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                                                                 Exhibit 10.19

                             CMC Heartland Partners
                           547 West Jackson Boulevard
                             Chicago, Illinois 60661

December 20, 1999

Mr. Edwin Jacobson
161 East Chicago Avenue
Apartment 43H
Chicago, Illinois 60611

Dear Mr. Jacobson:

         We are writing with respect to your employment by CMC Heartland
Partners (the "Company") as President and Chief Executive Officer of the
Company. The Company acknowledges and recognizes the value of your experience
and abilities to the Company throughout the term of your employment with the
Company pursuant to an Employment Agreement, dated July 2, 1995, as amended by a
First Amendment to Employment Agreement, dated January 2, 1998 (the employment
agreement, as so amended, being hereinafter referred to as the "Original
Employment Agreement"), the term of which expires by its own terms on the date
hereof. For its own benefit and for the benefit of Heartland Partners, L.P.
("Heartland"), a Delaware limited partnership organized under the Amended and
Restated Agreement of Limited Partnership of Heartland Partners, L.P., dated as
of June 27, 1990, as amended by the Amendment to the Amended and Restated
Agreement of Limited Partnership of Heartland Partners, L.P., dated December 4,
1997 (the "Partnership Agreement"), the Company desires to continue to retain
and make secure for itself such experience and abilities on the terms
hereinafter provided. If the following is satisfactory, would you please so
indicate by signing and returning to the Company the enclosed copy of this
letter whereupon this will constitute our agreement (the "Agreement") on the
subject.

         1.       Employment. The Company agrees to employ you and you agree to
be employed by the Company commencing on the date hereof and ending on May 30,
2002 (unless sooner terminated as hereinafter provided in this Agreement), on
the terms and conditions set forth in this Agreement.

         2.       Duties.

         (a) You shall be employed as President and Chief Executive Officer of
         the Company with general supervision over and responsibility for the
         general management and operation of the Company. In the performance of
         your duties, you shall be subject to the supervision and direction of
         the Board of Directors of the Managing General Partner (as that term is
         defined in the Partnership Agreement) of the Company and the Executive
         Committee (as that term is defined in the Partnership Agreement) of the
         Board of Directors of the Managing General Partner.

         (b) During the term of your employment hereunder, you shall not be
         required to devote your full business time to such employment. You
         shall devote an amount of time to such employment determined by the
         Board of Directors of the Managing General Partner or the Executive
         Committee to be required of you to accomplish the business objectives
         of the

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         Company. During the term of your employment hereunder, you shall have
         the right to continue your employment as President and Chief Executive
         Officer of Heartland Technology, Inc., formerly known as Milwaukee Land
         Company ("Technology") and, subject to the preceding sentence, you
         shall have the right to pursue other employment or business activities
         not in competition with the activities of the Company, provided that
         any such activity does not interfere with the performance of your
         duties hereunder and does not otherwise violate any provision of this
         Agreement. Prior to your engaging in any such other employment or
         business activity, you shall provide notice in reasonable detail to,
         and consult with, the Chairman of the Executive Committee with respect
         to your intention to engage in any such activity.

         3.       Compensation.
                  ------------

         (a) Base Salary. The Company shall pay you, and you shall accept from
         the Company for your services, the following salary payable in
         accordance with the Company's policy with respect to the compensation
         of executives ("Base Salary"), commencing with the date hereof and
         continuing through the term of your employment hereunder, a salary at
         the rate of not less than $275,000 per year. During the term hereof,
         the Board of Directors of the Managing General Partner may adjust the
         Base Salary upwards (but not downwards). The Company shall be entitled
         to withhold such amounts on account of payroll taxes and similar
         matters as are required by applicable law, rule or regulation of
         appropriate governmental authorities. Nothing contained herein shall
         preclude you from participating in the present or future employee
         benefit plans of the Company if you meet the eligibility requirements
         therefor. You shall also have the right to defer receipt of some or all
         of the Base Salary which you are entitled to receive hereunder by
         written notice to the Company, which notice shall set forth the date to
         which you wish to defer receipt of such compensation. If you elect to
         defer receipt of all or any portion of the Base Salary ("Deferred
         Compensation"), the amount due you shall be adjusted periodically to
         reflect any interest that would be realized with respect to the
         Deferred Compensation had it been invested at the rate of interest
         announced publicly by Citibank, N.A. in New York, New York, from time
         to time, as Citibank's base rate. No specific assets of the Company
         shall be allocated or segregated with respect to the Deferred
         Compensation and the foregoing shall not be construed to create a trust
         of any kind or a fiduciary relationship between the Company and you,
         the executor or administrator of your estate or any other person. Your
         right, or the right of your estate, to receive the Deferred
         Compensation, as adjusted in accordance with this Section 3(a), shall
         be no greater than the right of an unsecured general creditor of the
         Company.

         (b)      Incentive Compensation.
                  ----------------------

                           (i) You will receive incentive payments equal to 10%
                  of the aggregate of (x) the value of all amounts distributed
                  to holders of a Class A limited partnership interest
                  (hereinafter defined as "Units") in Heartland and (y) the
                  value of all amounts distributed to the holder of the Class B
                  limited partnership interest in Heartland (holders of Units
                  and the holders of the Class B limited partnership interest
                  are collectively referred to herein as "Unitholders") after
                  distributions in excess of the Capital Amount (as hereinafter
                  defined) have been made by Heartland to Unitholders (i.e.,
                  after distributions in excess of the Capital Amounts have been
                  made to

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                  Unitholders, for every $1,000 available for distribution by
                  the Company, $899.91 will distributed to Heartland for
                  distribution to Unitholders and its general partner, $.09 will
                  be distributed to the Managing General Partner and you will be
                  paid $100 as incentive compensation). Incentive payments will
                  be made with respect to distributions by Heartland and the
                  Company during their respective entire terms, and, if
                  distributions are made subsequent to your death, payments will
                  be made to such person as you shall designate in a notice
                  filed with the Company, or, if no such person shall be
                  designated, to your estate. Payments will be made to you (or
                  your designee or estate) simultaneously with the making by
                  Heartland of distributions to Unitholders, subject to your
                  right to defer receipt of all or a portion of such payments as
                  described above in respect of your Base Salary. The Company
                  shall be entitled to withhold from such payments such amounts
                  on account of payroll taxes and similar matters as are
                  required by applicable law, rule or regulation of appropriate
                  governmental authorities.

                           (ii) (1) The Capital Amount initially will be equal
                           to the product of (x) the average of the publicly
                           reported per Unit closing sales prices for the first
                           30 trading days after the date the Units were
                           distributed by Chicago Milwaukee Company ("CMC") to
                           its common stockholders (the "Distribution Date") and
                           (y) 2,142,438 (the number of Units distributed on the
                           Distribution Date). For purposes of this subsection
                           (ii), the "closing sales prices" of the Units as of a
                           particular date shall mean the closing price (or, if
                           there is no closing price, then the mean between the
                           closing bid and asked prices), of such Unit as
                           reported on the Composite Tape, or if not reported
                           thereon, then such price as reported in the trading
                           reports of the principal securities exchange in the
                           United States on which such partnership interests are
                           listed, or if the Units are not listed on a
                           securities exchange in the United States, the mean
                           between the dealer closing "bid" and "asked" prices
                           as reported by the National Association of Securities
                           Dealers Automated Quotation System ("NASDAQ") or
                           NASDAQ's successor, or if not reported on NASDAQ, the
                           fair market value of such Unit as determined by the
                           Board of Directors of the Managing General Partner in
                           good faith.

                                    (2) (x) The Capital Amount will be adjusted
                           downward by (i) the amount of cash and aggregate fair
                           market value of all other property distributed by
                           Heartland to Unitholders from the Distribution Date
                           to the end of its term and (ii) amounts paid by
                           Heartland or the Company to repurchase Units during
                           such time period and (y) upward by the net proceeds
                           received by Heartland upon the issuance for value of
                           additional Units from and after the Distribution
                           Date.

                                    (3) In addition to the adjustments specified
                           in Section 3(b)(ii)(2) above, the Capital Amount will
                           be adjusted upward during each year by applying to a
                           portion of the Capital Amount a compounding interest
                           factor equal to the average annual yield on five-year
                           U.S. treasury notes for the preceding year as
                           reported by any nationally recognized securities
                           dealer which makes a market therein selected by the
                           Company. The interest factor

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                           will be applied to that portion of the Capital Amount
                           (the "Development Portion") which is represented by
                           the properties transferred to the Company which were
                           being held for development purposes (as contrasted
                           with properties being held for sale or lease). The
                           Development Portion will be determined by multiplying
                           the initial Capital Amount (as determined as
                           described above) by a fraction, the numerator of
                           which will be the appraised value of the properties
                           transferred to the Company which were being held for
                           development by CMC and Technology and the denominator
                           of which will be the aggregate appraised value of all
                           of the real estate properties transferred to the
                           Company by CMC and Technology (including the
                           development properties). For this purpose, appraised
                           values will be as shown in the July 30, 1986
                           appraisals in the possession of CMC. The Development
                           Portion will be deemed to accrue interest at the
                           applicable interest rate from and after the
                           Distribution Date and, at the end of each year, the
                           resulting interest component will be added to the
                           principal amount of the Development Portion and the
                           increased amount thereafter will be deemed to accrue
                           interest at the rate described above. Solely for the
                           purposes of determining the amount of interest deemed
                           to accrue on the Development Portion, cash proceeds
                           actually received by the Company in respect of sales
                           or other dispositions for value of the development
                           properties will be deemed applied at the time of
                           receipt first to reduce the imputed interest amount
                           and then to reduce the principal amount of the
                           Development Portion. The Company will deliver to you
                           on or before the last business day in February of
                           each year its calculation of the Capital Amount as of
                           the end of the preceding year. Any disagreement that
                           you may have with such calculation will be
                           communicated in writing to the Chairman of the
                           Executive Committee as promptly thereafter as
                           practicable.

         (c) Reimbursement of Expenses. During your employment, you will be
         entitled to receive prompt reimbursement for all reasonable expenses
         incurred by you in performing your services hereunder, provided that
         you properly account therefor in accordance with Company policy.

         (d)      Change of Control.
                  -----------------

                           (i) Upon the first occurrence of a Change of Control
                  of Heartland (as hereinafter defined) occurring during or
                  after the term of your employment with the Company, the
                  Company will pay you (or if you die, such person as you shall
                  designate in a notice filed with the Company or, if no such
                  person shall be designated, your estate) either a single lump
                  sum of $1,250,000 or incentive compensation pursuant to
                  Section 3(b) hereof, to be determined by you in writing within
                  90 days from the Change of Control of Heartland. Payment will
                  begin within 30 days after receipt of such written election.
                  Further, notwithstanding anything to the contrary herein, in
                  the event you elect to receive payment in a single lump sum of
                  $1,250,000, the obligations, if any, of the Company to pay
                  incentive compensation pursuant to Section 3(b) hereof shall
                  terminate.

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                           (ii) For purposes of this Agreement, a "Change of
                  Control of Heartland" shall be deemed to have occurred if:

                                    (1) a person or group of related persons is
                           or becomes the beneficial owner (within the meaning
                           of Rule 13d-3, as amended ("Rule 13d-3"), under the
                           Securities Exchange Act of 1934, as amended (the
                           "Exchange Act")), directly or indirectly, of
                           outstanding Units or securities of Technology
                           representing 20% or more of the combined voting power
                           of Technology's then outstanding securities;
                           provided, however, that the beneficial ownership of
                           Units or securities of Technology by (a) Ezra K.
                           Zilkha, Zilkha & Sons, Inc., The Zilkha Foundation,
                           Inc., any of their respective affiliates or any
                           future members of one or more of the foregoing
                           persons, Schedule 13D group and (b) one or more
                           investors eligible to file Schedule 13G under the
                           Exchange Act in respect of such beneficial ownership
                           but which has not filed a Schedule 13D thereunder in
                           respect thereof, in each case shall not be included
                           in the calculation to determine a Change of Control
                           of Heartland for purposes of this Agreement;

                                    (2) a person or group of related persons is
                           or becomes the beneficial owner (within the meaning
                           of Rule 13d-3), directly or indirectly, of
                           outstanding Units or securities of Technology
                           representing 10% or more of the combined voting power
                           of Technology's then outstanding securities and
                           individuals who at the time of acquisition of such
                           beneficial ownership were members of the Board of
                           Directors of Technology cease for any reason to
                           constitute a majority thereof at any time within the
                           24 months following such acquisition; provided,
                           however, that the beneficial ownership of Units or
                           securities of Technology by the persons set forth in
                           the proviso to clause (1) above shall similarly not
                           be included in the calculation to determine a Change
                           of Control of Heartland for purposes of this
                           Agreement;

                                    (3) all or substantially all of the assets
                           of the Company are sold in one or a series of related
                           transactions;

                                    (4) all or substantially all of Technology's
                           general partner interest in the Company is sold;

                                    (5) The Company or Technology enters into an
                           agreement with an unaffiliated third party, the
                           consummation of which would result in the occurrence
                           of any one or more of the foregoing; or

                                    (6) Heartland shall fail to make a
                           distribution to its Class A Limited Partners (as that
                           term is defined in Article I of the Partnership
                           Agreement) and assignees in an amount equal to the
                           excess of the distribution from the Company over the
                           sum of (i) the cash requirements of Heartland (which
                           shall be an amount necessary for debt services and
                           working capital sufficient to fund operating expenses
                           of Heartland for a period of one year)

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                           and (ii) any distributions required to be made to its
                           Class B Limited Partners (as that term is defined in
                           Article I of the Partnership Agreement) pursuant to
                           the Partnership Agreement;

                           provided, however, that an event or transaction that
                           would otherwise constitute a Change of Control of
                           Heartland shall not be deemed to constitute a Change
                           of Control of Heartland for purposes of this
                           Agreement if the buyer or buying group is a person in
                           which you have an interest or with whom you are
                           affiliated or such event or transaction is one of
                           which you otherwise approve in writing.

                           further, provided, however, that a Change of Control
                           of Heartland for purposes of this Agreement shall not
                           be deemed to have occurred by reason of (i) a private
                           offering of securities issued by Technology pursuant
                           to a resolution of the Board of Directors of
                           Technology approved December 20, 1999, or (ii) the
                           transfer of Technology's interest as General Partner
                           to a limited liability corporation in which you are a
                           member or otherwise participate directly or
                           indirectly.

         4. Vacations.  During your employment, you shall be entitled to
reasonable vacations from time to time in accordance with the regular procedures
of the Company governing senior executives. You shall also be entitled to all
paid holidays given by the Company to its senior executives.

         5. Participation in Benefit Plans. You shall be entitled to participate
in and to receive benefits under all of the Company's employee benefit plans and
programs, including but not limited to any pension or retirement plan, savings
plan, or health-and-accident plan made available by the Company in the present
or future to its senior executives and other key management employees, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and programs.

         6.       Termination.

         (a) Death. Your employment hereunder shall terminate upon your death.

         (b) Disability. In the event of your permanent disability (as
         hereinafter defined) during the term of your employment hereunder, the
         Company shall have the right, upon written notice to you, to terminate
         your employment hereunder, effective upon the giving of such notice.
         For purposes of this Section, "permanent disability" shall mean any
         physical or mental disability or incapacity which renders you incapable
         of fully performing the services required of you in accordance with
         your obligations hereunder for a period of 90 consecutive days.

         (c) Cause. The Company may terminate your employment hereunder for
         Cause.  For the purposes of this Agreement, termination for Cause shall
         mean termination after:

                           (i) your commission of a material act of fraud
                  against the Company or

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                  its affiliates;

                           (ii) your conviction of any crime which constitutes a
                  felony in the jurisdiction involved; or

                           (iii) the willful, repeated and demonstrable failure
                  by you to substantially perform your duties over a period of
                  not less than 30 days, other than any such failure resulting
                  from your incapacity due to physical or mental illness, or
                  material breach of any of your obligations under this
                  Agreement, and your failure to cure such failure or breach
                  within 30 days after receipt of written notice from the Board
                  of Directors of the Managing General Partner. No act or
                  failure to act on your part will be considered "willful"
                  unless done, or omitted to be done, by you not in good faith
                  and without reasonable belief that your action or omission was
                  in the best interests of the Company and its affiliates.

         (d) Termination by You. You may terminate your employment hereunder (i)
         for Good Reason, or (ii) if your health should become impaired to an
         extent that makes the continued performance of your duties hereunder
         hazardous to your physical or mental health or your life. For purposes
         of this Agreement, "Good Reason" shall mean (A) any assignment to you
         of any duties other than those contemplated by, or any limitation of
         your powers in any respect not contemplated by, Section 2 hereof,
         provided that you first deliver written notice thereof to the Executive
         Committee and the Company shall have failed to cure such non-permitted
         assignment or limitation within thirty (30) days after receipt of such
         written notice, or (B) a reduction in your rate of compensation, or a
         material reduction in your fringe benefits or any other material
         failure by the Company to comply with Sections 3 through 5 hereof,
         provided that you first deliver written notice thereof to the Executive
         Committee and the Company shall have failed to cure such reduction or
         failure within thirty (30) days after receipt of such written notice.

