LOAN AGREEMENT

     This Loan Agreement (the "Agreement") is entered into by and between
MCO PROPERTIES INC., a Delaware corporation, MCO PROPERTIES L.P., a
Delaware limited partnership, HORIZON CORPORATION, a Delaware corporation,
HORIZON PROPERTIES CORPORATION, a Delaware corporation, and WESTCLIFF
DEVELOPMENT CORPORATION, a Texas corporation (collectively, "Borrower"),
and SOUTHWEST BANK OF TEXAS, N.A., a national banking association
("Lender") effective as of October 27, 1998.  Borrower has requested and
Lender has agreed to lend to Borrower the sum of up to $14,000,000.00, upon
the terms and subject to the conditions set forth herein.  In consideration
for the above premises and the mutual promises and covenants herein
contained, Borrower and Lender do hereby agree as follows:

     1.   Loan.  

          (a)  On the terms and subject to the conditions set forth in this
Agreement, Lender agrees to lend to Borrower up to $14,000,000.00 (the
"Loan").  The Loan shall be evidenced by a Revolving Credit Note (the
"Note") in a form satisfactory to Lender, duly executed by Borrower in the
principal amount of $14,000,000.00 and made payable to the order of Lender. 
Principal and interest on the Note shall be due and payable in the manner
and at the times set forth in the Note with final maturity (the "Maturity
Date") on October 1, 2000; provided however, that upon the request of
Borrower and the consent of Lender, which consent shall not be unreasonably
withheld, but may be conditioned upon: (i) Lender's review of the credit
standing and financial condition of the Borrower, and (ii) no Events of
Default (as hereinafter defined) hereunder, the final maturity shall be
October 1, 2001.  The availability or proceeds of the Loan shall be used
only (i) for the issuance of one or more Letters of Credit (as hereinafter
defined), and (ii) for Borrower's general corporate purposes.
          
          (b)  On the terms and subject to the conditions set forth in this
Agreement, Lender agrees to make advances on the Note to Borrower for the
issuance of one or more letters of credit the total aggregate face amount
of which shall not exceed at any one time the lesser of (i) $14,000,000.00
and (ii) the "Borrower's Loan Limit", as such term is defined in Exhibit
"A" hereto.  Each of the letters of credit shall be evidenced by an
Application and Agreement for Letter of Credit (the "Application") in a
form satisfactory to Lender.  Each of these letters of credit and any
renewals, extensions and modifications thereof are collectively referred to
herein as the "Letter of Credit", and shall be for a term of no more than
one year from the date of issuance.  Repayment of drafts against the Letter
of Credit shall be governed by this Agreement and the Application, and
shall be and is secured by the collateral and guaranties, if any, provided
herein.

     2.   Revolving Credit Advances.  Subject to the terms hereof, Borrower
may borrow, pay, reborrow and repay under the Note, provided, however, the
maximum principal outstanding under the Note shall not exceed the lesser of
(i) $14,000,000.00 and (ii) the Borrower's Loan Limit.  Borrower's requests
for advances (whether for cash or Letter of Credit) under the Note shall
specify the aggregate amount of the advance and the date of such advance. 
Borrower shall furnish to Lender a request for borrowing in a form
satisfactory to Lender at least two (2) business day prior to the requested
borrowing date.  Such request shall include, among other items, a Borrowing
Base Report as required under Paragraph 5(c).  After receiving notice of a
requested advance in the manner provided herein, Lender shall make the
requested funds available to Borrower on the requested borrowing date at
Lender's principal banking office in Houston, Texas.  If at any time prior
to the Maturity Date, the outstanding advances (including the face amount
of outstanding Letters of Credit) under the Note exceed the Borrower's Loan
Limit as shown on any reports delivered to Lender under Paragraph 5(c) or
as indicated by Lender's own records, Borrower shall, on the date of the
delivery of such report to Lender, prepay on the Note such amount as may be
necessary to eliminate such excess.

     3.   Conditions Precedent.

          (a)  The obligation of Lender to make the initial advance under
the Note is subject to the conditions precedent that, as of the date of
such advance, Lender shall have received (i) duly executed copies of each
document listed on the last page hereof relating to the Loan, in form and
substance acceptable to Lender and its legal counsel (all the documents
listed on the last page hereof, together with this Agreement and any other
security documents relating to the Loan, and any modifications thereof, are
hereinafter collectively referred to as the "Loan Documents"), (ii) an
origination fee of $140,000.00, as consideration for Lender's commitment to
make advances under the Note, (iii) copies of all deeds of trust, mortgages
and security documents related to the Real Estate Notes, and originals of
all of the Real Estate Notes (hereinafter defined) properly endorsed to the
order of Lender, (iv) Mortgagee Policies of Title Insurance issued with
respect to the Real Estate Notes endorsed for the benefit of Lender, (v)
appraisals of all the Real Estate Collateral (as hereinafter defined) and
the Real Estate Notes (as hereinafter defined), the principal amount of
which exceeds $250,000, in form and content satisfactory to Lender, (vi) a
Mortgagee Policy of Title Insurance for the Real Estate Collateral in form
and content satisfactory to Lender, and (vii) such other documents and
certificates as Lender or Lender's counsel may reasonably request.

