SECOND AMENDMENT, EXTENSION
                           AND REAFFIRMATION AGREEMENT

This Agreement, is effective as of the _______ day of __________, 1997, by and
among Lundgren Bros. Construction, Inc., a Minnesota corporation ("Borrower"),
Patrick C. Wells, Peter Pflaum, Edmund M. Lundgren, Allan D. Lundgren, and
Gerald T. Lundgren (collectively, the "Guarantors") and Norwest Bank Minnesota,
National Association, a national banking association ("Lender").

                                    RECITALS

WHEREAS, Borrower and Lender entered into that certain Amended and Restated
Demand Discretionary Revolving Credit Agreement dated as of March 18, 1994 (the
"Credit Agreement"), concerning the extension by the Lender to the Borrower of a
$2,200,000 Revolving Line of Credit (the "Revolving Credit Facility"); and

WHEREAS, Borrower and Lender subsequently entered into that certain Amendment,
Extension and Reaffirmation Agreement dated as of March 14, 1995 (the AFirst
Amendment@), pursuant to which the Lender increased the maximum amount available
at any one time under the Revolving Credit Facility from $2,200,000 to
$3,500,000. The Credit Agreement and the First Amendment shall hereinafter
collectively be referred to as the ACredit Agreement@.

WHEREAS, the obligation of the Borrower to repay advances under the Credit
Agreement is evidenced by a certain Fourth Amended and Restated Revolving Note
dated March 14, 1995, executed by the Borrower in the original principal amount
of $3,500,000 and payable to the order of the Lender (the "Fourth Amended
Note"); and

WHEREAS, in consideration of the increase in the Revolving Credit Facility
pursuant to the First Amendment, the Borrower granted the Lender additional
collateral pursuant to a Third Life Insurance Assignment and the Guarantor Life
Insurance Assignments (as those terms are defined in the First Amendment).

WHEREAS, the obligations of the Borrower under and pursuant to the Fourth
Amended Note and the Credit Agreement are secured by, among other things, the
First Life Insurance Assignment, the Second Life Insurance Assignment; the Third
Life Insurance Assignment and the Guarantor Life Insurance Assignments (all as
defined in the First Amendment).

WHEREAS, payment and performance of the obligations of the Borrower under and
pursuant to the Fourth Amended Note and the Credit Agreement have, among other
things, been jointly and severally guaranteed by the Guarantors pursuant to that
certain Guaranty dated as of November 5, 1990, executed by the Guarantors and
delivered to the Lender (the "Guaranty"); and

WHEREAS, the Borrower has requested that the Lender increase the maximum amount
available at any one time under the Revolving Credit Facility from $3,500,000.00
to $4,250,000.00.

WHEREAS, the Lender is willing to do so on the terms and subject to the
conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing Recitals, which are hereby
made a part hereof, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto do hereby
agree as follows:

1. Revolving Credit Facility. Section 1 of the Credit Agreement is hereby
deleted in its entirety and the following should be substituted therefor:

             Subject to and upon the terms, covenants and conditions hereinafter
             set forth, the Lender hereby agrees to make loans to the Borrower
             under this Section 1 from time to time until and including May 31,
             1997 (and thereafter until and including May 31 of each succeeding
             calendar year if the line of credit is extended in writing by the
             Lender and the Borrower for an additional one (1) year period(s)
             pursuant to Section 13.J. herein) (such date hereinafter referred
             to as the "Expiration Date"), at such time and in such amount as to
             each loan as the Borrower shall request, up to but not exceeding in
             aggregate principal amount at any one time outstanding the lesser
             of (i) the sum of Four Million Two Hundred Fifty Thousand and
             00/100 Dollars ($4,250,000.00) or (ii) the sum of $500,000 plus the
             "Aggregate Net Cash Surrender Value" ("Maximum Loan Amount"). For
             purposes hereof, the term "Aggregate Net Cash Surrender Value"
             shall mean the aggregate net cash surrender value of the "Assigned
             Policies" (as defined in Section 6.A. of this Credit Agreement)
             after payment of all policy loans, as confirmed in writing by the
             respective issuers of the Assigned Policies in form acceptable to
             the Lender in its discretion. Such advances shall be used for
             working capital needs, including but not limited to work in
             progress, payroll, general and administrative expenses and expenses
             incurred in connection with land purchases. So long as no demand
             for payment has been made, and so long as the Borrower has
             otherwise complied with the terms and conditions hereof, the
             Borrower may borrow, repay and reborrow within such limit under
             this Section 1 from the date hereof to and including the Expiration
             Date. The line of credit described above is hereinafter referred to
             as the "Revolving Credit Facility."