         (e) Any termination by the Company pursuant to subsection (b) or (c)
         above or by you pursuant to subsection (d) above shall be communicated
         by written Notice of Termination to the other party hereto. For
         purposes of this Agreement, a "Notice of Termination" shall mean a
         notice which shall indicate the specific termination provision in this
         Agreement relied upon and shall set forth in reasonable detail the
         facts and circumstances claimed to provide a basis for termination of
         your employment under the provision so indicated.

         (f) "Date of Termination" shall mean (i) if your employment is
         terminated by your death, the date of your death, and (ii) if your
         employment is terminated for any other reason, the date on which a
         Notice of Termination is given.

         (g) If within fifteen (15) days after a Notice of Termination is given
         to you by the Company in connection with the termination of your
         employment hereunder pursuant to subsections (b) and (c) above you
         notify the Company in writing that you believe that your employment was
         wrongfully terminated, and you shall have delivered such notification
         in good faith with a reasonable belief that your employment was
         wrongfully terminated, then you shall be entitled to continue to
         receive the Base Salary provided for in Section 3(a) hereof for a
         period of time ending on the date six months after the Date of
         Termination. In

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         the event a court of competent jurisdiction finally decides that your
         employment was rightfully terminated in accordance with the provisions
         of this Agreement, you shall return, within thirty (30) days after the
         date of such final decision to the Company the amounts paid to you
         pursuant to this subsection (g).

         7.       Compensation Upon Death, During Disability or Termination.

         (a) If your employment shall be terminated by reason of your death, the
         Company shall pay, to such person as you shall designate in a notice
         filed with the Company or, if no such person shall be designated, to
         your estate, as a lump sum death benefit, an amount equal to the
         amount, if any, by which $150,000 exceeds the proceeds payable to your
         designated beneficiary or estate pursuant to any life insurance policy
         covering your life maintained by the Company. This amount shall be
         exclusive of and in addition to any payments your widow, beneficiaries
         or estate may be entitled to receive pursuant to any employee benefit
         plan or program maintained by the Company. Your designated beneficiary
         or the executor of your estate, as the case may be, shall accept the
         payment provided for in this Section 7 in full discharge and release of
         the Company of and from any further obligations under this Agreement,
         other than the obligations, if any, of the Company to pay incentive
         compensation pursuant to Section 3(b) and such amount as set forth in
         Section 3(d)(i) hereof.

         (b) During any period that you fail to perform your duties hereunder as
         a result of incapacity due to physical or mental illness, you shall
         continue to receive your full Base Salary until your employment is
         terminated pursuant to Section 6(b) hereof, or until you terminate your
         employment pursuant to Section 6(d)(ii) hereof, whichever first occurs.
         If your employment is terminated by the Company pursuant to Section
         6(b) or you terminate your employment pursuant to Section 6(d)(ii), the
         Company shall be discharged and released of and from any further
         obligations under this Agreement, other than the obligations, if any,
         of the Company to pay incentive compensation pursuant to Section 3(b)
         and such amount as set forth in Section 3(d)(i) hereof. During any such
         period and thereafter you shall continue to bear the obligations
         provided for in Section 8 below.

         (c) If your employment shall be terminated for Cause, or you shall
         terminate your employment other than for Good Reason, the Company shall
         pay you your full Base Salary through the Date of Termination or the
         date on which you terminate your employment at the rate in effect at
         the time the Notice of Termination is given or the date on which you
         terminate your employment. The Company shall be discharged and released
         of and from any further obligations under this Agreement, other than
         the obligations, if any, of the Company to pay incentive compensation
         pursuant to Section 3(b) and such amount as set forth in Section
         3(d)(i) hereof. Thereafter you shall continue to have the obligations
         provided for in Section 8 below in accordance with the terms of such
         Section 8. Nothing contained herein shall be deemed to be a waiver by
         the Company of any rights that it may have against you in respect of
         your actions which gave rise to the termination of your employment.

         (d) If the Company shall terminate your employment other than pursuant
         to Sections 6(b) or 6(c) hereof or if you shall terminate your
         employment for Good Reason, then:

                           (i) The Company shall continue to pay you your full
                  Base Salary through

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                  May 30, 2002 at the rate in effect at the time Notice of
                  Termination is given in accordance with Section 3(a) hereof;

                           (ii) The Company shall continue to pay you the
                  incentive compensation provided in Section 3(b) hereof;

                           (iii) The Company shall continue to have the
                  obligation, if any, to pay the amount set forth in Section
                  3(d)(i) hereof;

                           (iv) The Company shall pay all other pecuniary
                  damages (but not including punitive or exemplary damages) to
                  which you may be entitled as a result of the Company's
                  termination of your employment under this Agreement, including
                  damages for any and all loss of benefits to you under the
                  Company's employee benefit plans and programs which you would
                  have received if the Company had not breached this Agreement
                  and had your employment continued for the full term provided
                  in Section 1 hereof, and including all reasonable legal fees
                  and expenses incurred by you as a result of such termination;
                  and

                           (v) The Company shall maintain in full force and
                  effect, for your continued benefit for the full term of this
                  Agreement, all employee benefit plans and programs in which
                  you were entitled to participate immediately prior to the Date
                  of Termination provided that your continued participation is
                  possible under the general terms and provisions of such plans
                  and programs. In the event that your participation in any such
                  plan or program is barred, you shall be entitled to receive an
                  amount equal to the annual contributions, payments, credits or
                  allocations made by the Company to you, to your account or on
                  your behalf under such plans and programs from which your
                  continued participation is barred.

         8.       Restrictive Covenants and Confidentiality: Injunctive Relief.
                  ------------------------------------------------------------

         (a) You agree, as a condition to the performance by the Company of its
         obligations hereunder, particularly its obligations under Section 3
         hereof, that during the term of your employment hereunder and during
         the further period of one (1) year after the termination of such
         employment, you shall not, without the prior written approval of the
         Board of Directors of the Managing General Partner, directly or
         indirectly through any other person, firm or corporation:

                           (i) Solicit, raid, entice or induce any person, firm
                  or corporation that presently is or at any time during the
                  term of your employment hereunder shall have a material
                  business relationship with the Company, or any of its
                  affiliated companies, to engage in any material business
                  transaction with any other person, firm or corporation, and
                  you shall not approach any such person, firm or corporation
                  for such purpose or authorize or knowingly approve the taking
                  of such actions by any other person; or

                           (ii) Solicit, raid, entice or induce any person that
                  presently is or at any time during the term of your employment
                  hereunder shall be an employee of the

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                  Company, or any of its affiliated companies, to become
                  employed by any person, firm or corporation, and you shall not
                  approach any such employee for such purpose or authorize or
                  knowingly approve the taking of such actions by any other
                  person.

         (b) Recognizing that the knowledge, information and relationship with
         customers, suppliers, and agents, and the knowledge of the Company's
         and its affiliated companies, business methods, systems, plans and
         policies which you shall hereafter establish, receive or obtain as an
         employee of the Company or its affiliated companies, are valuable and
         unique assets of the respective businesses of the Company and its
         affiliated companies, you agree that, during and after the term of your
         employment hereunder, you shall not (otherwise than pursuant to your
         duties hereunder) disclose, without the prior written approval of the
         Board of Directors of the Managing General Partner, any such knowledge
         or information pertaining to the Company or any of its affiliated
         companies, their business, personnel or policies, to any person, firm,
         corporation or other entity, for any reason or purpose whatsoever. The
         provisions of this Section 8 shall not apply to information which is or
         shall become generally known to the public or the trade (except by
         reason of your breach of your obligations hereunder), information which
         is or shall become available in trade or other publications,
         information known to you prior to entering the employ of the Company,
         and information which you are required to disclose by order of a court
         of competent jurisdiction.

         (c) The provisions of this Section 8 shall survive the termination of
         your employment hereunder, irrespective of the reason therefor.

         (d) You acknowledge that the services to be rendered by you are of a
         special, unique and extraordinary character and, in connection with
         such services, you will have access to confidential information vital
         to the Company's and its affiliated companies' businesses. By reason of
         this, you consent and agree that if you violate any of the provisions
         of this Agreement with respect to diversion of the Company's or its
         affiliated companies, business relationships or employees, or
         confidentiality, the Company and its affiliated companies would sustain
         irreparable harm and, therefore, in addition to any other remedies
         which the Company may have under this Agreement or otherwise, the
         Company shall be entitled to an injunction restraining you from
         committing or continuing any such violation of this Agreement.

         (e) The failure of the Company or any affiliated companies to exercise
         any rights under this Agreement upon any breach or threatened breach by
         you shall not constitute a waiver of any rights arising by reason of
         other or similar breaches.

         9. Gross-Up Payment. If any portion of the payments described herein,
and/or any other payments no matter the source of such payments, shall be
subject to the tax imposed by Section 4999 of the Internal Revenue Code (the
"Excise Tax") (the portion of such payments which are subject to the Excise Tax
being referred to herein as "Payments"), the Company shall pay to you no later
than the 30th day following the date you become subject to the Excise Tax an
additional amount (the "Gross-Up Payment"), such that the net amount you retain
after deduction of the Excise Tax on such Payments, and all federal, state and
local income and employment tax (assuming you are in the highest marginal tax
bracket), interest and penalties and Excise Tax on the Gross-Up Payment, shall
be equal to the amount you would have retained had the Payments not been subject
to the Excise

                                       10
<PAGE>

Tax.

         10.      Successors: Binding Agreement.
                  -----------------------------

         (a) The Company will require any successor (whether direct or indirect,
         by purchase, merger, consolidation or otherwise) to all or
         substantially all of the business and/or assets of the Company, by
         agreement in form and substance reasonably satisfactory to you, to
         expressly assume and agree to perform this Agreement in the same manner
         and to the same extent that the Company would be required to perform it
         if no such succession had taken place. Failure of the Company to obtain
         such agreement prior to the effectiveness of any such succession shall
         be a breach of this Agreement and shall entitle you to compensation
         from the Company in the same amount and on the same terms as you would
         be entitled to hereunder if you terminated your employment for Good
         Reason, except that for purposes of implementing the foregoing, the
         date on which any such succession becomes effective shall be deemed the
         Date of Termination. As used in this Agreement, "Company" shall include
         any successor to the Company's business and/or assets as aforesaid
         which executes and delivers the agreement provided for in this Section
         10 or which otherwise becomes bound by all the terms and provisions of
         this Agreement by operation by law.

         (b) This Agreement and all your rights hereunder shall inure to the
         benefit of and be enforceable by your personal or legal
         representatives, executors, administrators, successors, heirs,
         distributes, devisees and legatees. If you should die while any amounts
         would still be payable to you hereunder if you had continued to live,
         all such amounts, unless otherwise provided herein, shall be paid in
         accordance with the terms of this Agreement to your devisee, legatee,
         or other designee or, if there be no such designee, to your estate.
         Your obligations hereunder may not be delegated and except as otherwise
         provided herein relating to the designation of a devisee, legatee or
         other designee, you may not assign, transfer, pledge, encumber,
         hypothecate or otherwise dispose of this Agreement or any of your
         rights hereunder, and any such attempted delegation or disposition
         shall be null and void and without effect.

         11. Notice. For the purposes of this Agreement, notices and all other
communications provided for shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:

                  If to you:

                  Mr. Edwin Jacobson
                  161 East Chicago Avenue
                  Apartment 43H
                  Chicago, Illinois 60611

                  If to the Company:

                  547 West Jackson Boulevard
                  Chicago, Illinois 60661

                                       11
<PAGE>

                  Attn:  Chairman of the Executive Committee

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

         12. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by you and by such officer as may be specifically designated
by the Board of Directors of the Managing General Partner. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. This Agreement
constitutes the complete understanding between the parties with respect to your
employment and no agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Illinois.

         13. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

         14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

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

                                      CMC HEARTLAND PARTNERS

                                      By:      Heartland Technology, Inc.
                                               as Managing General Partner

                                      By:      _______________________________

                                               Name: _________________________

                                               Title: _________________________

ACCEPTED AND AGREED TO:

                                       12
<PAGE>

-----------------------------------
Edwin Jacobson<PAGE>

                                                                 Exhibit 10.20

                          CONSTRUCTION LOAN AGREEMENT

                                    BETWEEN

                        CMC HEARTLAND PARTNERS III, LLC,
               a Delaware limited liability company, as Borrower

                                      AND

                            BANK ONE, ILLINOIS, NA,
                   a national banking association, as Lender

<PAGE>

                               TABLE OF CONTENTS
                               -----------------

Section                                                                Page No.

1.       RECITALS.............................................................1

2.       DEFINITIONS..........................................................1

3.       COMMITMENT TO LEND; COMMITMENT FEE...................................8
         3.1      Maximum Construction Loan Amount............................8
         3.2      Loan Advances Evidenced by Mortgage Note....................8
         3.3      Payment of Interest and Principal...........................8
         3.4      Default Rate................................................9
         3.5      Late Charge.................................................9
         3.6      Fees........................................................9
         3.7      Letter of Credit; Letter of Credit Fees and Cash Collateral.9

4.       LOAN DOCUMENTS......................................................10

5.       DISBURSEMENT OF THE LOAN............................................15
         5.1      Conditions Precedent.......................................15
         5.2      Use of Construction Loan Proceeds; Inspections of the Work.15
         5.3      Disbursement Requests......................................16
         5.4      Certifications, Representations and Warranties.............17
         5.5      Amount of Disbursements; Retainage.........................18
         5.6      Costs......................................................18
         5.7      Reserves...................................................18
         5.8      Loan In Balance............................................19
         5.9      Escrow; Application of Disbursements.......................20
         5.10     Release of Retainage.......................................20

6.       REPRESENTATIONS AND WARRANTIES......................................22
         6.1      Borrower...................................................22
         6.2      Member.....................................................22
         6.3      Heartland..................................................22
         6.4      Title......................................................23
         6.5      Improvements...............................................23
         6.6      Validity and Enforceability of Documents...................23
         6.7      Litigation.................................................23
         6.8      Utilities; Authorities.....................................23
         6.9      Solvency...................................................24
         6.10     Financial Statements.......................................24
         6.11     Compliance with Laws.......................................24
         6.12     Construction Contract......................................24
         6.13     Subcontracts...............................................25
         6.14     Architectural Contract.....................................25
<PAGE>

         6.15     Plans and Specifications...................................25
         6.16     Budget.....................................................25
         6.17     Financing Statements.......................................25
         6.18     Event of Default...........................................25
         6.19     Responsible Property Transfer Act..........................25
         6.20     Federal Interstate Land Sales Full Disclosure Act;
                  Illinois Land Sales Registration Act of 1989...............25
         6.21     Additional Agreements......................................25

7.       BORROWER'S COVENANTS................................................26
         7.1      Manner of Construction.....................................26
         7.2      Certificate of Completion..................................26
         7.3      Change Orders..............................................26
         7.4      Compliance with Laws.......................................27
         7.5      Inspection.................................................27
         7.6      Mechanics' Liens...........................................27
         7.7      Release by Lender..........................................28
         7.8      Financial Statements; Reports..............................28
         7.9      Affirmation of Representations and Warranties..............29
         7.10     Title......................................................29
         7.11     Proceedings Affecting Property.............................29
         7.12     Disposal and Encumbrance of Property.......................29
         7.13     Insurance..................................................30
         7.14     Performance of Obligations; Notice of Default..............30
         7.15     Subcontracts...............................................30
         7.16     Restrictions Affecting Borrower............................30
         7.17     Use of Receipts............................................30
         7.18     Budget.....................................................31
         7.19     Management and Leasing Agreements; Subordination...........31
         7.20     Additional Documents.......................................31
         7.21     Sale to Investors..........................................31
         7.23     Survey.....................................................32
         7.24     Borrower's Accounts........................................32
         7.25     Ineligible Securities......................................32

8.       LOAN EXPENSES.......................................................32

9.       LENDER'S REPRESENTATIVES............................................33

10.      EVENTS OF DEFAULT...................................................33

11.       REMEDIES...........................................................35

12.      SALES OF UNIT INTERESTS; PARTIAL RELEASES...........................36
         12.1     Right to Sell..............................................36
         12.2     Release of Liens...........................................36

                                       ii
<PAGE>

13.      MISCELLANEOUS.......................................................37
         13.1     Additional Indebtedness....................................37
         13.2     Additional Acts............................................37
         13.3     Loan Agreement Governs.....................................37
         13.4     Additional Advances........................................37
         13.5     Amendment; Waiver; Approval................................37
         13.6     Notice.....................................................38
         13.7     Benefit; Assignment........................................38
         13.8     Governing Law..............................................39
         13.9     Indemnity..................................................39
         13.10    Headings...................................................39
         13.11    No Partnership or Joint Venture............................39
         13.12    Time is of the Essence.....................................39
         13.13    Invalid Provisions.........................................39
         13.14    Offset.....................................................40
         13.15    Acts by Lender.............................................40
         13.16    Binding Provisions.........................................40
         13.17    Counterparts...............................................40
         13.18    No Third Party Beneficiary.................................40
         13.19    Publicity..................................................40
         13.20    JURISDICTION AND VENUE.....................................40
         13.21    JURY WAIVER................................................41

                                      iii
<PAGE>

                          CONSTRUCTION LOAN AGREEMENT

         This Construction Loan Agreement ("Agreement") is dated as of October
20, 1999, by and between CMC HEARTLAND PARTNERS III, LLC, a Delaware limited
liability company ("Borrower"), and BANK ONE, ILLINOIS, NA, a national banking
association ("Lender").

