month period which results in any person (other than Peter
      Pflaum) or entity acquiring, directly or indirectly, more than forty
      percent (40%) of the voting power of the Borrower (any of the foregoing
      being referred to as a "Change of Control");

      I. any representation or warranty made by the Borrower or any of the
      Personal Guarantors herein or in the documents related hereto shall prove
      to be untrue or misleading in any material respect, or any statement,
      certificate or report furnished hereunder or under any of the foregoing
      documents by or on behalf of the Borrower or any of the Personal
      Guarantors shall prove to be untrue or misleading in any material respect
      on the date when the facts set forth and recited therein are stated or
      certified;

      J. the Borrower or any of the Personal Guarantors shall liquidate,
      dissolve, terminate or suspend its, his or her business operations, or
      sell all or substantially all of its, his or her assets, without the prior
      written consent of the Lender;

      K. all or any portion of the property subject to the Mortgage, or the
      legal, equitable or any other interest therein, shall be sold,
      transferred, assigned, leased or otherwise disposed of unless the prior
      written consent of the Lender is first obtained;

      L. any Personal Guarantors shall repudiate, purport to revoke or fail to
      perform any such Personal Guarantor's obligations under such Personal
      Guarantor's Personal Guaranty; or

      M. any breach, default, or event of default by or attributable to any
      affiliate of the Borrower or any Personal Guarantor occurs under any
      agreement between such affiliate and the Lender.

<PAGE>


15. REMEDIES. In addition to any other remedies provided for in the Note, the
Mortgage, and any of the other Borrower Documents or otherwise available at law
or in equity, upon the occurrence of an Event of Default, the Lender may, in its
sole discretion, refrain from making any further advances in connection with any
Project under the Credit Facility and/or terminate the Credit Facility.

16. NOTICES. All notices, consents, requests, demands and other communications
hereunder shall be given to or made upon the respective parties hereto at their
respective addresses specified below or, as to any party, at such other address
as may be designated by it in a written notice to the other party. All notices,
requests, consents and demands hereunder shall be effective when personally
delivered or duly deposited in the United States mails, certified or registered,
postage prepaid, or delivered via telecopier, addressed as follows:

17.         IF TO THE LENDER:

            Norwest Bank Minnesota, National Association
            Old St. Anthony Office
            425 East Hennepin Avenue
            Minneapolis, Minnesota 55479
            Attention: Commercial Real Estate Department
            Telecopier: (612) 667-1344

18.         IF TO THE BORROWER:

            Lundgren Bros. Construction, Inc.
            935 East Wayzata Boulevard
            Wayzata, Minnesota 55391
            Telecopier: (612) 473-7401
            Attention: Peter Pflaum

19. MISCELLANEOUS.

      A. Waivers, etc. No failure on the part of the Lender to exercise, and no
      delay in exercising, any right or remedy hereunder or under applicable law
      or any document or agreement related hereto shall operate as a waiver
      thereof; nor shall any single or partial exercise of any such right or
      remedy preclude any other or further exercise thereof or the exercise of
      any other right or remedy. The remedies herein provided are cumulative and
      not exclusive of any remedies provided by law.

      B. Expenses. The Borrower shall reimburse the Lender for any and all costs
      and expenses, including without limitation attorneys' fees, paid or
      incurred by the Lender in connection with (i) the preparation of this
      Agreement and any other document or agreement related hereto or thereto,
      and the transactions contemplated hereby, which amount shall be paid prior
      to the making of any advance hereunder; (ii) the closing and 

<PAGE>


      consummation of the transactions contemplated hereby; (iii) the
      negotiation of any amendments, modifications or extensions to any of the
      foregoing documents, instruments or agreements and the preparation of any
      and all documents necessary or desirable to effect such amendments,
      modifications or extensions; and (iv) the enforcement by the Lender during
      the term hereof or thereafter of any of the rights or remedies of the
      Lender under any of the foregoing documents, instruments or agreements
      under applicable law, whether or not suit is filed with respect thereto.
      The obligation of the Borrower to reimburse the Lender for attorneys' fees
      shall be limited to reasonable attorneys' fees for purposes of subsections
      (i), (ii) and (iii) above but shall not be so limited for purposes of
      subsection (iv).

      C. Amendments, etc. This Agreement and the Note may not be amended or
      modified, nor may any of their terms (including without limitation, terms
      affecting the maturity of or rate of interest on the Note) be modified or
      waived, except by written instruments signed by the Lender and the
      Borrower.

      D. Entire Agreement; Assignment. This Agreement, together with the
      documents related hereto, comprises the complete and integrated agreement
      of the parties on the subject matter hereof and supersedes all prior
      agreements, written or oral, on the subject matter hereof. This Agreement
      shall be binding upon and inure to the benefit of the Borrower and the
      Lender and their respective successors and assigns; provided, however,
      that the Borrower may not transfer or assign its right to borrow hereunder
      without the prior written consent of the Lender.