2. New Revolving Note. The Borrower has executed and delivered to the Lender
that certain Fifth Amended and Restated Revolving Note of even date herewith in
the original principal amount of $4,250,000 made payable to the order of the
Lender (the "New Revolving Note"). The Borrower and Guarantors acknowledge and
agree that the New Revolving Note is a complete restatement and amendment of the
Fourth Amended Note and supersedes the Fourth Amended Note in its entirety.
Borrower acknowledges and agrees that any and all references contained in the
Credit Agreement, the First Life Insurance Assignment, the Second Life Insurance
Assignment, the Third Life Insurance Assignment or any other document or
agreement executed in connection therewith to the term "Note" or "Revolving
Note" shall henceforth mean and refer to the New Revolving Note. Borrower fully
acknowledges and agrees that any indebtedness of the Borrower to the Lender
pursuant to the New Revolving Note shall be secured by, among other things, the
First Life Insurance Assignment, the Second Life Insurance Assignment and the
Third Life Insurance Assignment. Upon execution of this Agreement and the New
Revolving Note, the Lender shall return the Fourth Amended Note to the Borrower.

3. Outstanding Balance. Borrower acknowledges that the unpaid principal balance
of the New Revolving Note as of the effective date hereof is $________________.

4. Representations. The Borrower and the Guarantors each hereby warrant and
represent to the Lender that each and all of the representations and warranties
set forth and contained in the Credit Agreement, the Guaranty, the First Life
Insurance Assignment, the Second Life Insurance Assignment, the Third Life
Insurance Assignment, the Guarantor Life Insurance Assignments, and the
documents and agreements related hereto or thereto are true, correct and
complete in all respects as of the date hereof. The Borrower hereby supplements
the representations set forth in Section 8.D. of the Credit Agreement as
described on EXHIBIT A attached hereto and incorporated herein.

5. No Waiver. The Borrower and the Guarantors each hereby acknowledge and agree
that by executing and delivering this Agreement the Lender is not waiving any
existing default, whether known or unknown, nor is the Lender waiving any of its
rights or remedies under the Credit Agreement, the New Revolving Note, the First
Life Insurance Assignment, the Second Life Insurance Assignment, the Third Life
Insurance Assignment, the Guarantor Life Insurance Assignments and the Guaranty,
or any of the documents related to or executed in connection with the Revolving
Credit Facility.

6. Costs and Expenses. In accordance with Section 13.B. of the Credit Agreement,
the Borrower shall pay all reasonable costs and expenses, including reasonable
attorneys' fees, incurred by the Lender in connection with the preparation of
this Agreement and the New Revolving Note and any documents relating thereto.

7. No Set-Off. The Borrower hereby acknowledges to and agrees with the Lender
that no events, conditions or circumstances have arisen or exist as of the date
hereof which would give the Borrower the right to assert a defense, counterclaim
and/or setoff to any claim by the Lender for payments of amounts owing under the
Fourth Amended Note, the New Revolving Note, the Credit Agreement, the First
Life Insurance Assignment, the Second Life Insurance Assignment, the Third Life
Insurance Assignment or any of the documents related thereto. Any defense, right
of set off or counterclaim which might otherwise be available to Borrower is
hereby fully and finally waived and released in all respects in consideration of
the Lender's agreement to increase the amount available to the Borrower pursuant
to the Revolving Credit Facility as set forth herein; provided, however, that
the release shall not apply to any possible errors by the Lender involving
strict mathematical calculation of principal and/or interest due from time to
time under the Fourth Amended Note or the New Revolving Note.

8. Consent of Guarantors. The Guarantors hereby consent to each and all of the
provisions of this Agreement. Guarantors further acknowledge and agree that the
Guaranty shall be and is hereby amended to provide that all references contained
in the Guaranty to the term "Note" shall henceforth refer to the New Revolving
Note.

9. Acknowledgment of Guarantors. Each of the Guarantors hereby acknowledges and
agrees that the Guaranty and the Guarantor Life Insurance Assignment executed by
him and delivered to the Lender remain fully enforceable and in full force and
effect in accordance with their original terms, except as expressly amended
hereby, and are not subject to any defense, counterclaim or right of set-off.