         1.       RECITALS.
                  --------

                  1.1 Borrower is the fee owner of the Land (this and all other
         capitalized terms used in this Article 1 and not otherwise defined
         shall have the meanings ascribed thereto in Article 2 below).

                  1.2 Borrower has requested that Lender make a construction
         loan (the "Construction Loan") to Borrower in the maximum principal
         amount of $5,250,000 to pay a portion of the amounts needed to finance
         the Project Costs associated with the construction of a midrise
         building containing 24 residential condominium units and underground
         parking on the Land. Lender has agreed to make the Construction Loan
         subject to the terms and conditions set forth herein.

                  1.3 In consideration of the mutual agreements set forth herein
         and for other good and valuable consideration, the receipt and
         sufficiency of which are hereby acknowledged, Borrower and Lender agree
         as follows:

         2.       DEFINITIONS.  As used in this Agreement, the following terms
shall have the following meanings:

                  2.1 "Acceptable Unit Sale Contract" shall mean a binding,
         unconditional sale contract for a Unit Interest (with any financing and
         other contingencies having been satisfied or expired) (i) with a third
         party unrelated to and unaffiliated with Borrower, (ii) with earnest
         money paid in cash in an amount not less than 10% of the purchase price
         of the Unit Interest, (iii) on a form of contract approved in writing
         by Lender (with only such changes thereto as may be requested by the
         purchaser and agreed to by Borrower exercising commercially reasonable
         judgment), and (iv) for a gross sales price of not less than the
         minimum sales price therefor contained in Exhibit E attached hereto.

                  2.2 "Applicable Laws" shall mean all laws, statutes,
         ordinances, rules, regulations, judgments, decrees or orders of any
         state, federal or local government or agency which are applicable to
         the Obligors and/or the Project.

                  2.3      "Architect" shall mean Pappageorge/Haymes, Ltd.

                  2.4 "Architectural Contract" shall mean that certain contract
         dated December 9, 1997, between Borrower and the Architect regarding
         the architectural services to be performed by the Architect in
         connection with the construction of the Improvements.
<PAGE>

                  2.5 "Assignment of Developer Rights" shall mean the assignment
         from Borrower to Lender to secure the Loans of all of Borrower's rights
         as the developer/declarant under the Condominium Documents.

                  2.6 "Assignment of Plans" shall mean the collateral assignment
         of all licenses, permits, plans, specifications and contracts relating
         to the construction, use or operation of the Project to be made by
         Borrower to Lender to secure the Loans.

                  2.7 "Assignment of Rents and Leases" shall mean the collateral
         assignment of the rents and leases of the Project, or any part thereof,
         to be made by Borrower to Lender to secure the Loans.

                  2.8 "Assignment of Sales Contracts" shall mean the assignment
         of all sales contracts with respect to any Unit Interests to be made by
         Borrower to Lender to secure the Loans.

                  2.9 "Budget" shall mean the detailed budget of all costs to be
         incurred in connection with the Work, including both hard costs and
         soft costs, as set forth in Exhibit A attached hereto and made a part
         hereof.

                  2.10 "Building" shall mean the midrise building with 24
         residential condominium units and 32 underground parking stalls to be
         constructed on the Land.

                  2.11 "Business Day" shall mean each day excluding Saturdays,
         Sundays and any other day on which Lender is closed for business to the
         public.

                  2.12 "Closing Date" shall mean the date of this Agreement.

                  2.13 "Condominium Laws" shall mean, collectively, the Illinois
         Condominium Property Act, the City of Chicago Condominium Ordinance and
         all other laws, rules, regulations and governmental actions governing
         the development, conversion, ownership or operation of condominium
         projects such as the Project, as amended from time to time.

                  2.14 "Condominium Documents" shall mean the condominium
         declarations, the plats of condominium, the association articles of
         incorporation, by-laws and rules and regulations, the City of Chicago
         property report and all other documents and instruments governing the
         ownership, operation or administration of the Project as an integrated
         condominium project.

                  2.15 "Construction Contract" shall mean that certain contract
         dated September 7, 1999, between Borrower and the Contractor regarding
         the general contracting and construction management services to be
         performed in connection with the construction of the Improvements.

                                       2
<PAGE>

                  2.16 "Consultant" shall mean an independent architect or
         engineer selected by Lender.

                  2.17 "Contractor" shall mean Linn-Mathes, Inc.

                  2.18 "Demand Note" shall mean that certain Demand Note of even
         date herewith made by Borrower in the amount of $3,000,000 evidencing
         all draws hereafter made on the Letter of Credit.

                  2.19 "Default Rate" shall mean the Loan Rate plus three
         percent (3.0%) per annum.

                  2.20 "Event of Default" shall have the meaning ascribed to it
         in Section 10 of this Agreement.

                  2.21 "Hazardous Materials" shall mean and include any and all
         hazardous, toxic or dangerous substances, wastes and materials and
         other pollutants and contaminants as defined or described in any or all
         applicable federal, state or local statutes, laws, ordinances, codes,
         rules, regulations, orders or decrees now or hereafter regulating,
         relating to or imposing liability or standards of conduct with respect
         to environmental matters, including, without limitation the
         Comprehensive Environmental Response, Compensation, and Liability Act
         of 1980, as amended by the Superfund Amendments and Reauthorization Act
         of 1986 (42 U.S.C. Section 9601 et seq.), the Hazardous Materials
         Transportation Act (49 U.S.C. Section 1801 et seq.), the Solid Waste
         Disposal Act, as amended by the Resource Conservation and Recovery Act
         of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984
         (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution Control
         Act, as amended by the Clean Water Act of 1977 and the Water Quality
         Act of 1987 (33 U.S.C. Section 1251 et seq.), the Toxic Substances
         Control Act of 1976 (15 U.S.C. Section 2601 et seq.), the Emergency
         Planning and Community Right-to-Know Act of 1986 (42 U.S.C. Section
         11001 et seq.), the Clear Air Act of 1966, as amended (42 U.S.C.
         Section 7401 et seq.), the National Environmental Policy Act of 1970
         (42 U.S.C. Section 4321 et seq.), the Rivers and Harbours Act of 1899
         (33 U.S.C. Section 401 et seq.), the Endangered Species Act of 1973, as
         amended (16 U.S.C. Section 1531 et seq.), the Safe Drinking Water Act
         of 1974, as amended (42 U.S.C. Section 300(f) et seq.), the
         Occupational Safety and Health Act of 1970, as amended (29 U.S.C.
         Section 651 et seq.) and the Illinois Environmental Protection Act of
         1970, as amended (Ill.Rev.Stat. ch.111-1/2, Paragraph 1001 et seq.) and
         all rules, regulations and guidance documents promulgated or published
         thereunder, all as amended or hereinafter amended.  Without intending
         to limit the scope or breadth of the foregoing definition, the term
         Hazardous Materials shall include asbestos, urea formaldehyde,
         polychlorinated biphenyls, crude oil, radioactive materials and
         underground storage tanks.

                  2.22 "Heartland" shall mean Heartland Technology, Inc., a
         Delaware corporation.

                                       3
<PAGE>

                  2.23 "Improvements" shall mean the Building and all other
         structures, all paving, lighting, landscaping, utility lines and
         equipment and all other site improvements and all other improvements to
         be constructed on the Land in accordance with the Plans and
         Specifications.

                  2.24 "Indemnity Agreement" shall mean the environmental
         indemnity agreement to be made by Borrower in favor of Lender.

                  2.25 "Initial Advance" shall mean the first draw or
         disbursement made from the proceeds of the Construction Loan.

                  2.26 "Land" shall mean the tract of land located in Chicago,
         Cook County, Illinois and legally described in Exhibit B attached
         hereto.

                  2.27 "Letter of Credit" shall mean that certain irrevocable
         standby letter of credit (no. StI14057) established by Lender at the
         request of Borrower with Corus Bank as the beneficiary in the amount of
         $3,000,000, pursuant to the terms of the Letter of Credit Agreement.

                  2.28 "Letter of Credit Agreement" shall mean that certain Bank
         One Application and Agreement for Irrevocable Standby Letter of Credit
         dated as of July 31, 1999.

                  2.29 "Letter of Credit Liability" means, at any time, the sum
         of (i) the aggregate amount then available to be drawn or that may
         thereafter be drawn under the Letter of Credit, and (ii) all amounts
         that have theretofore been drawn on the Letter of Credit and that have
         not been reimbursed or repaid to Lender.

                  2.30 "Loans" shall mean (i) the Construction Loan, and (ii)
         any amounts that have been drawn on the Letter of Credit and that have
         not been reimbursed or repaid to Lender.

                  2.31 "Loan Advance" shall mean a disbursement of all or any
         portion of the Construction Loan.

                  2.32 "Loan Documents" shall mean this Agreement, the Mortgage,
         the Notes, the Assignment of Leases and Rents, the Assignment of Plans,
         the Assignment of Sales Contracts, Assignment of Developer Rights, the
         Security Agreement, the Indemnity Agreement, the Letter of Credit
         Agreement, and every other document now or hereafter evidencing,
         securing or otherwise executed in conjunction with the Loans, together
         with all amendments and modifications thereof.

                  2.33 "Loan Expenses" shall mean the expenses, charges, costs
         (including both hard costs and soft costs) and fees relating to the
         making, administration, negotiation, documentation or any other aspect
         of the Loans or relating to the performance of the

                                       4
<PAGE>

         Work, including, without limitation, Lender's reasonable attorneys'
         fees and costs in connection with the negotiation, documentation and
         enforcement of the Loans, the fees of the Consultant, all recording
         fees and charges, title insurance charges and premiums, escrow fees,
         fees of insurance consultants, costs of surveys and of other bonds
         required by the Title Company in connection with clearing title to the
         Real Property or the issuance of title reports, binders, policies and
         the like, and all other costs, expenses, charges and fees referred to
         in or necessitated by the terms of this Agreement or any of the other
         Loan Documents.

                  2.34 "Loan Rate" shall mean the Prime Rate.

                  2.35 "Maturity Date" shall mean October 20, 2002.

                  2.36 "Member" shall mean CMC Heartland Partners, a Delaware
         general partnership, Borrower's sole member.

                  2.37 "Mortgage" shall mean the construction mortgage
         encumbering the Real Property to be made by Borrower to Lender to
         secure the Loans.

                  2.38 "Mortgage Note" shall mean the Mortgage Note evidencing
         the Construction Loan to be made by Borrower payable to the order of
         Lender in the original principal amount of $5,250,000.

                  2.39 "Net Sales Proceeds" shall mean, with respect to the sale
         of any Unit Interest, the gross sales proceeds payable by the purchaser
         thereof, minus all customary and reasonable title insurance charges,
         escrow fees, legal fees, real estate taxes and other prorations
         approved by Lender, transfer taxes and market rate real estate brokers'
         commissions, all to the extent payable as a result of the sale of such
         Unit Interest, provided, however, if there is a holdback escrow as a
         result of the sale of such Unit Interest, then the Net Sales Proceeds
         shall not include the amount of such escrow until such amount is
         delivered to Borrower, further provided, that any such holdback escrow
         shall not be greater than $1,500.

                  2.40 "Notes" shall mean the Demand Note and the Mortgage Note.

                  2.41 "Obligors" shall mean Borrower and Member.

                  2.42 "Permitted Exceptions" shall mean the exceptions to the
         title of the Real Property listed on Exhibit C attached hereto.

                  2.43 "Person" shall mean any individual, firm, corporation,
         business enterprise, trust, association, joint venture, partnership,
         limited liability company, governmental body or other entity, whether
         acting in an individual, fiduciary or other capacity.

                                       5
<PAGE>

                  2.44 "Personal Property" shall mean and include any and all
         furniture, furnishings, appliances, equipment and all fixtures (to the
         extent such fixtures are attached in a manner so as not to be deemed to
         be part of the Real Property) to be located in the Units or otherwise
         at the Land which will be used or usable in connection with the
         ownership, development, construction or operation of the Project and
         which will be owned, leased or otherwise possessed by Borrower or any
         of its affiliates, including all of such personal property contemplated
         under the Plans and Specifications.

                  2.45 "Plans and Specifications" shall mean, collectively, the
         architectural and engineering plans and specifications relating to the
         Work or any portion thereof, all of which must be acceptable to Lender
         in its sole and absolute discretion.

                  2.46 "Prime Rate" shall mean an annual rate of interest equal
         to the prime rate as publicly announced by Lender to be in effect from
         time to time, adjusted and changing when and as said prime rate
         changes.

                  2.47 "Principal Balance" shall mean the unpaid principal
         balance of the Loans outstanding from time to time.

                  2.48 "Project" shall mean the residential condominium complex
         more fully described in Section 1.2 above.

                  2.49 "Project Cost" shall mean each of the following items,
         but only to the extent specifically set forth in the Budget and only to
         the extent specifically required to complete the Project:

                           (a)      The actual hard costs of completing
                  construction of the Improvements, including demolition and
                  environmental remediation costs;

                           (b)      The actual costs of acquiring the Land and
                  acquiring and installing the Personal Property;

                           (c)      Premiums for title, casualty, liability and
                  other insurance required by Lender;

                           (d)      The cost of recording and filing the Loan
                  Documents;

                           (e)      Real estate taxes and other assessments
                  which Borrower is obligated to pay during the term of the
                  Loans;

                           (f)      Interest, fees and similar charges payable
                  by Borrower to Lender hereunder or under the Notes;

                           (g)      Legal and other closing costs;

                                       6
<PAGE>

                           (h)      Architectural, engineering and consulting
                  fees;

                           (i)      Such other soft costs as may be set forth in
                  the Budget or as may be hereafter approved in writing by
                  Lender; and

                           (j)      All other Loan Expenses.

                  2.50 "Property" shall mean the Real Property, the Building and
         the Personal Property (whether before or after completion of the Work)
         and all other tangible and intangible assets benefiting or otherwise
         appertaining to the Project, including, without limitation, all of the
         collateral for the Loans described in the Loan Documents.

                  2.51 "Real Property" shall mean the Land, the Improvements and
         all easements and appurtenants thereto.

                  2.52 "Reserves" shall mean the reserves described in Section
         5.7 below.

                  2.53 "Retainage" shall mean the portion of each Loan Advance
         retained by Lender in accordance with Section 5.5 below.

                  2.54 "Security Agreement" shall mean the security agreement
         encumbering the Personal Property to be made by Borrower to Lender to
         secure the Loans.

                  2.55 "Subcontracts" shall mean all subcontracts now or
         hereafter entered into by the Contractor for the construction of any of
         the Improvements or the installation of any of the Personal Property or
         the performance of any other aspect of the Work, together with all
         sub-subcontracts, material or equipment purchase orders, equipment
         leases and other agreements entered into by the Contractor, any
         subcontractor or any other party supplying labor or materials in
         connection with the Work.

                  2.56 "Survey" shall mean the plat of survey of the Real
         Property as described in Section 4.3 below.

                  2.57 "Title Company" shall mean Near North National Title
         Corporation, as issuing agent for First American Title Insurance
         Company.

                  2.58 "Title Policy" shall mean the title insurance policy
         described in Section 4.5 below.

                  2.59 "Unit" shall mean a residential condominium unit dwelling
         located within the Building that is to be sold to purchasers in a fully
         finished (but unfurnished) condition, as more fully described in the
         plans to be delivered to Lender (which plans are subject to Lender's
         approval).

                                       7
<PAGE>

                  2.60 "Unit Interest" shall mean an ownership interest in a
         Unit, together with the undivided ownership interest in the common
         elements, easements and other rights appurtenant to such Unit, as more
         fully provided in the Condominium Documents to be approved by Lender.

                  2.61 "Unmatured Default" shall mean an event or circumstance
         that with the giving of notice, the passage of time, or both, would
         constitute an Event of Default.