          (b)  Lender's obligation to make advances under the Note shall be
subject to the additional conditions precedent that, as of the date of such
advance and after giving effect thereto: (i) all representations and
warranties made by Borrower to Lender are true and correct, as if made on
such date, (ii) all documents and proceedings shall be reasonably
satisfactory to legal counsel for Lender, (iii) no condition or event
exists which constitutes an Event of Default (as hereinafter defined) or
which, with the lapse of time and/or giving of notice, would constitute an
Event of Default, and (iv) all conditions precedent set forth in
subparagraph (a) above shall have been satisfied.

     4.   Representations and Warranties.  In order to induce Lender to
make the Loan, Borrower represents and warrants to Lender that:

          (a)  The Loan Documents are the legal and binding obligations of
Borrower, enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors' rights;

          (b)  All financial statements delivered by Borrower to Lender
prior to the date hereof are true and correct in all material respects,
fairly present the financial condition of Borrower and have been prepared
in accordance with generally accepted accounting principles, consistently
applied; as of the date hereof, there are no obligations, liabilities or
indebtedness (including contingent and indirect liabilities) which are
material to Borrower and not reflected in such financial statements; and no
material adverse changes have occurred in the financial condition or
business of Borrower since the date of the most recent financial statements
which Borrower has delivered to Lender;

          (c)  Except in connection with that certain Second Amended and
Restated Credit and Security Agreement dated July 15, 1995 among Borrower
and Bank Boston, N.A., which will be terminated on or about the date
hereof, neither the execution and delivery of this Agreement and the other
Loan Documents, nor consummation of any of the transactions herein or
therein contemplated, nor compliance with the terms and provisions hereof
or thereof, will contravene or conflict with any provision of law, statute
or regulation to which Borrower is subject or any judgment, license, order
or permit applicable to Borrower or any indenture, mortgage, deed of trust
or other instrument to which Borrower may be subject; no consent, approval,
authorization or order of any court, governmental authority or third party
is required in connection with the execution and delivery by Borrower of
this Agreement or the transactions contemplated herein or therein;

          (d)  No litigation, investigation, or governmental proceeding is
pending, or, to the knowledge of any of Borrower's officers, threatened
against or affecting Borrower, which may result in any material adverse
change in Borrower's business, properties or operations;

          (e)  There is no specific fact known to Borrower that Borrower
has not disclosed to Lender in writing which is likely to result in any
material adverse change in Borrower's business, properties or operations;

          (f)  Borrower owns all of the assets reflected on its most recent
balance sheet free and clear of all liens, security interests or other
encumbrances, except as previously disclosed in writing to Lender or in the
notes to the financial statements delivered by Borrower to Lender;

          (g)  The principal office, and principal place of business of
Borrower is in Fountain Hills, Arizona; the chief executive office is in
Houston, Texas;

          (h)  All taxes required to be paid by Borrower have in fact been
paid, except for taxes being contested in good faith by appropriate
proceedings for which adequate reserves have been established; 

          (i)  Borrower is not in violation of any law, ordinance,
governmental rule or regulation to which it is subject, to the actual
knowledge of Borrower's officers, and is not in default in any material
respect under any material agreement, contract or understanding to which it
is a party; 

          (j)  No written certificate or written statement herewith or
heretofore delivered by Borrower to Lender in connection herewith, or in
connection with any transaction contemplated hereby, contains any untrue
statement of a material fact or fails to state any material fact necessary
to keep the statements contained therein from being misleading;

          (k)  Borrower has taken certain reasonable steps necessary to
determine and has determined that no hazardous substances, or other
substances known or suspected to pose a threat to health or the environment
which are in violation of Applicable Environmental Laws ("Hazard[s]") exist
with respect to the Collateral (hereinafter defined).  No prior use, either
by Borrower or, to Borrower's knowledge, the prior owners of the
Collateral, has occurred, which violates any laws pertaining to health or
the environment ("Applicable Environmental Laws"), including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA"), the Resource Conservation and
Recovery Act of 1976, as amended ("RCRA"), the Texas Water Code and the
Texas Solid Waste Disposal Act.  The Borrower's handling and maintenance of
the Collateral does not and will not result in the disposal or release of
any hazardous substance or Hazard on, in or to the Collateral.  The terms
"hazardous substance" and "release" shall each have the meanings specified
in CERCLA, and the terms "solid waste" and "disposal" (or "disposed") shall
each have the meanings specified in RCRA; provided, however, that in the
event either CERCLA or RCRA is amended so as to broaden the meaning of any
term defined thereby, such broader meaning shall apply subsequent to the
effective date of such amendment; and provided further that, to the extent
that the laws of the State of Texas establish a meaning for "hazardous
substance", "release", "solid waste", or "disposal" which is broader than
that specified in either CERCLA or RCRA, such broader definition shall
apply.

          (l)  All Real Estate Notes included in the Borrowing Base were
"Eligible" (as defined in Exhibit "A") when pledged to Lender, and continue
to be "Eligible" so long as they are included in the Borrowing Base;

          (m)  All material software, hardware and critical systems used by
Borrower and its subsidiaries, if any, in the conduct of Borrower's
business ("Borrower's Computer Items") will record, store, process and
present calendar dates falling on or after January 1, 2000, and all
information pertaining to such dates accurately;

          (n)  Borrower's Computer Items will have all appropriate
capability and compatibility for handling century-aware or year 2000
compliant data, when reasonably necessary; and

          (o)  The data related user interface functions, data fields and
data related program instructions and functions of Borrower's Computer
Items will include the indication of the century.