      E. Offsets. Nothing in this Agreement shall be deemed a waiver or
      prohibition of the Lender's right of banker's lien, offset, or
      counterclaim, which right the Borrower hereby grants to the Lender.

      F. 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.

      G. Governing Law. This Agreement and all other agreements related hereto,
      shall be construed in accordance with and governed by the laws of the
      State of Minnesota.

      H. Headings. The descriptive headings for the several sections of this
      Agreement are inserted for convenience only and shall not define or limit
      any of the terms or provisions hereof.

<PAGE>


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.


                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION

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


                                          LUNDREN BROS. CONSTRUCTION,
                                          INC.

                                          By:
                                              ----------------------------------
                                              Its: President

<PAGE>


                                    EXHIBIT A

                   AMENDMENT TO MORTGAGE, SECURITY AGREEMENT,
                         FIXTURE FINANCING STATEMENT AND
                         ASSIGNMENT OF LEASES AND RENTS

THIS AMENDMENT TO MORTGAGE, SECURITY AGREEMENT, FIXTURE FINANCING STATEMENT AND
ASSIGNMENT OF LEASES AND RENTS, is made and entered into as of the ____ day of
_____, 1997, by and between LUNDGREN BROS. CONSTRUCTION, INC., a Minnesota
corporation (the "Mortgagor"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
a national banking association (the "Mortgagee").

                              W I T N E S S E T H:

WHEREAS, the Mortgagor and the Mortgagee entered into that certain Loan
Agreement dated as of ___________, 1997 (the "Loan Agreement"), concerning the
extension of a $3,000,000 revolving credit facility by the Mortgagee to the
Mortgagor (the "Loan"); and

WHEREAS, amounts outstanding under the Loan are evidenced by that certain Real
Estate Note (Construction) dated as of ___________, 1997 (the "Original Note"),
executed by the Mortgagor in favor of the Mortgagee in the maximum principal
amount of $3,000,000; and

WHEREAS, the Note is secured pursuant to that certain Mortgage, Security
Agreement, Fixture Financing Statement and Assignment of Leases and Rents dated
as of ___________, 1997 (as heretofore and hereafter amended from time to time
the "Mortgage"), encumbering property legally described therein; and

WHEREAS, the Mortgage was originally filed of record in the office of the ______
County ___________________ on ____________, 1997, as Document No. _____; and

WHEREAS, the Mortgage, or amendments thereto, may have also been filed of record
from time to time in various other counties as additional parcels of real
property were subjected to the lien of the Mortgage in order to allow the
Mortgagor to obtain additional advances under the Loan Agreement evidenced by
the Note with respect to said parcels; and

WHEREAS, the Mortgagee has agreed to subject the real property described on
Exhibit A to the lien of the Mortgage under the Loan Agreement and evidenced by
the Note with respect to said parcels; and

WHEREAS, mortgage registration tax was paid in connection with the recording of
the Mortgage in the amount of $________, as evidenced by the _________ County
Treasurer's Receipt No. ______.

<PAGE>


WHEREAS, the Mortgagor and the Mortgagee desire to enter into this Amendment to
Mortgage, Security Agreement, Fixture Financing Statement and Assignment of
Leases and Rents to secure the payment of all amounts outstanding under the
Note.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

      1. The legal description of the land set forth on Exhibit A to the
      Mortgage is hereby amended to also include the land legally described on
      Exhibit A attached hereto (which land shall at all times hereafter be
      included in the definition of "land" set forth in the Mortgage).

      2. Except as expressly amended herein, the Mortgage shall be and remain in
      full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the parties hereto have made and entered into this Amendment
to Mortgage, Security Agreement, Fixture Financing Statement and Assignment of
Leases and Rents as of the day and year first above written.

                                          LUNDGREN BROS. CONSTRUCTION,
                                          INC.

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


                                          NORWEST BANK MINNESOTA,
                                          NATIONAL ASSOCIATION

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


STATE OF MINNESOTA            )
                              ) ss.
COUNTY OF                     )

The foregoing instrument was acknowledged before me this ____ day of November,
1997, by ________________________ the _____________________ of LUNDGREN BROS.
CONSTRUCTION, INC., a Minnesota corporation, for and on behalf of such
corporation.


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

<PAGE>


STATE OF MINNESOTA            )
                              ) ss.
COUNTY OF                     )

The foregoing instrument was acknowledged before me this ____ day of November,
1997, by ___________________________, the ____________________ of Norwest Bank
Minnesota, National Association, a national banking association, for and on
behalf of said association.


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


THIS INSTRUMENT WAS DRAFTED BY:

Winthrop & Weinstine, P.A. (TMH)
30 East Seventh Street
3200 Minnesota World Trade Center
St. Paul, MN  55101

<PAGE>


                                    EXHIBIT B

                             (FORM OF DRAW REQUEST)