                  2.62 "Work" shall mean the performance of all work to be
         performed and the supplying of all materials to be supplied in
         connection with the building, furnishing, fixturing and equipping of
         the Project, all in accordance with the provisions of this Agreement
         and with the Plans and Specifications, the Budget and other
         documentation approved by Lender.

         3.       COMMITMENT TO LEND; COMMITMENT FEE.
                  ----------------------------------

                  3.1 Maximum Construction Loan Amount. Lender agrees to lend to
         Borrower, and Borrower agrees to borrow from Lender, an amount not to
         exceed $5,250,000 for the purposes, upon the terms and subject to the
         conditions contained in this Agreement. Notwithstanding anything
         contained in this Article to the contrary, Loan Advances shall be
         limited to such amounts as Borrower is eligible to receive pursuant to,
         and upon compliance with, the conditions of Article 5 hereof. Borrower
         may prepay all or any part of the Construction Loan at any time and
         from time to time upon five days prior written notice to Lender without
         cost or penalty. Borrower shall not be entitled to reborrow portions of
         the Construction Loan that are repaid or prepaid pursuant to, and upon
         compliance with, the conditions of Article 4 hereof.

                  3.2 Loan Advances Evidenced by Mortgage Note. All Loan
         Advances hereunder shall be evidenced by the Mortgage Note, which shall
         be executed and delivered by Borrower simultaneously with the execution
         of this Agreement.

                  3.3 Payment of Interest and Principal. Payments of principal
         and interest due under the Notes, if not sooner declared to be due in
         accordance with the provisions of the Notes or this Agreement, shall be
         made as follows:

                           (a) Commencing on the first Business Day of the
                  calendar month following the Initial Advance and on the first
                  Business Day of each calendar month thereafter through and
                  including the calendar month in which the Maturity Date
                  occurs, accrued and unpaid interest only on the Principal
                  Balance shall be due and payable;

                           (b)      Upon the consummation of each sale of a
                  Unit, a payment equal to 100% of the Net Sales Proceeds with
                  respect to such Unit;

                                       8
<PAGE>

                           (c) The principal balance of the Mortgage Note, if
                  not sooner declared to be due in accordance with the terms of
                  the Mortgage Note or this Agreement, together with all accrued
                  and unpaid interest thereon, shall be due and payable in full
                  on the Maturity Date.

         Borrower hereby authorizes Lender on the first day of each month during
         the term of the Construction Loan (and on any other date on which
         interest is due under the Mortgage Note) to disburse to itself from the
         undisbursed proceeds of the Construction Loan all then accrued and
         unpaid interest on the Construction Loan, and Lender agrees to disburse
         Construction Loan proceeds to itself to pay such interest, provided all
         conditions precedent to such disbursement as set forth in this
         Agreement are satisfied; provided, however, that neither such
         authorization nor agreement shall be deemed to limit, reduce or
         otherwise affect Borrower's obligation to pay interest if (a) there are
         no remaining amounts in the Budget allocated for the payment of
         interest (including Reserves specifically allocated to pay interest),
         or (b) Lender is entitled to withhold disbursement of the Construction
         Loan for any reason. Any amounts disbursed from the interest reserve
         shall become part of the outstanding principal balance and interest
         thereon shall accrue and be payable as provided in the Mortgage Note.

                  3.4 Default Rate. At any time, after the Maturity Date or
         otherwise, when an Event of Default exists under this Agreement or any
         of the other Loan Documents, the Principal Balance and any other
         amounts then owing by Borrower to Lender shall bear interest at the
         Default Rate.

                  3.5 Late Charge. If any payment of interest or principal due
         under the Notes is not made within ten days after such payment is due,
         then, in addition to the payment of the amount so due, Borrower shall
         pay to Lender a "late charge" equal to five percent (5.0%) of the
         amount of that payment or $25.00, whichever is greater, to compensate
         Lender for the cost of collecting and handling such late payment.

                  3.6 Fees. Lender has fully earned a non-refundable loan and
         administration fee in the amount of $52,500.00, and, concurrently with
         the execution of this Agreement, the unpaid balance of such fee shall
         be due and payable by Borrower.

                  3.7      Letter of Credit; Letter of Credit Fees and Cash
                           Collateral.
                           ------------------------------------------------

                           (a) Concurrently with the Initial Advance, Lender
                  shall issue the Letter of Credit on Lender's standard form and
                  otherwise in form and substance acceptable to Lender in an
                  aggregate amount of $3,000,000; provided, however, that prior
                  to and as a condition to Lender being obligated to issue the
                  Letter of Credit, Borrower shall pay to Lender an issuance fee
                  equal to $30,000 and such issuance fee shall be deemed to be
                  fully earned upon the payment thereof. Provided that the
                  Letter of Credit is then outstanding, on October 20, 2000,
                  January 20, 2001, April 20, 2001 and July 20, 2001, Borrower
                  shall pay to Lender

                                       9
<PAGE>

                  a quarterly fee equal to $7,500, which such fee shall be
                  deemed to be fully earned upon the payment thereof.

                           (b) Any amounts disbursed by Lender under the Letter
                  of Credit at any time and from time to time shall be deemed
                  disbursements of proceeds of the Loans and shall be due and
                  payable by Borrower to Lender at the times and in the manner
                  set forth in the Demand Note.

                           (c) If the Letter of Credit is outstanding prior to
                  Maturity Date, but subsequent to the repayment in full of the
                  Construction Loan, then upon the consummation of each sale of
                  a Unit Interest, Borrower shall deliver cash collateral equal
                  to 50% of the Net Sales Proceeds with respect to such Unit
                  Interest shall be delivered to Lender. If the Letter of Credit
                  is outstanding on the Business Day immediately preceding the
                  Maturity Date (or if an amount has then been drawn on the
                  Letter of Credit which has not been reimbursed or repaid),
                  Lender may demand delivery of cash collateral in an amount
                  equal to the then outstanding Letter of Credit Liability, and
                  such cash collateral may be retained by Lender until such time
                  as the Letter of Credit Liability is reduced to $0. Lender may
                  apply any such cash collateral to the payment of any amounts
                  thereafter drawn on the Letters of Credit which have not been
                  reimbursed or repaid to Lender by Borrower. The failure to
                  deliver any such cash collateral upon demand shall constitute
                  an immediate Event of Default under the Loan Documents. The
                  repayment of any draws on the Letters of Credit shall be
                  secured by the Loan Documents, and so long as any Letter of
                  Credit is outstanding, Lender shall not be required to issue a
                  full release of the Loan Documents.

         4. LOAN DOCUMENTS. Prior to the Initial Advance, Borrower shall execute
and/or deliver to Lender those of the following documents and other items
required to be executed and/or delivered by Borrower, and shall cause to be
executed and/or delivered to Lender those of the following documents and other
items required to be executed and/or delivered by others, all of which documents
and other items shall contain such provisions as shall be required to conform to
this Agreement and otherwise shall be satisfactory in form and substance to
Lender:

                  4.1 The Loan Documents.

                  4.2 UCC financing statements perfecting the security interests
         created by the Security Agreement.

                  4.3 Three copies of a plat of survey (the "Survey") prepared
         and certified by a registered or certified surveyor in compliance with
         the 1992 Minimum Standard Detail Requirements for ALTA/ACSM Land Title
         Surveys, including Table A items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13.
         The Survey shall be as of a current date and shall bear a

                                       10
<PAGE>

         statement of the surveyor stating that the Survey and the ALTA
         certification run to the benefit of Lender and the Title Company.

                  4.4 Such insurance policies and certificates (with premiums
         prepaid) evidencing builder's risk insurance, all-risk, fire and
         extended coverage, hazard and comprehensive liability insurance,
         including contractual liability, workmen's compensation insurance, and
         such other insurance as Lender reasonably requires covering the
         Project, in such form, with such endorsements, in such amounts, with
         deductibles and with such carriers as shall be acceptable to Lender,
         and naming Lender as an additional insured party on all liability
         policies and as mortgagee/additional loss payee on the builder's risk
         and other property damage policies and containing a prohibition against
         cancellation for nonpayment of premiums or any other reason or
         modification without thirty days prior written notice to Lender. Any
         provision of this Section to the contrary notwithstanding, all
         insurance policies required to be carried under this Agreement shall
         provide expressly that they shall not be rendered invalid by a waiver
         of the right of subrogation by any insured and that the insurer shall
         have no right to be subrogated to Lender. Borrower shall deliver (or
         cause to be delivered) to Lender either (i) an original of each such
         insurance policy, or (ii) a copy of each such policy certified by the
         issuing agent as being a true, correct and complete copy of the
         original.

                  4.5 An ALTA Construction Loan Policy of Title Insurance (the
         "Title Policy") issued by the Title Company in the full amount of the
         Notes insuring that the Mortgage will be a first priority lien upon the
         fee simple title to the Real Property to the extent of advances made by
         Lender from time to time under this Agreement, subject to no liens,
         claims, exceptions or encumbrances except the Permitted Exceptions and
         containing the following endorsements:

                           (a)      Endorsements for Interim Certification;

                           (b)      ALTA Broad Form 3.1 Zoning Endorsement,
                  including coverage for parking and for loading docks and bays
                  and deleting the marketability limitation, based upon the
                  completion of the Project in accordance with the Plans and
                  Specifications;

                           (c)      Comprehensive Endorsement No. 1 (in form
                  modified for construction loans);

                           (d)      Access Endorsement;

                           (e)      Survey Endorsement;

                           (f)      Contiguity Endorsement;

                                       11
<PAGE>

                           (g)      Variable Rate Endorsement;

                           (h)      Endorsement deleting the creditors' rights
                  exception;

                           (i)      Condominium Endorsement No. 4;

                           (j)      Letter of Credit Endorsement;

                           (k)      Usury Endorsement; and

                           (l)      Such additional endorsements as may be
                  reasonably required by Lender based upon its review of the
                  Title Policy and Survey.

                  4.6 Copies of such documents, if any, as Borrower has provided
         the Title Company in connection with the issuance and underwriting of
         the Title Policy.

                  4.7 Copies of all recorded documents described in the Title
         Policy.

                  4.8 Current Uniform Commercial Code, federal and state tax
         lien and judgment searches, pending suit and litigation searches and
         bankruptcy court filings searches covering each Obligor and disclosing
         no matters objectionable to Lender.

                  4.9 A Certificate executed by the Architect containing the
         following: (a) a detailed list of the final Plans and Specifications of
         the Work; (b) a statement that such Plans and Specifications are
         complete in all respects and show all work and material required for
         construction of the Project, which when completed in accordance
         therewith, shall render the Project ready for use and occupancy for its
         intended purposes in compliance with all Applicable Laws; (c) a
         statement that the Plans and Specifications were prepared in a manner
         consistent with accepted architectural or engineering practices, as the
         case may be, and in full compliance with all Applicable Laws relating
         to the construction of the Project; (d) a list of all certificates,
         permits, licenses, consents and authorizations of governmental
         authorities which will be required for the performance of the Work, and
         a statement that either (i) all such certificates, permits, licenses
         and other authorizations of governmental authorities which are
         necessary to construct the Project have been obtained and are in full
         force and effect, or (ii) there are no impediments to obtaining such
         certificates, permits, licenses and other authorizations; and (e) a
         statement that adequate sewer, water, electrical power and other public
         and private utilities are available to the site in such capacities as
         to adequately service the Project upon completion thereof.

                  4.10 The consent of the Contractor and the Architect to the
         collateral assignment of the Construction Contract and the
         Architectural Contract, respectively, pursuant to the Assignment of
         Plans.

                                       12
<PAGE>

                  4.11 The Plans and Specifications, which have been approved by
         Borrower and the Contractor and approved and stamped by the appropriate
         governmental authorities, including detailed descriptions (with
         drawings and specifications).

                  4.12 Certified copies of the Construction Contract and the
         Architectural Contract, all licenses, permits and governmental
         approvals necessary for the construction, use or operation of the
         Project and all other documents and instruments relating to performance
         of the Work.

                  4.13 Opinion letter from Jenner & Block, legal counsel for
         Borrower opining to the authority of said parties to execute, deliver
         and perform their respective obligations under the Loan Documents, to
         the validity and binding effect of the Loan Documents and to such other
         matters as Lender and its counsel shall require.

                  4.14 A soil test report prepared by a licensed soil engineer
         approved by Lender and otherwise satisfactory in all respects to Lender
         containing, among other things, boring logs and the locations of all
         borings and confirming that no condition exists with respect to the
         Land which would cause subsidence of any portion of the Land and
         showing that no state of facts exists which would adversely affect the
         completion of the Work in accordance with the Plans and Specifications
         or would require any costs with respect thereto not otherwise provided
         for in the Budget.

                  4.15 Evidence that (i) no portion of the Real Property is
         located in an area designated by the Secretary of Housing and Urban
         Development as having special flood hazards, or if any portion of the
         Real Property is so located, evidence that flood insurance is in
         effect; and (ii) no portion of the Real Property is located in a
         federally, state or locally designated wetland or other type of
         government protected area.

                  4.16 Certified copies of the Operating Agreement and Articles
         of Organization of Borrower, together with all amendments thereto, and
         such resolutions and other documents as Lender deems appropriate
         evidencing the authority of Borrower to execute and deliver the Loan
         Documents to which such Persons are a party and to perform the
         obligations contemplated hereby and thereby.

                  4.17 Certified copies of the general partnership agreement of
         Member, and certified copies of the articles of incorporation creating
         the Heartland, together with all amendments thereto, and such
         resolutions and other documents as Lender deems appropriate evidencing
         the authority of Borrower and Member to execute and deliver the Loan
         Documents to which such Persons are a party and to perform the
         obligations contemplated hereby and thereby.

                  4.18 Certified copies of all service contracts, development
         agreements and other agreements affecting the use, development or
         operation of the Project, if any.

                                       13
<PAGE>

                  4.19 Evidence that the environmental condition of the Property
         is, and the environmental condition of the Project upon completion will
         be, satisfactory to Lender, including, without limitation, evidence
         that there are no conditions at or with respect to the Property that
         require disclosure upon a mortgage, conveyance or other transfer of the
         Property pursuant to the Illinois Responsible Property Transfer Act.
         Such evidence shall include, but shall not be limited to, a "Phase I
         Environmental Audit" (as defined in the Illinois Environmental
         Protection Act) certified to Borrower and Lender and setting forth an
         asbestos evaluation and other environmental investigations of the
         Property and the areas surrounding the Property. Such testing and
         investigation shall be performed by an "environmental professional" (as
         defined in the Illinois Environmental Protection Act) acceptable to
         Lender in a manner satisfactory to Lender.

                  4.20 Evidence that, as of the date of the initial Loan
         Advance, there has been no material adverse change in the financial or
         other projections for the Project, the physical condition of the
         Property or the financial condition of Borrower since the date of the
         most recent financial statements or projections delivered to Lender or
         the most recent inspections of the condition of the Property made by
         the Consultant, as the case may be.

                  4.21 Form of proposed sales contracts and other documents to
         be used in connection with the sale of the Unit Interests, together
         with a schedule of minimum sales prices therefor.

                  4.22 An MAI appraisal satisfactory to Lender indicating the
         aggregate fair market value of the Project is acceptable to Lender.

                  4.23 Certified copies of any sale contracts, letters of intent
         and other agreements relating to the sale of the Unit Interests that
         have been executed as of the date of the initial Loan Advance.

                  4.24 A detailed marketing and sales projection, including a
         projection of the amount of time required to close sales of the Unit
         Interests.

                  4.25 Copies of the forms of all of the Condominium Documents.

                  4.26 Evidence that the Property is, and upon completion the
         Project will be, in compliance with all Applicable Laws.

                  4.27 A reasonably detailed Project development and
         construction schedule specifying all of the projected start and
         completion dates (or delivery dates) for each component of development
         of the Project, including each separate component of performance of the
         Work and each required license, permit or other public or private
         approval.

                  4.28 Such other assignments, certificates, opinions and other
         documents, instruments and information affecting or relating to
         Lender's interest in the Project or the

                                       14
<PAGE>

         use, operation, development or construction of the Project as Lender
         may reasonably require.

         5.       DISBURSEMENT OF THE LOAN.
                  ------------------------

                  5.1 Conditions Precedent. In addition to the other conditions
         set forth herein, the obligation of Lender to make the initial and each
         subsequent disbursement of the Construction Loan under this Agreement
         shall be conditioned upon and subject to the payment to Lender of all
         loan fees then owing from Borrower to Lender and to satisfaction of all
         of the following conditions:

                           (a) All representations and warranties contained in
                  this Agreement and in the other Loan Documents shall be true
                  in all material respects on and as of the date of such
                  disbursement.

                           (b) Borrower shall have performed all of its
                  obligations under all Loan Documents which are required to be
                  performed on or prior to the date of such disbursement.