     5.   Affirmative Covenants.  Until payment in full of the Note and all
other obligations and liabilities of Borrower hereunder, Borrower agrees
and covenants that (unless Lender shall otherwise consent in writing):

          (a)  As soon as available, and in any event within forty-five
(45) days after the close of each calendar month, Borrower shall deliver to
Lender an unaudited financial statement showing the financial condition of
Borrower at the close of each such month and the results of operations
during such month, which financial statements shall include, but shall not
be limited to, a profit and loss statement, balance sheet, cash flow
statement and such other matters as Lender may reasonably request; all such
monthly financial statements shall be certified on the face thereof by the
chief financial officer of Borrower, or any person acceptable to Lender,
and shall be forwarded to Lender with a letter of transmittal from him in
which he shall certify that Borrower is in compliance with all of the
affirmative covenants contained in this Paragraph and further stating that
no Event of Default exists in the performance by Borrower of any of the
other terms, conditions and covenants required under this Agreement to be
performed by Borrower;

          (b)  As soon as available, and in any event within one hundred
twenty (120) days after the end of each fiscal year of Borrower, Borrower
shall deliver to Lender a copy of the annual audited financial statement of
Borrower prepared in conformity with generally accepted accounting
principles, certified (with no material qualifications or exceptions) by
independent public accountants selected by Borrower and acceptable to
Lender, which show the financial condition of Borrower at the close of such
fiscal year and the results of operations during such fiscal year, and
shall include, but not be limited to, a profit and loss statement, balance
sheet and such other matters as Lender may reasonably request;

          (c)  As soon as available, and in any event within forty-five
(45) days after the end of each calendar month, and upon each request for
an advance, Borrower shall deliver to Lender (i) a Borrowing Base Report
and Compliance Certificate in the form of Exhibit "B" attached hereto or
other form reasonably acceptable to Lender together with such other
information as may be deemed necessary or appropriate by Lender, and (ii)
an aging and listing of the Real Estate Notes, in summary form, or if
requested by Lender, setting forth all Real Estate Notes in all material
respects in a form reasonably acceptable to Lender;

          (d)  Borrower shall conduct its business in all material respects
in an orderly and efficient manner consistent with good business practices
and in accordance with all valid regulations, laws and orders of any
governmental authority, and will act in accordance with customary industry
standards in maintaining and operating its assets, properties and
investments;

          (e)  Borrower shall maintain complete and accurate books and
records of its transactions in accordance with generally accepted
accounting principles, and will give Lender access during business hours to
all books, records and documents of Borrower and permit Lender to make and
take away copies thereof;

          (f)  Borrower shall furnish to Lender, promptly upon becoming
aware of the existence of any condition or event constituting an Event of
Default or event which, with the lapse of time and/or giving of notice,
would constitute an Event of Default, written notice specifying the nature
and period of existence thereof and any action which Borrower is taking or
proposes to take with respect thereto;

          (g)  Borrower shall maintain or cause to be maintained insurance
from responsible and reputable companies in such amounts and covering such
risks as is acceptable to Lender, is prudent and is usually carried by
companies engaged in businesses similar to that of Borrower; Borrower shall
furnish Lender, on request, with certified copies of insurance policies or
other appropriate evidence of compliance with the foregoing covenant and
said policies shall contain the usual mortgagee clause, and provide that
loss, if any, shall be paid to Lender;

          (h)  Borrower shall promptly notify Lender of (i) any material
adverse change in its financial condition or business; (ii) any default
under any material agreement, contract or other instrument to which
Borrower is a party or by which any of its properties are bound, or any
acceleration of any maturity of any indebtedness owing by Borrower, (iii)
any material adverse claim against or affecting Borrower or any of its
properties; and (iv) any litigation, or any claim or controversy which
might become the subject of litigation, against Borrower or affecting any
of Borrower's property, if such litigation or potential litigation might,
in the event of an unfavorable outcome, have a material adverse effect on
Borrower's financial condition or business or might cause an Event of
Default;

          (i)  Borrower shall preserve and maintain all material licenses,
privileges, franchises, certificates and the like necessary for the
operation of its business;

          (j)  Borrower shall promptly furnish to Lender, at Lender's
request, such additional financial or other information concerning assets,
liabilities, operations and transactions of Borrower and each of its
subsidiaries as Lender may from time to time reasonably request; 

          (k)  Borrower shall give notice to Lender promptly upon acquiring
knowledge of the presence of any Hazards relating to the Collateral, which
is in a condition that is resulting or could reasonably be expected to
result in any adverse environmental impact, with a full description
thereof; promptly comply with all Applicable Environmental Laws requiring
the notice, removal, treatment, or disposal of such hazardous substances;
and provide Lender, within thirty (30) days after demand by Lender, with
evidence to Lender's reasonable satisfaction that sufficient funds are
available to pay the cost of removing, treating and disposing of any such
known Hazards and discharging any liens or assessments that may be
established relating to the Collateral; 