10. Demand Feature. The Borrower and the Guarantors each hereby acknowledge that
the New Revolving Note continues to be due and payable in full ON DEMAND, and
this Agreement shall not in any way constitute or be deemed to constitute an
amendment, modification or limitation of such provision.

11. No Other Amendments. Except as expressly amended hereby, the Credit
Agreement, the First Life Insurance Assignment, the Second Life Insurance
Assignment, the Third Life Insurance Assignment, the Guarantor Life Insurance
Assignments, the Guaranty and all documents and agreements executed in
connection therewith or otherwise related thereto shall remain in full force and
effect in accordance with their original terms, and no course of dealing or
other action or statement of the Lender or any of its officers, directors,
agents, employees, legal counsel or other representatives shall amend, or be
deemed an amendment of, this Agreement, the Credit Agreement, the Fourth Amended
Note, the New Revolving Note, the First Life Insurance Assignment, the Second
Life Insurance Assignment, the Third Life Insurance Assignment, the Guaranty,
the Guarantor Life Insurance Assignments or any of the documents or agreements
related thereto or hereto (collectively, the "Loan Documents").

12. Merger. All prior oral and written communications, commitments, alleged
commitments, promises, alleged promises, agreements and alleged agreements by or
among the Lender, the Borrower and/or the Guarantors are hereby merged into the
Loan Documents. All commitments, promises and agreements of the parties hereto
are set forth in the Loan Documents and no other commitments, promises or
agreements, oral or written, of any of the parties hereto shall be enforceable
against any such party.

13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

14. Successors. This Agreement shall be binding upon and inure to the benefit of
the respective heirs, successors or assigns of the parties hereto; provided,
however, that any right the Borrower may have, as set forth in the Credit
Agreement, to obtain advances under the Revolving Credit Facility is not
assignable.

15. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which, taken together, shall constitute
one and the same instrument.

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


                                     LENDER:

                                                     NORWEST BANK MINNESOTA,
                                                     NATIONAL ASSOCIATION


                                                     By_________________________
                                                          Its Vice President


                                                    BORROWER:

                                                    LUNDGREN BROS. CONSTRUCTION,
                                                    INC.


                                                    By_________________________
                                                      Its


                                                    GUARANTORS:

                                                    ___________________________
                                                    Patrick C. Wells

                                                    ___________________________
                                                    Peter Pflaum

                                                    ___________________________
                                                    Edmund M. Lundgren

                                                    ___________________________
                                                    Allan D. Lundgren

                                                    ___________________________
                                                    Gerald T. Lundgren


STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )

The foregoing instrument was acknowledged before me this ______ day of
___________, 1997, by ________________________________, the Vice President of
Norwest Bank Minnesota, National Association, a national banking association,
for and on behalf of said association.

                                                  ______________________________
                                                  Notary Public


STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )

The foregoing instrument was acknowledged before me this ______ day of
___________, 1997, by Peter Pflaum, the President of Lundgren Bros.
Construction, Inc., a Minnesota corporation, for and on behalf of said
corporation.

                                                  ______________________________
                                                  Notary Public


STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )

The foregoing instrument was acknowledged before me this ______ day of
___________, 1997, by Patrick C. Wells.

                                                  ______________________________
                                                  Notary Public


STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )


The foregoing instrument was acknowledged before me this ______ day of
______________, 1997, by Peter Pflaum.

                                                  ______________________________
                                                  Notary Public



STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )


The foregoing instrument was acknowledged before me this ______ day of
__________, 1997, by Edmund M. Lundgren.

                                                  ______________________________
                                                  Notary Public

STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )


The foregoing instrument was acknowledged before me this ______ day of
____________, 1997, by Allan D. Lundgren.

                                                  ______________________________
                                                  Notary Public

STATE OF MINNESOTA         )
                           ) ss.
COUNTY OF                  )


The foregoing instrument was acknowledged before me this ______ day of
_____________, 1997, by Gerald T. Lundgren.

                                                  ______________________________
                                                  Notary Public


THIS INSTRUMENT WAS DRAFTED BY:
Winthrop & Weinstine, P.A.
ATTN: Thomas M. Hart (Atty #41816)
3200 Minnesota World Trade Center
30 East Seventh Street
St. Paul, Minnesota  55101
STP1: 400369-1



                                    EXHIBIT A

                 (Supplemental Disclosure of Pending Litigation)