                           (c) The Construction Loan shall not be "out of
                  balance" as determined under Section 5.8 below, and the
                  disbursement shall not cause the Construction Loan to be "out
                  of balance."

                           (d) There shall be no material adverse change in the
                  financial condition of Borrower as reasonably determined by
                  Lender.

                           (e) No Event of Default shall have occurred that has
                  not been waived in writing by Lender, and no Unmatured Default
                  shall then exist.

                  5.2 Use of Construction Loan Proceeds; Inspections of the
         Work. The proceeds of the Construction Loan disbursed to Borrower shall
         be used by Borrower solely for the purpose of paying (or reimbursement
         to others for payment of) items of Project Cost actually incurred by
         Borrower, and, in connection therewith, no Project Cost shall include
         expenses relating to any development, construction, operating or other
         cost attributable to any project other than the Project specifically
         described in this Agreement. Notwithstanding anything contained in this
         Agreement to the contrary, all inspections of the Work made by Lender,
         the Consultant or their respective agents, employees and designees
         shall be solely for Lender's own information and shall not be deemed to
         have been made for or on account of Borrower or any other party.
         Borrower hereby specifically relieves Lender of any and all liability
         or responsibility relating in any way whatsoever to the construction of
         the Project, including but not limited to, the work thereat, the
         material or labor supplied in connection therewith, and any errors,
         inconsistencies or other defects in the Project or the Plans and
         Specifications.

                  5.3      Disbursement Requests.
                           ---------------------

                                       15
<PAGE>

                           (a) Borrower shall request and Lender shall be
                  required to make disbursement of the Construction Loan not
                  more frequently than once each calendar month. Lender may at
                  any time take such action as it deems appropriate to verify
                  that the conditions precedent to each disbursement have been
                  satisfied, including, without limitation, verification of any
                  amounts due under the Construction Contract or any
                  Subcontract. Borrower agrees to cooperate with Lender in any
                  such action. If in the course of any such verification, any
                  amount shown on any contract or subcontract entered into for
                  the performance of any portion of the Work, or any application
                  for payment, sworn statement or waiver of lien is subject to a
                  possible discrepancy, such discrepancy shall be eliminated by
                  Borrower to Lender's satisfaction. Each request for
                  disbursement shall be made by a letter from the chief
                  financial officer of the Borrower, addressed to Lender,
                  specifying in detail the amount and mode of each disbursement
                  and accompanied by the following, all in form and substance
                  satisfactory to Lender:

                                    (i)  An Owner's Sworn Statement and
                           disbursement request;

                                    (ii) A Contractor's Application for Payment
                           and Sworn Contractor's Statement from Contractor, and
                           a statement of a duly authorized officer of
                           Contractor that all items of construction cost have
                           been incorporated into the Project in accordance with
                           the Plans and Specifications, together with waivers
                           of lien with respect to the current disbursement and
                           all previous disbursements from Contractor and all
                           subcontractors and materialmen to whom payment is to
                           be made, as are required by the Title Company as a
                           condition to issuing the date-down endorsement
                           described in subparagraph 5.3(b) below;

                                    (iii) A certificate of the Architect
                           certifying (based on its diligent investigation of
                           the Project and the Work then performed) (A) that all
                           construction to the date of the request for
                           disbursement has been completed in accordance with
                           the Plans and Specifications; (B) the percentage of
                           completion of each component of the Work; (C) its
                           approval of the request for disbursement; (D) that
                           there has been no material deviation from the
                           contract amount under the Construction Contract or
                           any Subcontract or from the projected time of
                           completion of any component of the Work; and (E) the
                           total construction cost to complete the construction
                           of the Project and that after giving effect to all
                           amounts previously certified for payment, plus the
                           amount then requested, the remaining uncertified and
                           undisbursed funds shall be sufficient to pay all
                           costs required to complete the construction of the
                           Project in accordance with the Plans and
                           Specifications; and

                                    (iv) An inspection report of the Consultant
                           certifying the percentages of completion of the
                           components of the Work and setting forth the amount
                           authorized for disbursement and such other matters as

                                       16
<PAGE>

                           Lender may require (including compliance with the
                           Plans and Specifications). (It is understood and
                           agreed by Borrower that any and all inspections of
                           the Work made by Lender, the Consultant or their
                           respective agents, employees and/or designees shall
                           be solely for Lender's own information and shall not
                           be deemed to have been made for or on account of
                           Borrower or any other party, and that Lender shall
                           have no liability or responsibility relating in any
                           way whatsoever to the construction of the Project,
                           including, but not limited to, the work thereon, the
                           material or labor supplied in connection therewith,
                           and any errors, inconsistencies or other defects in
                           the Plans and Specifications.)

                                    (v)     Such other documents, assignments,
                           certificates and opinions as are required by the
                           Title Company, or as may be reasonably required by
                           Lender.

                           (b) Notwithstanding anything contained in this
                  Agreement to the contrary, Lender shall not be required to
                  make any disbursement of the Construction Loan pursuant to
                  this Agreement until the Title Company is prepared to issue an
                  endorsement to the Title Policy, updating the same to the date
                  of such disbursement and increasing the amount of coverage
                  (including mechanic lien coverage) thereunder to the Principal
                  Balance (taking into account the then current disbursement),
                  and insuring the lien of the Mortgage to be superior to all
                  defects in title other than the Permitted Exceptions and other
                  exceptions hereafter approved by Lender in writing.

                           (c) No disbursement of any amount shown in the Budget
                  as a contingency reserve shall by made without Lender's
                  approval with respect to the type and amount of the requested
                  expenditure, which approval shall not be unreasonably
                  withheld.

                  5.4 Certifications, Representations and Warranties. Each
         request for disbursement by Borrower shall constitute (a) Borrower's
         certification that the representations and warranties contained in
         Article 6 below are true and correct in all material respects as of the
         date of such request, (b) Borrower's certification that Borrower is in
         compliance with the conditions contained in this Article 5, and (c)
         Borrower's representation and warranty to Lender, with respect to the
         Work, materials and other items for which payment is requested that (i)
         such Work and materials have been incorporated into the Project, free
         and clear of liens and encumbrances, (ii) the value thereof is as
         estimated therein, (iii) such Work and materials substantially conform
         to the Plans and Specifications, this Agreement and all Applicable
         Laws, and (iv) the requisitioned value of such Work and materials and
         the amounts of all other items of cost for which payment is requested
         by Borrower have theretofore been in fact paid for in cash by Borrower
         or the same are then due and owing by Borrower and (unless Lender
         disburses funds directly to the parties performing the Work or to the
         Title Company) will in fact be paid in cash by Borrower within five
         days after Borrower's receipt of the

                                       17
<PAGE>

         requested disbursement. Neither review nor approval by Lender of
         requests for disbursement or any information contained therein or any
         other information provided to Lender in accordance with the other
         provisions of this Article 5 shall constitute the acceptance or
         approval by Lender of any portion of the Work.

                  5.5 Amount of Disbursements; Retainage. Subject to the other
         conditions and limitations set forth herein, the amount of each
         disbursement shall be the amount requested by Borrower; provided,
         however, that (a) Lender shall have the right to retain 10% of each
         "hard cost" item of Project Cost (other than amounts requested for
         payment to suppliers of materials only who have either fully delivered
         all materials or delivered such portion thereof whereby it is
         reasonable and necessary to fully pay for such materials)(the
         "Retainage"), which Retainage shall be disbursed in accordance with the
         provisions of Section 5.10 below, and (b) in no event shall Lender be
         obligated to disburse for any item an amount in excess of the amount
         allocated for such item pursuant to the Budget, including any Reserve
         set aside specifically for such item as provided in Section 5.7 below.

                  5.6 Costs. For purposes of this Agreement, including without
         limitation, Section 5.2 hereof, (a) the cost of labor and material
         furnished for the Work shall be deemed to be incurred by Borrower when
         the labor and material have been incorporated into the Project and the
         payment therefor is due and payable, (b) the cost of services (other
         than labor included in the Work) shall be deemed to be incurred by
         Borrower when the services are actually rendered and the payment
         therefor is due and payable, (c) real estate taxes, interest and
         insurance premiums shall be deemed to be incurred by Borrower when such
         items become due and payable, and (d) any other costs shall be deemed
         to be incurred by Borrower when the payment therefor is due and
         payable, but not before the value to be received in return for such
         cost has been received by Borrower.

                  5.7 Reserves. In addition to any reserves for specific line
         items that are already established in the Budget, Lender may establish
         and set aside out of the undisbursed proceeds of the Construction Loan,
         reserves (collectively, the "Reserves") in such amounts as may be
         reasonably estimated by Lender from time to time to provide for payment
         of the items of Project Cost as the same may accrue or become payable
         prior to the repayment in full of the Construction Loan. Amounts set
         aside as Reserves shall not be available for disbursement to Borrower
         for any purpose other than payment of the item or group or items for
         which the Reserve was established. Based upon the facts then available
         to Lender, Lender may adjust and reallocate the amount of any Reserve
         from time to time. Items for which Reserves may be established shall
         include (i) Loan Expenses, (ii) interest on the Loans, (iii) real
         estate taxes and assessments, (iv) premiums on insurance policies and
         bonds (if any) required to be furnished by Borrower hereunder (v)
         professional fees and (vi) promotion and sale costs.

                                       18
<PAGE>

                  5.8 Loan In Balance. At all times prior to repayment of the
         Loans in full, (a) the sum of the undisbursed Construction Loan
         proceeds allocated to each line item in the Budget (including any
         Reserve specifically set aside for such line item) must be sufficient,
         in Lender's reasonable determination, to pay the unpaid costs and
         expenses that will be incurred to complete such item, and (b) the
         aggregate undisbursed Construction Loan proceeds, as set forth in the
         Budget, must be sufficient, in Lender's reasonable determination, to
         pay all unpaid Project Costs and all operating, management and other
         expenses of the Property through the projected date on which all of the
         Unit Interests will be sold (or such earlier date by which the Loans
         will be fully repaid from the proceeds of sales of Unit Interests), as
         such dates are reasonably determined by Lender from time to time.
         Lender and Borrower mutually acknowledge that the Budget includes an
         amount necessary to complete all of the Units. If Lender reasonably
         determines that (i) the costs and expenses to complete any line item in
         the Budget exceeds the remaining undisbursed Construction Loan proceeds
         allocated therefor, or (ii) the remaining Project Costs and all
         estimated operating, management and other expenses of the Project
         through the projected date on which all of the Unit Interests will be
         sold (or such earlier date by which the Loans will be fully repaid from
         the proceeds of sales of Unit Interests), as such dates are reasonably
         determined by Lender from time to time, exceeds the sum of the
         aggregate undisbursed Construction Loan proceeds, as set forth in the
         Budget, then the Construction Loan shall be deemed "out of balance" to
         the extent of such excess. The Construction Loan shall also be deemed
         to be "out of balance" if Lender reasonably determines that the
         aggregate prices at which the Unit Interests can be sold are less than
         the aggregate Minimum Sales Prices for the Unit Interests, and/or the
         pace of the sales of the Unit Interests is slower than that projected
         by Borrower when establishing the Budget, and, as a result of either of
         such circumstances, there will not be sufficient revenue generated from
         the Project to pay all of Borrower's obligations under the Loan
         Documents as and when required. In the event that Lender determines
         that the Construction Loan is out of balance, Borrower shall, within
         five (5) days after written request by Lender, deposit with Lender the
         amount reasonably required by Lender to eliminate the out-of-balance
         deficiency, whereupon the sums thus deposited by Borrower with Lender
         will be disbursed by Lender to complete the Work prior to any further
         disbursement of Construction Loan proceeds (or, if the Work has been
         completed, to the repayment of the outstanding principal balance of the
         Loans and other amounts payable under the Loan Documents). No interest
         shall be payable to Borrower on the amounts so deposited, nor to Lender
         on such amounts when disbursed to pay the cost of any Work. Borrower
         agrees to furnish to Lender, upon request, all information required by
         Lender to make the determinations described in this Section.

                  5.9      Escrow; Application of Disbursements.
                           ------------------------------------

                  (a) Lender shall make each requested disbursement of the
         Construction Loan through a construction escrow with the Title Company
         within ten days after all of the conditions precedent to such
         disbursement set forth in this Article have been satisfied (including
         delivery of all documentation required under Section 5.3 above), except
         that Lender, in its discretion, may make payments of Project Cost
         directly to Borrower or to

                                       19
<PAGE>

         the person or entity Lender determines is entitled to such payment or
         jointly to Borrower and such person or entity. The escrow agreement
         governing such construction escrow shall be in form and substance
         acceptable to Lender.

                  (b) Notwithstanding the foregoing, Lender shall not be
         responsible, liable or obligated to the contractors, subcontractors,
         suppliers, materialmen, laborers, architects, engineers, or any other
         parties, for services or work performed, or for goods delivered by them
         or any of them, in and upon the Land or employed directly or indirectly
         in the performance of the Work, or for any debts or claims whatsoever
         accruing in favor of any such parties and against Borrower or others,
         or against the Project. It is expressly understood and agreed that
         Borrower is not and shall not be an agent of Lender for any purpose
         whatsoever. Without limiting the generality of the foregoing, advances
         made at Lender's option, directly to any contractor, subcontractor or
         supplier of labor or materials, or any other party, shall not be deemed
         a recognition by Lender of any third party beneficiary status of any
         such person or entity.

                  (c) Borrower covenants and agrees that it shall receive all
         advances of Construction Loan proceeds to be made hereunder by Lender
         as a trust fund and that Borrower shall withdraw and use said funds
         solely for the payment of the bills for the labor and materials used in
         the performance of the Work for which such Construction Loan funds were
         requested by Borrower, and for the payment of the other items of
         Project Cost for which such Construction Loan proceeds were requested
         by Borrower, and for no other purpose whatsoever; however, nothing
         herein shall impose upon Lender any obligation whatsoever to see to the
         proper application of any such monies by Borrower.

                  (d) Whenever so requested by Lender, Borrower shall promptly
         furnish Lender written evidence reasonably satisfactory to Lender that
         all monies theretofore advanced by Lender pursuant to this Agreement
         have actually been paid or applied in payment of the cost of
         performance of the Work and in payment of the other items of Project
         Cost for which such funds were advanced by Lender, and until such
         evidence is produced, at the option of Lender, no future or additional
         payments or advances of Construction Loan funds need be made hereunder.

                  5.10 Release of Retainage.  Retainage(s) shall be released as
         follows:

                  (a) Retainage on any Subcontract shall be released within
         thirty days after such Subcontract has been fully performed and the
         following conditions have been satisfied:

                           (i) Borrower has delivered final and unconditional
                  waivers of lien from the subcontractor whose individual
                  Subcontract has been fully performed to the Title Company with
                  copies to Lender;

                                       20
<PAGE>

                           (ii) All conditions precedent to disbursement of
                  proceeds of the Construction Loan as set forth in this
                  Agreement have been fully satisfied; and

                           (iii) Lender has received a certificate in writing
                  signed by a duly authorized officer of Contractor and
                  Architect certifying that the Work provided for in the
                  Subcontract has been fully and satisfactorily completed in
                  accordance with the Plans and Specifications, and in
                  compliance with all Applicable Laws, and the Consultant has
                  approved all such Work.

                  (b) Final disbursement of construction retainages to the
         Contractor for the Work not previously released shall be made upon
         satisfaction of the following conditions in addition to satisfaction of
         the other conditions precedent for disbursement of proceeds of the
         Construction Loan by Lender:

                           (i) Borrower has delivered to Lender (A) a
                  certificate in writing signed by a duly authorized officer of
                  the Contractor certifying that all obligations of the
                  Contractor under the Construction Contract and all obligations
                  of the subcontractors under the Subcontracts have been fully
                  performed, and (B) a certificate signed by the Architect,
                  certifying that the construction of the Work has been
                  completed in all respects in accordance with the Plans and
                  Specifications and the use and occupancy of the Project is
                  permitted under all Applicable Laws;

                           (ii) If requested by Lender, Lender shall have
                  received a certificate in writing signed by the Consultant
                  certifying that the construction of the Work has been
                  completed in all respects in accordance with the Plans and
                  Specifications and the use and occupancy of the Project is
                  permitted under all Applicable Laws;

                           (iii) Borrower has delivered to Lender all applicable
                  licenses or permits necessary for the use of the Project,
                  including without limitation, a final, unconditional
                  certificate of occupancy the Project;

                           (iv) Borrower has delivered to Lender original
                  policies of fire and extended coverage insurance as herein
                  required, with Lender named as mortgagee and as an additional
                  insured party and loss payee;

                           (v) The Title Company is unconditionally prepared to
                  issue its final updated ALTA loan policy of title insurance
                  covering the Principal Balance, subject only to the Permitted
                  Exceptions and other exceptions approved by Lender in writing,
                  and containing its final forms of Comprehensive Endorsement 1
                  and ALTA 3.1 Zoning Endorsement (without exception and based
                  on as-built conditions), full coverage against all mechanics'
                  liens and such other endorsements as are required under
                  Section 4.5 above;

                           (vi) Borrower has delivered to the Title Company and
                  Lender final and unconditional waivers of lien from the
                  Contractor and all subcontractors and

                                       21
<PAGE>

                  materialmen who have supplied labor or material in connection
                  with the Work and who have not previously submitted such final
                  waivers.