          (l)  Borrower shall make, execute or endorse, and acknowledge and
deliver or file or cause the same to be done, all such vouchers, invoices,
notices, certifications and additional agreements, undertakings,
conveyances, promissory notes, deeds of trust, mortgages, transfers,
assignments, financing statements or other assurances, and take any and all
such other action, as Lender may, from time to time, deem reasonably
necessary or proper, and as are reasonably acceptable to Borrower, in
connection with any of the Loan Documents, and/or the Collateral (as
hereinafter defined), the obligations of Borrower, or for better assuring
and confirming unto Lender all or any part of the security for any of such
obligations; 

          (m)  Borrower shall pay Lender a letter of credit commission in
respect of each Letter of Credit issued by Lender equal to an amount
determined by multiplying (i) three quarters of one percent (.75%) of the
face amount of such Letter of Credit by (ii) a fraction, the numerator of
which shall be the number of days between the date of such Letter of Credit
and the stated expiration date thereof and the denominator of which shall
be 360; such commission shall be payable at the time a Letter of Credit is
issued and upon any renewal or extension thereof; additionally, Borrower
agrees to reimburse Lender for all actual out-of-pocket expenses incurred
by Lender, such as advising or confirming bank fees, telex charges and the
like and to pay those fees customarily charged by Lender for any amendments
to a Letter of Credit;

          (n)  Within thirty (30) days of any request therefor by Lender,
Borrower will deliver to Lender a statement from a person acceptable to
Lender to the effect that Borrower's Computer Items comply with the
representations contained in Paragraph 4, subparagraphs (m) through (o); 

          (o)  Borrower shall maintain, for the benefit of Lender, a lock
box arrangement with Bank One, Arizona, N.A. to be serviced by Concord
Servicing Corporation in accordance with its normal practices in connection
with the payment and collection of the Real Estate Notes, all of which
shall be paid and processed thereby; and

          (p)  By March 31, 1999, Borrower will deliver to Lender fully
executed Note Maker Estoppels, with respect to the Real Estate Notes, in
form and content satisfactory to Lender; provided, however, Borrower shall
not be required to deliver Note Maker Estoppels for the Real Estate Notes: 
(i) with a principal balance of less than $50,000.00 pertaining to the
Fountain Hills, Arizona property, or (ii) with a principal balance of less
than $100,000.00 pertaining to all other property.
          
     6.   Negative Covenants.  Until payment in full of the Note and all
accrued obligations and liabilities of Borrower hereunder, Borrower
covenants that it shall not (unless Lender shall otherwise consent in
writing):

          (a)  Permit any transfer or other change in the ownership of
controlling interest of the stock of Borrower during the term of the Loan;
as used herein the term "controlling interest" means 51% or more of the
stock of Borrower.  Notwithstanding the foregoing, Lender hereby consents
to the merger of Horizon Properties Corporation into Horizon corporation,
provided that Horizon Corporation shall succeed to all of Horizon
Properties Corporation's rights and obligations hereunder;

          (b)  Permit Borrower's Tangible Net Worth to be less than
$30,000,000.00; as used herein, the term "Tangible Net Worth" shall mean
the aggregate net worth of Borrower in accordance with generally accepted
accounting principles, minus all intangibles, expenses and other items
deducted in arriving at tangible net worth.  Lender approves Borrower's
determination of Tangible Net Worth as being equal to total equity as shown
on Borrower's financial statements provided to Lender; or

          (c)  Permit, at any time, its ratio of total liabilities to
Tangible Net Worth to exceed 1.00 to 1.00.

          (d)  Extend, modify, or renew or consent to the extension,
modification or renewal of any of the Real Estate Notes. 

          (e)  Upon receipt of any involuntary principal prepayment (e.g.,
condemnation or insurance proceeds) of a Real Estate Note, Borrower shall
pay to Lender an amount equal to such prepayment, which amount shall be
applied by Lender against the outstanding principal balance of the Note. 
In the event a Real Estate Note is refinanced at or prior to its maturity
date, Borrower shall pay to Lender the amount received by Borrower in
payment of such Real Estate Note, which amount shall be applied by Lender
against the outstanding principal balance of the Note.  Except with the
prior written consent of Lender, Borrower will not accept less than the
entire outstanding principal balance and interest accrued thereon in
connection with the pay off of any Real Estate Note which is refinanced. 
In the event a Real Estate Note is not refinanced at or prior to its
maturity, Borrower shall pay to Lender within thirty (30) days of the
maturity date of the Real Estate Note an amount equal to the entire
outstanding principal balance on such Real Estate Note, which amount shall
be applied by Lender against the outstanding principal balance of the Note,
or the Borrowing Base shall be so reduced. 

          (f)  Permit the outstanding principal balance of the Note to
exceed the lesser of the Borrowing Base or $14,000,000.00, and if such
event should occur, Borrower shall promptly pay to Lender a sufficient
amount such that when applied against the principal balance of the Note,
Borrower shall be in compliance herewith.

     7.   Default.  An "Event of Default" shall exist if any one or more of
the following events (herein collectively called "Events of Default") shall
occur:

          (a)  Borrower shall fail to pay when due any principal of, or
interest on, the Note or any other fee or payment due hereunder or under
any of the Loan Documents within five (5) days of Lender's sending demand
therefor, provided, Lender shall not be obligated to send such demand more
often than twice per calendar year, and thereafter Borrower shall be in
default upon its failure to pay such sums when due;

          (b)  Any representation or warranty made in any of the Loan
Documents shall prove to be untrue or inaccurate in any material respect as
of the date on which such representation or warranty is made, and, if the
inaccuracy of such warranty or representation is capable of being cured,
Borrower fails to correct or cure same within fifteen (15) days of Lender's
sending written notice thereof;

          (c)  Default shall occur in the performance of any of the
covenants or agreements of Borrower contained herein or in any of the other
Loan Documents, and such default (other than a monetary default) shall
continue for a period of fifteen (15) days after Lender sends written
notice thereof to Borrower;

          (d)  Borrower shall (i) apply for or consent to the appointment
of a receiver, custodian, trustee, intervenor or liquidator of it or of all
or a substantial part of its assets, (ii) voluntarily become the subject of
a bankruptcy, reorganization or insolvency proceeding or be insolvent or
admit in writing that it is unable to pay debts as they become due, (iii)
make a general assignment for the benefit of creditors, (iv) file a
petition or answer seeking reorganization or an arrangement with creditors
or to take advantage of any bankruptcy or insolvency laws, (v) file an
answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding, (vi) become the subject of an order for relief under
any bankruptcy, reorganization or insolvency proceeding, or (vii) fail to
pay any money judgment against it before the expiration of sixty (60) days
after such judgment becomes final and no longer subject to appeal;

          (e)  An order, judgment or decree shall be entered by any court
of competent jurisdiction or other competent authority approving a petition
appointing a receiver, custodian, trustee, intervenor or liquidator of
Borrower or of all or substantially all of its assets, and such order,
judgment or decree shall continue unstayed and in effect for a period of
sixty (60) days; or a complaint or petition shall be filed against Borrower
seeking or instituting a bankruptcy, insolvency, reorganization,
rehabilitation or receivership proceeding of Borrower, and such petition or
complaint shall not have been dismissed within sixty (60) days; or

          (f)  Borrower shall default in the payment of any indebtedness of
Borrower or in the performance of any of Borrower's obligations and such
default shall continue for more than any applicable period of grace, and in
Lender's judgment is likely to have a material adverse effect on Borrower's
ability to repay the Loan.

     8.   Remedies Upon Event of Default.  If an Event of Default shall
have occurred and be continuing, then Lender, at its option, may (i)
declare the principal of, and all interest then accrued on, the Note and
any other liabilities of Borrower to Lender to be forthwith due and
payable, whereupon the same shall forthwith become due and payable without
notice, presentment, demand, protest, notice of intention to accelerate,
notice of acceleration, or other notice of any kind, all of which Borrower
hereby expressly waives, anything contained herein or in the Note to the
contrary notwithstanding, (ii) reduce any claim to judgment, and/or (iii)
without notice of default or demand, pursue and enforce any of Lender's
rights and remedies under the Loan Documents or otherwise provided under or
pursuant to any applicable law or agreement.

     9.   Collateral.

          (a)  Payment of the Note and performance of the obligations
described herein shall be secured, directly or indirectly, by (i) first
priority perfected collateral assignments of those certain promissory notes
listed on "Exhibit C," annexed hereto, and all liens, rights, titles,
equities and interests securing those Real Estate Notes, including but
limited to the liens of all deeds of trust or mortgages securing those Real
Estate Notes (collectively, the "Real Estate Notes"), and (ii) first lien
deeds of trust on certain real estate described in Exhibit" D," annexed
hereto (the "Real Estate Collateral").  The Real Estate Notes and Real
Estate Collateral are collectively referred to as the "Collateral".

          (b)  Release of Liens

               (i)  Borrower may sell or otherwise dispose of portions of
                    the Real Estate Collateral as hereinafter provided. If
                    an intended sale or disposition of any of the Real
                    Estate Collateral is evidenced by a bona fide agreement
                    to an unaffiliated third party acquiror, is for
                    adequate consideration, and provided there is no
                    existing Event of Default, such sale or disposition
                    shall not constitute an Event of Default, and the
                    Lender agrees to release its lien against such Real
                    Estate Collateral.  The Lender may condition its
                    release of its lien against such Real Estate Collateral
                    upon (A) payment to the Lender of all or such portion
                    of the proceeds of such sale, as is sufficient to pay
                    the interest next due under the Note, (B) collateral
                    assignment to Lender of any purchase money notes, which
                    are a portion of the consideration of sale of such Real
                    Estate Collateral, and instruments associated with such
                    Real Estate Notes, or (C) a commensurate reduction in
                    the Borrowing Base.

               (ii) Lender acknowledges that Borrower may collaterally
                    assign to Lender any purchase money notes, which are a
                    portion of the consideration of the sale of Real Estate
                    Collateral, and instruments associated with such Real
                    Estate Notes.  Provided that any Real Estate Notes
                    which are collaterally assigned to Lender after the
                    date hereof are Eligible, as defined below, and such
                    collateral assignment is in form reasonably acceptable
                    to Lender, such Real Estate Notes shall be added to the
                    Borrowing Base, as defined below.