         6.       REPRESENTATIONS AND WARRANTIES.  In order to induce Lender to
execute this Agreement and to make the Loans, Borrower represents and warrants
to Lender as follows:

                  6.1 Borrower. Borrower is a duly formed limited liability
         company, validly existing and in good standing in the State of Illinois
         and has full power and authority to execute and deliver the Loan
         Documents and to perform its obligations hereunder and thereunder.
         Member is the sole member of Borrower and Borrower is managed solely by
         Member. The Amended and Restated Limited Liability Company Agreement
         dated as of May 9, 1997, creating Borrower and the Articles of
         Organization of Borrower, copies of which have been furnished to
         Lender, are in effect, unamended and is the true, correct and complete
         documents relating to Borrower's creation and governance. Borrower,
         Member and their affiliates have fully complied with all applicable
         securities and other laws and regulations in connection with the
         formation of Borrower and the sale and offer for sale of interests
         therein.

                  6.2 Member. Member is a duly formed general partnership
         validly existing and in good standing in the State of Illinois and has
         full power and authority to execute and deliver the Loan Documents and
         to perform its obligations hereunder and thereunder. Heartland
         Partners, L.P., a Delaware limited partnership and Heartland are the
         sole general partners of Member. The Amended and Restated Partnership
         Agreement dated as of June 27, 1990 creating Member, a copy of which
         has been furnished to Lender, is in effect, unamended and is the true,
         correct and complete documents relating to Member's creation and
         governance. Member has fully complied with all applicable securities
         and other laws and regulations in connection with the formation of
         Member and the sale and offer for sale of interests therein.

                  6.3 Heartland. Heartland is a duly formed corporation under
         the laws of the State of Delaware, validly existing, in good standing
         and fully qualified to do business in the State of Illinois. The
         articles of incorporation and by-laws of Heartland, copies of which
         have been furnished to Lender, are in effect, unamended, and are the
         true, correct and complete documents relating to Heartland's creation
         and governance.

                  6.4 Title. Borrower owns good and marketable fee simple title
         to the Real Property and the Personal Property. The Real Property and
         the Personal Property are owned free and clear of all liens, claims and
         encumbrances, except the Permitted Exceptions.

                  6.5 Improvements. Subject to the terms and conditions
         contained in this Agreement, Borrower intends to improve the Land with
         the Improvements. The Work will be performed in accordance with the
         provisions of the Plans and Specifications and the Budget and all of
         the other requirements of this Agreement.

                                       22
<PAGE>

                  6.6 Validity and Enforceability of Documents. Upon the
         execution and delivery of the Loan Documents, the Loan Documents shall
         be valid and binding upon the parties that have executed the same in
         accordance with the respective provisions thereof, and enforceable in
         accordance with the respective provisions thereof, subject only to
         applicable bankruptcy, reorganization, insolvency, moratorium and other
         similar laws affecting the enforcement of creditor's rights. Execution,
         delivery and performance of the Loan Documents do not and will not
         contravene, conflict with, violate or constitute a default under the
         Operating Agreement creating Borrower, the certificate of formation of
         Borrower, or any Applicable Law or any agreement, indenture or
         instrument to which Borrower, Member or Heartland is a party or is
         bound or which is binding upon or applicable to the Project or any
         portion thereof.

                  6.7 Litigation. There is not any condition, event or
         circumstance existing, or any litigation, arbitration, governmental or
         administrative proceeding, action, examination, claims or demand
         pending or, to the best of Borrower's knowledge after due inquiry,
         threatened affecting Borrower, Member or Heartland or the Project, or
         involving the validity or enforceability of the Loan Documents or
         involving any risk of a judgment or liability which, if satisfied,
         would have an adverse effect on the financial condition, business or
         properties of Borrower, Member or Heartland or the priority of the lien
         of the Mortgage, or which would prevent Borrower or Member from
         complying with or performing its obligations under this Agreement, the
         Notes, or any of the other Loan Documents within the time limits set
         forth therein for such compliance or performance and no basis for any
         such matter exists.

                  6.8 Utilities; Authorities. All utilities necessary for use,
         operation and occupancy of the Project (including, without limitation,
         water, storm sewer, sanitary sewer and drainage, electric, gas and
         telephone facilities) are available at the boundaries of the Land (or
         in the streets adjoining the Land), and all requirements for the use of
         such utilities have been fulfilled. All building, zoning, safety,
         disabled persons, health, fire, water district, sewerage and
         environmental protection agency permits and other licenses and permits
         which are required by any governmental authority for construction of
         the Improvements, and the use, occupancy and operation of the Project
         in accordance with the Plans and Specifications have been obtained by
         or furnished to Borrower and are in full force and effect or will be
         obtained by and maintained in full force and effect by Borrower when
         and as required by any governmental authority.

                  6.9 Solvency. Each Obligor is solvent and able to pay such
         Obligor's debts as such debts become due, and has capital sufficient to
         carry on such Obligor's present business transactions. The value of
         each Obligor's property, at a fair valuation, is greater than the sum
         of such Obligor's debts. No Obligor is bankrupt or insolvent, nor has
         any Obligor made an assignment for the benefit of such Obligor's
         creditors, nor has there been a trustee or receiver appointed for the
         benefit of such Obligor's creditors, nor has there been any bankruptcy,
         reorganization or insolvency proceedings instituted by or against any
         Obligor, nor will any Obligor be rendered insolvent by such Obligor's

                                       23
<PAGE>

         execution, delivery or performance of the Loan Documents or by the
         transactions contemplated thereunder.

                  6.10 Financial Statements. All financial statements submitted
         to Lender relating to Borrower, Heartland and the Project are true,
         complete and correct, and have been prepared in accordance with sound
         accounting principles consistently applied and fairly present the
         financial condition of the Person to which they pertain and the other
         information therein described and do not contain any untrue statement
         of a material fact or omit to state a fact material to the financial
         statement submitted or this Agreement. No material adverse change has
         occurred in the financial condition of Borrower, Heartland, any
         Guarantor or the Project since the dates of each such financial
         statements.

                  6.11 Compliance with Laws. Upon completion of the Work in
         accordance with the Plans and Specifications, the Project and the use,
         occupancy and operation thereof for their intended purposes will not,
         violate any Applicable Laws, any contractual arrangements with third
         parties or any covenants, conditions, easements, rights of way or
         restrictions of record. Neither Borrower nor any agent thereof has
         received any notice, written or otherwise, alleging any such violation,
         which violation has not previously been cured. Upon completion of the
         Work in accordance with the Plans and Specifications, the Project will
         be in full compliance and conformity with all zoning requirements,
         including without limitation, those relating to setbacks, height,
         parking, floor area ratio, fire lanes and percentage of land coverage,
         and will not be a non-conforming or special use.

                  6.12 Construction Contract. Pursuant to the Construction
         Contract, the Contractor has agreed to construct the Improvements. The
         Construction Contract is in full force and effect, unamended, and no
         default exists thereunder by either party thereto. In the event of any
         conflict between the terms of the Construction Contract, other
         Subcontracts and this Agreement or any other Loan Document, Borrower
         shall abide by and shall cause the Contractor to act in accordance with
         the provisions of the Loan Documents.

                  6.13 Subcontracts. Borrower has delivered to Lender true,
         complete and correct copies of all Subcontracts that have been entered
         into prior to the date hereof. The Subcontracts that have been entered
         into prior to the date hereof are in full force and effect, unamended,
         and no default exists thereunder by any party thereto.

                  6.14 Architectural Contract. Pursuant to the Architectural
         Contract, the Architect has agreed to perform architectural services in
         connection with the design and construction of the Improvements. The
         Architectural Contract is in full force and effect, unamended, and no
         default exists thereunder by either party thereto.

                  6.15 Plans and Specifications. Borrower has delivered to
         Lender true, complete and correct copies of all of the plans and
         specifications listed in Exhibit D attached hereto and the plans and
         specifications listed in Exhibit D are the Plans and Specifications
         which have been approved by Lender.

                                       24
<PAGE>

                  6.16 Budget. The Budget is a true, complete and correct budget
         with respect to the costs of the Work (including both hard costs and
         soft costs associated therewith). The total of all Project Costs as
         specified in the Budget will not exceed $5,250,000.

                  6.17 Financing Statements.  There are no UCC financing
         statements in effect other than those to be filed and/or recorded by
         Lender which name Borrower as debtor and pertaining to any rights in
         any of the Personal Property.

                  6.18 Event of Default.  No Event of Default has occurred, and
         no Unmatured Default shall then exist.

                  6.19 Responsible Property Transfer Act. To Borrower's
         knowledge, there are no facilities on the Real Estate that are subject
         to reporting under Section 312 of the federal Emergency Planning and
         Community Right-To-Know Act of 1986, 43 U.S.C. Section 11022, and
         federal regulations promulgated thereunder. To Borrower's knowledge,
         the Real Estate does not contain any underground storage tanks. The
         Real Estate is not "real property" as the term is defined under Section
         3 of the Responsible Property Transfer Act of 1988 (765 ILCS 90/1, et
         seq.), as now or hereafter amended ("RPTA"). Neither the making of the
         Loans by Lender nor the granting of a lien or security interest in the
         Project to Lender by Borrower is subject to RPTA.

                  6.20 Federal Interstate Land Sales Full Disclosure Act;
         Illinois Land Sales Registration Act of 1989. The Sale of the Units is
         exempt from the registration and disclosure requirements of the Federal
         Interstate Land Sales Disclosure Act, 15 U.S.C. Section 1701 et seq.,
         and the Illinois Land Sales Registration Act of 1989, 765 ILCS 85/1 et
         seq.

                  6.21 Additional Agreements. There are no management, leasing,
         development or other agreements in existence that affect the Project,
         other than those described in the schedule of Permitted Exceptions or
         as described in Exhibit B of the Assignment of Plans.

         All representations and warranties which have been made by Borrower in
         this Agreement or the other Loan Documents shall be true in all
         respects at the time of each disbursement of the Construction Loan, and
         in the event of any material breach, misrepresentation or omission,
         Lender shall have the absolute right to terminate its obligations under
         this Agreement (without any obligation to refund any loan or other fees
         previously paid), and upon demand by Lender, Borrower shall reimburse
         Lender for the Loan Expenses, and Lender shall be entitled to recover
         from Borrower all losses and damages resulting therefrom.

         7.       BORROWER'S COVENANTS.
                  --------------------

                  7.1 Manner of Construction. Borrower shall, at its sole cost
         and expense, cause the construction of the Project to be diligently and
         expeditiously carried out, in a

                                       25
<PAGE>

         good and workmanlike manner, in accordance with the Plans and
         Specifications and all Applicable Laws. All materials, fixtures,
         equipment or articles used in the renovation, construction or equipping
         of the Project shall comply with the Plans and Specifications. Without
         limiting the generality of the foregoing, Borrower will cause
         construction to continue without interruption until completion, and to
         be completed in accordance with the Plans and Specifications and
         Applicable Laws prior to July 31, 2000. Construction of the each Unit
         shall not be deemed to be complete until the Architect and the
         Consultant have certified that each Unit can be used and occupied in
         accordance with all Applicable Laws and a final, unconditional
         certificate of occupancy has been issued by the city of Chicago
         therefor.

                  7.2 Certificate of Completion. Within fifteen days after each
         Unit is completed, Borrower shall deliver to Lender a certificate of
         the Architect stating that the Unit has been completed in accordance
         with the Plans and Specifications and all Applicable Laws.

                  7.3 Change Orders. Borrower shall not, without the prior
         written approval of Lender, make or permit any modification of the
         Plans and Specifications, or amend or modify the Construction Contract,
         the Architectural Contract or enter into any change orders or
         additional contracts for the performance of any portion of the Work;
         provided, however, Borrower shall have the right to enter into one or
         more change orders without Lender's consent, so long as (a) no Event of
         Default or Unmatured Default exists under this Agreement or any of the
         other Loan Documents, (b) the change order does not individually result
         in a change in the cost of constructing the Project of more than
         $50,000, (c) the change order does not, together with all other change
         orders, result in a change in the cost of constructing the Project of
         more than $200,000, (d) the change order does not affect any structural
         portion of the Project, the overall appearance of the Project or the
         use or operation of the Project in any material respect, and (e) any
         increased cost resulting from the change order is paid for from the
         contingency line item in the Budget. In any event, Borrower shall
         deliver to Lender copies of all such change orders not requiring
         Lender's prior approval, together with all related documentation, no
         later than ten days after the execution thereof. Except to the extent
         expressly permitted in this Section, Borrower shall not, without the
         prior written approval of Lender, the Consultant and the Architect,
         make or permit any change in the Plans and Specifications.

                  7.4 Compliance with Laws. Borrower shall comply or cause
         compliance with all Applicable Laws governing the construction,
         development, use and operation of the Project and the development,
         operation and sale of the Units. Evidence of such compliance shall be
         submitted to Lender on request.

                  7.5 Inspection. Upon reasonable prior written or oral notice
         (which shall not be required in the event of an emergency), Borrower
         shall permit inspection of the Property by Lender, the Consultant and
         any other agent or designee of Lender. In addition, upon reasonable
         prior written or oral notice (which shall not be required in the event
         of an emergency), Borrower shall permit Lender and/or its agents and
         designees

                                       26
<PAGE>

         access to and the right to inspect, audit and copy all books, records,
         contracts and other documents and information relating to Borrower or
         the Property. Lender shall use reasonable efforts to keep confidential
         all information and documentation obtained by Lender in connection with
         such audits and inspections, except to the extent that Lender
         determines, in its reasonable discretion, a need to disclose same;
         provided, however, under no circumstances shall Lender have any
         liability to Borrower in the event of an unintentional disclosure or
         disclosure deemed necessary by Lender. All such books, records and
         accounts of operations relating to the Property shall be kept in
         accordance with sound accounting practices consistently applied.
         Borrower shall promptly respond to any inquiry from Lender for
         information with respect to the Property, which information may be
         verified by Lender at Borrower's expense; provided, however, that
         Lender shall at all times be entitled to rely upon any statements or
         representations made by Borrower or any agent thereof.

                  7.6 Mechanics' Liens. Borrower shall not permit any mechanics'
         lien claims to be filed or otherwise asserted against the Project or
         against any funds due any contractor or subcontractor, and Borrower
         shall promptly (and in any event within fifteen days after Borrower has
         received notice of such filing) discharge or cause to be discharged the
         same in case of the filing of any claims for lien or proceedings for
         the enforcement thereof; provided that in connection with any such lien
         or claim which Borrower may in good faith desire to contest, Borrower
         may contest the same by appropriate legal proceedings diligently
         prosecuted, but only if Borrower shall furnish to the Title Company
         such security or indemnity as the Title Company requires to induce the
         Title Company to issue an endorsement to the Title Policy insuring over
         the exception created by such lien, and provided further, that Lender
         shall not be required to make any further disbursements of the
         Construction Loan until any mechanics' lien claims have been so insured
         against by the Title Company.

                  7.7 Release by Lender. With respect to the matters set forth
         in Section 7.6 above, if Borrower shall (a) fail promptly to discharge
         any asserted liens or claims, or (b) fail promptly to contest asserted
         liens or claims or to give security or indemnity in the manner provided
         in Section 7.6 above, or (c) having commenced to contest the same, and
         having given such security or indemnity, fail to prosecute such contest
         with diligence, or to maintain such indemnity or security so required
         by the Title Company for its full amount, or (d) upon adverse
         conclusion of any such contest, fail promptly to cause any judgment or
         decree to be satisfied and lien to be released, then Lender may, but
         shall not be required to, procure the release and discharge of any such
         claim and any judgment or decree thereon and, further, may, in its sole
         discretion, effect any settlement or compromise of the same, or may
         furnish such security or indemnity to the Title Company, and any
         amounts so expended by Lender, including premiums paid or security
         furnished in connection with the issuance of any surety company bonds,
         shall be deemed to constitute disbursements of the proceeds of the
         Loans hereunder and shall bear interest from the date so disbursed
         until paid at the Default Rate. In settling, compromising or
         discharging any claims for lien, Lender shall not be required to
         inquire into the validity or amount of any such claim.