               (iii) Upon sale or repayment in full of any Real Estate Note
                    and Borrower's compliance with (i) above, the Lender
                    agrees to release its lien against such Real Estate
                    Note upon request by Borrower and return such Real
                    Estate Note and associated instruments to Borrower.

               (iv) In the event Borrower deems it reasonable necessary to
                    modify, extend or subordinate any Real Estate Note,
                    Lender's consent to any such modification shall not be
                    unreasonably withheld, provided however, that Lender's
                    consent in connection with subordination of any Real
                    Estate Note may be conditioned upon removal of such
                    Real Estate Note from the Borrowing Base.

     10.  Miscellaneous.

          (a)  Waiver.   No advance hereunder shall constitute a waiver of
any of the conditions of Lender's obligation to make further advances nor,
in the event Borrower is unable to satisfy any such condition, shall any
such waiver have the effect of precluding Lender from thereafter declaring
such inability to be an Event of Default as hereinabove provided. No
failure to exercise, and no delay in exercising, on the part of Lender, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right.  The rights of Lender hereunder and under
the other Loan Documents shall be in addition to all other rights provided
by law.  No notice or demand given in any case shall constitute a waiver of
the right to take other action in the same, similar or other instances
without such notice or demand.

          (b)  Notices.  Any notices or other communications required or
permitted to be given by any of the Loan Documents must be given in writing
and must be personally delivered, or mailed by prepaid certified or
registered mail, with return receipt requested, to the party to whom such
notice or communication is directed at the address of such party as
follows:

          (i)  Borrower:           MCO Properties Inc.
                                   5847 San Felipe, Suite 2600
                                   Houston, Texas 77057-3010
                                   Attention: J. Richard Rosenberg

               with a copy to:     MCO Properties Inc.
                                   5847 San Felipe, Suite 2600
                                   Houston, Texas  77057-3010
                                   Attention: Erik Erikkson, Jr., Esq.

               and:                MCO Properties Inc.
                                   5847 San Felipe, Suite 2600
                                   Houston, Texas  77057-3010
                                   Attention:  Delona Moore

          (ii) Lender:             Southwest Bank of Texas, N.A.
                                   5 Post Oak Park
                                   4400 Post Oak Parkway 
                                   Houston, Texas  77027
                                   Attention:  Commercial Real Estate

               with a copy to:     Brown, Parker and Leahy, L.L.P.
                                   1200 Smith Street, Suite 3600
                                   Houston, Texas 77002-4595
                                   Attention:  Alfred M. Meyerson, Esq.

Any such notice or other communication shall be deemed to have been given
(whether actually received or not) on the day it is personally delivered as
aforesaid, or, if mailed, on the third day after it is mailed as aforesaid. 
Any party may change its address for purposes of this Agreement by giving
notice of such change to all other parties pursuant to this Paragraph.

          (c)  GOVERNING LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
ARE BEING EXECUTED AND DELIVERED, AND ARE INTENDED TO BE PERFORMED, IN THE
STATE OF TEXAS, AND THE SUBSTANTIVE LAWS OF TEXAS SHALL GOVERN THE
VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT
AND ALL OTHER LOAN DOCUMENTS, EXCEPT TO THE EXTENT:  (I) OTHERWISE
SPECIFIED THEREIN; (II) THE FEDERAL OR STATE LAWS GOVERNING NATIONAL
BANKING ASSOCIATIONS EXPRESSLY SUPERSEDE AND HAVE CONTRARY APPLICATION; OR
(III) FEDERAL LAWS GOVERNING MAXIMUM INTEREST RATES SHALL PROVIDE FOR RATES
OF INTEREST HIGHER THAN THOSE PERMITTED UNDER THE LAWS OF THE STATE OF
TEXAS.

          (d)  Invalid Provisions.  If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall remain
in full force and effect and shall not be affected by the illegal, invalid
or unenforceable provision or by its severance from this Agreement.
     
          (e)  Conditions for Benefit of Lender.  All conditions to the
obligations of Lender to make any advances hereunder are imposed solely and
exclusively for the benefit of Lender and its assigns, and no other person
shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Lender will
refuse to make advances in the absence of strict compliance with any or all
thereof, and any or all of such conditions may be freely waived in whole or
in part by Lender at any time if, in Lender's sole discretion, Lender deems
it advisable to do so.

          (f)  Entirety and Amendments.  The Loan Documents embody the
entire agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and thereof,
and this Agreement and the other Loan Documents may be amended only by an
instrument in writing executed by the party, or an authorized officer of
the party, against whom such amendment is sought to be enforced.  

          (g)  Headings.  Paragraph and section headings are for
convenience of reference only and shall in no way affect the interpretation
of this Agreement.  

          (h)  Construction and Conflicts.  The provisions of this
Agreement shall be in addition to those of the Note, the Loan Documents and
any guaranty, pledge or security agreement, note or other evidence of
liability held by Lender, all of which shall be construed as complementary
to each other.  Nothing herein contained shall prevent Lender from
enforcing the Note, the Loan Documents and any and all other notes,
guaranty, pledge or security agreements in accordance with their respective
terms.  To the extent of any conflict or contradiction between the terms
hereof and the terms of the Note, the Loan Documents or any other document
executed in connection herewith, the terms hereof shall control.

          (i)  Hazardous Substances; Indemnification.  Borrower shall
protect, indemnify and hold Lender, its directors, officers, employees and
agents, and any immediate successors to Lender's interest in the Collateral
and any other person who acquires any portion of the Collateral at a
foreclosure sale or otherwise through the exercise of Lender's rights and
remedies under the Loan Documents, and all directors, officers, employees
and agents of all of the aforementioned indemnified parties, harmless from
and against any and all actual or potential claims, proceedings, lawsuits,
liabilities, damages, losses, fines, penalties, judgments, awards, and
reasonable costs and expenses (including, without limitation, attorneys'
fees and costs and expenses of investigation) which arise out of or relate
in any way to any use, handling, production, transportation, disposal or
storage of any hazardous substance or solid waste affecting the Collateral
whether by Borrower or any tenant or any other person, except resulting
from the gross negligence or intentional misconduct of Lender, during the
ownership of the Collateral by Borrower, including, without limitation, (i)
all foreseeable and all unforeseeable consequential damages directly or
indirectly arising out of (A) the use, generation, storage, discharge or
disposal of the Collateral by Borrower or (B) any residual contamination
affecting any natural resource or the environment, and (ii) the cost of any
required or necessary repair, cleanup, or detoxification of the Collateral
and the preparation of any closure or other required remedial plans.  In
addition, Borrower agrees that in the event the Collateral is assigned an
identification number by the Environmental Protection Agency, the
Collateral shall be solely in the name of Borrower or other responsible
person and, as between Borrower and Lender, Borrower shall assume any and
all liability for such removed Collateral.  All such costs, damages, and
expenses referred to herein shall hereinafter be referred to as "Expenses". 
Borrower understands and agrees that its liability to the aforementioned
indemnified parties shall arise upon the earlier to occur of (a) discovery
of any violation of the Applicable Environmental Laws or (b) the
institution of any Hazardous Materials Claim, and not upon the realization
of loss or damage, and Borrower agrees to pay to Lender from time to time,
immediately upon Lender's request, an amount equal to such Expenses, as
reasonably incurred by Lender.  In addition, Borrower agrees that any
Expenses incurred by Lender and not paid by Borrower within thirty (30)
days following demand by Lender shall be additional indebtedness of
Borrower and shall be secured by the Loan Documents and shall accrue
interest at the Maximum Rate.  The agreements contained herein shall
survive the repayment of the Note and the termination of the Loan
Documents.  As used herein, "Hazardous Materials Claims" shall mean any and
all enforcement, clean-up, removal or other governmental or regulatory
actions or orders threatened, instituted or completed pursuant to any
Applicable Environmental Laws, together with all claims made or threatened
by any third party against Borrower or the Collateral relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
hazardous substance or solid waste affecting the Collateral. 
Notwithstanding anything to the contrary contained in this subparagraph or
in the Loan Documents, it is hereby expressly agreed and understood that
Borrower's obligation to protect, indemnify and hold Lender and the other
aforementioned indemnified parties harmless from and against any and all
Hazardous Materials Claims and Expenses pursuant to this subparagraph shall
not apply to Hazardous Materials Claims or Expenses arising out of or
relating in any way to any use, handling, production, transportation,
disposal or storage of the Collateral directly caused by Lender or any such
other indemnified party during the management, operation, possession or
ownership of the Collateral by Lender or any such other indemnified party,
and not resulting from a condition existing prior to the commencement of
such management, operation, possession or ownership of the Collateral by
Lender or any such other indemnified party.

          (j)  Financial Terms.  As used in this Agreement, all financial
and accounting terms not otherwise defined herein shall be defined and
calculated in accordance with generally accepted accounting principles
consistently applied.

          (k)  Expenses of Lender.  Borrower will, on demand, reimburse
Lender for all expenses except as otherwise provided herein, including the
reasonable fees and expenses of legal counsel for Lender, incurred by
Lender in connection with the preparation, administration, amendment,
modification, renewal, or enforcement of this Agreement, the Note and the
Loan Documents and the collection or the attempted collection of the Note.

          (l)  Maximum Interest Rate.  It is the intention of the parties
hereto to comply with the usury laws of the State of Texas and the United
States; accordingly, it is agreed that notwithstanding any provision to the
contrary in the Notes, or in any of the documents securing payment hereof
or otherwise relating hereto, no such provision shall require the payment
or permit the collection of interest in excess of the maximum permitted by
applicable state or Federal law.  If any excess of interest in such respect
is provided for, or shall be adjudicated to be so provided for, in the
Notes or in any of the documents securing payment hereof or otherwise
relating hereto, or in the event the maturity of the indebtedness evidenced
by the Notes is accelerated in whole or in part, or in the event that all
or part of the principal or interest of the Notes shall be prepaid, so that
under any of such circumstances the amount of interest contracted for,
charged or received under the Notes or under any of the instruments
securing payment hereof or otherwise relating hereto, on the amount of
principal actually outstanding from time to time under the Notes shall
exceed the maximum amount of interest permitted by the usury laws of the
State of Texas and the United States, then, in any such event, (i) the
provisions of this paragraph shall govern and control, (ii) neither
Borrower nor its heirs, legal representatives or assigns or any other party
liable for the payment hereof shall be obligated to pay the amount of such
interest to the extent that it is in excess of the maximum amount permitted
by applicable state or Federal law, (iii) any such excess which may have
been collected shall be, at the holder's option (at maturity or in the
Event of Default hereunder), either applied as a credit against the then
unpaid principal amount hereof or refunded to Borrower, and (iv) the
effective rate of interest shall be automatically subject to reduction to
the maximum lawful contract rate allowed under the usury laws of the State
of Texas or the United States as now or hereafter construed by the courts
having jurisdiction.  It is further agreed that without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged
or received under the Notes or under such other documents which are made
for the purpose of determining whether such rate exceeds the maximum lawful
rate of interest, shall be made, to the extent permitted by the laws of the
State of Texas and the United States, by amortizing, prorating, allocating
and spreading in equal parts during the period of the full stated term of
the Loans, all interest at any time contracted for, charged or received
from Borrower or otherwise by the holder of the Notes in connection with
such Loans.