                                       27
<PAGE>

                  7.8 Financial Statements; Reports. Borrower shall deliver or
         cause to be delivered to Lender each month, a detailed report showing
         the progress of the Work, the number of reservation deposits for Units
         made, if any, and the number of sales contracts for Units entered into
         by Borrower during the immediately preceding month, if any, and the
         status of all reservation deposits and sales contracts entered into
         prior thereto, if any. In addition to such progress reports and any
         other financial statements required to be delivered to Lender pursuant
         to the provisions of any of the other Loan Documents, Borrower will
         from time to time furnish to Lender such information and reports,
         financial and otherwise, concerning Borrower, Member and Heartland, the
         performance of the Work and the operation of the Project as Lender
         reasonably requires, including, without limitation, the following:

                           (a) Within ninety days after the end of each calendar
                  year, compiled financial statements of the Project on a form
                  acceptable to Lender, setting forth the information therein
                  required as of December 31 of the immediately preceding year,
                  containing income and expense statements and a balance sheet.
                  The financial statements shall be prepared by an independent
                  accounting firm in accordance with generally accepted
                  accounting principles consistently applied and shall be
                  certified by the chief financial officer of Borrower as fairly
                  and accurately presenting the information contained therein.

                           (b) Within ninety days after the end of each calendar
                  year, financial statements and the federal and state income
                  tax returns for Borrower, Member and Heartland, such financial
                  statements to be on Lender's standard form or another form
                  acceptable to Lender, setting forth the information therein
                  required as of December 31 of the immediately preceding year,
                  and certified by such Person as fairly and accurately
                  presenting the information contained therein.

                           (c) Within ninety days after the end of each calendar
                  year, detailed cash flow statements for the preceding calendar
                  year, on a form acceptable to Lender, for all income producing
                  properties listed on the financial statements of Borrower,
                  Member and Heartland, certified by the chief financial officer
                  of such Person, as fairly and accurately presenting the
                  information contained therein.

                  7.9 Affirmation of Representations and Warranties. Borrower
         agrees that all representations and warranties of Borrower contained in
         Article 6 hereof shall remain true in all material respects at all
         times until the Construction Loan is repaid in full.

                  7.10 Title. Except for (i) the Mortgage and other security for
         the Loans, (ii) the lien of general real estate taxes payment of which
         is not yet due, (iii) mechanics' liens which are contested in the
         manner permitted in Paragraphs 7.6 above, and (iv) any other Permitted
         Exceptions, Borrower shall keep its fee simple title to the Project
         free and clear of all liens, claims and encumbrances, whether senior or
         junior to or at parity with the Mortgage.

                                       28
<PAGE>

                  7.11 Proceedings Affecting Property. If any proceedings are
         filed seeking to enjoin or otherwise prevent or declare invalid or
         unlawful the construction, occupancy, use, maintenance or operation of
         the Project, or any portion thereof, Borrower shall cause such
         proceedings to be vigorously contested in good faith, and in the event
         of an adverse ruling or decision, prosecute all allowable appeals
         therefrom, and shall, without limiting the generality of the foregoing,
         resist the entry or seek the stay of any temporary or permanent
         injunction that may be entered, and use its best efforts to bring about
         a favorable and speedy disposition of all such proceedings. All such
         proceedings, including without limitation, all of Lender's costs, and
         fees and disbursements of Lender's counsel in connection with any such
         proceedings, whether or not Lender is a party thereto, shall be at
         Borrower's expense. To the extent that Lender incurs any such expenses,
         including attorneys' fees and fees and charges for court costs, bonds
         and the like, Borrower shall reimburse Lender for such expenses and the
         amount due Lender shall bear interest from the date so incurred by
         Lender until repaid to Lender at the Default Rate and shall be payable
         to Lender on demand.

                  7.12 Disposal and Encumbrance of Property. Except as expressly
         permitted pursuant to Article 12 below, Borrower shall not, without
         Lender's prior written consent, suffer, permit or enter into any
         agreement for any sale, lease, transfer, or in any way encumber or
         dispose of or grant or suffer any security or other assignment
         (collateral or otherwise) of or in all or any portion of the Project.
         Any consent given by Lender or any waiver of default under this
         Section, shall not constitute a consent to, or waiver of any right,
         remedy or power of Lender under any subsequent default hereunder.

                  7.13 Insurance. Borrower shall pay all premiums on all
         insurance policies required from time to time under this Agreement, and
         thirty days prior to expiration of any such policies, Borrower shall
         furnish to Lender, with premiums prepaid, additional and renewal
         policies in form, and with companies, coverage, deductibles and amounts
         satisfactory to Lender. In the event of failure by Borrower to provide
         such insurance, Lender may, but shall not be required to, place
         insurance and treat the amounts expended therefor as disbursements of
         Loans proceeds and such amounts from the date so expended by Lender
         until repaid to Lender shall bear interest at the Default Rate.

                  7.14 Performance of Obligations; Notice of Default. Borrower
         shall promptly and fully perform and comply in all respects with the
         obligations, terms, agreements, provisions and requirements of this
         Agreement and the other Loan Documents and all other documents and
         instruments relating thereto and will not permit to occur any default
         or breach hereunder or thereunder. Borrower shall promptly give to
         Lender notice of the occurrence of any Unmatured Default or of any
         event that could have a material adverse effect on any security for the
         Loans or on Borrower's ability to perform its obligations under this
         Agreement or any of the other Loan Documents.

                  7.15 Subcontracts.  Borrower shall deliver to Lender a copy of
         each Subcontract entered into by the Contractor within ten days of its
         receipt, if at all.

                                       29
<PAGE>

                  7.16 Restrictions Affecting Borrower. Borrower covenants and
         agrees that, without the prior written consent of Lender, there shall
         not occur: (i) any amendment or modification of the Borrower's
         operating agreement or the certificate of formation of Borrower, (ii)
         the admission of any new members to Borrower. At all times prior to the
         repayment of the Loans, (A) the Member shall be the sole member of
         Borrower; (B) Borrower shall not make or permit any distributions of
         cash flow or cash proceeds to Member or any partner, subpartner,
         member, shareholder, officer, director or affiliate of Borrower or
         Member and all positive cash flow from the Project shall be paid to
         Lender and applied to the repayment of the Principal Balance; (C)
         Borrower shall not enter into any contract or agreement for the
         provision of services or otherwise with respect to the Project with any
         partner, subpartner, member, shareholder, officer, director or
         affiliate of any partner of Borrower or Member unless such contract or
         agreement is an arms-length, market rate agreement and is cancelable
         upon thirty days written notice from any owner of the Project; and (D)
         neither Borrower nor Member shall be dissolved or its existence
         terminated; provided, however, as long as the Letter of Credit is
         surrendered to Lender and not drawn upon, Borrower shall be able to
         make distributions of cash flow or cash proceeds to Member as a result
         of sales of the condominiums in the Tower Residence Building located at
         333 N. Des Plaines Avenue, Chicago, Illinois 60661.

                  7.17 Use of Receipts. Borrower shall cause all rents and other
         income and receipts realized and received by Borrower, if any, from and
         in connection with the Project to be used for the purpose of paying the
         actual costs and expenses incurred by Borrower in connection with the
         ownership, operation, management and repair of the Project, including
         without limitation, operating expenses, real estate taxes, insurance
         premiums and interest on the Loans. Borrower shall cause all sale
         proceeds and other income and receipts realized and received by
         Borrower, if any, from and in connection with the Project to be used
         for the purpose of repaying the Loans, as more fully described in the
         Mortgage Note, Section 3.3 and Section 12.2 of this Agreement.

                  7.18 Budget. Borrower shall not make any changes in the
         expenses contained in the Budget without the prior written consent of
         Lender. Borrower shall not be entitled to reallocate among line items
         in the Budget without the prior written consent of Lender, which
         consent shall not be unreasonably withheld if Borrower has (i) proposed
         the reduction of a line item and the reallocation of the amount of such
         reduction to other line items in the Budget, and (ii) provided Lender
         with satisfactory evidence that the reduction of a line item is
         appropriate and reasonable because the amount originally set forth with
         respect thereto will not be required to complete said item.

                  7.19 Management and Leasing Agreements; Subordination.
         Borrower shall not amend, extend, substitute or enter into any new
         management or leasing agreement covering all or any portion of the
         Project without Lender's prior written consent. In the event that
         Lender grants such consent, Borrower shall cause the manager or leasing
         broker under said agreement to enter into an agreement with Lender,
         acceptable in form and substance to Lender, pursuant to which said
         manager or broker subordinates its liens for unpaid fees to the liens
         of the Mortgage and the other Loan Documents.

                                       30
<PAGE>

                  7.20 Additional Documents. Borrower shall not execute or
         record any document pertaining to, affecting or running with all or any
         portion of the Property, including, without limitation, any condominium
         declaration or plat, without the prior written approval of Lender of
         the form and substance of such documents, which approval shall not be
         unreasonably withheld. Upon granting such approval, Lender agrees to
         execute such consents and subordination agreements with respect to such
         condominium documents as are acceptable to Lender in its reasonable
         discretion.

                  7.21 Sale to Investors. Without the prior written consent of
         Lender, which consent may be granted or denied at Lender's sole
         discretion, Borrower shall not knowingly sell multiple Unit Interests
         to investors or syndicators who are acquiring such Unit Interests with
         the intent to resell them.

                  7.22 Condominium Act. As soon as reasonably requested by
         Lender, and in any event at least thirty (30) days prior to the sale of
         the first Unit Interest, Borrower shall take all necessary actions and
         execute, deliver, record (except recording of such documents shall not
         take place until immediately prior to such first sale) and file all
         necessary documents and instruments (including, without limitation, the
         condominium plats for the residential condominiums constituting part of
         the Project) to cause the Property to be submitted and made subject to
         the provisions of the Condominium Laws and to comply with all other
         legal requirements relating to the development of the Property as a
         condominium project; provided, however, that Borrower shall not take
         any such action or execute, deliver, record or file any such documents
         or instruments without first (a) providing Lender with written notice
         of such actions and copies of such documents and instruments and (b)
         obtaining Lender's written consent thereto, which consent shall not be
         unreasonably withheld. Borrower shall not terminate, amend or otherwise
         modify any of the Condominium Documents without Lender's prior written
         consent, which consent shall not be unreasonably withheld. Upon
         recordation of the plat of condominium, the condominium declaration and
         the other Condominium Documents required to be recorded, Borrower shall
         cause the Title Company to add to the Title Policy a Condominium
         Endorsement (No. 4) in form and substance acceptable to Lender. At all
         times after such recordation, Borrower shall, to the extent permitted
         by the Condominium Laws and the Condominium Documents, take all actions
         in its capacity as developer, declarant, manager, unit owner and
         otherwise to cause the Property (including, without limitation, all
         common elements) to (i) be insured, (ii) remain free and clear of all
         liens and encumbrances except the Permitted Exceptions and any other
         exceptions hereafter approved by Lender in writing, and (iii) be
         operated in accordance with all of the requirements of this Agreement
         and the other Loan Documents.

                  7.23 Survey. Within thirty days subsequent to the completion
         of the foundation of the Building and as a condition to any subsequent
         disbursement by Lender, the Survey shall be updated to show the
         location of such foundation; that such foundation is within all
         applicable lot, side, rear and set-back lines; and that there are no
         encroachments by the improvements over easements or adjoining property.
         Within thirty days subsequent to the completion of the exterior walls
         and roof of the Building and as a condition to any

                                       31
<PAGE>

         subsequent disbursement by Lender, the Survey shall be updated to show
         the Building "as built" and to show the location of all utilities and
         any additional easements or other matters of record affecting the
         Project.

                  7.24 Borrower's Accounts.  Borrower shall maintain the
         operating, earnest money and reserve accounts for the Property with
         Lender and pledge the operating and reserve accounts to Lender as
         security for the Loans.

                  7.25 Ineligible Securities. Borrower represents and warrants
         that no portion of any advance or loan made hereunder shall be used
         directly or indirectly to purchase ineligible securities, as defined by
         applicable regulations of the Federal Reserve Board, underwritten by
         any affiliate of Banc One Corporation during the underwriting period
         and for thirty (30) days thereafter.

         8. LOAN EXPENSES. Borrower agrees to pay all of the Loan Expenses. Any
Loan Expenses paid by Lender shall bear interest commencing on the date demand
for repayment thereof is made by Lender until repaid to Lender at the Default
Rate and shall be paid by Borrower upon demand, or may be paid by Lender at any
time by disbursement of proceeds of the Loans. Any Loan Expenses paid by Lender
shall be reimbursed to Lender by Borrower regardless of whether there shall be
any disbursements of the Loans.

         9. LENDER'S REPRESENTATIVES. Lender, at Borrower's expense, shall have
the right to engage personnel in connection with negotiation, documentation,
administration and servicing of the Construction Loan, including without
limitation, the Consultant, to (i) review and approve the Plans and
Specifications, (ii) review and approve Borrower's final construction budget,
(iii) conduct monthly inspections of the Work and report on the progress of
construction thereof, (iv) review and approve all change orders, (v) review and
approve applications for disbursements and accompanying documents, (vi) issue
reports and certificates to Lender, (vii) inspect the structural, mechanical,
electrical, plumbing, HVAC and roof systems constituting the Work, (viii)
determine whether the Work has been completed in accordance with the Plans and
Specifications, and (ix) provide other services as requested by Lender, and
Borrower shall fully cooperate with the Consultant and other personnel in all
reasonable respects in connection therewith.

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

                  (a) Failure by Borrower or any other obligor to pay on or
         before the fifth day following the date when due any installment of
         principal or interest or any other amount payable pursuant to the
         Notes, this Agreement or any of the other Loan Documents.

                  (b) Failure by Borrower to promptly perform or cause to be
         performed any non-monetary obligation or observe any non-monetary
         condition, covenant, term, agreement or provision required to be
         performed or observed by Borrower or any other obligor under this
         Agreement, the Notes, the Mortgage, the Indemnity Agreement or any

                                       32
<PAGE>

         of the other Loan Documents; provided, however, that if such failure by
         its nature can be cured, then so long as the continued operation and
         safety of the Project, and the priority, validity and enforceability of
         the lien created by the Mortgage or any of the other Loan Documents and
         the value of the Project are not imminently impaired, threatened or
         jeopardized, then Borrower shall have a period (the "Cure Period") of
         thirty days after written notice from Lender of any such failure of
         performance or observance to cure or cause the cure of the same, and an
         Event of Default shall not be deemed to exist during the Cure Period,
         provided further that if Borrower commences to cure such failure during
         the Cure Period and is diligently and in good faith attempting to
         effect such cure, the Cure Period shall be extended until such failure
         is cured, but in no event shall the Cure Period be longer than 90 days
         in the aggregate. The foregoing Cure Period is intended only to apply
         in circumstances not referred to in any of the other paragraphs of this
         Section; Borrower's right to a grace or cure period, if any, with
         respect to such other circumstances are to be governed by the
         provisions of such other paragraphs.

                  (c) The existence of any material inaccuracy or untruth in any
         representation, or warranty contained in this Agreement or any other
         Loan Documents, or of any statement or certification as to facts
         delivered to Lender by or on behalf of Borrower.

                  (d) A discontinuance of the construction of the Work for a
         period of fifteen consecutive days (unless otherwise approved by
         Lender), other than a discontinuance resulting from strikes, acts of
         God, adverse weather conditions or other occurrences beyond the
         reasonable control of Borrower (it being understood that a delay caused
         by an insufficiency of funds shall not be deemed to be beyond the
         control of Borrower), or any delay in the Work, regardless of cause,
         the result of which may be, in Lender's sole judgment, that the Work
         will not be substantially completed prior to July 31, 2000.

                  (e) At any time Borrower, Member or Heartland files a
         voluntary petition in bankruptcy, or is adjudicated a bankrupt or
         insolvent, or institutes (by petition, application, answer, consent or
         otherwise) any bankruptcy, insolvency, reorganization, arrangement,
         composition, readjustment, dissolution, liquidation or similar
         proceedings under any present or future federal, state or other statute
         or law, or admits in writing its inability to pay its debts as they
         mature, or makes an assignment for the benefit of its creditors, or
         seeks or consents to the appointment of any receiver, trustee or
         similar officer for all or any substantial part of its property.

                  (f) The commencement of any involuntary petition in bankruptcy
         against Borrower, Member or Heartland or the institution against
         Borrower, Member or Heartland of any reorganization, arrangement,
         composition, readjustment, dissolution, liquidation or similar
         proceedings under any present or future federal, state or other statute
         or law, or the appointment of a receiver, trustee or other officer for
         all or any substantial part of the property of Borrower, Member or
         Heartland which remains undismissed or undischarged for a period of
         thirty days.

                                       33
<PAGE>

                  (g) Borrower intentionally causes or knowingly permits any of
         the Work to be performed in a manner which is materially contrary to
         the Plans and Specifications or any provisions of this Agreement or the
         other Loan Documents.

                  (h) Any sale, transfer, lease, assignment, conveyance,
         financing, lien, encumbrance or other transaction made in violation of
         this Agreement.