     11.  NO ORAL AGREEMENTS.  THE WRITTEN LOAN AGREEMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  

     Executed effective as of the date and year first set forth
hereinabove.

                              "BORROWER"

                              MCO PROPERTIES INC., 
                              DELAWARE CORPORATION



                              By:  /S/ J. RICHARD ROSENBERG
                                   J. Richard Rosenberg, Vice-President


                              MCO PROPERTIES L.P, 
                              A DELAWARE LIMITED PARTNERSHIP

                              BY:       MCO PROPERTIES INC.,
                                        GENERAL PARTNER



                                  By:  /S/ J. RICHARD ROSENBERG
                                        J. Richard Rosenberg, Vice-
                                        President


                              HORIZON CORPORATION, 
                              A DELAWARE CORPORATION



                              By:  /S/ J. RICHARD ROSENBERG
                                  J. Richard Rosenberg, Vice-President

                              HORIZON PROPERTIES CORPORATION,
                              A DELAWARE CORPORATION



                              By:  /S/ J. RICHARD ROSENBERG
                                  J. Richard Rosenberg, Vice-President


                              WESTCLIFF DEVELOPMENT CORPORATION,      
                              a Texas corporation
                              By:  /S/ J. RICHARD ROSENBERG
                                  J. Richard Rosenberg, Vice-President


"LENDER"

SOUTHWEST BANK OF TEXAS, N.A.,
A NATIONAL BANKING ASSOCIATION


By:  /S/ CHRISTOPHER M. DENISON
     Christopher M. Denison
     Vice-President



                             November 24, 1998

VIA FACSIMILE NO. 713/439-5932

Mr. Christopher M. Denison
Southwest Bank of Texas, N.A.
4400 Post Oak Parkway
Houston, Texas 77005

VIA FACSIMILE NO. 713/267-3702

Mr. Erik Eriksson
Mr. Richard Rosenberg
MCO Properties, Inc.
5847 San Felipe, Suite 2600
Houston, Texas 77057

     Re:  Loan from Southwest Bank of Texas, N.A. (the "Bank") to MCO
          Properties, Inc., et al. (the "Borrower")

Gentlemen:

     It has come to our attention that Bank Boston has been dating all
"Transfers of Note and Liens" effective as of October 30, 1998, while we
have consistently dated all loan documents effective as of October 27,
1998.  To prevent any future confusion, we would like to correct this
inconsistency.  Rather than approach Bank Boston to have them re-execute
documents, we hereby request your permission to change the effective date
on all documents relevant to the above referenced loan, which were
previously executed by the Bank, the Borrower, or both, to reflect October
30, 1998 as the effective date.  

     If you are in agreement with the foregoing, please so indicate by
signing and returning a copy of this letter to me via facsimile.

     Thank you. 
  

                                   Very truly yours,


                                   /S/  JOHN D. HOLMES
                                   John D. Holmes

                              "BORROWER"
                              MCO PROPERTIES INC., 
                              DELAWARE CORPORATION



                              By:  /S/ J. RICHARD ROSENBERG
                                   J. Richard Rosenberg, Vice-President


                              MCO PROPERTIES L.P, 
                              A DELAWARE LIMITED PARTNERSHIP

                              By:  MCO PROPERTIES INC.,
                                   general partner



                                   By:  /S/ J. RICHARD ROSENBERG
                                        J. Richard Rosenberg, Vice-
                                             President


                              HORIZON CORPORATION, 
                              A DELAWARE CORPORATION



                              By:  /S/ J. RICHARD ROSENBERG
                                   J. Richard Rosenberg, Vice-President


                              HORIZON PROPERTIES CORPORATION,
                              A DELAWARE CORPORATION



                              By:  /S/ J. RICHARD ROSENBERG
                                   J. Richard Rosenberg, Vice-President


                              WESTCLIFF DEVELOPMENT CORPORATION, 
                              A TEXAS CORPORATION
                              By:  /S/ J. RICHARD ROSENBERG
                                   J. Richard Rosenberg, Vice-President


"BANK"

SOUTHWEST BANK OF TEXAS, N.A.,
A NATIONAL BANKING ASSOCIATION



By:  /S/ CHRISTOPHER M. DENISON
     Christopher M. Denison
     Vice-President