                  (i) Failure of Borrower for a period of thirty days after
         Lender's demand to procure the reversal, dismissal or disposition to
         Lender's satisfaction of any order enjoining or otherwise preventing or
         declaring invalid or unlawful the construction, occupancy, maintenance,
         operation or use of the Project, or any portion thereof, in the manner
         required by the terms of this Agreement, or of any proceedings which
         could or might affect the validity or priority of the lien of the
         Mortgage or any of the other security for the Loans, or which could
         materially affect Borrower's ability to perform its obligations under
         this Agreement or the other Loan Documents, except that Borrower shall
         have the right to contest by appropriate proceedings the validity of
         such order if and only if Borrower shall, within thirty days after
         Lender's demand aforesaid, (i) places a bond with Lender in an amount,
         form, content and issued by a surety reasonably acceptable to Lender
         for adequate security from such order, or, if acceptable to Lender (ii)
         cause the Title Company to issue an endorsement to the Loan Policy
         insuring against loss or damage on account of any such order.

                  (j) The attachment, seizure, levy upon or taking of possession
         by any receiver, custodian or assignee for the benefit of creditors of
         all or a substantial part of the property of Borrower, Member or
         Heartland which is not stayed or dismissed within thirty days after the
         occurrence thereof.

                  (k) The assignment or attempted assignment of this Agreement
         by Borrower without Lender's prior written consent.

                  (l) The filing or threatened filing of any condemnation or
         administrative proceeding or litigation against the Project or any
         casualty thereto which would in any way impair the completion of the
         Work prior to the applicable date required therefor or the full
         utilization of the Project once completed.

                  (m) The filing of formal charges under any federal, state or
         local law, statute or ordinance for which Borrower's forfeiture of all
         or any portion of the Project is a potential penalty.

                  (n) The occurrence of any material default or event of default
         by Borrower pursuant to the Borrower's financing agreements with Corus
         Bank in connection with Borrower's construction of Phase I of Kinzie
         Park located in Chicago, Illinois.

                  (o) The occurrence of an Event of Default under any of the
         other Loan Documents.

                                       34
<PAGE>

         11. REMEDIES. Upon the occurrence of any Event of Default, Lender, in
addition to availing itself of any remedies conferred upon it at law or in
equity and by the terms of the Notes, the Mortgage and the other Loan Documents,
may pursue any one or more of the following remedies first, concurrently or
successively with each other and with any other available remedies, it being the
intent hereof that none of such remedies shall be to the exclusion of any
others:

                  (a) Take possession of the Project and complete the Work and
         do anything necessary or desirable in Lender's sole judgment to fulfill
         the obligations of Borrower hereunder, including either the right to
         avail itself of and procure performance of the Construction Contract,
         any Subcontracts or any other contract entered into for the performance
         of all or any portion of the Work (or any substitute therefor), or to
         let new or additional contracts with the same contractors or
         subcontractors or others, and to employ watchmen to protect the Project
         from injury. Without restricting the generality of the foregoing and
         for the purposes aforesaid, Borrower hereby appoints and constitutes
         Lender its lawful attorney-in-fact with full power of substitution (i)
         to complete the Work in the name of Borrower; (ii) to use portions of
         the Construction Loan or other funds which may be reserved, escrowed or
         set aside for any purposes hereunder at any time to complete the Work;
         (iii) to make changes in the Plans and Specifications which shall be
         reasonably necessary or reasonably desirable to complete the Work; (iv)
         to retain or employ new general contractors, subcontractors,
         architects, engineers and inspectors as shall be required for such
         purposes; (v) to pay, settle or compromise all existing bills and
         claims, which may be liens or security interests or to avoid such bills
         and claims becoming liens or security interests against the Project, or
         as may be necessary or desirable for the completion of the Work or for
         the clearance of title; (vi) to execute all applications and
         certificates in the name of Borrower which may be required by any of
         the Loan Documents; (vii) to prosecute and defend all actions or
         proceedings in connection with the Work; (viii) to take such action and
         require such performance as it deems necessary under any of the bonds
         to be furnished pursuant to the provisions hereof and to make
         settlements and compromises with the surety or sureties thereunder, and
         in connection therewith, to execute instruments of release and
         satisfaction; it being understood that the foregoing power of attorney
         is coupled with an interest and cannot be revoked. All sums expended by
         Lender pursuant to this Article 11 shall be deemed to have been paid to
         Borrower and secured by the Mortgage and the other Loan Documents, and
         shall bear interest at the Default Rate until repaid to Lender.

                  (b) Withhold further disbursements of proceeds of the
         Construction Loan.

                  (c) Declare the unpaid indebtedness evidenced by the Notes to
         be immediately due and payable.

                  (d) Excluding any earnest money deposits, apply the balance of
         any deposits made with Lender toward the repayment of the Loans.

         12.      SALES OF UNIT INTERESTS; PARTIAL RELEASES.
                  -----------------------------------------

                                       35
<PAGE>

                  12.1 Right to Sell. Borrower shall have the right to enter
         into and perform sales contracts with creditworthy third party
         purchasers of the Unit Interests on the form contract submitted to and
         approved in writing by Lender, provided that (i) no Event of Default
         then exists, (ii) the gross sales price for the Unit Interest being
         sold is not less than the minimum sales price therefor contained in
         Exhibit E attached hereto, and (iii) the earnest money under said
         contract is being held by Lender. Borrower shall deliver to Lender a
         copy of each fully signed contract within five (5) days after the full
         execution and delivery thereof.

                  12.2 Release of Liens. Provided that all of the conditions
         described in Section 12.1 above have been satisfied in form and
         substance acceptable to Lender and no Event of Default then exists,
         Lender will issue a partial release of lien of its Loan Documents
         covering any Unit Interest upon the payment to Lender of an amount
         equal to 100% of the Net Sales Proceeds payable to Borrower with
         respect to the sale thereof.

         13.      MISCELLANEOUS.
                  -------------

                  13.1 Additional Indebtedness. If any advances or payments made
         by Lender pursuant to this Agreement or any other Loan Document,
         together with disbursements of the Loans, shall exceed the aggregate
         face amount of the Notes, all such advances and payments shall
         constitute additional indebtedness secured by the Mortgage and all
         other security for the Loans, and shall bear interest at the Default
         Rate from the date advanced until paid.

                  13.2 Additional Acts. Borrower shall, upon request, execute
         and deliver such further instruments and documents and do such further
         acts and things as may be reasonably required to provide to Lender the
         evidence of and security for the Loans contemplated by this Agreement.

                  13.3 Loan Agreement Governs. In the event of any inconsistency
         between any provision of this Agreement and any provision of any other
         Loan Document, the provision of this Agreement shall govern; provided,
         however, that the provisions of all of the Loan Documents shall be
         construed as an integrated set of provisions governing the Loans and,
         accordingly, shall be interpreted and construed liberally to give the
         maximum validity, enforceability and effect to all of such provisions.

                  13.4 Additional Advances. If an Event of Default shall occur,
         Lender may, but shall not be obligated to, take any and all actions to
         cure such default, and all amounts expended in so doing, all Loan
         Expenses and all other amounts paid or advanced by Lender pursuant to
         the Loan Documents, and all other amounts advanced by Lender in
         connection with the performance of the Work or preserving any security
         for the Loans, shall constitute additional advances of the Construction
         Loan, shall be secured by the Mortgage and all other security for the
         Loans, and shall bear interest at the Default Rate from the date
         advanced until paid.

                                       36
<PAGE>

                  13.5 Amendment; Waiver; Approval. This Agreement shall not be
         amended, modified or supplemented without the written agreement of
         Borrower and Lender at the time of such amendment, modification or
         supplement. No waiver of any provision of this Agreement or any of the
         other Loan Documents shall be effective unless set forth in writing
         signed by the party making such waiver, and any such waiver shall be
         effective only to the extent therein set forth. Failure by Lender to
         insist upon full and prompt performance of any provisions of this
         Agreement or any of the other Loan Documents, or to take action in the
         event of any breach of any such provision or upon the occurrence of any
         Event of Default, shall not constitute a waiver of any rights of
         Lender, and Lender may at any time thereafter exercise all available
         rights and remedies with respect to such breach or Event of Default.
         Receipt by Lender of any instrument or document shall not constitute or
         be deemed to be an approval thereof. Any approvals required under any
         of the other Loan Documents must be in writing, signed by Lender and
         directed to Borrower.

                  13.6 Notice. All notices, communications and waivers under
         this Loan Agreement shall be in writing and shall be (i) delivered in
         person or (ii) mailed, postage prepaid, either by registered or
         certified mail, return receipt requested, or (iii) sent by overnight
         express carrier, addressed in each case as follows:

                  To Lender:                 Bank One, Illinois, NA
                                             6000 State Street
                                             Rockford, Illinois 61108
                                             Attn: Donald J. Pafford

                           and:              Bank One, Illinois, NA
                                             200 South Wacker Drive - 6th Floor
                                             Chicago, Illinois 60606
                                             Attn: Terrance Rosenberger

                  With copy to:              Schwartz, Cooper, Greenberger &
                                             Krauss, Chtd.
                                             180 North LaSalle Street
                                             Suite 2700
                                             Chicago, Illinois  60601
                                             Attn: Jerrold M. Peven, Esq.

                  To Borrower:               CMC Heartland Partners III, LLC
                                             547 West Jackson Boulevard
                                             Suite 1510
                                             Chicago, Illinois 60661
                                             Attn: Richard P. Brandstatter

                                       37
<PAGE>

                  With copy to:              Jenner & Block
                                             One IBM Plaza
                                             330 N. Wabash, 40th floor
                                             Chicago, Illinois 60611
                                             Attn: Michael Margolies, Esq.

         or to any other address as to either of the parties hereto, as such
         party shall designate in a written notice to the other party hereto.
         All notices sent pursuant to the terms of this Section shall be deemed
         received (i) if personally delivered, then on the date of delivery,
         (ii) if sent by overnight, express carrier, then on the next Business
         Day immediately following the day sent, or (iii) if sent by registered
         or certified mail, then on the earlier of the third Business Day
         following the day sent or when actually received.

                  13.7 Benefit; Assignment. The rights, powers and remedies of
         Lender under this Agreement shall inure to the benefit of Lender and
         its successors and assigns. The rights and obligations of Borrower
         under this Agreement may not be assigned and any purported assignment
         by Borrower shall be null and void.

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

                  13.9 Indemnity. Borrower agrees to indemnify, defend and hold
         Lender harmless from and against any and all liabilities, obligations,
         losses, damages, claims, costs and expenses (including reasonable
         attorneys' fees and court costs) of whatever kind or nature which may
         be imposed on, incurred by or asserted against Lender at any time which
         relate to or arise from the performance of the Work, the offer for sale
         or sale of any limited partnership interest or membership interest in
         Borrower, the acquisition or sale or offer for sale of all or any
         portion of the Property (including Unit Interests) and/or the
         ownership, use, operation or maintenance of the Property, including,
         without limitation, (a) any brokerage commissions or finder's fees
         asserted against Lender with respect to the making of the Loans, the
         acquisition of the Property or the sale of Unit Interests and (b)
         claims by purchasers of Unit Interests with respect to defects in the
         Property or other matters; provided, however, that the foregoing
         indemnity shall not extend to any liabilities, obligations, claims,
         losses, costs, damages or expenses resulting from the gross negligence
         or willful misconduct of Lender.

                  13.10 Headings. The titles and headings of the articles,
         sections and paragraphs of this Agreement have been inserted as a
         matter of convenience of reference only and shall not control or affect
         the meaning or construction of any of the terms or provisions of this
         Agreement.

                  13.11 No Partnership or Joint Venture.  Lender, by executing
         and performing this Agreement shall not become a partner or joint
         venturer with Borrower or any partner

                                       38
<PAGE>

         of Borrower or any of their respective associates or affiliates and all
         inspections of the Property herein provided for are for the sole
         benefit of Lender.

                  13.12 Time is of the Essence. Time is of the essence of the
         payment of all amounts due Lender under the Loan Documents and
         performance and observance by Borrower of each covenant, agreement,
         provision and term of this Agreement and the other Loan Documents.

                  13.13 Invalid Provisions. In the event that any provision of
         this Agreement is deemed to be invalid by reason of the operation of
         law, or by reason of the interpretation placed thereon by any
         administrative agency or any court, Borrower and Lender shall negotiate
         an equitable adjustment in the provisions of the same in order to
         effect, to the maximum extent permitted by law, the purpose of this
         Agreement and the validity and enforceability of the remaining
         provisions, or portions or applications thereof, shall not be affected
         thereby and shall remain in full force and effect.

                  13.14 Offset. Without limitation of any other right or remedy
         of Lender hereunder or provided by law, any indebtedness relating to
         the Property or its operation and now or hereafter owing to Borrower by
         Lender (including, without limitation, any amounts on deposit in any
         demand, time, savings, passbook or like account maintained by Borrower
         with Lender) may be offset and applied by Lender hereunder, or under
         the Notes, the Mortgage or any of the other Loan Documents.

                  13.15 Acts by Lender. Notwithstanding anything herein
         contained to the contrary, Lender will not be required to make any
         disbursement or perform any other act under this Agreement if, as a
         result thereof, Lender will violate any law, statute, ordinance, rule,
         regulation or judicial decision applicable thereto.

                  13.16 Binding Provisions. The covenants, warranties,
         agreements, obligations, liabilities and responsibilities of Borrower
         under this Agreement shall be binding upon and enforceable against
         Borrower and its legal representatives, administrators, successors and
         permitted assigns.

                  13.17 Counterparts. This Agreement may be executed in
         counterparts, and all said counterparts when taken together shall
         constitute one and the same Agreement.

                  13.18 No Third Party Beneficiary. This Agreement is only for
         the benefit of the parties hereto and their permitted successors and
         assigns. No other person or entity shall be entitled to rely on any
         matter set forth herein without the prior written consent of such
         parties.

                  13.19 Publicity. Subject to compliance with Applicable Laws,
         Lender reserves the right to publicize the making of the Loans in any
         manner it deems appropriate, including, without limitation,
         advertisements in trade journals and newspapers. In addition, Borrower
         agrees that Lender shall have the right to erect and maintain a sign at

                                       39
<PAGE>

         the Project in a prominent location for the duration of the term of the
         Loans stating that Lender is providing the financing for construction
         of the Project. The sign shall be furnished by Lender and the sign
         shall be located in a place selected by Lender, provided that such
         location does not interfere with performance of the Work.

                  13.20 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL
         ACTIONS OR PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR
         INDIRECTLY OUT OF THIS AGREEMENT SHALL BE LITIGATED IN THE CIRCUIT
         COURT OF COOK COUNTY, ILLINOIS, OR THE UNITED STATES DISTRICT COURT FOR
         THE NORTHERN DISTRICT OF ILLINOIS OR, IF LENDER INITIATES SUCH ACTION,
         ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND WHICH HAS
         JURISDICTION. BORROWER HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE
         TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN
         ANY OF SUCH COURTS, AND HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS
         AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREE
         THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS
         MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT
         THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS AGREEMENT.
         BORROWER WAIVES ANY CLAIM THAT CHICAGO, ILLINOIS OR THE NORTHERN
         DISTRICT OF ILLINOIS IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM
         BASED ON LACK OF VENUE. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET
         FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT,
         BY LENDER, OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING,
         BY LENDER, OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
         JURISDICTION, AND BORROWER HEREBY WAIVES THE RIGHT, IF ANY, TO
         COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

                  13.21 JURY WAIVER. LENDER AND BORROWER HEREBY VOLUNTARILY,
         KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A
         JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT,
         TORT OR OTHERWISE) BETWEEN OR AMONG LENDER AND BORROWER ARISING OUT OF
         OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR
         ANY RELATIONSHIP BETWEEN LENDER AND BORROWER. THIS PROVISION IS A
         MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE LOANS DESCRIBED HEREIN AND
         IN THE OTHER LOAN DOCUMENTS.

                           [Signature page to follow]

                                       40
<PAGE>

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

CMC HEARTLAND PARTNERS III,                BANK ONE, ILLINOIS, NA, a national
LLC, a Delaware limited liability company  banking association

By:______________________________          By:      ___________________________
   Lawrence S. Adelson, Vice President     Title:   ___________________________

                                       41
<PAGE>

                              Schedule of Exhibits

                           A     -      Budget

                           B     -      Legal Description

                           C     -      Permitted Exceptions

                           D     -      List of Plans and Specifications

                           E     -      Schedule of Minimum Sales Prices
<PAGE>

                                   EXHIBIT A

                                     Budget
<PAGE>

                                   EXHIBIT B

                         Legal Description of the Land
<PAGE>

                                   EXHIBIT C

                              Permitted Exceptions
<PAGE>

                                   EXHIBIT D

                        List of Plans and Specifications
<PAGE>

                                   EXHIBIT E

                        Schedule of Minimum Sales Prices

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